As filed with the Securities and Exchange Commission on June 22, 2012
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Community Choice Financial Inc.
Subsidiary Guarantors Listed on Schedule A Hereto
(Exact name of registrant as specified in its charter)
Ohio |
|
6099 |
|
45-1536453 |
(State or other jurisdiction of |
|
(Primary Standard Industrial |
|
(I.R.S. Employer Identification No.) |
7001 Post Road, Suite 200
Dublin, Ohio 43016
(614) 798-5900
(Address, including zip code, and telephone number, including area code, of registrants principal executive offices)
William E. Saunders, Jr.
Chief Executive Officer
7001 Post Road, Suite 200
Dublin, Ohio 43016
(614) 798-5900
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Bridgette Roman, Esq. Senior Vice President, Secretary and General Counsel 7001 Post Road, Suite 200 Dublin, Ohio 43016 Tel: (614) 798-5900 Fax: (614) 760-4057 |
|
Christopher M. Kelly, Esq. Michael J. Solecki, Esq. John T. Owen, Esq. Jones Day 222 East 41st Street New York, NY 10017-6702 Tel: (212) 326-3939 Fax: (212) 755-7306 |
Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this Registration Statement becomes effective.
If the securities being registered on this Form are to be offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. o
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer o |
|
Accelerated filer o |
|
|
|
Non-accelerated filer x |
|
Smaller reporting company o |
If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:
Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ¨
Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) ¨
CALCULATION OF REGISTRATION FEE
Title of each class of |
|
Amount to be registered |
|
Proposed maximum offering |
|
Proposed maximum |
|
Amount of |
| |||
10.75% Senior Secured Notes due 2019 |
|
$ |
395,000,000 |
|
100 |
% |
$ |
395,000,000 |
|
$ |
45,267 |
|
Guarantees of 10.75% Senior Secured Notes due 2019 |
|
|
|
|
|
|
|
|
(2) | |||
(1) Estimated solely for the purpose of calculating the registration fee under Rule 457 of the Securities Act of 1933, as amended.
(2) Pursuant to Rule 457(n) of the Securities Act of 1933, as amended, no separate fee is payable for the guarantees.
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to Section 8(a), may determine.
SCHEDULE A
Exact name of registrant as specified |
|
State or other |
|
Primary |
|
I.R.S. Employer |
|
Address, including zip code, and |
ARH-Arizona, LLC |
|
Delaware |
|
6099 |
|
27-2570561 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
BCCI CA, LLC |
|
Delaware |
|
6099 |
|
20-8756962 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
BCCI Management Company |
|
Ohio |
|
6099 |
|
31-1745261 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Buckeye Check Cashing II, Inc. |
|
Ohio |
|
6099 |
|
31-1482037 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Buckeye Check Cashing of Arizona, Inc. |
|
Ohio |
|
6099 |
|
31-1715170 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Buckeye Check Cashing of California, LLC |
|
Delaware |
|
6099 |
|
20-5738249 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Buckeye Check Cashing of Florida, Inc. |
|
Ohio |
|
6099 |
|
31-1705930 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Buckeye Check Cashing of Illinois, LLC |
|
Delaware |
|
6099 |
|
27-4614574 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Buckeye Check Cashing of Kansas, LLC |
|
Delaware |
|
6099 |
|
20-4887219 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Buckeye Check Cashing of Kentucky, Inc. |
|
Ohio |
|
6099 |
|
20-2310420 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Buckeye Check Cashing of Michigan, Inc. |
|
Delaware |
|
6099 |
|
20-1286211 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Buckeye Check Cashing of Missouri, LLC |
|
Delaware |
|
6099 |
|
20-4887280 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Buckeye Check Cashing of Texas, LLC |
|
Delaware |
|
6099 |
|
26-0359272 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Buckeye Check Cashing of Utah, Inc. |
|
Ohio |
|
6099 |
|
20-1430197 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Buckeye Check Cashing of Virginia, Inc. |
|
Ohio |
|
6099 |
|
41-2032804 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Buckeye Check Cashing, Inc. |
|
Ohio |
|
6099 |
|
31-1195792 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Buckeye Commercial Check Cashing of Florida, LLC |
|
Delaware |
|
6099 |
|
26-0270715 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Buckeye Credit Solutions, LLC |
|
Delaware |
|
6099 |
|
26-3293792 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Buckeye Lending Solutions of Arizona, LLC |
|
Delaware |
|
6099 |
|
27-0869281 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Buckeye Lending Solutions, LLC |
|
Delaware |
|
6099 |
|
26-3042009 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Buckeye Small Loans, LLC |
|
Delaware |
|
6099 |
|
26-2643235 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Buckeye Title Loans of California, LLC |
|
Delaware |
|
6099 |
|
20-8106621 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Buckeye Title Loans of Kansas, LLC |
|
Delaware |
|
6099 |
|
20-5566344 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Buckeye Title Loans of Missouri, LLC |
|
Delaware |
|
6099 |
|
20-4950168 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Buckeye Title Loans of Utah, LLC |
|
Delaware |
|
6099 |
|
20-4677945 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Buckeye Title Loans of Virginia, LLC |
|
Delaware |
|
6099 |
|
20-4678002 |
|
7001 Post Road, Suite 200 |
Buckeye Title Loans, Inc. |
|
Ohio |
|
6099 |
|
20-3771897 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
California Check Cashing Stores, LLC |
|
Delaware |
|
6099 |
|
20-5371754 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Cash Central of Alabama, LLC |
|
Alabama |
|
6099 |
|
20-3075331 |
|
84 East 2400 North North Logan, Utah 84341 |
Cash Central of Alaska, LLC |
|
Alaska |
|
6099 |
|
20-3052199 |
|
84 East 2400 North North Logan, Utah 84341 |
Cash Central of California, LLC |
|
California |
|
6099 |
|
20-3133378 |
|
84 East 2400 North North Logan, Utah 84341 |
Cash Central of Delaware, LLC |
|
Delaware |
|
6099 |
|
20-3224184 |
|
84 East 2400 North North Logan, Utah 84341 |
Cash Central of Hawaii, LLC |
|
Hawaii |
|
6099 |
|
20-3515396 |
|
84 East 2400 North North Logan, Utah 84341 |
Cash Central of Idaho, LLC |
|
Idaho |
|
6099 |
|
20-3133324 |
|
84 East 2400 North North Logan, Utah 84341 |
Cash Central of Kansas, LLC |
|
Kansas |
|
6099 |
|
20-3052220 |
|
84 East 2400 North North Logan, Utah 84341 |
Cash Central of Minnesota, LLC |
|
Minnesota |
|
6099 |
|
20-3390170 |
|
84 East 2400 North North Logan, Utah 84341 |
Cash Central of Missouri, LLC |
|
Missouri |
|
6099 |
|
20-3071030 |
|
84 East 2400 North North Logan, Utah 84341 |
Cash Central of Nevada, LLC |
|
Nevada |
|
6099 |
|
20-3416474 |
|
84 East 2400 North North Logan, Utah 84341 |
Cash Central of North Dakota, LLC |
|
North Dakota |
|
6099 |
|
20-3279738 |
|
84 East 2400 North North Logan, Utah 84341 |
Cash Central of South Dakota, LLC |
|
South Dakota |
|
6099 |
|
20-3096791 |
|
84 East 2400 North North Logan, Utah 84341 |
Cash Central of Texas, LLC |
|
Texas |
|
6099 |
|
20-4998356 |
|
84 East 2400 North North Logan, Utah 84341 |
Cash Central of Utah, LLC |
|
Utah |
|
6099 |
|
20-3052693 |
|
84 East 2400 North North Logan, Utah 84341 |
Cash Central of Washington, LLC |
|
Washington |
|
6099 |
|
20-3036545 |
|
84 East 2400 North North Logan, Utah 84341 |
Cash Central of Wyoming, LLC |
|
Wyoming |
|
6099 |
|
20-3297792 |
|
84 East 2400 North North Logan, Utah 84341 |
Cash Central of Wisconsin, LLC |
|
Wisconsin |
|
6099 |
|
20-3036580 |
|
84 East 2400 North North Logan, Utah 84341 |
CCCIS, Inc. |
|
California |
|
6099 |
|
20-4040950 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
CCCS Corporate Holdings, Inc. |
|
Delaware |
|
6099 |
|
20-5491360 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
CCCS Holdings, LLC |
|
Delaware |
|
6099 |
|
20-5371704 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
CheckSmart Financial Company |
|
Delaware |
|
6099 |
|
20-4882314 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Checksmart Financial Holdings Corp. |
|
Delaware |
|
6099 |
|
20-4882400 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
CheckSmart Financial, LLC |
|
Delaware |
|
6099 |
|
20-8514088 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Checksmart Money Order Services, Inc. |
|
Delaware |
|
6099 |
|
26-4295132 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Community Choice Family Insurance Agency, LLC |
|
Delaware |
|
6099 |
|
45-3199757 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
CS-Arizona, LLC |
|
Delaware |
|
6099 |
|
27-2563500 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Direct Financial Solutions, LLC |
|
Delaware |
|
6099 |
|
20-3052679 |
|
84 East 2400 North North Logan, Utah 84341 |
Express Payroll Advance of Ohio, Inc. |
|
Ohio |
|
6099 |
|
20-2918150 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Fast Cash, Inc. |
|
California |
|
6099 |
|
77-0037914 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
First Virginia Credit Solutions, LLC |
|
Delaware |
|
6099 |
|
27-1097140 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
First Virginia Financial Services, LLC |
|
Delaware |
|
6099 |
|
26-4560641 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Hoosier Check Cashing of Ohio, Ltd |
|
Ohio |
|
6099 |
|
35-1965352 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Insight Capital, LLC |
|
Alabama |
|
6099 |
|
61-1455384 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
National Tax Lending, LLC |
|
Delaware |
|
6099 |
|
27-4286061 |
|
7001 Post Road, Suite 200 Dublin, Ohio 43016 |
Reliant Software, Inc. |
|
Utah |
|
6099 |
|
20-5934040 |
|
84 East 2400 North North Logan, Utah 84341 |
The information in this prospectus is not complete and may be changed. We may not sell securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any state where the offer or sale is not permitted.
Subject to completion, dated June 22, 2012.
PROSPECTUS
Community Choice Financial Inc.
OFFER TO EXCHANGE
Up to $395,000,000 aggregate principal amount of its 10.75% Senior Secured Notes due 2019
registered under the Securities Act of 1933 for
any and all outstanding 10.75% Senior Secured Notes due 2019
that were issued on April 29, 2011
· We are offering to exchange new registered 10.75% senior secured notes due 2019, which we refer to herein as the exchange notes, for all of our outstanding unregistered 10.75% senior secured notes due 2019 that were issued on April 29, 2011, which we refer to herein as the original notes. We refer herein to the exchange notes and the original notes, collectively, as the notes.
· The exchange offer expires at 5:00 p.m., New York City time, on , 2012, unless extended.
· The exchange offer is subject to customary conditions that we may waive.
· All outstanding original notes that are validly tendered and not validly withdrawn prior to the expiration of the exchange offer will be exchanged for the exchange notes.
· Tenders of outstanding notes may be withdrawn at any time before 5:00 p.m., New York City time, on the expiration date of the exchange offer.
· The exchange of original notes for exchange notes will not be a taxable exchange for U.S. federal income tax purposes.
· We will not receive any proceeds from the exchange offer.
· The terms of the exchange notes to be issued are substantially identical to the terms of the original notes, except that the exchange notes will not have transfer restrictions and you will not have registration rights.
· If you fail to tender your original notes, you will continue to hold unregistered securities and it may be difficult for you to transfer them.
· There is no established trading market for the exchange notes, and we do not intend to apply for listing of the exchange notes on any securities exchange or market quotation system.
We are an emerging growth company and are eligible for reduced reporting requirements.
See Risk Factors beginning on page 20 for a discussion of matters you should consider before you participate in the exchange offer.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is , 2012.
1 | |
20 | |
50 | |
51 | |
52 | |
52 | |
53 | |
54 | |
62 | |
65 | |
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
69 |
94 | |
118 | |
145 | |
147 | |
149 | |
151 | |
236 | |
239 | |
245 | |
245 | |
245 | |
245 | |
F-1 |
No dealer, salesperson or other individual has been authorized to give any information or to make any representations not contained in this prospectus in connection with the exchange offer. If given or made, such information or representations must not be relied upon as having been authorized by us. Neither the delivery of this prospectus nor any sale made hereunder shall, under any circumstances, create any implications that there has not been any change in the facts set forth in this prosecutes or in our affairs since the date hereof.
Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. The letter of transmittal accompanying this prospectus states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an underwriter within the meaning of the Securities Act of 1933, as amended, or the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of the exchange notes received in exchange for original notes where such original notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. We have agreed that, for a period of 180 days after the expiration of the exchange offer, we will make this prospectus available to any broker-dealer for use in connection with any such resales. See Plan of Distribution.
NOTICE TO INVESTORS
This prospectus contains summaries of the terms of certain agreements that we believe to be accurate in all material respects. However, we refer you to the actual agreements for complete information relating to those agreements. All summaries of such agreements contained in this prospectus or incorporated by reference into this prospectus are qualified in their entirety by this reference. To the extent that any such agreement is attached as an exhibit to this registration statement, we will make a copy of such agreement available to you upon request. We will provide this information to you at no charge upon written or oral request directed to Investor Relations, 7001 Post Road, Suite 200, Dublin, Ohio 43016 (telephone number (614) 798-5900). In order to ensure timely delivery of this information, any request should be made by , 2012, five business days prior to the expiration date of the exchange offer.
The notes will be available in book-entry form only. The notes exchanged pursuant to this prospectus will be issued in the form of one or more global certificates, which will be deposited with, or on behalf of, The Depository Trust Company, or DTC, and registered in its name or in the name of Cede & Co., its nominee. Beneficial interests in the global certificates will be shown on, and transfer of the global certificates will be effected only through, records maintained by DTC and its participants. After the initial issuance of the global certificates, notes in certificated form will be issued in exchange for global certificates only in the limited circumstances set forth in the indenture, dated as of April 29, 2011, or the Indenture, governing the notes. See Book-Entry, Delivery and Form. U.S. Bank National Association, as trustee under the Indenture or as collateral agent under the Indenture, credit agreement governing our revolving credit facility and the collateral agreement, has not reviewed this prospectus and has made no representations as to the information contained herein.
INDUSTRY AND MARKET DATA AND PERFORMANCE DATA
This prospectus includes information regarding the retail financial services industry and various markets in which we compete. When we refer to our position in the industry, such market position is based on the number of retail stores we operate and not on our revenues or volumes. Where possible, this information is derived from third-party sources that we believe are reliable, including the Federal Deposit Insurance Corporation, or FDIC, Mercator Advisory Group, or Mercator, Stephens Inc., or Stephens, the Federal Reserve Bank of New York, the National Bureau of Economic Research, or NBER, Bretton Woods, Inc., or Bretton Woods, and Financial Service Centers of America, Inc., or FiSCA. In other cases, this information is based on estimates made by our management, based on their industry and market knowledge and information from third-party sources. However, this data is subject to change and cannot be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any statistical survey. As a result, you should be aware that market share, ranking and other similar data set forth herein, and estimates and beliefs based on such data, may not be reliable.
This summary highlights information contained elsewhere in this prospectus. This summary may not contain all of the information that may be important to you. You should read the entire prospectus and the information incorporated by reference in this prospectus carefully, including the historical consolidated financial statements and pro forma consolidated statements of operations and the related notes included elsewhere in this prospectus, before you decide to participate in the exchange offer. This prospectus contains forward-looking statements, which involve risks and uncertainties. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of certain factors, including those discussed in the Risk Factors and other sections of this prospectus. When we present historical financial information on a pro forma basis, we provide such information after giving effect to each of the acquisition of CCCS Corporate Holdings, Inc., which we completed in April 2011, and the acquisition of 10 stores in Illinois, which we completed in March 2011, and to each of the offering of our original notes and the establishment of our $40 million revolving credit facility, or our Revolving Credit Facility, each of which we completed in April 2011, as described in more detail under Unaudited Pro Forma Consolidated Financial Information. In this prospectus, unless the context requires otherwise, references to CCFI, Issuer, we, our, us or the Company refer to Community Choice Financial Inc. and to our predecessor, CheckSmart Financial Holdings Corp., as the context requires. Unless indicated otherwise, all data in this prospectus is presented as of March 31, 2012.
Overview
We are a leading retailer of alternative financial services to unbanked and underbanked consumers through a network of 435 retail storefronts across 14 states. We focus on providing a wide range of convenient consumer financial products and services to help customers manage their day-to-day financial needs, including short-term consumer loans, medium-term loans, title loans, check cashing, prepaid debit cards, money transfers, bill payments and money orders. Although the majority of our customers have banking relationships, we believe that our customers use our financial services because they are convenient, easy to understand, and in many instances, more affordable than available alternatives.
We strive to provide customers with unparalleled customer service in a safe, clean and welcoming environment. Our stores are located in highly visible, accessible locations that allow customers convenient and immediate access to our services. Our professional work environment combines high employee performance standards, incentive-based pay and a wide array of training programs to incentivize our employees to provide superior customer service. We believe that this approach has enabled us to build strong customer loyalty, putting us in a position to expand and continue to capitalize on our innovative product offerings. As a result of our focus on store selection and design and our efforts to provide consistent, high-quality customer service, we have achieved per store revenue levels that we believe substantially exceed our publicly traded peers. See Certain Financial Measures and Other Information for an explanation of how we calculate these metrics.
We serve the large and growing market of individuals who have limited or no access to traditional sources of consumer credit and financial services. A study conducted by the FDIC published in 2009 indicates 25.6% of U.S. households are either unbanked or underbanked, representing approximately 60 million adults. As traditional financial institutions increase fees for consumer services, such as checking accounts and debit cards, and tighten credit standards as a result of economic and other market driven developments, consumers have looked elsewhere for less expensive and more convenient alternatives to meet their financial needs. According to a recent Federal Reserve Bank of New York report, total consumer credit outstanding has declined over $1.4 trillion since its peak in the third quarter of 2008. This contraction in the supply of consumer credit has resulted in significant unmet demand for consumer loan products.
For the year ended December 31, 2011, we generated $306.9 million in revenue and $16.9 million in net income. For the three months ended March 31, 2012, we generated $85.9 million in revenue and $7.4 million in net income. As of March 31, 2012, we had $528.3 million of total assets and $68.8 million of stockholders equity.
Our measurement of comparable store sales growth as of December 31, 2011 includes stores which we operated for the full year of 2011 and which were open for the full year of 2010. As of December 31, 2011 we had 280 stores included in this measurement. These stores achieved comparable sales growth of 7.3% for the year ended December 31, 2011 as compared to the year ended December 31, 2010. Our measurement of sales growth as of March 31, 2012 similarly includes stores open for the twelve month periods ended March 31, 2012 and 2011 and was 8.3%.
Products and Services
We offer several convenient, fee-based services to meet the needs of our customers, including short-term consumer loans, medium-term loans, title loans, check cashing, prepaid debit cards, money transfers, bill payments, money orders, international and domestic prepaid phone cards, tax preparation, auto insurance, motor vehicle registration services and other ancillary retail financial services. The following chart reflects the major categories of services that we currently offer and the revenues from these services for the year ended December 31, 2011:
Revenue by Product Group |
Consumer Loans. We offer a variety of consumer loan products and services. We believe that our customers find our consumer loan products and services to be convenient, transparent and lower-cost alternatives to other, more expensive short-term options, such as incurring returned item fees, credit card late fees, overdraft or overdraft protection fees, utility late payment, disconnect and reconnect fees and other charges imposed by other financing sources when they do not have sufficient funds to cover unexpected expenses or other needs. Our customers often have limited access to more traditional sources of consumer credit, such as credit cards.
The specific consumer loan products we offer vary by location, but generally include the following types of loans:
· Short-Term Consumer Loans. One of our primary products is a short-term, small-denomination consumer loan whereby a customer receives immediate cash, typically in exchange for a post-dated personal check or a pre-authorized debit from his or her bank account. We offer this product in 367 of our 435 stores. As the lender, we agree to defer deposit of the check or initiation of the debit from the customers bank account until the mutually agreed upon due date, which typically falls on the customers next payday. Principal amounts of our short-term consumer loans can be up to $1,000 and averaged approximately $426 during 2011. Fees charged vary from state to state, generally ranging from $8 to $15 per $100 borrowed. Our short-term consumer loan products are offered in the following 13 of the 14 states in which we operate
stores: Alabama, California, Florida, Illinois, Indiana, Kansas, Kentucky, Michigan, Missouri, Ohio, Oregon, Utah and Virginia.
The following table presents key operating data for our short-term consumer loan products.
|
|
Year ended |
|
Twelve-months ended |
| ||
Loan volume (in thousands) |
|
$ |
1,543,310 |
|
$ |
1,637,360 |
|
Number of loans (in thousands) |
|
3,625 |
|
4,068 |
| ||
Average originated loan size |
|
$ |
425.72 |
|
$ |
402.54 |
|
Average originated loan fee |
|
$ |
46.37 |
|
$ |
44.14 |
|
Loan loss provision as a percentage of loan volume |
|
2.6 |
% |
2.6 |
% |
· Medium-Term Loans. In meeting our customers financial needs, we also offer a range of medium-term loans. Principal amounts of medium-term loans typically range from $100 to $2,501 and have maturities between three months and 24 months. These loans vary in their structure in order to conform to the specific regulatory requirements of the various jurisdictions in which they are offered. The loans may have an installment repayment plan or provide for a line of credit with periodic monthly payments. We offer these loans in 164 of our 435 stores in the following three of the 14 states in which we operate stores: California, Illinois and Virginia.
The following table presents key operating data for our medium-term loan products.
|
|
As of |
|
As of |
| ||
Principal outstanding(1) (in thousands) |
|
$ |
12,174 |
|
$ |
11,926 |
|
Number of loans outstanding |
|
20,818 |
|
20,699 |
| ||
Average principal outstanding |
|
$ |
584.79 |
|
$ |
576,18 |
|
Average monthly percentage rate |
|
19.2 |
% |
18.3 |
% | ||
Allowance as a percentage of finance receivable |
|
10.6 |
% |
13.3 |
% |
(1) Loan participations are grouped with medium-term loans in our consolidated financial statements included elsewhere in this prospectus, but excluded from this calculation.
· Title Loans. Title loans are asset-based loans whereby the customer obtains cash using a vehicle as collateral. We offer this product in 243 of our 435 stores. The amount of funds made available is based on the vehicles value, and our policies typically authorize loans based on the wholesale value of the vehicle in exchange for a first priority lien on the customers otherwise unencumbered vehicle title. The customer receives the benefit of immediate cash and retains possession of the vehicle while the loan is outstanding. Our title loans are offered in the following eight of the 14 states in which we operate stores: Alabama, Arizona, California, Illinois, Kansas, Missouri, Utah and Virginia, and we intend to introduce title loans in additional states in the future.
The following table presents key operating data for our title loan products.
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As of |
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As of |
| ||
Principal outstanding (in thousands) |
|
$ |
17,334 |
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$ |
14,149 |
|
Number of loans outstanding |
|
15,283 |
|
13,822 |
| ||
Average principal outstanding |
|
$ |
1,134.20 |
|
$ |
1,023.67 |
|
Average monthly percentage rate |
|
13.3 |
% |
12.5 |
% | ||
Allowance as a percentage of finance receivable |
|
5.3 |
% |
5.8 |
% |
For the year ended December 31, 2011, short-term consumer loans, medium-term loans, and title loans generated 53.2%, 4.6%, and 6.1%, respectively, of our revenue. For the three-months ended March 31, 2012, short-term consumer loans, medium-term loans, and title loans generated 49.1%, 7.4%, and 7.0%, respectively, of our revenue.
Check Cashing. We offer check cashing services in 409 of our 435 stores. Prior to cashing a check, our customer service representatives verify the customers identification and enter the payees social security number and the payors bank account information in our internal, proprietary databases, which match these fields to prior transactions in order to mitigate our risk of loss. Although we have established guidelines for approving check cashing transactions, we do not impose maximum check size restrictions. Subject to appropriate approvals, we accept all forms of checks, including payroll, government, tax refund, insurance, money order, cashiers and personal checks. Our check cashing fees vary depending upon the amount and type of check cashed, applicable state regulations and local market conditions. Our check cashing services are offered in the following 13 of the 14 states in which we operate stores: Alabama, Arizona, California, Florida, Indiana, Kansas, Kentucky, Michigan, Missouri, Ohio, Oregon, Utah and Virginia.
The following table presents key operating data for our check cashing business.
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Year ended |
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Twelve-months Ended |
| ||
Face amount of checks cashed (in thousands) |
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$ |
2,163,276 |
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$ |
2,404,207 |
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Number of checks cashed (in thousands) |
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4,869 |
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5,427 |
| ||
Face amount of average check |
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$ |
444.26 |
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$ |
442.99 |
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Average fee per check |
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$ |
14.95 |
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$ |
14.36 |
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Fee as a percentage of average check size |
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3.4 |
% |
3.2 |
% | ||
Returned check expense (% of face amount) |
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0.2 |
% |
0.2 |
% |
Check cashing accounted for 23.7% and 23.5% of our revenue for the year ended December 31, 2011 and the three-month period ended March 31, 2012, respectively.
Prepaid Debit Card Services. One of our fastest growing businesses is the sale and servicing of prepaid debit cards, which we offer in 430 of our 435 stores. As an agent for a third-party debit card provider, we offer access to reloadable prepaid debit cards with a variety of enhanced features that provide our customers with a convenient and secure method of accessing their funds in a manner that meets their individual needs. The cards are provided by Insight Card Services LLC, successor to Insight LLC, or Insight, and our stores serve as distribution points where customers can purchase cards as well as load funds onto and withdraw funds from their cards. Customers can elect to receive check cashing proceeds on their cards without having to worry about security risks associated with carrying cash. The cards can be used at most places where MasterCard® or Visa® branded debit cards are accepted. These cards offer our customers the ability to direct deposit all or a portion of their payroll checks onto their cards, receive real-time wireless alerts for transactions and account balances, and utilize in-store and online bill payment services. In addition to these basic features available on all of the cards offered in our stores, we offer two additional card options with enhanced features. One of the enhanced feature cards provides, at the customers option, a lower-cost overdraft protection option compared to the typical overdraft fees charged by traditional banks. The other enhanced card option, for which marketing was discontinued in May 2012, allowed qualifying customers to receive loan proceeds from a state-licensed third-party lender directly onto their cards. This feature was offered in Arizona and certain stores in Ohio.
Since we began offering Insight cards in April 2010, we have experienced substantial growth in our prepaid debit card business. Active Insight accounts, which we define as accounts reflecting any activity during the preceding 90 days, had grown to 130,305 as of March 31, 2012, an increase of over 101.1% from December 31, 2010. We are paid certain agent fees from Insight that are based on monthly card fees, overdraft charges, interchange fees and ATM access fees. In addition, we earn fees from the sale of prepaid debit cards and are required to pre-fund certain card activity when customers load funds onto their cards. Our pre-funding obligation arises as a result of the time lag between when customers
load funds onto their cards in our stores and when funds are subsequently remitted to the banks that issue the cards. Until recently, we were required to pre-fund amounts in order to fund our obligation to purchase loan participations when our Arizona customers receive loan proceeds from a third-party lender onto their cards. We continue to prefund negative card balances our customers may experience. This obligation ended with the discontinuation of our third-party loan product in May 2012. The following table presents key operating data for our prepaid debit card services business as of December 31, 2011:
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As of |
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As of |
|
Active card holders in network (in thousands) |
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141.0 |
|
130.3 |
|
Active direct deposit customers (in thousands) |
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33.2 |
|
37.2 |
|
Prepaid debit card services accounted for 6.5% and 5.9% of our revenue for the year ended December 31, 2011 and the three-month period ended March 31, 2012, respectively.
Other Products and Services. Introducing new products into our markets has historically created profitable revenue expansion. Other products and services that we currently offer through our stores include money transfer, bill payment, international, prepaid phone cards and a pilot auto insurance program. These other products and services provide revenues and help drive additional traffic to our stores, resulting in increased volume across all of our product offerings. Other products and services accounted for 5.9% and 7.1% of our revenue for the year ended December 31, 2011 and the three-month period ended March 31, 2012, respectively.
Historical Acquisitions
California Acquisition. On April 29, 2011, we acquired CCCS, an alternative financial services business with similar product offerings as Checksmart Financial Holdings Corp., or CheckSmart. CheckSmart, together with CCCS and certain other parties, executed an agreement and plan of merger, under which CCFI, a newly formed holding company, acquired all outstanding shares of both CheckSmart and CCCS. We refer to this transaction as the California Acquisition. In connection with consummating the California Acquisition, we also issued $395 million in aggregate principal amount of our 10.75% senior secured notes due 2019, which we refer to as our original notes, and entered into a $40 million senior secured revolving credit facility, which we refer to as our Revolving Credit Facility.
Other Acquisitions. Since August 2009, we have also acquired:
· 10 stores in Illinois, which we acquired on March 21, 2011 in an asset purchase transaction. We refer to this transaction as the Illinois Acquisition.
· 19 stores in Alabama, which we acquired in March 2010. We refer to this transaction as the Alabama Acquisition.
· Eight stores in Michigan, which we acquired in August 2009. We refer to this transaction as the Michigan Acquisition.
Following these acquisitions, we have successfully integrated our expanded product offerings and retailing strategies at acquired stores. The stores acquired in the Alabama and Michigan Acquisitions, both owned and operated for the full year of 2011, experienced revenue growth in excess of 26% in 2011. We have invested significant resources in building a scalable company-wide platform in areas such as collections, call center operations, information technology, legal, compliance and accounting in order to quickly and successfully integrate acquired stores into our existing business.
Recent Acquisitions and Investments
Insight Investment. We acquired a 22.5% stake in Insight Holding Company LLC, or Insight Holding, in November 2011. Insight Holding is the parent company of Insight Cards Services LLC, the program manager for the Insight Card that is offered through our retail locations.
DFS Acquisition. On April 1, 2012 we acquired all of the equity interests of Direct Financial Solutions, LLC and its subsidiaries, or DFS, as well as three other affiliated entities, Direct Financial Solutions of UK Limited and its subsidiary Cash Central UK Limited, or DFS UK, DFS Direct Financial Solutions of Canada, Inc., or DFS Canada, and Reliant Software Inc., all of which we collectively refer to as the DFS Companies. The purchase price was approximately $22 million, subject to a post-closing working capital adjustment.
DFS offers short-term loans to consumers via the Internet under a state-licensed model in compliance with the applicable laws of the jurisdiction of its customers.
Currently, DFS offers loans, under a state-law based model, to residents of Alabama, Alaska, California, Delaware, Hawaii, Idaho, Kansas, Louisiana, Minnesota, Missouri, Nevada, North Dakota, Rhode Island, South Dakota, Utah, Washington, Wyoming, and Wisconsin, and operates as a Credit Access Business in Texas, through which it offers loans originated by an unaffiliated, third-party lender. In addition, DFS UK offers loans in the United Kingdom. DFS Canada does not currently offer any loans.
As of April 1, 2012, DFS had 76 employees, including part-time employees, primarily located at DFSs corporate headquarters in North Logan, Utah, which manages the loan underwriting, collections, information technology, and other aspects of the DFS business. Unless stated otherwise, information in this prospectus regarding our business does not give effect to the acquisition of DFS.
Through our acquisition of DFS, we gain access to a scalable Internet-based revenue opportunity. We believe this additional retail channel will enable us to efficiently reach consumers not fully served by our existing retail locations. Our objective will be to accelerate the growth of DFS through incremental capital, application of retailing strategies and an expansion of its product offerings.
For the year ended December 31, 2011, based on DFSs unaudited financial information provided to us by the seller, DFS reported revenues of approximately $22.7 million.
INDUSTRY OVERVIEW
We operate in a segment of the financial services industry that serves unbanked and underbanked consumers in need of convenient and immediate access to cash and other financial products and services, often referred to as alternative financial services. Our industry provides services to an estimated 60 million unbanked and underbanked consumers in the United States. Products and services offered by this industry segment include various types of short-term loans (including payday loans, title loans, small installment loans, internet loans and pawn loans), medium-term loans, check cashing, prepaid card products, rent-to-own products, bill payment services, tax preparation, money orders and money transfers. Consumers who use these services are often underserved by banks and other traditional financial institutions and referred to as unbanked or underbanked consumers.
We believe that consumers seek our industrys services for numerous reasons, including because they often:
· prefer and trust the simplicity, transparency and convenience of our products;
· may have a dislike or distrust of banks due to confusing and complicated fee structures that are not uncommon for traditional bank products;
· require access to financial services outside of normal banking hours;
· have an immediate need for cash for sudden financial challenges and unexpected expenses;
· have been rejected for or are unable to access traditional banking or other credit services;
· seek an alternative to the high cost of bank overdraft fees, credit card and other late payment fees and utility late payment, disconnect and reconnection fees; and
· wish to avoid potential negative credit consequences of missed payments with traditional creditors.
Demand in our industry has been fueled by several demographic and socioeconomic trends, including an overall increase in the population and stagnant to declining growth in the household income for working-class individuals. In addition, many banks have reduced or eliminated services that working-class consumers require, due to the higher costs associated with serving these consumers and increased regulatory and compliance costs. The necessity for our products was highlighted by a recent paper from the NBER, which found that half of the Americans surveyed reported that it is unlikely that they would be able to gather $2,000 to cover a financial emergency, even if given a month to obtain funds. As a result of these trends, a significant number of retailers in other industries have begun to offer financial services to these consumers. The providers of these services are fragmented and range from specialty finance stores to retail stores in other industries that offer ancillary financial services.
We believe that the markets in which we operate are highly fragmented. Stephens estimates that short-term consumer lenders generated approximately $40.0 billion of domestic transaction volume in 2010 from approximately 19,500 storefronts and 150 online lenders. According to Stephens, only seven industry participants have more than 500 storefront locations, and the largest 15 operators account for less than 51% of the storefronts in the United States. FiSCA estimated that in 2007 there were approximately 13,000 check-cashing and other fee-based financial service locations in the United States that cashed approximately $58.0 billion in aggregate face amount of checks.
We anticipate consolidation within the industry will continue as a result of numerous factors, including:
· economies of scale available to larger operators;
· adoption of technology to better serve customers and control large store networks;
· increased licensing, zoning and other regulatory requirements; and
· the inability of smaller operators to form the alliances necessary to deliver new products and adapt to changes in the regulatory environment.
The prepaid debit card space is one of the most rapidly growing segments of our industry. Mercators analysis of the prepaid debit card industry indicates that $28.6 billion was loaded onto general-purpose reloadable cards during 2009, a 47% growth rate from 2008, and estimates that the total general-purpose reloadable card market will grow at a compound annual growth rate of 63% from 2007 to 2013, reaching an estimated $201.9 billion in load volume by 2013. A March 2011 study conducted by Bretton Woods concluded that the opening of reloadable prepaid debit card accounts may surpass the opening of new checking accounts in the coming years as a result of the fact that prepaid debit cards, particularly when combined with direct deposit, will in many instances be less expensive for consumers than traditional checking accounts.
We take an active leadership role in numerous trade organizations that represent our industrys interests and promote best practices within the industry, including the Community Financial Services Association of America, FiSCA, the National Branded Prepaid Card Association and the American Association of Responsible Auto Lenders.
OUR ORGANIZATIONAL STRUCTURE
The following chart illustrates the organizational structure of our wholly-owned subsidiaries:
________________________________________
(1) One of our subsidiaries, Insight Capital, LLC, is the borrower under a revolving credit facility, which we refer to as the Alabama Facility. See Description of Certain Indebtedness.
OUR LARGEST SHAREHOLDER
Founded in 2004, Diamond Castle is a leading private equity investment firm with over $1.85 billion of capital under management. The Diamond Castle partners have an established history of successful investing at DLJ Merchant Banking Partners dating back to the early 1990s. The firm invests across a range of industries, with particular focus on the financial services, energy and power, and healthcare sectors. The Community Choice Financial investment was led by H. Eugene Lockhart, the former Chairman of Financial Institutions at Diamond Castle, President of the Global Retail Bank at Bank of America, CEO of MasterCard International and Chairman of NetSpend Corporation. In addition to Community Choice Financial, Diamond Castles current portfolio of companies includes Alterra Capital, EverBank Financial, Beacon Health Strategies, Managed Health Care Associates, KDC Solar and Professional Directional. Diamond Castle beneficially owns approximately 60.2% of our outstanding common shares.
CORPORATE INFORMATION
Community Choice Financial Inc. was formed on April 6, 2011 under the laws of the State of Ohio by the shareholders of CheckSmart Financial Holdings Inc. to be the holding company of CheckSmart Financial Holdings Corp. and to acquire the ownership interests of CCCS Corporate Holdings, Inc. through a merger. CCFI acquired CCCS through a merger on April 29, 2011. As of March 31, 2012, we owned and operated 435 stores in 14 states. We are primarily engaged in the business of providing consumer retail financial services and have grown from 179 stores in April 2006, when Diamond Castle purchased a majority interest in CheckSmart.
Our corporate offices are located at 7001 Post Road, Suite 200, Dublin, Ohio 43016. Our telephone number is (614) 798-5900 and our website is located at www.ccfi.com. Information appearing on or accessible through our website is not part of this prospectus.
SUMMARY OF THE EXCHANGE OFFER
On April 29, 2011, we issued the original notes in transactions exempt from registration under the Securities Act. In connection with the offering of the original notes, we entered into a registration rights agreement, dated as of April 29, 2011, with the initial purchasers of the original notes, or the registration rights agreement. In the registration rights agreement, we agreed to offer the exchange notes, which will be registered under the Securities Act, in exchange for the original notes. The exchange offer is intended to satisfy our obligations under the registration rights agreement. We also agreed to deliver this prospectus to the holders of the original notes. You should read the discussions under the headings Prospectus SummarySummary of the Terms of the Exchange Notes and Description of the Exchange Notes for information regarding the exchange notes.
The Exchange Offer |
This is an offer to exchange $2,000 and integral multiples of $1,000 in principal amount of the exchange notes for each $2,000 and integral multiples of $1,000 in principal amount of original notes. The exchange notes are substantially identical to the original notes, except that the exchange notes generally will be freely transferable. Based upon interpretations by the staff of the Securities and Exchange Commission, or the SEC, set forth in no actions letters issued to unrelated third parties, we believe that you can transfer the exchange notes without complying with the registration and prospectus delivery provisions of the Securities Act if you: | |
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· |
acquire the exchange notes in the ordinary course of your business; |
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are not and do not intend to become engaged in a distribution of the exchange notes; |
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are not an affiliate (within the meaning of the Securities Act) of ours; |
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are not a broker-dealer (within the meaning of the Securities Act) that acquired the original notes from us or our affiliates; and |
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are not a broker-dealer (within the meaning of the Securities Act) that acquired the original notes in a transaction as part of its market-making or other trading activities. |
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If any of these conditions are not satisfied and you transfer any exchange note without delivering a proper prospectus or without qualifying for a registration exemption, you may incur liability under the Securities Act. See The Exchange OfferPurpose of the Exchange Offer. | |
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Registration Rights Agreement |
Under the registration rights agreement, we have agreed to use our reasonable best efforts to consummate the exchange offer or cause the original notes to be registered under the Securities Act to permit resales. If we are not in compliance with our obligations under the registration rights agreement, liquidated damages will accrue on the original notes in addition to the interest that otherwise is due on the original notes. If the exchange offer is completed on the terms and within the time period contemplated by this prospectus, no liquidated damages will be payable on the original notes. The exchange notes will not contain any provisions regarding the payment of liquidated damages. See The Exchange OfferLiquidated Damages. | |
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Minimum Condition |
The exchange offer is not conditioned on any minimum aggregate principal amount of original notes being tendered in the exchange offer. | |
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Expiration Date |
The exchange offer will expire at 5:00 p.m., New York City time, on , 2012, unless we extend it. | |
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Exchange Date |
We will accept original notes for exchange at the time when all conditions of the exchange offer are satisfied or waived. We will deliver the exchange notes promptly after we accept the original notes. | |
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Conditions to the Exchange Offer |
Our obligation to complete the exchange offer is subject to certain conditions. See The Exchange OfferConditions to the Exchange Offer. We reserve the right to |
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terminate or amend the exchange offer at any time prior to the expiration date upon the occurrence of certain specified events. |
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Withdrawal Rights |
You may withdraw the tender of your original notes at any time before the expiration of the exchange offer on the expiration date. Any original notes not accepted for any reason will be returned to you without expense as promptly as practicable after the expiration or termination of the exchange offer. |
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Procedures for Tendering Original Notes |
See The Exchange OfferHow to Tender. |
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United States Federal Income Tax Consequences |
The exchange of the original notes for the exchange notes will not be a taxable exchange for U.S. federal income tax purposes, and holders will not recognize any taxable gain or loss as a result of such exchange. See Certain United States Federal Income Tax Considerations. |
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Effect on Holders of Original Notes |
If the exchange offer is completed on the terms and within the period contemplated by this prospectus, holders of original notes will have no further registration or other rights under the registration rights agreement, except under limited circumstances. See The Exchange OfferOther. |
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Holders of original notes who do not tender their original notes will continue to hold those original notes. All untendered, and tendered but unaccepted original notes, will continue to be subject to the transfer restrictions provided for in the original notes and the Indenture. To the extent that original notes are tendered and accepted in the exchange offer, the trading market, if any, for the original notes could be adversely affected. See Risk FactorsRisks Associated with the Exchange OfferYou may not be able to sell your original notes if you do not exchange them for registered exchange notes in the exchange offer, Risk FactorsYour ability to sell your original notes may be significantly more limited and the price at which you may be able to sell your original notes may be significantly lower if you do not exchange them for registered exchange notes in the exchange offer and The Exchange OfferOther. |
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Appraisal Rights |
Holders of original notes do not have appraisal or dissenters rights under applicable law or the Indenture. See The Exchange OfferTerms of the Exchange Offer. |
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Use of Proceeds |
We will not receive any proceeds from the issuance of the exchange notes pursuant to the exchange offer. |
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Exchange Agent |
U.S. Bank National Association, the trustee under the Indenture, is serving as the exchange agent in connection with this exchange offer. |
SUMMARY OF THE TERMS OF THE EXCHANGE NOTES
Issuer |
Community Choice Financial Inc. | |
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Exchange Notes |
$395,000,000 in aggregate principal amount of 10.75% Senior Secured Notes due 2019. | |
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Maturity Date |
May 1, 2019. | |
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Interest |
10.75% per annum, payable semi-annually on May 1 and November 1. | |
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Guarantees |
The exchange notes will be guaranteed, jointly and severally, on a senior secured basis, by each of our restricted subsidiaries as of April 29, 2011 (the date we issued the original notes) and any subsequent restricted subsidiaries that guarantee our indebtedness or indebtedness of any subsidiary guarantor. See Description of the Exchange NotesNote Guarantees. | |
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Collateral |
The exchange notes and the guarantees will be secured by a first priority lien on substantially all the present and after-acquired tangible and intangible assets of CCFI and the subsidiary guarantors, or the Collateral, subject to certain exceptions and permitted liens (including liens on the assets of our Alabama subsidiary as security for the Alabama Facility), equal and ratable with the obligations under our Revolving Credit Facility and certain hedging obligations. See Description of the Exchange NotesSecurity for the Notes. | |
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The Collateral will not include certain categories of assets. See Risk FactorsRisks Relating to the NotesThere are certain categories of property that are excluded from the Collateral. | |
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No appraisal of the value of the Collateral has been made in connection with the offering of original notes or the exchange offer, and the value of Collateral at any time will depend on market and other economic conditions, including the availability of suitable buyers for the Collateral. The liens on the Collateral may be released without the consent of the holders of the notes if Collateral is disposed of in a transaction that complies with the Indenture and the applicable security documents. In the event of a liquidation of the Collateral, the available proceeds may not be sufficient to satisfy the obligations under the exchange notes. See Risks Relating to the NotesThe Collateral may not be valuable enough to satisfy all the obligations secured by such Collateral and Description of the Exchange NotesSecurity for the Notes. | |
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Ranking |
Except as described below with respect to the assets of our Alabama subsidiary that secure the Alabama Facility on a first-priority basis and secure the original notes and our Revolving Credit Facility on a second-priority basis, or the Shared Alabama Collateral, the exchange notes and the guarantees will be our and the subsidiary guarantors senior secured obligations and will: | |
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rank pari passu in right of payment with all existing and future senior indebtedness; |
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rank senior in right of payment to all of our and the subsidiary guarantors future subordinated debt; |
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be effectively senior to any unsecured indebtedness to the extent of the value of the Collateral (after giving effect to any senior lien on such Collateral, including liens on the assets of our Alabama subsidiary as security for the Alabama Facility, and the contractual priority of our Revolving Credit Facility and certain |
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hedging obligations with respect to proceeds of the Collateral); |
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be effectively subordinated to any indebtedness that is secured by liens on assets that do not constitute a part of the Collateral, to the extent of the value of such assets; and |
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be structurally subordinated to any existing or future indebtedness and other liabilities, including preferred stock and indebtedness of any future subsidiaries that do not guarantee the exchange notes (other than indebtedness and liabilities owed to us or one of our subsidiary guarantors). |
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With respect to the Collateral, the indebtedness and obligations under the exchange notes, our Revolving Credit Facility and certain future indebtedness and obligations permitted under the Indenture will have first-priority liens (except with respect to the Shared Alabama Collateral described below). Under the terms of the security documents, however, in the event of a foreclosure on the Collateral or insolvency proceedings, upon acceleration of obligations under our Revolving Credit Facility pursuant to applicable law, or if our obligations under our Revolving Credit Facility otherwise become due, the holders of the exchange notes will receive proceeds from such enforcement, insolvency proceeding or acceleration, only after the repayment of amounts due including interest, under our Revolving Credit Facility and certain hedging obligations. See Description of the Exchange NotesSecurity for the NotesDesignated Priority Obligations. | |
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With respect to the Shared Alabama Collateral, the Alabama Facility is secured by first-priority liens, and the exchange notes and our Revolving Credit Agreement are secured by second-priority liens. The Shared Alabama Collateral consists of substantially all of the assets of our Alabama subsidiary, or the Shared Alabama Collateral. The lien priority with respect to the Shared Alabama Collateral is governed by an intercreditor agreement. See Description of the Exchange NotesSecurity for the NotesAlabama Intercreditor Arrangement. | |
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As of March 31, 2012, (1) our outstanding senior indebtedness was approximately $395 million, all of which was secured indebtedness; and (2) we had $39.5 million of availability under our Revolving Credit Facility, after deducting $0.5 million of outstanding and undrawn letters of credit thereunder, and our Alabama subsidiary had $7.0 million of availability under the Alabama Facility. Our Alabama subsidiary accounted for approximately $30.7 million, or 9.2%, of our pro forma revenue for 2011, approximately $27.2 million, or 5.3%, of our pro forma total assets and approximately $3.3 million, or 0.7%, of our pro forma total liabilities, in each case, as of December 31, 2011 (in each case, excluding intercompany balances). | |
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Optional Redemption |
Prior to May 1, 2015, we may redeem the exchange notes, in whole or in part, at a price equal to 100% of the principal amount thereof plus the make whole premium described under Description of the Exchange NotesOptional Redemption, plus accrued and unpaid interest to the redemption date. Thereafter, we may redeem some or all of the exchange notes at the redemption prices listed under Description of the Exchange NotesOptional Redemption, plus accrued and unpaid interest to the redemption date. | |
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At any time (which may be more than once) prior to May 1, 2014, we may redeem up to 35% in total of the aggregate principal amount of the notes at a redemption price of 110.750% of the aggregate principal amount thereof, plus accrued and unpaid interest to the redemption date, with the net proceeds of certain equity offerings. See Description of the Exchange NotesOptional Redemption. | |
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In addition, during each 12-month period commencing on May 1, 2011 and ending |
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on or prior to May 1, 2015, we may redeem up to 10% of the aggregate principal amount of the notes at a redemption price equal to 103% of the principal amount thereof, plus accrued and unpaid interest to the redemption date. See Description of the Exchange NotesOptional Redemption. | |
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Change of Control |
If we experience certain kinds of changes of control, we must offer to purchase the notes at 101% of their principal amount, plus accrued and unpaid interest. See Description of the Exchange NotesRepurchase at the Option of HoldersChange of Control. | |
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Mandatory Offer to Repurchase Following Certain Asset Sales |
If we sell certain assets, under certain circumstances we must offer to repurchase the notes at par. See Description of the Exchange NotesRepurchase at the Option of HoldersAsset Sales. | |
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Certain Covenants |
The Indenture contains covenants that, among other things, limit our ability and the ability of our restricted subsidiaries to: | |
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make restricted payments; |
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make investments; |
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incur additional debt or issue certain preferred shares; |
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create liens; |
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merge or consolidate, or sell, transfer or otherwise dispose of substantially all of our assets; |
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enter into certain transactions with affiliates; and |
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designate our subsidiaries as unrestricted. |
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The covenants applicable to us and our restricted subsidiaries are subject to a number of important qualifications and limitations. See Description of the Exchange NotesCertain Covenants. | |
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Use of Proceeds |
We will not receive any proceeds from the issuance of the exchange notes pursuant to the exchange offer. | |
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| |
Absence of public market for the exchange notes |
The exchange notes are a new issue of securities, and there is currently no established trading market for the exchange notes. The exchange notes generally will be freely transferable. We do not intend to apply for a listing of the exchange notes on any securities exchange or an automated dealer quotation system. Accordingly, there can be no assurance as to the development or liquidity of any market for the exchange notes. | |
|
| |
Trustee |
U.S. Bank National Association is the trustee for the holders of the exchange notes. | |
|
| |
Governing Law |
The exchange notes, the Indenture and the other documents for the offering of the exchange notes are governed by the laws of the State of New York. |
For additional information about the exchange notes, see the section of this prospectus entitled Description of the Exchange Notes.
Regulatory Approvals
Other than the federal securities laws, there are no federal or state regulatory requirements that we must comply with and there are no approvals that we must obtain in connection with the exchange offer.
Participating in the exchange offer involves certain risks. You should carefully consider the information under Risk Factors and all other information included in this prospectus before participating in the exchange offer.
Ratio of Earnings to Fixed Charges
Our ratio of earnings to fixed charges is set forth on page 52 of this prospectus.
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL DATA
The following table sets forth CCFIs summary historical consolidated financial and other data, as of December 31, 2010 and 2011 and for the years ended December 31, 2009, 2010 and 2011 and as of March 31, 2011 and 2012 and for the three-month periods ended March 31, 2011 and 2012. The summary historical financial and other data as of December 31, 2010 and 2011 and for each of the years ended December 31, 2009, 2010 and 2011 have been derived from, and should be read together with, CCFIs audited historical consolidated financial statements and the accompanying notes included elsewhere in this prospectus. The summary historical financial and other data as of March 31, 2012 and for each of the three-month periods ended March 31, 2011 and 2012 have been derived from, and should be read together with, CCFIs unaudited historical consolidated financial statements and the accompanying notes included elsewhere in this prospectus. The summary historical financial and other data as of March 31, 2011 have been derived from CCFIs unaudited historical consolidated financial statements not included in this prospectus. The unaudited financial data includes, in our opinion, all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair presentation of our financial position and results of operations for these periods.
The results of operations for the periods presented below are not necessarily indicative of the results to be expected for any future period. You should read the following information in conjunction with Capitalization and Managements Discussion and Analysis of Financial Condition and Results of Operations and CCFIs consolidated financial statements and related notes included elsewhere in this prospectus.
|
|
Year Ended December 31, |
|
Three-months Ended March 31, |
| |||||||||||
(In thousands) |
|
2009 |
|
2010 |
|
2011 |
|
2011 |
|
2012 |
| |||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
| |||||
Finance receivable fees |
|
$ |
136,957 |
|
$ |
146,059 |
|
$ |
196,153 |
|
$ |
36,152 |
|
$ |
54,560 |
|
Check cashing fees |
|
53,049 |
|
55,930 |
|
72,800 |
|
15,046 |
|
20,186 |
| |||||
Card fees |
|
2,063 |
|
10,731 |
|
19,914 |
|
3,948 |
|
5,071 |
| |||||
Other |
|
10,614 |
|
11,560 |
|
18,067 |
|
4,080 |
|
6,132 |
| |||||
Total revenues |
|
202,683 |
|
224,280 |
|
306,934 |
|
59,226 |
|
85,949 |
| |||||
Branch expenses: |
|
|
|
|
|
|
|
|
|
|
| |||||
Salaries and benefits |
|
34,343 |
|
38,759 |
|
57,411 |
|
10,261 |
|
16,113 |
| |||||
Provision for loan losses |
|
43,463 |
|
40,316 |
|
65,351 |
|
8,408 |
|
13,337 |
| |||||
Occupancy |
|
13,855 |
|
14,813 |
|
21,216 |
|
3,827 |
|
5,508 |
| |||||
Depreciation and amortization |
|
6,613 |
|
5,318 |
|
5,907 |
|
1,328 |
|
1,556 |
| |||||
Other |
|
22,652 |
|
27,994 |
|
35,515 |
|
7,338 |
|
9,793 |
| |||||
Total branch expenses |
|
120,926 |
|
127,200 |
|
185,400 |
|
31,162 |
|
46,307 |
| |||||
Branch gross profit |
|
81,757 |
|
97,080 |
|
121,534 |
|
28,064 |
|
39,642 |
| |||||
Corporate expenses |
|
31,518 |
|
33,940 |
|
44,742 |
|
10,282 |
|
14,356 |
| |||||
Transaction expense |
|
|
|
237 |
|
9,351 |
|
85 |
|
519 |
| |||||
Depreciation and amortization |
|
568 |
|
1,222 |
|
2,332 |
|
286 |
|
1,056 |
| |||||
Interest expense, net |
|
11,532 |
|
8,501 |
|
34,334 |
|
2,035 |
|
11,350 |
| |||||
Equity investment loss |
|
|
|
|
|
415 |
|
|
|
|
| |||||
Nonoperating income, management fees |
|
(172 |
) |
(46 |
) |
(46 |
) |
(11 |
) |
(11 |
) | |||||
Income before income taxes and discontinued operations |
|
38,311 |
|
53,226 |
|
30,406 |
|
15,387 |
|
12,393 |
| |||||
Provision for income taxes |
|
14,042 |
|
19,801 |
|
13,553 |
|
5,903 |
|
4,947 |
| |||||
Income from continuing operations |
|
24,269 |
|
33,425 |
|
16,853 |
|
9,484 |
|
7,446 |
| |||||
Discontinued operations (net of provision (benefit) for income tax of $226, ($1,346) and $0) |
|
368 |
|
(2,196 |
) |
|
|
|
|
|
| |||||
Net income |
|
24,637 |
|
31,229 |
|
16,853 |
|
9,484 |
|
7,446 |
| |||||
Net loss attributable to non-controlling interests |
|
|
|
(252 |
) |
(120 |
) |
(120 |
) |
|
| |||||
Net income attributable to controlling interests |
|
$ |
24,637 |
|
$ |
31,481 |
|
$ |
16,973 |
|
$ |
9,604 |
|
$ |
7,446 |
|
(In thousands, except for stores data, averages, |
|
Year Ended December 31, |
|
Three-months Ended March 31, |
| ||||||||||||
percentages or unless otherwise specified) |
|
2009 |
|
2010 |
|
2011 |
|
2011 |
|
2012 |
| ||||||
Balance Sheet Data (at period end): |
|
|
|
|
|
|
|
|
|
|
| ||||||
Cash and cash equivalents |
|
$ |
27,959 |
|
$ |
39,780 |
|
$ |
65,635 |
|
$ |
73,937 |
|
$ |
107,399 |
| |
Finance receivables, net |
|
66,035 |
|
81,337 |
|
120,451 |
|
68,625 |
|
93,213 |
| ||||||
Total assets |
|
280,476 |
|
310,644 |
|
515,547 |
|
341,886 |
|
528,282 |
| ||||||
Total debt |
|
193,365 |
|
188,934 |
|
395,000 |
|
206,361 |
|
395,000 |
| ||||||
Total stockholders equity |
|
77,791 |
|
109,791 |
|
61,314 |
|
119,585 |
|
68,842 |
| ||||||
Other Operating Data (unaudited): |
|
|
|
|
|
|
|
|
|
|
| ||||||
Number of stores (at period end) |
|
264 |
|
282 |
|
435 |
|
292 |
|
435 |
| ||||||
Short-term consumer loans data: |
|
|
|
|
|
|
|
|
|
|
| ||||||
Loan volume |
|
$ |
1,162,086 |
|
$ |
1,237,163 |
|
$ |
1,543,310 |
|
$ |
289,023 |
|
$ |
383,108 |
| |
Number of loans |
|
2,816 |
|
2,956 |
|
3,625 |
|
662 |
|
932 |
| ||||||
Average new loan size |
|
$ |
412.67 |
|
$ |
418.53 |
|
$ |
425.72 |
|
$ |
436.79 |
|
$ |
411.27 |
| |
Average new loan fee |
|
$ |
42.79 |
|
$ |
43.14 |
|
$ |
46.37 |
|
$ |
45.73 |
|
$ |
46.37 |
| |
Loan loss provision |
|
$ |
28,856 |
|
$ |
27,560 |
|
$ |
40,636 |
|
$ |
4,684 |
|
$ |
7,060 |
| |
Loan loss provision as a percentage of volume |
|
2.5 |
% |
2.2 |
% |
2.6 |
% |
1.6 |
% |
1,8 |
% | ||||||
Check cashing data: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Face amount of checks cashed |
|
$ |
1,309,425 |
|
$ |
1,442,501 |
|
$ |
2,163,276 |
|
$ |
392,528 |
|
$ |
633,459 |
| |
Number of checks cashed |
|
3,029 |
|
3,292 |
|
4,869 |
|
|
753 |
|
|
1,306 |
| ||||
Face amount of average check |
|
$ |
432.08 |
|
$ |
438.13 |
|
$ |
444.26 |
|
$ |
521.11 |
|
$ |
485.09 |
| |
Average fee per check |
|
$ |
17.51 |
|
$ |
16.99 |
|
$ |
14.95 |
|
$ |
19.98 |
|
$ |
15.46 |
| |
Returned check expense |
|
$ |
3,058 |
|
$ |
3,034 |
|
$ |
5,085 |
|
$ |
742 |
|
$ |
1,001 |
| |
Returned check expense as a percentage of face amount of checks cashed |
|
0.2 |
% |
0.2 |
% |
0.2 |
% |
0.2 |
% |
0.2 |
% | ||||||
(In thousands, except for stores data, averages, |
|
Year Ended December 31, |
|
Three-months Ended March 31, |
| |||||||||||
percentages or unless otherwise specified) |
|
2009 |
|
2010 |
|
2011 |
|
2011 |
|
2012 |
| |||||
Medium-term loan data:(1) |
|
|
|
|
|
|
|
|
|
|
| |||||
Principal outstanding |
|
$ |
3,109 |
|
$ |
3,601 |
|
$ |
12,174 |
|
$ |
3,881 |
|
$ |
11,926 |
|
Number of loans outstanding |
|
9,365 |
|
10,275 |
|
20,818 |
|
11,607 |
|
20,699 |
| |||||
Average principal outstanding |
|
$ |
331.97 |
|
$ |
350.47 |
|
$ |
584.79 |
|
$ |
334.41 |
|
$ |
576.18 |
|
Average monthly percentage rate |
|
22.3 |
% |
22.0 |
% |
19.2 |
% |
23.2 |
% |
18.3 |
% | |||||
Allowance as a percentage of finance receivable |
|
42.7 |
% |
11.7 |
% |
10.6 |
% |
7.9 |
% |
13.3 |
% | |||||
Loan loss provision |
|
$ |
6,708 |
|
$ |
5,267 |
|
$ |
11,470 |
|
$ |
1,516 |
|
$ |
3,051 |
|
Title loan data: |
|
|
|
|
|
|
|
|
|
|
| |||||
Principal outstanding |
|
$ |
6,047 |
|
$ |
9,541 |
|
$ |
17,334 |
|
$ |
7,829 |
|
$ |
14,149 |
|
Number of loans outstanding |
|
6,077 |
|
9,597 |
|
15,283 |
|
8,255 |
|
13,822 |
| |||||
Average principal outstanding |
|
$ |
995.00 |
|
$ |
994.12 |
|
$ |
1,134.20 |
|
$ |
948.45 |
|
$ |
1,023.67 |
|
Average monthly percentage rate |
|
16.0 |
% |
13.8 |
% |
13.3 |
% |
15.6 |
% |
12.5 |
% | |||||
Allowance as a percentage of finance receivable |
|
12.1 |
% |
5.3 |
% |
5.3 |
% |
7.0 |
% |
5.8 |
% | |||||
Loss loss provision |
|
$ |
2,970 |
|
$ |
3,497 |
|
$ |
5,463 |
|
$ |
845 |
|
$ |
1,241 |
|
Overall company data: |
|
|
|
|
|
|
|
|
|
|
| |||||
Total revenues |
|
$ |
202,683 |
|
$ |
224,280 |
|
$ |
306,934 |
|
$ |
59,226 |
|
$ |
85,949 |
|
Loan loss provisions |
|
41,592 |
|
39,358 |
|
62,654 |
|
6,825 |
|
11,344 |
| |||||
Other ancillary product provisions |
|
1,871 |
|
958 |
|
2,697 |
|
$ |
1,583 |
|
$ |
1,993 |
| |||
Total loan loss provision |
|
$ |
43,463 |
|
$ |
40,316 |
|
$ |
65,351 |
|
8,408 |
|
13,337 |
| ||
Total loan loss provision as a percentage of revenue |
|
21.4 |
% |
18.0 |
% |
21.3 |
% |
$ |
14.2 |
|
$ |
15.5 |
| |||
Other Financial Data (unaudited): |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Capital expenditures |
|
$ |
2,769 |
|
$ |
1,688 |
|
$ |
4,261 |
|
545 |
|
755 |
|
(1) Loan participations are grouped with medium-term loans in our consolidated financial statements included elsewhere in this prospectus, but are excluded from these calculations.
SUMMARY UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The pro forma information set forth below gives effect to the California Acquisition, the Illinois Acquisition, the offering of our original notes and the establishment of our Revolving Credit Facility as if they had each occurred on January 1, 2011. We have derived the pro forma consolidated financial data for the year ended December 31, 2011 by calculating the historical consolidated financial data for the period ended December 31, 2011 for CCFI and for the period ended April 29, 2011 for CCCS, the date of the California Acquisition, and then applying pro forma adjustments to give effect to such transactions. The pro forma information is unaudited, is for informational purposes only and is not necessarily indicative of what our financial position or results of operations would have been had such transactions been completed as of the dates indicated and does not purport to represent what our results of operations might be for any future period.
The following summary pro forma consolidated financial data should be read in conjunction with Selected Historical Consolidated Financial Data, Unaudited Pro Forma Consolidated Financial Information, Use of Proceeds, Managements Discussion and Analysis of Financial Condition and Results of Operations, and the consolidated financial statements of CCFI and CCCS and the accompanying notes thereto included elsewhere in this prospectus.
(In thousands) |
|
Year Ended |
| |
Revenue: |
|
|
| |
Finance receivable fees |
|
$ |
208,093 |
|
Check cashing fees |
|
82,272 |
| |
Card fees |
|
20,611 |
| |
Other |
|
21,751 |
| |
Total revenue |
|
332,727 |
| |
Salaries and benefits |
|
65,286 |
| |
Provision for loan losses |
|
67,832 |
| |
Occupancy |
|
24,207 |
| |
Depreciation and amortization |
|
6,050 |
| |
Other |
|
37,653 |
| |
Total branch expenses |
|
201,028 |
| |
Branch gross profit |
|
131,699 |
| |
Corporate Expenses |
|
47,158 |
| |
Depreciation and amortization |
|
3,407 |
| |
Interest expense, net |
|
45,140 |
| |
Goodwill impairment |
|
28,986 |
| |
Equity investment loss |
|
415 |
| |
Non-operating income, mgmt fees |
|
(46 |
) | |
Income before taxes and discontinued operations |
|
6,639 |
| |
Provision for income taxes |
|
2,523 |
| |
Total net income |
|
$ |
4,116 |
|
Participating in the exchange offer involves risks. You should carefully consider the risks described below, together with the other information contained in this prospectus, before you decide to participate in the exchange offer. Any of the following risks, as well as other risks and uncertainties, could harm the value of the notes directly, or our business and financial results and thus indirectly cause the value of the notes to decline. The risks described below are not the only ones that could impact our company or the value of the notes. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, financial condition or results of operations. As a result of any of these risks, known or unknown, you may lose all or part of your investment in the notes.
Risks Relating to the Notes
Our substantial indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, expose us to interest rate risk to the extent of our variable rate debt and prevent us from meeting our obligations under the notes or other indebtedness.
We have a significant amount of indebtedness. As of March 31, 2012, our outstanding senior indebtedness was approximately $395 million, all of which was secured indebtedness, and we had availability of $40 million under our Revolving Credit Facility, and our Alabama subsidiarys borrowing availability under its secured credit facility was $7 million.
Our substantial indebtedness could have important consequences to you. For example, it could:
· make it more difficult for us to satisfy our obligations with respect to the notes and our other indebtedness;
· require us to dedicate a substantial portion of our cash flow from operations to payments of principal and interest on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, business development, acquisitions, general corporate or other purposes;
· increase our vulnerability to and limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
· increase our vulnerability to general adverse economic and industry conditions;
· restrict us from making strategic acquisitions or cause us to make non-strategic divestitures;
· place us at a competitive disadvantage compared to our competitors that have less debt; and
· limit our ability to refinance our indebtedness, including the notes, or to obtain additional debt or equity financing for working capital, capital expenditures, business development, debt service requirements, acquisitions and general corporate or other purposes.
We expect to use cash flow from operations and borrowings under our revolving credit facilities to meet our current and future financial obligations, including funding our operations, debt service requirements, small acquisitions and capital expenditures. Our ability to make these payments depends on our future performance, which will be affected by financial, business, economic and other factors, many of which we cannot control. Our business may not generate sufficient cash flow from operations in the future, which could result in our being unable to repay indebtedness or to fund other liquidity needs.
Risks of leverage and debt service requirements may hamper our ability to operate and grow our revenues.
Our debt-to-equity ratio is high due to the requirement of borrowing funds to continue operations. High leverage creates risks, including the risk of default under our Revolving Credit Facility or our notes. The interest expense associated with our debt burden may be substantial and may create a significant drain on our future cash flow. These payments may also place us at a disadvantage relative to other better capitalized competitors and increase the impact of competitive pressures within our markets. For more information regarding the impact of our substantial indebtedness, please see Our substantial indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, expose us to interest rate risk to the extent of our variable rate debt and prevent us from meeting our obligations under our notes or other indebtedness. As of March 31, 2012, our total debt was $395.0 million and our negative tangible capital was $183.4 million.
Despite our current level of indebtedness, we may still be able to incur substantial additional indebtedness. This could exacerbate the risks associated with our substantial indebtedness.
We and our subsidiaries may be able to incur substantial additional indebtedness in the future. The terms of the Indenture and the agreement governing our Revolving Credit Facility limit, but do not prohibit, us or our subsidiaries from incurring additional indebtedness. If we incur any additional indebtedness the holders of that indebtedness will be entitled to share ratably with our other secured and unsecured creditors in any proceeds distributed in connection with any insolvency, liquidation, reorganization, dissolution or other winding-up of our business prior to any recovery by our shareholders. This may have the effect of reducing the amount of proceeds paid to you in such an event. If new indebtedness, including under our revolving credit facilities, is added to our current debt levels, the related risks that we and our subsidiaries now face could intensify, especially with respect to the demands on our liquidity as a result of increased interest commitments.
To service our indebtedness, we will require a significant amount of cash, and our ability to generate cash depends on many factors beyond our control.
Our ability to make scheduled cash payments on and to refinance our indebtedness, including the notes, and to fund planned capital expenditures will depend on our ability to generate significant operating cash flow in the future, which, to a significant extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. We may not be able to maintain a sufficient level of cash flow from operating activities to permit us to pay the principal, premium, if any, and interest on the notes and our other indebtedness.
If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets, seek additional capital or seek to restructure or refinance our indebtedness, including the notes. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. In the absence of such cash flows and resources, we could face substantial liquidity problems and might be required to sell material assets or operations in an attempt to meet our debt service and other obligations. The Indenture and the agreement governing our Revolving Credit Facility will restrict our ability to conduct asset sales and/or use the proceeds from asset sales. We may not be able to consummate those asset sales to raise capital or sell assets at prices and on terms that we believe are fair and any proceeds that we receive may not be adequate to meet any debt service obligations then due. See Description of Certain Indebtedness and Description of the Exchange Notes.
We are dependent upon our lenders for financing to execute our business strategy and meet our liquidity needs. If our lenders are unable to fund borrowings under their credit commitments or we are unable to borrow, it could negatively impact our business.
We may be exposed to the risk that lenders under our Revolving Credit Facility could fail or refuse to honor their legal commitments and obligations thereunder. If our lenders are unable to fund borrowings under their credit commitments, it could be difficult to replace our Revolving Credit Facility on similar terms. A default by one of the lenders under our Revolving Credit Facility or our inability to meet the conditions required for borrowing thereunder could negatively impact our ability to finance our working capital needs, thereby negatively impacting our business.
Covenants in our debt agreements restrict our business in many ways.
The Indenture and the agreement governing our Revolving Credit Facility contain various covenants that, subject to certain exceptions, including customary baskets, generally limit our ability and our subsidiaries ability to, among other things:
· incur or assume liens or additional debt or provide guarantees in respect of obligations of other persons;
· issue redeemable stock and preferred stock;
· pay dividends or distributions or redeem or repurchase capital stock;
· prepay, redeem or repurchase debt;
· make loans and investments;
· enter into agreements that restrict distributions from our subsidiaries;
· sell assets and capital stock of our subsidiaries;
· engage in certain transactions with affiliates; and
· consolidate or merge with or into, or sell substantially all of our assets to, another person.
As of the end of any fiscal quarter for which we have borrowings outstanding under our Revolving Credit Facility, we must have a leverage ratio, defined as consolidated total indebtedness less excess cash, divided by EBITDA for the trailing twelve months, equal to or less than 5.0 to 1. In calculating the leverage ratio, we calculate EBITDA and excess cash, which were $98.4 million and $43.3 million, respectively, for the twelve months ended and as of December 31, 2011, pursuant to the terms of our Revolving Credit Facility.
As of March 31, 2012, our leverage ratio was 3.2 to 1. A breach of the covenants or restrictions under the indenture governing the notes or the agreement governing our revolving credit facility could result in a default under the applicable indebtedness. Any such default may allow the creditors to accelerate the related debt and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies. In addition, an event of default under our Revolving Credit Facility would permit the lenders thereunder to terminate all commitments to extend further credit under that facility. Furthermore, if we were unable to repay the amounts due and payable under that facility, those lenders could, pursuant to the security documents and following a consultative process between the agent for those lenders and the trustee for the holders of the notes (or, if the notes are not the largest class of first-lien indebtedness then outstanding, the representative of the holders of such largest class, with the trustee or such representative being referred to as the applicable authorized representative), proceed against the Collateral in which they have a first-priority security interest shared with the notes. See Description of the Exchange NotesSecurity for the NotesDescription of the Collateral and Description of the Exchange NotesSecurity for the NotesSecurity Documents; Appointment of the Collateral Agent. In the event our lenders and holders of notes accelerate the repayment of our borrowings, we cannot assure you that we would have sufficient assets to repay such indebtedness or be able to borrow or raise additional equity in an amount sufficient to repay such indebtedness. Even if we are able to obtain new financing, it may not be on commercially reasonable terms or on terms acceptable to us. As a result of these restrictions, we may be:
· limited in how we conduct our business and execute our business strategy;
· unable to raise additional debt or equity financing to fund our operations; or
· unable to compete effectively or to take advantage of new business opportunities.
These restrictions may affect our ability to grow in accordance with our plans.
Changes in credit ratings issued by statistical rating organizations could adversely affect our costs of financing.
Credit rating agencies rate our indebtedness based on factors that include our operating results, actions that we take, their view of the general outlook for our industry and their view of the general outlook for the economy. Actions taken by the rating agencies can include maintaining, upgrading or downgrading the current rating or placing us on a watch list for possible future downgrading. Downgrading the credit rating of our indebtedness or placing us on a watch list for possible future downgrading could limit our ability to access the capital markets to meet liquidity needs and refinance maturing liabilities or increase the interest rates and our cost of financing.
Claims of holders of notes will be effectively subordinated to claims of creditors of current and any future subsidiaries that are not guarantors.
The notes initially were guaranteed on a senior basis by each of our restricted subsidiaries existing as of April 29, 2011, the date of issuance of the original notes, and any subsequent restricted subsidiaries that guarantee our or any subsidiary guarantors indebtedness. Our current and any future foreign subsidiaries, however, do not and will not be required to guarantee the notes unless they provide guarantees with respect to any of our or any subsidiary guarantors indebtedness. In addition, we will have the ability to designate certain of our subsidiaries as unrestricted subsidiaries pursuant to the terms of the Indenture and our Revolving Credit Facility, and any subsidiary so designated will not be a guarantor of the notes. See Description of the Exchange NotesCertain CovenantsAdditional Note Guarantees and Description of the Exchange NotesCertain DefinitionsUnrestricted Subsidiary.
Any non-guarantor subsidiaries will be separate and distinct legal entities without any obligation, contingent or otherwise, to pay any amounts due pursuant to the notes, or to make any funds available therefor, whether by dividends, loans,
distributions or other payments. Any right that we or the subsidiary guarantors have to receive any assets of any non-guarantor subsidiaries upon the liquidation or reorganization of such subsidiary, and the consequent rights of holders of notes to realize proceeds from the sale of any of such subsidiarys assets, will be effectively subordinated to the claims of such subsidiarys creditors, including trade creditors and holders of debt of such subsidiary.
Any future unrestricted subsidiaries may not be subject to the restrictive covenants in the Indenture.
The Indenture and our Revolving Credit Facility permit us to designate certain of our subsidiaries as unrestricted subsidiaries, which subsidiaries would not be subject to the restrictive covenants in the Indenture. This means that these entities would be able to engage in many of the activities the Indenture and our Revolving Credit Facility would otherwise prohibit, such as incurring substantial additional debt (secured or unsecured), making investments, selling, encumbering or disposing of substantial assets, entering into transactions with affiliates and entering into mergers or other business combinations. These actions could be detrimental to our ability to make payments when due and to comply with our other obligations under the notes, and could reduce the amount of our assets that would be available to satisfy your claims should we default on the notes. In addition, the initiation of bankruptcy or insolvency proceedings or the entering of a judgment against these entities, or their default under their other credit arrangements, will not result in an event of default under the Indenture.
Repayment of our debt, including the notes, is dependent on cash flow generated by our subsidiaries.
We are a holding company and our only material assets are the equity interests we hold in our subsidiaries. As a result, we will be dependent upon dividends and other payments from our subsidiaries to generate the funds necessary to meet our outstanding debt service and other obligations and such dividends may be restricted by law or the instruments governing our indebtedness or other agreements of our subsidiaries, including, for example, restrictions existing under the Alabama Facility that limit our Alabama subsidiarys ability to pay dividends. Our subsidiaries may not generate sufficient cash from operations to enable us to make principal and interest payments on our indebtedness, including the notes. In addition, our subsidiaries are separate and distinct legal entities, and any payments on dividends, distributions, loans or advances to us by our subsidiaries could be subject to legal and contractual restrictions on dividends. In addition, payments to us by our subsidiaries will be contingent upon our subsidiaries earnings. Additionally, we may be limited in our ability to cause any future joint ventures to distribute their earnings to us. Subject to certain qualifications, our subsidiaries are permitted under the terms of their indebtedness, including the Indenture, to incur additional indebtedness that may restrict payments from those subsidiaries to us. We cannot assure you that agreements governing the current and future indebtedness of our subsidiaries will permit those subsidiaries to provide us with sufficient cash to fund payments of principal, premiums, if any, and interest on the notes when due. In addition, if the guarantees are held to violate applicable fraudulent conveyance laws, our guarantor subsidiaries may have their obligations under their guarantees of the notes reduced to insignificant amounts pursuant to the terms of the guarantees or otherwise subordinated to their other liabilities. See Risks Relating to the NotesThe guarantees and security interests provided by the subsidiary guarantors may not be enforceable and, under specific circumstances, Federal and state statutes may allow courts to void the guarantees and security interests and require holders of notes to return payments received from the subsidiary guarantors. If we do not receive distributions from our subsidiaries, we may be unable to make required principal and interest payments on our indebtedness, including the notes.
In addition, the equity interests of other equity holders in any non-wholly-owned subsidiary, such as a joint venture, in any dividend or other distribution made by such entity would need to be satisfied on a proportionate basis with us. These non-wholly-owned subsidiaries may also be subject to restrictions, in their financing or other agreements, on their ability to distribute cash to us or a subsidiary guarantor, and, as a result, we may not be able to access their cash flow to service our debt obligations, including in respect of the notes.
Your right to take enforcement action with respect to the liens securing notes is limited in certain circumstances and you will receive the proceeds from such enforcement only after lenders under our Revolving Credit Facility and holders of certain other priority claims have been paid in full, including with respect to the Shared Alabama Collateral, obligations owing to Republic Bank under the Alabama Facility.
The notes, the guarantees thereof, the Revolving Credit Facility and certain hedging obligations are secured by a first-priority lien on the Collateral, subject to certain exceptions and permitted liens, including the liens of Republic Bank on our Alabama subsidiarys assets securing its obligations under the Alabama Facility. In addition, we may incur certain other indebtedness that is secured by a first-priority lien on the Collateral. Under the terms of the Indenture and the security documents, the net proceeds from the enforcement of the security for the notes and the guarantees thereof (including for these purposes distributions of cash, securities or other property on account of the value of the Collateral in a bankruptcy case of CCFI or any of the subsidiary guarantors) from any insolvency proceeding or other enforcement action taken with respect to the Collateral, will be applied first, in the case of any
proceeds from the Shared Alabama Collateral, to repay amounts due, including interest, under the Alabama Facility, and with respect to any other Collateral, to repay amounts due, including interest, under our Revolving Credit Facility and obligations to any lenders (or affiliates of any lender) under our Revolving Credit Facility with respect to certain hedging obligations, before the holders of the notes receive any proceeds. As a result, the claims of holders of the notes to such proceeds will rank behind the claims, including interest, of Republic Bank with respect to the Shared Alabama Collateral and the claims of the lenders and the letter of credit issuer under our Revolving Credit Facility, including claims for certain hedging obligations, with respect to any other Collateral. See Description of the Exchange NotesSecurity Documents; Appointment of the Collateral Agent, Description of the Exchange NotesCertain DefinitionsLender Hedging Obligations and Description of the Exchange NotesSecurity for the NotesAlabama Intercreditor Arrangement.
If you (or the trustee on your behalf) receive any proceeds of an enforcement of security or the guarantees prior to the satisfaction of the claims of those that are contractually superior (such as claims under our Revolving Credit Facility and lender hedging obligations) or ratable with those of the applicable notes, you (or the trustee on your behalf) will be required to turn over such proceeds until superior claims are satisfied and until ratable claims are equally satisfied. Accordingly, you will recover less from the proceeds of an enforcement of the security than you otherwise would have. As a result of these and other provisions governing the guarantees and the security and in the security documents, you may not be able to recover any amounts under the guarantees or the security in the event of a default on the notes.
The use of a collateral agent and the existence of other first-lien indebtedness may diminish the rights that a secured creditor would otherwise have with respect to the Collateral. Your right to take enforcement action with respect to the liens securing the notes is limited in certain circumstances.
The security interest in the Collateral securing the notes has been taken in the name of the collateral agent for the benefit of the holders of the notes, the trustee, the lenders under our Revolving Credit Facility (and any of their affiliates to whom we have hedging obligations) and any other parties that provide first-lien indebtedness secured by the Collateral in the future. The collateral agent has entered into each security document on behalf of the holders of the notes and such other secured parties. The terms of the security documents contain provisions restricting the rights of the holders of the notes to take enforcement action with respect to the liens securing such notes in certain circumstances. These provisions generally provide that the applicable authorized representative (which may be a party other than the trustee for the holders of the notes) and the agent for the lenders under our Revolving Credit Facility must generally engage in certain consultative processes before enforcing the liens securing the notes. In addition, disagreements between the applicable authorized representative and the agent for the lenders under our Revolving Credit Facility could limit or delay the ability of the collateral agent to enforce the liens securing the notes. Furthermore, the collateral agent may fail to act in a timely manner after receiving instructions from the agent for the lenders under our Revolving Credit Facility and the applicable authorized representative. Delays in the enforcement could decrease or eliminate recovery values.
In the event of a disagreement between the agent for the lenders under our Revolving Credit Facility and the applicable authorized representative, the security documents provide that the agent for the lenders under our Revolving Credit Facility ultimately has the ability to direct the collateral agent to act (or refrain from acting) with respect to the Collateral. The collateral agent may be instructed to take actions that holders of the notes disagree with or may fail to take actions that the holders of the notes wish to pursue. The holders of the notes do not have any independent power to enforce, or have recourse to, any of the security documents or to exercise any rights or powers arising under the security documents except through the trustee for the holders of the notes, to the extent the trustee is the applicable authorized representative. By accepting a note, you will be deemed to have agreed to these restrictions. As a result of these restrictions, holders of the notes will have limited remedies and recourse against CCFI and the guarantors in the event of a default. See Description of the Exchange NotesSecurity for the NotesSecurity Documents; Appointment of the Collateral Agent.
In addition, the collateral agent may be subject to conflicts of interest due to its role as bailee or agent on behalf of competing classes of creditors. Moreover, the holders of the notes will have limited rights against the collateral agent.
In addition to the foregoing, the liens on the Shared Alabama Collateral securing the notes will be subordinated to the liens securing the Alabama Facility.
The pledge of capital stock, other securities and similar items of CCFI and our subsidiaries that secure the notes will automatically be released from the lien on them and no longer constitute Collateral when the pledge of such capital stock or such other securities would require the filing of separate financial statements with the SEC for that subsidiary.
The notes and the guarantees are secured by a pledge of the stock of CCFI and certain of our subsidiaries. Under the SEC regulations in effect as of the issue date of the notes, if the par value, book value as carried by us or market value (whichever is greatest) of the capital stock, other securities or similar items of a subsidiary pledged as part of the Collateral is greater than or equal to 20% of the aggregate principal amount of the notes then outstanding, such a subsidiary would be required to provide separate financial statements to the SEC. Therefore, the Indenture and the Collateral documents provide that any capital stock and other securities of CCFI or any of our subsidiaries will be excluded from the Collateral to the extent that the pledge of such capital stock or other securities to secure the notes would cause such companies to be required to file separate financial statements with the SEC pursuant to Rule 3-16 of Regulation S-X (as in effect from time to time). As a result, holders of the notes could lose a portion or all of their security interest in the capital stock or other securities of those subsidiaries. The book value and/or the market value of certain of our intermediate holding companies, including CheckSmart Financial Holdings Corp., CheckSmart Financial Company, CCCS Corporate Holdings, Inc. and CCCS Holdings, LLC, as well as our primary operating subsidiary in California, California Check Cashing Stores, LLC, may in the future exceed 20% of the aggregate principal amount of the notes. These values, as well as the book value and market value of our other subsidiaries, may change at any time, as the Indenture will not impose any limit on our ability to merge our restricted subsidiaries with each other or otherwise make investments in our restricted subsidiaries.
It may be more difficult, costly and time-consuming for holders of the notes to foreclose on the assets of a subsidiary than to foreclose on its capital stock or other securities, so the proceeds realized upon any such foreclosure could be significantly less than those that would have been received upon any sale of the capital stock or other securities of such subsidiary. See Description of the Exchange NotesSecurity for the NotesLimitation on Collateral Consisting of Subsidiary Securities.
The Collateral may not be valuable enough to satisfy all the obligations secured by such Collateral.
The notes and guarantees are secured by substantially all the assets of CCFI and the guarantors, including stock of certain of their subsidiaries (subject to certain limitations), but specifically excluding certain types of assets. See Description of the Exchange NotesSecurity for the NotesDescription of the Collateral. See Risks Relating to the NotesThere are certain categories of property that are excluded from the Collateral. Other liabilities, including certain debt, can also be secured by the same Collateral to the extent permitted by the Indenture.
No appraisal of the value of the Collateral has been made in connection with the offering of original notes or the exchange offer, and we cannot assure you that the value of the Collateral is equal to or greater than our obligations with respect to the notes and the other obligations that will be secured thereby. In addition, the fair market value of the Collateral is subject to fluctuations based on factors that include, among others, general economic conditions. The amount to be received upon a sale of the Collateral would be dependent on numerous factors, including, but not limited to, the actual fair market value of the Collateral at such time, the timing and the manner of the sale and the availability of buyers. Likewise, we cannot assure you that the Collateral will be saleable or, if saleable, that there will not be substantial delays in its liquidation. The Indenture will allow us to incur additional secured debt, including additional secured debt that will share in the Collateral. Accordingly, in the event of a foreclosure, liquidation, bankruptcy or similar proceeding, the Collateral may not be sold in a timely or orderly manner, and the proceeds from any sale or liquidation of the Collateral may not be sufficient to satisfy CCFIs and the subsidiary guarantors obligations under the notes, the guarantees and any future debt that is secured by the Collateral.
To the extent that pre-existing liens, liens permitted under the Indenture (including the liens of Republic Bank on the Shared Alabama Collateral securing our Alabama subsidiarys obligations under the Alabama Facility) and other rights, including liens on excluded assets, such as those securing certain purchase money obligations and capital lease obligations granted to other parties (in addition to the holders of obligations secured by first-priority liens), encumber any of the Collateral, those parties have or may exercise rights and remedies with respect to the Collateral that could adversely affect the value of the Collateral and the ability of the collateral agent or the holders of the notes to realize or foreclose on the Collateral.
The security interests in the Collateral also will be subject to practical problems generally associated with the realization of security interests in Collateral. For example, the consent of a third-party may be required to obtain or enforce a security interest in a contract. We cannot assure you that any such consent could be obtained. We also cannot assure you that the consents of any third parties will be given when and if required to facilitate a foreclosure on such assets. Accordingly, the collateral agent may not have the ability to foreclose upon those assets and the value of the Collateral may be significantly impaired. In addition, our business requires compliance with numerous U.S. Federal, state and local license and permit requirements. Continued operation of our properties that are part of the Collateral will depend on the continued compliance with such license and permit requirements to the extent applicable, and our business and the value of the Collateral may be adversely affected if we fail to comply with these requirements, including as they may be changed from time to time. In the event of foreclosure, the transfer of such permits and licenses may be prohibited or may require us to incur significant cost and expense. Furthermore, we cannot assure you that the applicable governmental authorities will
consent to the transfer of all such permits. If the regulatory approvals required for such transfers are not obtained or are delayed, the foreclosure may be delayed, our operations may be shut down and the value of the Collateral may be significantly impaired.
Consequently, liquidating the Collateral may not result in proceeds in an amount sufficient to pay any amounts due under the notes after satisfying the obligations to pay any creditors with prior liens and the obligations under our Revolving Credit Facility, which will have contractual priority with respect to any net proceeds resulting from realization upon the Collateral. If the proceeds of the sale of the Collateral are not sufficient to repay all amounts due on the notes, the holders of the notes (to the extent not repaid from the proceeds of the sale of the Collateral) would have only an unsecured claim against our and the subsidiary guarantors remaining assets, which may not be sufficient to repay our obligations under the notes.
Also, certain permitted liens on the Collateral securing the notes may allow the holder of such lien to exercise rights and remedies with respect to the Collateral subject to such lien that could adversely affect the value of such Collateral and the ability of the collateral agent to realize or foreclose upon such Collateral.
We will, in most cases, have control over the Collateral, and the sale or pledge of particular assets by us could reduce the pool of assets securing the notes and the guarantees.
The security documents generally allow us to remain in possession of, retain exclusive control over, freely operate, dispose of and collect, and invest and dispose of any income from, the Collateral, with certain limited exceptions. Therefore, the pool of assets constituting the Collateral will change from time to time, and its fair market value may decrease from its value on the date the notes are originally issued.
There are circumstances other than repayment or discharge of the notes under which the Collateral securing the notes and the guarantees will be released automatically, without your consent or the consent of the trustee.
Under various circumstances, all or a portion of the Collateral may be released, including:
· to enable the disposition of such Collateral to the extent not prohibited under the Indenture;
· to the extent such Collateral is comprised of property leased to CCFI or a subsidiary guarantor, upon termination or expiration of such lease; and
· in connection with an amendment to the Indenture or the related security documents that has received the required consent.
In addition, the guarantee of a subsidiary guarantor will be released in connection with a sale of such subsidiary guarantor in a transaction not prohibited by the Indenture, in which case the Collateral held by that subsidiary guarantor will also be released.
The Indenture will also permit us to designate one or more of our restricted subsidiaries that is a guarantor of the notes as an unrestricted subsidiary. If we designate a guarantor as an unrestricted subsidiary, all of the Collateral owned by such subsidiary or any of its subsidiaries and any guarantees of the notes by such subsidiary or any of its subsidiaries will be released under the Indenture. Designation of a guarantor as an unrestricted subsidiary will reduce the aggregate value of the Collateral securing the notes to the extent that liens on the assets of the unrestricted subsidiary and its subsidiaries are released. In addition, the creditors of any unrestricted subsidiary and its subsidiaries will have a senior claim on the assets of such unrestricted subsidiary and its subsidiaries. See Description of the Exchange NotesCertain DefinitionsUnrestricted Subsidiary.
There are certain categories of property that are excluded from the Collateral.
Certain categories of assets are excluded from the Collateral. Excluded assets include, among other things, property and assets the pledge of which would violate applicable law, certain licenses, contracts and agreements containing terms prohibiting assignment, all real property leasehold interests, the assets of any unrestricted subsidiaries, any future non-guarantor subsidiaries and certain capital stock and other securities of any future foreign subsidiaries and any disregarded entity owners thereof (and in certain circumstances as described above under Risks Relating to the NotesThe pledge of capital stock, other securities and similar items of CCFI and our subsidiaries that secure the notes will automatically be released from the lien on them and no longer constitute Collateral when the pledge of such capital stock or such other securities would require the filing of separate financial statements with the SEC for that subsidiary, certain of our domestic subsidiaries). See Description of the Exchange NotesSecurity for the NotesDescription of the Collateral and Description of the Exchange NotesSecurity for the NotesLimitation on Collateral Consisting of Subsidiary Securities. If an event of default occurs and the notes are accelerated,
holders of the notes and the guarantees will rank equally with the holders of other unsubordinated and unsecured indebtedness of the relevant entity with respect to such excluded assets and junior to holders of indebtedness secured by a lien on such excluded assets.
Rights of holders of the notes in the Collateral may be adversely affected by the failure to perfect security interests in the Collateral. We will not be required to perfect the security interest over certain Collateral.
Applicable law requires that a security interest in certain tangible and intangible assets can only be properly perfected and its priority retained through certain actions undertaken by the secured party. The liens on the Collateral securing the notes and the guarantees may not be perfected with respect to the claims of the notes and the guarantees if the collateral agent is not able to take the actions necessary to perfect any of these liens on or prior to the date of the Indenture. If a security interest is not perfected with respect to any portion of the Collateral, the notes and the guarantees may not be effectively secured by such Collateral.
In addition, applicable law requires that certain property and rights acquired after the grant of a general security interest, such as real property, equipment subject to a certificate of title, certain proceeds and other assets, can only be perfected at the time such property and rights are acquired and identified. We and the guarantors have limited obligations to perfect the security interest for the benefit of the holders of the notes in specified Collateral. We cannot assure you that the trustee or the collateral agent will monitor, or that, despite our obligation to do so under the Indenture, that we will inform such trustee or collateral agent of, the future acquisition of assets and rights that constitute Collateral, and that the necessary action will be taken to properly perfect the security interest in such after-acquired Collateral. Neither the trustee nor the collateral agent has an obligation to monitor the acquisition of additional assets or rights that constitute Collateral or the perfection of any security interest. Such failure to monitor may result in the loss of the security interest in the Collateral or the priority of the security interest in favor of the notes and the guarantees against third parties. Furthermore, certain actions are required to be taken periodically to maintain certain security interests granted in the Collateral, and a failure to do so may result in the loss of the security interest in the Collateral or the priority of the security interest in favor of the notes and the guarantees, in each case, against third parties.
In addition, in certain jurisdictions, security interests created over particular assets can only be perfected by possession or control of the asset by the secured party. The terms of the security documents may not require possession or control to be granted to the secured party until enforcement, meaning that the security interest will remain unperfected until possession or control is granted.
The security interest in all cash maintained at, or that is in transit to, our stores will not be perfected. Moreover, the Indenture and the security documents do not require us to take any perfection actions with respect to certain other categories of cash, certain governmental receivables, certain commercial tort claims, certain promissory notes, certain letter-of-credit rights, certain transferable records (as defined in the Uniform Electronic Transaction Act), certain electronic chattel paper, and motor vehicles and other assets subject to certificates of title. See Description of the Exchange NotesSecurity for the NotesCertain Perfection Items.
Any future grant of a security interest in Collateral or guarantee in favor of the holders of the notes might be voidable in bankruptcy.
Any future grant of a security interest in Collateral or guarantee in favor of the holders of the notes might be voidable in a bankruptcy case of the grantor or subsidiary guarantor if certain events or circumstances exist or occur, including if the grantor or subsidiary guarantor is insolvent at the time of the grant or guarantee, the grant or guarantee enables the holders of the notes to receive more than they would receive if the grant or guarantee had not been made and the debtor were liquidated under Chapter 7 of the U.S. Bankruptcy Code, or the Bankruptcy Code, and a bankruptcy case in respect of the grantor or subsidiary guarantor is commenced within 90 days following the grant or guarantee (or one year before commencement of a bankruptcy case if the creditor that benefited from the lien or guarantee is an insider under the Bankruptcy Code).
The Collateral is subject to casualty risks.
We intend to maintain insurance or otherwise insure against hazards in a manner appropriate and customary for our business. There are, however, certain losses with respect to the Collateral that may be either uninsurable or not economically insurable, in whole or part. Insurance proceeds may not compensate us fully for our losses. If there is a complete or partial loss of any Collateral, the insurance proceeds may not be sufficient to satisfy all of our obligations, including the notes and the guarantees.
Bankruptcy laws may limit the ability of holders of the notes to realize value from the Collateral.
The right of the collateral agent to repossess and dispose of the Collateral upon the occurrence of an event of default under the Indenture is likely to be significantly impaired by applicable bankruptcy law if a bankruptcy case were to be commenced by or against us or any of the subsidiary guarantors before the collateral agent repossesses and disposes of the Collateral. For example, under the Bankruptcy Code, pursuant to the automatic stay imposed upon the bankruptcy filing, a secured creditor is prohibited from repossessing its collateral from a debtor in a bankruptcy case, or from disposing of collateral repossessed from such debtor, or taking other actions to levy against a debtor, without bankruptcy court approval after notice and a hearing. Moreover, the Bankruptcy Code permits the debtor to continue to retain and to use collateral even though the debtor is in default under the applicable debt instruments, provided that the secured creditor is given adequate protection. The meaning of the term adequate protection is undefined in the Bankruptcy Code and may vary according to circumstances (and is within the discretion of the bankruptcy court), but it is intended in general to protect the secured creditors interest in the Collateral from diminishing in value during the pending of the bankruptcy case and may include periodic payments or the granting of additional security, if and at such times as the court in its discretion determines, for any diminution in the value of the Collateral as a result of the automatic stay or any use of the Collateral by the debtor during the pendency of the bankruptcy case. A bankruptcy court could conclude that the secured creditors interest in its Collateral is adequately protected against any diminution in value during the bankruptcy case without the need of providing any additional protection. Due to the imposition of the automatic stay, the lack of a precise definition of the term adequate protection and the broad discretionary powers of a bankruptcy court, it is impossible to predict (i) how long payments under the notes could be delayed or if they will be made at all, following commencement of a bankruptcy case, (ii) whether or when the collateral agent could repossess or dispose of the Collateral or (iii) whether or to what extent holders of the notes would be compensated for any delay in payment or loss of value of the Collateral through the requirement of adequate protection.
The guarantees and security interests provided by the subsidiary guarantors may not be enforceable and, under specific circumstances, Federal and state statutes may allow courts to void the guarantees and security interests and require holders of notes to return payments received from the subsidiary guarantors.
Under Federal bankruptcy law and comparable provisions of state fraudulent transfer laws, a guarantee or the grant of a security interest could be deemed a fraudulent transfer if the guarantor or grantor of such security interest received less than a reasonably equivalent value in exchange for giving the guarantee or granting the security interest, and one of the following is also true:
· such guarantor or grantor was insolvent on the date that it gave the guarantee or granted the security interest or became insolvent as a result of giving the guarantee or granting the security interest; or
· such guarantor or grantor was engaged in business or a transaction, or was about to engage in business or a transaction, for which property remaining with the guarantor or grantor was an unreasonably small capital; or
· intended to incur, or believed that it would incur, debts that would be beyond the guarantors or grantors ability to pay as those debts matured.
A guarantee or the grant of a security interest could also be deemed a fraudulent transfer if it was given with actual intent to hinder, delay or defraud any entity to which the guarantor or grantor was or became, on or after the date the guarantee was given or the security interest was granted, indebted.
The measures of insolvency for purposes of the foregoing considerations will vary depending upon the law applied in any proceeding with respect to the foregoing. Generally, however, a guarantor or grantor would be considered insolvent if, at the time it incurred indebtedness:
· the sum of its debts, including contingent liabilities, is greater than all its assets, at a fair valuation; or
· the present fair saleable value of its assets is less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or
· it could not pay its debts as they become due.
We cannot predict:
· what standard a court would apply in order to determine whether a guarantor or grantor was insolvent as of the date it issued a guarantee or granted a security interest, as applicable, or whether, regardless of the method of valuation, a court would determine that the guarantor or grantor was insolvent on that date; or
· whether a court would determine that the payments under a guarantee or the realization on Collateral would constitute fraudulent transfers or fraudulent conveyances on other grounds.
The Indenture contains a savings clause intended to limit each guarantors liability under its guarantee to the maximum amount that it could incur without causing the guarantee to be a fraudulent transfer under applicable law. We cannot assure you that this provision will be upheld as intended. For example, in 2009, the U.S. Bankruptcy Court in the Southern District of Florida in Official Committee of Unsecured Creditors of TOUSA, Inc. v. Citicorp N. Am., Inc. found this kind of provision in that case to be ineffective, and held the guarantees to be fraudulent transfers and voided them in their entirety; this decision was affirmed by the Eleventh Circuit Court of Appeals on May 15, 2012.
If a guarantee of the notes by a subsidiary guarantor is deemed to be a fraudulent transfer, it could be voided altogether, or it could be subordinated to all other debts of the subsidiary guarantor. In such case, any payment by the subsidiary guarantor pursuant to its guarantee could be required to be returned to the subsidiary guarantor or to a fund for the benefit of the creditors of the subsidiary guarantor. If a guarantee is voided or held unenforceable for any other reason, holders of the notes would cease to have a claim against the subsidiary guarantor based on the guarantee and would be creditors only of CCFI and any subsidiary guarantor whose guarantee was not similarly voided or otherwise held unenforceable.
In the event of a bankruptcy of CCFI or any of the guarantors, holders of the notes may be deemed to have an unsecured claim to the extent that obligations in respect of the Notes exceed the fair market value of the Collateral securing the notes.
In any bankruptcy proceeding under Title 11 of the Bankruptcy Code, with respect to CCFI or any of the guarantors, it is possible that the bankruptcy trustee, the debtor-in-possession or competing creditors will assert that the fair market value of the Collateral with respect to the notes on the date of the bankruptcy filing was less than the then-current principal amount of the notes and all other obligations with equal and ratable security interests in the Collateral. Upon a finding by the bankruptcy court that the notes are under-collateralized, the claims in the bankruptcy proceeding with respect to the notes would be bifurcated between a secured claim and an unsecured claim, and the unsecured claim would not be entitled to the benefits of security in the Collateral.
Other consequences of a finding of under-collateralization would be, among other things, a lack of entitlement on the part of the holders of the notes to receive post-petition interest and a lack of entitlement on the part of the unsecured portion of the notes to receive adequate protection under the Bankruptcy Code. In addition, if any payments of post-petition interest had been made prior to the time of such a finding of under-collateralization, those payments could be recharacterized by the bankruptcy court as a reduction of the principal amount of the secured claim with respect to the notes.
We may not be able to satisfy our obligations to holders of the notes upon a change of control.
Upon the occurrence of a change of control, as defined in the Indenture, each holder of the notes will have the right to require us to purchase the notes at a price equal to 101% of their principal amount thereof, together with any accrued and unpaid interest. Our failure to purchase, or to give notice of purchase of, the notes would be a default under the Indenture. In addition, a change of control would constitute an event of default under our Revolving Credit Facility. Any of our future debt agreements may contain similar provisions.
If a change of control occurs, we may not have enough assets to satisfy all obligations under our Revolving Credit Facility, the notes and any other such indebtedness. Upon the occurrence of a change of control, we could seek to refinance the indebtedness under our Revolving Credit Facility, the notes and any other such indebtedness or obtain a waiver from the lenders under our Revolving Credit Facility, the holders of the notes and the holders of any other such indebtedness. We cannot assure you, however, that we would be able to obtain a waiver or refinance our indebtedness on commercially reasonable terms, if at all. We also cannot assure you that any court would enforce the change of control provisions in the Indenture as written for the benefit of the holders, or as to how these change of control provisions would be impacted were we to become a debtor in a bankruptcy case.
We may enter into transactions that would not constitute a change of control that could affect our ability to satisfy our obligations under the notes.
Legal uncertainty regarding what constitutes a change of control and the provisions of the Indenture may allow us to enter into transactions, such as acquisitions, refinancings or recapitalizations, that would not constitute a change of control, as defined in the Indenture, but may increase our outstanding indebtedness or otherwise affect our ability to satisfy our obligations under the notes. The definition of change of control for purposes of the notes includes a phrase relating to the transfer of all or substantially all of our assets taken as a whole. Although there is a limited body of case law interpreting the phrase substantially all, there is no precise established definition of the phrase under applicable law. Accordingly, your ability to require us to repurchase notes as a result of a transfer of less than all of our assets to another person may be uncertain.
The trading price of the notes may be volatile and can be directly affected by many factors, including our credit rating.
The trading price of the notes could be subject to significant fluctuation in response to, among other factors, changes in our operating results, interest rates, the market for non-investment grade securities, general economic conditions and securities analysts recommendations, if any, regarding our securities.
Credit rating agencies continually revise their ratings for companies they follow, including us. Any ratings downgrade could adversely affect the trading price of the notes, or the trading market for the notes, to the extent a trading market for the notes develops. The condition of the financial and credit markets and prevailing interest rates have fluctuated in the past and are likely to fluctuate in the future and any fluctuation may impact the trading price of the notes.
No public market exists for the notes, and resale of the notes is subject to significant legal restrictions as well as uncertainties regarding the liquidity of the trading market for the notes.
We do not intend to apply for the notes to be listed on any securities exchange or to arrange for any quotation on any automated dealer quotation systems. The initial purchasers in the offering of our original notes indicated that they intend to make a market in the notes as permitted by applicable laws and regulations. The initial purchasers are not, however, obligated to make a market in the notes, and they may discontinue their market making activities at any time without notice. Therefore, we cannot assure you that an active market for the notes will develop or, if developed, that it will continue. Historically, the market for non-investment grade debt has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the notes. We cannot assure you that any such disruptions will not adversely affect the prices at which you may sell your notes. In addition, the notes may trade at a discount from their initial offering price, depending upon prevailing interest rates, the market for similar notes, our performance and other factors.
Diamond Castle has substantial influence over us, and their interests in our business may be different from yours.
Diamond Castle beneficially owns approximately 60.2% of our outstanding common shares. Diamond Castle will, for the foreseeable future, have significant influence over our reporting and corporate management and affairs, and virtually all matters requiring shareholder approval. In particular, Diamond Castle will be able to exert a significant degree of influence over the election of directors and actions to be taken by us and our board of directors, including amendments to our articles of incorporation and code of regulations and approval of significant corporate transactions, including mergers and sales of substantially all of our assets. The directors so elected will have the authority, subject to the terms of our indebtedness and Ohio law, to issue additional shares, implement share repurchase programs, declare dividends and make other decisions. It is possible that the interests of Diamond Castle may in some circumstances conflict with our interests and with your interest as a holder of notes. For example, if we encounter financial difficulties or are unable to pay our debts as they mature, the interests of Diamond Castle and certain of its affiliates, as equity holders, might conflict with your interests as a holder of notes. Diamond Castle may also have an interest in pursuing acquisitions, divestitures, financings or other transactions that, in its judgment, could enhance the value of its investment, even through such transactions might involve risks to you as a holder of notes.
Risks Associated with the Exchange Offer
You may not be able to sell your original notes if you do not exchange them for registered exchange notes in the exchange offer.
If you do not exchange your original notes for exchange notes in the exchange offer, your original notes will continue to be subject to the restrictions on transfer as stated in the legends on the original notes. In general, you may not offer, sell or otherwise transfer the original notes in the United States unless they are:
· registered under the Securities Act:
· offered or sold under an exemption from the Securities Act and applicable state securities laws; or
· offered or sold in a transaction not subject to the Securities Act and applicable state securities laws.
Currently, we do not anticipate that we will register the original notes under the Securities Act. Except for limited instances involving the initial purchasers or holders of original notes who are not eligible to participate in the exchange offer or who receive freely transferable exchange notes in the exchange offer, we will not be under any obligation to register the original notes under the Securities Act under the registration rights agreement or otherwise. Also, if the exchange offer is completed on the terms and within the time period contemplated by this prospectus, no liquidated damages will be payable on your original notes.
Your ability to sell your original notes may be significantly more limited and the price at which you may be able to sell your original notes may be significantly lower if you do not exchange them for registered exchange notes in the exchange offer.
To the extent that original notes are exchanged in the exchange offer, the trading market for the original notes that remain outstanding may be significantly more limited. As a result, the liquidity of the original notes not tendered for exchange in the exchange offer could be adversely affected. The extent of the market for original notes will depend upon a number of factors, including the number of holders of original notes remaining outstanding and the interest of securities firms in maintaining a market in the original notes. An issue of securities with a similar outstanding market value available for trading, which is called the float, may command a lower price than would be comparable to an issue of securities with a greater float. As a result, the market price for original notes that are not exchanged in the exchange offer may be affected adversely to the extent that original notes exchanged in the exchange offer reduce the float. The reduced float also may make the trading price of the original notes that are not exchanged more volatile.
There are state securities law restrictions on the resale of the exchange notes.
In order to comply with the securities laws of certain jurisdictions, the exchange notes may not be offered or resold by any holder, unless they have been registered or qualified for sale in such jurisdictions or an exemption from registration or qualification is available and the requirements of such exemption have been satisfied. Currently, we do not intend to register or qualify the resale of the exchange notes in any such jurisdictions. However, generally an exemption is available for sales to registered broker-dealers and certain institutional buyers. Other exemptions under applicable state securities laws also may be available.
Some holders who exchange their original notes may be deemed to be underwriters.
If you exchange your original notes in the exchange offer for the purpose of participating in a distribution of the exchange notes, you may be deemed to have received restricted securities and, if so, will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction.
We will not accept your original notes for exchange if you fail to follow the exchange offer procedures and, as a result, your original notes will continue to be subject to existing transfer restrictions and you may not be able to sell your original notes.
We will issue exchange notes as part of the exchange offer only after a timely receipt of your original notes, a properly completed and duly executed letter of transmittal and all other required documents. Therefore, if you want to tender your original notes, please allow sufficient time to ensure timely delivery. If we do not receive your original notes, letter of transmittal and other required documents by the expiration date of the exchange offer, we will not accept your original notes for exchange. We are under no duty to give notification of defects or irregularities with respect to the tenders of original notes for exchange. If there are defects or irregularities with respect to your tender of original notes, we will not accept your original notes for exchange. See The Exchange Offer.
The market price for the exchange notes may be volatile.
Historically, the market for non-investment grade debt has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the exchange notes offered hereby. The market for the exchange notes, if any, may be subject to similar disruptions. Any such disruptions may adversely affect the value of your exchange notes.
Risks Related to Our Business
We are subject to regulation at both the state and federal levels that is subject to varying interpretations, and our failure to comply with applicable regulations could result in significant liability to us as well as significant additional costs to bring our business practices into compliance.
Our business and products are subject to extensive regulation by state, federal and local governments that may impose significant costs or limitations on the way we conduct or expand our business. In general, these regulations are intended to protect consumers and not our shareholders. See BusinessRegulation and Compliance for a discussion of the regulatory environment in which we operate.
These regulations include those relating to:
· usury, interest rates and fees;
· deferred presentment/small denomination lending, including terms of loans (such as maximum rates, fees and amounts and minimum durations); limitations on renewals and extensions; and disclosures;
· licensing and posting of fees;
· lending practices, such as Truth-in-Lending;
· unfair, deceptive and abusive acts and practices in consumer transactions;
· check cashing;
· money transmission;
· currency and suspicious activity recording and reporting;
· privacy of personal consumer information; and
· prompt remittance of excess proceeds for the sale of repossessed automobiles in certain states in which we operate as a title lender.
Most state laws that specifically regulate our products and services establish allowable fees, interest rates and other financial terms. In addition, many states regulate the maximum amount, maturity, frequency and renewal or extension terms of the loans we provide, as well as the number of simultaneous or consecutive loans. The terms of our products and services vary from state to state in order to comply with the specific laws and regulations of those states.
Our business is also regulated at the federal level. Our lending, like our other activities, is subject to routine oversight by the Federal Trade Commission, or FTC, and, effective July 2011 and as discussed in more detail below, is also subject to supervision by the Consumer Financial Protection Bureau, or CFPB. See The Dodd-Frank Act authorizes the newly created CFPB to adopt rules that could potentially have a serious impact on our ability to offer short-term consumer loans and it also empowers the CFPB and state officials to bring enforcement actions against companies that violate federal consumer financial laws.
In addition, our lending activities are subject to disclosure and non-discrimination requirements, including under the federal Truth-in-Lending Act, Regulation Z adopted under that Act and the Equal Credit Opportunity Act, as well as requirements governing electronic payments and transactions, including the Electronic Funds Transfer Act. In 2007, the U.S. Congress effectively prohibited lenders from making certain short-term consumer loans to members of the U.S. military, active-duty reservists and National Guard, and their respective dependents. Our operations are also subject to the rules and oversight of the Internal Revenue Service and U.S. Treasury related to the Bank Secrecy Act and other anti-money laundering laws and regulations, as well as the privacy and data security regulations under the Gramm-Leach-Bliley Act.
Statutes authorizing consumer loans and similar products and services, such as those we provide, typically provide the state agencies that regulate banks and financial institutions or similar state agencies with significant regulatory powers to administer and enforce the law. In most jurisdictions, we are required to apply for a license, file periodic written reports regarding business operations, and undergo comprehensive examinations or audits from time to time to assess our compliance with applicable laws and regulations.
State attorneys general and financial services regulators scrutinize our products and services and could take actions that may require us to modify, suspend, or cease operations in their respective states. We regularly receive, as part of comprehensive state examinations or audits or otherwise, comments from state attorneys general and financial services regulators about our business operations and compliance with state laws and regulations. These comments sometimes allege violations of, or deficiencies in complying with, applicable laws and regulations. While we have resolved most such allegations promptly and without penalty, we operate in a large number of jurisdictions with varying requirements and we cannot anticipate how state attorneys general and financial services regulators will scrutinize our products and services or the products and services of our industry in the future. If we fail to resolve future allegations satisfactorily, there is a risk that we could be subject to significant penalties, including material fines, or that we may lose our licenses to operate in certain jurisdictions.
Regulatory authorities and courts have considerable discretion in the way they interpret licensing and other statutes under their jurisdiction and may seek to interpret or enforce existing regulations in new ways. If we fail to observe, or are not able to comply with, applicable legal requirements (as such requirements may be interpreted by courts or regulatory authorities), we may be forced to modify or discontinue certain product service offerings or to invest additional amounts to bring our product service offerings into compliance, which could adversely impact our business, results of operations and financial condition. In addition, in some cases, violation of these laws and regulations could result in fines, penalties and other civil and/or criminal penalties. For example, state laws may require lenders that charge interest at rates considered to be usurious or that otherwise violate the law to pay a penalty equal to the principal and interest due for a given loan or loans or a multiple of the finance charges assessed. Depending on the nature and scope of a violation, fines and other penalties for non-compliance of applicable requirements could be significant and could have a material adverse effect on our business, results of operation and financial condition.
In states in which we are licensed to operate, we must comply with all applicable license requirements, including those concerning direct or indirect changes in control of the licensed entities. Most states in which we conduct licensed operations impose requirements related to changes in control of licensed entities or changes of officers of licensed entities or of controlling entities of licensed entities.
Changes in applicable laws and regulations, including adoption of new laws and regulations, governing consumer protection, lending practices and other aspects of our business could have a significant adverse impact on our business, results of operations, financial condition or ability to meet our obligations, or make the continuance of our current business impractical, unprofitable or impossible.
We are subject to the risk that the laws and regulations governing our business are subject to change. State legislatures, the U.S. Congress, and various regulatory bodies may adopt legislation, regulations or rules that could negatively affect our results of operations or make the continuance of our current business impractical, unprofitable or impossible.
For instance, at the federal level, bills were introduced in Congress in 2008 and 2009 that would have placed a federal cap of 36% on the APR applicable to all consumer loan transactions. Another bill directed at payday loans would have placed a 15-cent-per-dollar borrowed ($0.15/$1.00) cap on fees for cash advances, banned rollovers (which is a practice that allows consumers to pay a fee to extend the term of a payday or other short-term loan), and required us to offer an extended payment plan that would have severely restricted many of our payday lending products. Consumer advocacy groups and other opponents of payday and title lending are likely to continue their efforts before Congress, state legislatures and, now, the CFPB, to adopt laws or promulgate rules that would severely limit, if not eliminate, such loans.
Various states have also enacted or considered laws and regulations that could affect our business. Since July 1, 2007, several states in which we operate, including Florida, Illinois, Indiana, Kentucky, Ohio, and Virginia, have enacted laws (or in the case of Arizona, allowed the deferred presentment law to expire) that have impacted our short-term consumer loan business by adversely modifying or eliminating our ability to offer the loan products we previously offered in our stores in those jurisdictions. Recent state legislation has included the adoption of maximum APRs at rates well below a rate at which short-term consumer lending is profitable, the implementation of statewide consumer databases combined with the adoption of rules limiting the maximum number of payday or other short-term consumer loans any one customer can have outstanding at one time or in the course of a given period of time, the adoption of mandatory cooling-off periods for consumer borrowers and the implementation of mandatory and frequently cost-free installment repayment plan options for borrowers who request them, who default on their loans or who claim an inability to repay their loans.
In addition, under statutory authority, state regulators have broad discretionary power and may impose new licensing requirements, interpret or enforce existing regulatory requirements in different ways or issue new administrative rules, even if not contained in state statutes, that affect the way we do business and may force us to terminate or modify our operations in particular states or affect our ability to renew licenses we hold. Regulators may also impose rules that are generally adverse to our industry. Any new licensing requirements or rules, or new interpretations of existing licensing requirements or rules, or our failure to follow licensing requirements or rules could have a material adverse effect on our business, prospects, results of operations and financial condition.
We cannot currently assess the likelihood of the enactment of any future unfavorable federal or state legislation or regulations. We cannot assure you that further legislative or regulatory initiatives will not be enacted that would severely restrict, prohibit or eliminate our ability to offer small denomination loan products to consumers. Future legislative or regulatory actions could entail reductions of the fees and interest that we are currently allowed to charge, limitations on loan amounts, lengthening of the minimum loan term and reductions in the number of loans a consumer may have outstanding at one time or over a stated period of time or could entail prohibitions against rollovers, consumer loan transactions or other services we offer. Such changes could have a material adverse impact on our business prospects, result of operations, financial condition and cash flows or could make the continuance of our current business impractical, unprofitable or impossible and therefore could impair our ability to meet our obligations and to continue current operations. Moreover, similar actions by
states or by foreign countries in which we do not currently operate could limit our opportunities to pursue our growth strategies. As we develop new services, we may become subject to additional federal and state regulations.
As a result of our acquisition of DFS, we are subject to additional regulatory requirements and our failure to comply with such regulation could result in significant liability and materially adversely affect our business.
As a result of our acquisition of DFS, we are now offering loans to consumers over the Internet through the DFS Companies. Where required, DFSs subsidiaries are licensed by the jurisdiction in which they offer loans. DFS offers loans to residents of Alabama, Alaska, California, Delaware, Hawaii, Idaho, Kansas, Louisiana, Minnesota, Missouri, Nevada, North Dakota, Rhode Island, South Dakota, Utah, Washington, Wyoming and Wisconsin. In addition, DFS operates as a credit access business in Texas, through which it offers loans originated by an unaffiliated third-party lender. Further, DFS also offers loans in the United Kingdom through DFS UK and is able to offer loans through a Canadian entity, though it does not currently do so. While we have not previously offered loans in many of these jurisdictions, as a result of the acquisition of DFS, we are subject to the regulatory requirements of such jurisdictions, and our failure to comply with such regulations could subject us to significant liability and result in a material adverse effect on our business.
In addition, DFS relies heavily on the use of lead generators or providers as a source of first-time borrowers. The CFPB has indicated its intention to examine compliance with federal laws and regulations and to scrutinize the flow of non-public, private consumer information between lead generators and lead buyers, such as DFS. The use of such lead generators could subject us to additional regulatory cost and expense and, if DFSs ability to use lead generators were to be impaired, DFSs business could be materially adversely affected and we may not realize the expected benefits of our acquisition of DFS.
Further, borrowers repay loans made by DFS in the United States through automated clearing house funds transfer authorizations. Borrowers repay loans made by DFS in the United Kingdom by way of authorizations to process the repayment charge to the borrowers debit card. The CFPB has indicated its intention to scrutinize the electronic transfers of funds to repay certain small denomination loans. If DFS were to be restricted in its ability to rely on such funds transfers, its business could be materially adversely affected and we may not realize the expected benefits of our acquisition of DFS.
Short-term consumer lending, including payday lending, is highly controversial and has been criticized as being predatory by certain advocacy groups, legislators, regulators, media organizations and other parties.
A significant portion of our revenue and net income comes from loan interest and fees on payday or similar short-term consumer loans and from services we provide our customers. The short-term consumer loans we make typically involve APRs exceeding 395%. Consumer advocacy groups and media reports often focus on the costs to a consumer for small denomination loans and claim that such loans can trap borrowers in a cycle of debt and claim further that they are predatory or abusive. While we believe that these loans provide substantial benefits when responsibly utilized, the controversy surrounding this activity may result in our and the industry being subject to the threat of adverse legislation, regulation or litigation motivated by such critics. Such legislation, regulation or litigation could have a material adverse effect on our business, results of operations and financial condition or could make the continuance of our current business impractical, unprofitable or impossible. In addition, if this negative characterization of small consumer loans becomes increasingly accepted by consumers, demand for these loan products could significantly decrease, which could have a material adverse effect
on our business, results of operations and financial condition. Further, media coverage and public statements that assert some form of inappropriateness in our products and services can lower employee morale, make it more difficult for us to attract and retain qualified employees, management and directors, divert management attention and increase expense.
The Dodd-Frank Act authorizes the newly created CFPB to adopt rules that could potentially have a serious impact on our ability to offer short-term consumer loans and it also empowers the CFPB and state officials to bring enforcement actions against companies that violate federal consumer financial laws.
Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or Dodd-Frank or the Dodd-Frank Act, created the CFPB. The CFPB became operational in July 2011, and on January 4, 2012, Richard Cordray was installed as its director. The CFPB has regulatory, supervisory and enforcement powers over providers of consumer financial products and services, including explicit supervisory authority to examine and require registration of payday lenders. Although it has not yet done so, the CFPB now has the authority to adopt rules describing specified acts and practices as being unfair, deceptive or abusive, and hence unlawful. In addition, the CFPB has issued examination procedures for, and has begun conducting examinations of, payday lenders, evidencing the CFPBs intention to exercise the powers afforded it. The CFPB commenced its examination of us on April 23, 2012. While we do not anticipate any material changes to our operations as a result of this examination, we have not received a final examination report. We can provide no assurances as to the process, scope or results of their examination of us and how their examination of us or others will impact us directly or their rulemaking. Some consumer advocacy groups have suggested that payday and title lending should be a regulatory priority. In addition, some consumer advocacy groups have suggested that certain aspects of payday loans are abusive and therefore such loans should be declared unlawful. Accordingly, it is possible that at some time in the future the CFPB could propose and adopt rules making such lending services materially less profitable or impractical, forcing us to modify or terminate certain product offerings, including payday and/or title loans. The CFPB could also adopt rules imposing new and potentially burdensome requirements and limitations with respect to our other lines of business. Any of these potential rules discussed in this paragraph could have a material adverse effect on our business, results of operation and financial condition or could make the continuance of our current business impractical, unprofitable or impossible.
In addition to Dodd-Franks grant of regulatory and supervisory powers to the CFPB, Dodd-Frank gives the CFPB authority to pursue administrative proceedings or litigation for violations of federal consumer financial laws (including the CFPBs own rules). In these proceedings, the CFPB can obtain cease and desist orders (which can include orders for restitution or rescission of contracts, as well as other kinds of affirmative relief) and monetary penalties ranging from $5,000 per day for ordinary violations of federal consumer financial laws to $25,000 per day for reckless violations and $1 million per day for knowing violations. Also, where a company has violated Title X of Dodd-Frank or CFPB regulations under Title X, Dodd-Frank empowers state attorneys general and state regulators to bring civil actions for the kind of cease and desist orders available to the CFPB (but not for civil penalties). If the CFPB or one or more state officials believe we have violated the foregoing laws or regulations, they could exercise their enforcement powers in ways that would have a material adverse effect on us.
Some of our (and our competitors) lending practices in certain states have become or may become the subject of regulatory scrutiny and/or litigation. An unfavorable outcome in ongoing or future litigation could force us to discontinue these business practices and/or make monetary payments. This could have a material adverse effect on our business, financial condition and results of operations.
In most cases, our lending companies make short-term loans without any involvement of either affiliated or unaffiliated third parties. In Ohio and Arizona, however, our customers receive financial
services through us from multiple parties. In Ohio, one of our companies makes loans at the highest rate permitted by applicable law and disburses loan proceeds in the form of money orders. One of our other companies, sharing the same office, at the borrowers election cashes these money orders for a fee. In Arizona (and to a limited extent in Ohio), we market prepaid debit cards and lines of credit offered by a licensed lender unaffiliated with us. If a customer obtains both a prepaid debit card and a line of credit, loan funds can be disbursed in multiple ways at the borrowers election, including: (1) a card load, if and when the borrower seeks to make a card purchase but has insufficient funds on the card; (2) a card load at the borrowers request in advance of a transaction; and (3) a check mailed to the borrower at his or her request. The lender charges the borrower the highest interest rate permitted by applicable law on their lines of credit and the card program manager charges cardholders separate monthly, transaction, load and other fees charged for their cards.
While we believe that these multiple-party programs are lawful, they entail heightened legal risk when compared to our single-party loan programs. In an effort to prohibit programs similar to our Ohio program, in 2010 the Ohio Department of Commerce, Division of Financial Institutions, or the Ohio Division, adopted a rule (which was judicially declared invalid) and entered an order against another lender in regulatory enforcement proceedings (which order was vacated by the same judge that overturned the Ohio Division rule). The Ohio Division waived its right to appeal and agreed to terminate and/or not commence any regulatory proceedings challenging this practice. In May 2012, we discontinued the marketing of our third-party lending program. Although we no longer engage in third-party lending practices, if we adopted a similar program elsewhere, or if other pending litigation in Ohio successfully advances arguments that are contrary to those of the Ohio Divisions currently stated position, we could become subject to private class action litigation with respect to fees collected under any program adopted in the future or the discontinued version of the program. This could have a material adverse effect on our business, financial condition and results of operations. See BusinessLegal ProceedingsOhio Third-Party Litigation. Additionally, in the event of class action litigation and/or regulatory action in Arizona, a similar material adverse effect on our business, financial condition and results of operations could result.
Judicial decisions, CFPB rule-making or amendments to the Federal Arbitration Act could render the arbitration agreements we use illegal or unenforceable.
We include pre-dispute arbitration provisions in our loan agreements. These provisions are designed to allow us to resolve any customer disputes through individual arbitration rather than in court. Our arbitration agreements contain certain consumer-friendly features, including terms that require in-person arbitration to take place in locations convenient for the consumer and provide consumers the option to pursue a claim in small claims court. However, our arbitration provisions explicitly provide that all arbitrations will be conducted on an individual and not on a class basis. Thus, our arbitration agreements, if enforced, have the effect of shielding us from class action liability. They do not generally have any impact on regulatory enforcement proceedings.
We take the position that the Federal Arbitration Act requires the enforcement in accordance with the terms of arbitration agreements containing class action waivers of the type we use. While many courts, particularly federal courts, have agreed with this argument in cases involving other parties, an increasing number of courts, including courts in California, Missouri, Washington, New Jersey, and a number of other states, have concluded that arbitration agreements with class action waivers are unconscionable and hence unenforceable, particularly where a small dollar amount is in controversy on an individual basis.
In April 2011, the U.S. Supreme Court ruled in the AT&T Mobility v. Concepcion case that consumer arbitration agreements meeting certain specifications are enforceable. Because our arbitration agreements differ in several respects from the agreement at issue in that case, this potentially limits the
precedential effect of the decision on our business. In addition, Congress has considered legislation that would generally limit or prohibit mandatory pre-dispute arbitration in consumer contracts and has adopted such a prohibition with respect to certain mortgage loans and also certain consumer loans to members of the military on active duty and their dependents. Further, Dodd-Frank directs the CFPB to study consumer arbitration and report to Congress, and it authorizes the CFPB to adopt rules limiting or prohibiting consumer arbitration, consistent with the results of its study. Any such rule would apply to arbitration agreements entered into more than six months after the final rule becomes effective (and not to prior arbitration agreements).
Any judicial decisions, legislation or other rules or regulations that impair our ability to enter into and enforce pre-dispute consumer arbitration agreements could significantly increase our exposure to class action litigation as well as litigation in plaintiff-friendly jurisdictions. Such litigation could have a material adverse effect on our business, results of operations and financial condition.
Provisions of Dodd-Frank limiting interchange fees on debit cards could reduce the appeal of debit cards we distribute and/or limit revenues we receive from our debit card activities.
Dodd-Frank contains provisions that require the Federal Reserve Board to adopt rules that would sharply limit the interchange fees that large depository institutions (those that, together with their affiliates, have at least $10 billion of assets) can charge retailers who accept debit cards they issue. On June 29, 2011, the Federal Reserve Board set the interchange fee applicable to debit card transactions at 21 cents per transaction. While the statute does not apply to smaller entities, it is possible, and perhaps likely, that Visa, MasterCard and other debit card networks will continue their current practice of establishing the same interchange fees for all issuers or will establish interchange fees for exempt entities at levels significantly below current levels. If this happens, we would expect the issuer and processor of our debit cards to attempt to recover lost interchange revenues by imposing new or higher charges on cardholders and by seeking to capture a greater percentage of card revenues from us. Additional charges on debit cardholders could discourage use of debit cards for consumer transactions, and in either event, our revenues from prepaid debit card distribution would likely decline, perhaps materially.
Changes in local rules and regulations such as local zoning ordinances could negatively impact our business, results of operations and financial condition.
In addition to state and federal laws and regulations, our business is subject to various local rules and regulations, such as local zoning regulations and permit licensing. Local jurisdictions efforts to restrict the business of alternative financial services providers through the use of local zoning and permit laws have been on the rise. Any actions taken in the future by local zoning boards or other local governing bodies to require special use permits for, or impose other restrictions on, our ability to provide products and services could adversely affect our ability to expand our operations or force us to attempt to relocate existing stores.
Potential litigation and regulatory proceedings could have a material adverse impact on our business, results of operations and financial condition in future periods.
We could become subject to lawsuits, regulatory proceedings or class actions challenging the legality of our lending practices. An adverse ruling in any proceeding of this type could force us to refund fees and/or interest collected, refund the principal amount of advances, pay triple or other multiple damages, pay monetary penalties and/or modify or terminate operations in particular states or nationwide. Defense of any lawsuit, even if successful, could require substantial time and attention of our senior management that would otherwise be spent on other aspects of our business and could require the expenditure of significant amounts for legal fees and other related costs. Settlement of lawsuits may also result in significant payments and modifications to our operations. For example, in
December 2010, we reserved $0.9 million in connection with the pending settlements of lawsuits alleging violations of the California wage laws related to meal periods and rest breaks. See BusinessLegal ProceedingsCalifornia Settlement. Adverse interpretations of the law in proceedings in which we are not currently a party could also have a material adverse effect on our business, results of operations and financial condition. To protect us from potential legal and regulatory liability, we rely, in part, on the maintenance of the legal separation, or corporate veil, of our operating subsidiaries. If a court or regulatory body were to determine that such corporate veil is invalid, our business could be materially affected. For a more detailed description of the lawsuits, regulatory proceedings and potential settlements we are currently subject to, see BusinessLegal Proceedings.
A significant portion of our revenue is generated by our stores in Ohio and California and a limited number of other states.
Approximately 35.8% of our stores are located in California, 22.8% of our stores are located in Ohio, 9.9% of our stores are located in Arizona and 5.1% of our stores are located in Virginia. In addition, if we complete the Florida Acquisition, approximately 13.3% of our stores would be located in Florida. As a result, if any of the events noted in this Risk Factors section were to occur with respect to our stores in these states, including changes in the regulatory environment, or if the economic conditions in any of these states were to worsen, any such event could significantly reduce our revenue and cash flow and materially adversely affect our business, results of operations and financial condition.
Our revenue and net income from check cashing services may be materially adversely affected if the number of consumer check cashing transactions decreases as a result of technological development or in response to changes in the tax preparation industry.
For the fiscal years ended December 31, 2009, 2010 and 2011 and the first quarter of 2012, approximately 26.2%, 24.9%, 23.7% and 23.5% of our revenues were generated from the check cashing business, respectively. For the year ended December 31, 2011, on a pro forma basis, approximately 29.0% of our revenues were generated from the check cashing business. Recently, there has been increasing penetration of electronic banking services into the check cashing and money transfer industry, including the increasing adoption of prepaid debit cards, direct deposit of payroll checks, electronic payroll payments, electronic transfers of government benefits, electronic transfers using on-line banking and other payment platforms. A recent study by the Federal Reserve Board suggests that payments through electronic transfers are displacing a portion of the paper checks traditionally cashed in our stores by our customers. Employers are increasingly making payroll payments available through direct deposit or onto prepaid debit cards. In addition, state and federal assistance programs are increasingly delivering benefits either through direct deposit programs or prepaid debit cards, and the federal government has announced initiatives to transition the disbursement of some federal tax refunds to prepaid debit cards. For example, in April 2011, the State of California stopped issuing paper checks to benefits recipients, which adversely affected our check cashing revenue in that state. Moreover, the rise of on-line payment systems that allow for electronic check and credit card payments to be made directly to individuals has further contributed to the decline in this market. To the extent that checks received by our customer base are replaced with such electronic transfers or electronic transfer systems developed in the future, both the demand for our check cashing services and our revenues from our check cashing business could decrease. In addition, a significant part of our business involves the cashing of tax refund checks. Recent changes in the tax preparation industry, including tax preparers offering prepaid debit cards as an alternative to tax refund checks and a decrease in the number of tax preparers offering refund anticipation loans (which are typically disbursed by checks at the offices of the tax preparer) could cause the number of tax refund checks we cash to decline, which could have a material adverse effect on our financial condition and results of operations.
If our estimates of our loan losses are not adequate to absorb actual losses, our financial condition and results of operations could be adversely affected.
We utilize a variety of underwriting criteria, actively monitor the performance of our loan portfolio and maintain an allowance for losses on loans we underwrite (including fees and interest) at a level estimated to be adequate to absorb credit losses inherent in our loan receivables portfolio. To estimate the appropriate level of loan loss reserves, we consider known and relevant internal and external factors that affect loan collectability, including the total amount of loans outstanding, historical loans charge-offs, our current collection patterns and current economic trends. Our methodology for establishing our allowance for doubtful accounts and our provision for loan losses is based in large part on our historic loss experience. If customer behavior changes as a result of economic conditions and if we are unable to predict how the widespread loss of jobs, housing foreclosures and general economic uncertainty may affect our loan loss allowance, our provision may be inadequate. In addition, our shift in mix to more medium-term loans will result in a higher provision for loan losses as a result of the nature of medium-term loans as compared to short term loans, and, as this is a relatively new product for us, our provision for loan losses may be inadequate to cover losses on medium-term loans. At December 31, 2010, our loan loss allowance was $3.4 million, and in 2010 we had a net charge off of $38.4 million related to losses on our loans. As of December 31, 2011, our loan loss allowance was $5.6 million, and in 2011 we had a net charge off of $55.3 million related to losses on our loans. As of March 31, 2012, our loan loss allowance was $5.0 million with net charge offs for the quarter of $12.0 million, compared to $3.8 million and $6.4 million, respectively, as of and for the quarter ended March 31, 2011. Our loan loss allowance, however, is an estimate, and if actual loan losses are materially greater than our loan loss allowance, our financial condition and results of operations could be adversely affected.
The failure of third parties who provide products, services or support to us to maintain their products, services or support could disrupt our operations or result in a loss of revenue.
We are reliant on third parties to provide certain products, services and support that is material to our business. In the event such parties become unwilling or unable to continue to provide such products, services or support to us, our business operations could be disrupted and our revenue could be materially and adversely affected. For example:
· Our prepaid debit card business depends on our agreements for related services with Insight. If any disruption in this relationship occurs, our revenue generated as an agent for Insights product offerings and one of the central focuses for our future growth strategy may be adversely affected.
· Our money transfer and money order business depends on our agreements for such services with Western Union and MoneyGram. If any disruption in these relationships occurs, our revenue generated from our money order and money transfer product offerings may be adversely affected. Approximately $1.5 million in 2009, $1.3 million in 2010 and $4.9 million in 2011, or 0.8%, 0.6% and 1.6%, respectively, of our total revenue for the years ended December 31, 2009, 2010 and 2011, was related to our money transfer and money order services, respectively.
· We also have product and support agreements with various other third-party vendors and suppliers. If a third-party provider fails to provide its product or service or to maintain its quality and consistency, we could lose customers and related revenue from those products or services, or we could experience a disruption in our operations, any of which may adversely affect our business, results of operations and financial condition.
Our current and future business growth strategy involves new store acquisitions, and our failure to manage our growth or integrate or manage newly acquired stores may adversely affect our business, results of operations and financial condition.
Our growth strategy provides for our continued expansion through the acquisition of new stores. The acquisition of additional stores may impose costs on us and subject us to numerous risks, including:
· costs associated with identification of stores to be acquired and negotiation of acceptable lease terms;
· exposure to new or unexpected changes to existing regulations as we enter new geographic markets;
· costs associated with, and consequences related to our failure to obtain, necessary regulatory approvals, including state licensing approvals for change-of-control;
· integration of acquired operations or businesses, including the transition to our information technology systems;
· the loss of key employees from acquired businesses;
· diversion of managements attention from our core business;
· incurrence of additional indebtedness (if necessary to finance acquisitions);
· assumption of contingent liabilities;
· the potential impairment of acquired assets;
· the possibility that tax authorities may challenge the tax treatment of future and past acquisitions;
· incurrence of significant immediate write-offs; and
· performance which may not meet expectations.
We opened or acquired 21 stores in 2010. In 2011, we acquired 10 stores in Illinois in connection with the Illinois Acquisition, 141 stores in connection with the California Acquisition and we opened two other locations. In 2012 we acquired DFS and opened four stores through May 31st. Our continued growth is dependent upon a number of factors, including the availability of adequate financing and suitable store locations, acquisition opportunities and experienced management employees, the ability to obtain any required government permits and licenses and other factors, some of which are beyond our control. We cannot assure you that we will be able to expand our business successfully through additional store acquisitions. Our failure to successfully expand, manage or complete the integration of new stores or acquired businesses may adversely affect our business, results of operations and financial condition.
We may not realize the expected benefits of the recent or pending acquisitions because of integration difficulties and other challenges.
The success of any acquisitions will depend, in part, on our ability to integrate the acquired business with our business and our ability to increase their store-level performance in line with our historical store-level performance. The integration process may be complex, costly and time-consuming and may not result in the anticipated improvements to store-level performance. The difficulties of integrating the operation of a business may include, among others:
· failure to implement our business plan for the combined business;
· failure to achieve expected synergies or cost savings;
· unanticipated issues in integrating information, technology and other systems;
· unanticipated challenges in implementing our short-term consumer lending practices in acquired stores or in marketing loan products to their existing customers;
· unanticipated changes in applicable laws and regulations; and
· unanticipated issues, expenses and liabilities.
We may not accomplish the integration of the acquired business smoothly, successfully or with the anticipated costs or time frame. The diversion of the attention of management from our operations to the integration effort and any difficulties encountered in combining operations could prevent us from realizing the full benefits anticipated to result from the acquisition and could adversely affect our business.
The acquisition of DFS has resulted in a new line of business for us that could be difficult to integrate, disrupt our business or harm our results of operations.
We have never provided Internet loan products. The acquisition of DFS provides us with a new line of business offering loan products over the Internet. The process of integrating the acquired business, technology and service component into our business and operations, or our entry into a line of business in which we are inexperienced, may result in unforeseen operating difficulties and expenditures. We are relying on DFSs existing management teams experience and expertise in providing Internet loan products as we expand into this new line of business. If we were to lose the services of a significant portion of this management team, this line of business and our financial results could be adversely affected. In developing this line of business, we may invest significant time and resources and devote significant attention of management that would otherwise be focused on development of our existing business, which may affect our results of operations, and we may not be able to take full advantage of the business opportunities available to us as we expand this new line of business. Additionally, we may experience difficulties with technological changes in the Internet lending business. Moreover, we will be subject to regulations in connection with doing business and offering loan products over the Internet, with which we do not have experience. Failure to successfully manage these risks in the development and implementation of this new line of business could have a material adverse effect on our business, financial condition and results of operations.
We are subject to impairment risk.
At March 31, 2012, we had goodwill totaling $255.4 million on our consolidated balance sheet, all of which represents the excess of costs paid to acquire assets and liabilities over the fair value of those assets and liabilities. Accounting for goodwill requires significant management estimates and judgment. Events may occur in the future and we may not realize the value of our goodwill. Management performs reviews annually and when events or circumstances warrant a review of the carrying values of the goodwill to determine whether events and circumstances indicate that an impairment in value may have occurred. A variety of factors could cause the carrying value of our goodwill to become impaired. Should a review indicate impairment, a write-down of the carrying value of our goodwill would occur, resulting in a non-cash charge, which would adversely affect our results of operations. Our equity-method investments, such as our investment in Insight Holdings, as discussed under Managements Discussion and Analysis of Financial Condition and Results of OperationInvested Companies, are also subject to the same impairment risks.
We may not be successful at entering new businesses or broadening the scope of our existing product and service offerings.
We may enter into new businesses that are adjacent or complementary to our existing businesses and that broaden the scope of our existing product and service offerings. For example, we have recently
entered the business of offering loan products over the Internet through the acquisition of DFS. We may not achieve our expected growth if we are not successful in entering these new businesses or in broadening the scope of our existing product and service offerings. In addition, entering new businesses and broadening the scope of our existing product and service offerings may require significant upfront expenditures that we may not be able to recoup in the future. These efforts may also divert managements attention and expose us to new risks and regulations. As a result, entering businesses and broadening the scope of our existing product and service offerings may have a material adverse effect on our business, results of operations and financial condition.
If we lose key management or are unable to attract and retain the talent required for our business, our operating results and growth could suffer.
Our future success depends to a significant degree upon the members of our senior management. The loss of the services of members of senior management could harm our business and prospects for future development. Our continued growth also will depend upon our ability to attract and retain additional skilled management personnel. If we are unable to attract and retain the requisite personnel, our business, results of operations and financial condition may be adversely affected.
We are dependent on hiring an adequate number of hourly employees to run our business and are subject to government regulations concerning these and our other employees, including minimum wage laws.
Our workforce is comprised primarily of employees who work on an hourly basis. In certain areas where we operate, there is significant competition for employees. Our ability to continue to expand our operations depends on our ability to attract, train and retain a large and growing number of qualified employees. The lack of availability of an adequate number of hourly employees or increase in wages and benefits to current employees could adversely affect our operations. We are subject to applicable rules and regulations relating to our relationship with our employees, including the U.S. Fair Labor Standards Act, the U.S. Immigration Reform and Control Act of 1986 and various federal and state laws governing various matters including minimum wage and break requirements, exempt status classification, health benefits, unemployment and employment taxes and overtime and working conditions. Legislative increases in the federal minimum wage, as well as increases in additional labor
cost components, such as employee benefit costs, workers compensation insurance rates, compliance costs and fines, as well as the cost of litigation in connection with these regulations, would increase our labor costs. Furthermore, if we are unable to locate, attract, train or retain qualified personnel, or if our costs of labor increase significantly, our business, results of operations and financial condition may be adversely affected.
Competition in the retail financial services industry is intense and could cause us to lose market share and revenue.
The industry in which we operate has low barriers to entry and is highly fragmented and very competitive. In addition, we believe that the market will become more competitive as the industry continues to consolidate. We compete with other check cashing stores, short-term consumer lenders, internet lenders, mass merchandisers, grocery stores, banks, savings and loan institutions, other financial services entities and other retail businesses that cash checks, offer short-term consumer loans, sell money orders, provide money transfer services or offer similar products and services. Some of our competitors have larger and more established customer bases, and substantially greater financial, marketing and other resources, than we do. For example, Walmart offers a general-purpose reloadable prepaid debit card and also offers check cashing services, money transfers and bill payments through its Money Centers in select locations. In addition, short-term consumer loans are increasingly being offered by local banks and employee credit unions. Our stores also face competition from automated check cashing machines deployed in supermarkets, convenience stores and other venues by large financial services organizations. In addition, our competitors may operate, or begin to operate, under business models less focused on legal and regulatory compliance than ours, which could put us at a competitive disadvantage. We cannot assure you that we will be able to compete successfully against any or all of our current or future competitors. As a result, we could lose market share and our revenue could decline, thereby affecting our ability to generate sufficient cash flow to service our indebtedness and fund our operations.
Our competitors use of other business models could put us at a competitive disadvantage and have a material adverse effect on our business.
We operate our business pursuant to the laws and regulations of the states in which our stores are located, including compliance with the maximum fees allowed and other limitations. We have the requisite liscenses to operate in every state in which we lend. Some of our competitors, especially internet lenders, operate using other business models, including a single-state model where the lender is generally licensed in one state and follows only the laws and regulations of that state regardless of the state in which the customer resides and the lending transaction takes place, an offshore model where the lender is not licensed in any U.S. state and does not typically comply with any particular states laws or regulations and a tribal model where the lender follows the laws of a Native American tribe regardless of the state in which the lender is located, the customer resides and the lending transaction takes place. Competitors using these models may have higher revenue per customer and significantly less burdensome compliance requirements, among other advantages. Additionally, negative perceptions about these models could cause legislators or regulators to pursue additional industry restrictions that could affect the business model under which we operate, which could have a material adverse effect on our business, prospects, results of operations and financial condition.
A reduction in demand for our products and services and failure by us to adapt to such reduction could adversely affect our business and results of operations.
The demand for a particular product or service we offer may be reduced due to a variety of factors, such as regulatory restrictions that decrease customer access to particular products, the availability of competing products or changes in customers preferences or financial conditions. Should
we fail to adapt to significant changes in our customers demand for, or access to, our products or services, our revenues could decrease significantly and our operations could be harmed. Even if we do make changes to existing products or services or introduce new products or services to fulfill customer demand, customers may resist or may reject such products or services. Moreover, the effect of any product change on the results of our business may not be fully ascertainable until the change has been in effect for some time and by that time it may be too late to make further modifications to such product or service without causing further harm to our business, results of operations and financial condition.
Demand for our products and services is sensitive to the level of transactions effected by our customers, and accordingly, our revenues could be affected negatively by a general economic slowdown.
A significant portion of our revenue is derived from cashing checks and consumer lending. Revenues from check cashing and consumer lending accounted for 24.9% and 65.2%, respectively, of our total revenue for the year ended December 31, 2010, 23.7% and 63.9%, respectively, of our total revenue for the year ended December 31, 2011 and 23.5% and 63.5%, respectively, for the quarter ended March 31, 2012. An economic slowdown could cause deterioration in the performance of our loan portfolio and in consumer demand for our financial products and services. For example, a significant portion of our check cashing business is generated by cashing payroll checks and any prolonged economic downturn or increase in unemployment could have a material adverse effect on such business. In addition, reduced consumer confidence and spending may decrease the demand for our other products and services. Also, any changes in economic factors that adversely affect consumer transactions and employment could reduce the volume of transactions that we process and have an adverse effect on our business, results of operations and financial condition.
Our future growth and financial success will be harmed if there is a decline in the use of prepaid debit cards as a payment mechanism or if there are adverse developments with respect to the prepaid debit card services industry in general.
Our business strategy is dependent, in part, upon the general growth in demand for prepaid debit cards. As the market for prepaid debit card services matures, consumers may find prepaid debit cards to be less attractive than traditional bank solutions. Further, other alternatives to prepaid debit cards may develop and limit the growth of, or cause a decline in the demand for, prepaid debit cards. In addition, negative publicity surrounding other prepaid debit card services providers could impact our business and prospects for growth to the extent it adversely impacts the perception of prepaid debit card services industry among consumers. If consumers do not continue to increase their usage of prepaid debit card services, our operating revenues may remain at current levels or decline. Predictions by industry analysts and others concerning the growth of prepaid debit card services as an electronic payment mechanism, including those in this prospectus, may overstate the growth of an industry, segment or category, and you should not place undue reliance upon them. The projected growth may not occur or may occur more slowly than estimated. If consumer acceptance of prepaid debit card services does not continue to develop or develops more slowly than expected or if there is a shift in the mix of payment forms, such as cash, credit cards, traditional debit cards and prepaid debit cards, away from our products and services, it could have a material adverse effect on our business, results of operations and financial condition.
The pro forma financial information in this prospectus may not be reflective of our operating results and financial condition following the California Acquisition and related transactions.
The pro forma financial information included in this prospectus is derived from our and CCCSs separate historical audited and unaudited consolidated financial statements, as well as from certain internal, unaudited financial statements relating to our acquired stores in Illinois that were provided by the sellers in connection with those acquisitions. The preparation of this pro forma information is based
upon available information and certain assumptions and estimates that we believe are reasonable. This pro forma information may not necessarily reflect what our results of operations and financial position would have been had the California Acquisition and related transactions and the Illinois Acquisition occurred during the periods presented or what our results of operations and financial position will be in the future. Additionally, the pro forma information reflects financial information for our Alabama and Illinois acquired stores for the periods prior to when we acquired them, and we cannot assure you that this financial information is accurate.
Disruptions in the credit markets may negatively impact the availability and cost of our short-term borrowings, which could adversely affect our results of operations, cash flows and financial condition.
If our cash flow from operations is not sufficient to fund our working capital and other liquidity needs, we may need to rely on the banking and credit markets to meet our financial commitments and short-term liquidity needs. Disruptions in the capital and credit markets, as have been experienced since 2008, could adversely affect our ability to draw on our Revolving Credit Facility. Our access to funds under that credit facility is dependent on the ability of the banks that are parties to the facility to meet their funding commitments. Those banks may not be able to meet their funding commitments to us if they experience shortages of capital and liquidity or if they experience excessive volumes of borrowing requests from us and other borrowers within a short period of time. In addition, the effects of the global recession and its effects on our operations could cause us to have difficulties in complying with the terms of our Revolving Credit Facility.
Longer-term disruptions in the capital and credit markets as a result of uncertainty, changing or increased regulation, reduced alternatives, or failures of significant financial institutions could adversely affect our ability to refinance our outstanding indebtedness on favorable terms, if at all. The lack of availability under, and the inability to subsequently refinance, our indebtedness could require us to take measures to conserve cash until the markets stabilize or until alternative credit arrangements or other funding for our business needs can be arranged. Such measures could include deferring capital expenditures, including acquisitions, and reducing or eliminating other discretionary uses of cash.
Our revenue and net income from check cashing services may be materially adversely affected if the number and amount of checks we cash that go uncollected significantly increases.
When we cash a check, we assume the risk that we will be unable to collect from the check payor. We may not be able to collect from check payors as a result of a payor having insufficient funds in the account on which a check was drawn, stop payment orders issued by a payor or check fraud. If the number or amount of checks we cash that are uncollected increases significantly, our business, results of operations and financial condition may be materially adversely affected.
Any disruption in the availability or the security of our information systems or the Internet lending platform that we acquired from DFS or fraudulent activity could adversely affect our operations or subject us to significant liability or increased regulation.
We depend on our information technology infrastructure to achieve our business objectives. Our information systems include POS systems in our stores and a management information system. Our personal computer-based POS systems are fully operational in all stores. The management information system is designed to provide summary and detailed information to our regional and corporate managers at any time through the Internet. In addition, this system is designed to manage our credit risk and to permit us to maintain adequate cash inventory, reconcile cash balances on a daily basis and report revenues and expenses to our headquarters. Moreover, in connection with our acquisition of DFS, we will begin offering loans and other products through our Internet lending platform. Any disruption in the availability of our information systems or Internet lending platform could adversely affect our business, results of operations and financial condition.
Furthermore, a security breach of our information systems or Internet lending platform could also interrupt or damage our operations or harm our reputation, and could subject us to significant liability if confidential customer information is misappropriated. Despite the implementation of significant security measures, our information systems and Internet lending platform may still be vulnerable to physical break-ins, computer viruses, programming errors, telecommunications failure or lost connectivity, attacks by third parties or similar disruptive problems. If confidential information belonging to our customers or business partners is misappropriated from our information systems or over the Internet, the owners of such information could sue us, asserting that we did not take adequate precautions to safeguard our systems and confidential data. Any breach of our security measures could damage our reputation and cause us to lose customers and revenue, result in the unintentional disclosure of company and customer information, and require us to incur significant expense to eliminate these problems, address related data security concerns and pay damages to third parties including customers.
In addition, criminals are using increasingly sophisticated methods to engage in illegal activities such as fraud. Over the past several years, we and others in our industry have had customers and former customers contacted by unknown criminals making telephone calls attempting to collect debt, purportedly on our behalf. These criminals are often successful in fraudulently inducing payments to them. Increased fraud involving our products and services or affecting our customers could lead to litigation, significantly increased expenses, reputational damage, reduced use and acceptance of our products and services or new regulations and compliance obligations, which could have a material adverse effect on our business, prospects, results of operations and financial condition.
Our business may suffer if our trademarks or service marks are infringed.
We rely on trademarks and service marks to protect our various brand names in our markets. Many of these trademarks and service marks have been a key part of establishing our business in the communities in which we operate. We believe these trademarks and service marks have significant value and are important to the marketing of our services. We cannot assure you that the steps we have taken or will take to protect our proprietary rights will be adequate to prevent misappropriation of our rights or the use by others of features based upon, or otherwise similar to, ours. In addition, although we believe we have the right to use our trademarks and service marks, we cannot assure you that our trademarks and service marks do not or will not violate the proprietary rights of others, that our trademarks and service marks will be upheld if challenged, or that we will not be prevented from using our trademarks and service marks, any of which occurrences could harm our business.
Part of our business is seasonal, which causes our revenue to fluctuate and may adversely affect our ability to service our debt.
Our business is seasonal due to the impact of our customers cashing their tax refund checks with us and using the related proceeds in connection with our other products and services, such as prepaid debit cards. Also, our consumer loan business declines slightly in the first calendar quarter as a result of customers receipt of tax refund checks. If our revenue were to fall substantially below what we would normally expect during certain periods, our annual financial results would be adversely impacted, as would our ability to service our debt.
Because we maintain a significant supply of cash in our stores, we may be subject to cash shortages due to robbery, employee errors and theft.
Since our business requires us to maintain a significant supply of cash in each of our stores, we are subject to the risk of cash shortages resulting from robberies, as well as employee errors and theft. Although we have implemented various procedures and programs to reduce these risks, provide security, systems and processes for our employees and facilities, we cannot assure you that robberies,
employee errors and theft will not occur. The extent of these cash shortages could increase as we expand the nature and scope of our products and services. Any such cash shortages could adversely affect our business, results of operations and financial condition.
If our insurance coverage limits are inadequate to cover our liabilities, or increases in our insurance costs continue to increase or we suffer losses due to one or more of our insurance carriers defaulting on their obligations, our financial condition and results of operations could be materially adversely affected.
As a result of the liability risks inherent in our lines of business we maintain liability insurance intended to cover various types of property, casualty and other risks. The types and amounts of insurance that we obtain vary from time to time, depending on availability, cost and our decisions with respect to risk retention. The policies are subject to deductibles and exclusions that result in our retention of a level of risk on a self-insured basis. Our insurance policies are subject to annual renewal. The coverage limits of our insurance policies may not be adequate, and we may not be able to obtain liability insurance in the future on acceptable terms or at all. In addition, our insurance premiums may be subject to increases in the future, which increases may be material. Furthermore, the losses that are insured through commercial insurance are subject to the credit risk of those insurance companies. While we believe our commercial insurance providers are currently credit worthy, we cannot assure you that such insurance companies will remain so in the future. Inadequate insurance coverage limits, increases in our insurance costs or losses suffered due to one or more of our insurance carriers defaulting on their obligations, could have a material adverse effect on our financial condition and results of operations.
Our operations could be subject to natural disasters and other business disruptions, which could adversely impact our future revenue and financial condition and increase our costs and expenses.
Our operations could be subject to natural disasters and other business disruptions, which could adversely impact our future revenue and financial condition and increase our costs and expenses. For example, the occurrence and threat of terrorist attacks may directly or indirectly affect economic conditions, which could in turn adversely affect demand for our services. In the event of a major natural or man-made disaster, such as hurricanes, floods, fires or earthquakes, we could experience loss of life of our employees, destruction of facilities or business interruptions, any of which could materially adversely affect us. More generally, any of these events could cause consumer confidence and spending to decrease or result in increased volatility in the U.S. economy and worldwide financial markets. Any of these occurrences could have a material adverse effect on our business, results of operations and financial condition.
Adverse real estate market fluctuations could affect our profits.
We lease all of our store locations. A significant rise in overall lease costs may result in an increase in our store occupancy costs as we open new locations and renew leases for existing locations.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements, which reflect managements expectations regarding our future growth, results of operations, operational and financial performance and business prospects and opportunities. All statements, other than statements of historical fact, are forward-looking statements. You can identify such statements because they contain words such as plans, expects or does not expect, forecasts, anticipates or does not anticipate, believes, intends and similar expressions or statements that certain actions, events or results may, could, would, might or will be taken, occur or be achieved. Although the forward-looking statements contained in this prospectus reflect managements current beliefs based upon information currently available to management and upon assumptions which management believes to be reasonable, actual results may differ materially from those stated in or implied by these forward-looking statements.
A number of factors could cause actual results, performance or achievements to differ materially from the results expressed or implied in the forward-looking statements, including those listed in the Risk Factors section of this prospectus. These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. Forward-looking statements necessarily involve significant known and unknown risks, assumptions and uncertainties that may cause our actual results, performance and opportunities in future periods to differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things:
· our ability to complete pending acquisitions and successfully integrate newly acquired businesses and stores into our current operations;
· changes in customer demand for our products and services;
· the actions of third parties who offer products and services to or for us;
· regulatory matters affecting our products and services;
· the duration and impact of any economic downturn;
· our ability to effectively compete in the financial services industry and maintain our share of the market;
· the effects of any current or future litigation or regulatory proceedings against us;
· our ability to offer new products and services;
· our ability to compete in light of technological advances;
· our ability to safeguard against employee error and theft;
· our dependence upon key management personnel and executives;
· issues relating to our information systems; and
· the influence of our largest shareholder, Diamond Castle, on our business.
Although we have attempted to identify important risks and factors that could cause actual actions, events or results to differ materially from those described in or implied by our forward-looking statements, other factors and risks may cause actions, events or results to differ materially from those anticipated, estimated or intended. We cannot assure you that forward-looking statements will prove to be accurate, as actual actions, results and future events could differ materially from those anticipated or implied by such statements. Accordingly, as noted above, readers should not place undue reliance on forward-looking statements. These forward-looking statements are made as of the date of this prospectus and, except as required by law, we assume no obligation to update or revise them to reflect new events or circumstances.
CERTAIN FINANCIAL MEASURES AND OTHER INFORMATION
Our consumer loan product offerings vary state-by-state, depending on the applicable statutes in each jurisdiction.
We calculate per store revenue by dividing our total revenue over the applicable period by the average number of stores we operated during a period. We calculate the average number of stores we operated during a period by adding the number of stores operated on each day of the period and dividing that number by the number of days in such period.
Revenue and other financial information for our acquired businesses and businesses to be acquired for periods prior to our acquisition of such businesses have been derived from unaudited internal financial information that was provided to us by the sellers in each completed acquisition and pending acquisition. Thus, this information was not subject to our accounting controls and has not been reviewed by our independent accountants, and we cannot assure you that it is accurate.
We will not receive any proceeds from the issuance of exchange notes in the exchange offer. The exchange notes will evidence the same debt as the original notes tendered in exchange for the exchange notes. Accordingly, the issuance of the exchange notes will not result in any change in our indebtedness.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our consolidated ratio of earnings to fixed charges:
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Three Months |
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Year Ended December 31, |
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March 31, |
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2011 |
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2010 |
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2009 |
|
2008 |
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2007 |
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2012 |
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Ratio of earnings to fixed charges(1) |
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0.9 |
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6.3 |
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3.3 |
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|
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1.0 |
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1.1 |
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(1) For purposes of computing the ratio of earnings to fixed charges, earnings consists of the sum of income (loss) before provision (benefit) for income taxes, discontinued operations, and extraordinary item, and equity investment (income) loss. Fixed charges consist of interest expense and the amortization of deferred debt issuance costs. Earnings for the year ended December 31, 2008 were inadequate to cover fixed charges by $47.4 million.
The table below shows our cash, cash equivalents and capitalization as of March 31, 2012. You should read the table in conjunction with the information set forth under Use of Proceeds, Selected Historical Condensed Consolidated Financial Data and Managements Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements and related notes included elsewhere in this prospectus.
|
|
As of March 31, 2012 |
| |
(dollars in thousands) |
|
Actual |
| |
|
|
|
| |
Cash and cash equivalents |
|
$ |
107,399 |
|
Current debt: |
|
|
| |
Current portion of long-term debt |
|
|
| |
Notes payable |
|
|
| |
Total current debt |
|
|
| |
Long-term debt: |
|
|
| |
Revolving credit facility |
|
|
| |
Alabama revolving credit facility |
|
|
| |
Notes |
|
395,000 |
| |
Total long-term debt |
|
395,000 |
| |
Total debt |
|
395,000 |
| |
Shareholders equity: |
|
|
| |
Preferred shares, $0.01 par value; 3,000 shares authorized, no shares issued and outstanding |
|
|
| |
Common shares, $0.01 par value; 300,000 shares authorized, 7,982 shares issued and outstanding actual, 18,648 shares issued and outstanding as adjusted |
|
80 |
| |
Additional paid-in capital |
|
113,332 |
| |
Accumulated other comprehensive income |
|
|
| |
Retained deficit |
|
(44,570 |
) | |
Total shareholders equity |
|
68,842 |
| |
Total capitalization |
|
$ |
463,842 |
|
Purpose of the Exchange Offer
On April 29, 2011, we offered the original notes in a transaction exempt from registration under the Securities Act. Accordingly, the original notes may not be reoffered, resold or otherwise transferred in the United States, unless so registered or unless an exemption from the Securities Act registration requirements is available. Pursuant to the registration rights agreement entered into with the initial purchasers of the original notes, we and the guarantors agreed, for the benefit of holders of the original notes, to:
· no later than 420 days (or if the 420th day is not a business day, the first business day thereafter) after the dates of original issue of the original notes, file a registration statement with the SEC with respect to a registered offer to exchange the original notes for exchange notes having terms substantially identical in all material respects to the original notes, except that they will not contain terms with respect to transfer restrictions; and
· use our reasonable best efforts to cause the registration statement to be declared effective under the Securities Act within 510 days (or if the 510th day is not a business day, the first business day thereafter) after the dates of original issue of the original notes; and
· as soon as practicable after the effectiveness of the registration statement, offer the exchange notes in exchange for surrender of the original notes;
· keep the exchange offer open for not less than 20 business days (or longer if required by applicable law) after the date notice of the exchange offer is mailed to the Holders; and
· consummate the exchange offer within 30 days of the effectiveness of the registration statement.
For each original note tendered to us pursuant to the exchange offer, we will issue to the holder of such original note an exchange note having a principal amount equal to that of the surrendered original note. Interest on each exchange note will accrue from the last interest payment date on which interest was paid on the original note surrendered in exchange therefor, or, if no interest has been paid on such original note, from the date of its original issue.
Under existing SEC interpretations, the exchange notes will be freely transferable by holders other than our affiliates after the exchange offer without further registration under the Securities Act if the holder of the exchange notes represents to us in the exchange offer that it is acquiring the exchange notes in the ordinary course of its business, that it has no arrangement or understanding with any person to participate in the distribution of the exchange notes and that it is not an affiliate of ours, as such terms are interpreted by the SEC; provided, however, that broker-dealers, or Participating Broker-Dealers, receiving exchange notes in the exchange offer will have a prospectus delivery requirement with respect to resales of such exchange notes. The SEC has taken the position that Participating Broker-Dealers may fulfill their prospectus delivery requirements with respect to exchange notes (other than a resale of an unsold allotment from the original sale of the original notes) with the prospectus contained in the exchange offer registration statement.
Under the registration rights agreement, we are required to allow Participating Broker-Dealers and other persons, if any, with similar prospectus delivery requirements to use the prospectus contained in the exchange offer registration statement in connection with the resale of such exchange notes for 180 days following the effective date of such registration statement (or such shorter period during which Participating Broker-Dealers are required by law to deliver such prospectus).
A holder of original notes (other than certain specified holders) who wishes to exchange such original notes for exchange notes in the exchange offer will be required to represent that any exchange notes to be received by it will be acquired in the ordinary course of its business and that at the time of the commencement of the exchange offer it has no arrangement or understanding with any person to participate in the distribution (within the meaning of the Securities Act) of the exchange notes and that it is not an affiliate of ours, as defined in Rule 405 of the Securities Act, or if it is an affiliate, that it will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable.
Each broker-dealer that receives exchange notes for its own account in exchange for original notes, where such original notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. See Plan of Distribution.
Shelf Registration Statement
In the event that:
(1) because of any change in law or in applicable interpretations of the staff of the SEC, we are not permitted to effect the exchange offer;
(2) we do not consummate the exchange offer within 540 days (or if the 540th day is not a business day, the first business day thereafter) of the dates of original issue of the original notes;
(3) an initial purchaser notifies us following consummation of the exchange offer that original notes held by it are not eligible to be exchanged for exchange notes in the exchange offer; or
(4) certain holders are not eligible to participate in the exchange offer, or certain holders participate in the exchange offer but do not receive freely tradeable securities on the date of the exchange,
then, we will, subject to certain exceptions,
(x) promptly file a shelf registration statement, or the Shelf Registration Statement, with the SEC covering resales of the original notes or the exchange notes, as the case may be;
(y) (A) in the case of clause (1) above, use our reasonable best efforts to cause the Shelf Registration Statement to be declared effective under the Securities Act on or prior to the 510th day after the dates of original issue of the original notes and (B) in the case of clause (2), (3) or (4) above, use our reasonable best efforts to cause the Shelf Registration Statement to be declared effective under the Securities Act on or prior to the 60th day after the date on which the Shelf Registration Statement is required to be filed; and
(z) We have agreed to use our reasonable best efforts to keep the Shelf Registration Statement effective for a period of two years from the dates of original issue of the original notes or such shorter period that will terminate when all of the securities covered by the Shelf Registration Statement have been sold pursuant thereto.
We will, in the event a Shelf Registration Statement is filed, among other things, provide to each holder for whom such Shelf Registration Statement was filed copies of the prospectus which is a part of the Shelf Registration Statement, notify each such holder when the Shelf Registration Statement has become effective and take certain other actions as are required to permit unrestricted resales of the original notes or the exchange notes, as the case may be. A holder selling such original notes or exchange notes pursuant to the Shelf Registration Statement generally would be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the registration rights agreement that are applicable to such holder (including certain indemnification obligations).
Liquidated Damages
We will pay additional cash interest on the original notes and exchange notes, subject to certain exceptions, upon the occurrence of any of the following events:
(1) if any registration statement required by the registration rights agreement is not filed with the SEC on or prior to the applicable filing deadline;
(2) if any registration statement required by the registration rights agreement is not declared effective by the SEC on or prior to the applicable effectiveness deadline;
(3) if the exchange offer is not consummated on or prior to the applicable consummation deadline; or
(4) after the exchange offer registration statement or the Shelf Registration Statement, as the case may be, is declared effective, such registration statement thereafter ceases to be effective or usable due to the reasons specified in the registration rights agreement, subject to certain exceptions.
Each such event referred to in the preceding clauses (1) through (4) is referred to herein as a Registration Default. Additional cash interest on the original notes and exchange notes will be payable from and including the date on which any such Registration Default shall occur to but excluding the date on which all Registration Defaults have been cured.
The rate of the additional interest will be 0.25% per annum for the first 90-day period immediately following the occurrence of a Registration Default, and such rate will increase by an additional 0.25% per annum with respect to each subsequent 90-day period
until all Registration Defaults have been cured, up to a maximum additional interest rate of 1.0% per annum; provided that we shall in no way be required to pay additional interest for more than one Registration Default at any given time. We will pay such additional interest on regular interest payment dates. Such additional interest will be in addition to any other interest payable from time to time with respect to the original notes and the exchange notes.
We will be entitled to consummate the exchange offer on the expiration date, provided that we have accepted all original notes previously validly tendered in accordance with the terms set forth in this prospectus and the applicable letter of transmittal.
Expiration Date; Extensions; Termination; Amendments
The exchange offer expires on the expiration date. The expiration date is 5:00 p.m., New York City time, on , 2012, unless we, in our sole discretion, extend the period during which the exchange offer is open, in which event the expiration date is the latest time and date on which the exchange offer, as so extended by us, expires. We reserve the right to extend the exchange offer at any time and from time to time prior to the expiration date by giving written notice to U.S. Bank National Association, as the exchange agent, and by timely public announcement communicated in accordance with applicable law or regulation. During any extension of the exchange offer, all original notes previously tendered pursuant to the exchange offer and not validly withdrawn will remain subject to the exchange offer.
The exchange date will occur promptly after the expiration date. We expressly reserve the right to:
· terminate the exchange offer and not accept for exchange any original notes for any reason, including if any of the events set forth below under Conditions to the Exchange Offer shall have occurred and shall not have been waived by us; and
· amend the terms of the exchange offer in any manner, whether before or after any tender of the original notes.
If any such termination or amendment occurs, we will notify the exchange agent in writing and either will issue a press release or will give written notice to the holders of the original notes as promptly as practicable. Unless we terminate the exchange offer prior to 5:00 p.m., New York City time, on the expiration date, we will exchange the exchange notes for the original notes on the exchange date.
If we waive any material condition to the exchange offer, or amend the exchange offer in any material respect, and if at the time that notice of such waiver or amendment is first published, sent or given to holders of original notes in the manner specified above, the exchange offer is scheduled to expire at any time earlier than the expiration of a period ending on the fifth business day from, and including, the date that such notice is first so published, sent or given, then the exchange offer will be extended until the expiration of such five business day period.
This prospectus and the related letter of transmittal and other relevant materials will be mailed by us to record holders of original notes and will be furnished to brokers, banks and similar persons whose names, or the names of whose nominees, appear on the lists of holders for subsequent transmittal to beneficial owners of original notes.
Each broker-dealer that receives exchange notes for its own account in exchange for original notes, where such original notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. See Plan of Distribution.
Terms of the Exchange Offer
We are offering, upon the terms and subject to the conditions set forth in this prospectus and in the accompanying letter of transmittal, to exchange $2,000 and integral multiples of $1,000 in principal amount of the exchange notes for each $2,000 and integral multiples of $1,000 in principal amount of original notes. We will accept for exchange any and all original notes that are validly tendered on or before 5:00 p.m., New York City time, on the expiration date. Tenders of the original notes may be withdrawn at any time before 5:00 p.m., New York City time, on the expiration date. The exchange offer is not conditioned upon any minimum principal amount of original notes being tendered for exchange. However, the exchange offer is subject to the terms of the registration rights agreement and the satisfaction of the conditions described under Conditions of the Exchange Offer. Original notes may be tendered only in multiples of $1,000. Holders of original notes may tender less than the aggregate principal amount represented by their original notes if they appropriately indicate this fact on the letter of transmittal accompanying the tendered original notes or indicate this fact pursuant to the procedures for book-entry transfer described below.
As of the date of this prospectus, $395 million in aggregate principal amount of the original notes are outstanding. Solely for reasons of administration, we have fixed the close of business on , 2012 as the record date for purposes of determining the persons to whom this prospectus and the letter of transmittal will be mailed initially. Only a holder of the original notes, or the holders legal representative or attorney-in-fact, whose ownership is reflected in the records of U.S. Bank National Association, as registrar, or whose original notes are held of record by the depositary, may participate in the exchange offer. There will be no fixed
record date for determining the eligible holders of the original notes who are entitled to participate in the exchange offer. We believe that, as of the date of this prospectus, no holder of notes is our affiliate, as defined in Rule 405 under the Securities Act.
We will be deemed to have accepted validly tendered original notes when, as and if we give oral or written notice of our acceptance to the exchange agent. The exchange agent will act as agent for the tendering holders of original notes and for purposes of receiving the exchange notes from us. If any tendered original notes are not accepted for exchange because of an invalid tender or otherwise, certificates for the unaccepted original notes will be returned, without expense, to the tendering holder as promptly as practicable after the expiration date.
Holders of original notes do not have appraisal or dissenters rights under applicable law or the Indenture as a result of the exchange offer. We intend to conduct the exchange offer in accordance with the applicable requirements of the Exchange Act and the rules and regulations under the Exchange Act, including Rule 14e-1.
Holders who tender their original notes in the exchange offer will not be required to pay brokerage commissions or fees or, provided that the instructions in the letter of transmittal are followed, transfer taxes with respect to the exchange of original notes under the exchange offer. We will pay all charges and expenses, other than transfer taxes in some circumstances, in connection with the exchange offer. See Solicitation of Tender; Expenses for more information about the costs of the exchange offer.
We do not make any recommendation to holders of original notes as to whether to tender any of their original notes under the exchange offer. In addition, no one has been authorized to make any recommendation. Holders of original notes must make their own decision whether to participate in the exchange offer and, if the holder chooses to participate in the exchange offer, the aggregate principal amount of original notes to tender, after reading carefully this prospectus and the letter of transmittal and consulting with their advisors, if any, based on their own financial position and requirements.
How to Tender
The tender to us of original notes by you pursuant to one of the procedures set forth below will constitute an agreement between you and us in accordance with the terms and subject to the conditions set forth herein and in the applicable letter of transmittal.
General Procedures. A holder of an original note may tender the same by (i) properly completing and signing the applicable letter of transmittal or a facsimile thereof (all references in this prospectus to the letter of transmittal shall be deemed to include a facsimile thereof) and delivering the same, together with the certificate or certificates representing the original notes being tendered and any required signature guarantees (or a timely confirmation of a book-entry transfer, which we refer to herein as a Book-Entry Confirmation, pursuant to the procedure described below), to the exchange agent at its address set forth in The Exchange OfferExchange Agent on or prior to the expiration date or (ii) complying with the guaranteed delivery procedures described below.
If tendered original notes are registered in the name of the signer of the letter of transmittal and the exchange notes to be issued in exchange therefor are to be issued (and any untendered original notes are to be reissued) in the name of the registered holder, the signature of such signer need not be guaranteed. In any other case, the tendered original notes must be endorsed or accompanied by written instruments of transfer in form satisfactory to us and duly executed by the registered holder and the signature on the endorsement or instrument of transfer must be guaranteed by a firm, which we refer to herein as an Eligible Institution, that is a member of a recognized signature guarantee medallion program, which we refer to herein as an Eligible Program, within the meaning of Rule 17Ad-15 under the Exchange Act. If the exchange notes and/or original notes not exchanged are to be delivered to an address other than that of the registered holder appearing on the note register for the original notes, the signature on the letter of transmittal must be guaranteed by an Eligible Institution.
Any beneficial owner whose original notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender original notes should contact such holder promptly and instruct such holder to tender original notes on such beneficial owners behalf. If such beneficial owner wishes to tender such original notes himself, such beneficial owner must, prior to completing and executing the letter of transmittal and delivering such original notes, either make appropriate arrangements to register ownership of the original notes in such beneficial owners name or follow the procedures described in the immediately preceding paragraph. The transfer of record ownership may take considerable time.
Book-Entry Transfer. The exchange agent will make a request to establish an account with respect to the original notes at The Depository Trust Company, which we refer to herein as the Book-Entry Transfer Facility, for purposes of the exchange offer within two business days after receipt of this prospectus, and any financial institution that is a participant in the Book-Entry Transfer Facilitys systems may make book-entry delivery of original notes by causing the Book-Entry Transfer Facility to transfer such original notes into the exchange agents account at the Book-Entry Transfer Facility in accordance with the Book-Entry Transfer Facilitys procedures for transfer. However, although delivery of original notes may be effected through book-entry transfer at the Book-Entry Transfer Facility, the letter of transmittal, with any required signature guarantees and any other required documents, must,
in any case, be transmitted to and received by the exchange agent at the address set forth in The Exchange OfferExchange Agent on or prior to the expiration date or the guaranteed delivery procedures described below must be complied with.
The method of delivery of original notes and all other documents is at your election and risk. If sent by mail, we recommend that you use registered mail, return receipt requested, obtain proper insurance, and complete the mailing sufficiently in advance of the expiration date to permit delivery to the exchange agent on or before the expiration date.
Guaranteed Delivery Procedures. If a holder desires to accept the exchange offer and time will not permit a letter of transmittal or original notes to reach the exchange agent before the expiration date, a tender may be effected if the exchange agent has received at its office set forth in The Exchange OfferExchange Agent on or prior to the expiration date a letter or facsimile transmission from an Eligible Institution setting forth the name and address of the tendering holder, the names in which the original notes are registered, the principal amount of the original notes and, if possible, the certificate numbers of the original notes to be tendered, and stating that the tender is being made thereby and guaranteeing that within three business days after the date of execution of such letter or facsimile transmission by the Eligible Institution, the original notes, in proper form for transfer, will be delivered by such Eligible Institution together with a properly completed and duly executed letter of transmittal (and any other required documents). Unless original notes being tendered by the above-described method (or a timely Book-Entry Confirmation) are deposited with the exchange agent within the time period set forth above (accompanied or preceded by a properly completed letter of transmittal and any other required documents), we may, at our option, reject the tender. Copies of a Notice of Guaranteed Delivery that may be used by Eligible Institutions for the purposes described in this paragraph are being delivered with this prospectus and the related letter of transmittal.
A tender will be deemed to have been received as of the date when the tendering holders properly completed and duly signed letter of transmittal accompanied by the original notes (or a timely Book-Entry Confirmation) is received by the exchange agent. Issuances of exchange notes in exchange for original notes tendered pursuant to a Notice of Guaranteed Delivery or letter or facsimile transmission to similar effect (as provided above) by an Eligible Institution will be made only against deposit of the letter of transmittal (and any other required documents) and the tendered original notes (or a timely Book-Entry Confirmation).
All questions as to the validity, form, eligibility (including time of receipt) and acceptance for exchange of any tender of original notes will be determined by us and our determination will be final and binding. We reserve the absolute right to reject any or all tenders not in proper form or the acceptances for exchange of which may, in the opinion of our counsel, be unlawful. We also reserve the absolute right to waive any of the conditions of the exchange offer or any defect or irregularities in tenders of any particular holder whether or not similar defects or irregularities are waived in the case of other holders. None of us, the exchange agent or any other person will be under any duty to give notification of any defects or irregularities in tenders or shall incur any liability for failure to give any such notification. Our interpretation of the terms and conditions of the exchange offer (including the letter of transmittal and the instructions thereto) will be final and binding.
Terms and Conditions of the Letter of Transmittal
The letter of transmittal contains, among other things, the following terms and conditions, which are part of the exchange offer.
The party tendering original notes for exchange, whom we refer to herein as the Transferor, exchanges, assigns and transfers the original notes to us and irrevocably constitutes and appoints the exchange agent as the Transferors agent and attorney-in-fact to cause the original notes to be assigned, transferred and exchanged. The Transferor represents and warrants that it has full power and authority to tender, exchange, assign and transfer the original notes and that, when the same are accepted for exchange, we will acquire good and unencumbered title to the tendered original notes, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim. The Transferor also warrants that it will, upon request, execute and deliver any additional documents deemed by us to be necessary or desirable to complete the exchange, assignment and transfer of tendered original notes. The Transferor further agrees that acceptance of any tendered original notes by us and the issuance of exchange notes in exchange therefor shall constitute performance in full by us of our obligations under the registration rights agreement and that we shall have no further obligations or liabilities thereunder (except in certain limited circumstances). All authority conferred by the Transferor will survive the death or incapacity of the Transferor and every obligation of the Transferor shall be binding upon the heirs, legal representatives, successors, assigns, executors and administrators of such Transferor.
Withdrawal Rights
Original notes tendered pursuant to the exchange offer may be withdrawn at any time prior to the expiration date. For a withdrawal to be effective, a written or facsimile transmission notice of withdrawal must be timely received by the exchange agent at its address set forth in The Exchange OfferExchange Agent. Any such notice of withdrawal must specify the person named in the letter of transmittal as having tendered the original notes to be withdrawn, the certificate numbers of the original notes to be withdrawn, the principal amount of original notes to be withdrawn (which must be an authorized denomination), a statement that such holder is withdrawing his election to have such original notes exchanged, and the name of the registered holder of such original notes,
and must be signed by the holder in the same manner as the original signature on the letter of transmittal (including any required signature guarantees) or be accompanied by evidence satisfactory to us that the person withdrawing the tender has succeeded to the beneficial ownership of the original notes being withdrawn. The exchange agent will return the properly withdrawn original notes promptly following receipt of notice of withdrawal. All questions as to the validity of notices of withdrawals, including time of receipt, will be determined by us, and our determination will be final and binding on all parties.
Acceptance of Original Notes for Exchange; Delivery of Exchange Notes
Upon the terms and subject to the conditions of the exchange offer, the acceptance for exchange of original notes validly tendered and not withdrawn and the issuance of the exchange notes will be made on the exchange date. For the purposes of the exchange offer, we shall be deemed to have accepted for exchange validly tendered original notes when, as and if we have given written notice thereof to the exchange agent.
The exchange agent will act as agent for the tendering holders of original notes for the purposes of receiving exchange notes from us and causing the original notes to be assigned, transferred and exchanged. Upon the terms and subject to the conditions of the exchange offer, delivery of exchange notes to be issued in exchange for accepted original notes will be made by the exchange agent promptly after acceptance of the tendered original notes. Original notes not accepted for exchange by us will be returned without expense to the tendering holders (or in the case of original notes tendered by book-entry transfer into the exchange agents account at the Book-Entry Transfer Facility pursuant to the procedures described above, such non-exchanged original notes will be credited to an account maintained with such Book-Entry Transfer Facility) promptly following the expiration date or, if we terminate the exchange offer prior to the expiration date, promptly after the exchange offer is so terminated.
Conditions to the Exchange Offer
We are not required to accept or exchange, or to issue exchange notes in exchange for, any outstanding original notes. We may terminate or extend the exchange offer by oral or written notice to the exchange agent and by timely public announcement communicated in accordance with applicable law or regulation, if:
· any federal law, statute, rule, regulation or interpretation of the staff of the SEC has been proposed, adopted or enacted that, in our judgment, might impair our ability to proceed with the exchange offer or otherwise make it inadvisable to proceed with the exchange offer;
· an action or proceeding has been instituted or threatened in any court or by any governmental agency that, in our judgment might impair our ability to proceed with the exchange offer or otherwise make it inadvisable to proceed with the exchange offer;
· there has occurred a material adverse development in any existing action or proceeding that might impair our ability to proceed with the exchange offer or otherwise make it inadvisable to proceed with the exchange offer;
· any stop order is threatened or in effect with respect to the registration statement of which this prospectus is a part or the qualification of the Indenture under the Trust Indenture Act of 1939;
· all governmental approvals that we deem necessary for the consummation of the exchange have not been obtained;
· there is a change in the current interpretation by the staff of the SEC which permits holders who have made the required representations to us to resell, offer for resale, or otherwise transfer exchange notes issued in the exchange offer without registration of the exchange notes and delivery of a prospectus; or
· a material adverse change shall have occurred in our business, condition, operations or prospects.
The foregoing conditions are for our sole benefit and may be asserted by us with respect to all or any portion of the exchange offer regardless of the circumstances (including any action or inaction by us) giving rise to such condition or may be waived by us in whole or in part at any time or from time to time in our sole discretion. The failure by us at any time to exercise any of the foregoing rights will not be deemed a waiver of any such right, and each right will be deemed an ongoing right that may be asserted at any time or from time to time. In addition, we have reserved the right, notwithstanding the satisfaction of each of the foregoing conditions, to terminate or amend the exchange offer.
Any determination by us concerning the fulfillment or non-fulfillment of any conditions will be final and binding upon all parties.
Exchange Agent
U.S. Bank National Association has been appointed as the exchange agent for the exchange offer. Letters of transmittal must be addressed to the exchange agent at its address set forth below. Delivery to an address other than the one set forth herein, or transmissions of instructions via a facsimile number other than the one set forth herein, will not constitute a valid delivery.
U.S. BANK NATIONAL ASSOCIATION
By registered mail, overnight mail, overnight courier or hand delivery:
U.S. Bank National Association
U.S. Bank West Side Flats Operations Center
60 Livingston Ave.
St. Paul, MN 55107
Attn: Specialized Finance
Reference: Community Choice Financial Inc.
By facsimile (for eligible institutions only):
(651) 466-7372
Reference: Community Choice Financial Inc.
For information or confirmation by telephone:
Specialized Finance
(800) 934-6802
Solicitation of Tenders; Expenses
We have not retained any dealer-manager or similar agent in connection with the exchange offer and will not make any payments to brokers, dealers or others for soliciting acceptances of the exchange offer. We will, however, pay the exchange agent reasonable and customary fees for its services and will reimburse it for reasonable out-of-pocket expenses in connection therewith. We also will pay brokerage houses and other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding tenders for their customers. The expenses to be incurred in connection with the exchange offer, including the fees and expenses of the exchange agent and printing, accounting and legal fees, will be paid by us.
No dealer, salesperson or other individual has been authorized to give any information or to make any representations not contained in this prospectus in connection with the exchange offer. If given or made, you must not rely on such information or representations as having been authorized by us. Neither the delivery of this prospectus nor any exchange made hereunder shall, under any circumstances, create any implication that there has been no change in our affairs since the respective dates as of which information is given herein.
The exchange offer is not being made to (nor will tenders be accepted from or on behalf of) holders of original notes in any jurisdiction in which the making of the exchange offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction. However, at our discretion, we may take such action as we may deem necessary to make the exchange offer in any such jurisdiction and extend the exchange offer to holders of original notes in such jurisdiction. In any jurisdiction the securities laws or blue sky laws of which require the exchange offer to be made by a licensed broker or dealer, the exchange offer is being made on behalf of us by one or more registered brokers or dealers that are licensed under the laws of such jurisdiction.
Appraisal Rights
You will not have appraisal rights in connection with the exchange offer.
Federal Income Tax Consequences
We believe that the exchange of original notes for exchange notes should not be a taxable exchange for U.S. federal income tax purposes, and that holders should not recognize any taxable gain or loss or any interest income as a result of such exchange. See Certain United States Federal Income Tax Considerations.
Regulatory Approvals
Other than the federal securities laws, there are no federal or state regulatory requirements that we must comply with and there are no approvals that we must obtain in connection with the exchange offer.
Accounting Treatment
The exchange notes will be recorded at the same carrying value as the original notes. Accordingly, we will recognize no gain or loss for accounting purposes in connection with the exchange offer. The expense of the exchange offer will be expensed over the term of the exchange notes.
Other
Participation in the exchange offer is voluntary and you should consider carefully whether to accept. You are urged to consult your financial and tax advisors in making your own decisions on what action to take.
As a result of the making of, and upon acceptance for exchange of all validly tendered original notes pursuant to the terms of the exchange offer, we will have fulfilled a covenant contained in the terms of the original notes and the registration rights agreement. Holders of the original notes who do not tender their original notes in the exchange offer will continue to hold such original notes and will be entitled to all the rights and limitations applicable thereto under the Indenture and the registration rights agreement, except for any terms of such documents which, by their terms, terminate or cease to have further effect as a result of the making of this exchange offer. See Description of the Exchange Notes. All untendered original notes will continue to be subject to the restriction on transfer set forth in the Indenture. To the extent that original notes are tendered and accepted in the exchange offer, the trading market, if any, for the original notes not tendered and accepted in the exchange offer could be adversely affected. See Risk FactorsRisks Associated with the Exchange OfferYour ability to sell your original notes may be significantly more limited and the price at which you may be able to sell your original notes may be significantly lower if you do not exchange them for registered exchange notes in the exchange offer.
We may in the future seek to acquire untendered original notes in open market or privately negotiated transactions, through subsequent exchange offers or otherwise. We have no present plan to acquire any original notes that are not tendered in the exchange offer.
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
The following table sets forth selected historical consolidated financial data as of and for the years ended December 31, 2007, 2008, 2009, 2010 and 2011 and as of and for the three-month periods ended March 31, 2011 and 2012. The selected historical consolidated financial data as of December 31, 2010 and 2011 and for each of the years ended December 31, 2009, 2010 and 2011 have been derived from, and should be read together with, our audited historical consolidated financial statements and the accompanying notes included elsewhere in this prospectus. The selected historical consolidated financial data as of December 31, 2007, 2008 and 2009 and for each of the years ended December 31, 2007 and 2008 have been derived from CCFIs audited historical consolidated financial statements not included in this prospectus. The selected historical consolidated financial data as of March 31, 2012 and for the three-month periods ended March 31, 2011 and 2012 were derived from our unaudited consolidated financial statements included elsewhere in this prospectus. The selected historical consolidated financial data as of March 31, 2011 have been derived from our unaudited consolidated financial statements not included in this prospectus. The unaudited financial data includes, in our opinion, all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair presentation of our financial position and results of operations for these periods.
The results of operations for the periods presented below are not necessarily indicative of the results to be expected for any future period. The selected historical financial data should be read together with the section captioned Managements Discussion and Analysis of Financial Condition and Results of Operations (including the discussion therein of critical accounting policies and recent acquisitions) and CCFIs consolidated financial statements and the accompanying notes included elsewhere in this prospectus.
|
|
Year Ended December 31, |
|
Three-months Ended March 31, |
| |||||||||||||||||
(In thousands) |
|
2007 |
|
2008 |
|
2009 |
|
2010 |
|
2011 |
|
2011 |
|
2012 |
| |||||||
Statement of Operations Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Finance receivable fees |
|
$ |
138,736 |
|
$ |
152,732 |
|
$ |
136,957 |
|
$ |
146,059 |
|
$ |
196,153 |
|
$ |
36,152 |
|
$ |
54,560 |
|
Check cashing fees |
|
23,822 |
|
25,634 |
|
53,049 |
|
55,930 |
|
72,800 |
|
15,046 |
|
20,186 |
| |||||||
Card fees |
|
|
|
1,808 |
|
2,063 |
|
10,731 |
|
19,914 |
|
3,948 |
|
5,071 |
| |||||||
Other |
|
11,298 |
|
8,845 |
|
10,614 |
|
11,560 |
|
18,067 |
|
4,080 |
|
6,132 |
| |||||||
Total revenues |
|
173,856 |
|
189,019 |
|
202,683 |
|
224,280 |
|
306,934 |
|
59,226 |
|
85,949 |
| |||||||
Branch expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Salaries and benefits |
|
30,891 |
|
33,738 |
|
34,343 |
|
38,759 |
|
57,411 |
|
10,261 |
|
16,113 |
| |||||||
Provision for loan losses |
|
37,026 |
|
37,544 |
|
43,463 |
|
40,316 |
|
65,351 |
|
8,408 |
|
13,337 |
| |||||||
Occupancy |
|
11,413 |
|
13,457 |
|
13,855 |
|
14,813 |
|
21,216 |
|
3,827 |
|
5,508 |
| |||||||
Depreciation and amortization |
|
5,920 |
|
10,422 |
|
6,613 |
|
5,318 |
|
5,907 |
|
1,328 |
|
1,556 |
| |||||||
Other |
|
21,339 |
|
21,420 |
|
22,652 |
|
27,994 |
|
35,515 |
|
7,338 |
|
9,793 |
| |||||||
Total branch expenses |
|
106,589 |
|
116,581 |
|
120,926 |
|
127,200 |
|
185,400 |
|
31,162 |
|
46,307 |
| |||||||
Branch gross profit |
|
67,267 |
|
72,438 |
|
81,757 |
|
97,080 |
|
121,534 |
|
28,064 |
|
39,642 |
| |||||||
Corporate expenses |
|
29,518 |
|
31,795 |
|
31,518 |
|
33,940 |
|
44,742 |
|
10,282 |
|
14,356 |
| |||||||
Transaction expense |
|
|
|
|
|
|
|
237 |
|
9,351 |
|
85 |
|
519 |
| |||||||
Depreciation and amortization |
|
1,513 |
|
1,063 |
|
568 |
|
1,222 |
|
2,332 |
|
286 |
|
1,056 |
| |||||||
Interest expenses, net |
|
18,421 |
|
16,191 |
|
11,532 |
|
8,501 |
|
34,334 |
|
2,035 |
|
11,350 |
| |||||||
Goodwill impairment |
|
|
|
53,263 |
|
|
|
|
|
|
|
|
|
|
| |||||||
Equity investment loss |
|
|
|
|
|
|
|
|
|
415 |
|
|
|
|
| |||||||
Non-operating income, management fees |
|
(104 |
) |
(260 |
) |
(172 |
) |
(46 |
) |
(46 |
) |
(11 |
) |
(11 |
) | |||||||
Income (loss) before provision (benefit) for income taxes, discontinued operations, and extraordinary item |
|
17,919 |
|
(29,614 |
) |
38,311 |
|
53,226 |
|
30,406 |
|
15,387 |
|
12,393 |
| |||||||
Provision (benefit) for income taxes |
|
7,237 |
|
(10,635 |
) |
14,042 |
|
19,801 |
|
13,553 |
|
5,903 |
|
4,947 |
| |||||||
Income (loss) from continuing operations |
|
10,682 |
|
(18,979 |
) |
24,269 |
|
33,425 |
|
16,853 |
|
9,484 |
|
7,446 |
| |||||||
Discontinued operations(1) |
|
243 |
|
482 |
|
368 |
|
(2,196 |
) |
|
|
|
|
|
| |||||||
Income (loss) before extraordinary item |
|
10,925 |
|
(18,497 |
) |
24,637 |
|
31,229 |
|
16,853 |
|
9,484 |
|
7,446 |
| |||||||
Extraordinary item(2) |
|
|
|
3,913 |
|
|
|
|
|
|
|
|
|
|
| |||||||
Net income (loss) |
|
10,925 |
|
(22,410 |
) |
24,637 |
|
31,229 |
|
16,853 |
|
9,484 |
|
7,446 |
| |||||||
Net loss attributable to non-controlling interests |
|
|
|
|
|
|
|
(252 |
) |
(120 |
) |
(120 |
) |
|
| |||||||
Net income (loss) attributable to controlling interests |
|
$ |
10,925 |
|
$ |
(22,410 |
) |
$ |
24,637 |
|
$ |
31,481 |
|
$ |
16,973 |
|
$ |
9,604 |
|
$ |
7,446 |
|
(1) Discontinued operations is presented net of provision (benefit) for income tax of $151, $299, $226, ($1,346) and $0 for the years ended December 31, 2007, 2008, 2009, 2010 and 2011, respectively.
(2) Represents cost of ballot initiatives in Ohio and Arizona in 2008.
|
|
Year Ended December 31, |
|
Three-months Ended March 31, |
| |||||||||||||||||
(In thousands, except for store count) |
|
2007 |
|
2008 |
|
2009 |
|
2010 |
|
2011 |
|
2011 |
|
2012 |
| |||||||
Balance Sheet Data (at period end): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Cash and cash equivalents |
|
$ |
25,020 |
|
$ |
25,883 |
|
$ |
27,959 |
|
$ |
39,780 |
|
$ |
65,635 |
|
$ |
73,937 |
|
$ |
107,399 |
|
Finance receivables, net |
|
48,620 |
|
51,954 |
|
66,035 |
|
81,337 |
|
120,451 |
|
68,625 |
|
93,213 |
| |||||||
Total assets |
|
301,412 |
|
266,922 |
|
280,476 |
|
310,644 |
|
515,547 |
|
341,886 |
|
528,282 |
| |||||||
Total debt |
|
201,714 |
|
195,800 |
|
193,365 |
|
188,934 |
|
395,000 |
|
206,361 |
|
395,000 |
| |||||||
Total stockholders equity |
|
72,040 |
|
50,768 |
|
77,791 |
|
109,791 |
|
61,314 |
|
119,585 |
|
68,842 |
| |||||||
Other Operating Data (unaudited): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Stores in operation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Beginning of period |
|
211 |
|
256 |
|
252 |
|
264 |
|
282 |
|
282 |
|
435 |
| |||||||
Acquired |
|
17 |
|
|
|
8 |
|
19 |
|
151 |
|
10 |
|
|
| |||||||
Opened |
|
28 |
|
2 |
|
4 |
|
2 |
|
2 |
|
|
|
1 |
| |||||||
Closed |
|
|
|
6 |
|
|
|
3 |
|
|
|
|
|
1 |
| |||||||
End of period |
|
256 |
|
252 |
|
264 |
|
282 |
|
435 |
|
292 |
|
435 |
| |||||||
Capital Expenditures: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Purchases of property and equipment, net |
|
$ |
12,298 |
|
$ |
2,969 |
|
$ |
2,769 |
|
$ |
1,688 |
|
$ |
4,261 |
|
$ |
545 |
|
$ |
755 |
|
Store acquisition costs: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Property and equipment |
|
957 |
|
|
|
|
|
1,144 |
|
7,235 |
|
74 |
|
|
| |||||||
Intangible assets |
|
440 |
|
|
|
|
|
1,737 |
|
3,344 |
|
265 |
|
|
| |||||||
Total capital expenditures |
|
$ |
13,695 |
|
$ |
2,969 |
|
$ |
2,769 |
|
$ |
4,569 |
|
$ |
14,840 |
|
$ |
339 |
|
$ |
|
|
(In thousands, except for averages, percentages or unless |
|
Year Ended December 31, |
|
Three-months Ended March 31, |
| |||||||||||||||||
otherwise specified) |
|
2007 |
|
2008 |
|
2009 |
|
2010 |
|
2011 |
|
2011 |
|
2012 |
| |||||||
Check Cashing Data (unaudited): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Face amount of checks cashed |
|
$ |
708,860 |
|
$ |
821,475 |
|
$ |
1,309,425 |
|
$ |
1,442,501 |
|
$ |
2,163,726 |
|
392,528 |
|
633,459 |
| ||
Face amount of average check |
|
$ |
418.01 |
|
$ |
442.36 |
|
$ |
432.08 |
|
$ |
438.13 |
|
$ |
444.26 |
|
521.11 |
|
485.09 |
| ||
Average fee per check |
|
$ |
13.76 |
|
$ |
13.80 |
|
$ |
17.51 |
|
$ |
16.99 |
|
$ |
14.95 |
|
19.98 |
|
15.46 |
| ||
Number of checks cashed |
|
1,698 |
|
1,857 |
|
3,029 |
|
3,292 |
|
4,869 |
|
753 |
|
1,306 |
| |||||||
Returned Check Data (unaudited): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Returned check expense |
|
$ |
2,006 |
|
$ |
1,760 |
|
$ |
3,058 |
|
$ |
3,034 |
|
$ |
5,085 |
|
742 |
|
1,001 |
| ||
Returned check expense as a percentage of face amount of checks cashed |
|
0.3 |
% |
0.2 |
% |
0.2 |
% |
0.2 |
% |
0.2 |
% |
0.2 |
% |
0.2 |
% | |||||||
Short-Term Consumer Loan Data (unaudited): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Loan volume (originations and refinancings) |
|
$ |
1,081,865 |
|
$ |
1,116,869 |
|
$ |
1,162,086 |
|
$ |
1,237,163 |
|
$ |
1,543,310 |
|
289,023 |
|
383,107 |
| ||
Average new loan size |
|
385.55 |
|
382.62 |
|
412.67 |
|
418.53 |
|
425.72 |
|
436.79 |
|
411.27 |
| |||||||
Average new loan fee |
|
50.24 |
|
50.84 |
|
42.79 |
|
43.14 |
|
46.37 |
|
45.73 |
|
46.37 |
| |||||||
Loan loss provision |
|
$ |
34,166 |
|
$ |
33,849 |
|
$ |
28,856 |
|
$ |
27,560 |
|
$ |
40,636 |
|
4,684 |
|
7,060 |
| ||
Loan loss provision as a percentage of loan volume |
|
3.2 |
% |
3.0 |
% |
2.5 |
% |
2.2 |
% |
2.6 |
% |
1.6 |
% |
1.8 |
% | |||||||
Medium-Term Loan Operating Data (unaudited)(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Principal outstanding |
|
$ |
|
|
$ |
2,995 |
|
$ |
3,109 |
|
$ |
3,601 |
|
$ |
12,174 |
|
$ |
3,881 |
|
$ |
11,926 |
|
Number of loans outstanding |
|
|
|
7,525 |
|
9,365 |
|
10,275 |
|
20,818 |
|
11,607 |
|
20,699 |
| |||||||
Average principal outstanding |
|
$ |
|
|
$ |
397.98 |
|
$ |
331.97 |
|
$ |
350.47 |
|
$ |
584.79 |
|
$ |
344.41 |
|
$ |
576.18 |
|
Average monthly percentage rate |
|
0 |
% |
22.03 |
% |
22.3 |
% |
22.0 |
% |
19.2 |
% |
23.2 |
% |
18.3 |
% | |||||||
Allowance as a percentage of finance receivable |
|
|
|
14.3 |
% |
42.7 |
% |
11.7 |
% |
10.6 |
% |
7.9 |
% |
13.3 |
% | |||||||
Loan loss provision |
|
$ |
|
|
$ |
|
|
$ |
6,708 |
|
$ |
5,267 |
|
$ |
11,470 |
|
$ |
1,516 |
|
$ |
3,051 |
|
Title Loan Operating Data (unaudited): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Principal outstanding |
|
$ |
2,205 |
|
$ |
2,720 |
|
$ |
6,047 |
|
$ |
9,541 |
|
$ |
17,334 |
|
$ |
7,829 |
|
$ |
14,149 |
|
Number of loans outstanding |
|
2,187 |
|
3,178 |
|
6,077 |
|
9,597 |
|
15,283 |
|
8,255 |
|
13,822 |
| |||||||
Average principal outstanding |
|
$ |
1,008.42 |
|
$ |
855.85 |
|
$ |
995.00 |
|
$ |
994.12 |
|
$ |
1,134.20 |
|
$ |
948.45 |
|
$ |
1,023.67 |
|
Average monthly percentage rate |
|
16.06 |
% |
15.8 |
% |
16.0 |
% |
13.8 |
% |
13.3 |
% |
15.6 |
% |
12.5 |
% | |||||||
Allowance as a percentage of finance receivable |
|
4.6 |
% |
5.3 |
% |
12.1 |
% |
5.3 |
% |
5.3 |
% |
7.0 |
% |
5.8 |
% | |||||||
Loan loss provision |
|
$ |
854 |
|
$ |
1,209 |
|
$ |
2,970 |
|
$ |
3,497 |
|
$ |
5,463 |
|
$ |
845 |
|
$ |
1,241 |
|
Overall Company Data (unaudited): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Total revenues |
|
$ |
173,856 |
|
$ |
189,019 |
|
$ |
202,683 |
|
$ |
224,280 |
|
$ |
306,934 |
|
$ |
59,226 |
|
$ |
85,949 |
|
Loan loss provisions |
|
37,026 |
|
36,818 |
|
41,592 |
|
39,358 |
|
62,654 |
|
6,825 |
|
11,344 |
| |||||||
Other ancillary product provisions |
|
|
|
726 |
|
1,871 |
|
958 |
|
2,697 |
|
1,583 |
|
1,993 |
| |||||||
Total loan loss provision |
|
$ |
37,026 |
|
$ |
37,544 |
|
$ |
43,463 |
|
$ |
40,316 |
|
$ |
65,351 |
|
8,408 |
|
13,337 |
| ||
Total loan loss provision as a percentage of revenue |
|
21.3 |
% |
19.9 |
% |
21.4 |
% |
18.0 |
% |
21.3 |
% |
14.2 |
% |
15.6 |
% |
(1) Loan participations are grouped with medium-term loans in our consolidated financial statements included elsewhere in this prospectus, but are excluded from these calculations.
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma consolidated financial information is based on the historical financial statements of CCFI, and CCCS, each included elsewhere in this prospectus, adjusted to give pro forma effect to the California Acquisition, the Illinois Acquisition, the offering of our original notes and the establishment of our Revolving Credit Facility. The unaudited pro forma consolidated statement of income for the year ended December 31, 2011 gives effect to the California Acquisition, the Illinois Acquisition, the offering of our original notes and the establishment of our Revolving Credit Facility as if they were each consummated on January 1, 2011, the first day of our most recently completed fiscal year.
Assumptions underlying the pro forma adjustments are described in the accompanying notes, which should be read in conjunction with this unaudited pro forma consolidated financial information. The pro forma adjustments described in the accompanying notes have been made based on available information and, in the opinion of management, are reasonable. The unaudited pro forma consolidated financial information should not be considered indicative of actual results that would have been achieved had these transactions occurred on the date indicated and do not purport to indicate results of operations as of any future date or for any future period. We cannot assure you that the assumptions used in the preparation of the unaudited pro forma consolidated financial information will prove to be correct. The unaudited pro forma consolidated financial information should be read together with the information set forth under the headings Prospectus SummaryOverview, Managements Discussion and Analysis of Financial Condition and Results of Operations, Business, the historical financial statements of CCFI and CCCS and the notes thereto, and the other financial information included elsewhere in this prospectus.
The acquisition of CCCS by CCFI has been accounted for as a purchase in conformity with Accounting Standards Codification, or ASC, No. 805, Business Combinations, with intangible assets recorded in accordance with ASC No. 350, Intangibles-Goodwill and Other. The excess of the purchase price over the historical basis of the net assets to be acquired has been allocated in the accompanying pro forma condensed consolidated financial information based on managements best estimates of the fair values and certain assumptions that management believes are reasonable.
The pro forma adjustments related to the Illinois Acquisition are derived from unaudited internal financial information that was provided to us by the seller in the Illinois Acquisition. Thus, this information was not subject to our accounting controls and has not been reviewed by our independent accountants, and we cannot assure you that it is accurate.
Community Choice Financial Inc.
Unaudited Pro Forma Consolidated Statement of Income
for the Year Ended December 31, 2011
|
|
CCFI |
|
California |
|
Illinois |
|
Acquisition |
|
Adjustments |
|
Total |
| ||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Finance Receivable Fees |
|
$ |
196,153 |
|
$ |
10,498 |
|
$ |
1,442 |
|
$ |
|
|
$ |
|
|
$ |
208,093 |
|
Check Cashing Fees |
|
72,800 |
|
9,472 |
|
|
|
|
|
|
|
82,272 |
| ||||||
Card Fees |
|
19,914 |
|
697 |
|
|
|
|
|
|
|
20,611 |
| ||||||
Other |
|
18,067 |
|
3,667 |
|
17 |
|
|
|
|
|
21,751 |
| ||||||
Total Revenue |
|
306,934 |
|
24,334 |
|
1,459 |
|
|
|
|
|
332,727 |
| ||||||
Salaries and Benefits |
|
57,411 |
|
7,567 |
|
308 |
|
|
|
|
|
65,286 |
| ||||||
Provision for Loan Losses |
|
65,351 |
|
2,468 |
|
13 |
|
|
|
|
|
67,832 |
| ||||||
Occupancy |
|
21,216 |
|
2,907 |
|
84 |
|
|
|
|
|
24,207 |
| ||||||
Depreciation and Amortization |
|
5,907 |
|
131 |
|
12 |
|
|
|
|
|
6,050 |
| ||||||
Other |
|
35,515 |
|
1,953 |
|
185 |
|
|
|
|
|
37,653 |
| ||||||
Total Branch Expenses |
|
185,400 |
|
15,026 |
|
602 |
|
|
|
|
|
201,028 |
| ||||||
Branch Gross Profit |
|
121,534 |
|
9,308 |
|
857 |
|
|
|
|
|
131,699 |
| ||||||
Corporate Expenses |
|
54,093 |
|
10,146 |
|
|
|
(17,081 |
)(a) |
|
|
47,158 |
| ||||||
Depreciation and Amortization |
|
2,332 |
|
1,119 |
|
|
|
(44 |
)(b) |
|
|
3,407 |
| ||||||
Interest Expense, net |
|
34,334 |
|
2,248 |
|
|
|
|
|
8,558 |
(d) |
45,140 |
| ||||||
Goodwill Impairment |
|
|
|
28,986 |
|
|
|
|
|
|
|
28,986 |
| ||||||
Equity Investment Loss |
|
415 |
|
|
|
|
|
|
|
|
|
415 |
| ||||||
Non-operating Income, mgmt fees |
|
(46 |
) |
|
|
|
|
|
|
|
|
(46 |
) | ||||||
Income before taxes |
|
30,406 |
|
(33,191 |
) |
857 |
|
17,125 |
|
(8,558 |
) |
6,639 |
| ||||||
Provision for Income Taxes |
|
13,553 |
|
(12,613 |
) |
326 |
|
4,509 |
(c) |
(3,252 |
)(e) |
2,523 |
| ||||||
Total Net Income |
|
16,853 |
|
(20,578 |
) |
531 |
|
12,616 |
|
(5,306 |
) |
4,116 |
| ||||||
Community Choice Financial Inc.
Notes to Unaudited Pro Forma Condensed Consolidated
Statement of Income for the Year Ended December 31, 2011
(a) The $17.1 million adjustment to corporate expenses consists of CCFIs $9.4 million of transaction expenses and CCCSs $7.7 million of transaction expenses. The CCFI transaction expenses relate to the California Acquisition, Illinois Acquisition, the establishment of our Revolving Credit Facility and the offering of original notes. The CCCS transaction expenses consist of sellers costs, including equity holders fees, merger costs, and bonuses and severance payments related to the California Acquisition.
(b) Reflects a decrease to depreciation and amortization based upon the estimate of the portion of the purchase price for the California Acquisition to be allocated to the fair value of identifiable intangibles of $0.3 million. This is a result of the estimated identifiable intangibles acquired in connection with the California Acquisition being lowered to an amount less than the amount historically recorded by CCCS as of December 31, 2010. Also reflects a charge to depreciation and amortization based upon the estimate of the portion of the purchase price for the Illinois Acquisition to be allocated to the fair value of identifiable intangibles of $0.1 million.
(c) Reflects federal income tax provision estimated at 38% related to the pro forma adjustments for the California Acquisition and the Illinois Acquisition for the year ended December 31, 2011 and normalization of income taxes paid by CCFI due to transaction expenses.
(d) Reflects, for 2011, the additional interest expense in connection with our notes and our Revolving Credit Facility at annual interest rates of 10.75% and 7.25% (at the alternative base rate as described under Description of Certain Indebtedness), respectively, in addition to the amortization of deferred financing fees of $2.1 million and commitment fees related to our Revolving Credit Facility and our Alabama Facility.
The below table assumes that we paid down the $10 million borrowed under the Revolving Credit Facility as of April 30, 2011.
|
|
Interest |
| |
Notes Outstanding |
|
$ |
395,000 |
|
Annual Interest Rate |
|
10.75 |
% | |
Annual Interest on Notes Outstanding |
|
$ |
42,463 |
|
Revolving Credit Facilities |
|
|
| |
Main Revolving Credit Facility |
|
|
| |
Total Facility |
|
$ |
40,000 |
|
Annual Interest Rate on Amount Drawn |
|
7.25 |
% | |
Annual Commitment Fee on Undrawn Amount |
|
0.75 |
% | |
Average Outstanding |
|
$ |
3,333 |
|
Interest on Amount Drawn |
|
$ |
242 |
|
Annual Commitment Fee on Undrawn Amount |
|
$ |
296 |
|
Total Annual Interest on Main Revolving Credit Facility |
|
$ |
538 |
|
Alabama Revolving Credit Facility |
|
|
| |
Total Facility |
|
$ |
7,000 |
|
Annual Interest Rate on Amount Drawn |
|
5.00 |
% | |
Average Outstanding |
|
$ |
|
|
Annual Interest on Amount Drawn |
|
$ |
|
|
Commitment Fees |
|
$ |
20 |
|
Total Annual Interest on Alabama Revolving Credit Facility |
|
$ |
20 |
|
Annual Deferred Financing Costs |
|
$ |
2,119 |
|
Total Pro Forma Interest Calculation |
|
$ |
45,140 |
|
Interest Adjustment Calculation |
|
|
| |
CCFI 2011 Actual Interest Expense |
|
$ |
34,334 |
|
CCCS 2011 Actual Interest Expense |
|
$ |
2,248 |
|
Total 2011 Actual Interest Paid |
|
$ |
36,582 |
|
Pro Forma Interest Adjustment |
|
$ |
8,558 |
|
(e) Adjustment reflects the tax effect of the additional interest expense at the estimated effective tax rate of 38%.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion contains managements discussion and analysis of our financial condition and results of operations and should be read in conjunction with the consolidated financial statements and the related notes included elsewhere in this prospectus. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the Special Note Regarding Forward-Looking Statements and Risk Factors sections of this prospectus. Actual results may differ materially from those contained in any forward-looking statements.
Overview
We are a leading retail provider of alternative financial services to unbanked and underbanked consumers. Through our network of retail stores, we provide our customers a variety of financial products and services, including short-term consumer loans, medium-term loans, check cashing, prepaid debit cards, title loans and other services that address the specific needs of our individual customers. Through our retail-focused business model, which we refer to as our retail model, we strive to provide our customers with high-quality customer service and immediate access to retail financial services at competitive rates during convenient operating hours. As of March 31, 2012, we operated 435 retail storefront locations across 14 states.
Over each of the past three years, we increased revenue, driven by both organic growth and acquisitions. Our retail business model consists of, among other things, a focus on customer service, incentive-based compensation structures, strategies to increase customer traffic, and an expanding product set to address a larger share of our customers financial needs. Our overall revenue has expanded as we have executed on our retail model, which has increased incremental revenue from our existing store base, and added store count. We have limited capital expenditure requirements, and our primary store-level operating expenses are occupancy and labor. As part of our retail model, we strive to invest in premier locations and to develop a highly trained and motivated workforce, all with the aim of enhancing the customers experience in our stores, generating increased store traffic and introducing our customers to our diversified set of products. We have achieved organic growth through increased market share and by expanding our customer relationships through our additional product offerings. Our measurement of comparable store sales growth as of December 31, 2011 includes stores which we operated for the full year of 2011 and which were open for the full year of 2010. As of December 31, 2011 we had 280 stores included in this measurement. These stores achieved comparable sales growth of 7.3% for the year ended December 31, 2011 as compared to the year ended December 31, 2010. Our acquisitions during 2011 included the addition of 10 stores in Illinois and 141 stores in California and Oregon. Our net income during the year ended December 31, 2011, declined as compared to the year ended December 31, 2010, as a result of incremental interest expense and transaction expenses associated with our acquisitions and our recapitalization discussed below under Recapitalization.
Factors Affecting Our Results of Operations
Expansion of our Retail Platform
We believe that our ability to execute on our retail model generates higher per store revenue and contribution to Adjusted EBITDA as compared to our publicly traded peer companies. Our results of operations are heavily impacted by the number of stores we operate and the degree to which we have integrated acquired stores into our operations. We have recently added stores primarily through acquisitions. The results of our internal customer surveys suggest that over 30% of our customers learn about our products and services and come to our stores as a result of a referral. Acquisitions allow us to leverage an established customer base, who continue to use the acquired stores and generate word-
of-mouth marketing as we implement our retail model at the stores, as a source of referrals. Acquisitions have also provided us an existing market presence which we have been able to build upon through expanding the acquired stores product offerings. We have had success in deploying this model, as we were able to increase revenue for the year ended December 31, 2011 for our Michigan and Alabama acquired stores, which were acquired in August 2009 and March 2010, respectively, by 26.4% and 34.4%, respectively.
We have also grown through de novo store openings, which we have undertaken from time to time to increase our market penetration. Specifically, in 2010, following the Alabama Acquisition, we opened two de novo stores in that market to expand our brand presence and capture additional market share. In addition, in 2011 we opened two de novo stores: one in California and one in Ohio. Since March 31, 2012, we have opened two de novo stores in California.
Our recent acquisitions include:
· California Acquisition. On April 29, 2011, we acquired CCCS and its chain of 141 retail stores in California and Oregon. We undertook the California Acquisition as a means of gaining access to several key markets in California, thereby increasing our geographic diversity, and as a means of gaining additional product expertise, specifically related to CCCSs core check cashing competency. We plan to create additional value through the California Acquisition by increasing store profitability throughout CCCSs existing store chain through the execution of our retail model, the introduction of a superior prepaid debit card offering through our Insight program and a focus on growing title lending, medium-term lending, as well as by achieving additional economies of scale through our existing corporate infrastructure.
We have fully integrated several aspects of CCCSs business and all integration efforts related to the California Acquisition were performed by CCFI employees and were expensed as incurred. We made investments in information technology to bring CCCSs information security, compliance and operational functionality in line with CCFI standards. We capitalized approximately $0.1 million in relation to these investments during 2011. Our results of operations for the year ended December 31, 2011 include the results of the stores acquired in the California Acquisition for the period beginning on April 29, 2011.
· Illinois Acquisition. On March 21, 2011, we acquired 10 stores in the Chicago metro area for a purchase price of $19.7 million. At the time of their acquisition, these stores offered only lending products. Since the Illinois Acquisition, we have fully integrated their operations and have expanded the products and services offered in these stores to include our Insight prepaid card offering, money orders, bill payment services and title lending, thereby further addressing the financial needs of our customers in the Chicago market.
· Alabama Acquisition. In March 2010, we completed the acquisition of a 19-store chain in Alabama for a purchase price of $15.9 million. Since the time of the acquisition we have enhanced store productivity and profitability through focusing on customer traffic and branch cost containment. The per store contribution to our operating income from our Alabama stores has increased dramatically since the time of the acquisition.
· Michigan Acquisition. In August 2009, we completed the acquisition of eight stores in Michigan for a purchase price of $0.5 million. These stores were underperforming at the time of their acquisition and represented an opportunity for us to benefit from our existing Michigan infrastructure to increase revenues and profitability at the acquired stores. Through implementing our retail model and focusing employees on customer service and revenue growth, the per store contribution to our operating income from our acquired Michigan stores has grown substantially since the time of acquisition.
· Insight Holding Company LLC Acquisition. In November 2011, we purchased a 22.5% interest in Insight Holding, which is the parent company of, among other entities, Insight, for which we are
an agent of its prepaid card product. We believe this investment aligns our strategic interests and positions us to participate in the value creation at Insight.
· DFS Acquisition. On April 1, 2012 we acquired all of the equity interests of the DFS Companies. The purchase price was approximately $22 million, subject to a post-closing working capital adjustment. DFS offers short-term loans to consumers via the Internet under a state-licensed model in compliance with the applicable laws of the jurisdiction of its customers. Through our acquisition of DFS, we gain access to a scalable Internet-based revenue opportunity. We believe this additional retail channel will enable us to efficiently reach consumers not fully served by our existing retail locations. Our objective will be to accelerate the growth of DFS through incremental capital, application of retailing strategies and an expansion of its product offerings.
In total, our store count increased by 151 stores during 2011 as a result of the California and Illinois Acquisitions. We did not close any stores during 2011 and opened two de novo stores. The chart below sets forth certain information regarding our stores for each of the past three years and the first three months of 2012.
|
|
Year Ended December 31, |
|
Three Months |
| ||||
|
|
2009 |
|
2010 |
|
2011 |
|
2012 |
|
# of Locations |
|
|
|
|
|
|
|
|
|
Beginning of Period |
|
252 |
|
264 |
|
282 |
|
435 |
|
Acquired |
|
8 |
|
19 |
|
151 |
|
|
|
Opened |
|
4 |
|
2 |
|
2 |
|
1 |
|
Closed |
|
|
|
3 |
|
|
|
1 |
|
End of Period |
|
264 |
|
282 |
|
435 |
|
435 |
|
The following table provides the geographic composition of our locations as of December 31, 2011 and March 31, 2012:
|
|
December 31, |
|
March 31, |
|
Alabama |
|
21 |
|
21 |
|
Arizona |
|
43 |
|
43 |
|
California |
|
156 |
|
156 |
|
Florida |
|
10 |
|
11 |
|
Indiana |
|
21 |
|
21 |
|
Illinois |
|
10 |
|
10 |
|
Kansas |
|
6 |
|
5 |
|
Kentucky |
|
13 |
|
13 |
|
Michigan |
|
14 |
|
14 |
|
Missouri |
|
7 |
|
7 |
|
Ohio |
|
99 |
|
99 |
|
Oregon |
|
3 |
|
3 |
|
Utah |
|
10 |
|
10 |
|
Virginia |
|
22 |
|
22 |
|
Total Locations |
|
435 |
|
435 |
|
Overall Trends in Consumer Credit
Our revenues are influenced by trends in the overall market for consumer financial products and services. We believe, as a result of these current trends, our addressable market is growing. A study conducted by the FDIC published in 2009 indicates that 25.6% of U.S. households are either unbanked or underbanked, representing approximately 60 million adults. As traditional financial institutions
increase fees for consumer services, such as checking accounts and debit cards, and as traditional credit sources tighten credit standards as a result of economic and other market driven developments, consumers have looked elsewhere for less expensive and more convenient alternatives to meet their financial needs. According to a recent Federal Reserve Bank of New York report, total consumer credit outstanding has declined over $1.4 trillion since its peak in the third quarter of 2008. Since the adoption of the Credit Card Accountability, Responsibility and Disclosure Act of 2009, we believe that traditional credit card issuers have tightened their underwriting standards. This contraction in the supply of consumer credit has resulted in significant unmet demand for consumer loan products. We believe this shift has resulted in increased demand for our loan products, as consumers have had their traditional sources of consumer credit reduced or terminated.
Changes in Legislation
During the last few years, legislation that has required us to alter the manner in which we offer certain products and services has been introduced or adopted in a number of states. See BusinessRegulation and Compliance for a discussion of the various regulatory regimes applicable to our business and certain recent legislative developments affecting our industry. Some of these legislative and regulatory changes may result in the discontinuation of certain operations, while others may result in less significant short-term or long-term changes, interruptions in revenues and lower operating margins. In order to address market, legislative and regulatory developments, we regularly refine our product offerings and develop new products and services to better serve our customers.
Recent developments include:
Virginia. In Virginia, as a result of changes in legislation in early 2009, we transitioned a significant portion of our customers from cash advance products to an open-ended line of credit.
Arizona. As a result of the expiration of the enabling statute for deferred presentment loans in Arizona in mid-2010, we transitioned customers from short-term consumer loans to other loan products, such as title loans and loans from third-party lending offerings, which may be delivered via prepaid debit cards.
Illinois. In Illinois, House Bill 537, which created an installment payday loan product with a term of not less than 112 days and not more than 180 days, went into effect on March 21, 2011. We believe the new statute provides legislative stability in the state and that our retail-oriented business model will prove successful with this product.
In certain states, either in compliance with law or through our following of best practices recommended by the Community Financial Services Association of America, or CFSA, we offer an extended payment plan for all borrowers. This extended payment plan is advertised to all customers where the program is offered, either via pamphlet or by being posted at the store at the time of the loan. This payment plan is available to all customers in these states upon request and is not contingent on the borrowers repayment status or further underwriting standards. The term is extended from an average of approximately 17 days to roughly four payments over eight weeks. If customers do not make these payments, then their held check is deposited. Loan receivables subject to these repayment plans represented $1.4 million of the $131.3 million of total receivables at December 31, 2011.
At the federal level, in July 2010, the Dodd-Frank Act was signed into law. Among other things, this act created the Consumer Financial Protection Bureau (CFPB) which will have authority to regulate companies that provide consumer financial services. The CFPB became operative in July of 2011. Now that the CFPB has installed director Richard Cordray, it has regulatory, supervisory and enforcement powers over providers of consumer financial products and services, including explicit supervisory authority to examine and require registration of payday lenders. Recently, the CFPB has begun examinations of payday lenders and has begun an examination of us in late April 2012.
We believe that our ability to develop legal and financially viable products and services, as the regulatory environment evolves, is one of our competitive strengths.
New Product Expansion and Trends
We constantly seek to develop and offer new products in order to address the full range of our customers financial needs. From 2009 to 2011, revenue from our title loan products has grown 62% on a compound annual basis. During 2011, title loan revenues increased 39% over 2010. In 2010, we introduced a new prepaid card offering to our customers. During 2011, prepaid debit card fees
increased 86% over 2010. Importantly, we believe the prepaid card solution we offer, specifically when coupled with direct deposit, can serve as a catalyst to a longer-term customer relationship.
Internal surveys indicate our customers are interested in a broad set of products to meet their financial service needs. In executing on our retail model, we regularly pilot and introduce new offerings to meet these needs. These product introductions have historically created profitable revenue expansion. The acquisition of DFS provides an additional channel through which to offer our broad product set and service our customers.
Product Characteristics and Mix
As we introduce new products throughout our markets and expand our product offerings to meet our customers needs, the characteristics of our overall loan portfolio shift to reflect the terms of these new products. Our various lending products have different terms, depending on the underlying type of loan product that is offered. Our title loan offerings tend to have longer maturities than our short-term consumer loan offerings, and though loans to a single customer may generate lower finance charges as a result of there being fewer origination events, their increased maturity can result in comparable overall revenue generation over the life of an individual loan. In addition, the shift in mix to more medium-term loans results in a higher loan loss reserve as a result of the nature of medium-term loans as compared to short-term loans. Recently, as we have emphasized our Insight prepaid debit card program, we have increased card fees from individual card purchases, load fees, and commissions related to card activity. We believe that our prepaid debit card revenue, together with the prepaid debit card direct deposit offering, have reduced some of our check cashing fees. We believe, however, that establishing our Insight prepaid debit card as a hub for our customers financial service needs will lengthen the customer relationship and increase associated revenue over time.
Expenses
Historically, our operating expenses have primarily related to the operation of our stores, including salaries and benefits for employees, store occupancy costs, loan loss provisions, returns and cash shortages and depreciation of assets. We also incur corporate and other expenses on a company-wide basis, including interest expense and other financing costs related to our indebtedness, advertising, insurance, salaries, benefits, occupancy costs, professional expenses and management fees paid by us to Diamond Castle. Our organization is equipped with acquisition and integration capabilities. Most integration tasks are managed by CCFI employees, the cost of which is expensed as incurred. Acquisitions and integrations often result in moderate temporary increases in expenses related to travel, training and incremental pay for hourly employees involved in integration activities.
We view our compliance, collections and information technology groups as core competencies. We have invested in each of these areas and believe we will continue to benefit from increased economies of scale as we grow our business with additional future acquisitions. Our efficient corporate cost structure is evident as revenue has grown at a compound annual rate of 23.1% from 2009 to 2011 while corporate expenses have grown at a compound annual growth rate of 19.1% over the same periods and have decreased as a percentage of revenue from 15.6% in 2009 to 14.6% in 2011.
Recapitalization
Concurrent with the California Acquisition, we issued $395.0 million in original notes, entered into a new four-year, $40 million Revolving Credit Facility and amended our existing $7.0 million credit facility for our Alabama subsidiary. The proceeds from the original notes offering, together with $10.0 million of
proceeds from our new Revolving Credit Facility and $27.7 million of cash on hand were used to complete the California Acquisition, to retire our and CCCSs outstanding credit facility debt and to pay a dividend to our shareholders and pay bonuses to our management. We incurred $24.2 million in related fees and expenses in completing the California Acquisition and the financing related to our recapitalization, of which $15.6 million was directly attributable to other expenses incurred in connection with the financing and was capitalized accordingly. As a result of the increase in the amount of debt in our capital structure following the recapitalization, our interest expense has risen, impacting our results of operations and liquidity. See Unaudited Pro Forma Consolidated Financial Information, Liquidity and Capital Resources, Contractual Obligations and Commitments and Description of Certain Indebtedness for further detail.
Discontinued Operations
In December 2010, we discontinued our commercial check cashing business in Florida. The commercial check cashing business, which provided check cashing services to high-volume check cashers, required significant capital commitments and the underwriting of commercial customer risk. In 2010, we had a significant write-off of a customer receivable and discontinued these operations due to operational considerations. As a result of discontinuing these operations, we recorded a one-time after tax charge of approximately $2.2 million during 2010. This was an isolated business unit, and its closure had no impact on the rest of our Florida operations.
In August 2010, CCCS decided to close four stores in the state of Washington due primarily to a change in law in Washington that made the business unprofitable. As a result of the closures, CCCS incurred an after tax loss from discontinued operations of $0.5 million.
Critical Accounting Policies
Consistent with generally accepted accounting principles in the United States, our management makes certain estimates and assumptions to determine the reported amounts of assets, liabilities, revenue and expenses in the process of preparing our financial statements. These estimates and assumptions are based on the best information available to management at the time the estimates or assumptions are made. The most significant estimates made by our management, which management considers critical, include valuation of our net finance receivables, stock based compensation and goodwill and our determination for recording the amount of deferred income tax assets and liabilities, because these estimates and assumptions could change materially as a result of conditions both within and beyond managements control.
Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We are electing to not delay such adoption of new or revised accounting standards, and such election is irrevocable.
Management believes that among our significant accounting policies, the following involve a higher degree of judgment:
Finance Receivables, Net
Finance receivables consist of three categories of receivables, short-term consumer loans, medium-term loans and title loans.
Short-term consumer loan products provide customers with cash or a money order, typically ranging in size from $100 to $1,000, in exchange for a promissory note with a maturity generally 14 to 30 days with an agreement to defer the presentment of the customers personal check for the aggregate amount of the advance plus fees. This form of lending is based on applicable laws and regulations which vary by state. Statutes vary from providing fees of 15% to 20%, to providing interest at 25% per annum plus origination fees. The customers repay the cash advance by paying cash or allowing the check to be presented. For unsecured loans, the risk of repayment primarily relates to the customers ability to repay the loans.
Medium-term loan products provide customers with cash, typically ranging from $100 to $2,501, in exchange for a promissory note with a maturity between three months and 24 months. These loans vary
in their structure between the regulatory environments where they are offered. The loans are due in installments or provide for a line of credit with periodic monthly payments. In certain instances we also purchase loan participations in a third-party lenders loan portfolio that are classified as medium-term finance receivables.
Title loan products provide customers with cash, typically ranging from $750 to $2,500, in exchange for a promissory note with a maturity between 30 days and 24 months. The loan is secured with a lien on the customers vehicle title. The risk characteristics of secured loans primarily depend on the markets in which we operate and the regulatory requirements of each market. Risks associated with secured financings relate to the ability of the borrower to repay the loan and the value of the collateral underlying the loan should the borrower default on its payments.
In some instances we maintain debt-purchasing arrangements with third-party lenders. We accrue for this obligation through managements estimation of anticipated purchases based on expected losses in the third-party lenders portfolio. This obligation is recorded as a current liability on our balance sheet.
Finance receivables, net, on the consolidated balance sheets as of December 31, 2009, 2010 and 2011 were approximately $66.0 million, $81.3 million and $120.5 million, respectively. The allowance for loan losses of $5.4 million, $3.4 million, and $5.6 million as of December 31, 2009, 2010 and 2011 represented 7.6%, 4.0% and 4.5% of finance receivables, net of unearned advance fees, respectively. Finance receivables, net, on the consolidated balance sheet as of March 31, 2012 were approximately $93.2 million. The allowance for loan losses of $5.0 million as of March 31, 2012 represented 4.9% of gross loans receivable. Finance receivables, net as of December 31, 2009, 2010 and 2011 and March 31, 2012 are as follows (in thousands):
|
|
As of December 31, |
|
As of March 31, |
| |||||||||
|
|
2009 |
|
2010 |
|
2011 |
|
2012 |
| |||||
Finance Receivables, net of unearned advance fees |
|
$ |
71,441 |
|
$ |
84,694 |
|
$ |
126,077 |
|
$ |
98,226 |
| |
Less: Allowance for loan losses |
|
5,406 |
|
3,357 |
|
5,626 |
|
5,013 |
| |||||
Finance Receivables, Net |
|
$ |
66,035 |
|
$ |
81,337 |
|
$ |
120,451 |
|
$ |
93,213 |
| |
Net loan charge-offs for the three years ended December 31, 2009, 2010 and 2011 were $37.3 million, $38.4 million and $55.3 million, respectively. Net loan charge-offs for the three-months ended March 31, 2012 were $(12.0) million. The total changes to the allowance for loan losses for the years ended December 31, 2009, 2010 and 2011 and the three-months ended March 31, 2012 were as follows (in thousands):
|
|
Year Ended December 31, |
|
Three-months Ended |
| ||||||||
|
|
2009 |
|
2010 |
|
2011 |
|
March 31, 2012 |
| ||||
Allowance for Loan Losses |
|
|
|
|
|
|
|
|
| ||||
Beginning of Period |
|
$ |
2,451 |
|
$ |
5,406 |
|
$ |
3,357 |
|
$ |
5,626 |
|
Provisions for Loan Losses |
|
40,255 |
|
36,324 |
|
57,569 |
|
11,344 |
| ||||
Charge-offs, net |
|
(37,300 |
) |
(38,373 |
) |
(55,300 |
) |
(11,957 |
) | ||||
End of Period |
|
$ |
5,406 |
|
$ |
3,357 |
|
$ |
5,626 |
|
$ |
5,013 |
|
Allowance as Percentage of Finance Receivables, net of unearned advance fees |
|
7.6 |
% |
4.0 |
% |
4.5 |
% |
5.10 |
% |
The provision for loan losses for the years ended December 31, 2009 and 2010 also includes losses from returned items from check cashing of $3.0 million and $3.1 million, respectively, and card losses of $0.2 million for the year ended December 31, 2010. The provision for loan loss for the year ended December 31, 2011 also includes losses from returned items from check cashing of $5.1 million, loss on tax loans of $0.4 million and card losses of $0.2 million. The provision for loan losses for the three months ended March 31, 2012 also includes losses from returned items from check cashing of $1.0 million, loss on tax loans of $0.3 million, and card losses of $0.1 million.
Goodwill
Management evaluates all long-lived assets, including goodwill, for impairment annually as of December 31, or whenever events or changes in business circumstances indicate an asset might be
impaired. Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets at the date of the acquisition and the excess of purchase price over identified net assets acquired.
One of the methods that management employs in the review uses estimates of future cash flows from acquired assets. If the carrying value of goodwill or other intangible assets is considered impaired, an impairment charge is recorded for the amount by which the carrying value of the goodwill or intangible assets exceeds its fair value. Management believes that its estimates of future cash flows and fair value are reasonable. Changes in estimates of such cash flows and fair value, however, could impact the estimated value of goodwill.
There was no impairment loss charged to operations for goodwill during the years ended December 31, 2011 and December 31, 2010 or the quarter ended March 31, 2012.
During the year ended December 31, 2011, goodwill increased by $117.0 million, due to the California and Illinois Acquisitions. During the first three months of 2012, goodwill decreased by $0.6 million due to a tax adjustment.
Income Taxes
We record income taxes as applicable under generally accepted accounting principles. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is recorded to reduce the deferred tax asset if it is more likely than not that some portion of the asset will not be realized.
Primarily as a result of Diamond Castles acquisition of CheckSmart and Golden Gate Capitals acquisition of CCCS, both in 2006, we benefit from the tax amortization of the goodwill resulting from those transactions. For tax purposes this goodwill amortizes over a 15-year period from the date of the acquisitions. This resulted in goodwill amortization of $21.0 million for the purposes of our 2011 federal income taxes. Although we have not yet finalized our 2011 tax return, we believe the tax benefit of $21.0 million results in cash tax savings of approximately $8.3 million. We expect the corresponding goodwill amortization in 2012 to be $23.0 million, which, at an applicable federal and state tax rate of 38%, would result in cash tax savings of approximately $8.7 million (which amounts do not include goodwill from the DFS Acquisition or any other future acquisitions we may consummate, including the Florida Acquisition, each of which we expect would increase the amount of our goodwill amortization and cash tax savings for 2012 and future years). Under GAAP, our income tax expense for accounting purposes, however, does not reflect the impact of this deduction for the amortization of goodwill. This difference between our cash tax expense and our accrued income tax expense results in the creation of deferred income tax items on our balance sheet.
Results of Operations
Three Months Ended March 31, 2012 Compared to Three Months Ended March 31, 2011
The following table sets forth key operating data for our operations for the three months ended March 31, 2012 and 2011 (dollars in thousands):
|
|
Three Months Ended March 31, |
| |||||||||||||
|
|
2011 |
|
2012 |
|
Increase (Decrease) |
|
2011 |
|
2012 |
| |||||
|
|
|
|
|
|
|
|
(Percent) |
|
(Percent of |
| |||||
Total Revenues |
|
$ |
59,226 |
|
$ |
85,949 |
|
$ |
26,723 |
|
45.1 |
% |
100.0 |
% |
100.0 |
% |
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Salaries and benefits |
|
10,261 |
|
16,113 |
|
5,852 |
|
57.0 |
% |
17.3 |
% |
18.8 |
% | |||
Provision for losses |
|
8,408 |
|
13,337 |
|
4,929 |
|
58.6 |
% |
14.2 |
% |
15.5 |
% | |||
Occupancy |
|
3,827 |
|
5,508 |
|
1,681 |
|
43.9 |
% |
6.5 |
% |
6.4 |
% | |||
Depreciation and amortization (store-level) |
|
1,328 |
|
1,556 |
|
228 |
|
17.2 |
% |
2.2 |
% |
1.8 |
% | |||
Other operating expenses |
|
7,338 |
|
9,793 |
|
2,455 |
|
33.5 |
% |
12.4 |
% |
11.4 |
% | |||
Total Operating Expenses |
|
31,162 |
|
46,307 |
|
15,145 |
|
48.6 |
% |
52.6 |
% |
53.9 |
% | |||
Income from Operations |
|
28,064 |
|
39,642 |
|
11,578 |
|
41.3 |
% |
47.4 |
% |
46.1 |
% | |||
Corporate and other expenses |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Corporate expenses |
|
9,892 |
|
13,961 |
|
4,069 |
|
41.1 |
% |
16.7 |
% |
16.2 |
% | |||
Transaction expenses |
|
85 |
|
519 |
|
434 |
|
510.6 |
% |
0.1 |
% |
0.6 |
% | |||
Depreciation and amortization (corporate) |
|
286 |
|
1,056 |
|
770 |
|
269.2 |
% |
0.5 |
% |
1.2 |
% | |||
Interest |
|
2,035 |
|
11,350 |
|
9,315 |
|
457.7 |
% |
3.4 |
% |
13.2 |
% | |||
Income Tax Expense |
|
5,903 |
|
4,947 |
|
(956 |
) |
(16.2 |
)% |
10.0 |
% |
5.8 |
% | |||
Total corporate and other expenses |
|
18,201 |
|
31,833 |
|
13,632 |
|
74.9 |
% |
30.7 |
% |
37.0 |
% | |||
Net income before management fee |
|
9,863 |
|
7,809 |
|
(2,054 |
) |
(20.8 |
)% |
16.7 |
% |
9.1 |
% | |||
Sponsor Management Fee |
|
259 |
|
363 |
|
104 |
|
40.2 |
% |
0.5 |
% |
0.4 |
% | |||
Net Income |
|
$ |
9,604 |
|
$ |
7,446 |
|
$ |
(2,158 |
) |
(22.5 |
)% |
16.2 |
% |
8.7 |
% |
The following tables set forth key loan and check cashing operating data for our operations for the periods indicated (in thousands, except for store data, averages, percentages or unless otherwise specified):
|
|
Twelve Months Ended |
| ||||
|
|
2011 |
|
2012 |
| ||
Short-term Loan Operating Data (unaudited): |
|
|
|
|
| ||
Loan volume (originations and refinancings) |
|
$ |
1,241,214 |
|
$ |
1,637,360 |
|
Number of loan transactions |
|
2,948 |
|
4,068 |
| ||
Average new loan size |
|
$ |
421.04 |
|
$ |
402.54 |
|
Average fee per new loan |
|
$ |
43.26 |
|
$ |
44.14 |
|
Loan loss provision |
|
27,937 |
|
42,704 |
| ||
Loan loss provision as a percentage of loan volume |
|
2.25 |
% |
2.61 |
% | ||
Check Cashing Data (unaudited): |
|
|
|
|
| ||
Face amount of checks cashed |
|
$ |
1,536,916 |
|
$ |
2,404,207 |
|
Number of checks cashed |
|
3,384 |
|
5,427 |
| ||
Face amount of average check |
|
$ |
454.21 |
|
$ |
442.99 |
|
Average fee per check |
|
$ |
16.78 |
|
$ |
14.36 |
|
Returned check expense |
|
$ |
3,271 |
|
$ |
5,344 |
|
Returned check expense as a percent of face amount of checks cashed |
|
0.21 |
% |
0.22 |
% |
|
|
As of and for the Three |
| ||||
|
|
2011 |
|
2012 |
| ||
Medium-term Loan Operating Data (unaudited): |
|
|
|
|
| ||
Principal outstanding |
|
$ |
3,881 |
|
$ |
11,926 |
|
Number of loans outstanding |
|
11,607 |
|
20,699 |
| ||
Average principal outstanding |
|
$ |
334.41 |
|
$ |
576.18 |
|
Weighted average monthly percentage rate |
|
23.2 |
% |
18.3 |
% | ||
Allowance as a percentage of finance receivable |
|
7.9 |
% |
13.3 |
% | ||
Loan Loss Provision |
|
$ |
1,516 |
|
$ |
3,051 |
|
Title Loan Operating Data (unaudited): |
|
|
|
|
| ||
Principal outstanding |
|
$ |
7,829 |
|
$ |
14,149 |
|
Number of loans outstanding |
|
8,255 |
|
13,822 |
| ||
Average principal outstanding |
|
$ |
948.45 |
|
$ |
1,023.67 |
|
Weighted average monthly percentage rate |
|
15.6 |
% |
12.5 |
% | ||
Allowance as a percentage of finance receivable |
|
7.0 |
% |
5.8 |
% | ||
Loan Loss Provision |
|
$ |
845 |
|
$ |
1,241 |
|
Operating Metrics
Revenue
|
|
Three Months Ended March 31, |
| |||||||||||||
(dollars in thousands) |
|
2011 |
|
2012 |
|
Increase (Decrease) |
|
2011 |
|
2012 |
| |||||
|
|
|
|
|
|
|
|
(Percent) |
|
(Percent of |
| |||||
Short-term Consumer Loan Fees and Interest |
|
$ |
30,495 |
|
$ |
42,226 |
|
$ |
11,731 |
|
38.5 |
% |
51.4 |
% |
49.1 |
% |
Medium-term Loans |
|
1,994 |
|
6,328 |
|
4,334 |
|
217.4 |
% |
3.4 |
% |
7.4 |
% | |||
Check Cashing Fees |
|
15,047 |
|
20,186 |
|
5,139 |
|
34.2 |
% |
25.4 |
% |
23.5 |
% | |||
Prepaid Debit Card Services |
|
3,948 |
|
5,071 |
|
1,123 |
|
28.4 |
% |
6.7 |
% |
5.9 |
% | |||
Title Loan Fees |
|
3,710 |
|
6,006 |
|
2,296 |
|
61.9 |
% |
6.3 |
% |
7.0 |
% | |||
Other Income |
|
4,032 |
|
6,132 |
|
2,100 |
|
52.1 |
% |
6.8 |
% |
7.1 |
% | |||
Total Revenue |
|
$ |
59,226 |
|
$ |
85,949 |
|
$ |
26,723 |
|
45.1 |
% |
100.0 |
% |
100.0 |
% |
For the three months ended March 31, 2012, total revenue increased by $26.7 million, or 45.1%, compared to the same period in 2011. The majority of this growth was created through the California and Illinois acquisitions with our core operations also experiencing organic growth.
Revenue generated from short-term consumer loan fees and Interest for the three months ended March 31, 2012 increased $11.7 million, or 38.5%, compared to the same period in 2011. We grew consumer loan revenue as we integrated the California and Illinois Acquisitions and focused on growing the product organically within most of our other markets. As we focus on meeting our customers financial needs and building a longer-term relationship with our customers, we have diversified our revenue mix and increased our medium-term loan offerings. This proactive approach has led to a shift in revenue mix from short-term loans to medium-term loans.
Revenue generated from medium-term loans for the three months ended March 31, 2012 increased $4.3 million, or 217.4%, compared to the same period in 2011. We grew medium-term loan revenue as we integrated the California and Illinois Acquisitions and focused on growing the product organically.
Revenue generated from check cashing for the three months ended March 31, 2012 increased $5.1 million, or 34.2%, compared to the same period in 2011. A general decline in check cashing was offset by the California Acquisition. Although this continues to be an important offering for our company, representing 23.5% of our revenue, we continue to leverage check cashing to drive traffic through which to offer ancillary products and services, including prepaid debit cards.
Revenue from prepaid debit card services during the three months ended March 31, 2012 increased by $1.1 million, or 28.4%, as customer demand for the prepaid card product offerings grew. The prepaid debit card products that we offer our customers, provide them with options including direct deposit, online bill payment, electronic alerts, and in certain markets, access to a third-party loan, increasing our touch points and integrating our services as a central hub for all our customers financial service needs.
We actively promoted the cards to our customer base, increasing the number of active card accounts (defined as accounts with activity within the previous 90 days) from 100,838 in March 2011 to 130,305 in March 2012, and the number of direct deposit accounts from 26,345 to 37,186. We have bolstered our marketing efforts in support of the Insight products, in turn expanding customer awareness and penetration.
Revenue generated from title loan fees for the three months ended March 31, 2012 increased $2.3 million, or 61.9%, compared to the same period in 2011. We grew title loan revenue as we
integrated the California and Illinois Acquisitions and focused on growing the product organically within each of our other title loan markets.
Operating Expenses
|
|
Three Months Ended March 31, |
| |||||||||||||
(dollars in thousands) |
|
2011 |
|
2012 |
|
Increase (Decrease) |
|
2011 |
|
2012 |
| |||||
|
|
|
|
|
|
|
|
(Percent) |
|
(Percent of |
| |||||
Salaries and Benefits |
|
$ |
10,261 |
|
$ |
16,113 |
|
$ |
5,852 |
|
57.0 |
% |
17.3 |
% |
18.9 |
% |
Provision for Loan Losses |
|
8,408 |
|
13,337 |
|
4,929 |
|
58.6 |
% |
14.2 |
% |
15.6 |
% | |||
Occupancy |
|
3,827 |
|
5,508 |
|
1,681 |
|
43.9 |
% |
6.5 |
% |
6.4 |
% | |||
Depreciation & Amortization (Store-level) |
|
1,328 |
|
1,556 |
|
228 |
|
17.2 |
% |
2.2 |
% |
1.8 |
% | |||
Advertising & Marketing |
|
875 |
|
975 |
|
100 |
|
11.4 |
% |
1.5 |
% |
1.1 |
% | |||
Bank Charges |
|
650 |
|
1,009 |
|
359 |
|
55.2 |
% |
1.1 |
% |
1.2 |
% | |||
Store Supplies |
|
579 |
|
795 |
|
216 |
|
37.3 |
% |
1.0 |
% |
0.9 |
% | |||
Collection Expenses |
|
660 |
|
1,224 |
|
564 |
|
85.5 |
% |
1.1 |
% |
1.4 |
% | |||
Telecommunications |
|
587 |
|
1,414 |
|
827 |
|
140.9 |
% |
1.0 |
% |
1.6 |
% | |||
Security |
|
243 |
|
637 |
|
394 |
|
162.1 |
% |
0.4 |
% |
0.7 |
% | |||
License & Other Taxes |
|
291 |
|
348 |
|
57 |
|
19.6 |
% |
0.5 |
% |
0.4 |
% | |||
Other Operating Expenses |
|
3,453 |
|
3,391 |
|
(62 |
) |
(1.8 |
)% |
5.8 |
% |
3.9 |
% | |||
Total Operating Expenses |
|
31,162 |
|
46,307 |
|
15,145 |
|
48.6 |
% |
52.6 |
% |
53.9 |
% | |||
Income from Operations |
|
$ |
28,064 |
|
$ |
39,642 |
|
$ |
11,578 |
|
41.3 |
% |
47.4 |
% |
46.1 |
% |
Total operating expenses, which consist primarily of store-related expenses, increased by $15.1 million, or 48.6%, for the three months ended March 31, 2012 as compared to the same period in 2011. This overall increase was due primarily to incremental store-level expenses from the 151 stores acquired through the California and Illinois Acquisitions. As a percent of revenue, salaries and benefits increased from 17.3% to 18.9% for the three months ended March 31, 2011 and 2012, respectively. This was due largely to employee payroll attributed to the California and Illinois Acquisitions as these locations were not as productive, with employee salaries resulting in a higher percent of revenue.
Occupancy expenses for the three months ended March 31, 2012 also increased from the same period in 2011 primarily due to an increase in the number of stores in operation from the California and Illinois Acquisitions.
Provision for loan losses increased during the three months ended March 31, 2012 compared to the same period in 2011, due primarily to increased volume as a result of the acquisitions and organic growth and increased defaults as customers faced continuing economic weakness. Provision for loan losses increased as a percentage of revenue primarily as a result of three factors: (1) the shift in mix to more medium-term loans and longer term title loans which began during the fourth quarter of 2011 and the higher reserves necessitated by those products, (2) our continued focus on market share expansion, particularly in the California market as we invest in developing new consumer lending relationships, and (3) we believe a continuing weak economy, particularly within the customer demographics we serve, creates a challenging collection environment.
Telecommunications expenses increased due to the California and Illinois Acquisitions and transitional expenses as we upgraded some of our telecommunication services.
Corporate and Other Expenses
|
|
Three Months Ended March 31, |
| |||||||||||||
(dollars in thousands) |
|
2011 |
|
2012 |
|
Increase (Decrease) |
|
2011 |
|
2012 |
| |||||
|
|
|
|
|
|
|
|
(Percent) |
|
(Percent of |
| |||||
Corporate Expenses |
|
$ |
10,012 |
|
$ |
13,961 |
|
$ |
3,949 |
|
39.4 |
% |
16.9 |
% |
16.2 |
% |
Transaction Expenses |
|
85 |
|
519 |
|
434 |
|
510.6 |
% |
0.1 |
% |
0.6 |
% | |||
Depreciation & Amortization (Corporate) |
|
286 |
|
1,056 |
|
770 |
|
269.2 |
% |
0.5 |
% |
1.2 |
% | |||
Sponsor Management Fee |
|
259 |
|
363 |
|
104 |
|
40.2 |
% |
0.4 |
% |
0.4 |
% | |||
Discontinued Operations |
|
(120 |
) |
|
|
120 |
|
(100.0 |
)% |
(0.2 |
)% |
0.0 |
% | |||
Interest |
|
2,035 |
|
11,350 |
|
9,315 |
|
457.7 |
% |
3.4 |
% |
13.3 |
% | |||
Income Tax Expense |
|
5,903 |
|
4,947 |
|
(956 |
) |
(16.2 |
)% |
10.0 |
% |
5.8 |
% | |||
Total Corporate and Other Expenses |
|
$ |
18,460 |
|
$ |
32,196 |
|
$ |
13,736 |
|
74.4 |
% |
31.2 |
% |
37.5 |
% |
Corporate Expenses
Corporate expenses increased $13.7 million during the three months ended March 31, 2012, or 74.4%, compared to the same period in 2011 exhibiting the absorption of the acquired operations. Collection expenses at the corporate level increased as we adapted to a broader product set and worked through the consolidation of the California acquisition.
Additionally, to support our prepaid card product and pilot other initiatives, we built a call center during 2011. This investment results in an increase in corporate expenses related to payroll, telephone expenses and transactional expenses. We believe this investment will benefit us as we continue to expand the products and services we offer our customer, supported from this center.
Interest Expense, Net
Interest expense, net, increased to $11.4 million during the three months ended March 31, 2012 as compared to $2.0 million for the same period in 2011, or an increase of 457.7%, due to the issuance of the notes.
Income Taxes
Income taxes for the three months ended March 31, 2012 were $4.9 million, as compared to $5.9 million for the same period in 2011. CCFIs annual effective income tax rates for the three months ended March 31, 2012 and 2011 were 39.9% and 38.4%, respectively.
Full-Year Results of Operations
The following table sets forth key operating data for our operations for the years ended December 31, 2009, 2010 and 2011 (dollars in thousands):
|
|
Year Ended December 31, |
| |||||||||||||
|
|
2009 |
|
Revenue % |
|
2010 |
|
Revenue % |
|
2011 |
|
Revenue % |
| |||
Total Revenues |
|
$ |
202,683 |
|
100 |
% |
$ |
224,280 |
|
100 |
% |
$ |
306,934 |
|
100 |
% |
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Salaries and benefits |
|
34,343 |
|
16.9 |
% |
38,759 |
|
17.3 |
% |
57,411 |
|
18.7 |
% | |||
Provision for losses |
|
43,463 |
|
21.4 |
% |
40,316 |
|
18.0 |
% |
65,351 |
|
21.3 |
% | |||
Occupancy |
|
13,855 |
|
6.8 |
% |
14,813 |
|
6.6 |
% |
21,216 |
|
6.9 |
% | |||
Depreciation and amortization (store-level) |
|
6,613 |
|
3.3 |
% |
5,318 |
|
2.4 |
% |
5,907 |
|
1.9 |
% | |||
Other operating expenses |
|
22,652 |
|
11.2 |
% |
27,994 |
|
12.5 |
% |
35,515 |
|
11.6 |
% | |||
Total Operating Expenses |
|
120,926 |
|
59.7 |
% |
127,200 |
|
56.7 |
% |
185,400 |
|
60.4 |
% | |||
Income from Operations |
|
81,757 |
|
40.3 |
% |
97,080 |
|
43.3 |
% |
121,534 |
|
39.6 |
% | |||
Corporate and other expenses |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Corporate expenses |
|
30,513 |
|
15.1 |
% |
32,710 |
|
14.6 |
% |
43,730 |
|
14.2 |
% | |||
Transaction expenses |
|
|
|
0.0 |
% |
237 |
|
0.1 |
% |
9,351 |
|
3.0 |
% | |||
Depreciation and amortization (corporate) |
|
568 |
|
0.3 |
% |
1,222 |
|
0.5 |
% |
2,332 |
|
0.8 |
% | |||
Interest |
|
11,532 |
|
5.7 |
% |
8,501 |
|
3.8 |
% |
34,334 |
|
11.2 |
% | |||
Income Tax Expense |
|
14,042 |
|
6.9 |
% |
19,801 |
|
8.8 |
% |
13,553 |
|
4.4 |
% | |||
Total corporate and other expenses |
|
56,655 |
|
28.0 |
% |
62,471 |
|
27.9 |
% |
103,300 |
|
33.7 |
% | |||
Net income before management fee and discontinued operations |
|
25,102 |
|
12.4 |
% |
34,609 |
|
15.4 |
% |
18,234 |
|
5.9 |
% | |||
Sponsor Management Fee |
|
833 |
|
0.4 |
% |
1,184 |
|
0.5 |
% |
1,381 |
|
0.4 |
% | |||
Discontinued Operations |
|
(368 |
) |
(0.2 |
)% |
2,196 |
|
1.0 |
% |
|
|
0.0 |
% | |||
Net Income |
|
24,637 |
|
12.2 |
% |
31,229 |
|
13.9 |
% |
16,853 |
|
5.5 |
% | |||
Year Ended December 31, 2011 Compared to Year Ended December 31, 2010
Revenue
|
|
Year Ended December 31, |
| |||||||||||||
(dollars in thousands) |
|
2010 |
|
2011 |
|
Increase (Decrease) |
|
2010 |
|
2011 |
| |||||
|
|
|
|
|
|
|
|
(Percent) |
|
(Percentage of Revenue) |
| |||||
Short-term Consumer Loans |
|
$ |
125,815 |
|
$ |
163,327 |
|
$ |
37,512 |
|
29.8 |
% |
56.0 |
% |
53.2 |
% |
Medium-term Loans |
|
6,863 |
|
14,170 |
|
7,307 |
|
106.5 |
% |
3.1 |
% |
4.6 |
% | |||
Check Cashing Fees |
|
55,930 |
|
72,800 |
|
16,870 |
|
30.2 |
% |
24.9 |
% |
23.7 |
% | |||
Prepaid Debit Card Services |
|
10,731 |
|
19,914 |
|
9,183 |
|
85.6 |
% |
4.8 |
% |
6.5 |
% | |||
Title Loans |
|
13,381 |
|
18,656 |
|
5,275 |
|
39.4 |
% |
6.0 |
% |
6.1 |
% | |||
Other Income |
|
11,560 |
|
18,067 |
|
6,507 |
|
56.3 |
% |
5.2 |
% |
5.9 |
% | |||
Total Revenue |
|
$ |
224,280 |
|
$ |
306,934 |
|
$ |
82,654 |
|
36.9 |
% |
100.0 |
% |
100.0 |
% |
For 2011, total revenue increased by $82.7 million, or 36.9%, compared to 2010. We experienced organic revenue growth in all of the states in which we operated for the 2011 fiscal year, compared with 2010, with the exception of Arizona, where we adjusted our product mix during May 2010 to conform to new regulatory requirements. Revenue from the California Acquisition increased our overall revenue during 2011 by $55.3 million. The Illinois Acquisition, which closed March 21, 2011, contributed $5.1 million to the revenue mix during 2011. We benefitted in 2011 from a full years contribution from the Alabama Acquisition.
Excluding Arizona for the effect of the regulatory change, and excluding the two acquisitions that closed during 2011, we achieved organic revenue growth of over 9.9% for the year.
Revenue generated from short-term consumer loan fees and interest for 2011 increased $37.5 million, or 29.8%, compared to 2010. We grew short-term consumer loan revenue as we integrated the California and Illinois Acquisitions and focused on growing the product organically within each of our other markets. The California Acquisition contributed $29.5 million to short-term consumer loan revenue from the close of the acquisition on April 29, 2011 through December 31, 2011. We achieved organic growth within each of our markets, excluding Arizona, during the 2011 fiscal year compared to 2010.
As we focus on meeting our customers financial needs and building longer-term relationships with our customers, we have diversified our revenue mix and increased our medium-term loan offerings. This proactive approach has led to a shift in revenue mix from short-term loans to medium-term loans. Revenue generated from medium-term loans for 2011 increased $7.3 million, or 106.5%, compared to 2010. The California Acquisition contributed $1.3 million to medium-term loan revenue from the close of the acquisition on April 29, 2011, through December 31, 2011. Illinois, following the close of the Illinois Acquisition on March 21, 2011, also contributed to the overall growth in medium-term loan revenue by $4.9 million during 2011.
Revenue generated from check cashing for 2011 increased $16.9 million, or 30.2%, compared to 2010. The general decline in check cashing was offset by the California Acquisition and a full twelve months of check cashing revenue from the Alabama Acquisition. Although this continues to be an important offering for our company, representing 24% of our revenue, we continue to focus on leveraging check cashing to grow ancillary products and services, including prepaid debit cards.
Revenue from prepaid debit card services during 2011 increased by $9.2 million, or 85.6%, as customer demand for the prepaid card product offerings grew dramatically. The prepaid debit card products that we offer provide our customers with options, including direct deposit, online bill payment, electronic alerts and, in certain markets, access to a third-party loan, increasing customer contact and integrating our services as a central hub for all our customers financial service needs. We transitioned
to Insights prepaid debit card products in April 2010. In 2011, we actively promoted the cards to our customer base, increasing the number of active card accounts (defined as accounts with activity within the previous 90 days) from approximately 25,900 at the launch of the Insight prepaid card program, to approximately 141,000 in December 2011.
Following the Alabama Acquisition in 2010, we were able to successfully integrate our title loan product into the stores within that market. This successful integration in 2010 led to significant growth during 2011 compared to 2010. Additionally, the transition of customers in Arizona to title loans, following the regulatory change in May 2010, grew revenue significantly in that market as well. Overall, our other states contributed organic title loan revenue growth during 2011 versus 2010. The additional title loan revenue from the newly-acquired stores in California also contributed to the growth in title loans during 2011. Finally, we began to offer title loans to our customers in the Chicago area through the locations acquired in the Illinois Acquisition during the third quarter of 2011.
Operating Expenses
The following table sets forth certain information with respect to our operating expenses for the years ended December 31, 2011 and 2010.
|
|
Year Ended December 31, |
| |||||||||||||
(dollars in thousands) |
|
2010 |
|
2011 |
|
Increase (Decrease) |
|
2010 |
|
2011 |
| |||||
|
|
|
|
|
|
|
|
(Percent) |
|
(Percent of Revenue) |
| |||||
Salaries and Benefits |
|
$ |
38,759 |
|
$ |
57,411 |
|
$ |
18,652 |
|
48.1 |
% |
17.3 |
% |
18.7 |
% |
Provision for Loan Losses |
|
40,316 |
|
65,351 |
|
25,035 |
|
62.1 |
% |
18.0 |
% |
21.3 |
% | |||
Occupancy |
|
14,813 |
|
21,216 |
|
6,403 |
|
43.2 |
% |
6.6 |
% |
6.9 |
% | |||
Depreciation & Amortization (Store-level) |
|
5,318 |
|
5,907 |
|
589 |
|
11.1 |
% |
2.4 |
% |
1.9 |
% | |||
Advertising & Marketing |
|
4,463 |
|
4,716 |
|
253 |
|
5.7 |
% |
2.0 |
% |
1.5 |
% | |||
Bank Charges |
|
2,360 |
|
2,953 |
|
593 |
|
25.1 |
% |
1.1 |
% |
1.0 |
% | |||
Store Supplies |
|
2,188 |
|
2,880 |
|
692 |
|
31.6 |
% |
1.0 |
% |
0.9 |
% | |||
Collection Expenses |
|
2,334 |
|
2,665 |
|
331 |
|
14.2 |
% |
1.0 |
% |
0.9 |
% | |||
Telecommunications |
|
2,232 |
|
3,788 |
|
1,556 |
|
69.7 |
% |
1.0 |
% |
1.2 |
% | |||
Security |
|
996 |
|
1,895 |
|
899 |
|
90.3 |
% |
0.4 |
% |
0.6 |
% | |||
License & Other Taxes |
|
793 |
|
1,339 |
|
546 |
|
68.9 |
% |
0.4 |
% |
0.4 |
% | |||
Other Operating Expenses |
|
12,628 |
|
15,279 |
|
2,651 |
|
21.0 |
% |
5.6 |
% |
5.0 |
% | |||
Total Operating Expenses |
|
127,200 |
|
185,400 |
|
58,200 |
|
45.8 |
% |
56.7 |
% |
60.4 |
% | |||
Income from Operations |
|
$ |
97,080 |
|
$ |
121,534 |
|
$ |
24,454 |
|
25.2 |
% |
43.3 |
% |
39.6 |
% |
Total operating expenses, which consist primarily of store-related expenses, increased by $58.2 million, or 45.8%, in 2011 as compared to 2010. This overall increase was due primarily to incremental store-level expenses from the 151 stores acquired through the California and Illinois Acquisitions and the full year of expenses from the Alabama Acquisition in 2011. As a percentage of revenue, salaries and benefits increased from 17.3% in 2010 to 18.7% in 2011. This was due largely to employee payroll attributable to the California and Illinois Acquisitions, as these locations were not as productive, with employee salaries resulting in a higher percentage of revenue.
Occupancy expenses for 2011 also increased from 2010 primarily due to an increase in the number of stores in operation from the California and Illinois Acquisitions, as well as the recognition of a full twelve months of expenses in 2011 from the Alabama Acquisition.
Provision for loan losses increased during 2011 compared to 2010, due primarily to increased volume as a result of the acquisitions and organic growth. Provision for loan losses increased as a
percentage of revenue primarily as a result of four factors: (1) the effect of new legislation within the Illinois market, as the state transitioned short-term loan consumers to a state-wide database; (2) the shift in mix to more medium-term loans during the fourth quarter and the higher reserves necessitated by those products; (3) our continued focus on market share expansion, particularly in the California market as we invest in developing new consumer lending relationships; and (4) a continuing weak economy, particularly within the customer demographics we serve, coupled with high gas prices, which creates a challenging collection environment.
Independent of the acquisitions, telecommunications expenses increased as long distance costs and the costs for other telephone services increased. Other operating expenses were impacted by the growing acceptance of debit and credit cards as a form of electronic repayment and the merchant processing costs which result, and an increase in customer incentive costs associated with transitioning customers into the prepaid card products that we offer and direct deposit.
Corporate and Other Expenses
|
|
Year Ended December 31, |
| |||||||||||||
(dollars in thousands) |
|
2010 |
|
2011 |
|
Increase (Decrease) |
|
2010 |
|
2011 |
| |||||
|
|
|
|
|
|
|
|
(Percent) |
|
(Percent of Revenue) |
| |||||
Corporate Expenses |
|
$ |
32,710 |
|
$ |
43,730 |
|
$ |
11,020 |
|
33.7 |
% |
14.6 |
% |
14.2 |
% |
Transaction Expenses |
|
237 |
|
9,351 |
|
9,114 |
|
3845.6 |
% |
0.1 |
% |
3.0 |
% | |||
Depreciation & Amortization (Corporate) |
|
1,222 |
|
2,332 |
|
1,110 |
|
90.8 |
% |
0.5 |
% |
0.8 |
% | |||
Sponsor Management Fee |
|
1,184 |
|
1,381 |
|
197 |
|
16.6 |
% |
0.5 |
% |
0.4 |
% | |||
Discontinued Operations |
|
2,196 |
|
|
|
(2,196 |
) |
(100.0 |
)% |
1.0 |
% |
0.0 |
% | |||
Interest |
|
8,501 |
|
34,334 |
|
25,833 |
|
303.9 |
% |
3.8 |
% |
11.2 |
% | |||
Income Tax Expense |
|
19,801 |
|
13,553 |
|
(6,248 |
) |
(31.6 |
)% |
8.8 |
% |
4.4 |
% | |||
Total Corporate and Other Expenses |
|
65,851 |
|
104,681 |
|
38,830 |
|
59.0 |
% |
29.4 |
% |
34.1 |
% | |||
Corporate Expenses
Corporate expenses increased $11.0 million during 2011, or 33.7%, compared to 2010, reflecting costs incurred with respect to the integration of the acquired operations. Collection expenses at the corporate level increased as we adapted to a broader product set and consolidated the California Acquisition.
Additionally, to support our prepaid card product and pilot other initiatives, we built a call center during 2011. This investment results in an increase in corporate expenses related to payroll, telephone expenses and transactional expenses. We believe this investment will benefit us as we continue to expand the products and services we offer our customers.
Interest Expense, Net
Interest expense, net, increased to $34.3 million during 2011 compared to $8.5 million for 2010, or an increase of 303.9%, due to the issuance of the original notes concurrent with the California Acquisition. See Contractual Obligations and Commitments.
Income Taxes
Income taxes during 2011 were $13.6 million, as compared to $19.8 million for the same period in 2010. Our annual effective income tax rates in 2011 and 2010 were 44.6% and 37.2%, respectively. The effective income tax rate for 2011 is elevated as the result of non-deductible transaction expenses.
Year Ended December 31, 2010 Compared to Year Ended December 31, 2009
Revenue
|
|
Year Ended December 31, |
| |||||||||||||
(dollars in thousands) |
|
2009 |
|
2010 |
|
Increase |
|
|
|
2009 |
|
2010 |
| |||
|
|
|
|
|
|
|
|
(Percent) |
|
(Percent of Revenue) |
| |||||
Short-term Consumer Loans |
|
$ |
122,582 |
|
$ |
125,815 |
|
$ |
3,233 |
|
2.6 |
% |
60.5 |
% |
56.1 |
% |
Medium-term Loans |
|
7,235 |
|
6,863 |
|
(372 |
) |
(5.1 |
)% |
3.6 |
% |
3.1 |
% | |||
Check Cashing Fees |
|
53,049 |
|
55,930 |
|
2,881 |
|
5.4 |
% |
26.2 |
% |
24.9 |
% | |||
Prepaid Debit Card Services |
|
2,063 |
|
10,731 |
|
8,668 |
|
420.2 |
% |
1.0 |
% |
4.8 |
% | |||
Title Loans |
|
7,140 |
|
13,381 |
|
6,241 |
|
87.4 |
% |
3.5 |
% |
6.0 |
% | |||
Other Income |
|
10,614 |
|
11,560 |
|
946 |
|
8.9 |
% |
5.2 |
% |
5.2 |
% | |||
Total Revenue |
|
$ |
202,683 |
|
$ |
224,280 |
|
$ |
21,597 |
|
10.7 |
% |
100.0 |
% |
100.0 |
% |
In 2010, total revenue increased by $21.6 million, or 10.7%, compared to 2009. The increase in total revenue was due to both the Alabama Acquisition during the first quarter of 2010, and the follow-on opening of two additional stores in that market. We also achieved organic revenue growth in each state in which we operated in 2010, with the exceptions of Virginia and Arizona, where we adjusted our product mix during the year to conform to new regulatory requirements. We attribute our organic revenue growth in 2010 to favorable demographic trends that increased our target market as well as our successful penetration of our target market. We owned and operated 282 retail service locations as of December 31, 2010, compared to 264 stores as of December 31, 2009.
Revenue generated from short-term consumer loan fees and interest for 2010 increased $3.2 million, or 2.6%, compared to 2009. Revenue growth across most of our markets was offset by a decrease in lending revenue in Arizona as customers transitioned from short-term consumer loans to other products, such as title loans and prepaid debit cards, and in Virginia, where consumers were adapting to our line of credit offerings. Overall, revenue growth was driven by greater transaction volumes, attributable to successful market penetration, with the average fee per loan made remaining flat.
The development and introduction of title loans provided our customers with an alternative product to short-term consumer loans as we modified our product offerings in Arizona and Virginia. The increase in title loan fees of $6.2 million was primarily due to the migration of customers to this product within the Arizona and Virginia markets as well as a result of the Alabama Acquisition, where our acquired stores also offered title loans.
Revenue generated from check cashing for 2010 increased $2.9 million, or 5.4%, compared to 2009. The growth in check cashing from the Alabama Acquisition was offset by the negative impact of macroeconomic weakness and high unemployment in certain markets. Transaction volume growth in 2010 offset a slightly lower average check size, and the average fee per check cashed remained constant. Check cashing was also impacted by consumers migration towards electronic payment options such as direct deposit.
Revenue from prepaid debit card services in 2010 increased by $8.7 million, or 420%, compared to 2009, as consumers grew increasingly accepting of the use of prepaid debit cards. Our penetration into the expanding market with Insights prepaid debit card products, introduced in April 2010, was the primary driver of this revenue growth. In 2010, we actively promoted the benefits of the Insight prepaid debit card offering to our customer base, increasing the number of active card accounts (defined as
accounts with activity within the previous 90 days) from the beginning of our agreement with Insight in April 2010 to over 87,000 in December 2010.
Operating Expenses
The following table sets forth certain information with respect to our operating expenses for the years ended December 31, 2010 and 2009.
|
|
Year Ended December 31, |
| |||||||||||||
(dollars in thousands) |
|
2009 |
|
2010 |
|
Increase |
|
|
|
2009 |
|
2010 |
| |||
|
|
|
|
|
|
|
|
(Percent) |
|
(Percent of Revenue) |
| |||||
Salaries and Benefits |
|
$ |
34,343 |
|
$ |
38,759 |
|
$ |
4,416 |
|
12.9 |
% |
16.9 |
% |
17.3 |
% |
Provision for Loan Losses |
|
43,463 |
|
40,316 |
|
(3,147 |
) |
(7.2 |
)% |
21.4 |
% |
18.0 |
% | |||
Occupancy |
|
13,855 |
|
14,813 |
|
958 |
|
6.9 |
% |
6.8 |
% |
6.6 |
% | |||
Depreciation & Amortization (Store-level) |
|
6,613 |
|
5,318 |
|
(1,295 |
) |
(19.6 |
)% |
3.3 |
% |
2.4 |
% | |||
Advertising & Marketing |
|
4,437 |
|
4,463 |
|
26 |
|
0.6 |
% |
2.2 |
% |
2.0 |
% | |||
Bank Charges |
|
2,166 |
|
2,360 |
|
194 |
|
9.0 |
% |
1.1 |
% |
1.1 |
% | |||
Store Supplies |
|
1,756 |
|
2,188 |
|
432 |
|
24.6 |
% |
0.9 |
% |
1.0 |
% | |||
Collection Expenses |
|
1,709 |
|
2,334 |
|
625 |
|
36.6 |
% |
0.8 |
% |
1.0 |
% | |||
Telecommunications |
|
1,888 |
|
2,232 |
|
344 |
|
18.2 |
% |
0.9 |
% |
1.0 |
% | |||
Security |
|
846 |
|
996 |
|
150 |
|
17.7 |
% |
0.4 |
% |
0.4 |
% | |||
License & Other Taxes |
|
678 |
|
793 |
|
115 |
|
17.0 |
% |
0.3 |
% |
0.4 |
% | |||
Other Operating Expenses |
|
9,172 |
|
12,628 |
|
3,456 |
|
37.7 |
% |
4.5 |
% |
5.6 |
% | |||
Total Operating Expenses |
|
120,926 |
|
127,200 |
|
6,274 |
|
5.2 |
% |
59.7 |
% |
56.7 |
% | |||
Income from Operations |
|
$ |
81,757 |
|
$ |
97,080 |
|
$ |
15,323 |
|
18.7 |
% |
40.3 |
% |
43.3 |
% |
Total operating expenses, which consist primarily of store-related expenses, increased by $6.3 million, or 5.2%, in 2010 from 2009, but decreased as a percentage of revenue from 59.7% in 2009 to 56.7% in 2010, primarily as a result of a decrease in our provision for loan losses in 2010 as compared to 2009. Expenses for loan loss provisions declined as we benefitted from a restructuring of our Virginia line of credit products to better align with customer needs.
Salaries and benefits and occupancy expenses for 2010 increased from 2009 due to an increase in the number of stores in operation.
Security expense increased as a result of the greater number of stores in operation. Bank charges increased due to increased transaction volume. The increase in licenses and other taxes were primarily related to our new products. The increase in collections and other operating expenses reflected the incremental costs associated with new product development and implementation as we adapted to different regulatory requirements, the increase in number of stores under operation through the Alabama Acquisition and expansion in the products and services we offered our customers. Other operating expenses were impacted by an increase in merchant processing charges as a result of the increased frequency with which our customers use debit and credit cards as a form of electronic payment for our products and services. Income from operations expanded in 2010 to 43.3% of revenue versus 40.3% in 2009.
Corporate and Other Expenses
|
|
Year Ended December 31, |
| |||||||||||||
(dollars in thousands) |
|
2009 |
|
2010 |
|
Increase |
|
|
|
2009 |
|
2010 |
| |||
|
|
|
|
|
|
|
|
(Percent) |
|
(Percent of Revenue) |
| |||||
Corporate Expenses |
|
$ |
30,513 |
|
$ |
32,710 |
|
$ |
2,197 |
|
7.2 |
% |
15.1 |
% |
14.6 |
% |
Transaction Expenses |
|
|
|
237 |
|
237 |
|
100.0 |
% |
|
|
0.1 |
% | |||
Depreciation & Amortization (Corporate) |
|
568 |
|
1,222 |
|
654 |
|
115.1 |
% |
0.3 |
% |
0.5 |
% | |||
Sponsor Management Fee |
|
833 |
|
1,184 |
|
351 |
|
42.1 |
% |
0.4 |
% |
0.5 |
% | |||
Discontinued Operations |
|
(368 |
) |
2,196 |
|
2,564 |
|
(696.7 |
)% |
(0.2 |
)% |
1.0 |
% | |||
Interest |
|
11,532 |
|
8,501 |
|
(3,031 |
) |
(26.3 |
)% |
5.7 |
% |
3.8 |
% | |||
Income Tax Expense |
|
14,042 |
|
19,801 |
|
5,759 |
|
41.0 |
% |
6.9 |
% |
8.8 |
% | |||
Total Corporate and Other Expenses |
|
57,120 |
|
65,851 |
|
8,731 |
|
15.3 |
% |
28.2 |
% |
29.4 |
% | |||
Corporate Expenses
Administrative expenses increased $2.2 million in 2010, or 7.2%, compared to 2009, primarily due to increased expense related to compliance, technology and additional personnel associated with new product introductions and an increased number of store locations. We also paid a management fee of $1.2 million to Diamond Castle in 2010, an increase of $0.4 million compared to 2009, as a result of the Alabama Acquisition and the associated increase in company-wide EBITDA. In 2010, we exited our commercial check cashing business in Florida and recognized a one-time discontinued operations expense of $2.2 million, net of tax benefits.
Interest Expense, Net
Interest expense, net, decreased to $8.5 million in 2010 compared to $11.5 million in 2009, or a decrease of 26.3%, due to reductions in the variable interest rates under our existing term loan facilities.
Income Taxes
A tax provision of $19.8 million was recorded for income taxes for 2010, as compared to $14.0 million for 2009. Our annual effective income tax rate for 2010 was 37.2%, net of provisions for discontinued operations. The annual effective income tax rate for 2009 was 36.7%.
Liquidity and Capital Resources
We have historically funded our liquidity needs through cash flow from operations and borrowing under our revolving credit facilities. We believe that cash flow from operations and available cash, together with available borrowings under our credit facilities, will be adequate to meet our liquidity needs for the foreseeable future. Our future liquidity and future ability to fund capital expenditures, working capital and debt requirements will depend, however, upon our future financial performance, which is subject to many economic, commercial, financial and other factors that are beyond our control. If those factors significantly change, our business may not be able to generate sufficient cash flow from operations, and future borrowings may not be available to meet our liquidity needs. We anticipate that to the extent that we require additional liquidity as a result of these factors or in order to execute our strategy, our liquidity needs would be financed by additional indebtedness, equity financings, asset sales or a combination of the foregoing. We may be unable to obtain any such additional financing or consummate asset sales on reasonable terms or at all.
Three-Month Cash Flow Analysis
The table below summarizes our cash flows for three months ended March 31, 2011 and 2012.
|
|
Three Months Ended |
| ||||
(in thousands) |
|
2011 |
|
2012 |
| ||
Net Cash Provided by Operating Activities |
|
$ |
30,409 |
|
$ |
28,618 |
|
Net Cash Provided by (Used in) Investing Activities |
|
(13,963 |
) |
13,146 |
| ||
Net Cash Provided by Financing Activities |
|
17,711 |
|
|
| ||
Net Increase in Cash and Cash Equivalents |
|
$ |
34,157 |
|
$ |
41,764 |
|
Cash Flows from Operating Activities. During the three months ended March 31, 2012, net cash provided by continuing operating activities was $28.6 million compared to $30.4 million during the same period in 2011. Net cash decreased primarily due to the timing of payments.
Cash Flows from Investing Activities. During the three months ended March 31, 2012, net cash provided by investing activities was $13.1 million. The primary source of cash was for $13.9 million in net loan repayments. During the three months ended March 31, 2011, net cash used by investing activities was $14.0 million and the primary use of cash was for the Illinois acquistion.
Cash Flows from Financing Activities. Net cash provided by financing activities for the three months ended March 31, 2011 was $17.7 million and was attributable to advances on our line of credit.
Full-Year Cash Flow Analysis
The table below summarizes our cash flows for 2009, 2010 and 2011.
|
|
Year Ended December 31, |
| |||||||
(in thousands) |
|
2009 |
|
2010 |
|
2011 |
| |||
Net Cash Provided by Operating Activities |
|
$ |
68,826 |
|
$ |
82,369 |
|
$ |
130,823 |
|
Net Cash Used in Investing Activities |
|
(64,315 |
) |
(54,950 |
) |
(100,553 |
) | |||
Net Cash Used in Financing Activities |
|
(2,435 |
) |
(15,598 |
) |
(4,415 |
) | |||
Net Increase in Cash and Cash Equivalents |
|
2,076 |
|
11,821 |
|
25,855 |
| |||
Cash Flows from Operating Activities. During 2011, net cash provided by operating activities was $130.8 million compared to $82.4 million during the same period in 2010. Cash flows from operating activities increased primarily due to acquisitions, including the California Acquisition, and organic growth.
During 2010, net cash provided by operating activities was $82.4 million compared to $68.8 million in 2009. The improvement in cash flows from operating activities in 2010 compared to 2009 was due primarily to an increase in profits.
Cash Flows from Investing Activities. During 2011, net cash used in investing activities was $100.6 million compared to $55.0 million in 2010. The primary use of cash in 2011 was for $88.8 million in loan originations (while the corresponding loan loss provision is recorded within cash flows from operating activities). The California Acquisition provided $22.9 million of positive cash flow as a result of issuing common stock for that transaction. The Illinois Acquisition used $19.7 million from investing activities. In addition, $15.5 million was used for various purchases of equity investments and leasehold improvements and equipment.
During 2010, net cash used in investing activities was $55.0 million, of which $51.6 million was attributable to loans we made during the year. The acquisition of the 19 Alabama stores in 2010 was the largest investment activity outside of our loan portfolio during 2010. The other investing activities were primarily related to the purchase of computer equipment, the cost of remodeling existing stores, new store openings, and maintenance capital expenditures.
We funded the acquisition of DFS on April 1, 2012 with cash flow from operations.
Cash Flows from Financing Activities. Net cash used by financing activities during 2011 was $4.4 million. Positive cash flow was attributed to the issuance of $395 million aggregate principal amount of our notes. This was offset by $262.9 million in notes payable payments and a $120.6 million special dividend distribution. At the close of the recapitalization transaction consummated in connection with the California Acquisition, we borrowed $10 million under our Revolving Credit Facility. We paid down the entirety of the amount drawn prior to the close of the second quarter of 2011. Net cash used in financing activities for 2010 was $15.6 million and was attributable to payments on long-term debt.
Net cash used in financing activities for the year ended December 31, 2010 was $15.6 million, compared to $2.4 million in 2009. In 2010, this included the repayment of a $5.0 million line of credit then had been provided by Diamond Castle and $11.0 million used for the extinguishment of other debt offset by contributions from non-controlling interest.
Financing InstrumentsRestrictive Covenants
The Indenture governing our notes contains certain covenants and events of default that are customary with respect to non-investment grade debt securities, including limitations on our ability to incur additional indebtedness, pay dividends on or make other distributions or repurchase our capital stock, make certain investments, enter into certain types of transactions with affiliates, create liens and sell certain assets or merge with or into other companies. The agreement governing our Revolving Credit
Facility contains restrictive covenants that limit our ability to incur additional indebtedness, pay dividends on or make other distributions or repurchase our capital stock, make certain investments, enter into certain types of transactions with affiliates, create liens and sell certain assets or merge with or into other companies, in each case to the same extent as the Indenture governing our notes. In addition, the agreement governing our Revolving Credit Facility contains a consolidated total net leverage ratio covenant, which will be tested at the time of any borrowing under the facility and on a quarterly basis when any loans are outstanding. As of December 31, 2011, we were in compliance with these covenants. See Description of Certain Indebtedness for more information.
Capital Expenditures
Our business model requires relatively low maintenance capital expenditures. For the three months ended March 31, 2011 and 2012, we spent $0.5 million and $0.8 million, respectively on capital expenditures. For the years ended December 31, 2009, 2010 and 2011, we spent $2.8 million, $1.7 million and $4.3 million, respectively, on capital expenditures excluding acquisitions. The increase in 2011 was primarily due to the investment we made in the branches acquired during 2011 as we upgraded locations. Capital expenditures for existing CCFI branches during these periods related primarily to the refreshing of certain existing stores, and maintenance and ongoing upgrades of our information systems. We expect that future capital expenditures, excluding acquisitions, will remain consistent with our historical experience on a per-store basis.
Seasonality
Our business is seasonal due to tax refunds received by our customers. Customers cash tax refund checks primarily in the first calendar quarter of each year. In the first quarter, we traditionally have our strongest check cashing quarter. We typically see our loan portfolio decline in the first quarter as a result of the consumer liquidity created through the refund checks. Following the first quarter, we typically see our loan portfolio expand through the balance of the year with the third and fourth quarters showing the strongest loan demand due to the holiday season.
Contractual Obligations and Commitments
The table below summarizes our contractual obligations and commitments as of March 31, 2012:
|
|
Total |
|
2012 |
|
2013 |
|
2014 |
|
2015 |
|
2016 |
|
Thereafter |
| |||||||
Operating Leases |
|
$ |
47,454 |
|
$ |
12,920 |
|
$ |
13,732 |
|
$ |
9,971 |
|
$ |
5,764 |
|
$ |
3,114 |
|
$ |
1,953 |
|
Term Loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Principal |
|
395,000 |
|
|
|
|
|
|
|
|
|
|
|
395,000 |
| |||||||
Interest |
|
300,779 |
|
31,847 |
|
42,463 |
|
42,463 |
|
42,463 |
|
42,463 |
|
99,080 |
| |||||||
Total Term Loans |
|
695,779 |
|
31,847 |
|
42,463 |
|
42,463 |
|
42,463 |
|
42,463 |
|
494,080 |
| |||||||
Borrowings under Revolving Credit Facility |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Principal |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Interest(1) |
|
913 |
|
222 |
|
296 |
|
296 |
|
99 |
|
|
|
|
| |||||||
Total borrowings under Revolving Credit Facility |
|
913 |
|
222 |
|
296 |
|
296 |
|
99 |
|
|
|
|
| |||||||
Total |
|
$ |
744,146 |
|
$ |
44,989 |
|
$ |
56,491 |
|
$ |
52,730 |
|
$ |
48,326 |
|
$ |
45,577 |
|
$ |
496,033 |
|
(1) Contractual interest obligations for the Revolving Credit Facility includes cash payments we expect to make with respect to the undrawn line fee of 0.75% of the unused commitments under the Revolving Credit Facility.
Existing Indebtedness. In connection with the California Acquisition, we issued $395 million aggregate principal amount of our notes, all of which remained outstanding as of March 31, 2012. The notes have an interest rate of 10.75% payable semi-annually and will mature on
May 1, 2019. The proceeds were used to refinance debt, pay fees and expenses, and to finance a dividend payment to shareholders.
Following the Alabama Acquisition, our Alabama subsidiary maintained the Alabama Facility, a $7.0 million revolving line of credit that was undrawn as of March 31, 2012.
Concurrent with the offering of original notes, we also entered into a four-year, $40 million Revolving Credit Facility. The Revolving Credit Facility has an interest rate of LIBOR plus 5.00%, will mature on May 1, 2019, and was undrawn as of March 31, 2012.
Impact of Inflation
Our results of operations are not materially impacted by fluctuations in inflation.
Balance Sheet Variations
Several of the items on our balance sheet as of December 31, 2011 were impacted significantly by our acquisitions and our related recapitalization.
Cash and cash equivalents, accounts payable, accrued liabilities, money orders payable and revolving advances vary because of seasonal and day-to-day requirements resulting primarily from maintaining cash for cashing checks and making short-term consumer loans and title loans, and the receipt and remittance of cash from the sale of prepaid debit cards, wire transfers, money orders and the processing of bill payments.
Loan Portfolio
As of March 31, 2012, we offered loans in every state in which we operate. We have established a loan loss allowance in respect of our loans receivable at a level that our management believes to be adequate to absorb known or probable losses from loans made by us. Our policy for determining the loan loss allowance is based on historical experience, as well as our managements review and analysis of the payment and collection of the loans within prior periods. Our policy is to charge off accounts in accordance with policy. For short-term consumer loans, accounts are charged off when they become past due. For title loans which are 30 days in duration, accounts are charged off when they become 30 days past due on a contractual basis. For title loans which have terms ranging from 60 days to one year and medium-term loans which have a term of one year or less, accounts are charged off when accounts are 60 days past due on a contractual basis. For medium-term loans with a term more than one year, accounts are charged off when the accounts are 90 days past due. Charge-offs are applied as a reduction to the loan loss allowance and any recoveries of previously charged-off loans are applied as an increase to the loan loss allowance.
All loans and services, regardless of type, are made in accordance with state regulations, and, therefore, the terms of the loans and services may vary from state to state. Loan fees and interest include fees and interest received from loan customers. Advance fees on short-term consumer loans with terms between 14 to 30 days and title loans with terms up to 30 days are recognized as unearned finance charges at the time the loans are made. Advance fee income is recognized using the interest (actuarial) method over the term of each loan for our line-of-credit products. Advance fees on title loans with terms up to 24 months, and medium-term loans with terms up to 180 days are classified as unrecognized income at the time the loans are made.
As of December 31, 2011 and March 31, 2012, our finance receivables net of unearned advance fees were approximately $126.1 million and $98.2 million, respectively.
Investee Companies
We have an equity investment in Latin Card Strategies LLC, or Latin Card. Prior to May 2011, the Company held a 57% ownership in Latin Card. In May 2011, our membership units were reduced to 49%. Effective May 2011, we recorded the investment in Latin Card under the equity method of accounting. As of March 31, 2012, our membership units were reduced to 39%.
We also have an equity investment in Insight Holding (the parent company of the program manager for the prepaid card offered through our subsidiaries). We recorded the 22.5% investment in Insight Holdings under the equity method of accounting effective November 2011.
Under our corporate policies, investee companies that are not consolidated, but over which we exercise significant influence, are accounted for under the equity method of accounting. Whether or not we exercise significant influence with respect to an investee depends on an evaluation of several factors including, among others, representation on the investee companys board of directors and ownership level, which is generally a 20% to 50% interest in the voting securities of the investee company. Under the equity method of accounting, an investee companys accounts are not reflected within our consolidated balance sheets and statements of income; however, our share of the earnings or losses of the investee company is reflected in the caption Equity investment loss in the consolidated statements of income. Our carrying value in an equity method investee company is reflected in the caption Equity investments in our consolidated balance sheets.
Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements as of March 31, 2012.
Qualitative Disclosures about Market Risk
We are exposed to financial market risks, particularly with respect to changes in interest rates that might affect the costs of financing our borrowings under our revolving credit facilities. Given the anticipated short-term nature of expected borrowings under our revolving credit facilities, we do not expect that our interest rate risk will be substantial, nor do we currently anticipate a need to hedge such risk. We do not hold market risk sensitive instruments entered into for trading purposes, as defined by GAAP.
Company Overview
We are a leading retailer of alternative financial services to unbanked and underbanked consumers through a network of 435 retail storefronts across 14 states. We focus on providing a wide range of convenient consumer financial products and services to help customers manage their day-to-day financial needs, including short-term consumer loans, medium-term loans, title loans, check cashing, prepaid debit cards, money transfers, bill payments and money orders. Although the majority of our customers have banking relationships, we believe that our customers use our financial services because they are convenient, easy to understand and, in many instances, more affordable than available alternatives.
We strive to provide customers with unparalleled customer service in a safe, clean and welcoming environment. Our stores are located in highly visible, accessible locations that allow customers convenient and immediate access to our services. Our professional work environment combines high employee performance standards, incentive-based pay and a wide array of training programs to incentivize our employees to provide superior customer service. We believe that this approach has enabled us to build strong customer loyalty, putting us in a position to expand and continue to capitalize on our innovative product offerings. As a result of our focus on store selection and design and our efforts to provide consistent, high-quality customer service, we have achieved per store revenue levels that we believe substantially exceed our publicly traded peers. See Certain Financial Measures and Other Information for an explanation of how we calculate these metrics.
We serve the large and growing market of individuals who have limited or no access to traditional sources of consumer credit and financial services. A study conducted by the FDIC, published in 2009 indicates 25.6% of U.S. households are either unbanked or underbanked, representing approximately 60 million adults. As traditional financial institutions increase fees for consumer services, such as checking accounts and debit cards, and tighten credit standards as a result of economic and other market driven developments, consumers have looked elsewhere for less expensive and more convenient alternatives to meet their financial needs. According to a recent Federal Reserve Bank of New York report, total consumer credit outstanding has declined over $1.4 trillion since its peak in the third quarter of 2008. This contraction in the supply of consumer credit has resulted in significant unmet demand for consumer loan products.
For the year ended December 31, 2011, we generated $306.9 million in revenue and $16.9 million in net income. As of December 31, 2011, we had $515.5 million of total assets and $61.3 million of stockholders equity. For the three-month period ended March 31, 2012, we generated $85.9 million in revenue and $7.4 million in net income. As of March 31, 2012, we had $528.3 million of total assets and $68.8 million of stockholders equity.
Our measurement of comparable store sales growth as of December 31, 2011 includes stores which we operated for the full year of 2011 and which were open for the full year of 2010. As of December 31, 2011 we had 280 stores included in this measurement. These stores achieved comparable sales growth of 7.3% for the year ended December 31, 2011 as compared to the year ended December 31, 2010.
Products and Services
We offer several convenient, fee-based services to meet the needs of our customers, including short-term consumer loans, medium-term loans, title loans, check cashing, prepaid debit cards, money transfers, bill payments, money orders, international and domestic prepaid phone cards, tax preparation, auto insurance, motor vehicle registration services and other ancillary retail financial services.
The following chart reflects the major categories of services that we currently offer and the revenues from these services for the year ended December 31, 2011:
Revenue by Product Group |
Consumer Loans. We offer a variety of consumer loan products and services. We believe that our customers find our consumer loan products and services to be convenient, transparent and lower-cost alternatives to other, more expensive short-term options, such as incurring returned item fees, credit card late fees, overdraft or overdraft protection fees, utility late payment, disconnect and reconnect fees and other charges imposed by other financing sources when they do not have sufficient funds to cover unexpected expenses or other needs. Our customers often have limited access to more traditional sources of consumer credit such as credit cards.
The specific consumer loan products we offer vary by location, but generally include the following types of loans:
Short-Term Consumer Loans. One of our primary products is a short-term, small-denomination consumer loan whereby a customer receives immediate cash, typically in exchange for a post-dated personal check or a pre-authorized debit from his or her bank account. We offer this product in 367 of our 435 stores. As the lender, we agree to defer deposit of the check or initiation of the debit from the customers bank account until the mutually agreed upon due date, which typically falls on the customers next payday. Principal amounts of our short-term consumer loans can be up to $1,000 and averaged approximately $426 during 2011. Fees charged vary from state to state, generally ranging from $8 to $15 per $100 borrowed. Our short-term consumer loan products are offered in the following 13 of the 14 states in which we operate stores: Alabama, California, Florida, Illinois, Indiana, Kansas, Kentucky, Michigan, Missouri, Ohio, Oregon, Utah and Virginia.
In order to receive a short-term consumer loan, a new customer must generally have a verifiable, primary phone number, be a full-time employee at the same job for greater than one month with verifiable monthly recurring income, have an open checking account with a positive balance, and possess a valid government issued identification and a copy of their most recent pay stub or bank statement.
We utilize extensive application controls to reduce risk of teller error, fraud and inappropriate use of our POS systems in order to authorize transactions. Once a new customer completes an initial application, our branch employees enter all customer information into our POS systems, which provide fully automated, immediate and validated loan application decisions to ensure consistent underwriting standards and compliance with state and federal lending regulations. The loan amount is determined
based upon the income level of the applicant, and the POS system automatically calculates fees, rates, payment amounts and due dates, further reducing risk of teller error and strengthening our compliance. In addition, before the lending decision is made, the branch employee refers to an internal database to ensure that the customer has no outstanding loans that are in default at any of our other locations, which would preclude the customer from obtaining additional loans and, where applicable, checks appropriate state wide databases.
Once all underwriting criteria are met and the loan is approved, in exchange for cash, the customer typically writes a check payable to us on the due date, in the amount of the loan plus the applicable fee and finance charges, or completes a pre-authorized debit authorization form, as part of the loan agreement, which authorizes us to debit their checking account on the due date. The transaction is entered into the POS system, at which time the branch employee provides a copy of the loan agreement and other necessary disclosures which are automatically printed from the POS system. After the customer has executed the agreements, branch employees distribute the loan proceeds to the customer and file all necessary paperwork.
Customers may repay outstanding loans through a variety of channels, including at the store, where permissible by applicable state law, by phone or via debit card. All transaction activity, including loan extensions and repayments, is automatically updated through the POS system.
The following table presents key operating data for our short-term consumer loan products.
|
|
Year ended |
|
Twelve-months ended |
| ||
Loan volume (in thousands) |
|
$ |
1,543,310 |
|
$ |
1,637,360 |
|
Number of loans (in thousands) |
|
3,625 |
|
4,068 |
| ||
Average originated loan size |
|
$ |
425.72 |
|
$ |
402.54 |
|
Average originated loan fee |
|
$ |
46.37 |
|
$ |
44.14 |
|
Loan loss provision as a percentage of loan volume |
|
2.6 |
% |
2.6 |
% |
Medium-term Loans. In meeting our customers financial needs, we also offer a range of medium-term loans. Principal amounts of medium-term loans typically range from $100 to $2,501 and have maturities between three months and 24 months. These loans vary in their structure in order to conform to the specific regulatory requirements of the various jurisdictions in which they are offered. The loans may have an installment repayment plan or provide for a line of credit with periodic monthly payments. Whereas we measure short-term consumer loans on a transactional or volume basis, medium-term loans are monitored with portfolio-based metrics. The initial loan amount is typically larger than the loan amount under a short-term consumer loan and requires different underwriting parameters that are dependent upon the structure. The longer term nature of these products also necessitates a larger allowance for loan losses than is required to support our short-term consumer loans. We offer these loans in 164 of our 435 stores in the following three of the 14 states in which we operate stores: California, Illinois and Virginia.
The following table presents key operating data for our medium-term loan products.
|
|
As of |
|
As of |
| ||
Principal outstanding (in thousands)(1) |
|
$ |
12,174 |
|
$ |
11,926 |
|
Number of loans outstanding |
|
20,818 |
|
20,699 |
| ||
Average principal outstanding |
|
$ |
584.79 |
|
$ |
576.18 |
|
Average monthly percentage rate |
|
19.2 |
% |
18.3 |
% | ||
Allowance as a percentage of finance receivable |
|
10.6 |
% |
13.3 |
% |
(1) Loan participations are grouped with medium-term loans in our consolidated financial statements included elsewhere in this prospectus, but excluded from this calculation.
Title Loans. Title loans are asset-based loans whereby the customer obtains cash using a vehicle as collateral. We offer this product in 243 of our 435 stores. The amount of funds made available is based on the vehicles value, and our policies authorize loans based on the wholesale value of the vehicle typically in exchange for a first priority lien on the customers otherwise unencumbered vehicle title. The customer receives the benefit of immediate cash and retains possession of the vehicle while the loan is outstanding. The outstanding principal amount of our title loans averaged approximately $1,134 as of December 31, 2011. Our title loans are offered in the following eight of the 14 states in which we operate stores: Alabama, Arizona, California, Illinois, Kansas, Missouri, Utah and Virginia, and we intend to introduce title loans in additional states in the future.
Our title loan process is actively managed to ensure consistent underwriting standards, compliance with state law, and a simple and expeditious transaction process. Prior to receiving a funded loan, each title loan customer must complete an application and sign a title loan agreement, which contains the terms of the title loan, including government mandated disclosures and provisions that summarize each partys rights and obligations in the event either party does not satisfy the agreement terms. Our POS system automatically calculates the APR and applicable fees and enters the information into the security agreement, promissory note and loan agreement forms.
While loan requirements vary by state, we typically require the following documentation as a condition for providing a title loan: proof of current state registration; clear title; a working home or mobile phone number; current bill, bank statement or lease agreement in the customers name that includes the customers address; a valid government issued identification; a completed title loan application; and a vehicle in drivable condition.
As part of the title loan application process, we calculate the rough wholesale value of the vehicle using Black Book USA values to determine the amount a customer is eligible to borrow.
The following table presents key operating data for our title loan products.
|
|
As of |
|
As of |
| ||
Principal outstanding (in thousands) |
|
$ |
17,334 |
|
$ |
14,149 |
|
Number of loans outstanding |
|
15,283 |
|
13,822 |
| ||
Average principal outstanding |
|
$ |
1,134.20 |
|
$ |
1,023.67 |
|
Average monthly percentage rate |
|
13.3 |
% |
12.5 |
% | ||
Allowance as a percentage of finance receivable |
|
5.3 |
% |
5.8 |
% |
Our consumer loan products are authorized by statute or rule in the various states in which we offer them and are subject to extensive regulation. The scope of that regulation, including the terms on which consumer loans may be made, varies by jurisdiction. The states in which we offer consumer loan products generally regulate the maximum allowable fees and other charges to consumers and the
maximum amount of the loan, maturity and renewal or extension terms of these consumer loans. Some of the states in which we operate impose limits on the number of loans a customer may have outstanding or on the amount of time that must elapse between loans. To comply with the laws and regulations of the states in which consumer loan products are offered at our stores, the terms of our consumer loan products must vary from state to state.
As of December 31, 2011, our gross receivable for short-term consumer loans, medium-term loans and title loans was approximately $131.3 million. At the end of each fiscal quarter, we analyze the loan loss provision and our loan loss allowance in order to determine whether our estimates of such allowance are adequate for each of our consumer loan products. Our analysis is based on our understanding of our past loan loss experience, current economic conditions, volume and growth of our loan portfolios, timing of maturity, as well as collections experience.
Consumer loan products, including short-term consumer loans, medium-term loans and title loans, accounted for 63.9% and 63.5% of our revenue for the year ended December 31, 2011 and the three-month period ended March 31, 2012, respectively.
Check Cashing. We offer check cashing services in 409 of our 435 stores. Prior to cashing a check, our customer service representatives verify the customers identification and enter the payees social security number and the payors bank account information in our internal, proprietary databases, which match these fields to prior transactions in order to mitigate our risk of loss. Although we have established guidelines for approving check cashing transactions, we do not impose maximum check size restrictions. Subject to appropriate approvals, we accept all forms of checks, including payroll, government, tax refund, insurance, money order, cashiers and personal checks. Our check cashing fees vary depending upon the amount and type of check cashed, applicable state regulations and local market conditions. Our check cashing services are offered in the following 13 of the 14 states in which we operate stores: Alabama, Arizona, California, Florida, Indiana, Kansas, Kentucky, Michigan, Missouri, Ohio, Oregon, Utah and Virginia.
The following table presents key operating data for our check cashing business.
|
|
Year ended |
|
Twelve-months ended |
| ||
Face amount of checks cashed (in thousands) |
|
$ |
2,163,276 |
|
$ |
2,404,207 |
|
Number of checks cashed (in thousands) |
|
4,869 |
|
5,427 |
| ||
Face amount of average check |
|
$ |
444.26 |
|
$ |
442.99 |
|
Average fee per check |
|
$ |
14.95 |
|
$ |
14.36 |
|
Fee as a percentage of average check size |
|
3.4 |
% |
3.2 |
% | ||
Returned check expense (% of face amount) |
|
0.2 |
% |
0.2 |
% |
Check cashing accounted for 23.7% and 23.5% of our revenue for the year ended December 31, 2011 and the three-month period ended March 31, 2012, respectively.
Prepaid Debit Card Services. One of our fastest growing businesses is the sale and servicing of prepaid debit cards, which we offer in 430 of our 435 stores. As an agent for a third-party debit card provider, we offer access to reloadable prepaid debit cards with a variety of enhanced features that provide our customers with a convenient and secure method of accessing their funds in a manner that meets their individual needs. The cards are provided by Insight, and our stores serve as distribution points where customers can purchase cards as well as load funds onto and withdraw funds from their cards. Customers can elect to receive check cashing proceeds on their cards without having to worry about security risks associated with carrying cash. The cards can be used at most places where MasterCard® or Visa® branded debit cards are accepted. These cards offer our customers the ability to direct deposit all or a portion of their payroll checks onto their cards, receive real-time wireless alerts for transactions and account balances, and utilize in-store and online bill payment services. In addition to these basic features available on all of the cards offered in our stores, we offer two additional card options with enhanced features. One of the enhanced feature cards provides, at the customers option,
a lower-cost overdraft protection option compared to the typical overdraft fees charged by traditional banks. The other enhanced card option, for which marketing was discontinued in May 2012, allowed qualifying customers to receive loan proceeds from a state-licensed third-party lender directly onto their cards. This feature was offered in Arizona and certain stores in Ohio.
Since we began offering Insight cards in April 2010, we have experienced substantial growth in our prepaid debit card business. Active Insight accounts, which we define as accounts reflecting any activity during the preceding 90 days, had grown to 130,305 as of March 31, 2012, an increase of over 101.1% from December 31, 2010. We are paid certain agent fees from Insight that are based on monthly card fees, overdraft charges, interchange fees and ATM access fees. In addition, we earn fees from the sale of prepaid debit cards and are required to pre-fund certain card activity when customers load funds onto their cards. Our pre-funding obligation arises as a result of the time lag between when customers load funds onto their cards in our stores and when funds are subsequently remitted to the banks that issue the cards. Until recently, we were required to pre-fund amounts in order to fund our obligation to purchase loan participations when our Arizona customers receive loan proceeds from a third-party lender onto their cards and in relation to negative card balances our customers may experience. This obligation ended with the discontinuation of our third-party loan product in May 2012. We continue to prefund negative card balances our customers may experience. The following table presents key operating data for our prepaid debit card services business as of December 31, 2011:
|
|
As of |
|
As of |
|
Active card holders in network (in thousands) |
|
141.0 |
|
130.3 |
|
Active direct deposit customers (in thousands) |
|
33.2 |
|
37.2 |
|
During 2011, our customers loaded approximately $683.8 million onto prepaid debit cards. Most of the increase in load volume from 2011 compared to 2010 is attributable to increased card sales, a focus on direct deposit activity and loan proceeds from third-party lenders that our customers elected to have loaded onto their prepaid debit cards through one of Insights enhanced feature card offerings. One of our key operating goals is to convert our check cashing customers from cashing payroll checks to directly depositing their payroll checks onto prepaid debit cards offered in our stores, as we believe this increases customer activity and retention.
Prepaid debit card services accounted for 6.5% and 5.9% of our revenue for the year ended December 31, 2011 and the three-month period ended March 31, 2012, respectively.
Money Transfers. We are an agent for the transmission and receipt of wire transfers through the Western Union network, the largest wire transfer provider in the world. Through these networks, our customers can transfer funds electronically to any of approximately 485,000 Western Union agent locations worldwide in over 200 countries, including most of our stores. Western Union establishes the fees for this service and pays us a commission. We are also an agent for the transmission and receipt of wire transfers through the MoneyGram network in our Alabama locations. For the year ended December 31, 2011, we acted as an agent transferring $164.9 million.
Bill Payments. Our stores serve as payment locations for customers to pay their utility, telephone and other bills to third parties. Upon acceptance of the customers bill payment, we remit the amount owed to the third party under an agreement with that payee (who credits the customers account with the payee in the amount of such payment) and we either receive a service fee from the payee or collect a fee directly from the customer. Our bill pay agreements generally have a three-to-five year term and renew automatically unless written notice is provided by either party. We offer these services through relationships with third-party aggregators such as CheckFreePay and Western Union. These third-party aggregators have established relationships with additional third-party payees, which allow us to expand the network of payees for which customers are able to make bill payments in our stores. For the year
ended December 31, 2011, we processed approximately $25.2 million in bill payment transactions resulting in revenue of $0.8 million.
Money Orders. Depending on the location, we currently offer money orders issued by Western Union, and Global Express in any amount up to $1,000 and Continental Express up to $500. These money orders are generally used by our customers for bill payments, rent payments and other disbursements. In our Ohio stores, loan proceeds are issued to our customers in the form of a money order issued by Global Express. We issued $602.6 million in money orders during 2011. We issued approximately 2.7 million money orders during 2011. We issue money orders for free to customers that are cashing a check or processing a loan and otherwise charge a $1.00 fee per money order. We remit the face amount of each money order sold to Western Union, or Global Express, as applicable, together with any fees that we are contractually obligated to deliver to these vendors.
Other products and services accounted for 5.9% and 7.1% of our revenue for the year ended December 31, 2011 and the three-month period ended March 31, 2012, respectively.
Historical Acquisitions
California Acquisition. On April 29, 2011, we acquired CCCS, an alternative financial services business with similar product offerings as CheckSmart. CheckSmart, together with CCCS and certain other parties, executed an agreement and plan of merger, under which CCFI, a newly formed holding company, acquired all outstanding shares of both CheckSmart and CCCS. In connection with consummating the California Acquisition, we also issued $395 million in aggregate principal amount of our 10.75% senior secured notes due 2019, which we refer to as our notes, and entered into a $40 million senior secured revolving credit facility, which we refer to as our Revolving Credit Facility. The net proceeds from the offering of the notes, together with the initial borrowings under our Revolving Credit Facility and cash on hand, were used to retire $207.2 million of CheckSmarts outstanding debt and $74.1 million of CCCSs outstanding debt, pay a $120.6 million special dividend to our shareholders, and pay a $4.4 million bonus to management. The CheckSmart debt consisted of $20.1 million of debt outstanding under a first-lien secured revolving credit facility bearing interest at 4.75% per annum, $146.9 million of first-lien secured term loan debt bearing interest at 4.75% per annum, and $40.2 million of second-lien secured term loan debt bearing interest at 7.75% per annum. The CCCS debt consisted of $56.0 million of first-lien secured term loan debt bearing interest at 3.54% per annum and $18.1 million of second-lien secured term loan debt bearing interest at 7.52% per annum. The special dividend consisted of $72.6 million paid to Diamond Castle, $16.7 million paid to Golden Gate Capital, $20.2 million paid to other CCFI equity holders, and $11.1 million paid to other CCCS equity holders.
Other Acquisitions. Since August 2009, we have also acquired:
· 10 stores in Illinois, which we acquired on March 21, 2011 in an asset purchase transaction.
· 19 stores in Alabama, which we acquired in March 2010.
· Eight stores in Michigan, which we acquired in August 2009.
Following these acquisitions, we have successfully integrated our expanded product offerings and retailing strategies at acquired stores. The stores acquired in the Alabama and Michigan Acquisitions, both owned and operated for the full year of 2011, experienced revenue growth in excess of 26% in 2011. We have invested significant resources in building a scalable company-wide platform in areas such as collections, call center operations, information technology, legal, compliance and accounting in order to quickly and successfully integrate acquired stores into our existing business.
Recent Acquisitions and Investments
Insight Investment. We acquired a 22.5% stake in Insight Holding in November 2011. Insight Holding is the parent company of Insight Cards Services LLC, the program manager for the Insight Card that is offered through our retail locations.
DFS Acquisition. On April 1, 2012 we acquired all of the equity interests of the DFS Companies. The purchase price was approximately $22 million, subject to a post-closing working capital adjustment.
DFS offers short-term loans to consumers via the Internet under a state-licensed model in compliance with the applicable laws of the jurisdiction of its customers.
Currently, DFS offers loans, under a state-law based model, to residents of Alabama, Alaska, California, Delaware, Hawaii, Idaho, Kansas, Louisiana, Minnesota, Missouri, Nevada, North Dakota, Rhode Island, South Dakota, Utah, Washington, Wyoming, and Wisconsin, and operates as a Credit Access Business in Texas, through which it offers loans originated by an unaffiliated, third-party lender. In addition, DFS UK offers loans in the United Kingdom. DFS Canada does not currently offer any loans.
As of April 1, 2012, DFS had 76 employees, including part-time employees, primarily located at DFSs corporate headquarters in North Logan, Utah, which manages the loan underwriting, collections, information technology, and other aspects of the DFS business. Unless stated otherwise, information in this prospectus regarding our business does not give effect to the acquisition of DFS.
Through our acquisition of DFS, we gain access to a scalable Internet-based revenue opportunity. We believe this additional retail channel will enable us to efficiently reach consumers not fully served by our existing retail locations. Our objective will be to accelerate the growth of DFS through incremental capital, application of retailing strategies and an expansion of its product offerings.
For the year ended December 31, 2011, based on DFSs unaudited financial information provided to us by the seller, DFS reported revenues and EBITDA of approximately $22.7 million and $3.5 million, respectively.
Industry Overview
We operate in a segment of the financial services industry that serves unbanked and underbanked consumers in need of convenient and immediate access to cash and other financial products and
services, often referred to as alternative financial services. Our industry provides services to an estimated 60 million unbanked and underbanked consumers in the United States. Products and services offered by this industry segment include various types of short-term loans (including payday loans, title loans, small installment loans, internet loans and pawn loans), medium-term loans, check cashing, prepaid card products, rent-to-own products, bill payment services, tax preparation, money orders and money transfers. Consumers who use these services are often underserved by banks and other traditional financial institutions and referred to as unbanked or underbanked consumers.
We believe that consumers seek our industrys services for numerous reasons, including because they often:
· prefer and trust the simplicity, transparency and convenience of our products;
· may have a dislike or distrust of banks due to confusing and complicated fee structures that are not uncommon for traditional bank products;
· require access to financial services outside of normal banking hours;
· have an immediate need for cash for sudden financial challenges and unexpected expenses;
· have been rejected for or are unable to access traditional banking or other credit services;
· seek an alternative to the high cost of bank overdraft fees, credit card and other late payment fees and utility late payment, disconnect and reconnection fees; and
· wish to avoid potential negative credit consequences of missed payments with traditional creditors.
Demand in our industry has been fueled by several demographic and socioeconomic trends, including an overall increase in the population and stagnant to declining growth in the household income for working-class individuals. In addition, many banks have reduced or eliminated services that working-class consumers require, due to the higher costs associated with serving these consumers and increased regulatory and compliance costs. The necessity for our products was highlighted by a recent paper from the NBER, which found that half of the Americans surveyed reported that it is unlikely that they would be able to gather $2,000 to cover a financial emergency, even if given a month to obtain funds. As a result of these trends, a significant number of retailers in other industries have begun to offer financial services to these consumers. The providers of these services are fragmented and range from specialty finance stores to retail stores in other industries that offer ancillary financial services.
We believe that the markets in which we operate are highly fragmented. Stephens estimates that short-term consumer lenders generated approximately $40.0 billion of domestic transaction volume in 2010 from approximately 19,500 storefronts and 150 online lenders. According to Stephens, only seven industry participants have more than 500 storefront locations, and the largest 15 operators account for less than 51% of the storefronts in the United States. FiSCA estimated that in 2007 there were approximately 13,000 check-cashing and other fee-based financial service locations in the United States that cashed approximately $58.0 billion in aggregate face amount of checks.
We anticipate consolidation within the industry will continue as a result of numerous factors, including:
· economies of scale available to larger operators;
· adoption of technology to better serve customers and control large store networks;
· increased licensing, zoning and other regulatory requirements; and
· the inability of smaller operators to form the alliances necessary to deliver new products and adapt to changes in the regulatory environment.
The prepaid debit card space is one of the most rapidly growing segments of our industry. Mercators analysis of the prepaid debit card industry indicates that $28.6 billion was loaded onto general-purpose reloadable cards during 2009, a 47% growth rate from 2008, and estimates that the total general-purpose reloadable card market will grow at a compound annual growth rate of 63% from 2007 to 2013, reaching an estimated $201.9 billion in load volume by 2013. A March 2011 study conducted by Bretton Woods concluded that the opening of reloadable prepaid debit card accounts may surpass the opening of new checking accounts in the coming years as a result of the fact that prepaid debit cards, particularly when combined with direct deposit, will in many instances be less expensive for consumers than traditional checking accounts.
We take an active leadership role in numerous trade organizations that represent our industrys interests and promote best practices within the industry, including the Community Financial Services Association of America, FiSCA, the National Branded Prepaid Card Association and the American Association of Responsible Auto Lenders.
Our Customers
We serve a large and growing demographic group of customers by providing services to help them manage their day-to-day financial needs. Our customers often live paycheck-to-paycheck and, therefore, all or a substantial portion of their current income is expended to cover immediate living expenses.
Our customers are typically working-class, middle-income individuals. Based on third-party market surveys, we believe the following about our customers:
· they typically have an annual household income between $20,000 and $50,000, with approximately one-sixth in excess of $50,000;
· over 70% are under the age of 45;
· over 50% are between 25 and 44 years of age;
· approximately half are male and half are female;
· approximately half have attended at least some college;
· over 95% have access to the Internet;
· over 70% own a home computer;
· over 55% have access to a computer in the workplace; and
· approximately 75% have access to a checking account and choose to use our services as a means of managing their financial needs.
Our customers generally are unserved or underserved by the traditional banking system and choose alternative solutions to gain convenient and immediate access to cash, consumer loans, prepaid debit cards, money transfers, bill payments and money orders. We believe that our customers use our financial services because we provide them with a safe, welcoming environment and because they are quick, convenient and, in many instances, more affordable than available alternatives.
Store Locations and Operations
The following sets forth the number and location of our stores in operation as of March 31, 2012.
|
|
March 31, |
|
Alabama |
|
21 |
|
Arizona |
|
43 |
|
California |
|
156 |
|
Florida |
|
11 |
|
Indiana |
|
21 |
|
Illinois |
|
10 |
|
Kansas |
|
5 |
|
Kentucky |
|
13 |
|
Michigan |
|
14 |
|
Missouri |
|
7 |
|
Ohio |
|
99 |
|
Oregon |
|
3 |
|
Utah |
|
10 |
|
Virginia |
|
22 |
|
Total Locations |
|
435 |
|
We typically locate our stores in highly visible and accessible locations, such as shopping centers and free-standing buildings in high-traffic shopping areas. Other nearby retailers are typically grocery stores, restaurants, drug stores and discount stores. All of our stores are leased. Our stores, on average, occupy approximately 1,920 square feet. We are focused on increasing the customers awareness of each of our brands by using uniform signage for each brand and store design at each location. We currently operate stores under the following brands:
· CheckSmart;
· Buckeye CheckSmart;
· California Check Cashing Stores;
· Express Consumer Loans;
· First Cash Advance (pursuant to a license agreement that expires on December 31, 2016);
· Cash 1;
· Southwest Check Cashing;
· Cash & Go;
· First Virginia;
· Buckeye Title Loan; and
· Easy Money.
Our stores are typically open from 8 a.m. until 8 p.m. Monday through Saturday and 11 a.m. until 5 p.m. on Sunday, although some stores are closed on Sunday. Additionally, 26 of our stores are open 24 hours a day.
Our store development staff selects each new store location, negotiates leases, and supervises the construction of new stores and the remodeling of existing stores. In addition, it performs lease management and facility maintenance services for open stores. Since all of our stores are built within existing retail space, the customer area of each store is customized to meet the varying size and other requirements of each location while also giving it an appearance that is consistent with our other similarly branded stores.
We close stores for various reasons, including inadequate operating performance, lease expirations and shopping center closings. During 2008, 2009 and 2010, we closed or consolidated six, zero and three stores, respectively. We did not close any stores during 2011.
Advertising and Marketing
Our marketing efforts are designed to promote our product and service offerings, create customer loyalty, introduce new customers to our stores and create cross-selling opportunities. In our markets, we operate under several brands (including those of stores we have acquired) each with individually strong local reputations. In most of our markets, we utilize mass-media advertising, including flyers, direct mail, outdoor advertising, yellow pages and radio and television advertising. We also utilize point-of-purchase materials in our retail locations to implement in-store marketing programs and promotions. We generally implement special promotions to maximize certain seasonal revenue opportunities, including holidays and tax season. Additional local marketing initiatives include sponsorship and participation in local events and charity functions.
We develop our marketing strategies based in part on results from consumer research and data analysis and from insights gained from phantom-shopper programs. We are continuously testing new ways of communicating and promoting our products and services, which include direct mail, online advertising, text messaging, print advertising, telemarketing and enhanced bilingual communications.
Employees
As of March 31, 2012, we had 2,735 employees, including 2,359 store managers and service associates, 54 district managers, 11 regional managers, four regional vice presidents, 16 regional support personnel located in Alabama, 260 corporate employees located in Ohio and 15 corporate employees located in California.
We consider our employee relations to be good. Our employees are not covered by a collective bargaining agreement, and we have never experienced any organized work stoppage, strike, or labor dispute.
Human Resources
Our store operations have historically been organized into three regions, and since the California Acquisition we have added a fourth region. Each region has a regional vice president who reports to our Vice President of Operations and is responsible for the operations, administration, training and supervision of stores in his or her region. As of March 31, 2012, our four regional vice presidents were responsible for the operations of approximately 108 stores each. We have 54 district managers, each of whom reports to the regional manager or regional vice president for his or her region and is directly responsible for the general management of approximately eight stores within his or her territory. These district managers are responsible for hiring, scheduling, store operations, local marketing and employee relations. Each store manager reports to a district manager and has direct responsibility over his or her stores operations.
Each regional vice president is supported by the human resources department and training department, which coordinate recruiting, hiring and training (initial and on-going). Our corporate vice president of human resources has worked with us for over nineteen years, seventeen of which have been in a human resource function, and also has in-depth knowledge and experience with internal investigations and human resources compliance and is supported by a full-time human resource and benefits staff of six employees. We organize human resource learning sessions for field management on a monthly basis as well conducting on-going coaching and support for the district and regional management. Human resources sponsors on-going programs intended to prepare employees to advance to the next level of operations management. All human resource associates attend continuing education training sessions throughout the year.
Training
Customer service associates, store managers, district managers, regional managers and regional vice presidents must complete formal training programs. Those training programs include:
· management training programs that cover employee hiring, progressive discipline, retention, sexual harassment, compensation, equal employment opportunity compliance and leadership;
· an annual operations conference, which is state specific, with all regional vice presidents, regional managers, district managers and store managers, which covers topics such as customer service, loss reduction, safety and security, better delivery of services and compliance with legal and regulatory requirements, human resources policies and procedures and leadership development;
· the use of a web-based training tool, Bankers Edge, to augment our on-the-job training, and effectively deliver and document our mandatory annual anti-money laundering and suspicious activity reporting training and testing;
· new branch employee training which consists of online and on-the-job training with experienced branch employees for a minimum of six weeks; and
· multiple, annual, SmartTrack succession programs in place to identify and develop exceptional store, district and regional managers.
Our national training coordinator and director of auditing and loss prevention also coordinates on-going training for branch employees to review customer service, compliance, security and service-focused issues.
Hiring and Retention. District managers and experienced store managers are responsible for branch employee recruitment. To facilitate this process, we use multiple Internet-based automated recruitment systems for position placement advertising and pre-screening. We believe the automated recruitment systems allow us to identify employee characteristics and recruiting sources that can lead to long-term, successful employees.
Our branch employees undergo a criminal background check, a process whereby we confirm that the social security number provided by the prospective employee matches the name of the employee, a credit check (where permitted by law), prior employment verification, random drug screening and an interview process before employment. We maintain a compensation and career path program to provide employees with competitive pay rates and opportunities for advancement. We offer a complete and competitive benefits package to attract and retain employees.
Information Systems
We utilize a centralized management information system to support our customer service strategy and manage transaction risk, collections, internal controls, record keeping and compliance, and daily reporting functions. Our management system incorporates three commercial, off-the-shelf point-of-sale
systems customized to our specific use characteristics. These POS systems are complemented by two proprietary systems: Lookup, a web application that uses data from the enterprise reporting database to enable tellers to view a customers transaction history and current collection status, and MyCard, a card activation program with Insight. We operate three POS systems in order to effectively manage our diverse product set with the most effective applications, and to manage acquired stores legacy systems in the most efficient manner.
Our POS systems are licensed in all stores and record and monitor the details of every transaction, including the service type, amount, fees, employee, date/time, and actions taken, which allows us to provide our services in a standardized and efficient manner in compliance with applicable regulations. We believe these systems enable us to optimize our store operations to handle more volume than many of our competitors. Transaction data is posted to our accounting system daily.
We operate a wide area data communications network for our stores that has reduced customer waiting times, increased reliability and allows the implementation of new service enhancements. Each store runs Windows operating systems with a four to ten PC network that is connected to our corporate headquarters using a DSL, cable, or T1 connection.
Our corporate data center consists of approximately 40 database and application servers, configured for redundancy and high availability with two EMC storage area network devices, or SANs, with 44 terabytes of available storage. We recently entered into an agreement to build out and migrate our primary data processing off-site to a state-of-the-art facility. The existing data center at our headquarters will remain intact and will be used as a backup site for disaster recovery. This will maximize the availability of centralized systems, optimize up-time for store operations, and eliminate our corporate office as a single point of failure in case of disaster. We maintain and test a comprehensive disaster recovery plan for all critical host systems. We have also contracted with a disaster recovery facility to provide workspaces, computers, and connectivity to our data center for 100 employees in case our headquarters becomes unavailable due to disaster.
Our information technology department maintains a staff of 21 employees. Our development staff primarily focuses on designing and testing customizations to our third-party POS systems, reports, and system integration applications, as well as ongoing development of the management information systems infrastructure. Our information technology help desk staff provides assistance to our branch employees related to hardware/software troubleshooting, application support, and telecommunications.
Collections
If a check or electronic account debit is returned after deposit or initiation, the account is immediately charged off and collection procedures are initiated. If a title loan customer defaults (30 days for short-term title loans and 60 days for long-term title loans), the account is immediately charged off and collection procedures are initiated. Our collections procedures for consumer loans comply with, as applicable, the stricter of state regulation and best practices set forth by the CFSA. When a check or account debit is returned, all returned items are referred to the corporate office. They are entered into the collections system, and the store at which the customer initiated the transaction is notified of the return. We generally perfect our interest in secured loans at the time of the loan where allowed by law. Our collection procedures for title loans comply with state laws regarding notice, repossession and sale of secured collateral. Servers for the collections system are maintained in our data center, and collections activity is imported into our accounting system on a daily basis.
Once notified, the branch employees attempt to collect by calling the telephone number(s) the customer previously provided to inform them of the return. After a loan becomes two weeks overdue or two weeks after a cashed check is returned, the account is sent to the internal, centralized collections department. The collections department attempts to settle the account by sending letters and making phone calls to the customer. After 90 to 120 days, a consumer loan account may be sent to
a third-party collections agency and after 90 days, we may attempt repossession on vehicles securing title loans. Where repossession occurs, it is done by bonded and insured asset recovery firms. Should disposition of a vehicle securing a title loan happen, the sale is conducted in a commercially reasonable manner as required by applicable state law. The third-party collection agencies we engage are appropriately bonded and insured.
Because we maintain extensive customer information, any customer who has a delinquent account may not obtain another cash advance from us. We maintain a uniform policy, however, that if a customer returns to pay off a delinquent account, we will lend to that customer again.
Security
Employee safety is critical to us. Nearly all of our branch employees work behind bullet-resistant Plexiglas and reinforced partitions, and have security measures that include a time-delay equipped safe, an alarm system monitored by a third party, and personal panic buttons for each of our tellers. Many of our stores also have multi-camera DVR systems with remote access capability, teller area entry control, perimeter opening entry detection, and tracking of all employee movement in and out of secured areas. Training on security measures is part of each annual state meeting.
Our business requires our stores to maintain a significant supply of cash. We are therefore subject to the risk of cash shortages resulting from employee and non-employee theft, as well as employee errors. Although we have implemented various programs to reduce these risks and provide security for our facilities and employees, these risks cannot be eliminated. From 2009 through 2011, our uncollected cash shortages from employee errors and from theft were consistently less than 0.10% of revenue annually from continuing operations.
Our POS system allows management to detect cash shortages on a daily basis. In addition to other procedures, district managers and our internal audit staff conduct audits of each stores cash position and inventories on an unannounced, random basis. Professional armored carriers provide the daily transportation of currency for the majority of our stores. In addition, most stores electronically scan their check inventory to facilitate verification and record keeping.
Competition
The industry in which we operate is highly fragmented and very competitive. We believe the principal competitive factors in short-term consumer lending, title lending, check cashing and prepaid debit card services are location, customer service, fees and the transparency of fees, convenience, range of services offered, speed of service and confidentiality. We face intense competition and believe each of the markets in which we operate is becoming more competitive as these industries mature and consolidate. With respect to our short-term consumer lending business, we compete primarily with mono-line payday lending businesses, other check cashers and multi-line alternative financial service providers, pawn shops, rent-to-own businesses, banks and credit unions. With respect to our check cashing business, we compete with other check cashers and multi-line alternative financial service providers, grocery stores, convenience stores, banks, credit unions, and any other retailer that cashes checks, sells money orders, provides money transfer services or offers other similar financial services, including some big-box retailers. Some retailers cash checks without charging a fee under limited circumstances. With respect to our prepaid debit card services, we compete primarily with prepaid debit card issuers, other check cashers and multi-line alternative financial service providers, banks, credit unions, and any other retailer offering general purpose reloadable prepaid debit cards, including some big-box retailers. Some of our competitors, such as big-box retailers, have larger and more established customer bases and networks of existing stores and substantially greater financial, marketing and other resources than us.
Relationships with Key Vendors
Western Union / MoneyGram Agreements. We are party to a master Agency Agreement, dated December 30, 2011, with Western Union, which we refer to as the Western Union Agreement. The Western Union Agreement is comprised of two parts. Under the first part of the Western Union Agreement, we act as an agent for the receipt and transmission of wire transfers of money through the Western Union money transfer system. Under the second part of the Western Union Agreement, we sell money orders that bear the Western Union logo at certain locations.
The initial term of the Western Union Agreement is five years, which automatically renews for an additional one-year term. Upon expiration of the one-year renewal term, the Western Union Agreement will continue in effect, subject to either partys right to terminate the agreement by giving the other party at least nine months prior written notice. Western Union paid us a signing bonus in connection with its execution of the Western Union Agreement. Upon the occurrence of certain events, we will be obligated to repay Western Union a portion of the signing bonus. Western Union is obligated to pay us new store incentive bonuses for each new and acquired location opened during the term of the agreement at which Western Union money transfer services are offered.
We earn commissions for each transmission and receipt of money through the Western Union network and MoneyGram Payment Systems Inc., or MoneyGram, transacted at a company-owned location. Those commissions equal a percentage of the fees charged by Western Union to consumers for Western Union services. Our total revenues from commissions for money transfer services during the years ended December 31, 2009, 2010 and 2011 was $0.9 million, $0.8 million and $3.8 million, respectively. Such revenue in 2010 and 2011 includes both commissions from Western Union and MoneyGram.
With respect to our Alabama locations, we are party to similar contracts with MoneyGram under which we act as an agent for the receipt and transmission of wire transfers of money through the MoneyGram money transfer system.
The fee charged for money order sales is $1.00, or free for our check cashing customers. During the years ended December 31, 2009, 2010 and 2011, our revenues from such fees were $0.6 million, $0.5 million and $1.1 million, respectively. Such revenue includes both Western Union and Money-2-Go money orders.
Insight Agreements. In September 2009, we entered into Independent Agency Agreements with Insight in each state in which we operate, which were amended and restated in November 2011. Under each Independent Agency Agreement, our stores serve as distribution points where customers can purchase prepaid debit cards provided by Insight as well as load funds onto and withdraw funds from their cards. As compensation, we are paid certain agent fees from Insight, which are based on monthly card fees, overdraft charges, interchange fees and ATM access fees. In addition, we earn fees from the sale of prepaid debit cards provided by Insight. During the years ended December 31, 2009, 2010 and 2011, our revenues from fees paid pursuant to this agreement were $0.1 million, $9.9 million and $19.4 million, respectively. We are required to pre-fund certain card activity under this agreement with Insight.
In November 2011, we purchased a 22.5% interest in Insight Holding. We also agreed to make available to Insight Holding a revolving credit facility of $3,000,000. See Certain Relationships and Related-Party TransactionsInsight Agent Agreements.
Third-Party Lender Agreements. In Arizona and to a much lesser extent in certain stores in Ohio, third-party licensed lenders, unaffiliated with us, offer our customers the ability to access a credit line with loan proceeds delivered via debit card. The customer may access their credit line in one of the following methods: (1) a card load, if and when the borrower seeks to make a debit card purchase but
has insufficient funds on the card; (2) a card load at the borrowers request in advance of a transaction; and (3) a check mailed to the borrower at his or her request. With respect to these credit lines, a subsidiary other than the subsidiary operating the store at which the debit cards are purchased has an agreement in place whereby it, in the case of Arizona, purchases an 85% participation interest in the third-party lenders portfolio or, in the case of the limited number of stores in Ohio, acquires defaulted loans. The marketing of the third-party loan product was discontinued for both Arizona and Ohio in May 2012.
Global Express Agreement. In November 2008, we entered into a Universal Trust Agreement with Global Express. Pursuant to the Universal Trust Agreement, we issued certain loan proceeds in the State of Ohio through Global Express in the form of money orders. We are required to compensate Global Express for the use of these money orders and must pre-fund certain amounts to mitigate Global Expresss risk related to the outstanding money order. The initial term of the Universal Trust Agreement was two years, which automatically renewed for a second one-year term after the first renewal term expired in November 2011. At December 31, 2009, 2010 and 2011, we had $13.5 million, $8.0 million and $0 in pre-funding assets, respectively.
Regulation and Compliance
Our products and services are subject to extensive state, federal and local regulation. The regulation of the consumer financial services industry is intended primarily to protect consumers, detect illicit activity involving the use of cash, as well as provide operational guidelines to standardize business practices. Regulations commonly address allowable fees and charges related to consumer loan products, maximum loan duration and amounts, renewal policies, disclosures and reporting and documentation requirements.
We are subject to federal and state regulations that require disclosure of the principal terms of each transaction to every customer, prohibit misleading advertising, protect against discriminatory practices, and proscribe unfair, deceptive and abusive practices. We maintain legal and compliance departments to monitor new regulations as they are introduced at the federal, state, and local level and existing regulations as they are repealed, amended, and modified. Although we cannot assure you that we are in full compliance, we believe we are in substantial compliance with all material federal and state laws and regulations.
Our compliance committee, chaired by our Chief Compliance and Technology Officer, is comprised of several high-level executives who bring together knowledge from their respective areas of expertise. The committee is responsible for approving new or modified products and services after thorough review of applicable statutes and regulations. We place a strong emphasis from the top down on the importance of compliance, and require annual training for compliance committee members, all executives, and all operations employees.
Our compliance department consists of 26 employees, including our internal audit team. We have a staff of 14 internal auditors whose function is to monitor compliance by our branches with applicable federal and state laws and regulations as well as our internal policies and procedures. The internal auditors conduct periodic unannounced audits of our branches, typically spending one to two days in each branch reviewing customer files, reports, held checks, cash controls, and compliance with state specific legal requirements and disclosures. Upon completion of an audit, the auditor conducts an exit interview with the branch manager to discuss issues found during the review. As part of the internal audit program, reports for management regarding audit results are prepared to help identify compliance issues that need to be addressed and areas for further training. The compliance committee, through a compliance officer, reviews the internal audit program results, suggests procedural changes, and oversees the implementation of new compliance processes.
Nine employees of our compliance department are dedicated to anti-money laundering compliance, form filing, suspicious activity monitoring, and, in the applicable states, statewide database
reconciliation. We have continually allocated increasing resources to these areas as we have grown and added new or modified products and services.
U.S. Federal Regulations
Title X of the Dodd-Frank Act establishes the CFPB, which became operational on July 21, 2011. Now that the CFPB has installed director Richard Cordray, it has regulatory, supervisory and enforcement powers over providers of consumer financial products and services, including explicit supervisory authority to examine and require registration of payday lenders. Recently, the CFPB has begun examinations of payday lenders and has informed us that it will be beginning an examination of us in late April 2012. Included in the powers afforded the CFPB is the authority to adopt rules describing specified acts and practices as being unfair, deceptive or abusive, and hence unlawful. While Dodd-Frank expressly provides that the CFPB has no authority to establish usury limits, some consumer advocacy groups have suggested that payday and title lending should be a regulatory priority and it is possible that at some time in the future the CFPB could propose and adopt rules making such lending materially less profitable, impractical or impossible. The CFPB could also adopt rules imposing new and potentially burdensome requirements and limitations with respect to our other lines of business.
In addition to Dodd-Franks grant of regulatory powers to the CFPB, Dodd-Frank gives the CFPB authority to pursue administrative proceedings or litigation for violations of federal consumer financial laws (including the CFPBs own rules). In these proceedings, the CFPB can obtain cease and desist orders (which can include orders for restitution or rescission of contracts, as well as other kinds of affirmative relief) and monetary penalties ranging from $5,000 per day for ordinary violations of federal consumer financial laws to $25,000 per day for reckless violations and $1 million per day for knowing violations. Also, where a company has violated Title X of Dodd-Frank or CFPB regulations under Title X, Dodd-Frank empowers state attorneys general and state regulators to bring civil actions for the kind of cease and desist orders available to the CFPB (but not for civil penalties).
Federal law has effectively prohibited lenders from making certain short-term consumer loans to members of the U.S. military, active-duty reservists and National Guard, and their respective dependents since October 1, 2007. Under regulations promulgated by the U.S. Department of Defense to implement section 670 of the John Warner National Defense Act of 2007, otherwise known as the Talent Amendment, certain short-term consumer loans, including payday loans with terms of 91 days or less and vehicle title loans with terms of 181 days or less, are subject to a 36 percent annual rate cap. As a result, we have ceased offering short-term consumer loans to these customers.
Federal law imposes additional requirements on us with respect to our short-term consumer lending. These requirements include disclosure requirements under the Truth-in-Lending Act (TILA) and Regulation Z; notice and non-discrimination requirements under the Equal Credit Opportunity Act (ECOA) and Regulation B; requirements with respect to electronic signatures and disclosures under the Electronic Signatures In Global And National Commerce Act (ESIGN); and requirements with respect to electronic payments under the Electronic Funds Transfer Act (EFTA) and Regulation E. EFTA and Regulation E requirements also have an important impact on our prepaid debit card services business.
Under regulations of the U.S. Department of the Treasury (the Treasury Department), adopted under the Bank Secrecy Act of 1970 (BSA), we must report transactions involving currency in an amount greater than $10,000, and we must retain records for five years for purchases of monetary instruments for cash in amounts from $3,000 to $10,000. In general, every financial institution, including us, must report each deposit, withdrawal, exchange of currency or other payment or transfer, whether by, through or to the financial institution, that involves currency in an amount greater than $10,000. In addition, multiple currency transactions must be treated as single transactions if the financial institution has knowledge that the transactions are by, or on behalf of, any person and result in either cash in or
cash out totaling more than $10,000 during any one business day. We believe that our point-of-sale system and employee-training programs permit us to comply with these requirements.
The BSA also requires certain of our subsidiaries to register as a money services business with the Treasury Department. This registration is intended to enable governmental authorities to better enforce laws prohibiting money laundering and other illegal activities. We are registered as a money services business with the Treasury Department and must re-register with the Financial Crimes Enforcement Network of the Treasury Department (FinCEN) by December 31 every other year. We must also maintain a list of names and addresses of, and other information about, our stores and must make that list available to any requesting law enforcement agency (through FinCEN). That store list must be updated at least annually. We do not believe compliance with these existing requirements has had or will have any material impact on our operations.
Federal anti-money-laundering laws make it a criminal offense to own or operate a money transmitting business without the appropriate state licenses, which we maintain where necessary. In addition, the USA PATRIOT Act of 2001 and its implementing federal regulations require us, as a financial institution, to establish and maintain an anti-money-laundering program. Such a program must include: (1) internal policies, procedures and controls designed to identify and report money laundering; (2) a designated compliance officer; (3) an ongoing employee-training program; and (4) an independent audit function to test the program. Because of our compliance with other federal regulations having essentially similar purposes, we do not believe compliance with these requirements has had or will have any material impact on our operations.
In addition, federal regulations require us to report suspicious transactions involving at least $2,000 to FinCEN. The regulations generally describe three classes of reportable suspicious transactionsone or more related transactions that the money services business knows, suspects, or has reason to suspect (1) involve funds derived from illegal activity or are intended to hide or disguise such funds, (2) are designed to evade the requirements of the BSA or (3) appear to serve no business or lawful purpose. Because of our POS system and transaction monitoring systems, we do not believe compliance with the existing reporting requirement and the corresponding record-keeping requirements has had or will have any material impact on our operations.
The Office of Foreign Assets Control (OFAC) publishes a list of individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries. It also lists individuals, groups, and entities, such as terrorists and narcotics traffickers, designated under programs that are not country-specific. Collectively, such individuals and companies are called Specially Designated Nationals. Their assets are blocked and we are generally prohibited from dealing with them. Because our POS system and transaction monitoring systems, we do not believe compliance with the existing reporting requirement and the corresponding record-keeping requirements of OFAC has had or will have any material impact on our operations.
The Gramm-Leach-Bliley Act of 1999 and its implementing federal regulations require us generally to protect the confidentiality of our customers nonpublic personal information and to disclose to our customers our privacy policy and practices, including those regarding sharing customers nonpublic personal information with affiliates and third parties. That disclosure must be made to customers at the time the customer relationship is established and at least annually thereafter.
U.S. State Regulation
Our business is regulated under a variety of state enabling statutes, including payday loan, deferred presentment, check cashing, money transmission, small loan and credit services organization state laws, among others. The scope of state regulation, including the fees and terms of our products and services, varies from state to state. Most states with laws that specifically regulate our products and services establish allowable fees and/or interest and other charges to consumers.
In addition, many states regulate the maximum amount of, minimum maturity of, and impose limits on the renewal or extension of, short-term consumer loans. The terms of our products and services vary from state to state in order to comply with the laws and regulations of the states in which we operate.
In some states, check cashing companies or money transmission agents are required to meet minimum bonding or capital requirements and are subject to record-keeping requirements and/or fee limits. We offer check cashing services in each of the states in which we operate that have licensing or fee regulations regarding check cashing, with the exception of Illinois and certain Virginia locations. We are licensed in each of the states or jurisdictions in which a license is currently required for us to operate as a check cashing company and/or money transmitter. To the extent these states have adopted ceilings on check cashing fees, those ceilings are in excess of or equal to the fees we charge.
In the event of serious or systemic violations of state law, we would be subject to a variety of regulatory and private sanctions. These could include license suspension or revocation; orders or injunctive relief, including judicial or administrative orders providing for restitution or other affirmative relief; and statutory penalties and damages. Depending upon the nature and scope of any violation, statutory penalties and damages could include fines for each violation and/or payments to borrowers equal to a multiple of the fees we charge and in some cases the principal amount loaned as well. Thus, violations of these laws could potentially have a material adverse effect on our results of operation and financial condition.
We do not utilize the so-called choice of law model of payday (or title) lending, where a lender attempts to make loans in one state under a contract clause calling for the application of another states substantive laws. Rather, we attempt to comply in full with the substantive laws of the state where the store involved in an in-person loan transaction is located.
In the last several years, several states in which we operate, including Florida, Illinois, Indiana, Kentucky, Ohio and Virginia have enacted laws (or in the case of Arizona, allowed the deferred presentment law to expire) that have impacted our short-term consumer loan business by imposing new limitations or requirements or effectively prohibiting the loan products we offer. These laws have had varying impacts on our operations and revenue depending on the nature of the limitations and restrictions implemented.
Arizona. On July 2, 2010, the enabling statute under which we formerly provided short-term consumer loans in Arizona expired. As a result, we transitioned customers to other products, including title loans and the enhanced prepaid debit cards described above.
Illinois. In June 2010, the Illinois Legislature passed House Bill 537, which created an installment payday loan product with a term of not less than 112 days and not more than 180 days. The law imposes certain restrictions on loans made pursuant to the statute, including limits on the amount licensees can charge and other payment terms. The statute also establishes a database to track consumer loans made under the statute. This law became effective March 21, 2011.
Ohio. In May 2008, the Ohio Legislature passed House Bill 545, which repealed the statute under which various payday lenders had previously operated. The State of Ohio subsequently issued a referendum staying the effective date of House Bill 545 until November of 2008. As a result of this legislation, we established a new subsidiary (the OMLA Licensee), which began offering small denomination loans pursuant to the Ohio Mortgage Loan Act (the OMLA). Another subsidiary of ours continued to offer check cashing services, as it had for many years prior to the 2008 legislation. In our Ohio stores, OMLA loan proceeds are issued to borrowers by the OMLA Licensee in the form of a money order and borrowers are presented by our OMLA Licensee with a disclosure form advising them that they can cash the money order with our check cashing affiliate or that they can cash the money order elsewhere possibly at a lower fee or for no cost. Subsequent to the initiation of our OMLA lending, the Ohio Department of Commerce, Division of Financial Institutions (the Ohio
Division) in the first quarter of 2010, issued a rule that purported to ban a company operating under the OMLA or any check cashing licensee affiliated with such company from charging a fee to cash checks or money orders issued by the company or its affiliate. That rule was first temporarily and then permanently enjoined by the Franklin County Court of Common Pleas. The Ohio Division agreed not to appeal that injunction and has not done so. For a more detailed discussion of this litigation, please see Legal Proceedings below.
Virginia. In April 2008, the Virginia legislature amended Virginias Payday Lending Act and substantially changed the terms for cash advance services in Virginia and severely restricted viable operations for short-term consumer lenders. The new legislation, among other things, (1) prohibited the offering of open ended unsecured lines of credit in the same place as a payday loan, (2) extended the time borrowers have to repay loans to twice their pay period, so that a customer who is paid weekly has two weeks to repay their loan, (3) changed the amount that lenders can charge to a simple annual interest rate of 36 percent plus a fee of as much as 20 percent of the loan amount, or $100 for a $500 loan, and an additional five dollar fee, (4) required the offer of an extended payment plan for defaulting borrowers, (5) imposed required cooling-off periods between loans, (6) instituted a statewide database and (7) prohibited borrowers from rolling over an existing loan and limited borrowers to one loan at a time. This legislation became effective on January 1, 2009. As a result, we discontinued originations of new lines of credit and draws on existing lines of credit in those locations offering our traditional short-term consumer loan product and opened four new locations under a separate brand to offer and service the unsecured line of credit product. Since that time, we have converted an additional ten locations to that separate brand.
We intend to continue, together with others in the short-term consumer loan industry, to inform and educate legislators and regulators and to oppose legislative or regulatory action that would prohibit or severely restrict short-term consumer loans. Nevertheless, if legislative or regulatory action with that effect were taken in states in which we have a significant number of stores, or at the federal level, that action could have a material adverse effect on our loan-related activities and revenues.
Regulating the DFS Companies
As a result of our acquisition of DFS, we are now offering loans to consumers over the Internet through the DFS Companies. Where required, DFSs subsidiaries are licensed by the jurisdiction in which they offer loans. DFS offers loans to residents of Alabama, Alaska, California, Delaware, Hawaii, Idaho, Kansas, Louisiana, Minnesota, Missouri, Nevada, North Dakota, Rhode Island, South Dakota, Utah, Washington, Wyoming and Wisconsin. In addition, DFS operates as a credit access business in Texas, through which it offers loans originated by an unaffiliated third-party lender. DFS also offers loans in the United Kingdom through DFS UK and is able to offer loans through a Canadian entity, though it does not currently do so. While we have not previously offered loans in many of these jurisdictions, as a result of the acquisition of DFS, we are subject to the regulatory requirements of such jurisdictions.
In addition, DFS relies heavily on the use of lead generators or providers as a source of first-time borrowers. DFS conducts regular audits of these lead generators or providers in order to ensure that each utilizes appropriate privacy and other disclosures to prospective borrowers as to how and where the prospective borrowers personal, non-public information may be disclosed. In addition, DFS regularly audits their lead generators and providers compliance with their privacy and other disclosures made to prospective borrowers. The CFPB has indicated its intention to examine compliance with federal laws and regulations and to scrutinize the flow of non-public, private consumer information between lead generators and lead buyers, such as DFS. The use of such lead generators could subject us to additional regulatory cost and expense and, if DFSs ability to use lead generators
were to be impaired, DFSs business could be materially adversely affected and we may not realize the expected benefits of the acquisition of DFS.
Further, borrowers repay loans made by DFS in the United States through automated clearing house funds transfer authorizations. Borrowers repay loans made by DFS in the United Kingdom by way of authorizations to process the repayment charge to the borrowers debit card. The CFPB has indicated its intention to examine compliance with various federal laws and regulations and to scrutinize the electronic transfers of funds to repay certain small denomination loans. If DFS were to be restricted in its ability to rely on such funds transfers, its business could be materially adversely affected and we may not realize the expected benefits of acquiring DFS.
Properties
Our average store size is approximately 1,920 square feet. Our stores are typically located in strip shopping centers or free-standing buildings. All of our stores are leased, generally under leases providing for an initial term of three to five years with optional renewal terms of three to five years. Our corporate headquarters in Dublin, Ohio, a suburb of Columbus, currently occupies approximately 37,000 square feet under a lease that expires in 2017.
A substantial number of the stores acquired in connection with the California Acquisition were formerly gas stations at which leaking underground storage tanks required remediation when those operations were discontinued. Although this remediation is still ongoing at a small number of stores, we are not responsible for performing the work, nor has the remediation affected our business.
Legal Proceedings
We are involved from time to time in various legal proceedings incidental to the conduct of our business. Sometimes the legal proceedings instituted against us purport to be class actions or multiparty litigation. In most of these instances, we believe that these actions are subject to arbitration agreements and that the plaintiffs are compelled to arbitrate with us on an individual basis. We believe that none of our current legal proceedings will result in any material impact on our financial condition, results of operations or cash flows. In the event that a lawsuit purports to be a class action, the amount of damages for which we might be responsible is uncertain. In addition, any such amount would depend upon proof of the allegations and on the number of persons who constitute the class of affected plaintiffs. Although the legal proceeding described below did not result in a material impact on our financial condition, these proceedings are reflective of the type of proceeding that could have a material impact on our financial condition.
Ohio Third-Party Litigation
While we were not a named party in the case, we voluntarily joined in an agreement (the Joinder Agreement) to be bound by the terms of the courts December 21, 2010, order in the case of Fast Cash of America, Inc., et al v. Ohio Department of Commerce and QC Financial Services, Inc. v. Ohio Department of Commerce (the QC Case). The initial portion of the QC Case was initiated by Fast Cash America and others in order to challenge Rule 1301:8-8-04(C)(5), or Rule 1301, issued on May 1, 2010 by the Ohio Division, which purported to prevent check casher licensees from charging customers a fee to cash checks or money orders issued as proceeds of a small loan or mortgage lending transaction. Following our entry into the Joinder Agreement, Judge Charles Schneider of the Franklin County Court of Common Pleas issued a permanent injunction enjoining the Ohio Division from enforcing Rule 1301 on the grounds that Rule 1301 exceeded the Ohio Divisions rule-making authority.
The second portion of the QC Case involved an appeal by QC Financial Services, Inc. (QC) from the decision of the superintendent of the Ohio Division in an administrative proceeding brought against QC. In May 2009, QC, as well as many other licensees and registrants under the OMLA,
including us, received notices alleging violation of Ohio law arising from the licensee or registrant (or an affiliate of the licensee or registrant) charging a customer a fee to cash a loan proceeds check or money order issued at the same location by the licensee or registrant, even if the purchase of check cashing services was not a condition of the loan. The Ohio Division asserted that charging a fee in such circumstances constituted a statutorily impermissible additional fee for the loan or, alternatively, constituted the licensee or registrant engaging in another business, check cashing, that tends to conceal an evasion of the act under which the licensee is licensed or the registrant is registered and is therefore illegal. While the Ohio Division followed QCs notice of violation with a notice of hearing against QC, no such notice of hearing was ever issued against us, and the only hearing held on any of the notices of violation was that involving QC. QC initially prevailed in its hearing before the Ohio Divisions hearing officer, who concluded that no violation of the law had occurred because the check cashing transaction took place separate from, and not as a condition to, the loan transaction and took place after the conclusion of the loan transaction. The superintendent of the Ohio Division, who has the power to accept or reject the hearing officers report, elected to reject it and issued a cease and desist order to QC. Accordingly, the superintendent held that QC was in violation of Ohio law. QC appealed the superintendents decision to Judge Schneiders court. Judge Schneider considered the administrative hearing record de novo, and on July 20, 2011, issued a decision reversing the Divisions cease and desist order. The courts opinion reasoned that a secondary check cashing transaction is not a condition to the loan and is, therefore, not prohibited. The Ohio Division waived its right to appeal either Rule 1301 and/or the reversal of the cease and desist order. In addition to this waiver, the Ohio Division agreed to terminate and/or not commence any regulatory proceedings challenging the charging of fees on these secondary check cashing transactions. A change in statute nonetheless could result in check casher licensees, including us, no longer being able to charge customers a fee to cash checks or money orders issued as proceeds of a small loan or mortgage lending transaction at the same office. In addition, the waivers by the Ohio Division do not bind private litigants, who remain free to initiate lawsuits, including putative class actions, based on the same or similar theories.
California Settlement
Five of our former employees filed two separate class action suits against us alleging that our employees in California were not provided minimum benefits and/or paid in accordance with the California wage order requirements regarding meal periods and rest breaks and alleging various other claims under California law and therefore had not been paid all wages owed to them. In January 2011, we negotiated a settlement agreement with the plaintiffs in one case, subject to the conditions that the settlement be approved by the California Superior Court and that the other pending case be consolidated with the first case in which we already entered into the settlement agreement. The conditions were satisfied and on December 21, 2011, the presiding judge gave final approval to the settlement. The maximum amount payable to the class pursuant to the settlement agreement was approximately $0.8 million, for which we reserved $0.9 million based on the expected volume of claims and expected fees and expenses. The actual amount we disbursed in satisfaction of the settlement agreement was $0.64 million.
Corporate History
Our predecessor, CheckSmart, a Delaware corporation, was formed in April 2006 upon the acquisition by Diamond Castle of a majority stake in CheckSmart. Since CheckSmarts formation, at which time we had 179 stores, we have continually expanded our business of providing consumer financial products and services. We acquired eight stores in Michigan in August 2009, 19 stores in Alabama in March 2010, and 10 stores in Illinois in March 2011. Community Choice Financial Inc. was formed on April 6, 2011 under the laws of the State of Ohio by the shareholders of CheckSmart to be the holding company of Checksmart and to acquire the ownership interests of CCCS, which had 141 stores at the time of acquisition, primarily in California. As of March 31, 2012, we owned and operated a network of 435 stores across 14 states.
Executive officers and directors
The following table sets forth information with respect to our directors and executive officers as of June 1, 2012.
Name |
|
Age |
|
Office and Position |
William E. Saunders, Jr. |
|
38 |
|
Chief Executive Officer and Director |
Kyle Hanson |
|
36 |
|
President |
Chad Streff |
|
53 |
|
Chief Technology Officer, Chief Compliance Officer and Senior Vice President |
Michael Durbin |
|
43 |
|
Senior Vice President, Chief Financial Officer and Treasurer |
Bridgette Roman |
|
49 |
|
Senior Vice President, Secretary and General Counsel |
H. Eugene Lockhart |
|
62 |
|
Chairman of the Board of Directors |
Andrew Rush |
|
54 |
|
Director |
Lee A. Wright |
|
40 |
|
Director |
David M. Wittels |
|
47 |
|
Director |
Michael Langer |
|
35 |
|
Director |
Felix Lo |
|
33 |
|
Director |
Eugene Schutt |
|
58 |
|
Director |
William E. Saunders, Jr. became our Chief Executive Officer in and has served as a Director since June 2008. Mr. Saunders served as our Chief Financial Officer from March 2006 to June 2008. Prior to joining CheckSmart, Mr. Saunders was a Vice President for Stephens Inc., an investment bank, from 2004 to 2006 and, prior to that, was an associate at Houlihan Lokey, an investment bank, SunTrust Equitable Securities, an investment bank, and Arthur Andersen, an accounting firm. Mr. Saunders currently serves as an advisory board member of Insight, to which the Company serves as an agent in offering Insights prepaid debit card products and in which the Company owns a 22.5% ownership interest. Mr. Saunders holds a B.S. in Business with Special Attainment in Accounting and Commerce from Washington & Lee University. Mr. Saunders brings extensive investment banking, finance, merger & acquisition, management, and strategic experience to our board of directors.
Kyle Hanson became our President in May 2008. Mr. Hanson served as our Director of Store Operations from August 2005 to February 2008 and then as our Vice President of Store Operations from February 2008 to May 2008. From December 1997 through July 2005, Mr. Hanson worked in various operational capacities for CheckSmart, including as a store manager and a district and regional manager. Mr. Hanson serves on the advisory board of Insight, to which the Company serves as an agent in offering Insights prepaid debit card products. Mr. Hanson holds a B.S. in Communications from Ohio University.
Chad Streff became our Chief Technology Officer and Chief Compliance Officer in 2011 and served as our Chief Operating Officer, Senior Vice President and Secretary from 2006 to 2010. Prior to joining CheckSmart, Mr. Streff was President of Streff and Associates, Inc. from 1992 to 2002 and was manager of IT consulting with a regional accounting firm from 1985 to 1992. Mr. Streff holds a B.S. in accounting and pre-law and a Minor in Computer Science from Ohio University.
Michael Durbin became our Chief Financial Officer and Treasurer and a Senior Vice President effective December 31, 2010. From June 2008 to December 2010, Mr. Durbin was a Managing Director at Servius Capital LP, an investment banking firm based in Atlanta, Georgia, and during that time Mr. Durbin served as Interim Chief Financial Officer of CheckSmart. From July 1995 to June 2008, Mr. Durbin was a Senior Vice President at National City Bank, located in Cleveland, Ohio, where his principal business was corporate banking with a specialization in retail and retail financial services. Mr. Durbin holds a B.S.B.A. summa cum laude from Ohio University and an M.B.A. from Fisher College of Business at The Ohio State University.
Bridgette Roman became our Senior Vice President and Secretary in January 2011. Ms. Roman has served as our General Counsel since October 2006. Before Ms. Roman became our Senior Vice President and Secretary, Ms. Roman served as our Vice President and Assistant Secretary from June 2008 to December 2010. Prior to joining CheckSmart in October 2006, Ms. Roman was Senior Corporate Counsel at Cooper Tire & Rubber Company, a global tire manufacturer. From 1995 to 2004, Ms. Roman was a litigation partner with the law firm of Schottenstein, Zox & Dunn and from 1988 to 1995 was an associate with the same firm. Ms. Roman holds a B.A. in Political Science from The Ohio State University and a J.D. from Duquesne University, School of Law.
H. Eugene Lockhart became a director in May 2006. Mr. Lockhart has served as Chairman of Diamond Castles Financial Institutions Investment practice since 2005. Before joining Diamond Castle in 2005 as Chairman of its Financial Institutions Investment practice, Mr. Lockhart became Venture Partner for Oak Investment Partners, a venture capital firm. Mr. Lockhart has worked in a senior executive role at several organizations, including from 1993 to 1997 as President and Chief Executive Officer of MasterCard International, as Chief Executive Officer of Midland Bank plc (from 1986 to 1993), as President of the Global Retail Bank of Bank of America (from 1997 to 1999) and as President of Consumer Services at AT&T. Mr. Lockhart was, until January 2010, also Chairman of NetSpend Corporation and is Chairman of Argus Information and Advisory Services LLC. He is also a director of Vesta Corporation, IMS Health Inc., RadioShack Corp., Huron Consulting Group Inc. and Asset Acceptance Corp. Mr. Lockhart is a former Director of RJR Nabisco Holdings, First Republic Bank and LendingTree, Inc. Mr. Lockhart holds a B.S. from the University of Virginia and an M.B.A. from The Darden School at the University of Virginia. Mr. Lockhart has held many significant positions in the financial services industry, has experience on public company audit and compliance committees, and brings extensive expertise in strategic planning to our board of directors.
Andrew Rush became a director in May 2006. Mr. Rush has many years of experience as a private equity investor. Mr. Rush is a co-founder and Senior Managing Director at Diamond Castle, a position he has held since 2004. Before serving as a Senior Managing Director at Diamond Castle, Mr. Rush was a Managing Director for DLJ Merchant Banking Partners, which he joined in 1989. Mr. Rush is a Director of Alterra Capital Holdings, Limited and Suture Express, Inc. and a former Director of AXIS Capital Holdings Limited, Nextel Partners, Inc., neuf telecom S.A. and several other companies. Mr. Rush holds a B.A., magna cum laude, from Wesleyan University, a J.D., cum laude, from the University of Pennsylvania and an M.B.A. with distinction from The Wharton School of the University of Pennsylvania. Because Mr. Rush has extensive experience in investing in financial services companies and has served on many corporate boards, we believe he brings significant and valuable experience to our board of directors.
Lee A. Wright became a director in May 2006. Mr. Wright is also a Senior Managing Director at Diamond Castle, which he joined in 2005. From 2000 to 2005, Mr. Wright was a Director at DLJ Merchant Banking Partners, a private equity firm. Mr. Wright previously worked at CSFB Private Equity (1996 to 2000) as a Vice President and Associate and was an analyst in CSFBs Investment Banking division (1994 to 1996). Mr. Wright is a Director of Professional Directional Holdings, Inc. (since 2010) and a former Director of U.S. Express Leasing, Inc. and Frontier Drilling ASA. Mr. Wright served as a director of Adhesion Holdings Inc. between 2008 and 2011, when it merged with multi-color Corporation. He continued to serve on multi-colors board until April of 2012. Mr. Wright holds a B.S., magna cum laude, from Washington & Lee University. Mr. Wright has an extensive history of investing in financial services companies and brings significant experience to our board of directors.
David M. Wittels became a director in November 2010. Mr. Wittels is also a Senior Managing Director at Diamond Castle, a position Mr. Wittels has held since 2004. Before serving as Senior Managing Director, Mr. Wittels was a Managing Director for DLJ Merchant Banking Partners, which he joined in 1986. Mr. Wittels is a former Chairman of the Board of Arcade Holding Corp. (from 1999 to 2004) and a former Director of several companies, including Wilson Greatbatch Technologies, Inc. (1997 to 2002), Katz Media Group Inc. (1994 to 1997), Mueller Group Inc. (1999 to 2004), Advanstar Holdings Corp. (2000 to 2004), Jostens Inc. (2003 to 2004), Ziff Davis Holdings, Inc (2000 to 2006).
Mr. Wittels holds a B.S., summa cum laude, from The Wharton School of the University of Pennsylvania. Mr. Wittels knowledge of investment management and his public company experience bring valuable skills to our board of directors.
Michael Langer became a director in May 2006. Mr. Langer is also a Principal at Diamond Castle, which he joined in 2005. Prior to joining Diamond Castle, Mr. Langer worked at DLJ Merchant Banking Partners and, prior to that, was an Associate at Leonard Green & Partners and an Analyst in the Investment Banking division at Deutsche Bank from 1998 to 2000. Since 2007, Mr. Langer has been a Director of Managed Health Care Associates, Inc. and Suture Express, Inc. Mr. Langer holds a B.S., magna cum laude from Boston College, where he graduated Beta Gamma Sigma, and an M.B.A. with Honors from The Wharton School of the University of Pennsylvania. Mr. Langer brings significant investment banking and business analytic experience to our board of directors.
Felix Lo became a director in April 2011. Mr. Lo is also a Principal at Golden Gate Capital, a private equity firm which he joined in 2004. From 2003 to 2004, Mr. Lo was an investment professional at Bain Capital, a private investment firm, and, prior to that, was a consultant at Bain & Company (from 2001 to 2003). Mr. Lo also serves as a director of Lantiq Holdco Sarl, which he joined in 2010, and Vistec Semiconductor Systems Holdings Ltd., which he joined in 2010. Mr. Lo holds an A.B. in Public Policy from Brown University. Mr. Los extensive history of investing in a broad range of growth companies brings valuable strategic experience to our board of directors.
Eugene R. Schutt became a director in February 2012. Since 2009, Mr. Schutt has served as Associate Dean of Development in the College and Graduate School of Arts & Sciences at the University of Virginia. Prior to joining the University of Virginia, Mr. Schutt had more than 30 years of business experience in financial services, most recently as Chairman, President and Chief Executive Officer of Citicorp Trust Bank, a Citigroup company. From 1992 until 1999, he was president of Avco Financial Services Inc., a branch-based multi-national consumer finance enterprise and from 1984 until 1991, he was president of Pratt Industries Inc. He began his career with the Philadelphia National Bank and spent nearly a decade managing two Asia/Pacific subsidiaries. Mr. Schutt is a 20-year member of the World Presidents Organization and has served on the boards of the American Financial Services Association and the Financial Services Roundtables Housing Policy Council. He holds a B.A. in Economics from the University of Virginia. Mr. Schutts extensive background in consumer financial services and his significant leadership experience bring valuable expertise to our board of directors.
Board Committees
On July 29, 2011, our board of directors created the following standing committees: the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee. These committees are described below.
Audit Committee
Our Audit Committee consists of Mr. Lockhart, as Chairman, and Messrs. Schutt and Wright. The Audit Committee, among other things, will oversee our accounting practices and processes, system of internal controls, independent auditor relationships, financial statement audits and audit and financial reporting processes.
Compensation Committee
Our Compensation Committee consists of Mr. Lockhart, as Chairman, and Messrs. Schutt and Wright. Our Compensation Committee reviews and recommends policy relating to compensation and benefits of our directors and executive officers, including evaluating executive officer performance, reviewing and approving executive officer compensation, reviewing director compensation, making recommendations to our board of directors with respect to the approval, adoption and amendment of incentive compensation plans, administering equity-based incentive compensation and other plans and reviewing executive officer employment agreements and severance arrangements.
Nominating and Governance Committee
Our Nominating and Governance committee consists of Mr. Lockhart, as Chairman, and Messrs. Saunders and Schutt. The Nominating and Governance committees responsibilities include, among other things (a) responsibility for establishing our corporate governance guidelines, (b) overseeing our board of directors operations and effectiveness and (c) identifying, screening and recommending qualified candidates to serve on our board of directors.
Compensation Committee Interlocks and Insider Participation
Our Compensation Committee consists of Mr. Lockhart, as Chairman, and Messrs. Schutt and Wright. None of these individuals has ever been an officer or employee of ours or any of our subsidiaries. None of our executive officers serves or have served as a member of the compensation committee or other board committee performing equivalent functions of any entity that has one or more executive officers serving as one of our directors or on our Compensation Committee. During 2011, Messrs. Lockhart and Wright served as the members of the Compensation Committee of CheckSmart and as the members of the CCFI Compensation Committee. Neither of Messrs. Lockhart and Wright was ever an officer or employee of either CheckSmart or CCFI or had any related person transactions with either CheckSmart or CCFI, and there were no relationships described under Item 407(e)(4)(iii) of Regulation S-K that existed during 2011.
Compensation Discussion and Analysis
This Compensation Discussion and Analysis discusses the material aspects of the compensation program that applied to our executive team for 2011. This discussion includes a description of the principles underlying our executive compensation policies and our most important executive compensation decisions for 2011, and provides our analysis of those policies and decisions. This Compensation Discussion and Analysis also gives perspective to the information we present in the compensation tables and related footnotes and narratives below. We have also provided certain information about how our executive compensation program has operated during 2012.
All stock amounts described in this Compensation Discussion and Analysis and the following compensation tables, footnotes and narratives reflect our May 2012 six-for-one stock split.
As more fully described below, the Compensation Committee currently makes all compensation decisions for CCFIs executive officers, including the following executive officers named in the 2011 Summary Compensation Table below, which officers we refer to as the named executive officers:
· William E. Saunders, Jr.Chief Executive Officer;
· Kyle F. HansonPresident;
· Chad M. StreffSenior Vice President, Chief Compliance Officer and Chief Technology Officer;
· Michael DurbinSenior Vice President, Chief Financial Officer and Treasurer; and
· Bridgette C. RomanSenior Vice President, General Counsel and Secretary.
Prior to the formation of CCFI on April 6, 2011, the Compensation Committee of CheckSmart Financial Holdings Corporation, which we refer to as the CheckSmart Committee, made the executive compensation decisions for the named executive officers. After CCFI was formed, CCFIs board of directors made executive compensation decisions for the named executive officers until July 29, 2011, when CCFIs board of directors formally appointed the Compensation Committee. The actual payment of compensation for 2011 was made by, and the payment of compensation for 2012 and beyond is expected to be made by, CheckSmart Financial LLC, an indirect subsidiary of CCFI.
Executive Summary
Company Background
We are a leading retailer of alternative financial services to unbanked and underbanked consumers through a network of retail storefronts across 14 states. We focus on providing a wide range of convenient consumer financial products and services to help customers manage their day-to-day financial needs, including short-term consumer loans, medium-term loans, title loans, check cashing, prepaid debit cards, money transfers, bill payments and money orders. Although the majority of our customers have banking relationships, we believe that our customers use our financial services because they are convenient, easy to understand, and in many instances, more affordable than available alternatives.
We strive to provide customers with unparalleled customer service in a safe, clean and welcoming environment. Our stores are located in highly visible, accessible locations that allow customers convenient and immediate access to our services. Our professional work environment combines high employee performance standards, incentive-based pay and a wide array of training programs to incentivize our employees to provide superior customer service. We believe that this approach has enabled us to build strong customer loyalty, putting us in a position to expand and continue to capitalize on our innovative product offerings.
On April 29, 2011, we acquired CCCS, an alternative financial services business with similar product offerings as CheckSmart. CheckSmart, together with CCCS and certain other parties, executed an agreement and plan of merger, under which CCFI, a newly formed holding company, acquired all outstanding shares of both CheckSmart and CCCS. CheckSmart is our predecessor for accounting purposes and for compensation disclosure purposes.
Key 2011 Compensation Decisions and Actions
The following is a summary of our key compensation decisions and actions for 2011:
· We established base salary levels consistent with increased performance expectations related to significant 2011 transaction activity, including, but not limited to, a merger, a bond offering and the filing of a Registration Statement on Form S-1;
· We paid special discretionary bonuses to our named executive officers to recognize their individual efforts for 2011, including helping close a merger and a bond offering;
· We paid each of our named executive officers a portion of a cash retention bonus opportunity that was earned based on personal achievement of qualitative performance goals with the aim of helping us retain these critical officers as our business continued to restructure and transform;
· Each of our named executive officers was awarded a portion of his or her target annual cash bonus opportunity based on the Compensation Committees subjective evaluation of company and individual 2011 performance, as well as our achievement of our EBITDA performance goal at 115.3% of target; and
· We did not award any equity incentive compensation to any of our named executive officers during 2011, but our outstanding equity awards were automatically adjusted as a result of our April 2011 merger transaction.
Executive Compensation Philosophy & Objectives
Beginning in July 2011, the Compensation Committee became responsible for establishing and administering our policies governing the compensation for our named executive officers. The Compensation Committee is composed entirely of non-employee directors.
The Compensation Committee believes that named executive officer compensation packages should incorporate an appropriate balance of fixed versus variable compensationas well as cash-based compensation versus share-based compensationand reward performance that is measured against established goals that correspond to our short-term and long-term business plan and objectives. CCFIs ongoing named executive officer compensation program is designed to achieve the following objectives:
· Attract and retain talented and experienced executives in the highly competitive and dynamic financial services industry;
· Motivate and reward executives whose knowledge, skills and performance are critical to our success;
· Align the interests of our executives and shareholders by motivating executives to increase shareholder value and rewarding executives when shareholder value increases, but doing so in a manner that does not encourage executives to take unreasonable risks that could threaten our viability;
· Provide a competitive compensation package that emphasizes pay for performance, and in which total compensation is primarily determined by company and individual results and the creation of shareholder value;
· Ensure fairness among the named executive officers by recognizing the relative contributions each executive makes to our success;
· Foster a shared commitment among executives by coordinating their company and individual goals; and
· Compensate our executives to manage our business to meet our long-range objectives.
The CheckSmart Committee was motivated by this same philosophy and these same objectives when making compensation decisions prior to CCFIs formation and the Compensation Committees assumption of its responsibilities.
Our Compensation Practices
The Compensation Committee meets outside the presence of all of our executive officers, including the named executive officers, to consider appropriate compensation for our Chief Executive Officer, whom we refer to as our CEO. The Compensation Committee analyzes annually our CEOs performance and determines his base salary, annual cash bonuses and long-term equity incentive awards based on its assessment of his performance. For compensation decisions regarding all other named executive officers, the Compensation Committee meets outside the presence of all executive officers except our CEO. The Compensation Committee engaged Frederic W. Cook & Co., Inc. (Cook) as a compensation consultant for approximately three weeks during August 2011, but discontinued this relationship in search of a consultant that would have a better fit with the Compensation Committee. Cooks brief engagement by the Compensation Committee had no material impact on our executive compensation either for 2011 or 2012. The Compensation Committee engaged Meridian Compensation Partners, LLC later in 2011, but their advice and assistance was limited to development of our 2012 compensation program, including 2012 equity grants.
Our CEO reviews annually each other named executive officers performance with the Compensation Committee and makes recommendations to the Compensation Committee with respect to the appropriate base salary, annual cash bonuses and the grants of long-term equity incentive awards for all executive officers, excluding himself. Based on these recommendations from our CEO and the other considerations discussed below, the Compensation Committee reviews and approves the annual compensation packages of our executive officers other than our CEO.
The annual performance reviews of our executive officers are considered by the Compensation Committee when making decisions on setting base salaries, cash bonuses and grants of long-term equity incentive awards. When making decisions on setting base salaries, cash bonuses and initial grants of long-term equity incentive awards for new executive officers, the Compensation Committee considers the importance of the position to us, the past salary history of the executive officer and the contributions to be made by the executive officer to us. For 2011 compensation decisions, the CheckSmart Committee and the Compensation Committee used this process and these same inputs for considering and setting compensation for our named executive officers, which resulted in the named executive officers earning the following distribution of fixed and variable compensation:
Named Executive Officer |
|
% Fixed Compensation |
|
% Variable Compensation |
|
Mr. Saunders |
|
19.7% |
|
80.3% |
|
Mr. Durbin |
|
50.8% |
|
49.2% |
|
Mr. Hanson |
|
30.6% |
|
69.4% |
|
Mr. Streff |
|
31.7% |
|
68.3% |
|
Ms. Roman |
|
35.4% |
|
64.6% |
|
The CheckSmart Committee used for the period prior to April 29, 2011, and the Compensation Committee has used since April 29, 2011, the following principles to guide specific decisions regarding executive compensation:
Provide compensation opportunities that are competitive in the marketplace.
To attract and retain executives with the ability and the experience necessary to lead us and deliver strong performance to our shareholders, we strive to provide a total compensation package that is competitive with total compensation provided by other private and public companies in our industry. In 2011, we did not specifically benchmark our compensation levels against a defined peer group. However, we do consider competitive market pay data to be relevant to our compensation decisions, as it allows our decision-makers to obtain a general understanding of current compensation practices. To this end, our management team gathered competitive market compensation information from the following sources:
· Data in proxy statements and other filings from public financial services companies that we believe are comparable to us based on revenue (ranging from $188 million to $1.3 billion) and market capitalization (ranging from $65 million to $1.6 billion). To provide context, our 2011 revenue was $306.9 million;
· Informal reviews of comparably sized public and private companies (measured generally by the revenue and market capitalization ranges described above); and
· Informal reviews of salaries posted on executive search websites.
We utilize this data not to base, justify or establish particular compensation levels, but rather to assess the overall competitiveness of our compensation packages. Our goal is to ensure that our executives are compensated at levels that are generally commensurate to what they could achieve at similarly situated companies in our industry and in comparable executive positions in other industries. For each executive officer, we consider this general understanding in concert with the following more important factors:
· Our business need for the executives skills;
· The contributions that the executive has made or we believe will make to our success;
· The transferability of the executives managerial skills to other potential employers;
· The relevance of the executives experience to other potential employers, particularly in the payments industry; and
· The readiness of the executive to assume a more significant role with another potential employer.
Require performance goals to be achieved in order for each named executive officers target incentive pay level to be earned.
Our named executive officer compensation program emphasizes pay for performance, which to us means paying performance-based compensation to reward the achievement of financial and strategic goals that enhance shareholder value. Performance is measured based on achievement of company and individual executive performance goals. The performance goals for the company are established by our board of directors, and individual performance measures are established by the Compensation Committee (and by our CEO in the case of each named executive officer other than the CEO) so that achievement of the goals is not assured for a given year. Achieving pay for performance therefore requires strong company performance and significant individual performance effort on the part of our executives.
Offer comprehensive benefits package to all full-time employees.
We provide a competitive benefits package to all full-time employees, which package includes health and welfare benefits, such as medical, dental, vision care, disability insurance, life insurance benefits, and potential participation in a 401(k) savings plan. These benefits are provided to support our employees basic health and welfare needs and to provide them with tax efficient ways to save cash compensation for retirement.
Provide fair and equitable compensation.
We provide a total compensation program that we believe is and will be perceived by both our executives and our shareholders as fair and equitable. In addition to using market pay information to develop a general understanding of current compensation practices and considering individual circumstances related to each executive, we also consider the pay of each named executive officer relative to each other named executive officer and relative to other members of our management team. We have designed the total compensation programs for our named executive officers to be consistent with those for our executive management team as a whole.
For 2011, in addition to the principles described above, the CheckSmart Committee and the Compensation Committee utilized performance-based retention bonuses to help retain our named executive officers during the ongoing transformation of our business model, which is described above under Prospectus SummaryGrowth Strategy. These retention bonuses were also tied to the named executive officers performance. We emphasized our pay for performance philosophy by measuring performance for these retention bonuses based on achievement of certain qualitative milestones by each named executive officer that were structured so that their achievement of the milestones was not assured for 2011. We also provided our named executive officers with annual cash bonus opportunities based on the Compensation Committees subjective evaluation of 2011 company and individual performance, including our achievement of our 2011 EBITDA target. Both the retention bonuses and the annual cash bonuses are described further below.
Analysis of 2011 Executive Compensation Decisions and Actions
For the fiscal year ended December 31, 2011, the total compensation opportunity for our named executive officers was comprised of the following components:
· base salary;
· one or more discretionary bonuses;
· performance-based retention bonuses and annual cash bonuses; and
· retirement & health savings contributions through the 401(k) plan and health savings accounts and executive perquisites.
2011 Base Salary
A clear objective of our executive compensation program has been, and is, to pay a base salary that is competitive (based on a general understanding of the data and survey elements discussed above) and geared toward retaining our named executive officers. The 2011 base salaries of the named executive officers were set in light of their employment agreements with us. Although these base salaries were mutually agreed upon by the named executive officers and by us, the base salary amounts were, in each case, primarily determined based on the CheckSmart Committees review of the named executive officers job responsibilities and historical individual contributions to the company, with particular scrutiny given to overall company financial performance during the prior year, the individuals performance during the prior year and the individuals expected goals and objectives for the current year.
Our named executive officers employment agreements set forth their 2011 base salaries. Mr. Durbin, however, did not enter into an employment agreement until January 1, 2011, the day after he became one of our employees. Mr. Durbin had previously served the company in a consultant capacity. His transition to full-time employment accounts for the sizeable increase in his base salary from 2010 to 2011. To determine 2011 base salaries, the CheckSmart Committee and board of directors reviewed the accomplishments and contributions made by the CEO. In addition, the CEO reviewed with the CheckSmart Committee the accomplishments and contributions made by each of the named executive officers under his direct and indirect supervision and provided his proposed base salary changes. After discussing the performance of each named executive officer and reviewing the recommendations made by the Executive Chairman and the CEO, and based upon the CheckSmart
Committees individual review and analysis of the competitive market compensation information described above as a check on its salary decisions, the CheckSmart Committee approved the following base salary changes (or new base salary for Mr. Durbin) for 2011:
Named Executive Officer |
|
2010 Base Salary |
|
2011 Base Salary |
|
% Increase |
|
Mr. Saunders |
|
$ 500,000 |
|
$ 600,000 |
|
20.0% |
|
Mr. Durbin |
|
$ 175,000 |
|
$ 375,000 |
|
114.3% |
|
Mr. Hanson |
|
$ 350,000 |
|
$ 450,000 |
|
28.5% |
|
Mr. Streff |
|
$ 330,000 |
|
$ 375,000 |
|
13.6% |
|
Ms. Roman |
|
$ 220,000 |
|
$ 275,000 |
|
25.0% |
|
We expect that the Compensation Committee will determine future base salaries for our named executive officers based on its review of job responsibilities and individual contributions during the prior year, with particular reference to the following considerations:
· overall company financial performance during the prior year;
· the individual performance of each named executive officer during the prior year;
· the individual goals and objectives for each named executive officer for the current year; and
· if relevant, compensation paid by a previous employer.
For 2012, the Compensation Committee established the following base salaries for the named executive officers:
Named Executive Officer |
|
2011 Base Salary |
|
2012 Base Salary |
|
% Increase |
|
Mr. Saunders |
|
$ 600,000 |
|
$ 650,000 |
|
8.3% |
|
Mr. Durbin |
|
$ 375,000 |
|
$ 375,000 |
|
0.0% |
|
Mr. Hanson |
|
$ 450,000 |
|
$ 450,000 |
|
0.0% |
|
Mr. Streff |
|
$ 375,000 |
|
$ 375,000 |
|
0.0% |
|
Ms. Roman |
|
$ 275,000 |
|
$ 275,000 |
|
0.0% |
|
Special Discretionary Bonuses
During 2011, the Compensation Committee awarded our named executive officers certain special discretionary bonuses to recognize their efforts in helping close the April 2011 merger in which we acquired CCCS and formed CCFI. These bonuses were also awarded in recognition of our named executive officers efforts in completing our 2011 bond offering. The Compensation Committee determined the specific amount of each named executive officers discretionary bonus based on its subjective determination of the officers contribution in connection with the merger and the bond offering. In addition, Ms. Roman received a discretionary bonus of $18,750 upon the commencement of her employment agreement in April 2011. The following special discretionary bonuses were awarded and paid in 2011:
Named Executive Officer |
|
Special Discretionary Bonus |
|
Mr. Saunders |
|
$ 2,105,623 |
|
Mr. Durbin |
|
$ 250,000 |
|
Mr. Hanson |
|
$ 1,002,370 |
|
Mr. Streff |
|
$ 776,039 |
|
Ms. Roman |
|
$ 394,379 |
|
Performance-Based Retention Bonuses
Our named executive officers were eligible to earn two different types of cash bonus compensation for 2011. We refer to the first type as a retention bonus. This award was provided by us to help retain our named executive officers as our business continued to restructure and transform and to incentivize the named executive officers to achieve pre-established and broad-based qualitative performance goals, which we refer to as their milestones. Under these awards, each of the named executive officers (except
for Ms. Roman) was eligible to receive his retention bonus opportunity, payable in four equal cash installments on each of March 31, June 30, September 30 and December 31, 2011, if he remained our employee on the relevant date and achieved his milestones, as determined prior to each payout. Ms. Roman, under her employment agreement, received a payment of $18,750 at the time of commencement of her employment agreement; she was eligible to receive her retention bonus opportunity, payable in three equal cash installments on each of June 30, September 30 and December 30, 2011, if she remained our employee on the relevant date and achieved her milestones, as determined prior to each payout. For 2011, the retention bonus opportunities were equal to the following amounts, which were negotiated at arms length between us and the named executive officers when entering into their employment agreements:
Named Executive Officer |
|
2011 Retention Bonus |
|
Mr. Saunders |
|
$ 400,000 |
|
Mr. Durbin |
|
$ 100,000 |
|
Mr. Hanson |
|
$ 100,000 |
|
Mr. Streff |
|
$ 100,000 |
|
Ms. Roman |
|
$ 56,250 |
|
The CheckSmart Committee communicated the applicable milestones to each named executive officers in his or her employment agreement. The milestones were specifically designed by the Compensation Committee to be broad based and qualitative achievements rather than narrow quantitative objectives. The following chart describes the milestones upon which the retention bonuses were based for each of the named executive officers for 2011:
Named Executive Officer |
|
2011 Milestones for Retention Bonuses |
Mr. Saunders |
|
· Leadership in new product development |
|
|
· Strategic relationship achievements |
|
|
· Public relations achievements |
|
|
· Acquisitions achievements |
|
|
· Debt refinancing achievements |
|
|
· Drive the company to meet its 2011 financial budget |
Mr. Durbin |
|
· Finance and accounting achievements |
|
|
· Leadership and management achievements |
|
|
· Structuring and strategy achievements |
|
|
· Collections achievements |
|
|
· External relations achievements |
Mr. Hanson |
|
· Departmental and employee oversight achievements |
|
|
· Leadership in refinancing activities |
|
|
· Acquisitions and integration achievements |
|
|
· New product achievements |
|
|
· Leadership in legacy markets |
|
|
· Legal compliance achievements |
|
|
· Drive the company to meet its 2011 financial budget |
Mr. Streff |
|
· Information technology achievements |
|
|
· Sarbanes-Oxley Act compliance achievements |
|
|
· Information technology compliance achievements |
Named Executive Officer |
|
2011 Milestones for Retention Bonuses |
Ms. Roman |
|
· Legal, compliance and corporate governance achievements |
|
|
· Record retention achievements |
|
|
· Initial public offering preparation achievements |
|
|
· Community relations achievements |
|
|
· Political Action Committee achievements |
|
|
· Personnel management achievements |
|
|
· Contract management process achievements |
|
|
· Executive compensation management achievements |
|
|
· New law compliance achievements |
To determine payouts for the 2011 performance-based retention bonuses, the Compensation Committee subjectively evaluated the degree to which each of the named executive officers had achieved his or her milestones as of each of March 31, June 30, September 30 and December 31, 2011 (or as of June 30, September 30 and December 30, 2011, in the case of Ms. Roman). As of each of these dates, the Compensation Committee subjectively determined whether the named executive officer had performed through that measurement date in a sufficient manner to earn the available portion of the performance-based retention bonus. Bonuses were earned by each named executive officer for the first, second and fourth quarters of 2011, as determined by the Compensation Committee, for achievement of their milestones. The amounts actually earned by the named executive officers for 2011 under their retention bonuses are included in the 2011 Summary Compensation Table below under the Non-Equity Incentive Plan Compensation column.
Named Executive Officer |
|
Actual 2011 Retention Bonus Payout |
|
Mr. Saunders |
|
$ 300,000 |
|
Mr. Durbin |
|
$ 75,000 |
|
Mr. Hanson |
|
$ 75,000 |
|
Mr. Streff |
|
$ 75,000 |
|
Ms. Roman |
|
$ 37,500 |
|
Annual Cash Bonuses
In late 2010, the CheckSmart Committee, in consultation with our board of directors, approved an annual cash bonus program for the CEO and the other named executive officers, which program was incorporated into each of the named executive officers employment agreements for 2011 based on arms length negotiations of target award amounts. This was our second type of cash bonus compensation for 2011. These annual cash bonus opportunities were intended to provide a financial incentive to executives at the senior vice president level and above to drive long-term growth and recurring profitability for the company. Payout of an annual cash bonus was determined on a subjective, discretionary basis by the Compensation Committee after 2011 based on its evaluation of 2011 performance, and required each named executive officer to be employed by us at the time of payout in 2012.
Under our 2011 annual cash bonus program, each of the named executive officers was assigned the following target annual cash bonus opportunity based on the terms of his or her applicable 2011 employment agreement:
Named Executive Officer |
|
Target 2011 Annual Cash Bonus |
|
2011 Annual Cash Bonus Payout |
|
Mr. Saunders |
|
$ 300,000 |
|
$ 300,000 |
|
Mr. Durbin |
|
$ 125,000 |
|
$ 50,000 |
|
Mr. Hanson |
|
$ 175,000 |
|
$ 200,000 |
|
Mr. Streff |
|
$ 125,000 |
|
$ 50,000 |
|
Ms. Roman |
|
$ 75,000 |
|
$ 43,750 |
|
Payout of the annual cash bonuses was determined by the Compensation Committees subjective determination of 2011 performance, including our achievement of an EBITDA performance target set
by the CheckSmart Committee for 2011 and each officers personal contributions to our business for 2011, as evaluated by the Compensation Committee. Fees paid by us pursuant to an advisory services agreement entered into by CheckSmart in 2006 were deducted in calculating net income for purposes of the EBITDA calculation. The EBITDA performance target was chosen by the CheckSmart Committee because it subjectively determined that this performance metric was an appropriate measure of overall corporate performance for a company of our size and in a growth mode similar to ours during 2011. For 2011, the performance target was $75.8 million. Actual performance against the target was $86.8 million, which resulted in our achievement of this goal. The Compensation Committee also determined to pay Mr. Hanson an additional $25,000 above his target annual bonus opportunity as a result of its evaluation that Mr. Hanson had taken on a larger amount of responsibility in his position for 2011 and had performed above expectation for 2011, and due to his personal contribution to the success of completing the April 2011 merger.
The Compensation Committee reviewed and approved the final annual cash bonus payouts in February 2012.
The annual cash bonuses paid to the named executive officers for 2011 are set forth below in the 2011 Summary Compensation Table under the Bonus column. We believe that the annual cash bonuses actually paid to the named executive officers for 2011 achieved our executive compensation objectives, compare favorably to the cash bonuses paid by other financial services companies and were consistent with our emphasis on pay for performance.
For 2012, the Compensation Committee has developed a new annual cash incentive program to replace the quarterly retention bonuses and the 2011 annual cash bonus program described above, which new program is briefly discussed further below.
Long-Term Equity Incentive Compensation
Our long-term equity incentive compensation has typically been in the form of either stock options to acquire our common shares or stock appreciation rights. The value of both the stock options and stock appreciation rights awarded are dependent upon the value of our common shares. The Compensation Committee and management believe that, given our stage of development, however, stock options and restricted stock units are the appropriate primary vehicle to provide long-term incentive compensation to the named executive officers. Other types of long-term equity incentive awards may be considered in the future as our business strategy evolves.
In past years, long-term equity incentive awards have been periodically awarded to executives, including the named executive officers, as part of their total compensation package. The CheckSmart Committee historically considered these awards to be consistent with our pay for performance principles and a useful method of aligning the interests of the executives with the interests of our shareholders. Except for one grant of stock options to Mr. Durbin on December 31, 2010, we did not grant long-term equity incentive awards between December 31, 2008 and February 14, 2012 due to our primary focus on retention efforts and short-term business stability.
In November 2011, the Compensation Committee recommended, and in February 2012, the board of directors approved the following equity awards under our 2011 Management Equity Incentive Plan, which we refer to as the 2011 Plan, for our named executive officers (giving effect to our May 2012 six-for-one stock split): Mr. Saunders, stock options for 86,454 shares and 14,400 restricted stock units; Mr. Durbin, stock options for 31,962 shares and 5,346 restricted stock units; Mr. Hanson, stock options for 60,162 shares and 10,038 restricted stock units; Mr. Streff, stock options for 31,962 shares and 5,346 restricted stock units; and Ms. Roman, stock options for 35,070 shares. These stock options were granted with an exercise price of $19.95 per share and generally vest ratably in equal one-third increments over the first three years following the grant date, or upon the officers termination without cause or for good reason in connection with a change in control (as such terms are defined in the applicable option award agreement). These restricted stock units will be settled in shares and generally vest in three equal annual installments beginning on February 14, 2013 if the officer remains
continuously employed by us or one of our subsidiaries through each such vesting date.
In April 2012, our board of directors determined that the exercise price of $19.95 per share for the February 2012 grants of stock options to our named executive officers had been established at a level that was significantly greater than the fair market value of our common shares as of the date of grant, based on the independent valuation that was performed by a third-party valuation firm. Our board of directors and the Compensation Committee approved a repricing of the February 2012 grants of stock options contingent on our consummation of an initial public offering. This contingency was not satisfied and the repricing did not occur.
Grants of future equity awards will be made based upon the Compensation Committees review and recommendation to the board of directors of the amount of each award to be granted to each named executive officer and the board of directors approval of each award. Long-term equity incentive awards have historically been made pursuant to our 2006 Management Equity Incentive Plan, or 2006 Plan, which was amended and restated as the 2011 Plan. As of June 1, 2012, giving effect to our May 2012 six-for-one stock split, 2,941,746 shares of common stock had been authorized and reserved for issuance under the 2011 Plan. As of June 1, 2012, also giving effect to our May 2012 six-for-one stock split, awards covering 1,612,128 shares had been granted under the 2011 Plan and 1,329,618 shares of common stock were available for award purposes.
Stock options are expected to provide the named executive officers with the right to purchase our common shares at a fixed exercise price under the 2011 Plan. Restricted stock units are expected to provide the named executive officers with the right to receive common shares after the restricted stock units vest over time. Except as described above regarding the February 2012 awards, the exercise price for each stock option and the base price for each stock appreciation right that we have granted was based on the fair market value of our common shares on or near the grant date as determined by our board of directors in consultation with a valuation consultant.
The determination of the number of stock options or other awards to be granted to a named executive officer in the future is expected to be made based on performance relative to the individuals contribution to financial and strategic objectives, the individuals base salary and target bonus amount and the market pay levels for the named executive officer.
Generally, no consideration is given to a named executive officers share holdings or previous stock options in determining the number of stock options or other awards to be granted to him or her for a particular year. The Compensation Committee believes that the named executive officers should be fairly compensated each year relative to market pay levels, as described above, and relative to our other executive officers. Moreover, we believe that a long-term incentive compensation program will further our significant emphasis on pay for performance compensation because executives will realize increased value from their equity awards when they achieve goals that increase shareholder value.
Other Benefits
Retirement savings opportunities
All employees, including our named executive officers and subject to certain age and length-of-service requirements, may participate in our standard tax-qualified defined contribution (401(k)) plan, which we refer to as our 401(k) Plan. Generally, each employee may make pre-tax contributions of up to 100% of their eligible earnings up to the current Internal Revenue Service annual pre-tax contribution limits. We provide the 401(k) Plan to help employees save some amount of their cash compensation for retirement in a tax efficient manner. We also make matching contributions equal to 100% of the first 3%, and 50% of the next 2%, of the eligible earnings that an employee contributes to the 401(k) Plan. We provide this matching contribution because it is a customary compensation feature that we must offer to compete for employees.
Health and welfare benefits
All full-time employees, including our named executive officers, may participate in our health and welfare benefit programs, including medical, dental and vision care coverage, health savings accounts, disability insurance and life insurance, which we offer as a customary practice to help them provide for their basic life and health needs.
Certain executive perquisites
For 2011, we provided our named executive officers with certain executive perquisites and personal benefits, which we use to attract and retain our executive talent. These perquisites and personal benefits included a $11,400 automobile allowance for Messrs. Saunders, Hanson, Streff and Durbin, employer matching contributions to a health savings account for Messrs. Saunders, Hanson and Durbin and Ms. Roman, rollover of accrued vacation value to a health savings account for Messrs. Saunders, Hanson and Streff, personal use of company-owned or company-leased aircraft for Messrs. Saunders and Hanson, personal trainer expenses for Messrs. Saunders, Hanson and Streff, and company-paid life insurance premiums for the benefit of Mr. Hanson. For more information about these perquisites and personal benefits, see the 2011 Summary Compensation Table and its related footnotes below.
Under the terms of Mr. Saunderss 2011 employment agreement amendment, we have agreed to provide Mr. Saunders with up to $25,000 of direct operating cost for personal use of company-owned or company-leased aircraft, and Mr. Saunders may designate additional passengers as seating permits on company-owned or company-leased aircraft, all as in accordance with the companys applicable policy. During 2011, the value of Mr. Saunders usage, and the value of Mr. Hansons usage (based on Mr. Saunders designation), was $10,254 and $1,479, respectively.
In 2011, we adopted a company policy applicable to business and personal use of company-owned, leased or chartered aircraft, which we refer to as company aircraft for purposes of describing this policy. Under this policy, Mr. Saunders use of company aircraft is subject to the terms of any
employment agreement with us or, if outside the parameters of such employment agreement, approval by the Chairman of the board. Use of company aircraft by the other named executive officers is subject to approval by Mr. Saunders and is subject to the terms of the policy. Company aircraft or personal aircraft may be used by the named executive officers (except Mr. Saunders) for commuting approved by Mr. Saunders and by Mr. Saunders, subject to the terms of any employment agreement he has entered into with us and, if outside of those parameters, approval by the Chairman of our board of directors. Under the policy, spousal or significant other travel may be permitted on company aircraft, in which case Mr. Saunders or the board may approve reimbursement of the spouse or significant others travel expenses and may approve a tax gross-up for the respective named executive officer with respect to any compensation resulting from such travel.
Share Ownership Guidelines
Share ownership guidelines have not been implemented by the Compensation Committee for our named executive officers. We have chosen not to require pre-specified levels of share ownership given the limited market for our shares. We will continue to periodically review best practices and re-evaluate our position with respect to share ownership guidelines.
Tax Deductibility of Executive Compensation
Limitations on deductibility of compensation may occur under Section 162(m) of the Internal Revenue Code of 1986, as amended, which generally limits the tax deductibility of compensation paid by a public company to its CEO and certain other highly compensated executive officers to $1 million in the year the compensation becomes taxable to the executive officer. There is an exception to the limit on deductibility for performance-based compensation that meets certain requirements. The Compensation Committee generally considers the deductibility of compensation when making its compensation decisions.
2012 Executive Compensation, Benefit and Severance Program
At the end of 2011, our employment agreements with Messrs. Saunders, Hanson and Streff and Ms. Roman expired pursuant to their terms. Our employment agreement with Mr. Durbin runs through December 31, 2013. Instead of entering into new employment agreements or renewing the employment agreements with these named executive officers, our board adopted our 2012 Executive Compensation, Benefit and Severance Program, which we refer to as our 2012 Program. The 2012 Program was revised in April 2012 to make conforming changes and changes to ensure that it complies with Section 409A of the Internal Revenue Code. The 2012 Program establishes the primary elements of our ongoing executive compensation arrangements with these named executive officers, including base salary levels, annual cash incentive opportunities, perquisites and other personal benefits, health and welfare program participation, retirement program participation and severance arrangements for a number of different termination scenarios, including after a change in control. The 2012 Program first entered into effect for Messrs. Saunders, Hanson and Streff and Ms. Roman on January 1, 2012. We expect that Mr. Durbins compensation arrangement with us will also be governed by this program after the termination of his current employment agreement.
The 2012 Program provides that Mr. Saunders will determine the general duties of the other named executive officers and provides that the named executive officers annual base salaries will be determined by the Compensation Committee. Each named executive officer is eligible to participate in a performance-based annual bonus at the following percentage of his or her respective base salary: Mr. Saunders, 100%; Mr. Durbin, 60%; Mr. Hanson, 61%; Mr. Streff, 60%; and Ms. Roman, 55%. The performance-based annual bonus will be earned based on the relative achievement of the goals and objectives established by, for Mr. Saunders, the Chairman of the Compensation Committee and, for the other named executive officers, Mr. Saunders; it is not intended that the Compensation Committee will take an active role in establishing these goals and objectives. Each named executive officer is entitled to business and professional expense reimbursement and perquisites offered by us, which perquisites may
include eligibility under our aircraft policy, personal training expenses, health savings account payments and an automobile allowance. The named executive officers also participate under the 2012 Program in our benefit plans, including our 401(k) plan, and Mr. Saunders receives payment for certain life insurance premiums. The 2012 Program also sets forth the procedure by which an officer may be terminated, and provides for certain payments and benefits upon termination described immediately below.
Termination by us without cause, or resignation by named executive officer for good reason. The 2012 Program provides that if we terminate a named executive officers employment without cause, or if a named executive officer resigns for good reason (defined below), the named executive officer is entitled to receive the following payments and continued benefits for the length of the base salary payment period:
· Mr. Saunders: two times his annual base salary payable over a two-year period;
· Mr. Hanson: one and one-half times his annual base salary payable over a one-and-one-half-year period; and
· Messrs. Streff and Durbin and Ms. Roman: one times his or her base salary payable over a one-year period.
In addition, upon any such termination, each named executive officer is entitled to receive payments related to accrued and unpaid base salary and vacation pay through the termination date and any annual bonus that has been earned for the year in which the termination occurs. All of the above payments and continued benefits are subject to the execution by the named executive officer of a non-competition agreement and general release of claims with us.
Cause is generally defined under the 2012 Program as:
· material failure to perform the duties or responsibilities reasonably assigned to the named executive officer (subject to a 20-day cure period) or the performance of such duties in a grossly negligent manner or the commission of an act of willful misconduct;
· failure or refusal to comply, on a timely basis, with any lawful direction or instruction of our board of directors or the CEO;
· the commission of an act of fraud, embezzlement, misappropriation of funds, breach of fiduciary duty or an act of dishonesty against the company;
· the conviction of the named executive officer, or the entry of a plea of nolo contendere or guilty by the named executive officer, to a felony; or
· habitual drug addiction or intoxication.
Good reason generally arises under the 2012 Program upon a reduction in the named executive officers base salary, the non-timely payment of the officers base salary or annual bonus or benefits, the companys breach of the 2012 Programs provisions, or a material reduction in the officers duties or responsibilities, in each case subject to a 20-day cure period.
Termination by us without cause, or resignation by named executive officer for good reason, coupled with a change in control. Each named executive officer will receive the following enhanced severance payments and continued benefits for the length of the base salary payment period in the event that he or she is terminated without cause or resigns within 180 days before or two years after a change in control:
· Messrs. Saunders and Hanson: three times his annual base salary payable over a three-year period; and
· Messrs. Streff and Durbin and Ms. Roman: two times his or her base salary payable over a two-year period.
In addition, upon any such termination, each named executive officer is entitled to receive payments related to accrued and unpaid base salary and vacation pay through the termination date and a pro rata annual bonus for the year in which the termination occurs. All of the above payments and
continued benefits are subject to the execution by the named executive officer of a non-competition agreement and general release of claims with us.
Change in control is generally defined under the 2012 Program as:
· the sale, lease or transfer of all or substantially all of our assets to other than our current shareholders, their affiliates or our management; or
· the acquisition by any person or group of 50% or more of our total voting stock (or of the total voting stock of any parent of the company) unless in connection with an initial public offering.
Termination by us for cause or resignation by named executive officer for other than good reason. We are not obligated to make any cash payment or provide any continued benefits to our named executive officers if their employment was terminated by us for cause or by the named executive officer without good reason, other than the payment of accrued and unpaid base salary and vacation pay through the termination date.
Termination upon death. In the event of termination due to death, we are obligated to pay the named executive officers accrued and unpaid base salary, vacation pay and annual bonus through the termination date and pay premiums at the employee rate for continued health and welfare benefits to the executives spouse and dependents for twelve months.
Termination upon disability. In the event of termination due to disability, we are obligated to pay the named executive officers accrued and unpaid base salary and vacation pay through the termination date, and benefits, pay the annual bonus otherwise earned for the year in which the termination occurred and pay his or her annual base salary and premiums at the employee rate for continued health and welfare benefits until the earlier of (1) six months following termination or (2) the date on which the named executive officer becomes entitled to long-term disability benefits under our applicable plan or program.
Compensation-Related Risk Analysis
During the fourth quarter of 2011, a team consisting of members of our management, including members from our internal legal, accounting, finance and human resources departments, along with our external legal counsel, engaged in a subjective review of our compensation policies and practices that apply to all of our employees. This review was designed to evaluate, consider and analyze the extent to which, if any, our compensation policies and practices might create risks for the company. This review also was focused on the variable and incentive elements of our executive compensation programs, as well as any policies and practices that could mitigate or balance any risks introduced by such elements. These team members are regularly exposed to information about our policies and practices as they relate to company-wide compensation programs and the potential creation of any risks that are likely to have a material adverse impact on the company. We did not find that any of our compensation policies and practices for our
employees create any risks that are reasonably likely to have a material adverse effect on the company. The results of the review were reviewed and independently considered by the Compensation Committee.
Summary of Compensation
The following table sets forth certain information with respect to compensation paid for the year ended December 31, 2011 by us (or our indirect subsidiary CheckSmart Financial LLC) to our CEO, our CFO and our three other most-highly compensated executive officers.
2011 Summary Compensation Table
Name and Principal Position |
|
Year |
|
Salary |
|
Bonus |
|
Stock |
|
Option |
|
Non- |
|
Change in |
|
All Other |
|
Total |
|
William E. Saunders, Jr., |
|
2011 |
|
622,727 |
|
2,405,623 |
|
|
|
|
|
300,000 |
|
|
|
39,907 |
|
3,368,257 |
|
Chief Executive Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael Durbin, |
|
2011 |
|
375,000 |
|
300,000 |
|
|
|
|
|
75,000 |
|
|
|
12,240 |
|
762,240 |
|
Senior Vice President, Chief Financial Officer and Treasurer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kyle F. Hanson, |
|
2011 |
|
467,045 |
|
1,202,370 |
|
|
|
|
|
75,000 |
|
|
|
96,911 |
|
1,841,326 |
|
President |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chad M. Streff, |
|
2011 |
|
389,205 |
|
826,039 |
|
|
|
|
|
75,000 |
|
|
|
28,903 |
|
1,319,147 |
|
Senior Vice President, Chief Compliance Officer and Chief Technology Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bridgette C. Roman, |
|
2011 |
|
261,667 |
|
456,879 |
|
|
|
|
|
37,500 |
|
|
|
9,133 |
|
765,179 |
|
Senior Vice President, General Counsel and Secretary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The amounts reported in this column include $22,727, $17,045, $14,205 and $417 paid in lieu of accrued vacation to Messrs. Saunders, Hanson and Streff and Ms. Roman, respectively.
(2) The amounts reported in this column represent the special discretionary bonuses, Ms. Romans employment agreement bonus and the annual cash bonuses paid to our named executive officers for 2011. For more information about the special discretionary bonuses, see Compensation Discussion and AnalysisAnalysis of 2011 Executive Compensation Decisions and ActionsSpecial Discretionary Bonuses. For more information about the bonus paid to Ms. Roman at the time of commencement of her employment agreement, see Compensation Discussion and AnalysisAnalysis of 2011 Executive Compensation Decisions and ActionsPerformance-Based Retention Bonuses. For more information about the annual cash bonuses paid to the named executive officers, see Compensation Discussion and AnalysisAnalysis of 2011 Executive Compensation Decisions and ActionsAnnual Cash Bonuses.
(3) The amount reported in this column represents the retention bonus earned by each named executive officer for 2011. For more information about the retention bonuses, see Compensation Discussion and AnalysisAnalysis of 2011 Executive Compensation Decisions and ActionsPerformance-Based Retention Bonuses.
(4) The amounts reported in this column include: for Mr. Saunders, an automobile allowance, an employer matching contribution to the 401(k) Plan, an employer matching contribution and rollover of accrued vacation value to a health savings account, personal trainer expenses and personal aircraft usage; for Mr. Hanson, an automobile allowance, an employer matching contribution to the 401(k) Plan, an employer matching contribution and rollover of accrued vacation value to a health savings account, personal trainer expenses, personal aircraft usage and $65,779 of company-paid life insurance premium expenses; for Mr. Streff, an automobile allowance, an employer matching contribution to the 401(k) Plan, rollover of accrued vacation value to a health savings account and personal trainer expenses; for Mr. Durbin, an automobile allowance and employer matching contribution to a health savings account; and for Ms. Roman, an employer matching contribution to the 401(k) Plan and an employer matching contribution to a health savings account. None of the amounts reported in this column, if not a perquisite or personal benefit, exceeds $10,000 or, if a perquisite or personal benefit, exceeds the greater of $25,000 or 10% of the total amount of perquisites and personal benefits for the officer, except as provided in this footnote.
2011 Grants of Plan-Based Awards Table
|
|
Estimated Possible Payouts Under |
| ||||
Name |
|
Threshold |
|
Target |
|
Maximum |
|
Mr. Saunders |
|
|
|
400,000 |
(1) |
|
|
Mr. Durbin |
|
|
|
100,000 |
(1) |
|
|
Mr. Hanson |
|
|
|
100,000 |
(1) |
|
|
Mr. Streff |
|
|
|
100,000 |
(1) |
|
|
Ms. Roman |
|
|
|
56,250 |
(1) |
|
|
(1) These amounts represents the performance-based retention bonus opportunities for our named executive officers for 2011. The CheckSmart Committee and Compensation Committee had discretion under this award to reduce payouts to zero based on the named executive officers achievement of their milestones. As a result, there was no threshold payout level for this award, and the target level served as the maximum payout level for this award. For more information about the performance-based incentive awards, see Compensation Discussion and AnalysisAnalysis of 2011 Executive Compensation Decisions and ActionsPerformance-Based Retention Bonuses.
As discussed above under Compensation Discussion and AnalysisAnalysis of 2011 Executive Compensation Decisions and ActionsLong-Term Equity Incentive Compensation, we did not make any new equity awards to our named executive officers in 2011. Pursuant to the April 2011 merger agreement, however, the named executive officers outstanding CheckSmart Financial Holdings Corporation stock options and stock appreciation rights were automatically adjusted pursuant to the terms of the 2006 Plan as a result of the merger. As a result of this adjustment, these awards now relate to CCFI shares, the number of shares to which most of these awards relate has been adjusted, and the exercise prices for most of these options and the base prices for most of these stock appreciation rights have been modified, in each case to reflect the merger (and our May 2012 six-for-one stock split). There was, however, no incremental fair value, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, for the adjusted equity awards. As a result, and pursuant to Instruction 7 to Regulation S-K Item 402(d), the adjusted equity awards are not disclosed in the 2011 Grants of Plan-Based Awards Table because the adjustments occurred through the pre-existing mechanisms in the 2006 Plan and the awards themselves. For more information on these awards, as adjusted, please see the Outstanding Equity Awards at 2011 Fiscal Year-End Table below.
Employment Agreements
For 2011, we were a party to management employment agreements with each of our named executive officers. Each of these agreements provided for certain severance payments. These arrangements were designed to help ensure the retention of our senior executive team. The material
details of each named executive officers employment agreement in effect as of December 30, 2011 are described below:
Named Executive |
|
Expiration |
|
2011 Base |
|
2011 Annual |
|
2011 Performance- |
|
2011 Employment |
|
Severance |
| ||||
Mr. Saunders |
|
December 31, 2011 |
|
$ |
600,000 |
|
$ |
300,000 |
|
$ |
400,000 |
|
N/A |
|
Yes |
| |
Mr. Durbin |
|
December 31, 2013 |
|
$ |
375,000 |
|
$ |
125,000 |
|
$ |
100,000 |
|
N/A |
|
Yes |
| |
Mr. Hanson |
|
December 31, 2011 |
|
$ |
450,000 |
|
$ |
175,000 |
|
$ |
100,000 |
|
N/A |
|
Yes |
| |
Mr. Streff |
|
December 31, 2011 |
|
$ |
375,000 |
|
$ |
125,000 |
|
$ |
100,000 |
|
N/A |
|
Yes |
| |
Ms. Roman |
|
December 31, 2011 |
|
$ |
275,000 |
|
$ |
75,000 |
|
$ |
56,250 |
|
$ |
18,750 |
|
Yes |
|
(1) Each of these agreements, except with respect to Mr. Durbin, terminated on December 31, 2011. For 2012 and beyond, Messrs. Saunders, Hanson and Streff and Ms. Roman are covered by our 2012 Executive Compensation, Benefit and Severance Program.
(2) These amounts represent the performance-based retention bonus opportunities for our named executive officers for 2011.
(3) This amount represents a bonus paid to Ms. Roman on the commencement of her 2011 employment agreement.
At the end of 2011, the employment agreements with Messrs. Saunders, Hanson and Streff and Ms. Roman expired pursuant to their terms. We did not enter into new employment agreements with these named executive officers, but instead implemented our 2012 Executive Compensation, Benefit and Severance Program, which was designed to establish the terms and conditions for our named executive officers compensatory arrangements with us (including severance and indemnification arrangements) without the need for individual bilateral employment agreements.
Mr. Saunders
In 2006, we entered into an employment agreement with Mr. Saunders, which employment agreement was amended in 2008 and 2009, and further amended on January 1, 2011. The employment agreement expired on December 31, 2011. Mr. Saunderss employment agreement specified his duties and responsibilities, his base salary for 2011 and his annual cash bonus target for 2011. The employment agreement also described Mr. Saunderss other compensation arrangements, including his participation in company benefit plans and his entitlement to equity awards and a performance-based retention bonus opportunity in 2011 based on his achievement of individual milestones. Mr. Saunders was also entitled to an annual perquisite of $25,000 in personal use of company-owned or company-leased aircraft (including the ability to designate additional passengers as seating permits on company-owned or company-leased aircraft), plus other perquisites offered by us. In the event that Mr. Saunderss employment with us had been terminated, he would have been entitled under the employment agreement to certain benefits and payments. Those benefits and payments are further described below under 2011 Potential Payments Upon Termination or Change in Control.
Messrs. Hanson and Streff and Ms. Roman
In 2006, we entered into employment agreements with each of Messrs. Hanson and Streff, which employment agreements were amended in 2008 and further amended on January 1, 2011. We also entered into a new employment agreement with Ms. Roman on April 1, 2011 to replace her prior agreement, which we entered into with her in 2008. The employment agreements for Messrs. Hanson and Streff and Ms. Roman expired on December 31, 2011, but were in effect during 2011. The employment agreements specify each executives duties and responsibilities, his or her base salary for 2011 and subsequent years and his or her annual cash bonus target for 2011 and subsequent years. The
employment agreements also describe each executives other compensation arrangements, including his or her participation in company benefit plans and his or her entitlement to equity awards and a performance-based retention bonus opportunity in 2011 and subsequent years based on his or her achievement of individual milestones. Each executive was also entitled to perquisites offered by us. In the event that any of the executives employment with us had been terminated, he or she would have been entitled under his or her employment agreement to certain benefits and payments. These benefits and payments are further described below under 2011 Potential Payments Upon Termination or Change in Control.
Mr. Durbin
We entered into an employment agreement with Mr. Durbin on January 1, 2011. The employment agreement currently runs through December 31, 2013, subject to automatic one-year renewals absent 90 days prior written notice of non-extension provided by the board of directors or by Mr. Durbin. The terms of Mr. Durbins employment agreement are otherwise substantially similar to those described above for Messrs. Hanson and Streff and Ms. Roman.
Outstanding Equity Awards at 2011 Fiscal Year-End Table
|
|
Option Awards(1) |
| ||||||||||
Name |
|
Grant Date |
|
Number of |
|
Number of |
|
Equity |
|
Option |
|
Option |
|
Mr. Saunders |
|
12/31/2008 |
|
175,008 |
|
|
|
|
|
6.00 |
|
12/31/2018 |
|
|
|
12/31/2008 |
|
|
|
|
|
175,008 |
|
6.00 |
|
12/31/2018 |
|
Mr. Durbin |
|
12/31/2010 |
|
|
|
|
|
252,600 |
|
8.27 |
|
4/30/2016 |
|
Mr. Hanson |
|
5/9/2006 |
|
68,310 |
|
|
|
13,662 |
|
8.81 |
|
5/9/2016 |
|
|
|
6/4/2007 |
|
20,484 |
|
|
|
|
|
10.53 |
|
6/4/2017 |
|
|
|
12/31/2008 |
|
75,000 |
|
|
|
|
|
6.00 |
|
12/31/2018 |
|
|
|
12/31/2008 |
|
|
|
|
|
75,000 |
|
6.00 |
|
12/31/2018 |
|
Mr. Streff |
|
5/9/2006 |
|
136,608 |
|
|
|
27,342 |
|
8.81 |
|
5/9/2016 |
|
|
|
12/31/2008 |
|
64,500 |
|
|
|
|
|
6.00 |
|
12/31/2018 |
|
|
|
12/31/2008 |
|
|
|
|
|
64,500 |
|
6.00 |
|
12/31/2018 |
|
Ms. Roman |
|
12/31/2008 |
|
|
|
|
|
12,000 |
|
6.00 |
|
12/31/2018 |
|
(1) As discussed above in the narrative to the 2011 Grants of Plan-Based Awards Table, these stock option and stock appreciation rights have been automatically adjusted pursuant to the terms of the 2006 Plan as a result of the April 2011 merger. As a result of this adjustment, these awards now relate to CCFI shares, the number of shares to which most of these awards relate has been adjusted, and the exercise prices for most of these options and the base prices for most of these stock appreciation rights have been modified, in each case to reflect the occurrence of the merger (and our May 2012 six-for-one stock split).
(2) These amounts represent performance-based stock options or stock appreciation rights that will vest if Diamond Castle recoups its investment in an initial public offering or upon a change in control.
2006 Management Equity Incentive Plan and 2011 Management Equity Incentive Plan
In 2006, we adopted the 2006 Plan as our omnibus equity plan (we also amended the 2006 Plan in July 2007). Under the 2006 Plan, we were permitted to grant stock options, stock appreciation rights, restricted shares and restricted stock units (including dividend equivalent rights in conjunction with any award) to employees and consultants to help attract and retain key personnel and provide incentives to participants. The 2006 Plan was administered by our board of directors. During 2011, we did not grant any equity awards. As described in Compensation Discussion and Analysis above, the 2006 Plan was amended and restated as our 2011 Plan, which we expect will be utilized in substantially the same manner as the 2006 Plan.
2011 Option Exercises and Shares Vested
None of our named executive officers exercised any stock options and none of our named executive officers had restricted shares that vested during 2011.
2011 Pension Benefits
We do not maintain any defined benefit plans or other plans with specified retirement benefits in which our named executive officers participate.
2011 Nonqualified Deferred Compensation
We do not maintain any nonqualified deferred compensation plans in which our named executive officers participate.
2011 Potential Payments Upon Termination or Change in Control
During 2011, we were a party to certain arrangements effective for 2011 that required us to provide compensation and other benefits to the named executive officers in the event of a termination of their employment or a change in control of the company. The following paragraphs describe the potential payments and benefits payable upon such termination or change in control for each named executive officer at December 30, 2011. Although our employment agreements with Messrs. Saunders, Hanson and Streff and Ms. Roman expired as of December 31, 2011, each of these named executive officers is eligible for payments in the event of a termination of their employment or a change in control of the company under the 2012 Executive Compensation, Benefit and Severance Program.
Termination by us without cause, or termination by named executive officer for good reason
We were a party to employment agreements with our named executive officers during 2011. These agreements with Messrs. Saunders, Hanson and Streff and Ms. Roman expired on December 31, 2011, but the agreement with Mr. Durbin remains in effect through December 31, 2013. Our management employment agreements provided that if we terminated a named executive officers employment without cause, or if a named executive officer terminated his or her employment for good reason, the named executive officer was entitled to receive the following payments and benefits (less applicable withholding taxes):
· with respect to Mr. Saunders, one year of his annual base salary following the date of termination, plus his annual cash bonus that he otherwise would have earned for the year in which the termination occurred;
· with respect to Messrs. Durbin, Hanson and Streff and Ms. Roman, his or her annual base salary for the longer of (1) the remainder of the year in which the termination occurs or (2) 90 days following the date of termination, plus any annual cash bonus that he or she otherwise would have earned for the year in which the termination occurred; and
· any accrued but unpaid portion, as of the date of termination, of his or her performance-based retention bonus opportunity.
In addition, upon any such termination, all named executive officers were entitled to receive payments related to accrued and unpaid expenses, base salary and vacation pay, benefits and a continuation of all health and welfare benefits described above under Compensation Discussion and Analysis for the period of time they were receiving base salary continuation payments.
These payments and benefits were subject to the execution of a general release by the named executive officers and were subject to covenants not to compete with us, covenants not to solicit our employees and covenants not to solicit our customers or suppliers, in each case for a period of up to one year following termination and, in the case of Ms. Roman, subject to certain exceptions based on Ohio law applicable to attorneys.
Cause was generally defined under the management employment agreements to include:
· the conviction or entry of a plea of nolo contendere or guilty to a felony;
· a material violation of such named executive officers employment agreement that is not cured within a 20-day cure period following notice of such violation;
· the commission of an act of fraud, embezzlement, misappropriation, breach of fiduciary duty or an act of dishonesty against the company;
· the failure to perform such named executive officers duties or the performance of such duties in a grossly negligent manner or the commission of an act of willful misconduct; or
· habitual drug addiction or intoxication.
Good reason was generally defined under the management employment agreements to include a reduction in the executives base salary or non-timely payment of base salary or an earned annual cash incentive award, a material reduction in the executives responsibilities, in each case subject to a cure period, or the requirement that the executive relocate his or her principal place of employment more than 20 miles. It was also defined in the employment agreements for Messrs. Durbin and Saunders and Ms. Roman as including a violation of the employment agreement by us, subject to a cure period.
Termination by us for cause or by named executive officer for other than good reason, death or disability
At December 30, 2011 we were not obligated to make any cash payment or provide any benefit to our named executive officers if their employment was terminated by us for cause or by the named executive officer without good reason, other than the payment of accrued and unpaid base salary, vacation pay, annual cash bonus, expenses and benefits.
Termination upon death
In the event of termination due to death, at December 30, 2011 we were obligated to pay the named executive officers accrued and unpaid expenses, base salary, vacation pay, annual cash bonus and benefits, pay a pro-rata portion of the executives annual cash bonus for the year in which the termination occurred, pay the accrued and unpaid performance-based retention bonus, and provide continued health and welfare benefits to the executives spouse and dependents for twelve months.
Termination upon disability
In the event of termination due to disability, at December 30, 2011 we were obligated to pay the named executive officers accrued and unpaid expenses, base salary, vacation pay, and benefits, pay the annual cash bonus otherwise earned for the year in which the termination occurred, pay his or her
annual base salary and provide continued health and welfare benefits until the later (in the case of Mr. Saunders) and earlier (in the case of the other named executive officers) of (1) six months or (2) the date on which the named executive officer becomes entitled to long-term disability benefits under the applicable plan or program, and pay the accrued and unpaid performance-based retention bonus.
Additional arrangements
Under his employment agreement, Mr. Durbin was and remains entitled to receive a one-time change in control bonus of $500,000 if (1) we experience a change in control, (2) Mr. Durbin remains employed with us through the date of the change in control and (3) Diamond Castle recoups its investment in the company. Additionally, under the terms of the unvested equity awards described above in the Outstanding Equity Awards at 2011 Fiscal Year-End Table, these performance-based stock option or stock appreciation rights will vest if Diamond Castle recoups its investment at a specified level as a result of an initial public offering or a change in control.
Tabular disclosure
Based on a hypothetical termination and/or change in control occurring on December 30, 2011, the following table describes the potential payments and benefits our named executive officers would have received upon such termination or change in control under the terms of their employment agreements in effect on December 30, 2011.
Potential Payments Upon Termination of Employment and/or a Change in Control Table
Name |
|
Benefits and Payments |
|
Involuntary |
|
Involuntary |
|
Termination |
|
Termination |
|
Additional |
|
William E. Saunders, Jr. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary Continuation |
|
600,000 |
|
0 |
|
0 |
|
300,000 |
|
0 |
|
|
|
Annual Cash Bonus |
|
0 |
|
0 |
|
0 |
|
0 |
|
0 |
|
|
|
Retention Bonus |
|
0 |
|
0 |
|
0 |
|
0 |
|
0 |
|
|
|
Health and Welfare Benefits Continuation |
|
7,228 |
|
0 |
|
7,228 |
|
3,614 |
|
0 |
|
|
|
Equity Vesting |
|
0 |
|
0 |
|
0 |
|
0 |
|
1,403,564 |
|
Total |
|
|
|
607,228 |
|
0 |
|
7,228 |
|
303,614 |
|
1,403,564 |
|
Michael Durbin |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary Continuation |
|
92,466 |
|
0 |
|
0 |
|
187,500 |
|
0 |
|
|
|
Change in Control Bonus |
|
0 |
|
0 |
|
0 |
|
0 |
|
500,000 |
|
|
|
Annual Cash Bonus |
|
0 |
|
0 |
|
0 |
|
0 |
|
0 |
|
|
|
Retention Bonus |
|
0 |
|
0 |
|
0 |
|
0 |
|
0 |
|
|
|
Health and Welfare Benefits Continuation |
|
2,594 |
(4) |
0 |
|
10,519 |
|
5,259 |
|
0 |
|
|
|
Equity Vesting |
|
0 |
|
0 |
|
0 |
|
0 |
|
1,452,450 |
|
Total |
|
|
|
95,060 |
|
0 |
|
10,519 |
|
192,759 |
|
1,952,450 |
|
Kyle F. Hanson |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary Continuation |
|
110,959 |
|
0 |
|
0 |
|
225,000 |
|
0 |
|
|
|
Annual Cash Bonus |
|
0 |
|
0 |
|
0 |
|
0 |
|
0 |
|
|
|
Retention Bonus |
|
0 |
|
0 |
|
0 |
|
0 |
|
0 |
|
|
|
Health and Welfare Benefits Continuation |
|
2,484 |
(4) |
0 |
|
10,073 |
|
5,037 |
|
0 |
|
|
|
Equity Vesting |
|
0 |
|
0 |
|
0 |
|
0 |
|
672,679 |
|
Total |
|
|
|
113,443 |
|
0 |
|
10,073 |
|
230,037 |
|
672,679 |
|
Name |
|
Benefits and Payments |
|
Involuntary |
|
Involuntary |
|
Termination |
|
Termination |
|
Additional |
|
Chad M. Streff |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary Continuation |
|
92,466 |
|
0 |
|
0 |
|
187,500 |
|
0 |
|
|
|
Annual Cash Bonus |
|
0 |
|
0 |
|
0 |
|
0 |
|
0 |
|
|
|
Retention Bonus |
|
0 |
|
0 |
|
0 |
|
0 |
|
0 |
|
|
|
Health and Welfare Benefits Continuation |
|
0 |
(4) |
0 |
|
0 |
|
0 |
|
0 |
|
|
|
Equity Vesting |
|
0 |
|
0 |
|
0 |
|
0 |
|
659,742 |
|
Total |
|
|
|
92,466 |
|
0 |
|
0 |
|
187,500 |
|
659,742 |
|
Bridgette C. Roman |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary Continuation |
|
67,808 |
|
0 |
|
0 |
|
137,500 |
|
0 |
|
|
|
Annual Cash Bonus |
|
0 |
|
0 |
|
0 |
|
0 |
|
0 |
|
|
|
Retention Bonus |
|
0 |
|
0 |
|
0 |
|
0 |
|
0 |
|
|
|
Health and Welfare Benefits Continuation |
|
1,782 |
(4) |
0 |
|
7,228 |
|
3,614 |
|
0 |
|
|
|
Equity Vesting |
|
0 |
|
0 |
|
0 |
|
0 |
|
96,240 |
|
Total |
|
|
|
69,590 |
|
0 |
|
7,228 |
|
141,114 |
|
96,240 |
|
(1) Assumes that all accrued base salary and vacation pay, expenses and benefits through December 30, 2011 have been paid as of December 30, 2011, and that all annual cash bonuses and performance-based retention bonuses for 2011 have been earned and paid for 2011 as of December 30, 2011. Also assumes that Ms. Roman is not entitled to any vested deferred compensation.
(2) Assumes that continued health and welfare benefits are provided for six months.
(3) The values reported as equity vesting in this column represent the assumed value for each named executive officer of the vesting of his or her unvested equity awards described above in the Outstanding Equity Awards at 2011 Fiscal Year-End Table upon a change in control occurring on December 30, 2011. These values represent the product of (A) the spread between the exercise price for his or her unvested equity awards and an assumed value for our common shares on December 30, 2011 of $14.02 per share (based on a recent valuation) and (B) the number of common shares subject to the accelerated award.
(4) Assumes that continued health and welfare benefits are provided for 90 days.
Director Compensation
During 2011, H. Eugene Lockhart, Lee Wright, James Frauenberg, Sr., Michael Langer, Felix Lo, Andrew Rush and David Wittels served as our non-employee directors. None of these non-employee directors received compensation from us for their service on our board of directors.
The following table sets forth certain information as of June 1, 2012 regarding the beneficial ownership of our outstanding common equity, by:
· each person or entity known by us to beneficially own more than 5% of our outstanding common shares;
· each of our directors and named executive officers; and
· all of our directors and executive officers as a group.
Beneficial ownership of shares is determined under rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, common shares subject to options held by that person that are currently exercisable or exercisable within 60 days of June 1, 2012 are deemed outstanding. These shares, however, are not deemed outstanding for the purposes of computing the percentage ownership of any other person. Except as indicated in the footnotes to this table and as provided pursuant to applicable community property laws, the shareholders named in the table have sole voting and investment power with respect to the shares set forth opposite each shareholders name. Unless otherwise indicated, the address for each of the persons listed below is: c/o Community Choice Financial Inc., 7001 Post Road, Suite 200, Dublin, Ohio 43016.
|
|
Shares Beneficially |
| ||
Name and Address of Beneficial Owner |
|
Number |
|
Percentage |
|
5% Shareholders |
|
|
|
|
|
California Check Cashing Stores, Inc.(1) |
|
447,162 |
|
5.6 |
% |
Diamond Castle Holdings(2) |
|
4,806,000 |
|
60.2 |
% |
Funds managed by Golden Gate Capital(3) |
|
1,178,214 |
|
14.8 |
% |
James H. Frauenberg 1998 Trust(4) |
|
835,800 |
|
10.5 |
% |
|
|
|
|
|
|
Executive Officers and Directors |
|
|
|
|
|
William E. Saunders, Jr.(5) |
|
489,552 |
|
5.9 |
% |
Kyle Hanson(6) |
|
252,456 |
|
3.1 |
% |
Chad Streff(7) |
|
316,944 |
|
3.8 |
% |
Michael Durbin(8) |
|
252,600 |
|
3.1 |
% |
Bridgette Roman(9) |
|
12,000 |
|
* |
% |
H. Eugene Lockhart |
|
|
|
|
% |
Lee A. Wright |
|
|
|
|
% |
Michael Langer |
|
|
|
|
% |
Felix Lo |
|
|
|
|
% |
Andrew Rush |
|
|
|
|
% |
Eugene Schutt |
|
|
|
|
% |
David M. Wittels |
|
|
|
|
% |
All executive officers and directors as a group (12 individuals) |
|
1,323,552 |
|
14.5 |
% |
* Represents less than 1%
(1) Jonathan Eager is the sole officer and director of California Check Cashing Stores, Inc. The sole shareholder of California Check Cashing Stores, Inc. is the Jonathan B. Eager Family Trust (a revocable trust), of which Mr. Eager is a trustor, trustee and beneficiary, with the authority to act individually, and accordingly Mr. Eager may be deemed to have beneficial ownership of the shares. The address for California Check Cashing Stores, Inc. is c/o Jonathan Eager, P.O. Box 11162, Oakland, California 94611.
(2) Includes (a) 3,451,056 common shares held by Diamond Castle Partners IV L.P., or DCP IV, of which DCP IV GP L.P. is the general partner (DCP IV GP-GP, L.L.C. is the general partner of DCP IV GP, L.P.), (b) 1,308,600 common shares held by Diamond Castle Partners IV-A, L.P., or DCP IV-A, of which DCP IV GP L.P. is the general partner (DCP IV GP-GP, L.L.C. is the general partner of DCP IV GP, L.P.),and (c) 46,344 common shares held by Deal Leaders Fund, L.P., or DLF, of which DCP IV GP L.P. is the general partner (DCP IV GP-GP, L.L.C. is the general partner of DCP IV GP, L.P.). The manner in which the investments of DCP IV, DCP IV-A and DLF are held, and any decisions concerning their ultimate disposition, are subject to the control of an investment committee consisting of certain partners of Diamond Castle: Ari Benacerraf, Michael Ranger, Andrew Rush, and David Wittels. The investment committee is appointed by DCP IV GP, L.P. The investment committee has voting and investment power with respect to the common shares owned by DCP IV, DCP IV-A, and DLF. The address of DCP IV, DCP IV-A, and DLF is 280 Park Avenue, Floor 25E, New York, New York 10017.
(3) Includes (a) 994,500 shares held by Golden Gate Capital Investment Fund II, L.P., (b) 61,800 shares held by Golden Gate Capital Investment Fund II-A, L.P., (c) 24,798 shares held by Golden Gate Capital Investment Fund II (AI), L.P., (d) 1,542 shares held by Golden Gate Capital Investment Fund II-A (AI), L.P., (e) 24,516 shares held by Golden Gate Capital Associates II-QP, L.L.C., (f) 390 shares held by Golden Gate Capital Associates II-AI, L.L.C., (g) 11,670 shares held by CCG AV, L.L.C.Series A, (h) 39,540 shares held by CCG AV, L.L.C.Series C, (i) 11,490 shares held by CCG AV, L.L.C.Series G, and (j) 7,968 shares held by CCG AV, L.L.C.Series I (the entities listed in clauses (a) through (j) above, the Golden Gate Capital Entities), each of which are funds managed by Golden Gate Capital. Golden Gate Capital may be deemed to be the beneficial owner of the shares owned by the Golden Gate Capital Entities, but disclaims beneficial ownership pursuant to the rules under the Exchange Act. Felix Lo does not beneficially own any of the securities owned by the Golden Gate Capital Entities. The address for the Golden Gate Capital Entities is c/o Golden Gate Private Equity, Inc., One Embarcadero Center, Ste. 3900, San Francisco, California 94111.
(4) James H. Frauenberg is the sole trustee of the trust which has sole voting and investment power over the shares, and accordingly Mr. Frauenberg may be deemed to have beneficial ownership of the shares. The address for the James H. Frauenberg 1998 Trust is c/o James Frauenberg, 1310 Old Stickney Point Rd., Unit EP2, Sarasota, Florida 34242.
(5) Includes 350,016 shares issuable upon exercise of options.
(6) Includes 252,456 shares issuable upon exercise of options.
(7) Includes 292,944 shares issuable upon exercise of options.
(8) Includes 252,600 shares issuable upon exercise of options.
(9) Includes 12,000 shares issuable upon exercise of options.
CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS
Advisory Services and Monitoring Agreement
Upon closing of the California Acquisition and related transactions in April 2011, we, along with CheckSmart and CCCS, entered into an Advisory Services and Monitoring Agreement with Diamond Castle and Golden Gate Capital, which together own approximately 75% of our outstanding common shares. Pursuant to this agreement, Diamond Castle and Golden Gate Capital provide us with various financial advisory and other services. Under this agreement, we paid Diamond Castle an initial fee of $3.8 million in consideration of the advisory services they provided in connection with the California Acquisition and related transactions and we will pay Diamond Castle and Golden Gate Capital (or any of their respective designees to our board of directors) a quarterly fee on the first day of each calendar quarter, which is equal to the greater of $150,000 or 25% multiplied by 1.5% of our average EBITDA for the previous 12-month period ending on the last day of the quarter immediately preceding the date the quarterly fee is due. We are also required under the agreement to pay Diamond Castle and Golden Gate Capital (or any of their respective designees to our board of directors) 1% of the total value (as determined on the basis set forth in the agreement) of any acquisition or merger by us, any sale of the equity or assets of our company, any sale or recapitalization or restructuring of equity or debt securities by our company and any other similar transaction. These fees will be apportioned 78% to Diamond Castle and 22% to Golden Gate Capital unless certain specified changes in ownership percentages occur. Diamond Castle and Golden Gate Capital are also entitled to reimbursement from us for reasonable fees incurred in connection with the provision of services the agreement contemplates. The term of the Advisory Services and Monitoring Agreement is for five years and will automatically renew on each anniversary so that the term is five years from the date of such renewal. The Advisory Services and Monitoring Agreement may be terminated by the joint written approval of Diamond Castle and Golden Gate Capital at any time prior to the consummation of an initial public offering and shall terminate automatically with respect to each of Diamond Castle and Golden Gate Capital if their respective equity ownership in our company falls below a certain specified percentage. For the years ended December 31, 2011, 2010 and 2009, we paid Diamond Castle fees of $1.4 million, $1.2 million and $0.8 million, respectively, and CCCS paid Golden Gate fees of $0.8 million for each of these periods.
If the Advisory Services and Monitoring Agreement is automatically terminated as a result of an initial public offering, we will pay Diamond Castle and Golden Gate Capital (or any of their designees), at the time of such termination, a cash lump-sum termination fee equal to $5.8 million, which is the net present value of the amount of the aggregate quarterly fees that otherwise would have been payable from us to Diamond Castle or Golden Gate, as the case may be, from the date of such termination until April 2016, calculated using an agreed upon discount rate.
Insight Agent Agreements
In connection with offering prepaid debit card services, we entered into agent agreements with Insight, the provider of our prepaid debit card products. Insight is a wholly owned subsidiary of Insight Holding. William Saunders, our Chief Executive Officer and a director, serves as an advisory board member of Insight Holding and Mr. Hanson, our President, previously served in such a capacity. Prior to November 2011, both Mr. Hanson and Mr. Saunders owned minority interests in Insight Holding equalling approximately 15% of the total equity thereof. In November 2011, the Company purchased Mr. Saunders and Mr. Hansons interests, along with those of other Insight Holding unit holders, and acquired a minority 22.5% ownership stake in Insight Holding. The Company paid a total of $11.25 million to acquire this ownership interest (with each of Mr. Saunders and Mr. Hanson receiving $3.75 million), a price that was established based on arms-length negotiations and, in the Companys view, represents a reasonable, fair market value. The agent agreements between us and Insight were
also negotiated on an arms length basis with terms that our management believes are standard for the market. During the year ended December 31, 2011, 2010 and 2009, our revenues from fees paid pursuant to this agreement were $19.7 million, $9.9 million and $0.1 million, respectively.
Registration Rights
Our shareholders have certain registration rights under the Shareholders Agreement. For a description of these registration rights, see Description of Capital StockRegistration Rights.
Corporate Office and Certain Branches
The property at which our corporate office is located is owned and operated by affiliates of Mr. Frauenberg, Mr. Streff and Michael Lenhart, an affiliate of certain of our shareholders. Certain properties where our branches are located are owned and operated by affiliates of Mr. Frauenberg and Mr. Lenhart. Rent paid to these related parties was $1.8 million, $1.8 million and $1.7 million for the years ended December 31, 2011, 2010 and 2009, respectively.
Line of Credit
On December 31, 2008, we entered into a $5.0 million line of credit with Diamond Castle. The line of credit bears interest at 20% and matured in February 2011. Interest expense and unused line fees recognized on this borrowing totaled $0.1 million, $0.3 million, and $0.3 million for the years ended December 31, 2011, 2010 and 2009, respectively.
DESCRIPTION OF CERTAIN INDEBTEDNESS
The following is a summary of the key terms of the agreements governing our material indebtedness that will be outstanding after the completion of the exchange offer. The following summary is not a complete description of all of the terms of the agreements governing our indebtedness.
Revolving Credit Facility
Our Revolving Credit Facility provides for revolving credit financings of up to $40.0 million and matures April 29, 2015.
Interest Rates and Fees. At our option, loans under our Revolving Credit Facility bear interest at LIBOR plus 5.00% per annum or an alternative base rate (determined to be the greatest of the prime rate, the federal funds effective rate plus 0.5% or LIBOR plus 1%) plus 4.00% per annum.
In addition, we pay a commitment fee of 0.75% of the undrawn portion of our Revolving Credit Facility, together with customary letter of credit fees.
Guarantees and Security. All obligations under our Revolving Credit Facility are our primary obligation and are guaranteed jointly and severally by each of our restricted subsidiaries. All obligations under our Revolving Credit Facility, and the guarantees of those obligations, together with certain hedging obligations owed to lenders and affiliates of lenders under the Revolving Credit Facility, are secured by substantially all of our assets and the guarantors on a first-priority basis (except with respect to the certain collateral securing the Alabama Facility, as described below). A collateral agreement governs all arrangements in respect of the collateral, including the application of proceeds from enforcement actions taken against the collateral, first to repay obligations to our lenders under the Revolving Credit Facility (and certain associated hedging obligations) prior to making any payments to the holders of our notes.
Restrictive Covenants and Other Matters. Our Revolving Credit Facility restricts our ability to, among other things:
· incur, assume or permit to exist additional indebtedness or guarantees;
· incur liens;
· engage in mergers, amalgamations, consolidations, liquidations or dissolutions;
· make investments, loans or acquisitions;
· engage in asset sales;
· engage in sale-leaseback transactions;
· engage in derivative transactions;
· pay dividends, make distributions or redeem or repurchase capital stock;
· prepay, redeem or purchase certain indebtedness, including the notes;
· enter into agreements or arrangements that block dividends or payments from subsidiaries or contain restrictions on the pledge of assets;
· amend or otherwise alter terms of certain material documents;
· engage in transactions with affiliates; and
· make capital expenditures.
Our Revolving Credit Facility also contains customary representations and warranties and customary affirmative covenants as well as a covenant requiring us to maintain a leverage ratio, defined as consolidated total indebtedness less excess cash, divided by EBITDA for the trailing twelve months, not to exceed 5.0 to 1 as of the end of each quarter when loans under the facility are outstanding. In calculating the leverage ratio, we calculate EBITDA and excess cash, which were $98.4 million and $43.3 million, respectively, for the twelve months ended and as of December 31, 2011, pursuant to the terms of our Revolving Credit Facility. Our leverage ratio as of March 31, 2012 was 3.2 to 1. Our Revolving Credit Facility also includes customary events of defaults, including certain changes of control. If such an event of default occurs, the lenders under our Revolving Credit Facility would be entitled to take various actions, including the acceleration of amounts due thereunder and all actions permitted to be taken by a secured creditor (subject to the terms of the collateral agreement).
Alabama Facility
In connection with the offering of original notes, we amended and restated the credit agreement governing our Alabama subsidiarys existing revolving credit facility, which we refer to as the Alabama Facility, to allow our Alabama subsidiary to provide a guarantee of and security with respect to our obligations under the notes and our Revolving Credit Facility and to allow our Alabama subsidiary to make certain distributions in accordance with the Indenture governing the notes.
Size and Maturity. The Alabama Facility provides a revolving credit commitment of up to $7.0 million. As of December 31, 2011, our Alabama subsidiary did not have any borrowings outstanding under the Alabama Facility. The Alabama Facility matures on July 31, 2013.
Interest Rates and Fees. Loans drawn under the Alabama Facility bear interest at Republic Bank of Chicagos prime rate plus 1.0% per annum, with a 5.00% floor.
Security. All obligations under the Alabama Facility, are secured on a first-priority basis by the assets of our Alabama subsidiary, and our notes and our revolving credit agreement are secured on a second-priority basis by the same collateral. An intercreditor agreement governs the lien priority with respect to this shared collateral.
Restrictive Covenants. The Alabama Facility restricts our Alabama subsidiarys ability to incur additional indebtedness, contingent liabilities and liens, make distributions to its equity holders and enter into certain merger and asset sale transactions. The Alabama Facility also requires our Alabama subsidiary to maintain certain financial ratios in order to draw under the facility as well as to maintain a minimum level of current asset coverage as compared to the amount of loans outstanding. The amended and restated Alabama Facility allows our Alabama subsidiary to pay quarterly distributions to the owners of its equity interests to the extent its quarterly earnings exceed the amount of capital expenditures made and changes in net working capital, in each case, during the applicable quarter.
DESCRIPTION OF THE EXCHANGE NOTES
General
The Issuer will issue the notes offered by this prospectus (the Exchange Notes) under the Indenture, dated as of April 29, 2011 (the Indenture), among itself, the Subsidiary Guarantors and U.S. Bank National Association, as trustee (the Trustee). The Issuer is issuing the Exchange Notes in exchange for the 10.75% Senior Secured Notes due 2019 that were issued under the Indenture by the Issuer on April 29, 2011 (the Original Notes). The Exchange Notes offered hereby and any Original Notes not tendered pursuant to the terms hereof will be treated as a single class under the Indenture, including for purposes of determining whether the required percentage of Holders have given approval or consent to an amendment or waiver or joined in directing the Trustee to take certain actions on behalf of all Holders. We refer to the Exchange Notes and the Original Notes collectively as the Notes.
Certain terms used in this Description of the Exchange Notes have the meanings set forth in the section Certain Definitions. As used in this section, we, us and our mean the Issuer and its Subsidiaries and the Issuer refers only to Community Choice Financial Inc. and not to any of its Subsidiaries.
The following summary of certain provisions of the Indenture, the Notes, the Security Documents, the Alabama Intercreditor Agreement and the form of the Junior Lien Intercreditor Agreement does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of those agreements and instruments, including the definitions of certain terms used therein and those terms made a part thereof by the TIA. We urge you to read those agreements and instruments because they, not this description, will define your rights as Holders of the Notes. You may request copies of those documents at our address set forth under the heading Where You Can Find Additional Information.
Brief Description of Notes
The Notes are:
· general senior obligations of the Issuer;
· pari passu in right of payment with all existing and future senior Indebtedness of the Issuer, except as described below with respect to Designated Priority Obligations;
· secured, together with the Obligations under our Revolving Credit Agreement and certain hedging obligations, on a first-priority basis by the Collateral owned by the Issuer, subject to certain Liens permitted under the Indenture; provided that any net proceeds resulting from realization upon the Collateral will be applied first to repay the Designated Priority Obligations prior to any payments being made with respect to the Notes Obligations;
· equal in priority as to the Collateral owned by the Issuer with respect to Other First Lien Obligations (if any) incurred after the Issue Date;
· senior in right of payment to any future Subordinated Indebtedness of the Issuer;
· initially guaranteed on a senior basis by each Domestic Subsidiary of the Issuer;
· effectively senior to all existing and future unsecured Indebtedness and Junior Lien Indebtedness of the Issuer, to the extent of the value of the Collateral owned by the Issuer (and after giving effect to any senior Lien on such Collateral permitted under the Indenture and the rights of the holders of Designated Priority Obligations to receive any net proceeds resulting from realization upon the Collateral prior to the Holders of the Notes);
· effectively subordinated to any existing and future Indebtedness of the Issuer that is secured by Liens on assets that do not constitute a part of the Collateral to the extent of the value of such assets; and
· structurally subordinated to all existing and future Indebtedness and other claims and liabilities, including preferred stock, of Subsidiaries of the Issuer that are not Subsidiary Guarantors.
Note Guarantees
The Subsidiary Guarantors, as primary obligors and not merely as sureties, have jointly and severally irrevocably and unconditionally guaranteed, on a senior secured basis, the performance and full and punctual payment when due, whether at maturity, by acceleration or otherwise, of all obligations of the Issuer under the Indenture and the Notes, whether for payment of principal of, premium, if any, or interest on the Notes, expenses, indemnification or otherwise, on the terms set forth in the Indenture by executing the Indenture.
Each Domestic Subsidiary in existence as of the Issue Date has guaranteed the Notes. In addition, each Restricted Subsidiary that is not a Guarantor that guarantees Indebtedness of the Issuer or any Subsidiary Guarantor has guaranteed the Notes pursuant to the covenant described under Certain CovenantsAdditional Note Guarantees.
Each Guarantee is:
· a general senior obligation of the applicable Subsidiary Guarantor;
· pari passu in right of payment with all existing and future senior Indebtedness of that Subsidiary Guarantor, except as described below with respect to its guarantee or other obligations in respect of Designated Priority Obligations;
· secured on a first-priority basis by the Collateral owned by that Subsidiary Guarantor, subject to certain Liens permitted under the Indenture; provided that, so long as the Alabama Revolving Credit Agreement remains outstanding, the Guarantee provided by our Alabama Subsidiary (the Alabama Guarantee), will be secured on a second-priority basis by the Shared Alabama Collateral; and provided further that any net proceeds resulting from realization upon the Collateral will be applied to repay the Designated Priority Obligations prior to any payments being made with respect to the Notes Obligations.
· equal in priority as to the Collateral owned by that Subsidiary Guarantor with respect to Other First Lien Obligations of that Subsidiary Guarantor (if any) incurred after the Issue Date;
· senior in right of payment to all future Subordinated Indebtedness of that Subsidiary Guarantor;
· effectively senior to all existing and future unsecured Indebtedness and Junior Lien Indebtedness of that Subsidiary Guarantor, to the extent of the value of the Collateral owned by that Subsidiary Guarantor (and after giving effect to any senior Lien on such Collateral permitted under the Indenture, including, with respect to the Shared Alabama Collateral, Liens securing the Republic Obligations, as well as the right of the holders of Designated Priority Obligations to receive any net proceeds resulting from realization upon the Collateral prior to the Holders of the Notes);
· effectively senior to all existing and future Junior Lien Indebtedness of that Subsidiary Guarantor to the extent of the value of the Collateral owned by such Subsidiary Guarantor;
· effectively subordinated to any existing and future Indebtedness of that Subsidiary Guarantor that is secured by Liens on assets that do not constitute a part of the Collateral to the extent of the value of such assets; and
· structurally subordinated to all existing and future Indebtedness and other claims and liabilities, including preferred stock, of any Subsidiaries of that Subsidiary Guarantor that are not Subsidiary Guarantors.
In addition, certain of the Issuers Subsidiaries do not and certain of the Issuers future Subsidiaries may not be required to guarantee the Notes, and Guarantees may be released in certain circumstances. In the event of a bankruptcy, liquidation or reorganization of any Subsidiaries that are not Subsidiary Guarantors, the Subsidiaries that are not
Subsidiary Guarantors will pay the holders of their debt and their trade creditors before they will be able to distribute any of their assets to the Issuer or any Subsidiary Guarantor.
The obligations of each Subsidiary Guarantor under its Guarantee will be limited to an amount not to exceed the maximum amount that can be guaranteed by the applicable Subsidiary Guarantor without rendering the Guarantee, as it relates to such Subsidiary Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. Any Subsidiary Guarantor that makes a payment under its Guarantee will be entitled upon payment in full of all guaranteed Obligations under the Indenture to a contribution from each other Subsidiary Guarantor in an amount equal to such other Subsidiary Guarantors pro rata portion of such payment based on the respective net assets of all the Subsidiary Guarantors at the time of such payment determined in accordance with GAAP. If a Guarantee were rendered voidable, it could be subordinated by a court to all other Indebtedness (including guarantees and other contingent liabilities) of the Subsidiary Guarantor, and, depending on the amount of such Indebtedness, a Subsidiary Guarantors liability on its Guarantee could be reduced to zero. See Risk FactorsRisks Relating to the NotesThe guarantees and security interests provided by the subsidiary guarantors may not be enforceable and, under special circumstances, federal and state statutes may allow courts to void the guarantees and security interests and require holders of Notes to return payments received from the subsidiary guarantors.
Each Guarantee by a Subsidiary Guarantor provides by its terms that it shall be automatically and unconditionally released and discharged upon:
(1) (a) any sale, exchange or transfer (by merger, amalgamation or otherwise) of (i) the Capital Stock of such Subsidiary Guarantor after which the applicable Subsidiary Guarantor is no longer a Restricted Subsidiary or (ii) all or substantially all of the assets of such Subsidiary Guarantor, in each case, if such sale, exchange or transfer is made in compliance with the applicable provisions of the Indenture, so long as such Subsidiary Guarantor is also released from its guarantees and all pledges and security, if any, granted in connection with the Revolving Credit Agreement and any other Indebtedness of the Issuer or another Subsidiary Guarantor;
(b) the designation of any Restricted Subsidiary that is a Subsidiary Guarantor as an Unrestricted Subsidiary in compliance with the applicable provisions of the Indenture;
(c) the Issuer exercising the legal defeasance option or covenant defeasance option as described under Legal Defeasance and Covenant Defeasance or the Issuers obligations under the Indenture being discharged in accordance with the terms of the Indenture; or
(d) in the case of any Subsidiary Guarantor that provides a Guarantee after the Issue Date pursuant to the covenant described under Additional Note Guarantees, the release or discharge of all guarantees made by such Subsidiary Guarantor that resulted in the obligation of such Subsidiary to Guarantee the Notes (it being understood that a release subject to a contingent reinstatement is still a release); and
(2) such Subsidiary Guarantor delivering to the Trustee an Officers Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for in the Indenture relating to the transaction permitting the release of such Guarantee have been complied with.
Ranking
The Indebtedness evidenced by the Notes and the Guarantees is senior Indebtedness of the Issuer or the applicable Subsidiary Guarantor, as the case may be, ranks equal in right of payment with all existing and future senior Indebtedness of the Issuer and the Subsidiary Guarantors, as the case may be, and is secured by the Collateral, which Collateral is shared on an equal and ratable basis with Obligations under our Revolving Credit Agreement and additional First Lien
Obligations (if any) incurred after the Issue Date and, with respect to the Shared Alabama Collateral, is shared on a second- priority basis with the Republic Obligations. The Obligations under our Revolving Credit Agreement, any Lender Hedging Obligations, the Notes Obligations and any additional First Lien Obligations have a first-priority security interest with respect to the Collateral, in each case, subject to Permitted Liens; provided that the Alabama Guarantee (and any other guarantee of First Lien Obligations provided by the Alabama Subsidiary) is secured on a second-priority basis by the Shared Alabama Collateral; and provided further that any net proceeds resulting from realization upon the Collateral will be applied to repay Designated Priority Obligations prior to any payments being made in respect of the Notes Obligations. As a result, the Notes and the Guarantees are effectively subordinated in right of payment to the Republic Obligations to the extent of the value of the Shared Alabama Collateral and to the Designated Priority Obligations to the extent of the value of the remaining Collateral. The security interests to be granted with respect to the Collateral are described under Security for the Notes.
As of March 31, 2012, the Issuers and the Subsidiary Guarantors outstanding senior Indebtedness was approximately $395.0 million, none of which was outstanding under the Alabama Revolving Credit Agreement and all of which constituted First Lien Obligations. As of March 31, 2012, our borrowing capacity under the Revolving Credit Agreement would have been approximately $39.5 million, after taking into account approximately $0.5 million of undrawn letters of credit and our Alabama Subsidiarys borrowing capacity under the Alabama Revolving Credit Agreement would have been approximately $7.0 million. The Alabama Subsidiary accounted for approximately $30.7 million, or 9.2%, of our pro forma revenue for 2011, approximately $27.2 million, or 5.3%, of our pro forma total assets and approximately $3.3 million, or 0.7%, of our pro forma total liabilities, in each case, as of December 31, 2011 (in each case, excluding intercompany balances).
All of our operations are conducted through our Subsidiaries. Certain of our existing and future Subsidiaries may not guarantee the Notes, and Guarantees may be released in certain circumstances. Unless a Subsidiary is a Subsidiary Guarantor, claims of creditors of such Subsidiaries, including trade creditors, and claims of preferred stockholders (if any) of such Subsidiaries generally will have priority with respect to the assets and earnings of such Subsidiaries over the claims of creditors of the Issuer, including the Holders of the Notes. The Notes, therefore, are structurally subordinated to holders of Indebtedness and other creditors (including trade creditors) and preferred stockholders (if any) of Subsidiaries of the Issuer that are not a Subsidiary Guarantor. Although the Indenture limits the incurrence of Indebtedness by and the issuance of Disqualified Stock and preferred stock of certain of the Issuers Subsidiaries, such limitation is subject to a number of significant qualifications. See Certain CovenantsLimitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. As of the date of this prospectus, none of our Subsidiaries that are not Guarantors have material assests or operations.
Although the Indenture contains limitations on the amount of additional Secured Indebtedness that the Issuer and the Restricted Subsidiaries may incur, under certain circumstances the amount of such additional Secured Indebtedness (including additional First Lien Obligations that share in the Collateral on a pari passu basis) could be substantial. See Certain CovenantsLimitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock and Certain CovenantsLiens.
Paying Agent and Registrar for the Notes
The Issuer maintains one or more paying agents for the Notes. The initial paying agent for the Notes is the Trustee.
The Issuer also maintains a registrar. The initial registrar is the Trustee. The registrar maintains a register reflecting ownership of the Notes outstanding from time to time and makes payments on and facilitates transfer of Notes on behalf of the Issuer.
The Issuer may change the paying agents or the registrars without prior notice to the Holders. Either the Issuer or any of the Issuers Subsidiaries may act as a paying agent or registrar.
Transfer and Exchange
A Holder may transfer or exchange Notes in accordance with the Indenture. The registrar and the Trustee may require a Holder to furnish appropriate endorsements and transfer documents in connection with a transfer of Notes. Holders will be required to pay all taxes due on transfer. The Issuer is not required to transfer or exchange any Note selected for redemption or tendered (and not withdrawn) for repurchase in connection with a Change of Control Offer, an Asset Sale Offer or other tender offer. Also, the Issuer is not required to transfer or exchange any Note for a period of 15 days before a selection of Notes to be redeemed.
Principal, Maturity and Interest
The Issuer issued $395,000,000 aggregate principal amount of Original Notes on April 29, 2011, and pursuant to this prospectus, the Issuer is offering to exchange all of the Original Notes for the Exchange Notes. The Notes mature on May 1, 2019. Subject to compliance with the covenants described below under the captions Certain CovenantsLimitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock and Certain CovenantsLiens, the Issuer may issue additional Notes from time to time under the Indenture (Additional Notes). The Notes and any Additional Notes subsequently issued under the Indenture will be treated as a single class for all purposes under the Indenture, including waivers, amendments, redemptions and offers to purchase; provided, however, that a separate CUSIP or ISIN would be issued for the Additional Notes, unless the Notes and the Additional Notes are treated as the same issue for U.S. federal income tax purposes. Unless the context requires otherwise, references to Notes for all purposes of the Indenture and this Description of the Notes include any Additional Notes that are actually issued.
Interest on the Notes accrues at the rate of 10.75% per annum and is payable semiannually in arrears on May 1 and November 1 to the Holders of Notes of record on the immediately preceding April 15 and October 15. Interest on the Notes accrues from the most recent date to which interest has been paid. Interest on the Notes is computed on the basis of a 360-day year comprised of twelve 30-day months. The Exchange Notes will be issued in minimum denominations of $2,000 and any integral multiple of $1,000 in excess thereof.
Additional interest may be payable with respect to the Notes in certain circumstances pursuant to the Registration Rights Agreement. See The Exchange Offer Liquidated Damages.
Principal of, premium, if any, and interest on the Notes will be payable at the office or agency of the Issuer maintained for such purpose or, at the option of the Issuer, payment of interest may be made by check mailed to the Holders of the Notes at their respective addresses set forth in the register of Holders; provided that all payments of principal, premium, if any, and interest with respect to the Notes represented by one or more global notes registered in the name of or held by DTC or its nominee will be made by wire transfer of immediately available funds to the accounts specified by the Holder or Holders thereof. Until otherwise designated by the Issuer, the Issuers office or agency will be the office of the Trustee maintained for such purpose.
Security for the Notes
The Collateral is pledged to the Collateral Agent for the benefit of each Holder of Notes, the Trustee, the Collateral Agent and each other holder of, or obligee in respect of, any Notes Obligations (the Noteholder Secured Parties) together with the other First Lien Holders. The First Lien Obligations (which, as of the Issue Date, consist of the Notes Obligations and the Obligations under our Revolving Credit Agreement and any Lender Hedging Obligations associated therewith), are secured by first-priority security interests in the Collateral, in each case, subject to Permitted Liens; provided that the Alabama Guarantee (and any other guarantee of First Lien Obligations provided by the Alabama Subsidiary) are secured on a second-priority basis by the Shared Alabama Collateral; and provided further that any net proceeds resulting from realization upon the Collateral will be applied to repay Designated Priority Obligations prior to any payments being made with respect to the Notes Obligations. As a result, the Notes and the Guarantees are effectively subordinated in right of payment to the Republic Obligations to the extent of the value of the Shared Alabama Collateral and to the Obligations under our Revolving Credit Agreement and any Lender Hedging Obligations, to the extent of the value of the remaining Collateral. See Designated Priority Obligations and Application of Proceeds; Post-Petition Interest.
The Issuer and the Subsidiary Guarantors may incur additional Indebtedness in the future that could share in the Collateral. The amount of all such additional Indebtedness is limited by the covenants disclosed under Certain CovenantsLimitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock and Certain CovenantsLiens. Under certain circumstances the amount of such additional Secured Indebtedness could be significant. See Risk FactorsRisks Relating to the NotesDespite our current indebtedness levels and restrictive covenants, we may still be able to incur significant additional indebtedness in the future. This could further exacerbate the risks associated with our substantial financial leverage and Risk FactorsRisks Relating to the NotesThere are certain categories of property that are excluded from the Collateral.
Any additional Indebtedness that is incurred by the Issuer or any Subsidiary Guarantor in compliance with the terms of the Indenture may also be given a Lien on and security interest in the Collateral that ranks junior to the Lien of the Noteholder Secured Parties in the Collateral. See Certain CovenantsLiens. Except as provided in the Junior Lien Intercreditor Agreement, holders of such junior Liens may not realize upon the Collateral so long as any Notes are outstanding.
Description of the Collateral
Subject to the terms described below under Release of Collateral and the exceptions described below, the Collateral consists of substantially all of the property and assets of the Issuer and the Subsidiary Guarantors. The Collateral does not include the following property and assets of the Issuer and the Subsidiary Guarantors (collectively, the Excluded Assets):
(1) any property to the extent that and for as long as the grant of a security interest (A) is prohibited by any Requirement of Law, (B) requires consent from any Governmental Authority pursuant to any Requirement of Law that has not been obtained or (C) constitutes a breach or default under or results in the termination of, or requires any consent not obtained under (after use of commercially reasonable efforts to obtain such consents), any Contractual Obligations, except to the extent that such Requirement of Law or provisions of any Contractual Obligations is ineffective under applicable law or would be ineffective under Sections 9-406, 9-407, 9-408 or 9-409 of the New York UCC to prevent the attachment of the security interest granted therein; provided that, (x) at such time as the applicable restrictions described in this clause (1) cease to exist, such property shall immediately and automatically become part of the Collateral and (y) to the extent
severable, the Collateral shall in any event include all rights in respect of such property that are not subject to the applicable restrictions described in this clause (1);
(2) any of the outstanding voting equity or other voting ownership interests of any Foreign Subsidiary or any Restricted DRE in excess of 65% of the voting power of all classes of equity or other ownership interests of such Foreign Subsidiary or Restricted DRE, in each case, that are entitled to vote (such stock, Excluded Capital Stock);
(3) leasehold real property;
(4) fee owned real property having a value (together with improvements thereof) of less than $1.0 million;
(5) any permit or license issued by a Governmental Authority to the Issuer or any Subsidiary Guarantor or any agreement to which any Grantor is a party, in each case, only to the extent and for so long as the terms of such permit, license or agreement or any applicable law validly prohibit the creation by the Issuer or a Subsidiary Guarantor of a security interest in such permit, license or agreement in favor of the Collateral Agent or would give rise to a right of termination by a third party (after giving effect to Section 9-406(d), 9-407(a), 9-408(a) or 9-409 of the New York UCC or any other applicable law (including the Bankruptcy Reform Act of 1978, as codified at Title 11 of the United States Code) or principles of equity);
(6) any Deposit Accounts (and the cash and Cash Equivalents therein) specifically and exclusively used for (i) payroll, payroll taxes, and other employee wage and benefit payments to or for the benefit of any Grantors employees and accrued and unpaid employee compensation (including salaries, wages, benefits and expense reimbursements), (ii) all taxes required to be collected or withheld (including, without limitation, federal and state withholding taxes (including the employers share thereof), taxes owing to any governmental unit thereof, sales, use and excise taxes, customs duties, import duties and independent customs brokers charges), other taxes for which the Issuer or a Subsidiary Guarantor may become liable and (iii) any other fiduciary funds, in each case solely to the extent that the failure to remit such funds to the Persons entitled thereto would result under applicable law in potential personal criminal or civil liability to any director, officer, member of management or employee of the Issuer (the cash and Cash Equivalents described in the foregoing clauses (i), (ii) and (iii) being Excluded Cash); and
(7) applications filed in the U.S. Patent and Trademark Office to register trademarks or service marks on the basis of the Issuers or a Subsidiary Guarantors intent to use such trademarks or service marks to the extent that granting a Lien therein would adversely affect the validity or enforceability thereof, unless and until the filing of a Statement of Use or Amendment to Allege Use has been filed and accepted, whereupon such applications shall be automatically subject to the Lien granted under the Collateral Agreement (and any other relevant Security Document) and deemed included in the Collateral.
Notwithstanding the foregoing, Excluded Assets do not include any proceeds, substitutions or replacements of any Excluded Assets referred to above (unless such proceeds, substitutions or replacements would otherwise constitute Excluded Assets).
Security Documents; Appointment of the Collateral Agent
The Issuer, the Subsidiary Guarantors and the Collateral Agent have entered into one or more Security Documents (including the Collateral Agreement) which have created and established the terms of the security interests in the Collateral. The Security Documents and the Collateral are administered by the Collateral Agent, according to the terms set forth in the Collateral Agreement.
The lenders under the Revolving Credit Agreement and the Trustee have, and by accepting a Note, each Holder is deemed to have:
· irrevocably appointed the Collateral Agent to act as its agent under the Security Documents; and
· irrevocably authorized the Collateral Agent to (i) perform the duties and exercise the rights, powers and discretions that are specifically given to it under the Security Documents or other documents to which it is a party, together with any other incidental rights, powers and discretions; and (ii) execute each document expressed to be executed by the Collateral Agent on its behalf.
Designated Priority Obligations
Under the Collateral Agreement, the Obligations with respect to the Revolving Credit Agreement and Lender Hedging Obligations owed by any Grantor to any agent, arranger or lender, or any Affiliate of an agent, arranger or lender under our Revolving Credit Agreement, are Designated Priority Obligations, with the contractual priority described below under Application of Proceeds; Post-Petition Interest. To the extent that the Issuer and the Restricted Subsidiaries incur future Revolving Credit Facility Obligations in accordance with the Indenture (and any other Applicable First Lien Document), the Issuer may designate such Revolving Credit Facility Obligations (and, accordingly, any Lender Hedging Obligations associated with such Revolving Credit Facility Obligations will automatically be designated) as Designated Priority Obligations under the Collateral Agreement by providing notice to such effect, together with an Officers Certificate certifying that such Revolving Credit Facility Obligations and the Liens associated therewith, have been incurred in compliance with the Indenture (and any other Applicable First Lien Document).
Enforcement of the Security
The lenders under our Revolving Credit Agreement are represented under the Collateral Agreement by the Revolving Administrative Agent and the Holders are represented under the Collateral Agreement by the Trustee. To the extent that the Issuer and the Restricted Subsidiaries incur additional First Lien Obligations, the Issuer will designate such additional First Lien Obligations as Additional Obligations under the Collateral Agreement by providing notice to such effect, together with an Officers Certificate certifying that such additional First Lien Obligations (and the Liens associated therewith) have been incurred in compliance with the Indenture (and any other Applicable First Lien Document), to the Collateral Agent. Upon such designation, the designated agent of the holders of such additional First Lien Obligations shall deliver a joinder to the Collateral Agreement, thereby acknowledging that the terms of the Collateral Agreement shall be applicable to such holders. Under the Collateral Agreement, each of the Trustee, the Revolving Administrative Agent and any such designated agent is an Authorized Representative with respect to the applicable class of First Lien Obligations and the authorized representative of the holders of the Designated Priority Obligations shall be the Designated Priority Representative.
The Collateral Agreement contains procedures with respect to the coordination of instructions from the Designated Priority Representative, acting as representative of the holders of Designated Priority Obligations, and the Applicable Authorized Representative (as defined below under Applicable Authorized Representative) acting as representative for the particular class of Pari Passu Payment Obligations for which the Applicable Authorized Representative is the Authorized Representative (and not as representative of any other holders of Pari Passu Payment Obligations), with respect to the security interests in the Collateral. If (a) any Event of Default under the Indenture (or any event of default under the Applicable First Lien Document for which the Applicable Authorized Representative is the Authorized Representative) or an event of default under the documentation
relating to Revolving Credit Facility Obligations that have been designated as Designated Priority Obligations shall have occurred and be continuing, (b) an insolvency proceeding with respect to the Issuer or any Guarantor is occurring, (c) Revolving Credit Facility Obligations that have been designated as Designated Priority Obligations have been accelerated pursuant to applicable law or (d) Revolving Credit Facility Obligations that have been designated as Designated Priority Obligations otherwise become due in full, the Collateral Agent shall act in relation to the Collateral in accordance with the instructions of (i) on or prior to the date of the payment in full of all of the Designated Priority Obligations (the Priority Obligations Discharge Date) the Designated Priority Representative and the Applicable Authorized Representative and (ii) after the Priority Obligations Discharge Date, the Applicable Authorized Representative. Any Person entitled to instruct the Collateral Agent to exercise any right or remedy with respect to the Collateral may give or refrain from giving instructions to the Collateral Agent to exercise or refrain from exercising the Collateral as it sees fit in accordance with the other provisions of the Security Documents.
Subject to the next succeeding paragraph, before giving any instructions to the Collateral Agent to exercise any right or remedy under the Security Documents with respect to the Collateral, the Designated Priority Representative and the Applicable Authorized Representative will consult with one another and with the Collateral Agent in good faith, with a view to coordinating those instructions, for a period of up to 45 days or such shorter period as the Designated Priority Representative and the Applicable Authorized Representative may agree.
The Designated Priority Representative and the Applicable Authorized Representative shall not be obliged to consult in accordance with the immediately preceding paragraph if the Designated Priority Representative and the Applicable Authorized Representative determine in good faith that to enter into such consultation and thereby delay the commencement of enforcement of the Collateral could reasonably be expected to have a material adverse effect on (A) their ability to enforce any of the security interests in the Collateral or (B) the realization of any proceeds of any enforcement of the security interests in the Collateral. If the instructions given to the Collateral Agent by the Designated Priority Representative or the Applicable Authorized Representative conflict with the instructions given to the Collateral Agent by the other party: (i) the Collateral Agent shall promptly notify the Designated Priority Representative and Applicable Authorized Representative and (ii) following such notification, the Designated Priority Representative and such Applicable Authorized Representative shall consult with one another in good faith over the course of at least 15 days (the Consultation Period) with a view to resolving the conflict in such instructions, provided that the Consultation Period shall end immediately if the Designated Priority Representative and the Applicable Authorized Representative determine in good faith that such consultation and thereby the delay in the enforcement of the security interest in the Collateral could reasonably be expected to have a material adverse effect on (A) their ability to enforce any of the security interests in the Collateral or (B) the realization of any proceeds of any enforcement of the security interests in the Collateral.
If, following the end of the Consultation Period, the Collateral Agent has not received consistent instructions from the Designated Priority Representative and the Applicable Authorized Representative, the Collateral Agent shall enforce the security interests in the Collateral in accordance with the instructions of the Designated Priority Representative.
Applicable Authorized Representative
The Trustee is the Applicable Authorized Representative. The Trustee (or any successor Applicable Authorized Representative) will remain as such until such time as either (i) the Notes (or the applicable class of Other First Lien Obligations represented by the then-Applicable Authorized Representative) do not represent the largest class of Pari Passu Payment Obligations (determined based on the aggregate principal amount of Indebtedness under such class of Pari Passu Payment Obligations then outstanding, taking into account the accretion of original issue
discount with respect to any such Indebtedness issued at a discount) (a Larger Holder Event) or (ii) the occurrence of a Non-Controlling Authorized Representative Enforcement Date (such earlier date, the Applicable Authorized Representative Change Date). Following an Applicable Authorized Representative Change Date, either (x) in the event that a Larger Holder Event has occurred, the Authorized Representative under the largest class of Pari Passu Payment Obligations then outstanding and (y) in the event that a Non-Controlling Authorized Representative Enforcement Date has occurred, the Major Non-Controlling Authorized Representative, will become the Applicable Authorized Representative.
As of any date, the Major Non-Controlling Authorized Representative is the Authorized Representative of the second largest class of Pari Passu Payment Obligations then outstanding (determined on the same basis as described above for determining the largest class of Pari Passu Payment Obligations then outstanding). The Non-Controlling Authorized Representative Enforcement Date is the date that is 90 days (throughout which 90-day period the applicable Authorized Representative was the Major Non-Controlling Authorized Representative) after the occurrence of both (a) an event of default under the terms of the applicable class of Pari Passu Payment Obligations and (b) the Collateral Agents and each other Authorized Representatives receipt of written notice from that Authorized Representative certifying that (i) such Authorized Representative is the Major Non-Controlling Authorized Representative and that an event of default with respect to the class of Pari Passu Payment Obligations represented by the Major Non-Controlling Authorized Representative has occurred and is continuing and (ii) such class of Pari Passu Payment Obligations is currently due and payable in full (whether as a result of acceleration thereof or otherwise) in accordance with the terms of that class of Pari Passu Payment Obligations; provided, however, that the Non-Controlling Authorized Representative Enforcement Date shall be stayed and shall not occur and shall be deemed not to have occurred with respect to any Collateral (1) at any time the Collateral Agent (pursuant to instructions from the Designated Priority Representative or the Applicable Authorized Representative) has commenced and is pursuing any enforcement action with respect to such Collateral with reasonable diligence in light of the then-existing circumstances or (2) at any time the Issuer or any other Grantor that has granted a security interest in such Collateral is then a debtor under or with respect to (or otherwise subject to) any insolvency or liquidation proceeding.
Subject to the discussion set forth under Enforcement of the Security above, (i) the Designated Priority Representative and the Applicable Authorized Representative or (ii) the Applicable Authorized Representative, as applicable, will have the sole right to instruct the Collateral Agent to act or refrain from acting with respect to the Collateral, and the Collateral Agent will not follow any instructions with respect to such Collateral from any other Person. No Authorized Representative of any Pari Passu Payment Obligations secured by the Collateral (other than the Applicable Authorized Representative) will instruct the Collateral Agent to commence any judicial or non-judicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any action to take possession of, exercise any right, remedy or power with respect to, or otherwise take any action to enforce its interests in or realize upon, or take any other action available to it in respect of, the Collateral. Other than with respect to the application of proceeds resulting from realization upon the Collateral, the Collateral Agent, acting on the instructions of the Designated Priority Representative or the Applicable Authorized Representative, may deal with the Collateral as if the Designated Priority Obligations and the class of Pari Passu Payment Obligations then represented by the Applicable Authorized Representative were the only classes of First Lien Obligations outstanding. No Authorized Representative of any class of Pari Passu Payment Obligations (other than the Applicable Authorized Representative) may contest, protest or object to any foreclosure proceeding or action brought by the Collateral Agent (acting on the instructions of the Designated Priority Representative and the Applicable Authorized Representative). The Collateral Agent, the Designated Priority Representative and each other Authorized Representative will agree that it will not accept any Lien on any Collateral for the benefit of any First Lien Holders (other than funds deposited for the discharge or defeasance of an applicable class of First Lien Obligations) other than pursuant to the
Security Documents. Each First Lien Holder, including the Holders of the Notes by acceptance thereof, will be deemed to have agreed that it will not contest or support any other Person in contesting, in any proceeding (including any insolvency or liquidation proceeding), the perfection, priority, validity or enforceability of a Lien granted pursuant to the Security Documents, or any of the provisions of the Collateral Agreement.
None of the First Lien Holders may institute any suit or assert in any suit, bankruptcy, insolvency or other proceeding any claim against the Collateral Agent or any other First Lien Holder seeking damages from or other relief by way of specific performance, instructions or otherwise with respect to any Collateral. In addition, none of the First Lien Holders may seek to have any Collateral or any part thereof marshaled upon any foreclosure or other disposition of such Collateral. If any First Lien Holder obtains possession of any Collateral or realizes any proceeds or payment in respect thereof, in each case, as a result of the enforcement of remedies, at any time prior to the discharge of the each class of First Lien Obligations, then it must hold such Collateral, proceeds or payment in trust for the other First Lien Holders and promptly transfer such Collateral, proceeds or payment to the Collateral Agent to be distributed in accordance with provisions of the Collateral Agreement (which are described below).
Application of Proceeds; Post-Petition Interest
The Security Documents provide that the net proceeds from any sale, disposition or other realization of the Collateral upon the enforcement of the security for the First Lien Obligations (including for these purposes distributions of cash, securities or other property on account of the value of the Collateral in a bankruptcy case of the Issuer or any of the Subsidiary Guarantors) shall be applied to any Designated Priority Obligations prior to any application to any remaining First Lien Obligations (including the Notes Obligations).
Except as described below under Alabama Intercreditor Arrangement with respect to the Shared Alabama Collateral, proceeds received upon a realization of the Collateral will be applied as follows:
first, to the payment of all costs and expenses incurred by the Collateral Agent in connection with the collection of proceeds or sale of any Collateral or otherwise in connection with the Security Documents, including all court costs and the fees and expenses of its agents and legal counsel, the repayment of all advances made by the Collateral Agent on behalf of the Issuer or a Subsidiary Guarantor and any other costs or expenses incurred in connection with the exercise of any right or remedy of any of the First Lien Holders;
second, to the payment of any Obligations in respect of any expense reimbursements or indemnities then due to any of the Authorized Representatives, in their capacities as such;
third, to the payment of all Designated Priority Obligations on a pro rata basis based on the respective amounts of Designated Priority Obligations then outstanding;
fourth, to the payment of any remaining First Lien Obligations (including the Notes Obligations) on a pro rata basis based on the respective amounts of such remaining First Lien Obligations then outstanding; and
fifth, to the applicable representative of the holders of any Junior Lien Indebtedness then outstanding for application in accordance with the applicable documentation governing such Junior Lien Indebtedness, or, if there is no Junior Lien Indebtedness then outstanding, to the Issuer or such Subsidiary Guarantor, as applicable, their successors or assigns, or as a court of competent jurisdiction may otherwise direct.
In a bankruptcy case of the Issuer or any Subsidiary Guarantor, the holders of the Designated Priority Obligations will be entitled to receive all Post-Petition Interest accruing thereon, whether or not allowable in such bankruptcy case, prior to the Holders of the Notes receiving any payments in respect of the Notes Obligations. If it is held that the claims with respect to the Designated Priority Obligations and the Pari Passu Payment Obligations constitute only one secured class (rather than separate classes for the Designated Priority Obligations and the Pari Passu Payment Obligations), all distributions in such bankruptcy case shall be made as if there were separate classes of claims, with the effect being that, to the extent that the aggregate value of the Collateral is sufficient (for this purpose ignoring all Pari Passu Payment Obligations), the holders of the Designated Priority Obligations shall be entitled to receive, in addition to amounts distributed to them in respect of principal, pre-petition interest and other claims, all amounts owing in respect of Post-Petition Interest before any distribution is made in respect of the Pari Passu Payment Obligations. The Collateral Agent, the Trustee and the Holders of the notes will agree to turn over to the holders of the Designated Priority Obligations amounts otherwise received or receivable by them to the extent necessary to effectuate the intent of the foregoing, even if such turnover has the effect of reducing their claim or recovery.
Possession of the Collateral; Enforcement Actions
So long as no Event of Default shall have occurred and be continuing, and subject to certain terms and conditions, the Issuer and the Subsidiary Guarantors are entitled to exercise any voting and other consensual rights pertaining to all Equity Interests pledged pursuant to the Security Documents and to remain in possession and retain exclusive control over the Collateral (other than as set forth in the Security Documents), to operate the Collateral, to alter the Collateral and to collect, invest and dispose of any income thereon. The Security Documents, however, generally require the Issuer and the Subsidiary Guarantors to deliver to the Collateral Agent and for the Collateral Agent to maintain in its possession certificates evidencing pledges of Equity Interests to the extent such Equity Interests are certificated and to use commercially reasonable efforts to subject all applicable deposit accounts and securities accounts not constituting Excluded Assets to a control agreement in favor of the Collateral Agent. See Risk FactorsRisks Relating to the NotesWe will, in most cases, have control over the Collateral, and the sale or pledge of particular assets by us could reduce the pool of assets securing the Notes and the guarantees.
Upon the occurrence and during the continuance of an Event of Default, to the extent permitted by law and subject to the provisions of the Security Documents:
(1) all of the rights of the Issuer and the Subsidiary Guarantors to exercise voting or other consensual rights with respect to all Equity Interests included in the Collateral shall cease, and all such rights shall become vested in the Collateral Agent, which, to the extent permitted by law, shall have the sole right to exercise such voting and other consensual rights; and
(2) the Collateral Agent may take possession of and sell the Collateral or any part thereof in accordance with the terms of applicable law and the Security Documents.
Upon the occurrence and during the continuance of an Event of Default, the Security Documents provide that the Collateral Agent may, or at the direction of the Designated Priority Representative and the Applicable Authorized Representative, will, foreclose upon and sell the applicable Collateral and to distribute the net proceeds of any such sale to the First Lien Holders as described above under Application of Proceeds; Post-Petition Interest, subject to any Permitted Liens and any applicable laws.
Certain Perfection Items
The Issuer and the Subsidiary Guarantors completed all filings and other similar actions required in connection with the provision or perfection of security interests in Collateral that may be
perfected by the filing of a financing statement under the Uniform Commercial Code and the pledge of the Capital Stock of any Domestic Subsidiary, in each case on the Issue Date. In addition, the Issuer and the Subsidiary Guarantors used their commercially reasonable efforts to complete all other filings, deposit account control agreements, securities account control agreements and other actions required in connection with the provision or perfection of security interests in Collateral on the Issue Date, but to the extent they were unable to do so without undue burden or expense, in any event completed such actions within 60 days following the Issue Date; provided that, the Issuer and the Subsidiary Guarantors were only required to use commercially reasonable efforts to cause 90% of the Issuers and the Susidiaries cash and Cash Equivalents (other than Store Cash and Excluded Cash) to be maintained in deposit accounts or securities accounts over which the Collateral Agent (or, in the case of cash and Cash Equivalents of the Alabama Subsidiary, the Collateral Agents bailee pursuant to the Alabama Intercreditor Agreement) has control (within the meaning of the UCC).
Notwithstanding the foregoing, the Issuer and its Subsidiaries (i) are not required under the terms of the Indenture or the Security Documents to deliver landlord lien waivers, estoppels or collateral access letters, (ii) are not required to take any perfection actions with respect to (a) motor vehicles and other assets subject to certificates of title, (b) commercial tort claims with an individual value of less than $500,000, (c) promissory notes evidencing Indebtedness (other than intercompany Indebtedness) in a principal amount, individually, of less than $500,000, (d) letter-of-credit rights not exceeding $100,000 in value individually or $500,000 in value in the aggregate, (e) transferable records (as defined in the Uniform Electronic Transaction Act) not in excess of $500,000 in value, (f) electronic chattel paper, to the extent the amount payable thereunder does not exceed $500,000, (g) Excluded Cash or (h) Store Cash and (iii) are not required to take any actions under laws outside the United States to grant, perfect or make enforceable any security interest to the extent the value of any such affected assets does not exceed $5.0 million in the aggregate.
Information Regarding Collateral
The Issuer will furnish to the Collateral Agent, with respect to the Issuer or any Subsidiary Guarantor, prompt written notice of any change in such Persons (i) organizational name, (ii) jurisdiction of organization or formation, (iii) identity or organizational structure or (iv) organizational identification number. The Issuer and the Subsidiary Guarantors have agreed to make all filings under the Uniform Commercial Code or equivalent statutes, or otherwise that are required by applicable law in order for the Collateral Agent to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral.
After-Acquired Property
Subject to certain limitations, if the Issuer or any Subsidiary Guarantor acquires any property which is of the type that would constitute Collateral under the Collateral Agreement or any other Security Document (excluding, for the avoidance of doubt, any Excluded Assets), it shall as soon as practicable (and in any event, within 90 days) after the acquisition thereof execute and deliver such security instruments, financing statements and such certificates and opinions of counsel as are required under the Indenture and the Collateral Agreement to vest in the Collateral Agent a first-priority Lien (subject only to Permitted Liens, including certain purchase money security interests) in such after-acquired property and to have such after-acquired property added to the Collateral, and thereupon all provisions of the Indenture and the Security Documents relating to the Collateral shall be deemed to relate to such after-acquired property to the same extent and with the same force and effect. If granting a Lien in such property requires the consent of a third party, the Issuer or the applicable Subsidiary Guarantor will use commercially reasonable efforts to obtain such consent within 45 days after the acquisition of such property. If such third party does not consent to
the granting of such Lien after the use of such commercially reasonable efforts, the applicable entity will not be required to provide such Lien.
Further Assurances
The Security Documents and the Indenture provide that the Issuer and the Subsidiary Guarantors shall, at their sole expense, do all acts that may be reasonably necessary to confirm that the Collateral Agent holds, for the benefit of the Noteholder Secured Parties (and any other First Lien Holders), duly created, enforceable and perfected first-priority Liens in the Collateral, subject only to (i) Permitted Liens and (ii) the perfection exceptions described above under Certain Perfection Items. As necessary, or upon request of the Collateral Agent, the Issuer and the Subsidiary Guarantors shall, at their sole expense, execute, acknowledge and deliver such documents and instruments and take such other actions as may be necessary to assure, perfect, transfer and confirm the rights conveyed by the Security Documents, to the extent permitted by applicable law.
Limitation on Collateral Consisting of Subsidiary Securities
Upon completion of the exchange offer, we will become subject to Rule 3-16 of Regulation S-X under the Securities Act. As a result, the stock, other equity interests and other securities of a Subsidiary of the Issuer otherwise constituting Collateral will constitute Collateral for the benefit of the Holders only to the extent that such stock, equity interests and other securities can secure the Notes without Rule 3-16 of Regulation S-X under the Securities Act (or any other U.S. Federal law, rule or regulation) requiring separate financial statements of such Subsidiary to be filed with the SEC (or any other U.S. Federal government agency). In the event that Rule 3-16 of Regulation S-X under the Securities Act (or any such other U.S. Federal law, rule or regulation) is then applicable to us and requires or is amended, modified or interpreted by the SEC to require (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would require) the filing with the SEC (or any other governmental agency) of separate financial statements of any Subsidiary due to the fact that such Subsidiarys stock, equity interests or other securities secure the Notes, then the stock, equity interests and other securities of such Subsidiary shall automatically be deemed not to be part of the Collateral for the benefit of the Holders (but only to the extent necessary to not be subject to such requirement).
However, if Rule 3-16 of Regulation S-X under the Securities Act is thereafter amended, modified or interpreted by the SEC to permit (or is replaced with another rule or regulation, or any law, rule or regulation is adopted, which would permit) such Subsidiarys stock, equity interests and other securities to secure the Notes in excess of the amount then pledged without filing with the SEC (or any other U.S. Federal governmental agency) of separate financial statements of such Subsidiary, then the stock, equity interests and other securities of such Subsidiary shall automatically be deemed to be a part of the Collateral for the benefit of the Holders (but only to the extent necessary to not be subject to any such financial statement requirement).
In accordance with the limitations described in the two immediately-preceding paragraphs, if Rule 3-16 of Regulation S-X under the Securities Act becomes applicable to us, the Collateral for the benefit of the Holders will include stock, other equity interests and other securities of existing and future Subsidiaries of the Issuer only to the extent that the applicable value of such stock, other equity interests and other securities (on a Subsidiary-by-Subsidiary basis) is less than 20% of the aggregate principal amount of the Notes outstanding. As a result (but subject to the proviso in the immediately preceding sentence), the portion of the stock, other equity interests and other securities of Subsidiaries constituting Collateral for the benefit of the Holders may decrease or increase as described above. See Risk FactorsRisks Relating to the NotesShares of stock and other equity interests or other securities of any of the Issuers subsidiaries that are pledged to secure the Notes or the guarantees will
no longer constitute collateral for the benefit of the Notes and the guarantees if the pledge of such stock and other equity interests or other securities would require the filing with the SEC of separate financial statements for that subsidiary.
Certain Limitations on the Collateral
No appraisals of any of the Collateral were prepared by or on behalf of the Issuer or any Subsidiary Guarantor in connection with the issuance and sale of the Notes. The value of the Collateral in the event of liquidation will depend on many factors. Consequently, liquidating the Collateral may not produce proceeds in an amount sufficient to pay any amounts due on the First Lien Obligations (including the Notes), or may produce proceeds sufficient to pay only Designated Priority Obligations and not the Notes or the other Pari Passu Payment Obligations. See Risk FactorsRisks Relating to the NotesThe Collateral may not be valuable enough to satisfy all the obligations secured by such Collateral.
The fair market value of the Collateral is subject to fluctuations based on a number of factors, including, among others, prevailing interest rates, the ability to sell the Collateral in an orderly sale, general economic conditions, the availability of buyers and similar factors. The amount to be received upon a sale of the Collateral will be dependent on numerous factors, including the actual fair market value of the Collateral at such time and the timing and the manner of the sale. By its nature, some of the Collateral may be illiquid and may have no readily ascertainable market value. In the event of a foreclosure, liquidation, bankruptcy or similar proceeding, we cannot assure you that the proceeds from any sale or liquidation of the Collateral will be sufficient to pay the Issuers and the Subsidiary Guarantors Obligations under the Notes. Any claim for the difference between the amount, if any, realized by Holders from the sale of Collateral securing the Notes and the Obligations under the Notes will rank equally in right of payment with all of the Issuers and the Subsidiary Guarantors other unsecured senior debt and other unsubordinated obligations, including trade payables. To the extent that third parties establish Liens on the Collateral, such third parties could have rights and remedies with respect to the assets subject to such Liens that, if exercised, could adversely affect the value of the Collateral or the ability of the Collateral Agent or the Holders to realize or foreclose on the Collateral. The Issuer may also issue Additional Notes as described above or otherwise incur Obligations that would be secured by the Collateral, the effect of which would be to increase the amount of Indebtedness secured equally and ratably by the Collateral. The ability of the Holders to realize on the Collateral may also be subject to certain bankruptcy law limitations in the event of a bankruptcy. See Certain Bankruptcy Limitations.
Certain Bankruptcy Limitations
In addition to the limitations described above, the right of the Collateral Agent to obtain possession of, exercise control over or dispose of the Collateral following an Event of Default is likely to be significantly impaired by applicable bankruptcy law if the Issuer or any Subsidiary Guarantor were to have become a debtor under the U.S. Bankruptcy Code prior to the Collateral Agent having obtained possession of, exercised control over or disposed of the Collateral. Under the U.S. Bankruptcy Code, a secured creditor is prohibited by the automatic stay from obtaining possession of its collateral from a debtor in a bankruptcy case, or from exercising control over or disposing of collateral taken from such debtor, without bankruptcy court approval. Moreover, the U.S. Bankruptcy Code permits the debtor in certain circumstances to continue to retain and to use collateral owned as of the date of the bankruptcy filing (and the proceeds, products, rents or profits of such collateral) even though the debtor is in default under the applicable debt instruments, provided that the secured creditor is given adequate protection.
The term adequate protection is not defined in the U.S. Bankruptcy Code, but it includes making periodic cash payments, providing an additional or replacement Lien or granting other relief, in
each case to the extent that the collateral decreases in value during the pendency of the bankruptcy case as a result of, among other things, the imposition of the automatic stay, the use, sale or lease of such collateral or any grant of a priming lien in connection with debtor-in-possession financing (DIP Financing). The type of adequate protection provided to a secured creditor will vary according to the circumstances. In view of the lack of a precise definition of the term adequate protection and the broad discretionary powers of a bankruptcy court, it is impossible to predict whether or when the Collateral Agent could repossess or dispose of the Collateral, or whether or to what extent Holders would be compensated for any delay in payment or decrease in value of the Collateral.
Furthermore, in the event a bankruptcy court determines the value of the Collateral (after giving effect to any prior Liens, including, with respect to the Shared Alabama Collateral, the Republic Liens) is not sufficient to repay all amounts due on the First Lien Obligations, the Holders would hold secured claims to the extent of the value of the Collateral (which would be shared ratably with other remaining First Lien Obligations, after the Designated Priority Obligations have been paid in full) and would hold unsecured claims with respect to any shortfall. Under the U.S. Bankruptcy Code, a secured creditors claim includes interest and any reasonable fees, costs or charges provided for under the agreement under which such claim arose if the claims are oversecured. In addition, if the Issuer or the Subsidiary Guarantors were to become the subject of a bankruptcy case, the bankruptcy court, among other things, may void certain prepetition transfers made by the entity that is the subject of the bankruptcy filing, including, without limitation, transfers held to be preferences or fraudulent conveyances. See Risk FactorsRisks Relating to the NotesThe guarantees and security interests provided by the subsidiary guarantors may not be enforceable and, under specific circumstances, Federal and state courts may void the guarantees and security interests and require holders to return payments received from the subsidiary guarantors. and Because each subsidiary guarantors liability under its guarantee may be reduced to zero, avoided or released under certain circumstances, you may not receive any payments from some or all of the subsidiary guarantors.
In the event the Issuer or any Subsidiary Guarantor becomes a debtor in a bankruptcy case, the Issuer or such Subsidiary Guarantor may enter into DIP Financing. As a result of any DIP Financing, the Liens on the Collateral securing the Notes and the Guarantees may, without any further action or consent by the Trustee, the Collateral Agent or the Holders, be made junior and subordinate to Liens granted to secure such DIP Financing so long as the Issuer or the applicable Subsidiary Guarantor can show that (i) it could not obtain credit otherwise and (ii) there is adequate protection of the interests of the holder of the Lien on the assets on which such priming Lien is proposed to be granted. See Risk FactorsRisks Relating to the NotesBankruptcy laws may limit the ability of holders of the Notes to realize value from the collateral, Any future pledge of collateral or guarantee in favor of the holders of the Notes might be voidable in bankruptcy.
Junior Lien Intercreditor Arrangements
If the Issuer or any other Grantor incurs any Indebtedness that is secured by the Collateral on a junior basis to the Liens securing the Notes Obligations and the other First Lien Obligations (Junior Lien Indebtedness), the Collateral Agent, as representative for the holders of First Lien Obligations, and the representative of the holders of the Junior Lien Indebtedness will enter into a junior lien intercreditor agreement (a Junior Lien Intercreditor Agreement), in substantially the form attached as an exhibit to the Indenture.
The Junior Lien Intercreditor Agreement will provide, among other things, that (i) the Liens on the Collateral securing the Junior Lien Indebtedness will be junior to the Liens on the Collateral securing the First Lien Obligations (including the Notes Obligations), and, consequently, the First Lien Holders (including the Holders of the Notes) will be entitled to receive the proceeds resulting from realization upon any Collateral prior to the holders of any Junior Lien Indebtedness, (ii) during any insolvency proceedings, the Collateral Agent and the agents for any Junior Lien Indebtedness will
coordinate their efforts to give effect to the relative priority of their Liens on the Collateral and (iii) certain procedures for enforcing the Liens on the Collateral will be followed. Pursuant to the terms of the Junior Lien Intercreditor Agreement, prior to the discharge of the Liens pursuant to the Security Documents, the Applicable Authorized Representative will determine the time and method by which the security interest in the Collateral will be enforced. The agents for any Junior Lien Indebtedness will not be permitted to enforce the security interest and certain other rights related to the Junior Lien Indebtedness on the Collateral even if an event of default under such Junior Lien Indebtedness has occurred or such Junior Lien Indebtedness has been accelerated, except in any insolvency or liquidation proceeding as necessary to file a claim or statement of interest with respect to such Junior Lien Indebtedness and in certain other circumstances.
Alabama Intercreditor Arrangement
On the Issue Date, the Collateral Agent (as representative of the First Lien Holders), Republic Bank and the Alabama Subsidiary entered into the Alabama Intercreditor Agreement. The Alabama Intercreditor Agreement provides that any and all Liens on the Shared Alabama Collateral in favor of any First Lien Holder securing the First Lien Obligations will be subordinated to the Liens on the Shared Alabama Collateral in favor of Republic Bank (or its successor, including by refinancing) securing the Republic Obligations. The terms of such subordination are substantially similar to those described above with respect to the subordination of the Liens securing Junior Lien Indebtedness to the Liens securing First Lien Obligations, as provided for under the Junior Lien Intercreditor Agreement; provided, however, that, upon the occurrence of any of the following: (i) the acceleration of the Republic Obligations, (ii) the occurrence of a payment default under the Alabama Revolving Credit Agreement that is not cured or waived within 60 days of its occurrence, (iii) the termination by Republic Bank (or its successor, including by refinancing) of its commitment to lend under the Alabama Revolving Credit Facility or (iv) the commencement of a bankruptcy or other insolvency proceeding against the Alabama Subsidiary (any of the foregoing, a Purchase Event), the First Lien Holders shall have the option to purchase the Republic Obligations at par. Under the terms of the Alabama Intercreditor Agreement, the First Lien Holders must purchase all of the Republic Obligations if any are purchased. Following the occurrence of a Purchase Event, Republic Bank (or its successor, including by refinancing) shall give the Collateral Agent notice thereof. Upon receipt of such notice, pursuant to the Collateral Agreement, the Collateral Agent shall notify the representatives of each class of First Lien Obligations thereof. Upon receipt of notice from the Collateral Agent, the Trustee shall notify the Holders, who shall have 10 Business Days to notify the Trustee of their intent to participate in the purchase of the Republic Obligations, together with the amount of their maximum purchase commitment. If the aggregate amount of the purchase commitments of all First Lien Holders equals or exceeds the aggregate amount of the Republic Obligations, the First Lien Holders providing such commitments shall purchase ratably (in relation to their purchase commitments) the Republic Obligations pursuant to an assignment and assumption agreement, the form of which is attached to the Alabama Intercreditor Agreement, with such purchase to be completed promptly following the Collateral Agents notice to Republic Bank of the intent of the First Lien Holders to purchase the Republic Obligations.
Release of Collateral
The Issuer and the Subsidiary Guarantors will be entitled to the release of property and other assets included in the Collateral from the Liens securing the Notes under any one or more of the following circumstances:
· to enable the disposition of such property or assets, including Capital Stock (other than to the Issuer or a Subsidiary Guarantor), to the extent not prohibited under the covenant described under Repurchase at the Option of HoldersAsset Sales;
· in the case of a Subsidiary Guarantor that is released from its Guarantee, the release of the property and assets of such Subsidiary Guarantor;
· to the extent such Collateral is comprised of property leased to the Issuer or a Subsidiary Guarantor, upon termination or expiration of such lease;
· with respect to Collateral that is Capital Stock, upon the dissolution or liquidation of the issuer of that Capital Stock that is not prohibited by the Indenture; or
· as described under Amendment, Supplement and Waiver below.
The security interests in all Collateral securing the Notes for the benefit of the Noteholder Secured Parties also will be released upon (i) payment in full of the principal of, together with accrued and unpaid interest on, the Notes and payment in full of all other Notes Obligations that are due and payable at or prior to the time such principal, together with accrued and unpaid interest, is paid, or (ii) a legal defeasance or covenant defeasance under the Indenture as described below under Legal Defeasance and Covenant Defeasance or a discharge of the Indenture as described under Satisfaction and Discharge.
To the extent applicable, the Issuer will cause TIA §313(b), relating to reports, and TIA §314(d), relating to the release of property or securities or relating to the substitution therefor of any property or securities to be subjected to the Lien of the Security Documents, to be complied with. Any certificate or opinion required by TIA §314(d) may be made by an Officer except in cases where TIA §314(d) requires that such certificate or opinion be made by an independent Person, which Person will be an independent engineer, appraiser or other expert selected or reasonably satisfactory to the Trustee.
Notwithstanding anything to the contrary in the preceding paragraph, the Issuer will not be required to comply with all or any portion of TIA §314(d) if it determines, in good faith based on advice of counsel, that under the terms of TIA §314(d) and/or any interpretation or guidance as to the meaning thereof of the SEC and its staff, including no action letters or exemptive orders, all or any portion of TIA §314(d) is inapplicable to the released Collateral.
The Issuer will not be required to comply with TIA §314(d) with respect to any of the following:
(1) cash payments (including for the scheduled repayment of Indebtedness) in the ordinary course of business;
(2) sales or other dispositions of inventory in the ordinary course of business;
(3) collections, sales or other dispositions of accounts receivable in the ordinary course of business; and
(4) sales or other dispositions in the ordinary course of business of any property the use of which is no longer necessary or desirable in, and is not material to, the conduct of the business of the Issuer and its Subsidiaries;
provided, however, the Issuers right to rely on the above will be conditioned upon the Issuers delivering to the Trustee, within 30 calendar days following the end of each six-month period beginning on April 1 and October 1 of any year, an Officers Certificate to the effect that all releases during such six-month period in respect of which the Issuer did not comply with TIA §314(d) in reliance on the above were made in the ordinary course of business.
The Issuer will otherwise comply with the provisions of TIA §314.
Mandatory Redemption; Offers to Purchase; Open Market Purchases
The Issuer is not required to make any mandatory redemption or sinking fund payments with respect to the Notes. However, under certain circumstances, the Issuer may be required to offer to purchase Notes as described under the caption Repurchase at the Option of Holders. We may at any time and from time to time purchase Notes in the open market or otherwise.
Optional Redemption
Except as set forth below, the Issuer is not entitled to redeem the Notes at its option prior to May 1, 2015.
At any time prior to May 1, 2015, the Issuer may redeem all or a part of the Notes, upon notice as described under the heading Repurchase at the Option of HoldersSelection and Notice, at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest, if any, to, but excluding, the date of redemption (any applicable date of redemption hereunder the Redemption Date), subject to the rights of Holders on the relevant record date to receive interest due on the relevant interest payment date.
On and after May 1, 2015, the Issuer may redeem the Notes, in whole or in part, upon notice as described under the heading Repurchase at the Option of HoldersSelection and Notice, at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest thereon, if any, to, but excluding, the applicable Redemption Date, subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date, if redeemed during the 12-month period beginning on May 1 of each of the years indicated below:
Year |
|
Percentage |
|
2015 |
|
105.375 |
% |
2016 |
|
102.688 |
% |
2017 and thereafter |
|
100.000 |
% |
In addition, until May 1, 2014, the Issuer may, at its option, upon notice as described under the heading Repurchase at the Option of HoldersSelection and Notice, on one or more occasions redeem up to 35% of the aggregate principal amount of Notes issued under the Indenture at a redemption price equal to 110.750% of the aggregate principal amount thereof, plus accrued and unpaid interest thereon, if any, to, but excluding, the applicable Redemption Date, subject to the right of Holders of Notes of record on the relevant record date to receive interest due on the relevant interest payment date, with the net cash proceeds of one or more Equity Offerings to the extent such net cash proceeds are received by or contributed to the Issuer; provided that (a) at least $165.0 million in aggregate principal amount of Notes (including any Exchange Notes issued in exchange therefor) issued under the Indenture (including any Additional Notes) remains outstanding immediately after the occurrence of each such redemption and (b) each such redemption occurs within 90 days of the date of closing of each such Equity Offering.
In addition, during each 12-month period, commencing with the 12-month period from May 1, 2011 to May 1, 2012, to and including the 12-month period from May 1, 2014 to May 1, 2015, the Issuer will be entitled to redeem up to 10% of the aggregate principal amount of the Notes issued under the Indenture at a redemption price equal to 103.000% of the aggregate principal amount thereof, plus accrued and unpaid interest thereon, if any, to, but excluding, the Redemption Date, subject to the right of Holders of Notes of record on the relevant record date to receive interest due on the relevant interest payment date; provided that at least $165.0 million in aggregate principal amount of Notes (including any Exchange Notes issued in exchange therefor) issued under the
Indenture (including any Additional Notes) remains outstanding immediately after the occurrence of each such redemption.
In connection with any optional redemption, the Issuer shall give notice of such redemption and the Trustee shall select the Notes to be redeemed in such redemption, in each case, in the manner described under Repurchase at the Option of HoldersSelection and Notice.
Repurchase at the Option of Holders
Change of Control
The Notes provide that if a Change of Control occurs, unless, prior to the time the Issuer is required to make a Change of Control Offer (as defined below), the Issuer has previously mailed or concurrently mails a redemption notice with respect to all the outstanding Notes as described under Selection and Notice the Issuer will make an offer to purchase all of the Notes pursuant to the offer described below (the Change of Control Offer) at a price in cash (the Change of Control Payment) equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to, but excluding, the date of purchase, subject to the right of Holders of the Notes of record on the relevant record date to receive interest due on the relevant interest payment date. Within 30 days following any Change of Control, the Issuer will send notice of such Change of Control Offer by first-class mail, with a copy to the Trustee, to each Holder of Notes to the address of such Holder appearing in the security register or otherwise in accordance with the procedures of DTC, with the following information:
(1) that a Change of Control Offer is being made pursuant to the covenant captioned Repurchase at the Option of HoldersChange of Control and that all Notes properly tendered pursuant to such Change of Control Offer will be accepted for payment by the Issuer;
(2) a description of the transaction or transactions constituting a Change of Control;
(3) the purchase price and the purchase date, which will be no earlier than 20 Business Days nor later than 60 days from the date such notice is mailed (the Change of Control Payment Date);
(4) that any Note not properly tendered will remain outstanding and continue to accrue interest;
(5) that unless the Issuer defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest on the Change of Control Payment Date;
(6) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender such Notes, with the form entitled Option of Holder to Elect Purchase on the reverse of such Notes completed, to the paying agent specified in the notice at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;
(7) that Holders will be entitled to withdraw their tendered Notes and their election to require the Issuer to purchase such Notes; provided that the paying agent receives, not later than the expiration time of the Change of Control Offer, a telegram, facsimile transmission or letter setting forth the name of the Holder of the Notes, the principal amount of the Notes tendered for purchase, and a statement that such Holder is withdrawing its tendered Notes and its election to have such Notes purchased;
(8) that if less than all of such Holders Notes are tendered for purchase, such Holder will be issued new Notes and such new Notes will be equal in principal amount to the unpurchased portion of the Notes surrendered; provided that the unpurchased portion of the Notes must be equal to $2,000 or an integral multiple of $1,000 in excess of $2,000;
(9) if such notice is delivered prior to the occurrence of a Change of Control, stating that the Change of Control Offer is conditional on the occurrence of such Change of Control; and
(10) such other instructions, as determined by us, consistent with the covenant described hereunder, that a Holder must follow.
The Issuer will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the Indenture, the Issuer will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in the Indenture by virtue thereof.
On the Change of Control Payment Date, the Issuer will, to the extent permitted by law,
(1) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer,
(2) deposit with the paying agent an amount equal to the aggregate Change of Control Payment in respect of all Notes or portions thereof so tendered, and
(3) deliver, or cause to be delivered, to the Trustee for cancellation the Notes so accepted together with an Officers Certificate to the Trustee stating that such Notes or portions thereof have been tendered to and purchased by the Issuer.
The Revolving Credit Agreement provides, and future credit agreements or other agreements relating to Indebtedness to which the Issuer becomes a party may provide, that certain change of control events with respect to the Issuer would constitute a default thereunder (including a Change of Control under the Indenture). If we experience a change of control that triggers a default under our Revolving Credit Agreement and/or such other agreement, we could seek a waiver of such default or seek to refinance our Revolving Credit Agreement and/or such other agreement. In the event we do not obtain such a waiver or refinance the Revolving Credit Agreement and/or such other agreement, such default could result in amounts outstanding under our Revolving Credit Agreement and/or such other agreement being declared due and payable.
Our ability to pay cash to the Holders of Notes following the occurrence of a Change of Control may be limited by our then-existing financial resources. Therefore, sufficient funds may not be available when necessary to make any required repurchases. See Risk FactorsRisks Relating to the NotesWe may not be able to satisfy our obligations to holders of the Notes upon a change of control.
The Change of Control purchase feature of the Notes may in certain circumstances make it more difficult or discourage a sale or takeover of us and, thus, the removal of incumbent management. The Change of Control purchase feature is a result of negotiations between the Initial Purchasers and us. We have no present intention to engage in a transaction involving a Change of Control, although it is possible that we could decide to do so in the future. Subject to the limitations discussed below, we could, in the future, enter into certain transactions, including acquisitions, refinancings or other recapitalizations, that would not constitute a Change of Control under the Indenture, but that could increase the amount of Indebtedness outstanding at such time or otherwise affect our capital structure or credit ratings. Restrictions on our ability to incur additional Indebtedness are contained in the covenants described under Certain CovenantsLimitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock and Certain CovenantsLiens. Such restrictions in the Indenture can be waived only with the consent of the Holders of a majority in principal amount of the Notes then outstanding. Except for the limitations contained in such covenants, however, the Indenture does not contain any covenants or provisions that may afford Holders of the Notes protection in the event of a highly leveraged transaction.
We will not be required to make a Change of Control Offer if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by us and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer. Notwithstanding anything to the contrary herein, a Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.
If Holders of not less than 95% in aggregate principal amount of outstanding Notes validly tender and do not withdraw their Notes in connection with a Change of Control Offer and the Issuer, or any third party making a Change of Control Offer in lieu of the Issuer as contemplated by the immediately preceding paragraph, purchases all of the Notes validly tendered and not withdrawn by such Holders, the Issuer or such third party will have the right, upon not less than 30 nor more than 60 days prior notice, given not more than 30 days have elapsed since such purchase pursuant to the applicable Change of Control Offer, to redeem all Notes that remain outstanding following such purchase at a price in cash equal to the applicable Change of Control Payment plus, to the extent not included in the Change of Control Payment, accrued and unpaid interest, if any, thereon, to the Redemption Date.
The definition of Change of Control includes a disposition of all or substantially all of the assets of the Issuer to any Person. Although there is a limited body of case law interpreting the phrase substantially all, there is no precise established definition of the phrase under applicable law. Accordingly, in certain circumstances there may be a degree of uncertainty as to whether a particular transaction would involve a disposition of all or substantially all of the assets of the Issuer. As a result, it may be unclear as to whether a Change of Control has occurred and whether a Holder of Notes may require the Issuer to make an offer to repurchase the Notes as described above.
The provisions under the Indenture relating to the Issuers obligation to make an offer to repurchase the Notes as a result of a Change of Control, including the definition of Change of Control, may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes.
Asset Sales
(a) The Indenture provides that the Issuer will not, and will not permit any Restricted Subsidiary to, consummate, directly or indirectly, an Asset Sale, unless:
(1) the Issuer or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the fair market value (measured at the time of contractually agreeing to such Asset Sale) of the assets sold or otherwise disposed of;
(2) except in the case of a Permitted Asset Swap, at least 75% of the consideration therefor received by the Issuer or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; and
(3) without limitation of the provisions described above under Security for the NotesAfter-Acquired Property and Security for the NotesFurther Assurances, to the extent that any consideration received by the Issuer or any Restricted Subsidiary in such Asset Sale (including, for avoidance of doubt, any Designated Non-cash Consideration and any assets received in a Permitted Asset Swap) consists of assets of the type that would constitute Collateral, such assets, including the assets of any Person that becomes a Subsidiary Guarantor as a result of such transaction, are as soon as reasonably practicable (and in any event within 90 days) after their acquisition added to the Collateral.
Within 365 days after the receipt of any Net Proceeds of any Asset Sale, the Issuer or such Restricted Subsidiary, at its option, may apply the Net Proceeds from such Asset Sale,
(i) to permanently reduce any Revolving Credit Facility Obligations, and to correspondingly reduce any outstanding commitments with respect thereto;
(ii) to make one or more offers to the Holders of the Notes (and, at the option of the Issuer, the holders of Other First Lien Obligations) to purchase Notes (and reduce such Other First Lien Obligations) pursuant to and subject to the conditions contained in the Indenture (each, an Asset Sale Offer); provided, however, that in connection with any prepayment, repayment or purchase of Indebtedness pursuant to this clause (ii), the Issuer or such Restricted Subsidiary shall permanently retire such Indebtedness and shall cause the related loan commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid or purchased; provided further that if the Issuer or such Restricted Subsidiary shall so reduce any Other First Lien Obligations, the Issuer will equally and ratably reduce Indebtedness under the Notes by making an offer to all Holders of Notes to purchase at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, the pro rata principal amount of the Notes, such offer to be conducted in accordance with the procedures set forth below for an Asset Sale Offer but without any further limitation in amount;
(iii) to make (a) one or more Investments in any business or businesses, provided that any such Investment is in the form of the acquisition of Capital Stock that results in the Issuer or a Restricted Subsidiary, as the case may be, owning an amount of the Capital Stock of such business such that it constitutes or continues to constitute a Restricted Subsidiary, (b) capital expenditures or (c) acquisitions of other assets that are, in the case of each of (a), (b) and (c), used or useful in a Similar Business or replace the businesses, properties and/or assets that are the subject of such Asset Sale (any businesses, properties or assets acquired pursuant to clause (a), (b) or (c) together, the Additional Assets); provided that, without limitation of the provisions described above under Security for the NotesFurther Assurances and Security for the NotesAfter-Acquired Property, any such Additional Assets acquired with Net Proceeds from an Asset Sale of Collateral are as soon as reasonably practicable (and in any event, within 90 days) after their acquisition added to the Collateral; or
(iv) to the extent such Net Proceeds are not from Asset Sales of Collateral, to permanently reduce Indebtedness of a Restricted Subsidiary that is not the Issuer or a Subsidiary Guarantor, other than Indebtedness owed to the Issuer, a Subsidiary Guarantor or a Restricted Subsidiary;
provided that, in the case of clause (iii) above, a binding commitment to acquire Additional Assets shall be treated as a permitted application of the Net Proceeds from the date of such commitment so long as the Issuer or such Restricted Subsidiary enters into such commitment with the good faith expectation that such Net Proceeds will be applied to satisfy such commitment within 180 days of such commitment (an Acceptable Commitment) and, in the event any Acceptable Commitment is later cancelled or terminated for any reason before the Net Proceeds are applied in connection therewith, then such Net Proceeds shall constitute Excess Proceeds unless the Net Proceeds are otherwise applied pursuant to any or all of clauses (i) through (iv) above, including, subject to the proviso below, the entry into a new Acceptable Commitment, prior to the later of (x) the date that is six months following the date of such cancellation or termination and (y) the expiration of the Application Period; provided, further that the Issuer or such Restricted Subsidiary may only enter into a new Acceptable Commitment under the foregoing provision one time with respect to each Asset Sale.
Any Net Proceeds from the Asset Sales covered by this clause (a) that are not invested or applied as provided and within the time period set forth in the preceding paragraph, less the amount of cash applied by the Issuer during the six months preceding the date of receipt of such Net Proceeds to redeem Notes pursuant to the fifth paragraph under Optional Redemption (other than any such cash applied in respect of accrued and unpaid interest), will be deemed to constitute
Excess Proceeds; provided that, in the event there have been multiple Asset Sales, cash applied with respect to any particular redemption pursuant to such paragraph shall only be deducted from the calculation of Excess Proceeds one time. When the aggregate amount of Excess Proceeds exceeds $20.0 million, the Issuer shall make an Asset Sale Offer to all Holders of the Notes and, if required by the terms of any Other First Lien Obligations, to the holders of such Other First Lien Obligations, to purchase the maximum aggregate principal amount of the Notes and such Other First Lien Obligations that is equal to $1,000 or an integral multiple thereof that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date fixed for the closing of such offer, in accordance with the procedures set forth in the Indenture. The Issuer will commence an Asset Sale Offer with respect to Excess Proceeds within ten Business Days after the date that Excess Proceeds exceed $20.0 million by mailing the notice required pursuant to the terms of the Indenture, with a copy to the Trustee. The Issuer may satisfy the foregoing obligation with respect to such Net Proceeds from an Asset Sale by making an Asset Sale Offer with respect to such Net Proceeds prior to the expiration of the Application Period.
To the extent that the aggregate amount of Notes and such Other First Lien Obligations tendered or otherwise surrendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuer may, subject to the other covenants contained in the Indenture, use any remaining Excess Proceeds for general corporate purposes. If the aggregate principal amount of Notes and Other First Lien Obligations surrendered by such Holders and holders thereof exceeds the amount of Excess Proceeds, the Issuer shall select the Notes and such Other First Lien Obligations to be purchased on a pro rata basis based on the accreted value or principal amount of the Notes or such Other First Lien Obligations tendered or surrendered. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. After the Issuer or any Restricted Subsidiary has applied the Net Proceeds from any Asset Sale covered by this covenant as provided in, and within the time periods required by, this covenant, the balance of such Net Proceeds, if any, from such Asset Sale shall be released by the Collateral Agent to the Issuer or such Restricted Subsidiary for use by the Issuer or such Restricted Subsidiary for any purpose not prohibited by the terms of the Indenture.
(b) Pending the final application of any Net Proceeds pursuant to this covenant, the holder of such Net Proceeds may apply such Net Proceeds to temporarily reduce revolving credit Indebtedness or otherwise invest such Net Proceeds in any manner not prohibited by the Indenture.
(c) For purposes of this covenant, the following are deemed to be cash or Cash Equivalents:
(1) any liabilities (as shown on the Issuers or such Restricted Subsidiarys most recent balance sheet or in the notes thereto or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been shown on the Issuers or such Restricted Subsidiarys balance sheet or in the footnotes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet, as determined in good faith by the Issuer) of the Issuer or any Restricted Subsidiary, that are assumed by the transferee of any such assets (or are otherwise extinguished in connection with the transactions relating to such Asset Sale) and for which the Issuer and all Restricted Subsidiaries have been validly released by all creditors in writing;
(2) any securities, notes or other obligations received by the Issuer or such Restricted Subsidiary from such transferee that are converted by the Issuer or such Restricted Subsidiary into cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received) within 180 days following the closing of such Asset Sale; and
(3) any Designated Non-cash Consideration received by the Issuer or such Restricted Subsidiary in such Asset Sale having an aggregate fair market value, taken together with all other Designated Non-cash Consideration received pursuant to this clause (3) that is at that time outstanding, not to
exceed the greater of $15.0 million and 3.0% of Total Assets at the time of the receipt of such Designated Non-cash Consideration, with the fair market value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value.
The Issuer will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with each repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the Asset Sale provisions of the Indenture, the Issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Asset Sale provisions of the Indenture by virtue of such compliance.
Selection and Notice
If the Issuer is redeeming or repurchasing less than all of the Notes at any time, the Trustee will select the Notes to be redeemed or repurchased (i) if the Notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the Notes are listed, (ii) on a pro rata basis to the extent practicable or (iii) by lot or such other similar method in accordance with the procedures of DTC. No Notes of $2,000 or less can be redeemed or repurchased in part.
Notices of purchase or redemption shall be delivered electronically or mailed by first-class mail, postage prepaid, at least 30 but not more than 60 days before the purchase or Redemption Date to each Holder of Notes at such Holders registered address or otherwise in accordance with the procedures of DTC, except that redemption notices may be mailed more than 60 days prior to a Redemption Date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of the Indenture. If any Note is to be purchased or redeemed in part only, any notice of purchase or redemption that relates to such Note shall state the portion of the principal amount thereof that has been or is to be purchased or redeemed.
Notice of any redemption upon any Equity Offering or other securities offering or financing, or in connection with a transaction (or series of related transactions) that constitute a Change of Control, may, at the Issuers discretion, be given prior to the completion thereof and be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering, securities offering, financing or Change of Control.
The Issuer will issue a new Note in a principal amount equal to the unredeemed portion of the original Note in the name of the Holder upon cancellation of the original Note. Notes called for redemption become due on the date fixed for redemption, unless such redemption is conditioned on the happening of a future event. On and after the Redemption Date, interest ceases to accrue on Notes or portions of them called for redemption.
Certain Covenants
Set forth below are summaries of certain covenants contained in the Indenture. If on any date (i) the Notes have Investment Grade Ratings from both Rating Agencies and (ii) no Default has occurred and is continuing under the Indenture (the occurrence of the events described in the foregoing clauses (i) and (ii) being collectively referred to as a Covenant Suspension Event), the Issuer and the Restricted Subsidiaries will not be subject to the following covenants (collectively, the Suspended Covenants):
(1) Repurchase at the Option of HoldersAsset Sales, but only to the extent relating to properties or assets of the Issuer or any Restricted Subsidiary that do not constitute Collateral;
(2) Limitation on Restricted Payments;
(3) Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock;
(4) clause (4) of the first paragraph of Merger, Consolidation or Sale of All or Substantially All Assets;
(5) Transactions with Affiliates; and
(6) Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.
In the event that the Issuer and the Restricted Subsidiaries are not subject to the Suspended Covenants under the Indenture for any period of time as a result of the foregoing, and on any subsequent date (the Reversion Date) one or both of the Rating Agencies withdraw their Investment Grade Rating or downgrade the rating assigned to the Notes below an Investment Grade Rating, then the Issuer and the Restricted Subsidiaries will thereafter again be subject to the Suspended Covenants with respect to future events.
The period of time between the Covenant Suspension Event and the Reversion Date is referred to in this description as the Suspension Period. In the event of any such reinstatement, no action taken or omitted to be taken by the Issuer or any of the Restricted Subsidiaries prior to such reinstatement that would otherwise be a breach of any Suspended Covenant will give rise to a Default or Event of Default under this Indenture with respect to the Notes; provided that (x) with respect to Restricted Payments made after any such reinstatement, the amount of Restricted Payments made will be calculated as though the covenant described under the caption Limitation on Restricted Payments had been in effect prior to, but not during, the Suspension Period, and all events set forth in clause (3) of the first paragraph under Limitation on Restricted Payments (including Consolidated Net Income earned) occurring during a Suspension Period shall be disregarded for purposes of determining the amount of Restricted Payments the Issuer or any Restricted Subsidiary is permitted to make pursuant to such clause (3) after the applicable Reversion Date, and (y) all Indebtedness incurred, or Disqualified Stock or Preferred Stock issued, during the Suspension Period will be classified to have been incurred or issued pursuant to clause (4) of the second paragraph of Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. No Subsidiaries shall be designated as Unrestricted Subsidiaries during any Suspension Period.
There can be no assurance that the Notes will ever achieve or maintain Investment Grade Ratings.
Limitation on Restricted Payments
The Issuer will not, and will not permit any of the Restricted Subsidiaries to, directly or indirectly:
(I) declare or pay any dividend or make any payment or distribution on account of the Issuers or any of the Restricted Subsidiaries Equity Interests, including any dividend or distribution payable in connection with any merger, consolidation or amalgamation, other than:
(a) dividends, payments or distributions by the Issuer payable solely in Equity Interests (other than Disqualified Stock) of the Issuer; or
(b) dividends, payments or distributions by a Restricted Subsidiary so long as, in the case of any dividend, payment or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary other than a Wholly-Owned Subsidiary of the Issuer, the Issuer or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities;
(II) purchase, redeem, defease or otherwise acquire or retire for value any Equity Interests of the Issuer or any Parent Entity, including in connection with any merger, consolidation or amalgamation;
(III) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value or give any irrevocable notice of redemption with respect to, in each case, prior to any scheduled repayment, sinking fund payment or maturity, any Subordinated Indebtedness of the Issuer or any Subsidiary Guarantor, other than:
(a) Indebtedness permitted to be incurred under clause (8) or (9) of the second paragraph of the covenant described under Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock;
(b) the purchase, repurchase or other acquisition of Subordinated Indebtedness purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of purchase, repurchase or acquisition; or
(c) the giving of an irrevocable notice of redemption with respect to transactions described in clause (2) or (3) of the second paragraph of this covenant; or
(IV) make any Restricted Investment
(all such payments and other actions set forth in clauses (I) through (IV) (other than any exception thereto) above being collectively referred to as Restricted Payments), unless, at the time of such Restricted Payment:
(1) no Default shall have occurred and be continuing or would occur as a consequence thereof;
(2) immediately after giving effect to such transaction on a pro forma basis, the Issuer could incur $1.00 of additional Indebtedness under the provisions of the first paragraph of the covenant described under Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Issuer and the Restricted Subsidiaries after the Issue Date (including Restricted Payments made pursuant to clause (1), (4), (8) or (11) of the next succeeding paragraph, but excluding all other Restricted Payments made pursuant to the next succeeding paragraph), is less than the sum of (without duplication):
(a) 50% of the Consolidated Net Income of the Issuer for the period (taken as one accounting period) beginning on the first day of the fiscal quarter commencing prior to the Issue Date to the end of the Issuers most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment, or, in the case such Consolidated Net Income for such period is a deficit, minus 100% of such deficit; plus
(b) 100% of the aggregate cash proceeds and the fair market value of marketable securities or other property received by the Issuer since immediately after the Issue Date (other than cash proceeds to the extent such cash proceeds have been used to incur Indebtedness, Disqualified Stock or Preferred Stock pursuant to clause (13)(a) of the second paragraph of Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock or have been
used to make Restricted Payments pursuant to clause (2) of the second paragraph of this covenant) from the issue or sale of:
(i) (A) Equity Interests of the Issuer, excluding cash proceeds and the marketable securities or other property received from the sale of:
(x) Equity Interests to any future, current or former employee, director or consultant of the Issuer, any Parent Entity or any of the Issuers Subsidiaries after the Issue Date to the extent such amounts have been applied to Restricted Payments made in accordance with clause (4) of the next succeeding paragraph; and
(y) Designated Preferred Stock; and
(B) Equity Interests of Parent Entities, to the extent such cash proceeds are actually contributed to the Issuer (excluding contributions of the proceeds from the sale of Designated Preferred Stock of Parent Entities or contributions to the extent such amounts have been applied to Restricted Payments made in accordance with clause (4) of the next succeeding paragraph); or
(ii) debt securities of the Issuer that have been subsequently converted into or exchanged for Equity Interests of the Issuer;
provided, however, that this clause (b) shall not include the proceeds from (X) Equity Interests or convertible debt securities of the Issuer sold to a Restricted Subsidiary, (Y) Disqualified Stock or debt securities that have been converted into Disqualified Stock or (Z) Excluded Contributions; plus
(c) 100% of the aggregate amount of cash and the fair market value of marketable securities or other property contributed to the capital of the Issuer following the Issue Date (other than cash proceeds, marketable securities or other property to the extent such cash proceeds, marketable securities or other property (i) have been used to incur Indebtedness, Disqualified Stock or Preferred Stock pursuant to clause (13)(a) of the second paragraph of Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock, (ii) have been used to make Restricted Payments pursuant to clause (2) of the second paragraph of this covenant, (iii) are contributed by a Restricted Subsidiary or (iv) constitute Excluded Contributions); plus
(d) 100% of the aggregate amount received in cash and the fair market value of marketable securities or other property received by means of:
(i) the sale or other disposition (other than to the Issuer or a Restricted Subsidiary) of Restricted Investments made by the Issuer or the Restricted Subsidiaries and repurchases and redemptions of such Restricted Investments from the Issuer or the Restricted Subsidiaries and repayments of loans or advances, and releases of guarantees, that constitute Restricted Investments made by the Issuer or the Restricted Subsidiaries, in each case, after the Issue Date;
(ii) the sale (other than to the Issuer or a Restricted Subsidiary) of the stock of an Unrestricted Subsidiary after the Issue Date (other than to the extent any Investments made in such Unrestricted Subsidiary constituted Permitted Investments); or
(iii) a distribution or a dividend from an Unrestricted Subsidiary after the Issue Date (only to the extent such distribution or dividend is not already included in the calculation of Consolidated Net Income); plus
(e) in the case of the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary after the Issue Date (other than to the extent any Investments made in such Unrestricted Subsidiary constituted Permitted Investments), the fair market value, as determined by the Board
of the Issuer in good faith, of the Investment in such Unrestricted Subsidiary (if such fair market value exceeds $35.0 million, the fair market value thereof shall be as determined (and confirmed in writing) by an Independent Financial Advisor), at the time of the redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary.
The foregoing provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption within 60 days after the date of declaration thereof or the giving of such irrevocable notice, as applicable, if at the date of declaration or the giving of such notice such payment would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement or other acquisition of any Equity Interests or Subordinated Indebtedness of the Issuer in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Issuer or a Restricted Subsidiary) of, Equity Interests of the Issuer or contributions to the equity capital of the Issuer (other than Excluded Contributions) (in each case, other than any Disqualified Stock or, except in the case of a redemption, repurchase, retirement or other acquisition of Subordinated Indebtedness, Preferred Stock); provided that the amount of any such proceeds that are utilized for any such Restricted Payment are excluded from clause 3(b) of the preceding paragraph;
(3) the redemption, defeasance, repurchase or other acquisition or retirement of (i) Subordinated Indebtedness of the Issuer or a Subsidiary Guarantor made in exchange for, or out of the proceeds of a sale made within 45 days of, new Indebtedness of the Issuer or a Subsidiary Guarantor, as the case may be, or (ii) Disqualified Stock of the Issuer or a Subsidiary Guarantor made in exchange for, or out of the proceeds of a sale made within 45 days of, Disqualified Stock of the Issuer or a Subsidiary Guarantor, that, in each case, is incurred in compliance with Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock, so long as:
(a) the principal amount (or accreted value, if applicable) of such new Indebtedness or the liquidation preference of such new Disqualified Stock does not exceed the principal amount of (or accreted value, if applicable), plus any accrued and unpaid interest on, the Subordinated Indebtedness, or the liquidation preference of, plus any accrued and unpaid dividends on, the Disqualified Stock, being so defeased, redeemed, repurchased, exchanged, acquired or retired for value, plus the amount of any reasonable premium (including reasonable tender premiums), defeasance costs and any reasonable fees and expenses incurred in connection with the issuance of such new Indebtedness or Disqualified Stock;
(b) such new Indebtedness is subordinated to the Notes or the applicable Guarantee at least to the same extent as such Subordinated Indebtedness so purchased, defeased, exchanged, redeemed, repurchased, acquired or retired for value;
(c) such new Indebtedness or Disqualified Stock has a final scheduled maturity date equal to or later than the final scheduled maturity date of the Subordinated Indebtedness or Disqualified Stock being so purchased, defeased, redeemed, repurchased, exchanged, acquired or retired; and
(d) such new Indebtedness or Disqualified Stock has a Weighted Average Life to Maturity equal to or greater than the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness or Disqualified Stock being so purchased, defeased, redeemed, repurchased, exchanged, acquired or retired;
(4) a Restricted Payment to pay for the repurchase, retirement or other acquisition or retirement for value of Equity Interests (other than Disqualified Stock) of the Issuer or any Parent Entity held by any future, present or former employee, director or consultant of the Issuer or any of its Subsidiaries or any Parent Entity pursuant to any management equity plan or stock option plan or
any other management or employee benefit plan or agreement, or any stock subscription or shareholder agreement; provided, however, that the aggregate Restricted Payments made under this clause (4) do not exceed in any calendar year $7.5 million (with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum (without giving effect to the following proviso) of $15.0 million in any calendar year); provided further that such amount in any calendar year may be increased by an amount not to exceed:
(a) the cash proceeds from the sale of Equity Interests (other than Disqualified Stock and Preferred Stock) of the Issuer and, to the extent contributed to the Issuer, the cash proceeds from the sale of Equity Interests of any Parent Entity, in each case to any future, present or former employees, directors or consultants of the Issuer; any of its Subsidiaries or any Parent Entity, that occurs after the Issue Date; provided that the amount of such cash proceeds utilized for any such repurchase, retirement or other acquisition or retirement for value will not increase the amount available for Restricted Payments under clause (3) of the immediately preceding paragraph; plus
(b) the cash proceeds of key man life insurance policies received by the Issuer or the Restricted Subsidiaries after the Issue Date; less
(c) the amount of any Restricted Payments previously made with the cash proceeds described in clause (a) or (b) of this clause (4);
(5) the declaration and payment of dividends to holders of any class or series of Disqualified Stock of the Issuer or any of the Restricted Subsidiaries or any class or series of Preferred Stock of any Restricted Subsidiary, in each case issued in accordance with the covenant described under Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock; provided that all such dividends are included in the calculation of Fixed Charges;
(6) the declaration and payment of dividends to holders of any class or series of Designated Preferred Stock issued by the Issuer or any of the Restricted Subsidiaries after the Issue Date and the declaration and payment of dividends to a Parent Entity, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock of such Parent Entity issued after the Issue Date; provided that (x) for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock, after giving effect to such issuance (and the payment of related dividends) on a pro forma basis, the Fixed Charge Coverage Ratio on a consolidated basis for the Issuer and the Restricted Subsidiaries would have been at least 2.00 to 1.00 and (y) the amount of dividends paid pursuant to this clause (6) shall not exceed the aggregate amount of cash actually received by the Issuer or the Restricted Subsidiaries from the sale of such Designated Preferred Stock; and provided further that all such dividends are included in the calculation of Fixed Charges;
(7) payments made by the Issuer or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director or consultant and repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;
(8) the declaration and payment of dividends on the Issuers common equity (or the payment of dividends to any Parent Entity to fund a payment of dividends on such Parent Entitys common equity), following consummation of the first public offering of the Issuers common equity or the common equity of such Parent Entity after the Issue Date, of up to 6% per annum on the net cash proceeds received by or contributed to the Issuer in or from any such public offering, other than public offerings with respect to the Issuers common equity registered on Form S-8 and other than any public sale, the proceeds of which constitute an Excluded Contribution;
(9) Restricted Payments in an amount equal to the unused amount of Excluded Contributions previously received;
(10) [intentionally omitted];
(11) the repurchase, redemption, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in accordance with provisions similar to those described under the captions Repurchase at the Option of HoldersChange of Control and Repurchase at the Option of HoldersAsset Sales; provided that (x) prior to such repurchase, redemption, defeasance or other acquisition or retirement for value, the Issuer (or a third Person permitted by the Indenture) has made a Change of Control Offer or Asset Sale Offer, as the case may be, with respect to the Notes as a result of such Change of Control or Asset Sale, as the case may be, and (y) all Notes tendered by Holders in connection with the relevant Change of Control Offer or Asset Sale Offer, as applicable, have been repurchased, redeemed, acquired or retired for value;
(12) the declaration and payment of dividends by the Issuer to, or the making of loans to, any Parent Entity in amounts required for any Parent Entity to pay, in each case without duplication,
(a) franchise and excise taxes and other fees, taxes and expenses required to maintain their corporate existence;
(b) foreign, federal, state and local income and similar taxes, to the extent such income taxes are attributable to the income, revenue, receipts, capital or margin of the Issuer and the Restricted Subsidiaries and, to the extent of the amount actually received from the Issuers Unrestricted Subsidiaries, in amounts required to pay such taxes to the extent attributable to the income of such Unrestricted Subsidiaries; provided that in each case the amount of such payments in any calendar year does not exceed the amount that the Issuer and its Subsidiaries would be required to pay in respect of foreign, federal, state and local taxes for such calendar year were the Issuer, the Restricted Subsidiaries and the Issuers Unrestricted Subsidiaries (to the extent described above) to pay such taxes separately from any such Parent Entity;
(c) (i) customary salary, bonus and other benefits payable to officers, employees and directors of any Parent Entity and (ii) general corporate operating (including, without limitation, expenses related to auditing or other accounting matters) and overhead costs and expenses of any Parent Entity, in each case, to the extent such salary, bonus, other benefits, costs and expenses are attributable to the ownership or operation of the Issuer and the Restricted Subsidiaries, including the Issuers proportionate share of such amounts relating to such Parent Entity being a public company;
(d) fees and expenses (other than to Affiliates of the Issuer) related to any unsuccessful equity or debt offering of such Parent Entity;
(e) cash payments in lieu of issuing fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Equity Interests of any Parent Entity; and
(f) amounts that would be permitted to be paid by the Issuer under clause (3), (4), (5), (8) or (11) of the covenant described under Transactions with Affiliates; provided that the amount of any dividend or distribution under this clause (12)(f) to permit any such payment shall reduce Consolidated Net Income of the Issuer to the extent, if any, that such payment would have reduced Consolidated Net Income of the Issuer if such payment had been made directly by the Issuer and increase (or, without duplication of any reduction of Consolidated Net Income, decrease) EBITDA to the extent, if any, that Consolidated Net Income is reduced under this clause (12)(f) and such payment would have been added back to (or, would have been deducted from) EBITDA if such payment had been made directly by the Issuer, in each case, in the period such payment is made;
(13) the repurchase, redemption, or other acquisition for value of Equity Interests of the Issuer deemed to occur in connection with paying cash in lieu of fractional shares of such Equity Interests in connection with a share dividend, distribution, share split, reverse share split, merger, consolidation, amalgamation or other business combination of the Issuer, in each case, permitted under the Indenture;
(14) the distribution, by dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to the Issuer or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries the primary assets of which are cash and/or Cash Equivalents);
(15) Restricted Payments by the Issuer to any Parent Entity to finance Investments that would otherwise be permitted to be made pursuant to this covenant if made by the Issuer; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment, (B) such Parent Entity shall, immediately following the closing thereof, cause (i) all property acquired (whether Equity Interests or other assets) to be contributed to the capital of the Issuer or one of the Restricted Subsidiaries (and which contribution is not an Excluded Contribution) or (ii) the merger or amalgamation of the Person formed or acquired into the Issuer or one of the Restricted Subsidiaries (to the extent not prohibited by the covenant Merger, Consolidation or Sale of All or Substantially All Assets below) in order to consummate such Investment, (C) such Parent Entity and its Affiliates (other than the Issuer or a Restricted Subsidiary) receives no consideration or other payment in connection with such transaction except to the extent the Issuer or a Restricted Subsidiary could have given such consideration or made such payment in compliance with the Indenture, (D) any property received by the Issuer shall not increase amounts available for Restricted Payments pursuant to clause (3) of the preceding paragraph or any other provision of this paragraph and (E) such Investment shall have been permitted by and shall be deemed to be made by the Issuer or such Restricted Subsidiary pursuant to another provision of this covenant or pursuant to the definition of Permitted Investments pursuant to which the Issuer would have been entitled to have made such Investment if made by the Issuer; and
(16) the Special Dividend and the Special Options Distribution;
provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under clause (15), no Default shall have occurred and be continuing or would occur as a consequence thereof.
For purposes of determining compliance with this covenant, in the event that a payment or other action meets the criteria of more than one of the exceptions described in clauses (1) through (16) above, or is permitted to be made pursuant to the first paragraph of this covenant (including by virtue of qualifying as a Permitted Investment), the Issuer will be permitted to classify such payment or other action on the date of its occurrence in any manner that complies with this covenant. Payments or other actions permitted by this covenant need not be permitted solely by reference to one provision permitting such payment or other action but may be permitted in part by one such provision and in part by one or more other provisions of this covenant permitting such payment or other action (including pursuant to any section of the definition of Permitted Investment).
All of the Issuers Subsidiaries are Restricted Subsidiaries. The Issuer will not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the last sentence of the definition of Unrestricted Subsidiary. For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Issuer and the Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated will be deemed to be Restricted Payments in an amount determined as set forth in the last sentence of the definition of Investments. Such designation will be permitted only if a Restricted Payment in such amount would be permitted at such time, whether pursuant to the first
paragraph of this covenant or under clause (9) of the second paragraph of this covenant, or pursuant to the definition of Permitted Investments, and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. Unrestricted Subsidiaries will not be subject to any of the restrictive covenants set forth in the Indenture.
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock
The Issuer will not, and will not permit any of the Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, incur and collectively, an incurrence) any Indebtedness (including Acquired Indebtedness) and the Issuer will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Issuer may incur Indebtedness (including Acquired Indebtedness) and issue shares of Disqualified Stock, and any of the Subsidiary Guarantors may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Issuer and the Restricted Subsidiaries most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
The foregoing limitations will not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the Issuer or any of the Restricted Subsidiaries and the issuance or creation of letters of credit and bankers acceptances thereunder (with letters of credit and bankers acceptances being deemed to have a principal amount equal to the face amount thereof), up to an aggregate principal amount outstanding at any one time not to exceed $40.0 million; provided that, to the extent that less than $7.0 million in aggregate principal amount of Indebtedness is outstanding pursuant to clause (2) below, such $40.0 million amount may be increased by an amount equal to the positive difference, if any, of $7.0 million less the aggregate principal amount of Indebtedness outstanding pursuant to clause (2) below;
(2) the incurrence of Indebtedness under the Alabama Revolving Credit Agreement by the Alabama Subsidiary, up to an aggregate principal amount outstanding at any one time not to exceed $7.0 million; provided that, to the extent any Indebtedness in aggregate principal amount in excess of $40.0 million has been incurred pursuant to the proviso in clause (1) above and is outstanding, such $7.0 million amount in this clause (2) shall be reduced by such excess amount;
(3) the incurrence by the Issuer and any Subsidiary Guarantor of Indebtedness represented by the Notes (including any Guarantee) (other than any Additional Notes, but including any Exchange Notes and Guarantees thereof);
(4) Indebtedness of the Issuer and the Restricted Subsidiaries in existence on the Issue Date (other than Indebtedness described in clause (1), (2) or (3));
(5) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred by the Issuer or any of the Restricted Subsidiaries to finance the purchase, lease, construction, installation or improvement of property (real or personal), equipment or other asset that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, and Indebtedness, Disqualified Stock and Preferred Stock incurred or issued to refund, refinance, replace, renew, extend or defease any
Indebtedness, Disqualified Stock or Preferred Stock incurred or issued as permitted under this clause (5); provided that the aggregate amount of Indebtedness, Disqualified Stock and Preferred Stock incurred pursuant to this clause (5), when aggregated with the outstanding amount of Indebtedness, Disqualified Stock and Preferred Stock incurred or issued to refund, refinance, replace, renew, extend or defease Indebtedness, Disqualified Stock or Preferred Stock initially incurred or issued in reliance on this clause (5), does not exceed the greater of $10.0 million and 2.0% of Total Assets;
(6) Indebtedness incurred by the Issuer or any of the Restricted Subsidiaries constituting reimbursement obligations with respect to bankers acceptances, bank guarantees, letters of credit, warehouse receipts or similar facilities entered into in the ordinary course of business, including letters of credit in respect of workers compensation claims, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers compensation claims, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, in each case (other than in the case of performance or surety bonds incurred to satisfy a regulatory requirement) incurred in the ordinary course of business; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(7) Indebtedness arising from agreements of the Issuer or the Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and the Restricted Subsidiaries in connection with such disposition;
(8) Indebtedness of the Issuer to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Subsidiary Guarantor is expressly subordinated in right of payment to the Notes; provided further, that any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this clause;
(9) Indebtedness of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary; provided that if a Subsidiary Guarantor incurs such Indebtedness owing to a Restricted Subsidiary that is not a Subsidiary Guarantor, such Indebtedness shall be expressly subordinated in right of payment to the Guarantee of the Notes of such Subsidiary Guarantor, as the case may be; provided further, that any subsequent transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this clause;
(10) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any
other subsequent transfer of any such shares of Preferred Stock (except to the Issuer or another of the Restricted Subsidiaries or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed in each case to be an issuance of such shares of Preferred Stock not permitted by this clause;
(11) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this covenant, exchange rate risk or commodity pricing risk;
(12) obligations in respect of self-insurance and obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Issuer or any of the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, incurred in the ordinary course of business;
(13) (a) Indebtedness or Disqualified Stock of the Issuer and Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary in an aggregate principal amount or liquidation preference up to 100.0% of the net cash proceeds received by the Issuer since immediately after the Issue Date from the issue or sale of Equity Interests of the Issuer or cash contributed to the capital of the Issuer (in each case, other than Excluded Contributions, proceeds of Disqualified Stock or Designated Preferred Stock and sales of Equity Interests to any Subsidiary of the Issuer) as determined in accordance with clause (3)(b) or (3)(c) of the first paragraph of Limitation on Restricted Payments to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to the second paragraph of Limitation on Restricted Payments or to make Permitted Investments (other than Permitted Investments specified in clause (1), (2) or (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Issuer and Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, that, when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred or issued pursuant to this clause (13)(b), does not exceed $35.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued pursuant to this clause (13)(b) shall cease to be deemed incurred or issued for purposes of this clause (13)(b) but shall be deemed incurred pursuant to the first paragraph of this covenant from and after the first date on which the Issuer or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under the first paragraph of this covenant without reliance on this clause (13)(b); provided that, in the case of any such Indebtedness that is secured by a Lien, the foregoing reclassification shall only be effective if and to the extent that the Issuer and the Restricted Subsidiaries would be able to incur (and as a result of such reclassification are deemed to have incurred) such Lien pursuant to clause (19) or (38) of the definition of Permitted Liens);
(14) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness or the issuance by the Issuer or any Restricted Subsidiary of Disqualified Stock or Preferred Stock that serves to refund, refinance, replace, renew, extend or defease any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under the first paragraph of this covenant or clause (3), (4) or (13)(a) above, or clause (15) below or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund, refinance, replace, renew, extend or defease such Indebtedness, Disqualified Stock or Preferred Stock, including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees and accrued
and unpaid interest in connection therewith (the Refinancing Indebtedness) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(a) has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred that is not less than the remaining Weighted Average Life to Maturity, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded, refinanced, replaced, renewed, extended or defeased,
(b) to the extent such Refinancing Indebtedness refunds, refinances, replaces, renews, extends or defeases (i) Indebtedness subordinated or pari passu (without giving effect to security interests) to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu (without giving effect to security interests) to the same extent as the Indebtedness being refunded, refinanced, replaced, renewed, extended or defeased or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively, and
(c) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary that is not a Subsidiary Guarantor or the Issuer that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary that is not a Subsidiary Guarantor or the Issuer that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary Guarantor; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(15) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Issuer or a Restricted Subsidiary incurred or issued to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into, amalgamated with or consolidated with the Issuer or a Restricted Subsidiary in accordance with the terms of the Indenture; provided that after giving pro forma effect to such acquisition, amalgamation, merger or consolidation, either
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of this covenant, or
(b) the Fixed Charge Coverage Ratio of the Issuer and the Restricted Subsidiaries is greater than such Fixed Charge Coverage Ratio immediately prior to such acquisition, amalgamation, merger or consolidation;
(16) cash management obligations and other Indebtedness in respect of netting services, automatic clearing house arrangements, employees credit or purchase cards, endorsements of instruments for deposit, overdraft protections and similar arrangements, in each case incurred in the ordinary course of business;
(17) Indebtedness of the Issuer or any of the Restricted Subsidiaries supported by a letter of credit issued pursuant to a Credit Facility incurred pursuant to clause (1) above, in a principal amount not in excess of the stated amount of such letter of credit and only so long as such letter of credit remains outstanding;
(18) any guarantee by the Issuer or a Restricted Subsidiary of Indebtedness or other obligations of the Issuer or any Restricted Subsidiary so long as the incurrence of such guaranteed Indebtedness is permitted under the terms of the Indenture and, in the case of any such guarantee by a Restricted
Subsidiary, such Restricted Subsidiary is in compliance with the covenant described under Additional Note Guarantees;
(19) Indebtedness of Foreign Subsidiaries of the Issuer not to exceed at any one time outstanding, and together with any other Indebtedness incurred under this clause (19), the greater of $35.0 million and 7.0% of Total Assets;
(20) Indebtedness of the Issuer or any of the Restricted Subsidiaries consisting of (i) the financing of insurance premiums or (ii) take-or-pay obligations contained in supply arrangements, in each case, incurred in the ordinary course of business;
(21) Indebtedness of the Issuer or any of the Restricted Subsidiaries undertaken in connection with cash management and related activities with respect to any Subsidiary or joint venture in the ordinary course of business;
(22) Indebtedness consisting of Indebtedness issued by the Issuer or any of the Restricted Subsidiaries to future, current or former officers, directors and employees thereof, their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Issuer or any Parent Entity to the extent described in clause (4) of the second paragraph under the caption Limitation on Restricted Payments; and
(23) any obligation, or guaranty of any obligation, of the Issuer or any Restricted Subsidiary to reimburse or indemnify a Person extending credit to customers of the Issuer or a Restricted Subsidiary incurred in the ordinary course of business as part of a Similar Business for all or any portion of the amounts payable by such customers to the Person extending such credit.
Notwithstanding the foregoing, Restricted Subsidiaries that are not Subsidiary Guarantors shall not be permitted to incur Indebtedness or issue Disqualified Stock or Preferred Stock pursuant to clause (5), (13)(b) or (19) above if, after giving effect to such incurrence or issuance, the aggregate principal amount of Indebtedness of Restricted Subsidiaries that are not Subsidiary Guarantors outstanding pursuant to such clauses, together with the aggregate liquidation preference of Disqualified Stock and Preferred Stock issued by Restricted Subsidiaries that are not Subsidiary Guarantors outstanding pursuant to such clauses, would exceed the greater of $55.0 million and 11.0% of Total Assets.
For purposes of determining compliance with this covenant:
(1) in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of more than one of the categories of permitted Indebtedness, Disqualified Stock or Preferred Stock described in clauses (1) through (22) of the preceding paragraph or is entitled to be incurred pursuant to the first paragraph of this covenant, the Issuer, in its sole discretion, will classify, and may later reclassify, such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) in any manner that complies with this covenant; provided that (x) all Indebtedness outstanding under the Revolving Credit Agreement will be treated as incurred under clause (1) of the preceding paragraph, (y) all Indebtedness outstanding under the Alabama Revolving Credit Agreement will be treated as incurred under clause (2) of the preceding paragraph and (z) the Issuer shall not be permitted to reclassify all or any portion of any Indebtedness incurred pursuant to such clause (1) or (2); and
(2) at the time of incurrence, the Issuer will be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in the first and second paragraphs above.
Accrual of interest or dividends, the accretion of accreted value, the accretion or amortization of original issue discount and the payment of interest or dividends in the form of additional Indebtedness, Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this covenant.
For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed (i) the principal amount of such Indebtedness being refinanced plus (ii) the aggregate amount of accrued interest, fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing.
The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.
The Indenture provides that the Issuer will not, and will not permit any Subsidiary Guarantor to, directly or indirectly, incur any Indebtedness (including Acquired Indebtedness) that is subordinated or junior in right of payment to any Indebtedness of the Issuer or such Subsidiary Guarantor, as the case may be, unless such Indebtedness is expressly subordinated in right of payment to the Notes or such Subsidiary Guarantors Guarantee to the extent and in the same manner as such Indebtedness is subordinated to other Indebtedness of the Issuer or such Subsidiary Guarantor, as the case may be.
The Indenture does not treat (1) unsecured Indebtedness as subordinated or junior to Secured Indebtedness merely because it is unsecured or (2) Indebtedness as subordinated or junior to any other Indebtedness merely because it has a junior priority with respect to the same collateral.
Liens
The Issuer will not, and will not permit any Restricted Subsidiary to, directly or indirectly, create, incur or suffer to exist any Lien (except Permitted Liens) (each, a Subject Lien) that secures Obligations under any Indebtedness on any asset or property of the Issuer or any Restricted Subsidiary, except for:
(1) in the case of Subject Liens on any Collateral, any Subject Lien, if such Subject Lien expressly has Junior Lien Priority on the Collateral relative to the Notes and the Guarantees; or
(2) in the case of Subject Liens on any other asset or property, any Subject Lien, if the Notes and the Guarantees are equally and ratably secured with (or on a senior basis to, in the case such Subject Lien secures any Subordinated Indebtedness) the Obligations secured by such Subject Lien.
Any Lien created for the benefit of the Holders of the Notes pursuant to clause (2) of the preceding paragraph may provide by its terms that such Lien shall be automatically and unconditionally released and discharged upon the release and discharge of the Subject Lien that gave rise to the obligation to so secure the Notes and the Guarantees (which release and discharge in the case of any sale of any such asset or property shall not affect any Lien that the Collateral Agent may otherwise have on the proceeds from such sale).
Any reference to a Permitted Lien is not intended to subordinate or postpone, and shall not be interpreted as subordinating or postponing, or as any agreement to subordinate or postpone, any Lien in favor of the Collateral Agent in respect of the Collateral.
Merger, Consolidation or Sale of All or Substantially All Assets
The Issuer shall not consolidate, merge or amalgamate with or into or wind up into (whether or not the Issuer is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to any Person unless:
(1) the Issuer is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a Person organized or existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof (such Person, as the case may be, being herein called the Successor Company); provided that in the case where the Successor Company is not a corporation, a co-obligor of the Notes shall be a corporation;
(2) the Successor Company expressly assumes all the obligations of the Issuer under the Indenture, the Security Documents and the Notes pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;
(3) immediately after such transaction, no Default exists;
(4) immediately after giving pro forma effect to such transaction and any related financing transactions, as if such transactions had occurred at the beginning of the applicable four-quarter period,
(a) the Successor Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described under Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock, or
(b) the Fixed Charge Coverage Ratio for the Issuer (or the Successor Company, as applicable) and the Restricted Subsidiaries on a consolidated basis would be greater than the Fixed Charge Coverage Ratio for the Issuer and the Restricted Subsidiaries on a consolidated basis immediately prior to such transaction;
(5) each Subsidiary Guarantor, unless it is the other party to the transactions described above, in which case the third succeeding paragraph shall apply, shall have by supplemental indenture confirmed that its Guarantee shall apply to such Persons obligations under the Indenture and the Notes;
(6) the Issuer shall have delivered to the Trustee an Officers Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indentures, if any, comply with the Indenture;
(7) to the extent any assets of the Person that is merged, amalgamated or consolidated with or into the Successor Company are assets of the type that would constitute Collateral under the Security Documents, the Successor Company will take such action as may be reasonably necessary to cause such property and assets to be made subject to the Lien of the Security Documents in the manner and to the extent required by the Indenture or any of the Security Documents and shall take all reasonably necessary action so that such Lien is perfected to the extent required by the Indenture and the Security Documents; and
(8) the Collateral owned by or transferred to the Successor Company shall: (a) continue to constitute Collateral under the Indenture and the Security Documents, (b) be subject to the Lien in favor of the Collateral Agent for the benefit of the Trustee and the Holders of the Notes and (c) not be subject to any Lien other than Permitted Liens and other Liens permitted under the covenant described above under Liens.
The Successor Company will succeed to, and be substituted for the Issuer under the Indenture, the Security Documents and the Notes. Notwithstanding the foregoing clauses (3) and (4),
(1) any Restricted Subsidiary may consolidate or amalgamate with or merge into or transfer all or part of its properties and assets to the Issuer or any Restricted Subsidiary; and
(2) the Issuer may consolidate, amalgamate or merge with an Affiliate of the Issuer solely for the purpose of reincorporating the Issuer in another state in the United States, the District of Columbia or any territory thereof so long as the amount of Indebtedness of the Issuer and the Restricted Subsidiaries is not increased thereby.
Subject to certain provisions set forth in the Indenture governing release of a Guarantee upon the sale, disposition or transfer of the Capital Stock of a Subsidiary Guarantor, no Subsidiary Guarantor will, and the Issuer will not permit any such Subsidiary Guarantor to, consolidate, amalgamate or merge with or into or wind up into (whether or not such Subsidiary Guarantor is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to any Person unless:
(1) (a) such Subsidiary Guarantor is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than such Subsidiary Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a Person organized or existing under (i) the laws of the jurisdiction of organization of such Subsidiary Guarantor or (ii) the laws of the United States, any state thereof, the District of Columbia or any territory thereof (such Subsidiary Guarantor or such Person, as the case may be, being herein called the Successor Subsidiary Guarantor);
(b) the Successor Subsidiary Guarantor, if other than such Subsidiary Guarantor, expressly assumes all the obligations of such Subsidiary Guarantor under the Indenture and such Subsidiary Guarantors related Guarantee and the Security Documents pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;
(c) immediately after such transaction, no Default exists;
(d) the Issuer shall have delivered to the Trustee an Officers Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indentures, if any, comply with the Indenture;
(e) to the extent any assets of the Person that is merged, amalgamated or consolidated with or into the Successor Subsidiary Guarantor are assets of the type that would constitute Collateral under the Security Documents, the Successor Subsidiary Guarantor will take such action as may be reasonably necessary to cause such property and assets to be made subject to the Lien of the Security Documents in the manner and to the extent required by the Indenture or any of the Security Documents and shall take all reasonably necessary action so that such Lien is perfected to the extent required by the Indenture and the Security Documents; and
(f) the Collateral owned by or transferred to the Successor Subsidiary Guarantor shall: (i) continue to constitute Collateral under the Indenture and the Security Documents, (ii) be subject to the Lien in favor of the Collateral Agent for the benefit of the Trustee and the Holders of the Notes and (iii) not be subject to any Lien other than Permitted Liens and other Liens permitted under the covenant described above under Liens; or
(2) the transaction is made in compliance with the covenant described under Repurchase at the Option of HoldersAsset Sales.
Subject to certain limitations described in the Indenture, the Successor Subsidiary Guarantor will succeed to, and be substituted for, such Subsidiary Guarantor under the Indenture, the Security Documents and such Subsidiary Guarantors Guarantee. Notwithstanding the foregoing, any such Subsidiary Guarantor may (1) merge into or transfer all or part of its properties and assets to another Subsidiary Guarantor or the Issuer or (2) merge with an Affiliate of the Issuer solely for the purpose of
reincorporating or reorganizing such Subsidiary Guarantor in the United States, any state thereof, the District of Columbia or any territory thereof so long as the amount of Indebtedness of the Issuer and the Restricted Subsidiaries is not increased thereby.
Transactions with Affiliates
The Issuer will not, and will not permit any of the Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Issuer (each of the foregoing, an Affiliate Transaction) involving aggregate payments or consideration in excess of $5.0 million unless:
(1) such Affiliate Transaction is on terms that are not materially less favorable to the Issuer or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Issuer or such Restricted Subsidiary with an unrelated Person on an arms-length basis; and
(2) the Issuer delivers to the Trustee with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate payments or consideration in excess of $15.0 million, a resolution adopted by the majority of the Board of the Issuer approving such Affiliate Transaction and set forth in an Officers Certificate certifying that such Affiliate Transaction complies with clause (1) above.
The foregoing provisions will not apply to the following:
(1) transactions between or among the Issuer or any of the Restricted Subsidiaries or any entity that becomes a Restricted Subsidiary as a result of such transaction, so long as such transaction is otherwise consummated in compliance with the Indenture;
(2) Restricted Payments permitted by the provisions of the Indenture described above under the covenant Limitation on Restricted Payments and Permitted Investments permitted by clause (8) or (13) of the definition of Permitted Investments;
(3) the payment of management, consulting, monitoring and advisory fees and related expenses (including indemnification and other similar agreements) to the Investors pursuant to the Investor Management Agreement (plus any unpaid management, consulting, monitoring, advisory and other fees and related expenses (including indemnification and other similar amounts) accrued in any prior year) and the termination fees pursuant to the Investor Management Agreement, in each case, in amounts not in excess of those contemplated by the Investor Management Agreement as in effect on the Issue Date or as the same may be amended after the Issue Date, so long as any amendments thereto, when taken as a whole, are not disadvantageous in any material respect to the Holders;
(4) the payment of indemnification and other similar amounts to the Investors and reimbursement of expenses of the Investors approved by, or pursuant to arrangements approved by, the Board of the Issuer in good faith;
(5) the payment of reasonable and customary fees and compensation paid to, and indemnities and reimbursements and employment and severance arrangements provided on behalf of, or for the benefit of, future, current or former officers, directors, employees or consultants of the Issuer, any of the Restricted Subsidiaries or any Parent Entity;
(6) transactions in which the Issuer or any of the Restricted Subsidiaries, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to the Issuer or such Restricted Subsidiary from a financial point of view or stating that the terms
are not materially less favorable to the Issuer or its relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Issuer or such Restricted Subsidiary with an unrelated Person on an arms-length basis;
(7) any agreement or arrangement as in effect as of the Issue Date, as the same may be amended after the Issue Date, so long as any such amendments, when taken as a whole, are not disadvantageous in any material respect to the Holders;
(8) the existence of, or the performance by the Issuer or any of the Restricted Subsidiaries of its obligations under the terms of, any stockholders agreement or the equivalent thereof (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Issue Date and any amendment thereto or any similar agreement that it may enter into thereafter; provided, however, that any such amendment and any similar agreement shall not contain terms that, when taken as a whole, are disadvantageous in any material respect to the Holders;
(9) transactions with customers, clients, suppliers or purchasers or sellers of goods or services that are Affiliates, in each case in the ordinary course of business and otherwise in compliance with the terms of the Indenture and that are fair to the Issuer and the Restricted Subsidiaries, in the reasonable determination of the Board of the Issuer or the senior management thereof, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party;
(10) the issuance or transfer of Equity Interests (other than Disqualified Stock) of the Issuer to any Parent Entity or to any Permitted Holder or to any director, officer, employee or consultant (or their respective estates, investment funds, investment vehicles, spouses or former spouses) of the Issuer, any of the Issuers Subsidiaries or any Parent Entity and the granting and performing of reasonable and customary registration rights with respect to such Equity Interests;
(11) payments by the Issuer or any of the Restricted Subsidiaries to the Investors made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures; provided that such payments are approved by the Board of the Issuer in good faith;
(12) payments or loans (or cancellation of loans) to employees, directors or consultants of the Issuer, any of the Restricted Subsidiaries or any Parent Entity and employment agreements, stock option plans and other similar arrangements with such employees, directors or consultants that, in each case, that are approved by the Board of the Issuer in good faith;
(13) investments by the Investors in securities of the Issuer or any of the Restricted Subsidiaries (and payment of reasonable out-of-pocket expenses incurred by the Investors in connection therewith) so long as (i) the investment is being offered generally to other investors on the same or more favorable terms and (ii) the investment by the Investors, in the aggregate, constitutes less than 5% of the proposed issue amount of such class of securities;
(14) payments to any future, current or former employee, director, officer or consultant of the Issuer, any of its Subsidiaries or any Parent Entity pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement; and any employment agreements, stock option plans and other compensatory arrangements (and any successor plans thereto) and any health, disability and similar insurance or benefit plans or supplemental executive retirement benefit plans or arrangements with any such employees, directors, officers or consultants that are, in each case, approved by the Board of the Issuer in good faith;
(15) transactions with a Person (other than an Unrestricted Subsidiary) that is an Affiliate of the Issuer solely because the Issuer owns any Equity Interest in, or controls, such Person; provided that, no Affiliate of the Issuer, other than the Issuer or a Restricted Subsidiary, shall have a beneficial interest or otherwise participate in such Person other than through such Affiliates ownership of the Issuer;
(16) payments by the Issuer and its Subsidiaries pursuant to tax sharing agreements among the Issuer (and any Parent Entity) and its Subsidiaries; provided that in each case the amount of such payments in any calendar year does not exceed the amount that the Issuer, the Restricted Subsidiaries and the Issuers Unrestricted Subsidiaries (to the extent of the amount received from Unrestricted Subsidiaries) would be required to pay in respect of foreign, federal, state and local taxes for such calendar year were the Issuer, the Restricted Subsidiaries and the Issuers Unrestricted Subsidiaries (to the extent described above) to pay such taxes separately from any such Parent Entity; and
(17) intellectual property licenses entered into in the ordinary course of business.
Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries
The Issuer will not, and will not permit any of the Restricted Subsidiaries that are not Guarantors to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:
(1) (a) pay dividends or make any other distributions to the Issuer or any of the Restricted Subsidiaries on its Capital Stock or with respect to any other interest or participation in, or measured by, its profits, or
(b) pay any Indebtedness owed to the Issuer or any of the Restricted Subsidiaries;
(2) make loans or advances to the Issuer or any of the Restricted Subsidiaries; or
(3) sell, lease or transfer any of its properties or assets to the Issuer or any of the Restricted Subsidiaries, except (in each case) for such encumbrances or restrictions existing under or by reason of:
(a) contractual encumbrances or restrictions in effect on the Issue Date, including pursuant to the Alabama Revolving Credit Agreement, the Revolving Credit Agreement and the related documentation and related Hedging Obligations;
(b) the Indenture, the Notes, Exchange Notes and Guarantees thereof;
(c) purchase money obligations for property acquired in the ordinary course of business and Capital Lease Obligations that impose restrictions of the nature described in clause (3) above, in each case, only with respect to the property so acquired;
(d) applicable law or any applicable rule, regulation or order;
(e) any agreement or other instrument of a Person acquired by or merged, amalgamated or consolidated with or into the Issuer or any Restricted Subsidiary in existence at the time of such acquisition or at the time it merges, amalgamates or consolidates with or into the Issuer or any Restricted Subsidiary or assumed in connection with the acquisition of assets from such Person (but, in each case, not created in contemplation thereof); provided that such encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person and its Subsidiaries, or the property or assets of the Person and its Subsidiaries, so acquired;
(f) contracts for the sale of assets, including customary restrictions with respect to a Subsidiary of the Issuer pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of such Subsidiary, pending the sale of such assets;
(g) Secured Indebtedness otherwise permitted to be incurred pursuant to the covenants described under Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock and Liens that limit the right of the debtor to dispose of the assets securing such Indebtedness;
(h) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;
(i) customary provisions in joint venture agreements or arrangements and other similar agreements relating solely to such joint venture;
(j) customary provisions contained in leases, sub-leases, licenses, sub-licenses or similar agreements, including with respect to intellectual property and other agreements, in each case, entered into in the ordinary course of business to the extent such obligations impose restrictions of the nature described in clause (3) above on the property subject to such lease, sub-lease, license, sub-license or other similar agreement;
(k) restrictions or conditions contained in any trading, netting, operating, construction, service, supply, purchase, sale or other agreement to which the Issuer or any of the Restricted Subsidiaries is a party entered into in the ordinary course of business; provided that such agreement prohibits the encumbrance of solely the property or assets of the Issuer or such Restricted Subsidiary that are the subject of such agreement, the payment rights arising thereunder or the proceeds thereof and does not extend to any other asset or property of the Issuer or such Restricted Subsidiary or the assets or property of another Restricted Subsidiary;
(l) any encumbrance or restriction with respect to a Restricted Subsidiary that was previously an Unrestricted Subsidiary pursuant to or by reason of an agreement that such Subsidiary is a party to or entered into before the date on which such Subsidiary became a Restricted Subsidiary; provided that such agreement was not entered into in anticipation of an Unrestricted Subsidiary becoming a Restricted Subsidiary and any such encumbrance or restriction does not extend to any assets or property of the Issuer or any other Restricted Subsidiary other than the assets and property of such Subsidiary;
(m) other Indebtedness, Disqualified Stock or Preferred Stock of Foreign Subsidiaries that are not Guarantors that is permitted to be incurred subsequent to the Issue Date pursuant to the provisions of the covenant described under Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock;
(n) other Indebtedness, Disqualified Stock or Preferred Stock permitted to be incurred subsequent to the Issue Date pursuant to the provisions of the covenant described under Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock; provided that, in the good faith judgment of the Issuer, the encumbrances and restrictions contained therein will not materially impair the Issuers ability to make payments under the Notes when due; and
(o) any encumbrances or restrictions of the type referred to in clause (1), (2) or (3) above imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in any of clauses (a) through (n) above; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings (i) are, in the good faith
judgment of the Issuer, not materially more restrictive with respect to such encumbrance and other restrictions taken as a whole than those prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing, and (ii) in the case of the Alabama Revolving Credit Agreement, do not affect the ability of the Alabama Subsidiary to comply with the covenant described under Alabama Excess Cash Flow Distribution.
Alabama Excess Cash Flow Distribution
So long as the Alabama Subsidiary remains a Subsidiary of the Issuer and the Alabama Revolving Credit Agreement remains outstanding, within 45 days of the end of each fiscal quarter, the Issuer shall cause the Alabama Subsidiary to declare and pay a dividend, other payment or distribution on account of its Equity Interests to the holders of such Equity Interests on a pro rata basis in an amount equal to the Alabama Excess Cash Flow for such fiscal quarter, and shall deliver to the Trustee an Officers Certificate setting forth a reasonably detailed calculation of Alabama Excess Cash Flow for such fiscal quarter and confirming that such dividend or other payment or distribution has been made.
Additional Note Guarantees
The Issuer will cause each Restricted Subsidiary that is not a Guarantor that guarantees Indebtedness of the Issuer or any Subsidiary Guarantor after the Issue Date to, as promptly as reasonably practicable, execute and deliver to the Trustee a supplemental indenture, Security Documents (or supplements or counterparts thereto) and an acknowledgment to the Junior Lien Intercreditor Agreement (if then in existence) pursuant to which such Restricted Subsidiary will (A) guarantee payment of the Notes and all other Notes Obligations on the same terms and conditions as those set forth in the Indenture, (B) grant a Lien on such of its assets of the type that would constitute Collateral in favor of the Collateral Agent for the benefit of the Noteholder Secured Parties as security for the Notes and all other Notes Obligations on terms and conditions similar to those set forth in the other Security Documents then existing and (C) agree to acknowledge, and agree to comply with, the terms of the Collateral Agreement and the Junior Lien Intercreditor Agreement (if then in existence).
Reports and Other Information
Whether or not the Issuer is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Issuer will file with the SEC and provide the Trustee and Holders with such annual and other reports as are specified in Sections 13 and 15(d) of the Exchange Act and applicable to a U.S. corporation subject to such Sections, such reports to be so filed and provided within the time periods specified for the filings of such reports under such Sections and containing all the information, audit reports and exhibits required for such reports. If at any time the Issuer is not subject to the periodic reporting requirements of the Exchange Act, the Issuer will nevertheless file the reports specified in the preceding sentence with the SEC within the time periods required unless the SEC will not accept such a filing. The availability of the foregoing reports on the SECs EDGAR service (or successor thereto) shall be deemed to satisfy the Issuers delivery obligations to the Trustee and the Holders. The Issuer agrees that it will not take any action for the purpose of causing the SEC not to accept such filings. If, notwithstanding the foregoing, the SEC will not accept such filings for any reason, the Issuer will post the specified reports on its public website within the time periods that would apply if the Issuer were required to file those reports with the SEC.
Notwithstanding the foregoing, the Issuer shall not be obligated to file the annual and quarterly reports required by the preceding paragraph with the SEC prior to the filing of any registration statement pursuant to the registration rights agreement, and pending which the Issuer will post the following information on its public website, (1) within 90 days of the end of each fiscal year, annual audited financial statements of the Issuer and its Subsidiaries for such fiscal year and (2) commencing
with the fiscal quarter ended March 31, 2011, within 60 days of the end of such fiscal quarter and, thereafter, within 45 days of the end of each of the first three fiscal quarters of every fiscal year, unaudited financial statements of the Issuer and its Subsidiaries for the interim period as of, and for the period ending on, the end of such fiscal quarter prepared in accordance with GAAP and reviewed pursuant to Statement on Auditing Standards No. 116 (or any successor statement), in each case, including, with respect to the periods presented, applicable comparable prior periods and pro forma information, a Managements Discussion and Analysis of Financial Condition and Results of Operations and a presentation of EBITDA and Adjusted EBITDA of the Issuer and the Restricted Subsidiaries and, with respect to the annual information only, a report on the annual financial statements by the Issuers certified independent accountants (all of the foregoing information to be prepared on a basis substantially consistent with, and with the same level of detail as, the corresponding information included in the Offering Circular or, at the option of the Issuer, the then applicable SEC requirements); provided that, for the fiscal quarter ending March 31, 2011, the Issuer shall only be required to provide separate interim financial statements (with applicable comparable prior periods) for CheckSmart Financial Holdings Corp. (and its consolidated subsidiaries), together with a Managements Discussion and Analysis of Financial Condition and Results of Operations with respect to the interim financial information contained in such financial statements, prepared on a basis substantially consistent with, and with the same level of detail as, the corresponding information included in the Offering Circular or, at the option of the Issuer, the then applicable SEC requirements.
At any time that any of the Issuers Subsidiaries are Unrestricted Subsidiaries, then the quarterly and annual financial information required by the preceding paragraphs will include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, and in Managements Discussion and Analysis of Financial Condition and Results of Operations, such discussion to be on a basis substantially consistent with, and with the same level of detail as, the corresponding information included in the Offering Circular, of the financial condition and results of operations of the Issuer and the Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries of the Issuer.
Notwithstanding the foregoing, the requirement to provide the information and reports referred to in the first paragraph of this covenant shall be deemed satisfied prior to the commencement of the exchange offer or the effectiveness of a shelf registration statement relating to the registration of the Notes under the Securities Act (each as described in the Offering Circular) by the filing with the SEC, prior to the time the information required by the first paragraph would otherwise be required to be filed, of a registration statement, and any amendments thereto, with such financial information that satisfies Regulation S-X under the Securities Act.
In addition, at any time when the Issuer is not subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Issuer will furnish to the Holders and to prospective investors, upon the requests of such Holders, any information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act for so long as the Notes are not freely transferable under the Securities Act.
So long as any Notes are outstanding, the Issuer will also:
(1) as promptly as reasonably practicable after filing with the SEC or posting the annual and quarterly reports required by the first paragraph of this covenant, hold a conference call to discuss such reports and the results of operations for the relevant reporting period; and
(2) issue a press release to the appropriate nationally recognized wire services prior to the date of the conference call required to be held in accordance with clause (1) of this paragraph, announcing the time and date of such conference call and either including all information necessary to access the call or informing Holders, beneficial owners, prospective investors, market makers affiliated with any Initial Purchaser and securities analysts how they can obtain such information.
Events of Default and Remedies
The Indenture provides that each of the following is an Event of Default:
(1) default in payment when due and payable, upon redemption, acceleration or otherwise, of principal of, or premium, if any, on the Notes;
(2) default for 30 days or more in the payment when due of interest on or with respect to the Notes;
(3) failure by the Issuer or any Subsidiary Guarantor for 60 days (or, in the case of the provisions described under Certain CovenantsReports and Other Information, 180 days) after receipt of written notice given by the Trustee or the Holders of not less than 25% in principal amount of the outstanding Notes to comply with any of its obligations, covenants or agreements (other than a default referred to in clause (1) or (2) above) contained in the Indenture, the Security Documents, the Notes, the Alabama Intercreditor Agreement or the Junior Lien Intercreditor Agreement;
(4) default under any mortgage, indenture or instrument under which there is issued or by which there is secured or evidenced any Indebtedness for money borrowed by the Issuer or any of the Restricted Subsidiaries or the payment of which is guaranteed by the Issuer or any of the Restricted Subsidiaries, other than Indebtedness owed to the Issuer or a Restricted Subsidiary, whether such Indebtedness or guarantee now exists or is created after the issuance of the Notes, if both:
(a) such default either results from the failure to pay any principal of such Indebtedness at its stated final maturity (after giving effect to any applicable grace periods) or relates to an obligation other than the obligation to pay principal of any such Indebtedness at its stated final maturity and results in the holder or holders of such Indebtedness causing such Indebtedness to become due prior to its stated final maturity; and
(b) the principal amount of such Indebtedness, together with the principal amount of any other such Indebtedness in default for failure to pay principal at stated final maturity (after giving effect to any applicable grace periods), or the maturity of which has been so accelerated, is, in the aggregate, $25.0 million;
(5) failure by the Issuer or any Significant Subsidiary (or group of Restricted Subsidiaries that together (determined as of the most recent consolidated financial statements of the Issuer for a fiscal quarter end provided as required under Certain CovenantsReports and Other Information) would constitute a Significant Subsidiary) to pay final judgments aggregating in excess of $25.0 million or more (net of amounts covered by insurance policies issued by reputable insurance companies), which final judgments remain unpaid, undischarged and unstayed for a period of more than 60 days after such judgment becomes final, and in the event such judgment is covered by insurance, an enforcement proceeding has been commenced by any creditor upon such judgment or decree that is not promptly stayed;
(6) certain events of bankruptcy or insolvency with respect to the Issuer or any Significant Subsidiary (or group of Restricted Subsidiaries that together (determined as of the most recent consolidated financial statements of the Issuer for a fiscal quarter end provided as required under Certain CovenantsReports and Other Information) would constitute a Significant Subsidiary);
(7) the Guarantee of any Significant Subsidiary (or group of Restricted Subsidiaries that together (determined as of the most recent consolidated financial statements of the Issuer for a fiscal quarter end provided as required under Certain CovenantsReports and Other Information) would constitute a Significant Subsidiary) shall for any reason cease to be in full force and effect or be declared null and void or any responsible officer of the Issuer or any Subsidiary Guarantor that is a Significant Subsidiary (or the responsible officers of any such group of Restricted Subsidiaries), as the case may be, denies that it has any further liability under its Guarantee or gives notice to such effect, other than by reason of the termination of the Indenture or the release of any such Guarantee in accordance with the Indenture; or
(8) with respect to any Collateral, individually or in the aggregate, having a fair market value in excess of $15.0 million, any of the Security Documents ceases to be in full force and effect, or any of the Security Documents ceases to give the Holders of the Notes the Liens purported to be created thereby with the priority contemplated thereby, or any of the Security Documents is declared null and void or the Issuer or any Subsidiary Guarantor denies in writing that it has any further liability under any Security Document or gives written notice to such effect (in each case (i) other than in accordance with the terms of the Indenture, the Security Documents, the Alabama Intercreditor Agreement and the Junior Lien Intercreditor Agreement, and, except to the extent that any loss of perfection or priority results from the failure of the Collateral Agent to maintain possession of certificates actually delivered to it representing securities pledged under the Security Documents, or otherwise results from the gross negligence or wilful misconduct of the Trustee or the Collateral Agent; provided that if a failure of the sort described in this clause (8) is susceptible of cure (including with respect to any loss of Lien priority on material portions of the Collateral), no Event of Default shall arise under this clause (8) with respect thereto until 30 days after notice of such failure shall have been given to the Issuer by the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes.
If any Event of Default (other than of a type specified in clause (6) above) occurs and is continuing under the Indenture, the Trustee or the Holders of at least 25% in principal amount of the then total outstanding Notes may declare the principal, premium, if any, interest and any other monetary obligations on all the then outstanding Notes to be due and payable immediately.
Upon the effectiveness of such declaration, such principal and interest will be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising under clause (6) of the first paragraph of this section, all outstanding Notes will become due and payable without further action or notice. The Indenture provides that if a Default occurs and is continuing and is actually known to the Trustee, the Trustee must mail to each Holder of Notes notice of the Default within 90 days after it is known to the Trustee. The Indenture provides that the Trustee may withhold from the Holders notice of any continuing Default, except a Default relating to the payment of principal, premium, if any, or interest, if it in good faith determines that withholding notice is in their interest.
The Indenture provides that the Holders of a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default and its consequences under the Indenture (except a continuing Default in the payment of interest on, premium, if any, or the principal of any Note held by a non-consenting Holder) and rescind any acceleration and its consequences with respect to the Notes. In the event of any Event of Default specified in clause (4) above, such Event of Default and all consequences thereof (excluding any resulting payment default, other than as a result of acceleration of the Notes) shall be annulled, waived and rescinded, automatically and without any action by the Trustee or the Holders, if within 20 days after such Event of Default arose:
(1) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged; or
(2) the requisite holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default; or
(3) the default that is the basis for such Event of Default has been cured.
Subject to the provisions of the Indenture relating to the duties of the Trustee thereunder, in case an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the Holders of the Notes unless the Holders have offered to the Trustee indemnity or security satisfactory to the Trustee against any loss, liability or expense in relation to such exercise. Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no Holder of a Note may pursue any remedy with respect to the Indenture or the Notes unless:
(1) such Holder has previously given the Trustee notice that an Event of Default is continuing;
(2) Holders of at least 25% in principal amount of the total outstanding Notes have requested the Trustee to pursue the remedy;
(3) Holders of the Notes have offered and, if requested, provided to the Trustee indemnity or security satisfactory to the Trustee against any loss, liability or expense in relation to such Holders pursuit of such remedy;
(4) the Trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity; and
(5) Holders of a majority in principal amount of the total outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period.
Subject to certain restrictions, under the Indenture the Holders of a majority in principal amount of the total outstanding Notes are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder of a Note or that would involve the Trustee in personal liability.
The Indenture provides that the Issuer is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Issuer is required, within five Business Days, upon becoming aware of any Default, to deliver to the Trustee a statement specifying such Default.
No Personal Liability of Directors, Officers, Employees and Stockholders
No director, officer, employee, incorporator or stockholder of the Issuer or any Subsidiary Guarantor or any of their parent companies or entities shall have any liability for any obligations of the Issuer or the Subsidiary Guarantors under the Notes, the Guarantees, the Security Documents or the Indenture or for any claim based on, in respect of, or by reason of such obligations or their creation. Each Holder by accepting Notes waived and released all such liability. The waiver and release were part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws.
Legal Defeasance and Covenant Defeasance
The obligations of the Issuer and the Subsidiary Guarantors under the Indenture and the Security Documents will terminate (other than certain obligations) and will be released upon payment in full of all of the Notes. The Issuer may, at its option and at any time, elect to have all of its obligations
discharged with respect to the Notes and have each Subsidiary Guarantors obligation discharged with respect to its Guarantee (Legal Defeasance) and cure all then existing Events of Default except for:
(1) the rights of Holders of Notes to receive payments in respect of the principal of, premium, if any, and interest on the Notes when such payments are due solely out of the trust created pursuant to the Indenture;
(2) the Issuers obligations with respect to Notes concerning issuing temporary Notes, registration of such Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;
(3) the rights, powers, trusts, duties and immunities of the Trustee, and the Issuers obligations in connection therewith; and
(4) the Legal Defeasance provisions of the Indenture.
In addition, the Issuer may, at its option and at any time, elect to have its obligations and those of each Subsidiary Guarantor released with respect to substantially all of the restrictive covenants that are described in the Indenture (Covenant Defeasance) and thereafter any omission to comply with such obligations shall not constitute a Default with respect to the Notes. In the event Covenant Defeasance occurs, certain events (not including bankruptcy, receivership, rehabilitation and insolvency events pertaining to the Issuer) described under Events of Default and Remedies will no longer constitute an Event of Default with respect to the Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance with respect to the Notes:
(1) the Issuer must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Notes, cash in U.S. dollars, Government Securities or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest due on the Notes on the stated maturity date or on the Redemption Date, as the case may be, of such principal, premium, if any, or interest on such Notes and the Issuer must specify whether such Notes are being defeased to maturity or to a particular Redemption Date;
(2) in the case of Legal Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions,
(a) the Issuer has received from, or there has been published by, the United States Internal Revenue Service a ruling, or
(b) since the issuance of the Notes, there has been a change in the applicable U.S. federal income tax law,
in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, subject to customary assumptions and exclusions, the Holders of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes, as applicable, as a result of such Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;
(3) in the case of Covenant Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions, the Holders of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to such tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;
(4) no Default (other than that resulting from borrowing funds to be applied to make such deposit and any similar and simultaneous deposit relating to other Indebtedness, and, in each case, the granting of Liens in connection therewith) shall have occurred and be continuing on the date of such deposit;
(5) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any Credit Facility or any other material agreement or instrument (other than the Indenture) to which the Issuer or any Subsidiary Guarantor is a party or by which the Issuer or any Subsidiary Guarantor is bound (other than that resulting from borrowing funds to be applied to make such deposit and any similar and simultaneous deposit relating to the discharge of such agreement or instrument and, in each case, the granting of Liens in connection therewith);
(6) the Issuer shall have delivered to the Trustee an Officers Certificate stating that the deposit was not made by the Issuer with the intent of defeating, hindering, delaying or defrauding any creditors of the Issuer or any Subsidiary Guarantor or others; and
(7) the Issuer shall have delivered to the Trustee an Officers Certificate and an Opinion of Counsel (which Opinion of Counsel may be subject to customary assumptions and exclusions) each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance, as the case may be, have been complied with.
Satisfaction and Discharge
The Indenture will be discharged and will cease to be of further effect as to all Notes, when either:
(1) all Notes theretofore authenticated and delivered, except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust, have been delivered to the Trustee for cancellation; or
(2) (a) all Notes not theretofore delivered to the Trustee for cancellation have become due and payable by reason of the making of a notice of redemption or otherwise, will become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer and the Issuer or any Subsidiary Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders of the Notes, cash in U.S. dollars, Government Securities or a combination thereof, in such amounts as will be sufficient without consideration of any reinvestment of interest to pay and discharge the entire indebtedness on the Notes not theretofore delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to the date of maturity or redemption;
(b) no Default (other than that resulting from borrowing funds to be applied to make such deposit or the grant of any Lien securing such borrowing or any similar and simultaneous deposit relating to other Indebtedness and, in each case, the granting of Liens in connection therewith) with respect to the Indenture or the Notes shall have occurred and be continuing on the date of such deposit or shall occur as a result of such deposit and such deposit will not result in a breach or violation of, or constitute a default under, any Credit Facility or any other material agreement or instrument (other than the Indenture) to which the Issuer or any Subsidiary Guarantor is a party or by which the Issuer or any Subsidiary Guarantor is bound (other than that resulting from borrowing funds to be applied to make such deposit and any similar and simultaneous deposit relating to the discharge of such agreement or instrument and, in each case, the granting of Liens in connection therewith);
(c) the Issuer has paid or caused to be paid all sums payable by it under the Indenture; and
(d) the Issuer has delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Notes at maturity or the Redemption Date, as the case may be.
In addition, the Issuer must deliver an Officers Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.
Amendment, Supplement and Waiver
Except as provided for under this section Amendment, Supplement and Waiver, the Indenture, the Notes and any Guarantee may be amended or supplemented, and the Trustee (on behalf of the Holders) may consent to an amendment to any Security Document, the Junior Lien Intercreditor Agreement or the Alabama Intercreditor Agreement, in each case, with the consent of the Holders of at least a majority in principal amount of the Notes then outstanding (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes) and compliance with any provision of the Indenture, any Guarantee or the Notes may be waived with the consent of the Holders of at least a majority in principal amount of the then outstanding Notes, in each case other than Notes beneficially owned by the Issuer or its Affiliates (for the Notes and so as to exclude any consents with respect thereto obtained in connection with a purchase of or tender offer or exchange offer for the Notes).
The Indenture provides that, without the consent of each affected Holder of Notes, an amendment or waiver may not, with respect to any Notes held by a non-consenting Holder:
(1) reduce the principal amount of such Notes whose Holders must consent to an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed final maturity of any such Note or alter or waive the provisions with respect to the redemption of such Notes (other than provisions relating to the covenants described above under the caption Repurchase at the Option of Holders);
(3) reduce the rate of or change the time for payment of interest on any Note;
(4) waive a Default in the payment of principal of or premium, if any, or interest on the Notes, except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the Notes and a waiver of the payment default that resulted from such acceleration, or waive a Default in respect of a covenant or provision contained in the Indenture or any Guarantee that cannot be amended or modified without the consent of all Holders;
(5) make any Note payable in money other than that stated therein;
(6) make any change in the provisions of the Indenture relating to waivers of past Defaults or the rights of Holders to receive payments of principal of or premium, if any, or interest on the Notes;
(7) make any change in these amendment and waiver provisions;
(8) impair the right of any Holder to receive payment of principal of or interest on such Holders Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holders Notes;
(9) make any change to or modify the ranking of the Notes that would adversely affect the Holders; or
(10) except as expressly permitted by the Indenture, modify the Guarantees of any Significant Subsidiary (or any group of Restricted Subsidiaries that together (determined as of the most recent consolidated financial statements of the Issuer for a fiscal quarter end provided as required under Certain CovenantsReports and Other Information) would constitute a Significant Subsidiary) in any manner adverse in any material respect to the Holders of the Notes.
In addition, without the consent of the holders of at least 662/3% in principal amount of the Notes outstanding (determined as to exclude any Notes beneficially owned by the Issuer or its Affiliates), the Trustee may not consent to any amendment, supplement or waiver the effect of which would (1) modify any Security Document that would have the impact of releasing all or substantially all of the Collateral from the Liens of the Security Documents (except as permitted by the terms of the Indenture) or modify the Collateral Agreement, the Junior Lien Intercreditor Agreement (if then in existence) or the Alabama Intercreditor Agreement to adversely change or alter the priority of the security interests in the Collateral, (2) make any change in any Security Document, the Junior Lien Intercreditor Agreement (if then in existence) or the provisions in the Indenture dealing with the application of proceeds of the Collateral that would adversely affect the Holders in any material respect or (3) modify the Security Documents, the Junior Lien Intercreditor Agreement (if then in existence) or the Alabama Intercreditor Agreement in any manner adverse to the Holders in any material respect other than in accordance with the terms of the Indenture.
Notwithstanding the foregoing, the Issuer, any Subsidiary Guarantor (with respect to a Guarantee to which it is a party or the Indenture), the Trustee and, if applicable, the Collateral Agent party thereto, may amend or supplement the Indenture, the Security Documents, the Junior Lien Intercreditor Agreement (if then in existence), the Alabama Intercreditor Agreement and any Guarantee or Notes without the consent of any Holder:
(1) to cure any ambiguity, omission, mistake, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in place of certificated Notes (provided that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code);
(3) to comply with the covenant described under Certain CovenantsMerger, Consolidation or Sale of All or Substantially All Assets;
(4) to make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect the legal rights under the Indenture of any such Holder;
(5) to add covenants for the benefit of the Holders or to surrender any right or power conferred upon the Issuer or any Subsidiary Guarantor;
(6) to comply with requirements of the SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act;
(7) to evidence and provide for the acceptance and appointment under the Indenture of a successor Trustee or a successor Collateral Agent thereunder pursuant to the requirements thereof;
(8) to provide for the issuance of Exchange Notes or private exchange notes that are identical to Exchange Notes except that they are not freely transferable;
(9) to add a Subsidiary Guarantor under the Indenture;
(10) to conform the text of the Indenture, the Security Documents, the Junior Lien Intercreditor Agreement, the Alabama Intercreditor Agreement, the Guarantees or the Notes to any provision of this Description of the Notes to the extent that such provision in this Description of the Notes was intended to be a verbatim recitation of a provision of the Indenture, the Security Documents, the Junior Lien Intercreditor Agreement, the Alabama Intercreditor Agreement, the Guarantees or the Notes;
(11) to make any amendment to the provisions of the Indenture relating to the transfer and legending of Notes as permitted by the Indenture, including, without limitation, to facilitate the issuance and administration of the Notes; provided, however, that (i) compliance with the Indenture as so
amended would not result in Notes being transferred in violation of the Securities Act or any applicable securities law and (ii) such amendment does not materially and adversely affect the rights of Holders to transfer Notes;
(12) to add additional assets as Collateral;
(13) to release Collateral from the Lien securing the Notes or any Subsidiary Guarantor from its Guarantee, in each case pursuant to the Indenture, the Security Documents and the Junior Lien Intercreditor Agreement when permitted or required by the Indenture, the Security Documents and the Junior Lien Intercreditor Agreement;
(14) in the case of any deposit account control agreement, securities account control agreement or any similar agreement, in each case (a) providing for control and perfection of Collateral and (b) to which both the Collateral Agent and the representative of any Junior Lien Indebtedness are a party, at the request and sole expense of the Issuer, and without the consent of the Collateral Agent, to amend any such agreement to substitute a successor representative for such representative;
(15) in connection with the incurrence of any Junior Lien Indebtedness, at the request and sole expense of the Issuer, and without the consent of the Trustee or the Collateral Agent, to amend the Junior Lien Intercreditor Agreement or the Alabama Intercreditor Agreement, as applicable, to add parties (or any authorized agent or trustee therefor) providing any such First Lien Obligations or Junior Lien Indebtedness, as applicable;
(16) in connection with any replacement or refinancing of the Alabama Revolving Credit Agreement with a lender other than Republic Bank, to amend the Alabama Intercreditor Agreement to add such lender as a party thereto; or
(17) to comply with any requirement of the SEC in connection with the qualification of the indenture under the TIA.
To the extent that the Issuer and the Restricted Subsidiaries are permitted to incur Indebtedness and Liens in relation to additional First Lien Obligations, the Issuer may designate such additional First Lien Obligations as Additional Obligations (and may, in the case of any Revolving Credit Facility Obligations, designate such Revolving Credit Facility Obligations as Designated Priority Obligations) under the Collateral Agreement by providing notice to such effect and an Officers Certificate certifying that such additional First Lien Obligations (and the Liens associated therewith), as applicable, have been incurred in compliance with the Indenture, in each case, to the Collateral Agent. Upon receipt of such notice and Officers Certificate, the representative of the holders of any such additional First Lien Obligations will deliver to the Collateral Agent a joinder to the Collateral Agreement thereby acknowledging that such holders are bound by the terms thereof.
The consent of the Holders is not necessary under the Indenture, any Security Document, the Junior Lien Intercreditor Agreement or the Alabama Intercreditor Agreement to approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of the proposed amendment.
After an amendment under the Indenture, any Security Document, the Junior Lien Intercreditor Agreement or the Alabama Intercreditor Agreement becomes effective, we are required to mail to Holders of the Notes a notice briefly describing such amendment. The failure to give such notice to all Holders of the Notes (or any defect in such notice), however, will not impair or affect the validity of the amendment.
Neither the Issuer nor any Affiliate of the Issuer may, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Indenture,
the Notes, any Guarantee, any Security Document, the Junior Lien Intercreditor Agreement or the Alabama Intercreditor Agreement, unless such consideration is offered to all Holders and is paid to all Holders that so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or amendment; provided that, in connection with any consideration to be paid to Holders in an exchange offer in respect of Notes that are not registered under the Securities Act, such consideration need not be paid to Holders who, upon request, do not confirm they are qualified institutional buyers within the meaning of Rule 144A of the Securities Act or, in the case of non-U.S. Holders who, upon request, do not confirm they are non-U.S. persons within the meaning of Regulation S of the Securities Act.
Notices
Notices given by publication will be deemed given on the first date that publication is made and notices given by first-class mail, postage prepaid, will be deemed given five calendar days after mailing.
Concerning the Trustee
The Indenture contains certain limitations on the rights of the Trustee, should it become a creditor of the Issuer, to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest it must eliminate such conflict within 90 days or resign as Trustee.
The Indenture provides that the Holders of a majority in principal amount of the outstanding Notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. The Indenture provides that at all times that an Event of Default is continuing, the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent person under the circumstances in the conduct of his own affairs. Subject to such provisions, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any Holder of the Notes, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense with respect to such exercise.
Governing Law
The Indenture, the Notes, the Guarantees, the Junior Lien Intercreditor Agreement and certain of the Security Documents are governed by and construed in accordance with the laws of the State of New York. Certain of the Security Documents are governed by the laws of certain jurisdictions outside the State of New York.
Certain Definitions
Set forth below are certain defined terms used in the Indenture. For purposes of the Indenture, unless otherwise specifically indicated, the term consolidated with respect to any Person refers to such Person on a consolidated basis in accordance with GAAP, but excluding from such consolidation any Unrestricted Subsidiary as if such Unrestricted Subsidiary were not an Affiliate of such Person.
Acquired Indebtedness means, with respect to any specified Person,
(1) Indebtedness of any other Person existing at the time such other Person is merged or amalgamated with or into or became a Restricted Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging or amalgamating with or into or becoming a Restricted Subsidiary of such specified Person, and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.
Affiliate of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, control (including, with correlative meanings, the terms controlling, controlled by and under common control with), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.
Alabama Capital Expenditures means, for any period, the cash capital expenditures of the Alabama Subsidiary determined in accordance with GAAP, but excluding any such expenditure (a) made to restore, replace or rebuild property to the condition of such property immediately prior to any damage, loss, destruction or condemnation of such property, to the extent such expenditure is made with, or subsequently reimbursed out of, insurance proceeds, indemnity payments, condemnation awards (or payments in lieu thereof) or damage recovery proceeds relating to any such damage, loss, destruction or condemnation, (b) constituting reinvestment by the Alabama Subsidiary during such period of the Net Proceeds of any Asset Sale consummated by the Alabama Subsidiary, (c) made by the Alabama Subsidiary to effect leasehold improvements to any property leased by the Alabama Subsidiary as lessee, to the extent that such expenses have been reimbursed by the landlord and (d) expenditures that are accounted for as capital expenditures by the Alabama Subsidiary and that actually are paid for (including by means of the issuance of Equity Interests by the Alabama Subsidiary) by a Person other than the Alabama Subsidiary and for which the Alabama Subsidiary has not provided and is not required to provide or incur, directly or indirectly, any consideration or obligation to such Person or any other Person (whether before, during or after such period).
Alabama Excess Cash Flow means, for any period, (i) earnings before depreciation and amortization expenses of the Alabama Subsidiary for such period (excluding for this purpose all inter-company transactions), (ii) less Alabama Capital Expenditures for such period, (iii) less any increase in Alabama Net Working Capital for such period or plus any decrease in Alabama Net Working Capital for such period.
Alabama Intercreditor Agreement means the Intercreditor Agreement to be entered into as of the Issue Date among Republic Bank, the Collateral Agent and the Alabama Subsidiary.
Alabama Net Working Capital means, at any date, (a) the consolidated current assets of the Alabama Subsidiary as of such date (excluding cash and Cash Equivalents) minus (b) the consolidated current liabilities of the Alabama Subsidiary as of such date (excluding current liabilities in respect of Indebtedness). Alabama Net Working Capital at any date may be a positive or negative number. Alabama Net Working Capital increases when it becomes more positive or less negative and decreases when it becomes less positive or more negative.
Alabama Revolving Credit Agreement means the Credit Agreement by and between Insight Capital, LLC and Republic Bank of Chicago, dated July 31, 2009, as the same has been amended as of December 31, 2009 and as of the Issue Date, and as the same may be further amended, restated, replaced (whether upon or after termination or otherwise), refinanced, supplemented, modified or otherwise changed (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time.
Alabama Subsidiary means Insight Capital, LLC, an Alabama limited liability company.
Applicable First Lien Document means, from time to time, each document governing the terms of any First Lien Obligations then outstanding, including, for the avoidance of doubt, the Indenture and the Notes.
Applicable Premium means, with respect to any Note on any Redemption Date, the greater of:
(1) 1.0% of the principal amount of such Note; and
(2) the excess, if any, of (a) the present value at such Redemption Date of (i) the redemption price of such Note at May 1, 2015 (such redemption price being set forth in the table appearing above under the caption Optional Redemption), plus (ii) all required interest payments due on such Note through May 1, 2015 (excluding accrued but unpaid interest to the Redemption Date), computed using a discount rate equal to the Treasury Rate as of such Redemption Date plus 50 basis points; over (b) the principal amount of such Note.
Application Period means the 365 days after the receipt of any Net Proceeds of any Asset Sale.
Asset Sale means:
(1) the sale, conveyance, transfer or other disposition, whether in a single transaction or a series of related transactions, of property or assets (including by way of a Sale and Lease-Back Transaction) of the Issuer or any of the Restricted Subsidiaries (each referred to in this definition as a disposition); or
(2) the issuance or sale of Equity Interests of any Restricted Subsidiary (other than non-voting Preferred Stock of Restricted Subsidiaries issued in compliance with the covenant described under Certain CovenantsLimitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock), whether in a single transaction or a series of related transactions; in each case, other than:
(a) any disposition of Cash Equivalents or obsolete or worn out property or equipment in the ordinary course of business or any disposition of inventory or goods (or other assets) held for sale or no longer used or useful in the ordinary course of business;
(b) the disposition of all or substantially all of the assets of the Issuer in a manner permitted pursuant to the provisions described above under Certain CovenantsMerger, Consolidation or Sale of All or Substantially All Assets or any disposition that constitutes a Change of Control pursuant to the Indenture;
(c) the making of any Restricted Payment or Permitted Investment that is permitted to be made, and is made, under the covenant described above under Certain CovenantsLimitation on Restricted Payments;
(d) any disposition of assets by the Issuer or a Restricted Subsidiary or issuance or sale of Equity Interests of any Restricted Subsidiary in any transaction or series of transactions with an aggregate fair market value of less than $15.0 million;
(e) any disposition of property or assets or issuance of securities by a Restricted Subsidiary to the Issuer or by the Issuer or a Restricted Subsidiary to another Restricted Subsidiary;
(f) the lease, assignment, sub-lease, license or sub-license of any real or personal property in the ordinary course of business;
(g) any issuance, sale or pledge of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;
(h) foreclosures, condemnation or any similar action on assets or the granting of Liens, in each case, not prohibited by the Indenture;
(i) any financing transaction with respect to property constructed or acquired by the Issuer or any Restricted Subsidiary after the Issue Date, including Sale and Lease-Back Transactions and asset securitizations, within 12 months of such construction or acquisition and otherwise permitted by the Indenture;
(j) any surrender or waiver of contractual rights or the settlement, release or surrender of contractual rights or other litigation claims in the ordinary course of business;
(k) the sale or discount of inventory, accounts or loans receivable or notes receivable in the ordinary course of business or the conversion of accounts or loans receivable to notes receivable;
(l) the licensing or sub-licensing of intellectual property or other general intangibles in the ordinary course of business, other than the licensing of intellectual property on a long-term basis;
(m) the unwinding of any Hedging Obligations;
(n) sales, transfers and other dispositions of Investments in joint ventures to the extent required by, or made pursuant to, customary buy/sell arrangements between the joint venture parties set forth in joint venture arrangements and similar binding arrangements;
(o) the lapse or abandonment of intellectual property rights in the ordinary course of business, that, in the reasonable good faith determination of the Issuer, are not material to the conduct of the business of the Issuer and the Restricted Subsidiaries taken as a whole; and
(p) the issuance of directors qualifying shares and shares issued to foreign nationals, in each case, as required by applicable law.
Asset Sale Offer has the meaning set forth in the fourth paragraph under Repurchase at the Option of HoldersAsset Sales.
Attributable Debt in respect of a Sale and Lease-Back Transaction means, as at the time of determination, the present value (discounted at the interest rate equal to the rate of interest implicit in such transaction, determined in accordance with GAAP; provided that if such interest rate cannot be determined in accordance with GAAP, the present value shall be discounted at the interest rate borne by the Notes, compounded annually) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale and Lease-Back Transaction (including any period for which such lease has been extended); provided, however, that if such Sale and Lease-Back Transaction results in a Capitalized Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of Capitalized Lease Obligation.
Bankruptcy Code means Title 11 of the United States Code, as amended.
Board, with respect to a Person, means the board of directors (or similar body) of such Person or any committee thereof duly authorized to act on behalf of such board of directors (or similar body).
Business Day means each day that is not a Legal Holiday.
Capital Stock means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;
(3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person;
but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such securities include any right of participation with Capital Stock.
Capitalized Lease Obligation means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP.
Cash Equivalents means:
(1) United States dollars or Canadian dollars;
(2) (a) euro, pounds sterling or any national currency of any participating member state of the EMU; or
(b) in the case of any Foreign Subsidiary that is a Restricted Subsidiary, such local currencies held by such Restricted Subsidiary from time to time in the ordinary course of business;
(3) securities issued or directly and fully and unconditionally guaranteed or insured by the U.S. government or any agency or instrumentality thereof the securities of which are unconditionally guaranteed as a full faith and credit obligation of such government with maturities of 12 months or less from the date of acquisition;
(4) certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers acceptances with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank (any such instrument, a Qualifying Bank Instrument); provided that, with respect to any Qualifying Bank Instrument held by (x) the Issuer or any Domestic Subsidiary, the applicable commercial bank is a U.S. commercial bank having capital and surplus of not less than $500.0 million and (y) any Foreign Subsidiary, the applicable commercial bank is a U.S. commercial bank having capital and surplus of not less than $500.0 million or a non-U.S. commercial bank having capital and surplus of not less than $100.0 million (or the U.S. dollar equivalent thereof as of the date of determination);
(5) repurchase obligations for underlying securities of the types described in clause (3) or (4) entered into with any financial institution meeting the qualifications specified in clause (4) above;
(6) commercial paper rated at least P-1 by Moodys or at least A-1 by S&P and in each case maturing within 12 months after the date of creation thereof;
(7) marketable short-term money market and similar securities having a rating of at least P-2 or A-2 from either Moodys or S&P, respectively (or, if at any time neither Moodys nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency) and in each case maturing within 12 months after the date of acquisition thereof;
(8) investment funds investing 95% of their assets in securities of the types described in clauses (1) through (7) above and (9) through (11) below; provided that Qualifying Bank Instruments with any non-U.S. commercial bank and any securities described under clause (11) below, in each case, shall only be counted towards such 95% requirement to the extent that the holder of such investment fund is a Foreign Subsidiary;
(9) Indebtedness or Preferred Stock issued by Persons (other than the Issuer or any Affiliate of the Issuer) with a rating of A or higher from S&P or A2 or higher from Moodys with maturities of 12 months or less from the date of acquisition;
(10) Investments with average maturities of 12 months or less from the date of acquisition in money market funds rated AAA- (or the equivalent thereof) or better by S&P or Aaa3 (or the equivalent thereof) or better by Moodys; and
(11) in the case of any Foreign Subsidiary, readily marketable direct obligations issued by any foreign government or any political subdivision or public instrumentality thereof, in each case having an Investment Grade Rating from Moodys and S&P (or, if at any time either Moodys or S&P shall not be rating such obligations, an equivalent rating from another Rating Agency) maturing within 12 months of the date of acquisition thereof.
Notwithstanding the foregoing, Cash Equivalents shall include amounts denominated in currencies other than those set forth in clause (1) or (2) above, provided that such amounts are converted into any currency described in either clause (1) or (2) above as promptly as practicable and in any event within ten Business Days following the receipt of such amounts.
Change of Control means the occurrence of any of the following:
(1) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all of the assets of the Issuer and its Subsidiaries, taken as a whole, to any Person other than the Permitted Holders; or
(2) the Issuer becomes aware of (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than the Permitted Holders, in a single transaction or in a related series of transactions, by way of merger, amalgamation, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), directly or indirectly, of 50% or more of the total voting power of the Voting Stock of the Issuer or any Parent Entity.
Code means the Internal Revenue Code of 1986, as amended, or any successor thereto.
Collateral means all the assets and properties subject to the Liens created by the Security Documents.
Collateral Agent has the meaning set forth in the first paragraph under General.
Collateral Agreement means the Collateral Agreement to be entered into by the Issuer, the other Grantors the Trustee, the Revolving Administrative Agent and the Collateral Agent as of the Issue Date, which will create the security interests in the Collateral in favor of the Collateral Agent for the benefit of the Noteholder Secured Parties, the Revolving Lenders, the other agents under the Revolving Credit Agreement and the holders of the Lender Hedging Obligations associated therewith.
Consolidated Depreciation and Amortization Expense means, with respect to any Person for any period, the total amount of depreciation and amortization expense, including the amortization of deferred financing fees or costs, of such Person and the Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.
Consolidated Interest Expense means, with respect to any Person for any period, without duplication, the sum of:
(1) consolidated interest expense of such Person and the Restricted Subsidiaries for such period, to the extent such expense was deducted in computing Net Income (including (a) accrual of original issue discount that resulted from the issuance of Indebtedness at less than par, (b) all commissions, discounts and other fees and charges owed with respect to letters of credit or bankers acceptances, (c) non-cash interest expense (but excluding any non-cash interest expense attributable to the movement in the mark-to-market valuation of Hedging Obligations or other derivative instruments pursuant to GAAP), (d) the interest component of Capitalized Lease Obligations, and (e) net payments, if any, pursuant to interest rate Hedging Obligations with respect to Indebtedness, and excluding (v) accretion or accrual of discounts with respect to liabilities not constituting Indebtedness, (w) any expense resulting from the discounting of Indebtedness in connection with the application of recapitalization or purchase accounting, (x) amortization of deferred financing fees, debt issuance costs, commissions, fees and expenses and (y) any expensing of bridge, commitment and other financing fees); plus
(2) consolidated capitalized interest of such Person and the Restricted Subsidiaries for such period, whether paid or accrued; less
(3) interest income for such period.
For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by such Person to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.
Consolidated Net Income means, with respect to any Person for any period, the aggregate of the Net Income attributable to such Person and its Restricted Subsidiaries for such period, on a consolidated basis, and otherwise determined in accordance with GAAP; provided, however, that, without duplication,
(1) any after-tax effect of extraordinary, non-recurring or unusual gains, losses or charges (including all fees and expenses relating to any such gains, losses or charges) or expenses (including any fees or expenses paid in connection with the Transactions), severance, relocation costs and curtailments or modifications to pension and post-retirement employee benefit plans shall be excluded,
(2) the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period,
(3) any after-tax effect of income (loss) from discontinued operations and any net after-tax gains or losses on disposal of abandoned or discontinued operations shall be excluded,
(4) any after-tax effect of gains or losses (less all fees and expenses relating thereto) attributable to asset dispositions other than in the ordinary course of business shall be excluded,
(5) the Net Income for such period of any Person that is not a Subsidiary, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting, shall be excluded; provided that Net Income shall be increased by the amount of dividends or distributions or other payments that are actually paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period,
(6) solely for the purpose of determining the amount available for Restricted Payments under clause (3)(a) of the first paragraph of Certain CovenantsLimitation on Restricted Payments, the Net Income for such period of any Restricted Subsidiary (other than any Subsidiary Guarantor) shall be excluded to the extent the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, is otherwise restricted by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless all such restrictions with respect to the payment of dividends or similar distributions have been legally waived; provided that Net Income will be increased by the amount of dividends or other distributions or other payments actually paid in cash (or to the extent converted into cash) or Cash Equivalents to the referent Person or a Restricted Subsidiary thereof in respect of such period,
(7) effects of adjustments (including the effects of such adjustments pushed down to such Person and its Restricted Subsidiaries) in the inventory, property and equipment, software and other intangible assets, deferred revenue and debt line items in such Persons consolidated financial statements pursuant to GAAP resulting from the application of purchase accounting in relation to the Transactions or any consummated acquisition or the amortization or write-off of any amounts thereof, net of taxes, shall be excluded,
(8) any after-tax effect of income (loss) from the early extinguishment of Indebtedness or Hedging Obligations or other derivative instruments (including deferred financing costs written off and premiums paid) shall be excluded,
(9) any impairment charge, asset write-off or write-down, including impairment charges or asset write-offs or write-downs related to intangible assets, long-lived assets, investments in debt and equity securities, the amortization of intangibles, and the effects of adjustments to accruals and reserves during a prior period relating to any change in the methodology of calculating reserves for returns, rebates and other chargebacks (including government program rebates), in each case, pursuant to GAAP (excluding any non-cash item to the extent it represents an accrual or reserve for cash expenditures in any future period except to the extent such item is subsequently reversed) shall be excluded,
(10) any (i) non-cash compensation expense recorded from grants of stock appreciation or similar rights, stock options, restricted stock or other rights, (ii) income (loss) attributable to deferred compensation plans or trusts and (iii) compensation expense recorded in connection with the payment of the Special Options Distribution, in each case, shall be excluded,
(11) any expense relating to management, monitoring, consulting and advisory fees and related expenses paid in such period to the Investors to the extent such fees and expenses are permitted to be paid under Certain CovenantsTransactions with Affiliates and to the extent deducted in computing Net Income shall be excluded,
(12) any net gain or loss resulting in such period from currency transaction or translation gains or losses related to currency remeasurements (including any net loss or gain resulting from hedge agreements for currency exchange risk) shall be excluded, and
(13) any amortization of deferred financing fees or financial advisory costs incurred on or prior to the Issue Date, or in connection with the Transactions, shall be excluded.
Notwithstanding the foregoing, for the purpose of the covenant described under Certain CovenantsLimitation on Restricted Payments only (other than clause (3)(d) of the first paragraph thereof), there shall be excluded from Consolidated Net Income any income arising from any sale or other disposition of Restricted Investments made by the Issuer and the Restricted Subsidiaries, any repurchases and redemptions of Restricted Investments from the Issuer and the Restricted Subsidiaries, any repayments of loans and advances that constitute Restricted Investments by the Issuer or any of the Restricted Subsidiaries or any sale of the stock of an Unrestricted Subsidiary, in each case only to the extent such amounts increase the amount of Restricted Payments permitted under such covenant pursuant to clause (3)(d) of the first paragraph thereof.
Consolidated Secured Debt Ratio as of any date of determination means the ratio of (1) Consolidated Total Indebtedness of the Issuer and the Restricted Subsidiaries that is secured by Liens as of the end of the most recent fiscal quarter for which internal financial statements are available immediately preceding the date on which such event for which such calculation is being made shall occur to (2) the Issuers EBITDA for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such event for which such calculation is being made shall occur, in each case with such pro forma adjustments to Consolidated Total Indebtedness and EBITDA as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of Fixed Charge Coverage Ratio.
Consolidated Total Indebtedness means, as at any date of determination, an amount equal to (a) the sum of (1) the aggregate amount of all outstanding Indebtedness of the Issuer and the Restricted Subsidiaries on a consolidated basis consisting of Indebtedness for borrowed money, Obligations in respect of Capitalized Lease Obligations and debt obligations evidenced by promissory notes and similar instruments (for the avoidance of doubt, excluding any (A) Hedging Obligations and
(B) performance bonds or any similar instruments) and (2) the aggregate amount of all outstanding Disqualified Stock of the Issuer and all Preferred Stock of the Restricted Subsidiaries on a consolidated basis, with the amount of such Disqualified Stock and Preferred Stock equal to the greater of their respective voluntary or involuntary liquidation preferences and maximum fixed repurchase prices, in each case determined on a consolidated basis in accordance with GAAP, less (b) any Excess Cash. For purposes hereof, the maximum fixed repurchase price of any Disqualified Stock or Preferred Stock that does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Stock or Preferred Stock as if such Disqualified Stock or Preferred Stock were purchased on any date on which Consolidated Total Indebtedness shall be required to be determined pursuant to the Indenture, and if such price is based upon, or measured by, the fair market value of such Disqualified Stock or Preferred Stock, such fair market value shall be determined reasonably and in good faith by the Board of the Issuer.
Contingent Obligations means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (primary obligations) of any other Person (the primary obligor) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent,
(1) to purchase any such primary obligation or any property constituting direct or indirect security therefor,
(2) to advance or supply funds
(a) for the purchase or payment of any such primary obligation, or
(b) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, or
(3) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.
Contractual Obligations means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
Credit Facilities means one or more debt facilities (including the Revolving Credit Agreement), commercial paper facilities, securities purchase agreements, indentures or similar agreements, in each case, with banks or other institutional lenders or investors providing for revolving loans, term loans, letters of credit or the issuance of securities, including any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith, and, in each case, as amended, restated, replaced (whether upon or after termination or otherwise), refinanced, supplemented, modified or otherwise changed (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time.
Default means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.
Designated Non-cash Consideration means the fair market value of non-cash consideration received by the Issuer or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officers Certificate, setting forth the basis of such valuation, executed by the principal financial officer of the Issuer, less the amount of cash or Cash Equivalents received in connection with a subsequent sale of or collection on such Designated Non-cash Consideration.
Designated Preferred Stock means Preferred Stock of the Issuer or any Parent Entity (in each case other than Disqualified Stock) that is issued for cash (other than to a Restricted Subsidiary or an employee stock ownership plan or trust established by the Issuer or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officers Certificate executed by the principal financial officer of the Issuer or the applicable Parent Entity, as the case may be, on the issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in clause (3) of the first paragraph of the Certain CovenantsLimitation on Restricted Payments covenant.
Designated Priority Obligations means all Revolving Credit Facility Obligations that have been designated by the Issuer as Designated Priority Obligations under the Collateral Agreement, and any Lender Hedging Obligations associated with such Revolving Credit Facility Obligations. As of the Issue Date, the Obligations under the Revolving Credit Agreement and any associated Lender Hedging Obligations constitute Designated Priority Obligations.
Disqualified Stock means, with respect to any Person, any Capital Stock of such Person that, by its terms, or by the terms of any security into which it is convertible or for which it is putable or exchangeable, or upon the happening of any event, matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise (other than solely as a result of a change of control or asset sale), is convertible or exchangeable for Indebtedness or Disqualified Stock or is redeemable at the option of the holder thereof (other than solely as a result of a change of control or asset sale), in whole or in part, in each case prior to the date that is 91 days after the earlier of the maturity date of the Notes and the date the Notes are no longer outstanding; provided, however, that if such Capital Stock is issued to any plan for the benefit of employees of the Issuer or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Issuer or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations.
Domestic Subsidiary means any Restricted Subsidiary that is organized or existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof.
EBITDA means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period,
(1) increased (without duplication) by:
(a) provision for taxes based on income or profits or capital, including, without limitation, state, franchise and similar taxes and foreign withholding taxes of such Person paid or accrued during such period deducted in computing Net Income and not added back in computing Consolidated Net Income; plus
(b) Fixed Charges of such Person for such period, together with items excluded from the definition of Consolidated Interest Expense pursuant to clauses 1(w) through 1(y) thereof, to the extent the same were deducted in computing Net Income and not added back in calculating Consolidated Net Income; plus
(c) Consolidated Depreciation and Amortization Expense of such Person for such period to the extent the same was deducted in computing Net Income and not added back in computing Consolidated Net Income; plus
(d) the aggregate amount of fees, expenses or charges related to any acquisition, Investment, disposition, issuance, repayment or refinancing of Indebtedness (including, for the avoidance of doubt, the Transactions) or amendment or modification of any debt instrument or issuance of Equity Interests (in each case, to the extent such transaction is permitted by the Indenture and including any such transaction consummated prior to the Issue Date and any such transaction undertaken but not completed) and any bonus payments made as a result of the successful
consummation of the Transactions (to the extent the aggregate amount of such bonus payments does not exceed the amount of such bonus payments described in the Offering Circular), in each case, deducted in computing Net Income and not added back in computing Consolidated Net Income; plus
(e) the amount of (x) any restructuring charge or reserve or non-recurring integration costs deducted in computing Net Income and not added back in computing Consolidated Net Income, including any one-time costs incurred in connection with acquisitions after the Issue Date and (y) any costs or expenses relating to the closure and/or consolidation of facilities, including store closings; plus
(f) any other non-cash charges, including any write offs or write downs, deducted in computing Net Income and not added back in computing Consolidated Net Income (excluding any non-cash item to the extent it represents an accrual or reserve for cash expenditures in any future period except to the extent such item is subsequently reversed, and excluding amortization of any prepaid cash item that was paid in a prior period); plus
(g) the amount of any non-controlling interest expense consisting of Subsidiary income attributable to minority equity interests of third parties in any non-Wholly-Owned Subsidiary of the Issuer deducted in computing net income and not added back in computing Consolidated Net Income, excluding cash distributions made or declared in respect of any such minority equity interests of third parties; plus
(h) the amount of net cost savings resulting from specified actions that have been taken, which net cost savings are projected by the Issuer in good faith to be realized within 12 months following the date of determination (calculated on a pro forma basis as though such net cost savings had been realized on the first day of such period), with such amount of net cost savings being reduced by the amount of net cost savings actually realized during such period from any such specified actions that have already been taken; provided that (w) such projected net cost savings shall be set forth in an Officers Certificate delivered to the Trustee that certifies that such projected net cost savings meet the criteria of this clause (h), (x) such net cost savings are reasonably identifiable and factually supportable, (y) no net cost savings shall be added pursuant to this clause (h) to the extent they are duplicative of any expenses or charges relating to such net cost savings that are added pursuant to clause (e) above and (z) the aggregate amount of net cost savings added pursuant to this clause (h) shall not exceed 10.0% of EBITDA (calculated absent any such net cost savings) for any four consecutive fiscal quarter period; provided further that the additions made pursuant to this clause (h) may be incremental to (but not duplicative of) pro forma adjustments made pursuant to the second paragraph of the definition of Fixed Charge Coverage Ratio; plus
(i) any costs or expense incurred by such Person or a Restricted Subsidiary of such Person pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of such Person or net cash proceeds of an issuance of Equity Interests of such Person (other than Disqualified Stock and Designated Preferred Stock) solely to the extent that such net cash proceeds are excluded from the calculation set forth in clause (3) of the first paragraph under Certain CovenantsLimitation on Restricted Payments; plus
(j) the amount of expenses relating to payments made to option holders of the Issuer or any Parent Entity in connection with, or as a result of, any distribution being made to shareholders of such Person or its Parent Entity, which payments are being made to compensate such option holders as though they were shareholders at the time of, and entitled to share in, such distribution, but only to the extent such distributions to shareholders are permitted under the Indenture; plus
(k) proceeds from business interruption insurance (to the extent such proceeds are not reflected as revenue or income in computing Consolidated Net Income and only to the extent the losses or other reduction of net income to which such proceeds are attributable are not otherwise added back in computing Consolidated Net Income or EBITDA); plus
(l) any net loss resulting in such period from Hedging Obligations and the application of Statement of Financial Accounting Standards No. 133; and
(2) decreased by (without duplication) (A) non-cash gains increasing Consolidated Net Income of such Person for such period, excluding any non-cash gains to the extent they represent the reversal of an accrual or reserve for a potential cash item that reduced EBITDA in any prior period; provided that, to the extent non-cash gains are deducted pursuant to this clause (A) for any previous period and not otherwise added back to EBITDA, EBITDA shall be increased by the amount of any cash receipts (or any netting arrangements resulting in reduced cash expenses) in respect of such non-cash gains received in subsequent periods to the extent not already included therein and (B) any net gains resulting in such period from Hedging Obligations and the application of Statement of Financial Accounting Standards No. 133.
EMU means the economic and monetary union as contemplated by the Treaty on European Union.
Equity Interests means Capital Stock and all warrants, options or other rights to acquire Capital Stock, but excluding any debt security that is convertible into, or exchangeable for, Capital Stock.
Equity Offering means any public or private sale of common equity or Preferred Stock of the Issuer or any Parent Entity (excluding Disqualified Stock), other than:
(1) public offerings with respect to the Issuers or any Parent Entitys common stock registered on Form S-8;
(2) issuances to any Subsidiary of the Issuer; and
(3) any such public or private sale that constitutes an Excluded Contribution.
euro means the single currency of participating member states of the EMU.
Event of Default has the meaning set forth under Events of Default and Remedies.
Excess Cash means, as at any date of determination, an amount equal to (a) the cash and Cash Equivalents of the Issuer and the Restricted Subsidiaries as of such date (but excluding any cash or Cash Equivalents that are (or would be) the proceeds of Secured Indebtedness for which the amount of Excess Cash is being calculated), less (b) the sum of the aggregate amount of Store Cash and Excluded Cash of the Issuer and the Restricted Subsidiaries as of such date; provided that, the calculation of each such amount as of any relevant date of determination shall be set forth in an Officers Certificate delivered to the Trustee in which the relevant Officer shall also certify that the Issuer and the Subsidiary Guarantors are in compliance with the requirements set forth in the Collateral Agreement regarding cash, including that the Issuer and the Subsidiary Guarantors have taken and are taking commercially reasonable efforts to cause the Collateral Agent (or, in the case of cash and Cash Equivalents of the Alabama Subsidiary, the Collateral Agents bailee pursuant to the Alabama Intercreditor Agreement) to have control (as defined in the UCC) over at least 90% of the cash and Cash Equivalents of the Issuer and the Subsidiaries (other than Excluded Cash and Store Cash of the Issuer and the Subsidiaries).
Excess Proceeds has the meaning set forth in the fourth paragraph under Repurchase at the Option of HoldersAsset Sales.
Exchange Act means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.
Exchange Notes means the debt securities of the Issuer issued pursuant to the Indenture in exchange for, and in an aggregate principal amount equal to, the Notes exchanged therefor, in compliance with the terms of the Registration Rights Agreement.
Excluded Assets has the meaning set forth in the second paragraph under Security for the NotesDescription of the Collateral.
Excluded Capital Stock has the meaning set forth in clause (2) of the second paragraph under Security for the NotesDescription of the Collateral.
Excluded Cash has the meaning set forth in clause (6) of the second paragraph under Security for the NotesDescription of the Collateral.
Excluded Contribution means net cash proceeds, marketable securities or Qualified Proceeds received by the Issuer from:
(1) contributions to its common equity capital, and
(2) the sale (other than to a Subsidiary of the Issuer or to any management equity plan or stock option plan or any other management or employee benefit plan or agreement of the Issuer or any of its Subsidiaries) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of the Issuer,
in each case designated as Excluded Contributions pursuant to an Officers Certificate executed by the principal financial officer of the Issuer on the date such capital contributions are made or the date such Equity Interests are sold, as the case may be, which are excluded from the calculation set forth in clause (3) of the first paragraph under Certain CovenantsLimitation on Restricted Payments.
Existing Credit Agreements means each of: (1) the Credit Agreement among CheckSmart Financial Company, CheckSmart Financial Holdings Corp., RBS Securities Corporation and Bear Stearns Corporate Lending Inc., dated as of May 1, 2006, (2) the First Lien Credit Agreement among California Check Cashing Stores, LLC, CCCS Holdings, LLC, UBS Securities LLC, UBS AG, Stamford Branch and Union Bank of California, N.A., dated September 29, 2006, and (3) the Second Lien Credit Agreement among California Check Cashing Stores, LLC, CCCS Holdings, LLC, UBS Securities LLC, UBS AG, Stamford Branch and Union Bank of California, N.A., dated September 29, 2006, in the case of each of the foregoing, as the same has been amended, restated, amended and restated, supplemented and otherwise modified prior to the Issue Date.
fair market value means, with respect to any asset or liability, the fair market value of such asset or liability as determined by the Issuer in good faith.
First Lien Holder means each holder of any First Lien Obligations.
First Lien Obligations means all Revolving Credit Facility Obligations, Lender Hedging Obligations, Notes Obligations and Other First Lien Obligations.
First Lien Priority means, as to any Indebtedness or other Obligations secured by a Lien, relative to the Notes, having equal, first-lien priority on the Collateral and the representative for the holders of which has become a party to the Collateral Agreement.
Fixed Charge Coverage Ratio means, with respect to any Person for any period, the ratio of EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that the Issuer or any Restricted Subsidiary incurs, assumes, guarantees, redeems, retires or extinguishes any Indebtedness (other than any Indebtedness incurred under any revolving credit facility unless such Indebtedness has been permanently repaid during the applicable period (with a
corresponding reduction in commitments) and not replaced prior to the end of such period) or issues, redeems or repurchases Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to or simultaneously with the event for which the calculation of the Fixed Charge Coverage Ratio is made (the Fixed Charge Coverage Ratio Calculation Date), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee, redemption, retirement or extinguishment of Indebtedness, or such issuance, redemption or repurchase of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period.
For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP) that have been made by the Issuer or any of the Restricted Subsidiaries during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Fixed Charge Coverage Ratio Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, consolidations and discontinued operations (and the change in any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged or amalgamated with or into the Issuer or any of the Restricted Subsidiaries since the beginning of such period shall have made any Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation had occurred at the beginning of the applicable four-quarter period.
For purposes of this definition, whenever pro forma effect is to be given to a transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Issuer and shall be made in accordance with Article 11 of Regulation S-X. In addition to pro forma adjustments made in accordance with Article 11 of Regulation S-X, pro forma calculations may also include net operating expense reductions for such period resulting from any Asset Sale or other disposition or acquisition, Investment, merger, amalgamation, consolidation or discontinued operation (as determined in accordance with GAAP) for which pro forma effect is being given that (A) have been realized or (B) are reasonably expected to be realizable within twelve months of the date of such transaction; provided that (w) any pro forma adjustments made pursuant to this sentence shall be set forth in an Officers Certificate delivered to the Trustee that certifies that such net operating expense reductions meet the criteria set forth in this paragraph, (x) such net operating expense reductions are reasonably identifiable and factually supportable, (y) no net operating expense reductions shall be given pro forma effect to the extent duplicative of any expenses or charges that are added back pursuant to the definition of EBITDA and (z) net operating expense reductions given pro forma effect shall not include any operating expense reductions related to the combination of any Unrestricted Subsidiary that is converted into a Restricted Subsidiary or combined with the operations of the Issuer or any Restricted Subsidiary. Such pro forma adjustments may be incremental to (but not duplicative of) additions made to EBITDA pursuant to clause (h) of the definition thereof. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Fixed Charge Coverage Ratio Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Issuer to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility being given pro forma effect to shall be computed based upon the average daily balance of such Indebtedness during the applicable period (but excluding any such Indebtedness that has been
permanently repaid during the applicable period (with a corresponding reduction in commitments) and not replaced prior to the end of such period). Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Issuer may designate.
Fixed Charges means, with respect to any Person for any period, without duplication, the sum of:
(1) Consolidated Interest Expense of such Person for such period;
(2) all cash dividends or other distributions (excluding items eliminated in consolidation) (i) on any series of Preferred Stock and (ii) to finance dividends or distributions paid on any series of Designated Preferred Stock of any Parent Entity, in each case, paid during such period; and
(3) all cash dividends or other distributions paid (excluding items eliminated in consolidation) on any series of Disqualified Stock during such period.
Foreign Subsidiary means, with respect to any Person, any Restricted Subsidiary of such Person that is not organized or existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof and any Restricted Subsidiary of such Foreign Subsidiary.
GAAP means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, that are in effect on the Issue Date, it being understood that, for purposes of the Indenture, all references to codified accounting standards specifically named in the Indenture shall be deemed to include any successor, replacement, amended or updated accounting standard under GAAP. At any time after the Issue Date, the Issuer may elect, for all purposes of the Indenture, to apply IFRS accounting principles in lieu of U.S. GAAP and, upon any such election, references herein to GAAP shall thereafter be construed to mean IFRS as in effect on the date of such election; provided that (1) any such election, once made, shall be irrevocable (and shall only be made once), (2) all financial statements and reports required to be provided after such election pursuant to the Indenture shall be prepared on the basis of IFRS, (3) from and after such election, all ratios, computations and other determinations based on GAAP contained in the Indenture shall be computed in conformity with IFRS with retroactive effect being given thereto assuming that such election had been made on the Issue Date, (4) such election shall not have the effect of rendering invalid any payment or Investment made prior to the date of such election pursuant to the covenant described under Certain CovenantsLimitation on Restricted Payments or any incurrence of Indebtedness incurred prior to the date of such election pursuant to the covenant described under Certain CovenantsLimitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock (or any other action conditioned on the Issuer and the Restricted Subsidiaries having been able to incur $1.00 of additional Indebtedness) if such payment, Investment, incurrence or other action was valid under the Indenture on the date made, incurred or taken, as the case may be, (5) all accounting terms and references in the Indenture to accounting standards shall be deemed to be references to the most comparable terms or standards under IFRS and (6) in no event, regardless of the principles of IFRS in effect on the date of such election, shall any liabilities attributable to an operating lease be treated as Indebtedness nor shall any expenses attributable to payments made under an operating lease be treated, in whole or in part, as interest expense; provided that such payments under an operating lease shall be treated as an operating expense in computing Consolidated Net Income. The Issuer shall give notice of any such election made in accordance with this definition to the Trustee and the Holders of Notes promptly after having made such election (and in any event, within 15 days thereof). For the avoidance of doubt, solely making an election (without any other action) referred to in this definition will not be treated as an incurrence of Indebtedness.
Governmental Authority means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization.
Government Securities means securities that are:
(1) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged; or
(2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America,
which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian with respect to any such Government Securities or a specific payment of principal of or interest on any such Government Securities held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government Securities or the specific payment of principal of or interest on the Government Securities evidenced by such depository receipt.
Grantors means the Issuer and the Subsidiary Guarantors.
guarantee means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations.
Guarantee means the guarantee by any Subsidiary Guarantor of the Issuers Obligations under the Indenture and the Notes.
Hedging Obligations means, with respect to any Person, the obligations of such Person under any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, commodity swap agreement, commodity cap agreement, commodity collar agreement, foreign exchange contract, currency swap agreement or similar agreement providing for the transfer or mitigation of interest rate, currency or commodity risks either generally or under specific contingencies.
holder means, with reference to any Indebtedness or other Obligations, any holder or lender of, or trustee or collateral agent or other authorized representative with respect to, such Indebtedness or Obligations, and, in the case of Hedging Obligations, any counter-party to such Hedging Obligations.
Holder means the Person in whose name a Note is registered on the registrars books.
Indebtedness means, with respect to any Person, without duplication:
(1) any indebtedness (including principal and premium) of such Person, whether or not contingent:
(a) in respect of borrowed money;
(b) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers acceptances (or, without duplication, reimbursement agreements in respect thereof);
(c) representing the balance deferred and unpaid of the purchase price of any property (including Capitalized Lease Obligations), except (i) any such balance that constitutes a trade payable or similar obligation to a trade creditor, in each case accrued in the ordinary course of
business and (ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP; or
(d) representing any Hedging Obligations;
if and to the extent that any of the foregoing Indebtedness in any of clauses (a) through (d) (other than letters of credit and Hedging Obligations) would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP; provided that, Indebtedness of any Parent Entity that is non-recourse to the Issuer and all of its Restricted Subsidiaries but that appears on the consolidated balance sheet of the Issuer solely by reason of push-down accounting under GAAP shall be excluded;
(2) all Attributable Debt in respect of Sale and Lease-Back Transactions entered into by such Person;
(3) to the extent not otherwise included, any obligation by such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the obligations of the type referred to in clause (1) of a third Person (whether or not such items would appear upon the balance sheet of such obligor or guarantor), other than by endorsement of negotiable instruments for collection in the ordinary course of business; and
(4) to the extent not otherwise included, the obligations of the type referred to in clause (1) or (2) of a third Person secured by a Lien on any asset owned by such first Person, whether or not such Indebtedness is assumed by such first Person;
provided, however, that notwithstanding the foregoing, Indebtedness shall be deemed not to include Contingent Obligations incurred in the ordinary course of business. For the avoidance of doubt, in no event shall any liabilities attributable to an operating lease be treated as Indebtedness, so long as the associated payments under such operating lease are accounted for as an operating expense in computing Consolidated Net Income.
Independent Financial Advisor means an accounting, appraisal, investment banking firm or consultant to Persons engaged in Similar Businesses of nationally recognized standing that is, in the good faith judgment of the Issuer, qualified to perform the task for which it has been engaged and that is not an Affiliate of the Issuer.
Initial Purchasers means Credit Suisse Securities (USA) LLC, Jefferies & Company, Inc. and Stephens Inc.
Initial Unrestricted Subsidiary means Latin Card Strategy, LLC., a Delaware limited liability company.
Investment Grade Rating means (1) a rating equal to or higher than Baa3 (or the equivalent) by Moodys and BBB- (or the equivalent) by S&P or (2) a rating equal to or higher than Baa3 (or the equivalent) by Moodys or BBB- (or the equivalent) by S&P and an equivalent rating by any other Rating Agency.
Investments means, with respect to any Person, all investments, direct or indirect, by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts or loans receivable, trade credit, advances to customers, and commission, travel and similar advances to officers and employees, in each case made or arising in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet (excluding the footnotes) of the Issuer in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash
or other property. For purposes of the definition of Unrestricted Subsidiary and the covenant described under Certain CovenantsLimitation on Restricted Payments:
(1) Investments shall include the portion (proportionate to the Issuers equity interest in such Subsidiary) of the fair market value of the net assets of a Subsidiary of the Issuer at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Issuer shall be deemed to continue to have a permanent Investment in an Unrestricted Subsidiary in an amount (if positive) equal to:
(a) the Issuers Investment in such Subsidiary at the time of such redesignation; less
(b) the portion (proportionate to the Issuers equity interest in such Subsidiary) of the fair market value of the net assets of such Subsidiary at the time of such redesignation;
(2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at the time of such transfer, in each case, as determined in good faith by the Board of the Issuer.
If the Issuer or any Restricted Subsidiary of the Issuer sells or otherwise disposes of any Equity Interests of any direct or indirect Subsidiary of the Issuer such that, after giving effect to any such sale or disposition, such Person is no longer a Subsidiary of the Issuer, the Issuer (or the applicable Restricted Subsidiary) will be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Issuers (and its Restricted Subsidiaries) Investments in such Subsidiary that were not sold or disposed of.
The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any dividend, distribution, return of capital or repayment received in cash by the Issuer or a Restricted Subsidiary in respect of such Investment.
Investor Management Agreement means the management services agreement, dated the Issue Date, among the Issuer, CheckSmart Financial Company, California Check Cashing Stores, LLC, Diamond Castle Holdings, LLC and GGC Administration, LLC.
Investors means the Sponsor and Golden Gate Private Equity, Inc. and any funds, partnerships or other investment vehicles managed or directly or indirectly controlled by Golden Gate Private Equity Inc., but not including, however, any portfolio companies of any of the foregoing.
Issue Date means April 29, 2011.
Issuer has the meaning set forth in the first paragraph under General.
Junior Lien Indebtedness has the meaning set forth in Security for the NotesJunior Lien Intercreditor Arrangements.
Junior Lien Priority means, relative to specified Indebtedness or other Obligations secured by a Lien, having a junior Lien priority on specified Collateral and subject to a Junior Lien Intercreditor Agreement and, if the Alabama Revolving Credit Agreement remains outstanding, the Alabama Intercreditor Agreement.
Legal Holiday means a Saturday, a Sunday or a day on which commercial banking institutions are not required to be open in the State of New York.
Lender Hedging Obligations means any Hedging Obligations of the Grantors to any Person that is an agent, arranger or lender, or an Affiliate of an agent, arranger or lender, under a Credit Facility, the Obligations in respect of which are Revolving Credit Facility Obligations, at the time such Person enters into the applicable agreement giving rise to such Hedging Obligations. Lender Hedging Obligations shall be associated with a particular class of Revolving Credit Facility Obligations to the
extent that such Lender Hedging Obligations are owing to an agent, arranger or lender, or an Affiliate of an agent, arranger or lender, under the applicable Credit Facility governing such Revolving Credit Facility Obligations, at the time such Person enters into such Lender Hedging Obligations.
Lien means, with respect to any asset, any mortgage, lien (statutory or otherwise), pledge, hypothecation, charge, security interest, preference, priority or encumbrance of any kind in respect of such asset, whether or not filed, recorded, registered, published or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction; provided that in no event shall an operating lease be deemed to constitute a Lien.
Moodys means Moodys Investors Service, Inc. and any successor to its rating agency business.
Net Income means, with respect to any Person, the net income (loss) attributable to such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.
Net Proceeds means the aggregate cash proceeds received by the Issuer or any of the Restricted Subsidiaries in respect of any Asset Sale, including any cash received upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Sale, net of:
(1) the direct costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash Consideration, including legal, accounting and investment banking fees, and brokerage and sales commissions, any relocation expenses incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements);
(2) amounts required to be applied to the repayment of principal, premium, if any, and interest on Indebtedness that is (i) secured by a Lien on the property or assets that are the subject of such Asset Sale, that is, and is permitted to be, senior to the Lien securing the Notes or (ii) secured by a Lien on such property or assets and such property or assets do not constitute Collateral, which Indebtedness, in either case, is required (other than required by the covenant described under Repurchase at the Option of HoldersAsset Sales) to be paid as a result of such transaction; and
(3) any deduction of appropriate amounts to be provided by the Issuer or any of the Restricted Subsidiaries as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by the Issuer or any of the Restricted Subsidiaries after such sale or other disposition thereof, including pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.
New York UCC means the UCC as from time to time in effect in the State of New York.
Noteholder Secured Parties has the meaning set forth in the first paragraph under Security for the NotesCollateral.
Notes Obligations means all Obligations of the Grantors under the Notes, the Guarantees and the Indenture.
Obligations means any principal, interest (including any interest accruing subsequent to the filing of a petition in bankruptcy, reorganization or similar proceeding at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable state, federal or foreign law), premium, penalties, fees, indemnifications, reimbursements (including reimbursement obligations with respect to letters of credit and bankers acceptances), damages and
other liabilities, and guarantees of payment of such principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities, payable under the documentation governing any Indebtedness.
Offering Circular means the final offering circular, dated April 20, 2011, relating to the offering of the Notes.
Officer means the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer, the Controller or the Secretary of the Issuer or of any other Person, as the case may be.
Officers Certificate means a certificate signed on behalf of the Issuer by an Officer of the Issuer or on behalf of any other Person, as the case may be, who must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Issuer or of such other Person that meets the requirements set forth in the Indenture.
Opinion of Counsel means a written opinion acceptable to the Trustee from legal counsel. The counsel may be an employee of or counsel to the Issuer.
Other First Lien Obligations means any Indebtedness or other Obligations (other than the Notes and Designated Priority Obligations) having First Lien Priority with respect to the Collateral and that are not secured by any other assets and, in the case of Indebtedness for borrowed money, has a stated maturity that is equal to or later than the stated maturity of the Notes; provided that an authorized representative of the holders of such Indebtedness shall have executed a joinder to the Collateral Agreement and, if the Alabama Revolving Credit Agreement remains outstanding, the Alabama Intercreditor Agreement.
Parent Entity means any Person that is a direct or indirect parent of the Issuer.
Pari Passu Payment Obligations means the Notes Obligations and each class of Other First Lien Obligations.
Permitted Asset Swap means the concurrent purchase and sale or exchange of Related Business Assets or a combination of Related Business Assets and cash or Cash Equivalents between the Issuer or any of the Restricted Subsidiaries, on the one hand, and another Person, on the other hand; provided that any cash or Cash Equivalents received must be applied in accordance with the Repurchase at the Option of HoldersAsset Sales covenant.
Permitted Holders means (i) the Sponsor, (ii) members of management of the Issuer or any Parent Entity who are holders of Equity Interests of the Issuer (or any Parent Entity) on the Issue Date, (iii) any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or any successor provision) of which any of the Persons described in the foregoing clause (i) or (ii) are members; provided, that, in the case of such group and without giving effect to the existence of such group or any other group, the Sponsor and members of management, collectively, have beneficial ownership of more than 50% of the total voting power of the Voting Stock of the Issuer or any Parent Entity or (iv) any Permitted Parent. Any Person or group whose acquisition of beneficial ownership constitutes a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of the Indenture will thereafter, together with its controlled Affiliates, constitute an additional Permitted Holder.
Permitted Investments means:
(1) any Investment in the Issuer or any of the Restricted Subsidiaries;
(2) any Investment in cash or Cash Equivalents;
(3) any Investment by the Issuer or any of the Restricted Subsidiaries in a Person that is engaged in a Similar Business if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary; or
(b) such Person, in one transaction or a series of related transactions, is merged, amalgamated or consolidated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Issuer or a Restricted Subsidiary, and, in each case, any Investment held by such Person; provided that such Investment was not acquired by such Person in contemplation of such acquisition, merger, amalgamation, consolidation or transfer;
(4) any Investment in securities or other assets not constituting cash or Cash Equivalents and received in connection with an Asset Sale made pursuant to the provisions of Repurchase at the Option of HoldersAsset Sales or any other disposition of assets not constituting an Asset Sale;
(5) any Investment existing on the Issue Date or made pursuant to binding commitments in effect on the Issue Date to the extent described in the Offering Circular, or an Investment consisting of any extension, modification or renewal of any such Investment existing on the Issue Date or binding commitment in effect on the Issue Date to the extent described in the Offering Circular; provided that the amount of any such Investment may be increased in such extension, modification or renewal only (a) as required by the terms of such Investment or binding commitment as in existence on the Issue Date (including as a result of the accrual or accretion of interest or original issue discount or the issuance of pay-in-kind securities) or (b) as otherwise permitted under the Indenture;
(6) any Investment acquired by the Issuer or any of the Restricted Subsidiaries:
(a) in exchange for any other Investment or accounts or loans receivable held by the Issuer or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts or loans receivable;
(b) in satisfaction of judgments against other Persons; or
(c) as a result of a foreclosure by the Issuer or any of the Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;
(7) Hedging Obligations permitted under clause (11) of the second paragraph of the covenant described in Certain CovenantsLimitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock;
(8) any Investment in a Similar Business having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (8) that are at that time outstanding, not to exceed the greater of $25.0 million and 5.5% of Total Assets;
(9) Investments the payment for which consists of Equity Interests (exclusive of Disqualified Stock) of the Issuer or any Parent Entity; provided, however, that such Equity Interests will not increase the amount available for Restricted Payments under clause (3) of the first paragraph under the covenant described in Certain CovenantsLimitation on Restricted Payments;
(10) guarantees of Indebtedness permitted under the covenant described in Certain CovenantsLimitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock;
(11) any transaction to the extent it constitutes an Investment that is permitted and made in accordance with the provisions of the second paragraph of the covenant described under Certain
CovenantsTransactions with Affiliates (except transactions described in clause (2), (6), (8), (10) or (15) of such paragraph);
(12) Investments consisting of purchases and acquisitions of inventory, supplies, material or equipment or the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;
(13) additional Investments having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (13) that are at that time outstanding, not to exceed the greater of $20.0 million and 4.0% of Total Assets;
(14) advances to, or guarantees of Indebtedness of, employees not in excess of $5.0 million outstanding at any one time, in the aggregate;
(15) loans and advances to officers, directors and employees for business-related travel expenses, moving expenses and other similar expenses or payroll advances, in each case incurred in the ordinary course of business or consistent with past practices;
(16) advances, loans or extensions of trade credit in the ordinary course of business by the Issuer or any of the Restricted Subsidiaries;
(17) Investments consisting of purchases and acquisitions of assets or services in the ordinary course of business;
(18) Investments in the ordinary course of business consisting of Article 3 endorsements for collection or deposit and Article 4 customary trade arrangements with customers consistent with past practices; and
(19) Investments in Unrestricted Subsidiaries having an aggregate fair market value taken together with all other Investments made pursuant to this clause (19) that are at the time outstanding, not to exceed $10.0 million.
Permitted Liens means, with respect to any Person:
(1) pledges, deposits or security by such Person under workmens compensation laws, unemployment insurance, employers health tax, and other social security laws or similar legislation or other insurance related obligations (including, but not limited to, in respect of deductibles, self insured retention amounts and premiums and adjustments thereto) or indemnification obligations of (including obligations in respect of letters of credit or bank guarantees for the benefit of) insurance carriers providing property, casualty or liability insurance, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety, stay, customs or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, performance and return-of-money bonds and other similar obligations (including letters of credit issued in lieu of any such bonds or to support the issuance thereof and including those to secure health, safety and environmental obligations), in each case incurred in the ordinary course of business;
(2) Liens imposed by law or regulation, such as landlords, carriers, warehousemens and mechanics, materialmens and repairmens Liens, contractors, supplier of materials, architects, and other like Liens, in each case for sums not yet overdue for a period of more than 90 days or that are being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review, in each case, so long as adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;
(3) Liens for taxes, assessments or other governmental charges that are not yet overdue for a period of more than 30 days or not yet payable or that are being contested in good faith by appropriate proceedings diligently conducted, so long as adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;
(4) Liens in favor of the issuers of performance, surety, bid, indemnity, warranty, release, appeal or similar bonds or with respect to other regulatory requirements or letters of credit or bankers acceptances and completion guarantees, in each case issued pursuant to the request of and for the account of such Person in the ordinary course of its business;
(5) minor survey exceptions, minor encumbrances, ground leases, easements or reservations of, or rights of others for, licenses, rights-of-way, servitudes, drains, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning, building code or other restrictions (including minor defects and irregularities in title and similar encumbrances) as to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties that were not incurred in connection with Indebtedness and that do not in the aggregate materially impair their use in the operation of the business of such Person;
(6) Liens securing Indebtedness permitted to be incurred pursuant to clause (5), 13(b), (15) or (19) of the second paragraph under Certain CovenantsLimitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock; provided that (a) Liens securing Indebtedness permitted to be incurred pursuant to such clause (5) extend only to the assets purchased with the proceeds of such Indebtedness and the proceeds and products thereof, (b) Liens securing Indebtedness permitted to be incurred pursuant to such clause (15) only secure Indebtedness of, and extend only to the assets of, Foreign Subsidiaries and (c) Liens securing Indebtedness permitted to be incurred pursuant to such clause (19) extend only to the assets of Foreign Subsidiaries; provided further that to the extent any Liens cover the Collateral, this clause (6) shall be available to permit such Liens only to the extent that such Liens secure Other First Lien Obligations;
(7) Liens existing on the Issue Date or pursuant to agreements in existence on the Issue Date (other than the Liens created by the Security Documents and the Republic Liens);
(8) Liens on property or shares of stock or other assets of a Person at the time such Person becomes a Subsidiary that, in each case, secure an Obligation existing at the time such Person becomes a Subsidiary; provided that (x) such Liens and Obligations are not created or incurred in connection with, or in contemplation of, such other Person becoming a Subsidiary and (y) such Liens may not extend to any other property owned by the Issuer or any of the Restricted Subsidiaries (other than (a) after- acquired property that is affixed to or incorporated into the property covered by such Lien securing such Obligation, (b) any other after-acquired property subject to such Lien securing such Obligation; provided that, in the case of clauses (a) and (b), the terms of such Obligation require or include a pledge of such after acquired property (it being understood that such requirement shall not apply or be permitted to apply to any property to which such requirement would not have applied but for such acquisition) and (c) the proceeds and products thereof);
(9) Liens on property or other assets at the time the Issuer or a Restricted Subsidiary acquired the property or such other assets, including any acquisition by means of a merger, amalgamation or consolidation with or into the Issuer or any of the Restricted Subsidiaries; provided, however, that such Liens are not created or incurred in connection with, or in contemplation of, such acquisition, merger, amalgamation or consolidation; provided further, however, that the Liens may not extend to any other property owned by the Issuer or any of the Restricted Subsidiaries;
(10) Liens securing Obligations relating to any Indebtedness or other obligations of a Restricted Subsidiary owing to the Issuer or a Subsidiary Guarantor permitted to be incurred in accordance
with the covenant described under Certain CovenantsLimitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock;
(11) Liens securing Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes); provided that with respect to Hedging Obligations relating to Indebtedness, such Indebtedness is permitted under the Indenture;
(12) Liens on specific items of inventory or other goods and proceeds of any Person securing such Persons obligations in respect of bankers acceptances or trade letters of credit issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;
(13) leases, subleases, licenses or sublicenses (including of intellectual property) granted to others in the ordinary course of business that do not materially interfere with the ordinary conduct of the business of the Issuer or any of the Restricted Subsidiaries and do not secure any Indebtedness;
(14) Liens arising from Uniform Commercial Code (or equivalent statute) financing statement filings regarding operating leases or consignments entered into by the Issuer and the Restricted Subsidiaries in the ordinary course of business;
(15) Liens in favor of the Issuer or any Subsidiary Guarantor;
(16) Liens on vehicles or equipment of the Issuer or any of the Restricted Subsidiaries granted in the ordinary course of business;
(17) Liens to secure any modification, refinancing, refunding, extension, renewal or replacement (or successive modification, refinancing, refunding, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (6), (7), (8) or (9) or clauses (26) or (38) below; provided that (a) in the case of any Lien referred to in the foregoing clause (6), this clause (17) shall only apply to modifications, refinancings, refundings, extensions, renewals or replacements of Indebtedness of Foreign Subsidiaries initially incurred under clause (15) of the second paragraph under Certain CovenantsLimitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock that are secured by assets of such Foreign Subsidiaries, (b) any such new Lien shall be limited to all or part of the same property that secured the original Lien (plus accessions, additions and improvements on such property, including (i) after-acquired property that is affixed to or incorporated into the property covered by such Lien, (ii) any other after-acquired property subject to such Lien; provided that, in the case of clauses (i) and (ii), the terms of such Indebtedness require or include a pledge of such after acquired property (it being understood that such requirement shall not apply or be permitted to apply to any property to which such requirement would not have applied but for such modification, refinancing, refunding, extension, renewal or replacement) and (iii) the proceeds and products thereof) and (c) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (x) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clause (6), (7), (8), (9), (26) or (38) of this definition, in each case, at the time the original Lien became a Permitted Lien under the Indenture and (y) an amount necessary to pay any fees and expenses, including premiums and accrued and unpaid interest, related to such modification, refinancing, refunding, extension, renewal or replacement;
(18) deposits made or other security provided in the ordinary course of business to secure liability to insurance carriers;
(19) Liens securing any other Obligations (which Obligations may be Other First Lien Obligations) that do not exceed $25.0 million at any one time outstanding;
(20) Liens securing judgments for the payment of money not constituting an Event of Default under clause (5) under the caption Events of Default and Remedies so long as such Liens are adequately bonded and any appropriate legal proceedings that may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has not expired;
(21) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods in the ordinary course of business;
(22) Liens (a) of a collection bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection, (b) attaching to commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course of business and not for speculative purposes, and (c) in favor of banking institutions arising as a matter of law encumbering deposits (including the right of setoff) and that are within the general parameters customary in the banking industry;
(23) Liens deemed to exist in connection with Investments in repurchase agreements permitted under Certain CovenantsLimitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock; provided that such Liens do not extend to any assets other than those that are the subject of such repurchase agreement;
(24) Liens that are contractual rights of set-off or rights of pledge (a) relating to the establishment of depository relations with banks not given in connection with the issuance of Indebtedness, (b) relating to pooled deposit or sweep accounts of the Issuer or any of the Restricted Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Issuer and the Restricted Subsidiaries or (c) relating to purchase orders and other agreements entered into with customers of the Issuer or any of the Restricted Subsidiaries in the ordinary course of business;
(25) Liens securing Indebtedness incurred under clause (1) of the second paragraph under Certain CovenantsLimitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock; provided that an authorized representative of the holders of such Indebtedness shall have executed a joinder to the Collateral Agreement and, if the Alabama Revolving Credit Agreement remains outstanding, the Alabama Intercreditor Agreement;
(26) Liens securing the Notes and the Guarantees outstanding on the Issue Date;
(27) Liens securing Lender Hedging Obligations;
(28) any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;
(29) Liens solely on any cash earnest money deposits made by the Issuer or any of the Restricted Subsidiaries in connection with any letter of intent or purchase agreement with respect to a transaction permitted under the Indenture;
(30) Liens on Capital Stock of an Unrestricted Subsidiary that secure Indebtedness or other obligations of such Unrestricted Subsidiary;
(31) Liens arising out of conditional sale, title retention, consignment or similar arrangements with vendors for the sale or purchase of goods entered into by the Issuer or any Restricted Subsidiary in the ordinary course of business;
(32) ground leases, subleases, licenses or sublicenses in respect of real property on which facilities owned or leased by the Issuer or any of the Restricted Subsidiaries are located that do not in the aggregate materially impair their use in the operation of the business of the Issuer and the Restricted Subsidiaries;
(33) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;
(34) the reservations, limitations, provisos and conditions expressed in any original grants of real or immoveable property that do not materially impair the use of the affected land for the purpose used or intended to be used;
(35) any Lien resulting from the deposit of cash or securities in connection with the performance of a bid, tender, sale or contract (excluding the borrowing of money) entered into in the ordinary course of business or deposits of cash or securities in order to secure appeal bonds or bonds required in respect of judicial proceedings;
(36) any Lien in favor of a lessor or licensor for rent to become due or for other obligations or acts, the payment or performance of which is required under any lease as a condition to the continuance of such lease;
(37) Liens on the Collateral in favor of any collateral agent relating to such collateral agents administrative expenses with respect to the Collateral;
(38) Liens securing any Other First Lien Obligations incurred pursuant to the first paragraph of the covenant described under Certain CovenantsLimitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock, provided, however, that, at the time of incurrence of such Liens securing such Other First Lien Obligations under this clause (38) and after giving pro forma effect thereto, the Consolidated Secured Debt Ratio would be no greater than 3.25 to 1.0;
(39) the Republic Liens;
(40) Liens on the assets of Subsidiaries that are not Subsidiary Guarantors securing Indebtedness of such Subsidiaries that was permitted by the Indenture to be incurred;
(41) all rights of expropriation, access or use or other similar rights conferred by or reserved by any federal, state or municipal authority or agency;
(42) any agreements with any governmental authority or utility that do not, in the aggregate, adversely effect in any material respect the use or value of real property and improvements thereon in the good faith judgment of the Issuer;
(43) Liens (i) on cash advances in favor of the seller of any property to be acquired in an Investment permitted under the Indenture to be applied against the purchase price for such Investment, and (ii) incurred in connection with an agreement to sell, transfer, lease or otherwise dispose of any property in a transaction permitted under Repurchase at the Option of HoldersAsset Sales, in each case, solely to the extent such Investment or sale, disposition, transfer or lease, as the case may be, would have been permitted on the date of the creation of such Lien; and
(44) agreements to subordinate any interest of the Issuer or any Restricted Subsidiary in any accounts or loans receivable or other proceeds arising from inventory consigned by the Issuer or any Restricted Subsidiary pursuant to an agreement entered into in the ordinary course of business.
For purposes of determining compliance with this definition, (A) Liens need not be incurred solely by reference to one category of Permitted Liens described in this definition but are permitted to be incurred in part under any combination thereof and of any other available exemption and (B) in the event that a Lien (or any portion thereof) meets the criteria of one or more of the categories of Permitted Liens, the Issuer may, in its sole discretion, classify or reclassify such Lien (or any portion thereof) in any manner that complies with this definition.
For purposes of this definition, the term Indebtedness shall be deemed to include interest on such Indebtedness.
Permitted Parent means any Parent Entity formed by the Sponsor that is not formed in connection with, or in contemplation of, a transaction that, assuming such Parent Entity was not a Parent Entity, would constitute a Change of Control.
Person means any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.
Post-Petition Interest means any interest or entitlement to fees or expenses or other charges that accrues after the commencement of any bankruptcy proceeding, whether or not allowed or allowable in any such bankruptcy proceeding.
Preferred Stock means any Equity Interest with preferential rights of payment of dividends or upon liquidation, dissolution, or winding up.
Qualified Proceeds means assets that are used or useful in, or Capital Stock of any Person engaged in, a Similar Business; provided that the fair market value of any such assets or Capital Stock shall be determined by the Issuers Board in good faith.
Rating Agencies means Moodys and S&P, or if Moodys or S&P or both shall not make a rating on the Notes publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Issuer which shall be substituted for Moodys or S&P or both, as the case may be.
Registration Rights Agreement means the registration rights agreement dated the Issue Date among the Issuer, the Subsidiary Guarantors and the Initial Purchasers.
Related Business Assets means assets (other than cash or Cash Equivalents) used or useful in a Similar Business; provided that any assets received by the Issuer or a Restricted Subsidiary in exchange for assets transferred by the Issuer or a Restricted Subsidiary shall not be deemed to be Related Business Assets if they consist of securities of a Person, unless upon receipt of the securities of such Person, such Person would become a Restricted Subsidiary.
Republic Bank means Republic Bank of Chicago, in its capacity as the lender to the Alabama Subsidiary under the Alabama Revolving Credit Agreement.
Republic Liens means Liens on the Shared Alabama Collateral securing the Republic Obligations.
Republic Obligations means any and all Obligations of the Alabama Subsidiary pursuant to the Alabama Revolving Credit Facility the Indebtedness in respect of which is incurred under clause (2) of the second paragraph under Certain CovenantsLimitation on the Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock.
Requirement of Law means, as to any Person, any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
Restricted DRE means any Subsidiary that (a) is disregarded as an entity separate from its sole owner under Treasury Regulation Section 301.7701-2(c)(2) or 3(b) and (b) with respect to which substantially all of its assets consist of Equity Interests in (i) Foreign Subsidiaries or (ii) other Restricted DREs.
Restricted Investment means an Investment other than a Permitted Investment.
Restricted Subsidiary means, at any time, any direct or indirect Subsidiary of the Issuer (including any Foreign Subsidiary) that is not then an Unrestricted Subsidiary; provided, however, that upon the occurrence of an Unrestricted Subsidiary ceasing to be an Unrestricted Subsidiary, such Subsidiary shall be included in the definition of Restricted Subsidiary.
Revolving Administrative Agent means the administrative agent under the Revolving Credit Agreement, which, on the Issue Date, will be Credit Suisse AG.
Revolving Credit Agreement means the Revolving Credit Agreement to be dated the Issue Date, by and among the Issuer, the other persons party thereto designated as loan parties, Credit Suisse AG, as administrative agent and issuing bank thereunder, and the other parties thereto, including any related notes, letters of credit, guarantees, collateral documents, instruments and agreements executed in connection therewith, and any appendices, exhibits, annexes or schedules to any of the foregoing.
Revolving Credit Facility Obligations means Obligations of the Grantors in respect of revolving credit loans incurred, or letters of credit made, pursuant to a Credit Facility, the Indebtedness in respect of which is incurred pursuant to clause (1) of the second paragraph under Certain CovenantsLimitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock, which will include, for the avoidance of doubt, Obligations under the Revolving Credit Agreement and any related guarantee or security documents.
Revolving Lender means any lender or holder or agent or arranger of Indebtedness under the Revolving Credit Agreement.
S&P means Standard & Poors, a division of The McGraw-Hill Companies, Inc., and any successor to its rating agency business.
Sale and Lease-Back Transaction means any arrangement providing for the leasing by the Issuer or any of the Restricted Subsidiaries of any real or tangible personal property, which property has been or is to be sold or transferred by the Issuer or such Restricted Subsidiary to a third Person in contemplation of such leasing.
SEC means the U.S. Securities and Exchange Commission.
Secured Indebtedness means any Indebtedness of the Issuer or any of the Restricted Subsidiaries secured by a Lien.
Securities Act means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.
Security Documents means the security agreements (including the Collateral Agreement), pledge agreements, mortgages, hypothecs, collateral assignments, deeds of trust, deeds to secure debt and related agreements, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified from time to time, creating the security interests in any assets or property in favor of the Collateral Agent for the benefit of the Noteholder Secured Parties as contemplated by the Indenture.
Shared Alabama Collateral means that portion of the Collateral that is owned by the Alabama Subsidiary and pledged to secure the Republic Obligations, consisting on the date of the Indenture of substantially all of the Collateral owned by the Alabama Subsidiary or in which the Alabama Subsidiary has an interest, including all Documents; Instruments; General Intangibles; Chattel Paper; Accounts; Goods; Inventory; Receivables; books and records, documents of title, certificates of insurance or instruments relating to the foregoing, guaranties, liens on real or personal property, leases and other agreements and property that secure or relate to the foregoing; cash held as cash collateral and other cash on deposit with, and deposit accounts maintained with, Republic Bank; and any products and
proceeds of the foregoing. Where applicable, each of the capitalized terms used in this definition has the meaning assigned to it in the UCC.
Significant Subsidiary means any Restricted Subsidiary that would be a significant subsidiary as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such regulation is in effect on the Issue Date.
Similar Business means any business conducted or proposed to be conducted by the Issuer and the Restricted Subsidiaries on the Issue Date or any business that is similar, reasonably related, incidental or ancillary thereto, or is a reasonable extension, development or expansion thereof.
Special Dividend means a special dividend paid in respect of the Capital Stock of the Issuer in an aggregate amount that, when taken together with the Special Options Distribution, does not exceed $125,000,000, which dividend shall be declared substantially concurrently with the consummation of the initial offering of the Notes and which dividend and shall be paid within fifteen Business Days thereof.
Special Options Distribution means a special distribution paid in respect of options to purchase Capital Stock of the Issuer in an aggregate amount that does not exceed the amount of such distributions described in the Offering Circular, and which distribution shall be paid within fifteen Business Days of the declaration of the Special Dividend.
Sponsor means Diamond Castle Holdings, LLC and any funds, partnerships or other investment vehicles managed or directly or indirectly controlled by the Sponsor, but not including, however, any portfolio companies of any of the foregoing.
Store Cash means, as of any date, the product of $50,000 multiplied by the number of stores owned and operated by the Issuer and its Subsidiaries as of such date.
Subordinated Indebtedness means, with respect to the Notes and the Guarantees,
(1) any Indebtedness of the Issuer that is by its terms subordinated in right of payment to the Notes, and
(2) any Indebtedness of any Subsidiary Guarantor that is by its terms subordinated in right of payment to the Guarantee of such entity of the Notes.
Subsidiary means, with respect to any Person:
(1) any corporation, association or other business entity (other than a partnership, joint venture, limited liability company or similar entity) of which more than 50% of the total voting power of shares of Capital Stock entitled to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, and
(2) any partnership, joint venture, limited liability company or similar entity of which:
(a) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof whether in the form of membership, general, special or limited partnership or otherwise, and
(b) such Person or any Restricted Subsidiary of such Person is a controlling general partner or otherwise controls such entity.
Subsidiary Guarantor means each Subsidiary of the Issuer that executes the Indenture as a guarantor on the Issue Date and each other Subsidiary of the Issuer that thereafter guarantees the Notes in accordance with the terms of the Indenture.
TIA means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the Issue Date.
Total Assets means, as of any date, the total consolidated assets of the Issuer and the Restricted Subsidiaries on a consolidated basis, as shown on the consolidated balance sheet of the Issuer and the Restricted Subsidiaries as of the end of the most recently ended fiscal quarter prior to the applicable date of determination for which financial statements are available; provided that, for purposes of calculating Total Assets for purposes of testing the covenants under the Indenture in connection with any transaction, the total consolidated assets of the Issuer and the Restricted Subsidiaries shall be adjusted to reflect any acquisitions and dispositions of assets that have occurred during the period from the date of the applicable balance sheet through the applicable date of determination but without giving effect to the transaction being tested under the Indenture.
Transactions means the: (1) the execution and delivery of the Revolving Credit Agreement on or prior to the Issue Date on substantially the same terms as those described in the Offering Circular; (2) the issuance of the Notes (and the execution and delivery of the Guarantees and Security Documents in connection therewith); (3) the repayment in full of any amounts outstanding under the Existing Credit Agreements; (4) the acquisition by the Issuer on the Issue Date of all of the outstanding Equity Interests of California Check Cashing Stores, LLC and CheckSmart Financial Holdings Corp. pursuant to the Acquisition Agreement on substantially the same terms as those described in the Offering Circular; (5) the payment by the Issuer of the Special Dividend; (6) the payment by the Issuer of the Special Options Distribution; (7) the execution and delivery of an amendment to the Alabama Revolving Credit Agreement on substantially the same terms as those described in the Offering Circular and (8) the payment of fees and expenses in relation to the foregoing (including accounting, attorney and other professional fees).
Treasury Rate means, as of any Redemption Date, the yield to maturity as of such Redemption Date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the Redemption Date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such Redemption Date to May 1, 2015; provided, however, that if the period from such Redemption Date to May 1, 2015 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.
Trust Indenture Act means the Trust Indenture Act of 1939, as amended (15 U.S.C. §§ 77aaa-77bbbb).
Uniform Commercial Code or UCC means the Uniform Commercial Code as in effect in the relevant jurisdiction from time to time. Unless otherwise specified, references to the Uniform Commercial Code herein refer to the New York UCC.
Unrestricted Subsidiary means:
(1) as of the Issue Date and for so long as the same has not been designated as a Restricted Subsidiary, the Initial Unrestricted Subsidiary;
(2) any Subsidiary of the Issuer that at the time of determination is an Unrestricted Subsidiary (as designated by the Issuer, as provided below); and
(3) any Subsidiary of an Unrestricted Subsidiary.
The Issuer may designate any Subsidiary of the Issuer (including any existing Subsidiary and any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on, any
property of, the Issuer or any Restricted Subsidiary (other than solely any Subsidiary of the Subsidiary to be so designated); provided that
(1) such designation complies with the covenant described under Certain CovenantsLimitation on Restricted Payments; and
(2) each of:
(a) the Subsidiary to be so designated; and
(b) its Subsidiaries
has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness pursuant to which the lender has recourse to any of the assets of the Issuer or any Restricted Subsidiary (other than Equity Interests in the Unrestricted Subsidiary).
The Issuer may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that, immediately after giving effect to such designation, no Default shall have occurred and be continuing and either:
(1) the Issuer could incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test described in the first paragraph under Certain CovenantsLimitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock; or
(2) the Fixed Charge Coverage Ratio for the Issuer and the Restricted Subsidiaries would be greater than such ratio for the Issuer and the Restricted Subsidiaries immediately prior to such designation, in each case on a pro forma basis taking into account such designation.
Any such designation by the Issuer shall be notified by the Issuer to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of the Issuer giving effect to such designation and an Officers Certificate certifying that such designation complied with the foregoing provisions.
Voting Stock of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of such Person.
Weighted Average Life to Maturity means, when applied to any Indebtedness, Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing:
(1) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment; by
(2) the sum of all such payments.
Wholly-Owned Subsidiary of any Person means a Subsidiary of such Person, 100% of the outstanding Equity Interests of which (other than directors qualifying shares) are at the time owned by such Person or by one or more Wholly-Owned Subsidiaries of such Person.
The original notes were sold to qualified institutional buyers in reliance on Rule 144A (the Rule 144A Notes), and in offshore transactions in reliance on Regulation S (the Regulation S Notes). The original notes were issued in registered, global form in minimum denominations of $2,000 and integral multiples of $1,000 in excess of $2,000.
Rule 144A Notes are currently represented by one or more global notes in registered form without interest coupons (collectively, the Rule 144A Global Notes), and the Regulation S Notes are currently represented by one or more global notes in registered form without interest coupons (collectively, the Temporary Regulation S Global Notes). Beneficial ownership interests in a Temporary Regulation S Global Note are exchangeable for interests in a Rule 144A Global Note, a permanent global note (the Permanent Regulation S Global Note), or a definitive note in registered certificated form (a Certificated Note), only (i) upon certification in form reasonably satisfactory to the Trustee that beneficial ownership interests in such Temporary Regulation S Global Note are owned either by non-U.S. persons or U.S. persons who purchased such interests in a transaction that did not require registration under the Securities Act and (ii) in the case of an exchange for a Certificated Note, in compliance with the requirements described under Exchange of Global Notes for Certificated Notes. The Temporary Regulation S Global Note and the Permanent Regulation S Global Note are referred to herein as the Regulation S Global Notes and the Rule 144A Global Notes and the Regulation S Global Notes are collectively referred to herein as the Global Notes. The Global Notes were deposited upon issuance with the Trustee as custodian for The Depository Trust Company (DTC), in New York, New York, and registered in the name of DTC or its nominee, in each case for credit to an account of a direct or indirect participant in DTC as described below. Beneficial interests in the Rule 144A Global Notes may not be exchanged for beneficial interests in the Regulation S Global Notes at any time except in the limited circumstances described below. See Exchanges Between Regulation S Notes and Rule 144A Notes.
The exchange notes issued in exchange for the original notes will be represented by one or more fully registered global notes, without interest coupons and will be deposited upon issuance with the Trustee as custodian for DTC, in New York, New York, and registered in the name of DTC or its nominee, in each case for credit to an account of a direct or indirect participant as described below.
Except as set forth below, the global notes may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the global notes may not be exchanged for notes in certificated form except in the limited circumstances described below. See Exchange of Global Notes for Certificated Notes. Except in the limited circumstances described below, owners of beneficial interests in the global notes will not be entitled to receive physical delivery of exchange notes in certificated form.
Transfers of beneficial interests in the global notes will be subject to the applicable rules and procedures of DTC and its direct or indirect participants, which may change from time to time.
Depository Procedures
The following description of the operations and procedures of DTC is provided solely as a matter of convenience. These operations and procedures are solely within the control of the respective settlement systems and are subject to changes by them. Neither the Company nor the Trustee takes any responsibility for these operations and procedures and investors are urged to contact the system or their participants directly to discuss these matters.
DTC has advised the Company that DTC is a limited-purpose trust company created to hold securities for its participating organizations (collectively, the Participants) and to facilitate the clearance and settlement of transactions in those securities between Participants through electronic book-entry changes in accounts of its Participants. The Participants include securities brokers and dealers (including the initial purchasers), banks, trust companies, clearing corporations and certain other organizations. Access to DTCs system is also available to other entities such as banks, brokers, dealers and trust companies that clear through, or maintain a custodial relationship with, a Participant, either directly or indirectly (collectively, the Indirect Participants). Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through the Participants or the Indirect Participants.
The ownership interests in, and transfers of ownership interests in, each security held by or on behalf of DTC are recorded on the records of the Participants and Indirect Participants.
DTC has also advised the Company that, pursuant to procedures established by it:
(1) upon deposit of the global notes, DTC will credit the accounts of Participants designated by the initial purchasers with portions of the principal amount of the global notes; and
(2) ownership of these interests in the global notes will be shown on, and the transfer of ownership of these interests will be effected only through, records maintained by DTC (with respect to the Participants) or by the Participants and the Indirect Participants (with respect to other owners of beneficial interests in the global notes).
Investors in the global notes who are Participants in DTCs system may hold their interests therein directly through DTC. Investors in the global notes who are not Participants may hold their interests therein indirectly through organizations which are Participants in such system. All interests in a global note may be subject to the procedures and requirements of DTC. The laws of some states require that certain Persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interests in a global note to such Persons will be limited to that extent. Because DTC can act only on behalf of Participants, which in turn act on behalf of Indirect Participants, the ability of a Person having beneficial interests in a global note to pledge such interests to Persons that do not participate in the DTC system, or otherwise take actions in respect of such interests, may be affected by the lack of a physical certificate evidencing such interests.
Except as described below, owners of an interest in the global notes will not have exchange notes registered in their names, will not receive physical delivery of exchange notes in certificated form and will not be considered the registered owners or holders thereof under the Indenture for any purpose.
Payments in respect of the principal of, and interest and premium and additional interest, if any, on a global note registered in the name of DTC or its nominee will be payable to DTC in its capacity as the registered holder under the Indenture. Under the terms of the Indenture, the Company and the Trustee will treat the Persons in whose names the exchange notes, including the global notes, are registered as the owners of the exchange notes for the purpose of receiving payments and for all other purposes.
Consequently, neither the Company nor the Trustee nor any agent of the Company or the Trustee has or will have any responsibility or liability for:
(1) any aspect of DTCs records or any Participants or Indirect Participants records relating to, or payments made on account of, beneficial ownership interest in the global notes or for maintaining, supervising or reviewing any of DTCs records, or any Participants or Indirect Participants records, relating to the beneficial ownership interests in the global notes; or
(2) any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants.
DTC has advised the Company that its current practice, upon receipt of any payment in respect of securities such as the exchange notes (including principal and interest), is to credit the accounts of the relevant Participants with the payment on the payment date unless DTC has reason to believe it will not receive payment on such payment date. Each relevant Participant is credited with an amount proportionate to its beneficial ownership of an interest in the principal amount of the relevant security as shown on the records of DTC. Payments by the Participants and the Indirect Participants to the beneficial owners of exchange notes will be governed by standing instructions and customary practices and will be the responsibility of the Participants or the Indirect Participants and will not be the responsibility of DTC, the Trustee or the Company. Neither the Company nor the Trustee will be liable for any delay by DTC or any of its Participants in identifying the beneficial owners of the exchange notes, and the Company and the Trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee for all purposes.
Transfers between Participants in DTC will be effected in accordance with DTCs procedures and will be settled in same-day funds.
DTC has advised the Company that it will take any action permitted to be taken by a Holder of exchange notes only at the direction of one or more Participants to whose account DTC has credited the interests in the global notes and only in respect of such portion of the aggregate principal amount of the exchange notes as to which such Participant or Participants has or have given such direction. However, if there is an Event of Default under the exchange notes, DTC reserves the right to exchange the global notes for legended exchange notes in certificated form and to distribute such exchange notes to its Participants.
Neither the Company nor the Trustee nor any of their respective agents will have any responsibility for the performance by DTC or the Participants or Indirect Participants of their respective obligations under the rules and procedures governing their operations.
Exchange of Global Notes for Certificated Notes
A Global Note is exchangeable for certificated notes if:
(1) DTC (a) notifies the Company that it is unwilling or unable to continue as depositary for the Global Notes, and DTC fails to appoint a successor depositary or (b) has ceased to be a clearing agency registered under the Exchange Act;
(2) the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of the certificated notes; or
(3) there has occurred and is continuing a Default with respect to the exchange notes.
In addition, beneficial interests in a Global Note may be exchanged for certificated notes upon prior written notice given to the Trustee by or on behalf of DTC in accordance with the Indenture. In all cases, certificated notes delivered in exchange for any Global Note or beneficial interests in Global Notes will be registered in the names, and issued in any approved denominations, requested by or on behalf of the depositary (in accordance with its customary procedures).
Exchange of Certificated Notes for Global Notes
Certificated notes may not be exchanged for beneficial interests in any Global Note unless the transferor first delivers to the Trustee a written certificate (in the form provided in the Indenture) to the effect that such transfer will comply with the appropriate transfer restrictions applicable to such notes.
Exchanges Between Regulation S Notes and Rule 144A Notes
Beneficial interests in the Temporary Regulation S Global Note may be exchanged for beneficial interests in the Permanent Regulation S Global Note or the Rule 144A Global Note only after the expiration of the Distribution Compliance Period and then only upon certification in form reasonably satisfactory to the Trustee that beneficial ownership interests in such Temporary Regulation S Note are owned by, or being transferred to, either non-U.S. persons or U.S. persons who purchased such interests in a transaction that did not require registration under the Securities Act.
Beneficial interests in a Rule 144A Global Note may be transferred to a Person who takes delivery in the form of an interest in the Regulation S Global Note, whether before or after the expiration of the Distribution Compliance Period, only if the transferor first delivers to the Trustee a written certificate (in the form provided in the Indenture) to the effect that such transfer is being made in accordance with Rule 903 or 904 of Regulation S or Rule 144 (if available).
Transfers involving exchanges of beneficial interests between the Regulation S Global Notes and the Rule 144A Global Notes will be effected in DTC by means of an instruction originated by the Trustee through the DTC Deposit/Withdraw at Custodian system. Accordingly, in connection with any such transfer, appropriate adjustments will be made to reflect a decrease in the principal amount of the Regulation S Global Note and a corresponding increase in the principal amount of the Rule 144A Global Note or vice versa, as applicable. Any beneficial interest in one of the Global Notes that is transferred to a Person who takes delivery in the form of an interest in the other Global Note will, upon transfer, cease to be an interest in such Global Note and will become an interest in the other Global Note and, accordingly, will thereafter be subject to all transfer restrictions and other procedures applicable to beneficial interests in such other Global Note for so long as it remains such an interest.
Same Day Settlement and Payment
The Company will make payments in respect of the exchange notes represented by the global notes (including principal, premium, if any, interest and additional interest, if any) by wire transfer of immediately available funds to the accounts specified by the global note holder. The Company will make all payments of principal, interest and premium and additional interest, if any, with respect to certificated notes by wire transfer of immediately available funds to the accounts specified by the holders of the certificated notes or, if no such account is specified, by mailing a check to each such holders registered address. The exchange notes represented by the global notes are expected to be eligible to trade in DTCs Same-Day Funds Settlement System, and any permitted secondary market trading activity in such notes will, therefore, be required by DTC to be settled in immediately available funds. The Company expects that secondary trading in any certificated notes will also be settled in immediately available funds.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary describes certain United States federal income tax considerations relevant to the exchange offer and the ownership and disposition of the exchange notes issued pursuant to the exchange offer. Except where noted, this discussion is limited to beneficial owners of notes that have held the notes and will hold the exchange notes as capital assets (generally, property held for investment). This discussion does not deal with special situations, such as those of dealers in securities or currencies and traders in securities, regulated investment companies, real estate investment trusts, banks or traders and other financial institutions, tax-exempt entities, insurance companies, grantor trusts, U.S. expatriates, personal holding companies, persons who hold the notes through partnerships or other pass through entities for U.S. federal income tax purposes or investors in such entities, persons holding notes as a part of a hedging, integrated, conversion, or constructive sale transaction or a straddle, traders in securities that elect to use a mark-to-market method of accounting for their securities holdings, Non-U.S. Holders (defined below) subject to special tax rules such as controlled foreign corporations and passive foreign investment companies, persons liable for alternative minimum tax or holders of notes whose functional currency is not the U.S. dollar. Furthermore, the discussion below is based upon the provisions of the Internal Revenue Code of 1986, as amended (the Code), and regulations, rulings and judicial decisions thereunder as of the date hereof, which are subject to change or differing interpretations at any time, possibly with retroactive effect, which could affect the United States federal income tax considerations summarized below.
This summary constitutes neither tax nor legal advice. It does not address all tax considerations that may be relevant to a holder of notes. Persons considering participating in the exchange offer should consult their own tax advisors concerning the United States federal income tax consequences in light of their particular situations, as well as any state, local, foreign, estate and gift, alternative minimum tax or other tax consequences.
As used herein, a U.S. Holder means a holder of a note that is:
· an individual citizen or resident of the United States, including an alien individual who is a lawful permanent resident of the United States or meets the substantial presence test under section 7701(b) of the Code;
· a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, that was created or organized in or under the laws of the United States or any political subdivision thereof;
· an estate, the income of which is subject to United States federal income taxation regardless of its source; or
· a trust (i) that is subject to the primary supervision of a court within the United States and one or more United States persons (as described in section 7701(a)(30) of the Code) have the authority to control all substantial decisions of the trust or (ii) that has
a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person.
If a partnership (including an entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds our notes, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. If you are a partner or a partnership holding our notes, you should consult your tax advisors.
A Non-U.S. Holder is a holder of a note that is neither a U.S. Holder nor a partnership.
Exchange Offer
Because the exchange notes will not differ materially in kind or extent from the original notes, the exchange will not constitute a taxable event for United States federal income tax purposes. Consequently, (i) a holder will recognize no gain or loss upon receipt of an exchange note, (ii) a holders holding period for the exchange note will include its holding period for the original note exchanged therefor, and (iii) a holders basis in the exchange note will be the same as its basis in the old note immediately before the exchange. The following discussion of the notes refers to the exchange notes, unless otherwise indicated.
Ownership and Disposition of Notes
Effect of Certain Contingencies
Under the terms of the notes, we may be obligated in certain circumstances to pay amounts in excess of stated interest or principal on the notes. See, for example, Description of the Exchange NotesOptional Redemption and Description of the Exchange NotesRepurchase at the Option of HoldersChange of Control. It is possible that the IRS could assert that the payment of such excess amounts is a contingent payment, and the notes are therefore contingent payment debt instruments for U.S. federal income tax purposes. Under the applicable United States Treasury regulations, however, for purposes of determining whether a debt instrument is a contingent payment debt instrument, remote or incidental contingencies (determined as of the date the notes are issued) are ignored. We believe that the possibility of making additional payments is remote and/or incidental. Accordingly, we do not intend to treat the notes as contingent payment debt instruments. Our position will be binding on a holder, unless the holder timely and explicitly discloses to the IRS that it is taking a position different from ours. Our position, however, is not binding on the IRS. If the IRS successfully challenges this position, the timing and amount of income included and the character of the income recognized with respect to the notes may be materially and adversely different from the consequences discussed herein. Holders should consult their own tax advisors regarding this issue. The remainder of this discussion assumes that the notes are not treated as contingent payment debt instruments.
U.S. Holders
Payments of Stated Interest
Stated interest on a note will generally be taxable to a U.S. Holder as ordinary income at the time it is paid or accrued in accordance with the U.S. Holders method of accounting for tax purposes.
Amortizable bond premium
If a U.S. Holder purchased the notes after their original issuance date for an amount that is greater than the sum of all remaining payments on the notes other than stated interest, such holder will be treated as having purchased the notes with amortizable bond premium in an amount equal to such excess. Amortizable bond premium on the notes should carry over to the exchange notes received in exchange therefor. A U.S. Holder may elect to amortize this premium using a constant yield method over the term of the notes and generally may offset interest in respect of the note otherwise required to be included in income by the amortized amount of the premium for the taxable year. A U.S. Holder that elects to amortize bond premium must reduce its tax basis in its note by the amount of the premium amortized in any taxable year. An election to amortize bond premium is binding once made and applies to all notes held by the U.S. Holder at the beginning of the first taxable year to which this election applies and to all bonds thereafter acquired. U.S. Holders are urged to consult their own tax advisors concerning the computation and amortization of any bond premium on their exchange notes.
Market discount
If a U.S. Holder purchased the notes after their original issuance date for an amount that is less than their stated principal amount, such Holder will be treated as having purchased the notes with market discount unless the discount is less than a specified de minimis amount. Market discount on notes should carry over to the exchange notes received in exchange therefor. Under the market discount rules, a U.S. Holder generally will be required to treat any gain realized on the sale, exchange, retirement or other disposition of an exchange note as ordinary income to the extent of any accrued market discount that has not previously been included in income. For this purpose, market discount will be considered to accrue ratably during the period from the date of the U.S. Holders acquisition of the note to the maturity date of the note, unless the U.S. Holder made an election to accrue market discount on a constant yield basis. Accrued market discount on notes that has not previously been included in income by a U.S. Holder should carry over to the exchange notes received in exchange therefor. A U.S. Holder may be required to defer the deduction of all or a portion of the interest paid or accrued on any indebtedness incurred or maintained to purchase or carry a note with market discount until the maturity date or certain earlier dispositions. A U.S. Holder may elect to include market discount in income currently as it accrues on either a ratable or a constant yield basis, in which case the rules described above regarding (1) the treatment as ordinary income of gain upon the disposition of the note and (2) the deferral of interest deductions will not apply. Currently included market discount is generally treated as ordinary interest income for U.S. federal income tax purposes. An election to include market discount in income as it accrues will apply to all debt instruments with market discount acquired by the U.S. Holder on or after the first day of the taxable year to which the election applies and may be revoked only with the consent of the IRS. U.S. Holders are urged to consult their own tax advisors before making this election.
Sale, Exchange, Retirementor Other Disposition of Notes
Upon the sale, exchange (other than pursuant to the exchange offer), retirement or other taxable disposition of a note, a U.S. Holder will recognize gain or loss equal to the difference between the amount realized upon the sale, exchange, retirement or other taxable disposition (other than any amounts attributable to accrued stated interest, which will be taxable as such) and the adjusted tax basis of the note. A U.S. Holders adjusted tax basis in a note will, in general, be the U.S. Holders cost therefor, reduced by any cash payments received on the note other than stated interest.
Subject to the market discount rules described above under the heading Market Discount, any gain or loss recognized by a U.S. Holder will be capital gain or loss and, if such holder has held the notes for more than one year, long-term capital gain or loss. Long-term capital gains of non-corporate U.S. Holders currently are subject to reduced rates of taxation. The ability to deduct capital losses is subject to limitations.
Medicare Surtax
Legislation enacted in 2010 will require certain U.S. Holders who are individuals, estates or trusts to pay a 3.8% Medicare surtax on all or part of that holders net investment income, which includes, among other items, interest on, and capital gains from the sale or other taxable disposition of, the notes. This surtax will apply to taxable years beginning after December 31, 2012. Prospective investors should consult their own tax advisors regarding the effect, if any, of this legislation on their investment in the notes.
Non-U.S. Holders
Payments on the Notes
Subject to the discussion below concerning backup withholding, all payments to a Non-U.S. Holder that are attributable to interest generally will be exempt from United States federal withholding tax, provided that:
· such payments are not effectively connected with the conduct by the Non-U.S. Holder of a trade or business within the United States (or, in the case of an applicable tax treaty, are not attributable to the Non-U.S. Holders United States permanent establishment or fixed base);
· the Non-U.S. Holder does not own, actually or constructively, 10% or more of the total combined voting power of all classes of our stock entitled to vote; and
· prior to the payment, the Non-U.S. Holder certifies, under penalty of perjury, on a properly executed and delivered IRS Form W-8BEN or appropriate substitute form, that it is not a United States person for U.S. federal income tax purposes.
The certification described in the last clause above may be provided by (i) a securities clearing organization, (ii) a bank or other financial institution that holds customers securities in the ordinary course of its trade or business or (iii) a qualified intermediary that has entered into a withholding agreement with the IRS meets and other conditions.
A Non-U.S. Holder who is not exempt from tax under these rules generally will be subject to United States federal withholding tax at a gross rate of 30%, subject to any exemption or reduction under an applicable income tax treaty.
However, income from payments or accruals of interest that is effectively connected with a Non-U.S. Holders conduct of a trade or business in the United States (and, if provided in an applicable income tax treaty, is attributable to a United States permanent establishment or fixed base) generally will be subject to U.S. federal income tax in the same manner as U.S. Holders (but without regard to the additional 3.8% Medicare surtax described above) and, if paid to corporate holders, may also be subject to a branch profits tax at a rate of 30% or lower applicable treaty rate. If payments are subject to U.S. federal income tax in accordance with the rules described in the preceding sentence, such payments will not be subject to United States withholding tax so long as the Non-U.S. Holder provides us or our paying agent with a properly executed IRS Form W-8ECI (or suitable substitute form).
Non-U.S. Holders should consult applicable income tax treaties, which may provide reduced rates of or an exemption from United States federal withholding tax on payments of interest. Non-U.S. Holders will be required to comply with certification requirements in order to claim a treaty exemption or reduced rate, which may be satisfied by providing an IRS Form W-8BEN or appropriate substitute form to us or our agent.
Sale, Exchange, Retirement or Other Disposition of Notes
Subject to the discussion below concerning backup withholding, any gain realized by a Non-U.S. Holder on a sale, exchange, retirement or other taxable disposition of notes generally will be exempt from United States federal income and withholding tax, unless:
· that gain is effectively connected with the conduct by the Non-U.S. Holder of a trade or business in the United States and, if provided in an applicable income tax treaty, is attributable to a United States permanent establishment or fixed base of the Non-U.S. Holder; or
· in the case of a nonresident alien individual, the holder is present in the United States for 183 or more days in the taxable year of disposition and certain other conditions are satisfied.
Any amount received by a Non-U.S. Holder on a sale or other disposition attributable to accrued but unpaid interest will be treated as such. See Non-U.S. HoldersPayments on the Notes above. Any gain that is effectively connected with a Non-U.S. Holders conduct of a trade or business in the United States (and, if provided in an applicable income tax treaty, is attributable to a United States permanent establishment or fixed base) generally will be subject to U.S. federal income tax in the same manner as U.S. Holders (but without regard to the
additional 3.8% Medicare surtax described above). See the discussion regarding effectively connected income under Non-U.S. HoldersPayments on the Notes above.
Information Reporting and Backup Withholding
U.S. Holders. Information reporting will apply to payments of principal and interest made by us on, or the proceeds of the sale or other disposition of, the notes with respect to certain nonexempt U.S. Holders, and backup withholding may apply unless the recipient of such payment provides the appropriate intermediary with a taxpayer identification number, certified under penalties or perjury, as well as certain other information or otherwise establishes an exemption from backup withholding. Any amount withheld under the backup withholding rules is allowable as a credit against the U.S. Holders federal income tax, provided the requirement information is provided to the IRS. Certain persons are exempt from backup withholding. U.S. Holders should consult their tax advisors as to their qualification for exemption from backup withholding and the procedure to obtain such exemption.
Non-U.S. Holders. We will, where required, report to Non-U.S. Holders and to the IRS the amount of any principal and interest paid on the notes. Copies of these information returns also may be made available under the provisions of a specific treaty or other agreement to the tax authorities of the country in which the Non-U.S. Holder resides. Backup withholding generally will not apply to payments of principal and interest on the notes to a Non-U.S. Holder that certifies as to its Non-U.S. Holder status under penalties of perjury or otherwise qualifies for an exemption (provided that neither our company nor our agent knows or has reason to know that such holder is a U.S. person or that the conditions of any other exemptions are not in fact satisfied).
The payment of the proceeds of the disposition of notes to or through the U.S. office of a U.S. or foreign broker will be subject to information reporting and backup withholding unless the Non-U.S. Holder provides the certification described above or otherwise qualifies for an exemption. The proceeds of a disposition effected outside the United States by a Non-U.S. Holder to or through a foreign office of a broker generally will not be subject to backup withholding or information reporting. However, if such broker is a U.S. person, a controlled foreign corporation for U.S. tax purposes, a foreign person 50% or more of whose gross income from all sources for certain periods is effectively connected with a trade or business in the United States, or a foreign partnership that is engaged in the conduct of a trade or business in the United States or that one or more partners that are U.S. persons who in the aggregate hold more than 50 percent of the income or capital interests in the partnership, information reporting requirements will apply unless such broker has documentary evidence in its files of the holders non-U.S. status and has no actual knowledge or reason to know to the contrary or unless the holder otherwise qualifies for an exemption.
Any amount withheld under the backup withholding rules will be refunded or will be allowable as a credit against the Non-U.S. Holders federal income tax liability, if any, provided the required information or appropriate claim for refund is provided to the IRS. Non-U.S. Holders should consult their own tax advisors regarding application of withholding and backup withholding in their particular circumstance and the availability of any procedure for obtaining
an exemption from withholding, information reporting and backup withholding under current Treasury regulations.
Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for original notes where such original notes were acquired as a result of market-marketing activities or other trading activities. We have agreed that, for a period of 180 days after the expiration date, we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition, until , 201 , all dealers effecting transactions in the exchange notes may be required to deliver a prospectus.
We will not receive any proceeds from any such sale of exchange notes by broker-dealers. Exchange notes received by broker-dealers for their own account, pursuant to the exchange offer, may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the exchange notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or at negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such exchange notes. Any broker-dealer that resells exchange notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of such exchange notes may be deemed to be an underwriter within the meaning of the Securities Act and any profit on any such resale of exchange notes and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an underwriter within the meaning of the Securities Act.
For a period of 180 days after the expiration date we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the letter of transmittal. We have agreed to pay all expenses incident to the exchange offer (including the expenses of one counsel for the holders of the notes) other than commissions or concessions of any brokers or dealers and will indemnify the holders of the notes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.
The validity of the exchange notes will be passed upon for us by Jones Day. Certain matters related to the laws of Kansas and Missouri will be passed upon for us by Kutak Rock LLP. Certain matters related to the laws of South Dakota will be passed upon for us by Lindquist & Vennum PLLP. Certain matters related to the laws of Hawaii will be passed upon for us by McCorriston Miller Mukai MacKinnon LLP. Certain matters related to the laws of North Dakota will be passed upon for us by Serkland Law Firm. Certain matters related to the laws of Alabama will be passed upon for us by Sirote & Permutt PC. Certain matters related to the laws of Alaska, Idaho, Minnesota, Nevada, Utah, Washington and Wyoming will be passed upon for us by Stoel Rives LLP. Certain matters related to the laws of Wisconsin will be passed upon for us by Whyte, Hirschboeck Dudek S.C.
The consolidated financial statements of Community Choice Financial Inc. and Subsidiaries appearing in this prospectus and registration statement have been audited by McGladrey LLP (formerly McGladrey & Pullen, LLP), an independent registered public accounting firm, as stated in their report appearing elsewhere herein, which report expresses an unqualified opinion, and are included in reliance upon such report and upon the authority of such firm as experts in accounting and auditing.
The consolidated financial statements of CCCS Corporate Holdings, Inc. and Subsidiaries appearing in this prospectus and registration statement have been audited by McGladrey LLP (formerly McGladrey & Pullen, LLP), an independent certified public accounting firm, as stated in their report appearing elsewhere herein, which report expresses an unqualified opinion, and are included in reliance upon such report and upon the authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form S-4 with the SEC with respect to the exchange notes offered by this prospectus. This prospectus, which is a part of the registration statement, does not contain all of the information in the registration statement or the exhibits and schedules that are part of the registration statement. For further information on our company and the exchange notes we are offering, you should review the registration statement. We are subject to the periodic reporting and other informational requirements of the Exchange Act.
You may read and copy the registration statement and the exhibits and schedules to the registration statement at the public reference room maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information regarding the public reference room. You may also obtain copies of all or part of the registration statement by mail from the Public Reference Section of the SEC at prescribed rates. The SEC also maintains a website that contains reports, proxy and information statements and other information about issuers, including our company, that file electronically with the SEC. The address of that website is www.sec.gov.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
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McGladrey LLP |
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders
Community Choice Financial Inc. and Subsidiaries
We have audited the accompanying consolidated balance sheets of Community Choice Financial Inc. and Subsidiaries (formerly CheckSmart Financial Holding Corp. and Subsidiaries) as of December 31, 2011 and 2010, and the related consolidated statements of income, stockholders equity, and cash flows for the years then ended December 31, 2011, 2010, and 2009. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Community Choice Financial Inc. and Subsidiaries (formerly CheckSmart Financial Holding Corp. and Subsidiaries) as of December 31, 2011 and 2010, and the results of its operations and its cash flows for the years ended December 31, 2011, 2010, and 2009, in conformity with U.S. generally accepted accounting principles.
/s/ McGladrey LLP
Raleigh, North Carolina
March 29, 2012, except for Note 22 and Note 23 as to which the date is June 22, 2012.
Community Choice Financial Inc. and Subsidiaries
December 31, 2011 and 2010
(In thousands, except per share data)
|
|
2011 |
|
2010 |
| ||
Assets |
|
|
|
|
| ||
Current Assets |
|
|
|
|
| ||
Cash and cash equivalents |
|
$ |
65,635 |
|
$ |
39,780 |
|
Finance receivables, net |
|
120,451 |
|
81,337 |
| ||
Short-term investments, certificates of deposit |
|
1,110 |
|
1,814 |
| ||
Prepaid money orders |
|
|
|
8,030 |
| ||
Card related pre-funding and receivables |
|
12,910 |
|
11,094 |
| ||
Other current assets |
|
5,719 |
|
3,627 |
| ||
Deferred tax asset, net |
|
1,766 |
|
2,147 |
| ||
Total current assets |
|
207,591 |
|
147,829 |
| ||
Noncurrent Assets |
|
|
|
|
| ||
Leasehold improvements and equipment, net |
|
19,661 |
|
15,155 |
| ||
Goodwill and other identified intangibles |
|
259,541 |
|
140,480 |
| ||
Security deposits |
|
1,591 |
|
1,130 |
| ||
Equity method investments |
|
11,109 |
|
|
| ||
Deferred tax asset, net |
|
1,475 |
|
4,865 |
| ||
Deferred debt issuance costs |
|
14,579 |
|
1,185 |
| ||
Total assets |
|
$ |
515,547 |
|
$ |
310,644 |
|
Liabilities and Stockholders Equity |
|
|
|
|
| ||
Current Liabilities |
|
|
|
|
| ||
Notes payable |
|
$ |
|
|
$ |
17,573 |
|
Deferred revenue |
|
2,654 |
|
714 |
| ||
Accrued interest |
|
7,153 |
|
339 |
| ||
Money orders payable |
|
18,340 |
|
4,049 |
| ||
Accounts payable and accrued liabilities |
|
20,474 |
|
6,458 |
| ||
Total current liabilities |
|
48,621 |
|
29,133 |
| ||
Noncurrent Liabilities |
|
|
|
|
| ||
Notes payable |
|
395,000 |
|
171,361 |
| ||
Deferred revenue |
|
10,612 |
|
359 |
| ||
Total liabilities |
|
454,233 |
|
200,853 |
| ||
Commitments and Contingencies |
|
|
|
|
| ||
Stockholders Equity |
|
|
|
|
| ||
Preferred stock, par value $.01 per share, 3,000 shares authorized, no shares issued and outstanding |
|
|
|
|
| ||
Common stock, par value $.01 per share, 300,000 and 7,200 authorized shares at December 31, 2011 and 2010, 7,982 and 6,140 outstanding shares at December 31, 2011 and 2010 |
|
80 |
|
61 |
| ||
Additional paid-in capital |
|
113,250 |
|
57,972 |
| ||
Retained earnings (deficit) |
|
(52,016 |
) |
51,577 |
| ||
Non-controlling interests |
|
|
|
181 |
| ||
Total stockholders equity |
|
61,314 |
|
109,791 |
| ||
Total liabilities and stockholders equity |
|
$ |
515,547 |
|
$ |
310,644 |
|
See Notes to Consolidated Financial Statements.
Community Choice Financial Inc. and Subsidiaries
Consolidated Statements of Income
Years Ended December 31, 2011, 2010, and 2009
(In thousands)
|
|
2011 |
|
2010 |
|
2009 |
| |||
Revenues: |
|
|
|
|
|
|
| |||
Finance receivable fees |
|
$ |
196,153 |
|
$ |
146,059 |
|
$ |
136,957 |
|
Check cashing fees |
|
72,800 |
|
55,930 |
|
53,049 |
| |||
Card fees |
|
19,914 |
|
10,731 |
|
2,063 |
| |||
Other |
|
18,067 |
|
11,560 |
|
10,614 |
| |||
Total revenues |
|
306,934 |
|
224,280 |
|
202,683 |
| |||
Branch expenses: |
|
|
|
|
|
|
| |||
Salaries and benefits |
|
57,411 |
|
38,759 |
|
34,343 |
| |||
Provision for loan losses |
|
65,351 |
|
40,316 |
|
43,463 |
| |||
Occupancy |
|
21,216 |
|
14,813 |
|
13,855 |
| |||
Depreciation and amortization |
|
5,907 |
|
5,318 |
|
6,613 |
| |||
Other |
|
35,515 |
|
27,994 |
|
22,652 |
| |||
Total branch expenses |
|
185,400 |
|
127,200 |
|
120,926 |
| |||
Branch gross profit |
|
121,534 |
|
97,080 |
|
81,757 |
| |||
Corporate expenses |
|
44,742 |
|
33,940 |
|
31,518 |
| |||
Transaction expenses |
|
9,351 |
|
237 |
|
|
| |||
Depreciation and amortization |
|
2,332 |
|
1,222 |
|
568 |
| |||
Interest expense, net |
|
34,334 |
|
8,501 |
|
11,532 |
| |||
Loss on equity method investments |
|
415 |
|
|
|
|
| |||
Nonoperating income, related party management fees |
|
(46 |
) |
(46 |
) |
(172 |
) | |||
Income before income taxes and discontinued operations |
|
30,406 |
|
53,226 |
|
38,311 |
| |||
Provision for income taxes |
|
13,553 |
|
19,801 |
|
14,042 |
| |||
Income from continuing operations |
|
16,853 |
|
33,425 |
|
24,269 |
| |||
Discontinued operations (net of provision (benefit) for income tax of $0, ($1,346), and $226) |
|
|
|
(2,196 |
) |
368 |
| |||
Net income |
|
16,853 |
|
31,229 |
|
24,637 |
| |||
Net loss attributable to non-controlling interests |
|
(120 |
) |
(252 |
) |
|
| |||
Net income attributable to controlling interests |
|
$ |
16,973 |
|
$ |
31,481 |
|
$ |
24,637 |
|
See Notes to Consolidated Financial Statements.
Consolidated Statements of Stockholders Equity
Years Ended December 31, 2011, 2010, and 2009
(Dollars in thousands)
|
|
Common Stock |
|
Additional |
|
Retained |
|
Non-Controlling |
|
Accumulated |
|
Comprehensive |
|
|
| |||||||||
|
|
Shares |
|
Amount |
|
Capital |
|
(Deficit) |
|
Interest |
|
(Loss) |
|
Income |
|
Total |
| |||||||
Balance, December 31, 2008 |
|
6,139,536 |
|
$ |
61 |
|
$ |
56,577 |
|
$ |
(4,541 |
) |
$ |
|
|
$ |
(1,329 |
) |
$ |
|
|
$ |
50,768 |
|
Stock-based compensation expense |
|
|
|
|
|
1,057 |
|
|
|
|
|
|
|
|
|
1,057 |
| |||||||
Net income |
|
|
|
|
|
|
|
24,637 |
|
|
|
|
|
24,637 |
|
24,637 |
| |||||||
Unrealized gain on derivative instruments, net of tax, $815 |
|
|
|
|
|
|
|
|
|
|
|
1,329 |
|
1,329 |
|
1,329 |
| |||||||
Comprehensive income for the year ended December 31, 2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
25,966 |
|
|
| ||||||
Balance, December 31, 2009 |
|
6,139,536 |
|
61 |
|
57,634 |
|
20,096 |
|
|
|
|
|
|
|
77,791 |
| |||||||
Stock-based compensation expense |
|
|
|
|
|
338 |
|
|
|
|
|
|
|
|
|
338 |
| |||||||
Net income (loss) |
|
|
|
|
|
|
|
31,481 |
|
(252 |
) |
|
|
31,229 |
|
31,229 |
| |||||||
Non-controlling interests conversion elimination |
|
|
|
|
|
|
|
|
|
433 |
|
|
|
|
|
433 |
| |||||||
Comprehensive income for the year ended December 31, 2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
31,229 |
|
|
| ||||||
Balance, December 31, 2010 |
|
6,139,536 |
|
61 |
|
57,972 |
|
51,577 |
|
181 |
|
|
|
|
|
109,791 |
| |||||||
Stock-based compensation expense |
|
|
|
|
|
105 |
|
|
|
|
|
|
|
|
|
105 |
| |||||||
Issuance of common stock for merger |
|
1,842,000 |
|
19 |
|
55,173 |
|
|
|
|
|
|
|
|
|
55,192 |
| |||||||
Net income (loss) |
|
|
|
|
|
|
|
16,973 |
|
(120 |
) |
|
|
16,853 |
|
16,853 |
| |||||||
Non-controlling interests conversion elimination |
|
|
|
|
|
|
|
|
|
(61 |
) |
|
|
|
|
(61 |
) | |||||||
Dividend distribution |
|
|
|
|
|
|
|
(120,566 |
) |
|
|
|
|
|
|
(120,566 |
) | |||||||
Comprehensive income for the year ended December 31, 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
16,853 |
|
|
| ||||||
Balance, December 31, 2011 |
|
7,981,536 |
|
$ |
80 |
|
$ |
113,250 |
|
$ |
(52,016 |
) |
$ |
|
|
$ |
|
|
|
|
$ |
61,314 |
|
See Notes to Consolidated Financial Statements.
Community Choice Financial Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Years Ended December 31, 2011, 2010, and 2009
(In thousands)
|
|
2011 |
|
2010 |
|
2009 |
| |||
Cash flows from operating activities |
|
|
|
|
|
|
| |||
Net income |
|
$ |
16,853 |
|
$ |
31,229 |
|
$ |
24,637 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
| |||
Provision for loan losses |
|
65,351 |
|
40,316 |
|
43,463 |
| |||
Loss on disposal of assets |
|
34 |
|
|
|
361 |
| |||
Loss on equity method investments |
|
415 |
|
|
|
|
| |||
Depreciation |
|
6,956 |
|
6,206 |
|
7,206 |
| |||
Amortization of deferred financing cost |
|
2,598 |
|
882 |
|
958 |
| |||
Amortization of intangibles |
|
1,283 |
|
577 |
|
361 |
| |||
Deferred income taxes |
|
4,732 |
|
7,680 |
|
4,397 |
| |||
Stock-based compensation |
|
105 |
|
338 |
|
1,057 |
| |||
Changes in assets and liabilities: |
|
|
|
|
|
|
| |||
Deferred loan origination costs |
|
(120 |
) |
(6 |
) |
(32 |
) | |||
Related party receivables |
|
|
|
7 |
|
178 |
| |||
Prepaid money orders |
|
8,030 |
|
5,523 |
|
(2,086 |
) | |||
Card related pre-funding and receivables |
|
(1,816 |
) |
(10,434 |
) |
(660 |
) | |||
Other assets |
|
(1,378 |
) |
865 |
|
(2,123 |
) | |||
Deferred revenue |
|
7,654 |
|
(619 |
) |
(700 |
) | |||
Accrued interest |
|
6,814 |
|
228 |
|
(726 |
) | |||
Money orders payable |
|
14,291 |
|
(4,059 |
) |
|
| |||
Accounts payable and accrued expenses |
|
(979 |
) |
3,636 |
|
(7,465 |
) | |||
Net cash provided by operating activities |
|
130,823 |
|
82,369 |
|
68,826 |
| |||
Cash flows from investing activities |
|
|
|
|
|
|
| |||
Net receivables originated |
|
(88,773 |
) |
(51,617 |
) |
(57,011 |
) | |||
Net acquired assets, net of cash |
|
3,027 |
|
(3,381 |
) |
(484 |
) | |||
Sale (purchase) of short-term investments |
|
704 |
|
1,736 |
|
(3,550 |
) | |||
Purchase of equity investments |
|
(3,750 |
) |
|
|
|
| |||
Purchase of equity investments from related party |
|
(7,500 |
) |
|
|
|
| |||
Purchase of leasehold improvements and equipment |
|
(4,261 |
) |
(1,688 |
) |
(2,769 |
) | |||
Purchase of finance receivables |
|
|
|
|
|
(501 |
) | |||
Net cash used in investing activities |
|
(100,553 |
) |
(54,950 |
) |
(64,315 |
) | |||
Cash flows from financing activities |
|
|
|
|
|
|
| |||
Net payments on lines of credit |
|
|
|
(5,000 |
) |
|
| |||
Proceeds from notes payable |
|
395,000 |
|
|
|
|
| |||
Contributions for non-controlling interest |
|
|
|
433 |
|
|
| |||
Debt issuance costs |
|
(15,992 |
) |
|
|
(2,435 |
) | |||
Net payments of long-term debt |
|
(262,857 |
) |
(11,031 |
) |
|
| |||
Dividend distribution |
|
(120,566 |
) |
|
|
|
| |||
Net cash used in financing activities |
|
(4,415 |
) |
(15,598 |
) |
(2,435 |
) | |||
Net increase in cash and cash equivalents |
|
25,855 |
|
11,821 |
|
2,076 |
| |||
Cash and cash equivalents: |
|
|
|
|
|
|
| |||
Beginning |
|
39,780 |
|
27,959 |
|
25,883 |
| |||
Ending |
|
$ |
65,635 |
|
$ |
39,780 |
|
$ |
27,959 |
|
Community Choice Financial Inc. and Subsidiaries
Consolidated Statements of Cash Flows (Continued)
Years Ended December 31, 2011, 2010, and 2009
(In thousands)
|
|
2011 |
|
2010 |
|
2009 |
| |||
Supplemental Disclosures of Cash Flow Information |
|
|
|
|
|
|
| |||
Cash payments for: |
|
|
|
|
|
|
| |||
Interest |
|
$ |
24,913 |
|
$ |
7,340 |
|
$ |
11,375 |
|
Income taxes, net of refunds |
|
$ |
3,770 |
|
$ |
14,366 |
|
$ |
15,817 |
|
Supplemental Schedule of Noncash Investing and Financing Activities |
|
|
|
|
|
|
| |||
Acquisitions (Note 14): |
|
|
|
|
|
|
| |||
Purchase price |
|
$ |
74,917 |
|
$ |
15,900 |
|
$ |
484 |
|
Fair value of finance receivables acquired |
|
$ |
15,572 |
|
$ |
3,995 |
|
$ |
|
|
Fair value of cash acquired |
|
22,892 |
|
12,602 |
|
|
| |||
Fair value of other current assets acquired |
|
1,510 |
|
122 |
|
|
| |||
Fair value of other tangible assets acquired, principally property and equipment |
|
7,235 |
|
1,144 |
|
|
| |||
Fair value of liabilities assumed |
|
(92,754 |
) |
(15,013 |
) |
|
| |||
Fair value of other intangible assets acquired, principally non-compete |
|
3,344 |
|
1,737 |
|
160 |
| |||
Cost in excess of net assets acquired |
|
117,249 |
|
11,396 |
|
324 |
| |||
|
|
75,048 |
|
15,983 |
|
484 |
| |||
Less cash acquired |
|
(22,892 |
) |
(12,602 |
) |
|
| |||
Fair value of common stock issued for acquired assets |
|
(55,192 |
) |
|
|
|
| |||
|
|
$ |
(3,036 |
) |
$ |
3,381 |
|
$ |
484 |
|
See Notes to Consolidated Financial Statements
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share data)
Note 1. Ownership, Nature of Business, and Significant Accounting Policies
Nature of business: Community Choice Financial Inc. (together with its consolidated subsidiaries, CCFI or the Company) was formed on April 6, 2011 under the laws of the State of Ohio by the shareholders of Checksmart Financial Holdings Inc. (together with its consolidated subsidiaries, Checksmart) to be the holding company of Checksmart Financial Holdings Corp. and to acquire the ownership interests of CCCS Corporate Holdings, Inc. (together with its consolidated subsidiaries, CCCS) through a merger. The contribution of equity from Checksmart to CCFI is considered to be a merger of entities under common control and as result does not change the basis in accounting. CCFI acquired CCCS through a merger on April 29, 2011 and the acquisition of CCCS has been treated as a business combination. As of December 31, 2011, the Company operated 435 stores in 14 states.
The Company is primarily engaged in the business of providing consumers check cashing and short-term consumer loans. Through a network of retail stores, the Company provides customers a variety of financial products and services, including short-term consumer loans, check cashing, prepaid debit cards, title loans, medium term loans and other services that address the specific needs of its individual customers.
A summary of the Companys significant accounting policies follows:
Basis of consolidation: The accompanying consolidated financial statements include the accounts of Community Choice Financial Inc. and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.
Reclassifications: Certain amounts reported in the 2010 and 2009 consolidated financial statements have been reclassified to conform to classifications presented in the 2011 consolidated financial statements, without affecting the previously reported net income or stockholders equity.
Use of estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to change relate to the determination of the allowance for loan losses, the valuation of goodwill, the valuation of equity investments, the value of stock based compensation and the valuation of deferred tax assets and liabilities.
Business Segment: FASB Accounting Standards Codification (ASC) Topic 280 requires that a public enterprise report a measure of segment profit or loss, certain specific revenue and expense items, segment assets, information about the way operating segments were determined and other items. The Company reports operating segments in accordance with FASB ASC Topic 280. Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in determining how to allocate resources and assess performance. For purposes of disclosures required by ASC 280, the Company operates in one segment, retail financial services.
Revenue recognition: All of the Companys branch transactions are processed through its point-of-sale systems. These transactions include check cashing, bill payment, money transfer, money order sales, and other miscellaneous products and services. The full amount of the check
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 1. Ownership, Nature of Business, and Significant Accounting Policies (Continued)
cashing fee is recognized as revenue at the time of the transaction. The Company acts in an agency capacity regarding bill payment services, money transfers, card products, and money orders offered and sold at its branches. The Company records the net amount retained as revenue because the supplier is the primary obligor in the arrangement, the amount earned by the Company is fixed, and the supplier is determined to have the ultimate credit risk. Fees and direct costs incurred for the origination of finance receivables are deferred and amortized over the loan period using the interest method.
Advance fees on short-term consumer loans with terms between 14 and 30 days, title loans with terms up to 30 days and certain medium-term consumer loans with terms between 112 days and 180 days are recognized using the interest (actuarial) method over the term of each loan.
Title loans with terms between 30 days and 24 months, certain medium-term consumer loans with terms of up to 24 months, lines of credit, and loan participations are interest-bearing. Interest and fee income is recognized using the interest (actuarial) method.
As a result of the Companys charge-off policies, accounts are charged-off between 1 and 90 days past due rather than being placed in nonaccrual status.
Cash and cash equivalents: Cash and cash equivalents include cash on hand and short-term investments with original maturities of three months or less. At times, the Company may maintain deposits with banks in amounts in excess of federal depository insurance limits, but believes any such amounts do not represent significant credit risk.
Finance receivables: Finance receivables consist of three categories of receivables, short-term consumer loans, title loans, and medium-term loans.
Short-term consumer loan products provide customers with cash or a money order, typically ranging in size from $.1 to $1, in exchange for a promissory note with a maturity generally 14 to 30 days with an agreement to defer the presentment of the customers personal check for the aggregate amount of the advance plus fees. This form of lending is based on applicable laws and regulations which vary by state. Statutes vary from providing fees of 15% to 20%, to providing interest at 25% per annum plus origination fees. The customers repay the cash advance by paying cash or allowing the check to be presented. For unsecured loans, the risk of repayment primarily relates to the customers ability to repay the loans.
Medium-term loans provide customers with cash, typically ranging from $.1 to $2.5 in exchange for a promissory note with a maturity between three months and 24 months. These loans vary in their structure between the regulatory environments where they are offered. The loans are due in installments or provide for a line of credit with periodic monthly payments. In certain instances the Company also purchases loan participations in a third-party lenders loan portfolio which are classified as medium-term finance receivables.
Title loan products provide customers with cash, typically ranging in size from $.75 to $2.5, in exchange for a promissory note with a maturity between 30 days and 24 months. The loan is secured with a lien on the customers vehicle title. The risk characteristics of secured loans primarily depend on the markets in which the Company operates and the regulatory requirements of each market. Risks associated with secured financings relate to the ability of the borrower to
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 1. Ownership, Nature of Business, and Significant Accounting Policies (Continued)
repay its loans and the value of the collateral underlying the loan should the borrower default on its payments.
Short-term investments, certificates of deposit: Short-term investments consist of certificates of deposit with original maturities of more than three months. Short-term investments are recorded at the carrying value, which approximates fair value and interest is recognized as earned.
Allowance for loan losses: Provisions for loan losses are charged to income in amounts sufficient to cover estimated losses in the loan portfolio. The factors used in assessing the overall adequacy of the allowance and the resulting provision for loan losses for finance receivables include an evaluation by product by market based on historical loan loss experience, overall portfolio quality, current economic conditions that may affect the borrowers ability to pay and managements judgment. While management uses the best information available to make its evaluation, future adjustments to the allowance may be necessary if there are significant changes in economic conditions.
For short-term consumer loans, accounts are charged off when they become past due. The Companys policy dictates that, where a customer has provided a check for presentment upon the maturity of a loan, if the customer has not paid off the loan by the due date, the Company will deposit the customers check or draft the customers bank account for the amount due. If the check or draft is returned as uncollected, all accrued fees and outstanding principal are charged-off as uncollectible.
For medium-term loans which have a term of one year or less the Companys policy requires that balances be charged off when accounts are 60 days past due on a contractual basis. For medium-term loans which have an initial maturity of greater than one year, the Companys policy requires that balances be charged off when accounts are 90 days past due on a contractual basis.
For title loans that are 30 days in duration the Companys policy requires that balances be charged off when accounts are 30 days past due on a contractual basis. For title loans that have terms ranging from 60 days to one year, the Companys policy dictates that balances be charged off when accounts are 60 days past due on a contractual basis. For title loans that have terms of greater than 1 year, the Companys policy requires that balances be charged off when accounts are 90 days past due on a contractual basis. The Company charges off 24 month installment loans when they are 90 days past due.
Recoveries of amounts previously charged off are recorded as income in the period in which they are received.
During 2011, the Company introduced additional medium-term loan products, which resulted in a higher proportion of medium-term products in the Companys overall loan portfolio. Effective December 31, 2011, the Company modified its charge-off policies to align the policy with the contractual term of certain title loans and medium-term consumer loans. Prior to this date, all loans were charged-off when the loan became contractually past due. Based on additional information and analysis of current customer payment trends, management determined that the likelihood of receiving payment from a customer greatly diminishes when no payment has been received for 30 days on loans with a term of 30 days, 60 days on loans with a term of 60 days to 12 months, and 90 days for loans with terms greater than 12 months. The net effect of this change
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 1. Ownership, Nature of Business, and Significant Accounting Policies (Continued)
in estimate for the year ended December 31, 2011 was a $53 increase to finance receivables and a $53 decrease to the provision for loan losses, equal to $0.01 per average common share outstanding.
Loans may be charged off earlier than the Companys policy based upon managements review of information for each delinquent or impaired loan. Loan participations are charged off after they become 30 days past due on a contractual basis.
In some instances, the Company may have debt-buying arrangements with third-party lenders. The Company accrues for this obligation through managements estimation of anticipated purchases based on expected losses in the lenders portfolio. This obligation is recorded as a current liability on the Companys consolidated balance sheet.
Card related pre-funding and receivables: The Company acts as an agent for an entity marketing prepaid debit cards. Pursuant to the Companys agreement, the Company is required to pre-fund certain card activity; the Company is also the beneficiary of certain receivables resulting from its card sales which relate to the commissions earned from this entity payable according to negotiated terms.
Leasehold improvements and equipment: Leasehold improvements and equipment are carried at cost. Depreciation is provided principally by straight-line methods over the estimated useful lives of the assets or the lease term, whichever is shorter.
The useful lives of leasehold improvements and equipment by class are as follows:
|
|
Years |
|
Furniture and fixtures |
|
5 |
|
Leasehold improvements |
|
3 - 15 |
|
Equipment |
|
5 - 7 |
|
Vehicles |
|
5 |
|
Deferred loan origination costs: Direct costs incurred for the origination of loans, which consist mainly of employee-related costs, are deferred and amortized to loan fee income over the contractual lives of the loans using the interest method. Unamortized amounts are recognized in income at the time that loans are paid in full.
Goodwill and other intangibles: Goodwill, or cost in excess of fair value of net assets of the companies acquired, is recorded at its carrying value and is periodically evaluated for impairment. The Company tests the carrying value of goodwill and other intangible assets annually as of December 31 or when the events and circumstances warrant such a review. One of the methods for this review is performed using estimates of future cash flows. If the carrying value of goodwill or other intangible assets is considered impaired, an impairment charge is recorded for the amount by which the carrying value of the goodwill or intangible assets exceeds its fair value. Based upon the annual impairment testing performed by the Company, management has determined that goodwill is not impaired. Changes in estimates of cash flows and fair value, however, could affect the evaluation.
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 1. Ownership, Nature of Business, and Significant Accounting Policies (Continued)
The Companys other intangible assets consists of non-compete agreements, customer lists and trade names. The amounts recorded for non-compete agreements, customer lists and trade names are amortized using the straight-line method over five years. Amortization expense for the years ended December 31, 2011, 2010 and 2009 were $1,283, $399 and $361, respectively.
Equity Method of Accounting of Investment in Latin Card Strategy and Insight Holding Company: The Company has an equity investment in Latin Card Strategy, LLC (Latin Card). Prior to May 2011, the Company had consolidated Latin Card based on a 57% ownership interest in Latin Card. In May 2011, the Companys membership units were reduced to 49% based on members arrangement and Latin Card was deconsolidated. The Company, effective May 2011, recorded an investment in Latin Card under the equity method of accounting. As of December 31, 2011, the Companys membership units were reduced to 39% based on the members agreement.
The Company also has an equity investment in Insight Holding Company, LLC (the parent company of the program manager for the prepaid card offered through CCFIs subsidiaries) (Insight Holdings). The Company has recorded the 22.5% investment in Insight Holdings under the equity method of accounting effective November 2011.
Investee companies that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity method of accounting in accordance with ASC 323-10. Whether or not the Company exercises significant influence with respect to an investee depends on an evaluation of several factors including, among others, representation on the investee companys board of directors and ownership level, which is generally a 20% to 50% interest in the voting securities of the investee company. Under the equity method of accounting, an investee companys accounts are not reflected within the Companys consolidated balance sheets and statements of income; however, the Companys share of the earnings or losses of the investee company is reflected in the caption Equity investment loss in the consolidated statements of income. The Companys carrying value in an equity method Investee company is reflected in the caption Equity investments in the Companys consolidated balance sheets.
Deferred debt issuance costs: Deferred debt issuance costs are amortized on the interest method of accounting over the life of the related note payable agreement. Amortization is included as a component of interest expense in the consolidated statements of income.
Deferred revenue: The Companys deferred revenue is comprised of an upfront fee received under an agency agreement to offer wire transfer services at the Companys branches. The deferred revenue is recognized over the contract period on a straight-line basis.
Deferred rent: The Company leases premises under agreements which provide for periodic increases over the lease term. Accordingly, timing differences between the amount paid for rent and the amount expensed are recorded as deferred rent in the accompanying consolidated balance sheets. In 2011, an expense and liability of $678 has been recorded for deferred rent as it relates to escalation of rent payments.
Advertising costs: Costs incurred for producing and communicating advertising are charged to operations when incurred or the first time advertising takes place. Advertising expense was $4,013, $3,961 and $4,181 for the years ended December 31, 2011, 2010 and 2009, respectively.
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 1. Ownership, Nature of Business, and Significant Accounting Policies (Continued)
Branch expenses: The direct costs incurred in operating the Companys branches have been classified as branch expenses. Branch expenses include salaries and benefits of branch employees, loan losses, rent and other occupancy costs, depreciation and amortization of branch property and equipment, armored services and security costs, and other costs incurred by the branches. The district and regional managers salaries are included in corporate expenses.
Preopening costs: New store preopening costs are expensed when incurred.
Impairment of long-lived assets: The Company evaluates all long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. Impairment is recognized when the carrying amount of these assets cannot be recovered by the undiscounted net cash flows they will generate.
Income taxes: Deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. Income tax expense represents the tax obligations and the change in deferred tax assets and liabilities.
The Company has adopted the accounting standard on accounting for uncertainty in income taxes, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under this guidance, the Company may recognize the tax benefit from an uncertain tax position only if it is more-likely-than-not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has greater than 50% likelihood of being realized upon ultimate settlement. The guidance on accounting for uncertainty in income taxes also addresses de-recognition, classification, interest and penalties on income taxes, and accounting in interim periods. Interest and penalties on income taxes will be charged to income tax expense.
Transaction Expenses: Transaction expenses consist of costs directly associated with acquisitions, which are primarily bonus earnings, transaction advisory fees paid to the majority shareholder, and professional services, which are included in the non-branch expenses section to determine income before income taxes and discontinued operations on the consolidated statements of income.
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 1. Ownership, Nature of Business, and Significant Accounting Policies (Continued)
Additionally, the Company has deferred legal and other transaction expenses related to a planned initial public offering (IPO) with the expectation that such expenses will be accounted for as a reduction of capital paid in excess of par. These deferred expenses totaling $1,361 at December 31, 2011 are included in other current assets on the consolidated balance sheet. Should the IPO not occur, these deferred expenses will be charged to income.
Governmental regulation: The Company is subject to various state and federal laws and regulations, which are subject to change and which may impose significant costs or limitations on the way the Company conducts or expands its business. Certain limitations include among other things imposed limits on fee rates and other charges, the number of loans to a customer, a cooling off period, the number of permitted rollovers and required licensing and qualification. Changes in Ohio laws have caused the Company to begin offering consumer loans in the state of Ohio under the Ohio Mortgage Loan Act. The law under which the Company provides short-term loans in Arizona terminated in June 2010. The Company converted the Arizona customers to title loan and card based products.
Although states provide the primary regulatory framework under which the Company offers payday cash advance services and consumer loans, certain federal laws also impact the business. The Companys payday cash advance services and consumer loans are subject to federal laws and regulations, including the Truth-in-Lending Act (TILA), the Equal Credit Opportunity Act (ECOA), the Fair Credit Reporting Act (FCRA), the Fair Debt Collection Practices Act (FDCPA), the Gramm-Leach-Bliley Act (GLBA), the Bank Secrecy Act, the Money Laundering Control Act of 1986, the Money Laundering Suppression Act of 1994, and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (the PATRIOT Act) and the regulations promulgated for each. Among other things, these laws require disclosure of the principal terms of each transaction to every customer, prohibit misleading advertising, protect against discriminatory lending practices, proscribe unfair credit practices and prohibit creditors from discriminating against credit applicants on the basis of race, sex, age or marital status. The GLBA and its implementing regulations generally require the Company to protect the confidentiality of its customers nonpublic personal information and to disclose to the Companys customers its privacy policy and practices.
At the federal level, in July 2010, the Dodd-Frank Act was signed into law. Among other things, this act created the Consumer Financial Protection Bureau (CFPB) which will have authority to regulate companies that provide consumer financial services. The CFPB became operative in July of 2011. On January 4, 2012, President Obama appointed Richard Cordray as Director of the Consumer Financial Protection Bureau. With this appointment, the CFPB now has the power and authority to oversee non-bank financial institutions as was provided for in the Dodd-Frank Act.
Derivative financial instruments: All derivatives are recognized on the consolidated balance sheets at their fair value. On the date the derivative contract is entered into, the Company designates the derivative as a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability cash-flow hedge. Changes in the fair value of a derivative that is highly effective as, and that is designated and qualifies as, a cash-flow hedge are recorded in other comprehensive income, until earnings are affected by the variability of cash flows (e.g., when periodic settlements on a variable-rate asset or liability are recorded in earnings).
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 1. Ownership, Nature of Business, and Significant Accounting Policies (Continued)
The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking various hedged transactions. This process includes linking all derivatives that are designated as cash-flow hedges to specific assets and liabilities on the balance sheet or forecasted transactions. The Company also formally assesses, both at the hedges inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items. When it is determined that a derivative is not highly effective as a hedge or that it has ceased to be a highly effective hedge, the Company discontinues hedge accounting prospectively, as discussed below.
The Company discontinues hedge accounting prospectively when: (1) it is determined that the derivative is no longer effective in offsetting changes in the cash flows of a hedged item (including forecasted transactions); (2) the derivative expires or is sold, terminated, or exercised; (3) the derivative is no longer considered to be designated as a hedge instrument, because it is unlikely that a forecasted transaction will occur; or (4) management determines that designation of the derivative as a hedge instrument is no longer appropriate.
When hedge accounting is discontinued because it is probable that a forecasted transaction will not occur, the derivative will continue to be carried on the balance sheet at its fair value, and gains and losses that were accumulated in other comprehensive income will be recognized immediately in earnings. In all other situations in which hedge accounting is discontinued, the derivative will be carried at its fair value on the balance sheet, with subsequent changes in its fair value recognized in current-period earnings.
Comprehensive income: The Companys comprehensive income is comprised of net income and the change in the fair value of the interest rate swap.
Fair value of financial instruments: Financial assets and liabilities measured at fair value are grouped in three levels. The levels prioritize the inputs used to measure the fair value of the assets or liabilities. These levels are:
· Level 1Quoted prices (unadjusted) in active markets for identical assets or liabilities.
· Level 2Inputs other than quoted prices that are observable for assets and liabilities, either directly or indirectly. These inputs include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are less attractive.
· Level 3Unobservable inputs for assets and liabilities reflecting the reporting entitys own assumptions.
The Company follows the provisions of the ASC 820-10. ASC 820-10 applies to all assets and liabilities that are being measured and reported on a fair value basis. ASC 820-10 requires disclosure that establishes a framework for measuring fair value within generally accepted accounting principles and expands disclosure about fair value measurements. This standard enables a reader of consolidated financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The standard requires that assets and liabilities carried at fair value be classified and disclosed in one of the three categories.
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 1. Ownership, Nature of Business, and Significant Accounting Policies (Continued)
In determining the appropriate levels, the Company performed a detailed analysis of the assets and liabilities that are subject to ASC 820-10. At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs are classified as Level 3.
The Companys financial instruments consist primarily of cash and cash equivalents, finance receivables, accounts payable, and notes payable. For all such instruments, other than the notes payable at December 31, 2011, the carrying amounts in the Consolidated Financial Statements approximate their fair values. Our finance receivables are short term in nature and originated at prevailing market rates.
The fair value of notes payable at December 31, 2010 is estimated as being equal to the carrying value exhibited on our balance sheet at that time. There was no publicly available trading data available on those notes and the notes were subsequently paid off in full on April 29, 2011. The fair value of the notes payable at December 31, 2011 is determined based on the market yield on trades of the notes at the end of that reporting period. The estimated fair values of the Companys financial instruments are as follows:
|
|
December 31, 2011 |
|
December 31, 2010 |
| ||||||||
|
|
Carrying |
|
Fair Value |
|
Carrying |
|
Fair Value |
| ||||
Cash and cash equivalents |
|
$ |
65,635 |
|
$ |
65,635 |
|
$ |
39,780 |
|
$ |
39,780 |
|
Finance receivables |
|
120,451 |
|
120,451 |
|
81,337 |
|
81,337 |
| ||||
Short-term investments, certificates of deposit |
|
1,110 |
|
1,110 |
|
1,814 |
|
1,814 |
| ||||
Notes payable |
|
395,000 |
|
389,075 |
|
188,934 |
|
188,934 |
| ||||
Change in accounting estimate: During 2009, the estimated useful lives of certain leasehold improvements and equipment were changed in recognition of the current estimated useful life of these assets. The effect of this change in accounting estimate was to decrease net income for 2009 by approximately $3,600.
Recent Accounting Pronouncements: In July 2010, the FASB issued Accounting Standard Update (ASU) No. 2010-20, Receivables (Topic 310): Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses (ASU No. 2010-20). The ASU amends FASB Accounting Standards Codification Topic 310, Receivables, to improve the disclosures that an entity provides about the credit quality of its financing receivables and the related allowance for credit losses. As a result of these amendments, an entity is required to disaggregate, by portfolio segment or class of financing receivable, certain existing disclosures and provide certain new disclosures about its financing receivables and related allowance for credit losses. For public entities, the disclosures as of the end of a reporting period are effective for interim and annual reporting periods ending on or after December 15, 2010. The disclosures about activity that occurs during a reporting period are effective for interim and annual reporting periods beginning on or after December 15, 2010. The disclosures about the credit quality of the Companys receivables required by the ASU are in Note 2-Allowance for Doubtful Accounts and Accrual for Third-Party Lender Losses. As this ASU amends only the disclosure requirements for loans and the allowance for credit losses, the adoption of ASU No. 2010-20 did not have a significant impact on the Companys financial statements.
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 1. Ownership, Nature of Business, and Significant Accounting Policies (Continued)
In December 2010, the FASB issued ASU No. 2010-29, Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations. This standard update clarifies that, when presenting comparative financial statements, SEC registrants should disclose revenue and earnings of the combined entity as though the current period business combinations had occurred as of the beginning of the comparable prior annual reporting period only. The update also expands the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. ASU 2010-29 is effective prospectively for material (either on an individual or aggregate basis) business combinations entered into in fiscal years beginning on or after December 15, 2010 with early adoption permitted. The disclosures about the Pro Forma Information for Business Combinations required by the ASU are in Note 9Business Combinations. As this ASU amends only the disclosure requirement for business combinations, the adoption of ASU No. 2010-29 did not have a significant impact on the Companys financial statements.
In April 2011, the FASB issued ASU No. 2011-02, Receivables (Topic 310): A Creditors Determination of Whether a Restructuring Is a Troubled Debt Restructuring. The ASU clarifies which loan modifications constitute troubled debt restructurings. It is intended to assist creditors in determining whether a modification of the terms of a receivable meets the criteria to be considered a troubled debt restructuring, both for purposes of recording an impairment loss and for disclosure of troubled debt restructurings. This ASU is effective for interim and annual periods beginning on or after June 15, 2011, and applies retrospectively to restructurings occurring on or after the beginning of the fiscal year of adoption. The adoption of this guidance did not have a material impact on the Companys financial statements.
In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. This ASU establishes common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. GAAP and International Financial Reporting Standards (IFRS). This ASU is effective for fiscal years and interim periods beginning after December 15, 2011. The adoption of this guidance is not expected to have a material impact on the Companys financial statements.
In September 2011, the FASB issued ASU No. 2011-08 IntangiblesGoodwill and Other (Topic 350): Testing Goodwill for Impairment. This ASU permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350. Under ASU 2011-08, the two-step goodwill impairment test is not required unless the more-likely-than-not threshold is met. For public entities, the amendments in ASU 2011-08 are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011, with early adoption permitted. The Company plans to adopt this guidance on January 1, 2012. The adoption of ASU 2011-08 is not expected to have a material impact on the Companys financial statements.
Subsequent events: The Company has evaluated its subsequent events (events occurring after December 31, 2011) through the original issuance date of March 29, 2012, and through June 22, 2012 for subsequent events disclosed in Note 23.
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 2. Finance Receivables, Credit Quality Information and Allowance for Loan Losses
Finance receivables represent amounts due from customers for advances at December 31, 2011 and 2010 consisted of the following:
|
|
2011 |
|
2010 |
| ||
Short-term consumer loans |
|
$ |
91,460 |
|
$ |
67,897 |
|
Medium-term loans |
|
19,044 |
|
8,423 |
| ||
Title loans |
|
20,800 |
|
11,855 |
| ||
Gross receivables |
|
131,304 |
|
88,175 |
| ||
Unearned advance fees, net of deferred loan origination costs |
|
(5,227 |
) |
(3,481 |
) | ||
Finance receivables before allowance for loan losses |
|
126,077 |
|
84,694 |
| ||
Allowance for loan losses |
|
(5,626 |
) |
(3,357 |
) | ||
Finance receivables, net |
|
$ |
120,451 |
|
$ |
81,337 |
|
Changes in the allowance for the loan losses by product type for the year ended December 31, 2011 are as follows:
|
|
Balance |
|
Provision |
|
Charge-Offs |
|
Recoveries |
|
Balance |
|
Finance |
|
Allowance as |
| ||||||
Short-term consumer loans |
|
$ |
1,746 |
|
$ |
40,636 |
|
$ |
(144,934 |
) |
$ |
105,056 |
|
$ |
2,504 |
|
$ |
91,460 |
|
2.74 |
% |
Medium-term loans |
|
987 |
|
11,470 |
|
(13,553 |
) |
3,114 |
|
2,018 |
|
19,044 |
|
10.60 |
% | ||||||
Title loans |
|
624 |
|
5,463 |
|
(7,670 |
) |
2,687 |
|
1,104 |
|
20,800 |
|
5.31 |
% | ||||||
|
|
$ |
3,357 |
|
$ |
57,569 |
|
$ |
(166,157 |
) |
$ |
110,857 |
|
$ |
5,626 |
|
$ |
131,304 |
|
4.28 |
% |
The provision for loan losses for the year ended December 31, 2011 also includes card losses of $208, losses on tax loans of $432, and losses from returned items from check cashing of $5,085.
Changes in the allowance for the loan losses by product type for the year ended December 31, 2010 are as follows:
|
|
Balance |
|
Provision |
|
Charge-Offs |
|
Recoveries |
|
Balance |
|
Finance |
|
Allowance as |
| ||||||
Short-term consumer loans |
|
$ |
3,240 |
|
$ |
27,560 |
|
$ |
(84,279 |
) |
$ |
55,225 |
|
$ |
1,746 |
|
$ |
67,897 |
|
2.57 |
% |
Medium-term loans |
|
1,683 |
|
5,267 |
|
(8,318 |
) |
2,355 |
|
987 |
|
8,423 |
|
11.72 |
% | ||||||
Title loans |
|
483 |
|
3,497 |
|
(25,040 |
) |
21,684 |
|
624 |
|
11,855 |
|
5.26 |
% | ||||||
|
|
$ |
5,406 |
|
$ |
36,324 |
|
$ |
(117,637 |
) |
$ |
79,264 |
|
$ |
3,357 |
|
$ |
88,175 |
|
3.81 |
% |
The provision for losses for the year ended December 31, 2010 also includes losses from returned items from check cashing of $3,034 and card losses of $193.
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 2. Finance Receivables, Credit Quality Information and Allowance for Loan Losses (Continued)
Changes in the allowance for loan losses for the year ended December 31, 2009 is as follows:
|
|
2009 |
| |
Balance, beginning of period |
|
$ |
2,451 |
|
Provision for loan losses |
|
40,255 |
| |
Charge-offs, net |
|
(37,300 |
) | |
Balance, end of period |
|
$ |
5,406 |
|
The provision for losses for the year ended December 31, 2009 also includes losses from returned items from check cashing of $3,058.
Changes in the accrual for third-party lender losses for the years ended December 31, 2011, 2010, and 2009 were as follows:
|
|
2011 |
|
2010 |
|
2009 |
| |||
Balance, beginning of period |
|
$ |
110 |
|
$ |
150 |
|
$ |
|
|
Provision for loan losses |
|
2,057 |
|
765 |
|
150 |
| |||
Charge-offs, net |
|
(2,010 |
) |
(805 |
) |
|
| |||
Balance, end of period |
|
$ |
157 |
|
$ |
110 |
|
$ |
150 |
|
The Company considers the near term repayment performance of finance receivables as its primary credit quality indicator. The Company typically does not perform credit checks through consumer reporting agencies. If a third-party lender provides the advance, the applicable third-party lender decides whether to approve the cash advance and establishes all of the underwriting criteria and terms, conditions, and features of the customer agreements. The aging of receivables at December 31, 2011 and 2010 are as follows (in thousands):
|
|
2011 |
|
2010 |
| ||||||
Current finance receivables |
|
$ |
126,814 |
|
96.6 |
% |
$ |
86,544 |
|
98.2 |
% |
Past due finance receivables (1 - 30 days) |
|
|
|
|
|
|
|
|
| ||
Short-term consumer loans |
|
293 |
|
0.2 |
% |
|
|
|
| ||
Medium-term loans |
|
1,481 |
|
1.1 |
% |
754 |
|
0.9 |
% | ||
Title loans |
|
1,897 |
|
1.4 |
% |
877 |
|
1.0 |
% | ||
Total past due finance receivables (1 - 30 days) |
|
3,671 |
|
2.8 |
% |
1,631 |
|
1.8 |
% | ||
Past due finance receivables (31 - 60 days) |
|
|
|
|
|
|
|
|
| ||
Short-term consumer loans |
|
|
|
0.0 |
% |
|
|
|
| ||
Medium-term loans |
|
289 |
|
0.2 |
% |
|
|
|
| ||
Title loans |
|
395 |
|
0.3 |
% |
|
|
|
| ||
Total past due finance receivables (31 - 60 days) |
|
684 |
|
0.5 |
% |
|
|
|
| ||
Past due finance receivables (61 - 90 days) |
|
|
|
|
|
|
|
|
| ||
Short-term consumer loans |
|
|
|
0.0 |
% |
|
|
|
| ||
Medium-term loans |
|
52 |
|
0.0 |
% |
|
|
|
| ||
Title loans |
|
83 |
|
0.1 |
% |
|
|
|
| ||
Total past due finance receivables (61 - 90 days) |
|
135 |
|
0.1 |
% |
|
|
|
| ||
Total delinquent |
|
4,490 |
|
3.4 |
% |
1,631 |
|
1.8 |
% | ||
|
|
$ |
131,304 |
|
100.0 |
% |
$ |
88,175 |
|
100.0 |
% |
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 3. Related Party Transactions and Balances
On May 1, 2006, the Company entered into an Advisory Services and Monitoring Agreement with an affiliate of the majority stockholder. A quarterly fee is paid in consideration for ongoing management and other advisory services provided to the Company and its subsidiaries in the greater amount of a) $150 or b) 25% multiplied by 1.5% of the EBITDA for the previous twelve-month period. This agreement was amended to include total fees paid pursuant to this agreement for the years ended December 31, 2011, 2010 and 2009 totaling $1,381, $1,184 and $833, respectively. In addition, certain advisory fees were paid in conjunction with acquisition transactions. The Company paid $3,994 in transaction advisory fees to the majority shareholder during the year ended December 31, 2011 of which $1,600 was capitalized as deferred debt issuance costs. This agreement was amended to include the former majority shareholder of CCCS when the merger occurred.
The Company has a management agreement with a related party in which the Company receives management fee revenue on a monthly basis for providing certain accounting functions to these parties. For the years ended December 31, 2011, 2010 and 2009, management fee revenue from related parties totaled $46, $46 and $172, respectively. The Companys payroll department provides payroll administration for a related party. The related company is charged actual costs for payroll services.
At December 31, 2010, the Company had $4 recorded as receivables from stockholders and other related entities.
The Companys senior management has access to use an aircraft owned by a related party. The Company rents the aircraft from this related party and all personal use of the aircraft is reimbursed to the Company. Total rent paid to these related parties for usage of the aircraft totaled $93, $94 and $54 for the years ended December 31, 2011, 2010 and 2009, respectively.
The corporate office and certain branches of the Company are owned and operated by related parties and leased from the related party. Rent paid to the related parties was $1,801, $1,810 and $1,772 for the years ended December 31, 2011, 2010 and 2009, respectively.
Certain members of management had a noncontrolling, minority interest in Insight Holdings until November 2011 when the Company purchased a 22.5% interest in Insight Holdings. The interest was purchased from the owners of Insight Holdings, two of which are management of the Company. The total purchase price of the 22.5% was $11,250, of which $7,500 was purchased from the management of the Company. The percentage purchased from management was 67% of the total membership interests purchased by the Company. As of December 31, 2011 and 2010, the Company, as an agent for the card program managing company, had made net prepayments of $12,910 and $11,094, respectively, to the card program managing company for various items related to a product offering of the Company. The Company agreed to make available to Insight Holdings a revolving credit facility of $3,000.
On December 31, 2008 the Company entered into a $5,000 line of credit with the Companys majority shareholder. The interest associated with the line of credit was 20% and matured in February 2011. Interest expense and unused line fees recognized on this borrowing totaled $25, $255 and $305 for the years ended December 31, 2011, 2010 and 2009, respectively.
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 4. Leasehold Improvements and Equipment
At December 31, 2011 and 2010, leasehold improvements and equipment consisted of the following:
|
|
2011 |
|
2010 |
| ||
Furniture & fixtures |
|
$ |
18,839 |
|
$ |
15,596 |
|
Leasehold improvements |
|
30,681 |
|
25,201 |
| ||
Equipment |
|
7,887 |
|
5,758 |
| ||
Vehicles |
|
607 |
|
22 |
| ||
Assets acquired not yet placed in service |
|
438 |
|
454 |
| ||
|
|
58,452 |
|
47,031 |
| ||
Less accumulated depreciation |
|
(38,791 |
) |
(31,876 |
) | ||
|
|
$ |
19,661 |
|
$ |
15,155 |
|
Note 5. Goodwill and Other Intangible Assets
The following table summarizes goodwill and other intangible assets as of December 31, 2011 and 2010:
|
|
2011 |
|
2010 |
| ||
Goodwill |
|
$ |
255,953 |
|
$ |
138,963 |
|
Other intangible assets: |
|
|
|
|
| ||
Non-compete agreements |
|
1,260 |
|
1,178 |
| ||
Trade names |
|
2,102 |
|
242 |
| ||
Customer lists |
|
226 |
|
97 |
| ||
|
|
$ |
259,541 |
|
$ |
140,480 |
|
The changes in the carrying amount of goodwill are summarized as follows:
Balance at December 31, 2009 |
|
$ |
129,649 |
|
Acquisition of Insight Capital, LLC |
|
11,396 |
| |
Effect of tax benefits |
|
(2,082 |
) | |
Balance at December 31, 2010 |
|
138,963 |
| |
Acquisition of CCCS Corporate Holdings, Inc. and CCCS Corporate Holdings, LLC |
|
101,628 |
| |
Acquisition of Illinois stores |
|
17,444 |
| |
Effect of tax benefits |
|
(2,082 |
) | |
Balance at December 31, 2011 |
|
$ |
255,953 |
|
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 5. Goodwill and Other Intangible Assets (Continued)
Other intangible assets are summarized as follows:
|
|
December 31, 2011 |
|
December 31, 2010 |
| ||||||||||||||
|
|
Gross Carrying |
|
Accumulated |
|
Net Carrying |
|
Gross Carrying |
|
Accumulated |
|
Net Carrying |
| ||||||
Non-compete agreements |
|
$ |
2,506 |
|
$ |
(1,246 |
) |
$ |
1,260 |
|
$ |
1,560 |
|
$ |
(382 |
) |
$ |
1,178 |
|
Trade names |
|
2,606 |
|
(504 |
) |
2,102 |
|
391 |
|
(149 |
) |
242 |
| ||||||
Customer lists |
|
293 |
|
(67 |
) |
226 |
|
110 |
|
(13 |
) |
97 |
| ||||||
Total |
|
$ |
5,405 |
|
$ |
(1,817 |
) |
$ |
3,588 |
|
$ |
2,061 |
|
$ |
(544 |
) |
$ |
1,517 |
|
The Company conducted its annual test for impairment of goodwill as of December 31, 2011, which resulted in no impairment of goodwill. The methodology for determining the fair value was a combination of quoted market prices, prices of comparable businesses, discounted cash flows and other valuation techniques.
The amount of tax goodwill at the acquisition date of the Company in 2006 exceeded the reported amount of goodwill for financial statement reporting purposes by approximately $50,965. The total estimated effect of the tax benefit attributable to tax goodwill in excess of the amount reported in these financial statements was approximately $31,237 which will reduce financial statement goodwill each year as the tax benefits are recognized. This benefit will be recognized over a 15-year period from the date of acquisition by recording deferred income tax expense and reducing the carrying amount of goodwill as those tax benefits occur. The tax benefit for each of the years ended December 31, 2011, 2010 and 2009 was $2,082. The effect of the tax benefits for each subsequent year is expected to be $2,082 and will result in future reductions to the carrying amount of goodwill.
The amount of book goodwill at the acquisition date of CCCS exceeded the amount of tax goodwill by approximately $46,907. Differences arising for tax deductible goodwill will result in recognition of deferred tax liabilities.
Amortization expense on specifically identifiable intangibles for the next 5 years is estimated to be:
Year Ending December 31, |
|
Amount |
| |
2012 |
|
$ |
1,134 |
|
2013 |
|
858 |
| |
2014 |
|
858 |
| |
2015 |
|
571 |
| |
2016 |
|
167 |
| |
|
|
$ |
3,588 |
|
Total intangible amortization expense for the years ended December 31, 2011, 2010 and 2009 was $1,283, $399 and $361, respectively.
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 6. Pledged Assets and Debt
Debt at December 31, 2011 and 2010 consisted of the following:
|
|
2011 |
|
2010 |
| ||
First lien term loan, secured, LIBOR plus 2.75%, collateralized by all Company assets, quarterly principal payments of $400 and excess cash payments as defined in the agreeement, paid in full April 2011 |
|
$ |
|
|
$ |
146,361 |
|
Second lien term loan, secured, LIBOR plus 5.50%, collateralized by all Company assets, paid in full April 2011 |
|
|
|
40,000 |
| ||
Note payable, unsecured, 10% interest only payments, paid in full April 2011 |
|
|
|
2,573 |
| ||
$7,000 Revolving credit, secured, prime plus 1.00% with 5.00% floor, due July 2013, collateralized by all of Insight Capital, LLCs assets |
|
|
|
|
| ||
$40,000 Revolving credit, secured, interest rate as defined below, collateralized by all Company assets |
|
|
|
|
| ||
$395,000 Senior Secured Notes, 10.75%, collateralized by all Company assets, semi-annual interest payments with with principal due April 2019 |
|
395,000 |
|
|
| ||
|
|
395,000 |
|
188,934 |
| ||
Less current maturities |
|
|
|
17,573 |
| ||
Long-term portion |
|
$ |
395,000 |
|
$ |
171,361 |
|
The 4-year, $40,000 revolving credit facility, at the Companys option, bears interest at either (a) LIBOR plus a margin of 5% or (b) an alternative base rate (determined as the greatest of the prime rate, the federal funds effective rate plus 0.5% or 1-month LIBOR plus 1%) plus a margin of 4%, and will mature on April 29, 2015. The Company selected the alternate base rate option for advances under this credit facility during 2011.
The 3-month LIBOR rate at December 31, 2011 and 2010 was 0.53% and 0.31%, respectively, and the prime rate was 3.25% at December 31, 2011 and 2010.
Note 7. Agency Agreements
On June 14, 2007, the Company entered into an agency agreement with Western Union whereby the Company facilitates wire transfers and money orders via Western Unions network. The initial term of this agreement was a period of 5 years. Under this agreement, the Company receives a commission for each transfer conducted. During the years ended December 31, 2011, 2010 and 2009, the total amount of commissions earned related to the agreement totaled $3,823, $817 and $917, respectively.
Under the Western Union Agreement, the Company received approximately $3,500 in upfront bonuses at the inception of the agreement related to expected future business volumes. During the years ended December 31, 2011, 2010 and 2009, the total amount of revenue recognized related to bonuses under the Western Union Agreement was $1,398, $714 and $700, respectively. The total deferred revenue related to these bonuses and other incentive bonuses as of December 31, 2011 and 2010, was $-0- and $1,073, respectively, and is included in other current and noncurrent liabilities in the accompanying consolidated balance sheets.
A new agency agreement with Western Union was signed effective January 1, 2012 which superseded the existing agreement. The Company received a $13,200 bonus offset by the remaining
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 7. Agency Agreements (Continued)
unamortized deferred revenue on the prior contract as of December 31, 2011. Should the Company close a location, discontinue service at an existing location, or terminate the agreement at any time during the initial term, a prorated portion of this signing bonus must be repaid. In addition, the Company is also entitled to receive certain incentive bonuses, not to exceed $500 for the duration of the agreement, related to new Western Union service locations opened or acquired or certain performance goals met during the term of the agreement.
No revenue associated with the new contract was recognized in 2011. The total deferred revenue for all contracts as of December 31, 2011 and 2010 was $13,266 and $1,073, respectively.
The Company also entered into an agency agreement with another vendor whereby the Company facilitates prepaid debit card services. During the years ended December 31, 2011, 2010 and 2009, the total amount of fees earned related to the agreement totaled $-0-, $879 and $1,937, respectively. The agreement was cancelled during 2010. CCCS also had an agency agreement with the same vendor that was cancelled in 2011. Fees earned related to the agreement post-acquisition were $222 for the year ended 2011.
The Company entered into an agency agreement with an entity which is a prepaid debit card program manager during 2009. During the years ended December 31, 2011, 2010 and 2009, the total amount of fees earned related to the agreement totaled $19,427, $9,853 and $126, respectively. At December 31, 2011 and 2010 the Company had $12,910 and $11,094, respectively in card related pre-funding and receivables on its balance sheet associated with this agreement.
In November 2008, the Company entered into an agency agreement with an additional money order provider. Through this agreement the Company issues certain loan proceeds in the state of Ohio via a third-party money order provider. Under this agreement the Company is responsible for compensating for the use of the money orders and is also required to pre-fund certain amounts to mitigate the risk exposure of the third-party money order company related to the outstanding and projected outstanding money orders. At December 31, 2011 and 2010 the Company had $-0- and $8,030 in pre-funding assets, respectively.
Note 8. Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities at December 31, 2011 and 2010 consisted of the following:
|
|
2011 |
|
2010 |
| ||
Accounts payable |
|
$ |
808 |
|
$ |
1,048 |
|
Accrued payroll and benefits |
|
4,175 |
|
1,929 |
| ||
Compensated absences |
|
1,042 |
|
596 |
| ||
Wire transfers payable |
|
3,848 |
|
692 |
| ||
Accrual for third-party losses |
|
157 |
|
110 |
| ||
Income taxes payable |
|
1,908 |
|
|
| ||
Other |
|
8,536 |
|
2,083 |
| ||
|
|
$ |
20,474 |
|
$ |
6,458 |
|
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 9. Lease Commitments and Total Rental Expense
The Company leases its facilities under various noncancelable agreements, which require various minimum annual rentals. Certain of the leases also require the payment of normal maintenance on the properties. The total minimum rental commitment at December 31, 2011, is due as follows:
Year Ending December 31, |
|
Amount |
| |
2012 |
|
$ |
17,337 |
|
2013 |
|
13,305 |
| |
2014 |
|
9,598 |
| |
2015 |
|
5,420 |
| |
2016 |
|
2,658 |
| |
Thereafter |
|
1,896 |
| |
Total minimum lease payments |
|
$ |
50,214 |
|
Rental expense totaled $22,281, $15,624 and $14,825 for the years ended December 31, 2011, 2010 and 2009, respectively.
Note 10. Bonus Agreements
The Company pays a discretionary bonus or other bonuses as defined in agreements to employees based on performance. For the years ended December 31, 2011, 2010 and 2009, the bonus expense related to these agreements totaled $1,521, $1,650 and $1,000, respectively. The Company also paid transaction related bonuses to certain employees totaling $4,400 during the year ended December 31, 2011.
Note 11. Concentrations of Credit Risks
The Companys portfolio of finance receivables is with customers living in fourteen states and consequently such customers ability to honor their contracts may be affected by economic conditions in these areas. Additionally, the Company is subject to regulation by federal and state governments that affect the products and services provided by the Company. To the extent that laws and regulations are passed that affect the Companys ability to offer loans or similar products in any of the states in which it operates, the Companys financial position could be adversely affected. As an example, the law under which the Company provided short-term consumer loans in Arizona terminated in June 2010. The Company was able to transition customers in Arizona to title loans and loans offered by a third party.
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 11. Concentrations of Credit Risks (Continued)
The following table summarizes the allocation of the portfolio balance by state at December 31, 2011 and 2010:
|
|
December 31, 2011 |
|
December 31, 2010 |
| ||||||
State |
|
Balance |
|
Percentage of |
|
Balance |
|
Percentage of |
| ||
Alabama |
|
$ |
11,865 |
|
9.0 |
% |
$ |
9,175 |
|
10.4 |
% |
Arizona |
|
13,226 |
|
10.1 |
|
9,896 |
|
11.2 |
| ||
California |
|
28,404 |
|
21.6 |
|
4,548 |
|
5.2 |
| ||
Florida |
|
2,027 |
|
1.5 |
|
1,818 |
|
2.1 |
| ||
Illinois |
|
2,707 |
|
2.1 |
|
|
|
|
| ||
Indiana |
|
5,149 |
|
3.9 |
|
4,594 |
|
5.2 |
| ||
Kansas |
|
1,789 |
|
1.4 |
|
1,329 |
|
1.5 |
| ||
Kentucky |
|
3,019 |
|
2.3 |
|
2,648 |
|
3.0 |
| ||
Michigan |
|
3,395 |
|
2.6 |
|
2,465 |
|
2.8 |
| ||
Missouri |
|
1,867 |
|
1.4 |
|
1,390 |
|
1.6 |
| ||
Ohio |
|
43,434 |
|
33.1 |
|
39,238 |
|
44.5 |
| ||
Oregon |
|
1,029 |
|
0.8 |
|
|
|
|
| ||
Utah |
|
4,204 |
|
3.2 |
|
3,559 |
|
4.0 |
| ||
Virginia |
|
9,189 |
|
7.0 |
|
7,515 |
|
8.5 |
| ||
Total |
|
$ |
131,304 |
|
100.0 |
% |
$ |
88,175 |
|
100.0 |
% |
Note 12. Contingencies
Recently, the Company settled a lawsuit which included class allegations. A $640 settlement related to this class action suit is fully accrued and recorded in accounts payable and accrued liabilities on the Companys consolidated balance sheet.
Additionally, from time-to-time the Company is a defendant in various lawsuits and administrative proceedings wherein certain amounts are claimed or violations of law or regulations are asserted. In the opinion of the Companys management, these claims are without substantial merit and should not result in judgments which in the aggregate would have a material adverse effect on the Companys financial statements.
Note 13. Employee Benefit Plan
The Company has established a salary deferral plan under Section 401(k) of the Internal Revenue Code. The plan allows eligible employees to defer a portion of their compensation. Such deferrals accumulate on a tax deferred basis until the employee withdraws the funds. The Company has elected to match 100 percent of the employee contributions not exceeding 3 percent of compensation, plus 50 percent of the employee contributions exceeding 3 percent but not to exceed 5 percent of compensation. Total expense recorded for the Companys match was $1,064, $710 and $579 for the years ended December 31, 2011, 2010 and 2009.
The plan also provides a profit sharing component where the Company can make a discretionary contribution to the plan, which is allocated based on the compensation of eligible employees. No discretionary contributions were made for 2011, 2010 or 2009.
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 14. Business Combinations
In April 2011, Community Choice Financial Inc., a newly formed holding company, and CheckSmart Financial Holdings Corp., together with CCCS Corporate Holdings, Inc. and CCCS Holdings, LLC entities located in the western United States and certain other parties executed an Agreement and Plan of Merger pursuant to which CCFI acquired all outstanding shares of both CheckSmart Financial Holdings Corp. and CCCS. The Combination was structured as a stock-for-stock transaction, in which the equity holders of each of CheckSmart and CCCS agreed to contribute the equity of the separate companies to CCFI in exchange for shares of the combined company. As a result of the transaction, the former equity holders of CheckSmart Financial Holdings Corp. and CCCS own approximately 77% and 23% of CCFI, respectively.
In connection with the above transaction, Community Choice Financial Inc. issued $395,000 10.75% senior secured notes due 2019 (notes). The notes have an interest rate of 10.75% payable semi-annually and will mature on May 1, 2019. The proceeds were used to refinance existing debt, pay fees and expenses, and to finance a special dividend to shareholders and bonuses to management. The special dividend included $120,566 paid to its shareholders and the amount of management bonuses was $4,400.
In April 2011, the Company also entered into a four-year, $40,000 revolving credit facility concurrent with the notes offering. The revolving credit facility, at the Companys option, bears interest at either (a) LIBOR plus a margin of 5% or (b) and alternative base rate (determined as the greatest of the prime rate, the federal funds effective rate plus 0.5% of 1-month LIBOR plus 1%) plus a margin of 4% and will mature on April 29, 2015.
Also concurrent with the notes offering, Insight Capital, LLC, a Company subsidiary, entered into a $7,000 revolving credit facility. The facility expires July 31, 2013 and is collateralized by all of Insights assets. The interest rate is prime plus 1%.
Transaction expenses incurred include both direct and indirect costs associated with merger and acquisition costs.
All assets of the Company are pledged as collateral on the notes and primary revolving credit facility. The agreements contain various restrictions, including maintaining certain financial ratios and certain other restrictions.
The fair value of the 1,842,000 shares issued as consideration paid for CCCS was determined based on a combination of the income approach, using a discounted cash flow model, and a market approach, which considers comparable companies and transactions. Under the income approach, the discounted cash flow model determines fair value based on the present value of estimated future cash flows over a specific projection period and a residual value related to future cash flows beyond the projection period. Both values are discounted using a rate which reflects the Companys best estimate of the weighted average cost of capital of a market participant, and is adjusted for appropriate risk factors. Under the market approach, valuation multiples are derived based on a selection of comparable companies and acquisition transactions, and applied to projected operating data to arrive at an indication of fair value.
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 14. Business Combinations (Continued)
The following table summarizes the estimated fair value of assets acquired and liabilities assumed at the date of acquisition. The recognized amount of identifiable assets acquired and liabilities assumed have been adjusted for year-end adjustments to the acquired companys opening balance sheet.
Fair value of total consideration transferred |
|
$ |
55,192 |
|
Acquisition-related costs |
|
$ |
3,530 |
|
Recognized amounts of identifiable assets acquired and liabilities assumed |
|
|
| |
Cash and cash equivalents |
|
$ |
22,892 |
|
Finance receivables |
|
13,660 |
| |
Prepaid expenses and other assets |
|
1,480 |
| |
Leasehold improvements and equipment |
|
7,161 |
| |
Identifiable intangible assets |
|
2,948 |
| |
Note payable |
|
(73,923 |
) | |
Other liabilities |
|
(20,654 |
) | |
Total indentifiable net assets |
|
(46,436 |
) | |
Goodwill |
|
101,628 |
| |
|
|
$ |
55,192 |
|
The amounts of revenue and branch gross profit of CCCS included in the consolidated income statement from the acquisition date to the year ending December 31, 2011, were $55,363 and $24,747.
On March 21, 2011, the Company acquired ten loan stores in Illinois in an asset purchase. The purchase price was $19,725 in cash consideration. The purchase price was negotiated based upon a multiple of prior financial results and perceived opportunities. The results of operations have been included in the consolidated financial statements since the date of the acquisition. The following table summarizes the estimated fair value of assets acquired at the date of acquisition. The recognized amount of identifiable assets acquired and liabilities assumed have been adjusted for year-end adjustments to the acquired companys opening balance sheet.
Fair value of total consideration transferred, cash |
|
$ |
19,725 |
|
Acquisition-related costs |
|
$ |
85 |
|
Recognized amounts of identifiable assets acquired |
|
|
| |
Finance receivables |
|
$ |
1,912 |
|
Security deposits and other current assets |
|
30 |
| |
Leasehold improvements and equipment |
|
74 |
| |
Identifiable intangible assets |
|
265 |
| |
Total indentifiable net assets |
|
2,281 |
| |
Goodwill |
|
17,444 |
| |
|
|
$ |
19,725 |
|
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 14. Business Combinations (Continued)
The amounts of revenue and branch gross profits of Illinois included in the consolidated income statement from the acquisition date to the year ending December 31, 2011, were $5,108 and $809.
On February 28, 2010, the Company entered into a Membership Interest Purchase Agreement in which the Company acquired all membership interest of Insight Capital, LLC for $15,900 in cash consideration. This entity represents the Companys Alabama stores. The purchase price was negotiated based upon a multiple of prior financial results and perceived opportunities. The acquisition was paid for through cash plus assumed liabilities. The results of operations have been included in the consolidated financial statements since the date of the acquisition. The following table summarizes the estimated fair value of assets acquired and liabilities assumed at the date of acquisition.
Fair value of total consideration transferred, cash |
|
$ |
15,900 |
|
Acquisition-related costs |
|
$ |
237 |
|
Recognized amounts of identifiable assets acquired and liabilities assumed |
|
|
| |
Cash and cash equivalents |
|
$ |
12,602 |
|
Finance receivables |
|
3,995 |
| |
Prepaid expenses and other current assets |
|
122 |
| |
Leasehold improvements and equipment |
|
1,144 |
| |
Identifiable intangible assets |
|
1,654 |
| |
Note payable |
|
(2,600 |
) | |
Line of credit |
|
(9,000 |
) | |
Other liabilities |
|
(3,413 |
) | |
Total indentifiable net assets |
|
4,504 |
| |
Goodwill |
|
11,396 |
| |
|
|
$ |
15,900 |
|
The amounts of revenue and branch gross profit of Insight Capital, LLC included in the consolidated income statement from the acquisition date to the year ending December 31, 2010, were $18,766 and $8,249.
The unaudited pro forma revenue and earnings for the years ended December 31, 2011 and 2010 presented below is based upon combined financial statements of the acquisitions above and does not reflect any operating efficiencies or cost savings from the integration of these assets into our business.
|
|
2011 |
|
2010 |
| ||
Total revenue |
|
$ |
332,727 |
|
$ |
310,357 |
|
Net income from continuing operations |
|
$ |
4,260 |
|
$ |
28,074 |
|
Note 15. Interest Rate Swaps
The Company maintained an interest-rate risk-management strategy that used derivative instruments to minimize significant, unanticipated earnings fluctuations caused by interest-rate volatility.
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 15. Interest Rate Swaps (Continued)
In June 2006, the Company entered into an interest rate swap agreement related to their borrowings on their term loan. These swaps were utilized to manage interest rate exposures and were designated as highly effective cash flow hedges. The differential to be paid or received on all swap agreements is accrued as interest rates change and is recognized over the lives of the agreements in interest expense. The swap agreement expired in June 2009 and had a fixed rate of 5.55%. The notional amount was $100,000. Included in accumulated other comprehensive income is a gain of approximately $-0-, $-0- and $2,143 relating to the fair value of the swap agreements as of December 31, 2011, 2010 and 2009, respectively. These fair values were made utilizing inputs other than quoted prices that are observable (Level 2).
Note 16. Stock-Based Compensation
On May 1, 2006, the Company adopted the 2006 Management Equity Incentive Plan (the Plan) pursuant to which the Companys Board of Directors, or a duly-authorized committee thereof, may grant stock options, restricted stock, restricted stock units and stock appreciation rights to employees and consultants of the Company or its subsidiaries. CCFI amended the plan to increase the number of shares and to convert the number of shares in the 2006 plan to the 2011 plan. Options that have been granted under the Plan have been granted at an exercise price equal to (or greater than) the stocks fair market value at the date of the grant, with terms of 10 years and vesting generally over four to five years or on the occurrence of a liquidity event. On April 19, 2011, CCFI adopted the Plan to be effective as of April 29, 2011. The maximum number of shares that may be subject to awards under the Plan is 1,555,746 as of December 31, 2011.
The Company recognizes compensation costs in the financial statements for all share-based payments granted on or after May 1, 2006 based on the grant date fair value estimated. No options were outstanding prior to May 1, 2006.
The Plan allows for awards based on time, performance and market conditions. Compensation expense for awards based on time is expensed on a straight-line basis over the service period. Compensation expense for performance awards are recognized using the graded vesting method. Compensation expense for market conditions such as those conditioned on either a liquidity event condition or a specified performance condition have not been recognized and will be recognized upon consummation of the relevant market condition. At December 31, 2011, there were a total of 312,768 additional shares available for grant under the Plan.
The fair value of the option award is estimated on the date of grant using a lattice-based option valuation model. Because lattice-based option valuation models incorporate ranges of assumptions for inputs, those ranges are disclosed. Expected volatilities are based on the historical volatility of the stock of comparable public companies. The Company uses historical data to estimate option exercise and employee termination within the valuation model; separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The expected term of options granted is derived from the output of the option valuation model and represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 16. Stock-Based Compensation (Continued)
The weighted average assumptions used by the Company for option grants in 2011, 2010, and 2009 are illustrated in the following table:
|
|
2011 |
|
2010 |
|
2009 |
| |||
Risk-free interest rate |
|
0.17 |
% |
0.31 |
% |
1.00 |
% | |||
Dividend yield |
|
0.00 |
% |
0.00 |
% |
0.00 |
% | |||
Expected volatility |
|
35.00 |
% |
41.90 |
% |
52.00 |
% | |||
Expected life (years) |
|
0.75 |
|
1.25 |
|
1.25 |
| |||
Weighted average fair value of options granted |
|
$ |
7.72 |
|
$ |
3.02 |
|
$ |
|
|
Weighted average fair value of stock appreciation rights granted |
|
$ |
7.41 |
|
$ |
|
|
$ |
|
|
For the years ended December 31, 2011, 2010 and 2009, the Company recorded stock-based compensation costs in the amount of $105, $388 and $1,057, respectively. As of December 31, 2011, 2010 and 2009, unrecognized stock-based compensation costs to be recognized over future periods approximated $3,095, $3,400 and $3,700, respectively. At December 31, 2011, this amount is expected to be recognized as expense over a weighted-average period of 1 year. The total income tax benefit recognized in the income statement for the share-based compensation arrangements was $-0-, $125 and $391 for December 31, 2011, 2010 and 2009, respectively.
Stock option activity for the year ended December 31, 2011 is as follows (these amounts have not been rounded in thousands):
|
|
Shares |
|
Weighted-Average |
|
Weighted-Average |
|
Aggregate |
| ||
Outstanding at December 31, 2010 |
|
944,628 |
|
$ |
9.71 |
|
6.8 |
|
N/A |
| |
Granted |
|
950,034 |
|
7.14 |
|
|
|
N/A |
| ||
Exercised |
|
|
|
|
|
|
|
N/A |
| ||
Forfeited or expired |
|
944,628 |
|
9.71 |
|
|
|
N/A |
| ||
Outstanding at December 31, 2011 |
|
950,034 |
|
7.14 |
|
7.2 |
|
N/A |
| ||
Exercisable at December 31, 2011 |
|
379,788 |
|
$ |
7.23 |
|
6.3 |
|
$ |
6,677 |
|
Vested or expected to vest at December 31, 2011 |
|
379,788 |
|
$ |
7.23 |
|
6.3 |
|
$ |
6,677 |
|
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 16. Stock-Based Compensation (Continued)
Stock appreciation rights activity for the year ended December 31, 2011 is as follows (these amounts have not been rounded into thousands):
|
|
Shares |
|
Weighted-Average |
|
Weighted-Average |
|
Aggregate |
| |
Outstanding at December 31, 2010 |
|
268,536 |
|
|
|
6.1 |
|
N/A |
| |
Granted |
|
292,944 |
|
|
|
|
|
N/A |
| |
Exercised |
|
|
|
|
|
|
|
N/A |
| |
Forfeited or expired |
|
268,536 |
|
|
|
|
|
N/A |
| |
Outstanding at December 31, 2011 |
|
292,944 |
|
|
|
5.5 |
|
N/A |
| |
Exercisable at December 31, 2011 |
|
201,108 |
|
|
|
5.2 |
|
$ |
3,401 |
|
Vested or expected to vest at December 31, 2011 |
|
201,108 |
|
|
|
5.2 |
|
$ |
3,401 |
|
As previously described, the Company modified the Plan. As of December 31, 2011, there are 570,270 un-vested stock-options with a Weighted-Average Fair Value at Grant Date of $2.81 and 91,836 un-vested stock appreciation rights with a Weighted-Average Fair Value at Grant Date of $5.09 respectively.
Other information related to Stock Option activity for the years ended December 31, 2011, 2010, and 2009:
|
|
2011 |
|
2010 |
|
2009 |
| |||
Total fair value of options vested |
|
$ |
5,324 |
|
$ |
6,472 |
|
$ |
4,388 |
|
Total intrinsic value of options exercised |
|
|
|
|
|
|
| |||
Other information related to Stock Appreciation activity for the years ended December 31, 2011, 2010, and 2009:
|
|
2011 |
|
2010 |
|
2009 |
| |||
Total fair value of SARs vested |
|
$ |
2,819 |
|
$ |
2,730 |
|
$ |
1,735 |
|
Total intrinsic value of SARs exercised |
|
|
|
|
|
|
| |||
Note 17. Income Taxes
Community Choice Financial Inc. and Subsidiaries file a consolidated federal income tax return. The Company files consolidated or separate state income tax returns as permitted by the individual states in which it operates. The effective tax rate for the years ended December 31, 2011, 2010 and 2009 exceeds the statutory rate primarily due to certain acquisition costs that are deductible for financial statement reporting purposes but not deductible for tax purposes. The Company had no liability recorded for unrecognized tax benefits at December 31, 2011 and 2010.
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 17. Income Taxes (Continued)
On August 1, 2011, the Company was advised that the Internal Revenue Service had completed the examination of the Companys federal income tax returns for 2008. The income tax assessment was not material to the Companys consolidated financial statements.
Net deferred tax assets consist of the following components as of December 31, 2011:
|
|
Deferred Tax Assets |
|
Deferred Tax Liabilities |
| ||||||||
|
|
Current |
|
Noncurrent |
|
Current |
|
Noncurrent |
| ||||
Allowance for credit losses |
|
$ |
2,218 |
|
$ |
|
|
$ |
|
|
$ |
|
|
Goodwill |
|
|
|
|
|
1,289 |
|
3,410 |
| ||||
Accrued expenses |
|
309 |
|
|
|
|
|
|
| ||||
Depreciable assets |
|
|
|
2,767 |
|
|
|
|
| ||||
Intangible asset |
|
|
|
979 |
|
|
|
810 |
| ||||
Stock based compensation |
|
|
|
1,014 |
|
|
|
|
| ||||
Deferred revenue |
|
496 |
|
935 |
|
|
|
|
| ||||
Other |
|
32 |
|
|
|
|
|
|
| ||||
|
|
$ |
3,055 |
|
$ |
5,695 |
|
$ |
1,289 |
|
$ |
4,220 |
|
Net deferred tax assets consist of the following components as of December 31, 2010:
|
|
Deferred Tax Assets |
|
Deferred Tax Liabilities |
| ||||||||
|
|
Current |
|
Noncurrent |
|
Current |
|
Noncurrent |
| ||||
Allowance for credit losses |
|
$ |
1,735 |
|
$ |
|
|
$ |
|
|
$ |
|
|
Goodwill |
|
|
|
1,191 |
|
|
|
|
| ||||
Accrued expenses |
|
192 |
|
|
|
|
|
|
| ||||
Depreciable assets |
|
|
|
1,624 |
|
|
|
|
| ||||
Intangible asset |
|
|
|
874 |
|
|
|
|
| ||||
Stock based compensation |
|
|
|
974 |
|
|
|
|
| ||||
Deferred revenue |
|
205 |
|
202 |
|
|
|
|
| ||||
Other |
|
15 |
|
|
|
|
|
|
| ||||
|
|
$ |
2,147 |
|
$ |
4,865 |
|
$ |
|
|
$ |
|
|
The net deferred tax assets and (liabilities) are classified in the consolidated balance sheet as follows:
|
|
2011 |
|
2010 |
| ||
Current deferred tax asset |
|
$ |
3,055 |
|
$ |
2,147 |
|
Noncurrent deferred tax asset |
|
5,695 |
|
4,865 |
| ||
Current deferred tax liability |
|
(1,289 |
) |
|
| ||
Noncurrent deferred tax liability |
|
(4,220 |
) |
|
| ||
|
|
$ |
3,241 |
|
$ |
7,012 |
|
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 17. Income Taxes (Continued)
The provision for income taxes charged to operations for the years ended December 31, 2011, 2010 and 2009 consists of the following:
|
|
2011 |
|
2010 |
|
2009 |
| |||
Current tax expense |
|
$ |
8,821 |
|
$ |
10,775 |
|
$ |
9,871 |
|
Deferred tax expense |
|
2,650 |
|
5,598 |
|
2,315 |
| |||
Benefit applied to reduce goodwill |
|
2,082 |
|
2,082 |
|
2,082 |
| |||
|
|
$ |
13,553 |
|
$ |
18,455 |
|
$ |
14,268 |
|
Income tax expense (benefit) has been allocated as follows:
|
|
2011 |
|
2010 |
|
2009 |
| |||
Continuing operations |
|
$ |
13,553 |
|
$ |
19,801 |
|
$ |
14,042 |
|
Discontinued operations |
|
|
|
(1,346 |
) |
226 |
| |||
|
|
$ |
13,553 |
|
$ |
18,455 |
|
$ |
14,268 |
|
The Companys tax basis goodwill exceeds the amount recorded for financial reporting purposes. The accounting for deferred income taxes prohibits immediate recognition of a deferred tax asset created by tax goodwill in excess of book goodwill. The recognition of the tax benefits are required to be recognized when the excess tax goodwill is amortized and deducted on the Companys income tax return. This deduction will occur over the next 15 years from the acquisition date. The benefit for that tax deduction is recognized consistent with the initial recognition of an acquired tax benefit, which requires this amount to be applied as a reduction of goodwill. For reporting purposes, the amount of the tax deduction and the tax benefit attributable to the tax deduction is referred to as the benefit applied to reduce goodwill and will be recorded as additional income tax expense in these financial statements and will reduce the carrying amount of goodwill. The total amount of tax amortization of goodwill for the original purchase in 2006, amounted to approximately $14,600 in 2011, 2010 and 2009, respectively.
The reconciliation between income tax expense for financial statement purposes and the amount computed by applying the statutory federal income tax rate of 35% to pretax income before extraordinary item for the years ended December 31, 2011, 2010 and 2009 is as follows:
|
|
2011 |
|
2010 |
|
2009 |
| |||
Federal tax expense at statutory rate |
|
$ |
10,642 |
|
$ |
17,389 |
|
$ |
13,617 |
|
Increase (decrease) in income taxes resulting from: |
|
|
|
|
|
|
| |||
State income taxes, net of federal tax benefit |
|
721 |
|
1,317 |
|
1,026 |
| |||
Nondeductible expenses and other items |
|
2,190 |
|
(251 |
) |
(375 |
) | |||
|
|
$ |
13,553 |
|
$ |
18,455 |
|
$ |
14,268 |
|
Community Choice Financial Inc. and Subsidiaries are subject to taxation by the United States and various state jurisdictions. The federal tax return as filed by CheckSmart Financial Holdings Corp. for its 2008 tax year and the certain state tax returns for its 2008 year and forward remain open to examination by tax authorities.
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 18. Transactions with Variable Interest Entities
The Company began conducting business through a wholly owned subsidiary registered as a Credit Services Organization (CSO) under Ohio law during 2009. In connection with operating as a CSO, the Company entered into a credit services organization agreement with an unaffiliated third-party lender in 2009. The agreement governs the terms by which the Company refers customers to that lender, on a non-exclusive basis, for a possible extension of credit, processes loan applications and commits to reimburse the lender for any loans or related fees that were not collected from such customers. During 2010, the Company transitioned away from the CSO model but continued to offer customers access to the third party lender.
The Company has a debt-buying arrangement with the lender whereby it purchases defaulted accounts. The Company accrues for this obligation through managements estimation of anticipated purchases based on expected losses in the lenders portfolio. This obligation is recorded as a current liability on the Companys consolidated balance sheet. The accrual for these obligations totaled $157 and $110 for the years ended December 31, 2011 and 2010, respectively. The Company has determined that the vendor is a VIE but that the Company is not the primary beneficiary of this VIE. Therefore, the Company has not consolidated the lender in 2011 or 2010.
The Company acquired a 22.5% membership interest of Insight Holdings in 2011. As additional consideration to Insight Holdings, the Company agreed to make available to Insight Holdings a revolving credit facility of $3,000. The Company has determined that Insight Holdings is a VIE but that the Company is not the primary beneficiary of this VIE, and therefore has not consolidated Insight in 2011. The investment in Insight is accounted for under the equity method.
Note 19. Optional Card Feature
An optional feature available to some customers who sign up for a prepaid debit card through the Company, as Agent for Insight Card Services, is the ability to have a third-party lender unrelated to the customer direct loan proceeds onto the customers card. The Company purchases a participation in these loans which is recorded in the finance receivables. This optional card feature was not marketed to consumers after May 2012.
Note 20. Discontinued Operations
In December 2010, the Company decided to discontinue the Buckeye Commercial Check Cashing of Florida, LLC (Commercial) due to operational performance. The Company completed the liquidation of Commercial and ceased operations in December 2010. The liquidation consisted of normal collection practices with any uncollected balances charged-off by December 31, 2010. No recoveries are anticipated by the Company.
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 20. Discontinued Operations (Continued)
Results from discontinued operations of Commercial for the years ended December 31, 2010 and 2009 were as follows:
|
|
2010 |
|
2009 |
| ||
Total Revenue |
|
$ |
568 |
|
$ |
1,175 |
|
Branch Expenses: |
|
|
|
|
| ||
Provision for Loan Losses |
|
3,471 |
|
171 |
| ||
Selling, general and administrative |
|
571 |
|
407 |
| ||
Total operating expenses |
|
4,042 |
|
578 |
| ||
Corporate expenses |
|
68 |
|
3 |
| ||
Net income (loss) before income taxes |
|
(3,542 |
) |
594 |
| ||
Provision (benefit) for income taxes |
|
(1,346 |
) |
226 |
| ||
Income (loss) from discontinued operations |
|
$ |
(2,196 |
) |
$ |
368 |
|
Corporate expenses include only direct expenses that are related to Commercial but were considered corporate type expenses that are typically not allocated to store level operations. There were no significant non-cash assets or liabilities included in the balance sheets at December 31, 2011 and 2010.
Note 21. Equity Method Investments
The Company is accounting for the investment in Insight Holdings Company, LLC, a 22.5% owned affiliate, by the equity method of accounting under which the Companys share of the net income of the affiliate is recognized as income in the Companys statement of income and added to the investment account, and dividends received from the affiliate are treated as a reduction of the investment account.
Condensed financial information as of December 31, 2011 and for the period of November 15 through December 31, 2011 is as follows:
|
|
December 31, |
| |
Current assets |
|
$ |
11,475 |
|
Property & equipment, net |
|
1,115 |
| |
Other assets |
|
2,017 |
| |
Total assets |
|
$ |
14,607 |
|
Current liabilities |
|
$ |
14,080 |
|
Long term liabilities |
|
191 |
| |
Members equity |
|
336 |
| |
Total liabilities and members equity |
|
$ |
14,607 |
|
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 21. Equity Method Investments (Continued)
|
|
November 15, 2011 |
| |
Revenue |
|
$ |
5,551 |
|
Cost of goods sold |
|
4,935 |
| |
Gross margin |
|
616 |
| |
General & administrative expenses |
|
1,111 |
| |
Loss from operations |
|
(495 |
) | |
Other expense |
|
(210 |
) | |
Net loss |
|
$ |
(705 |
) |
The Companys 22.5% purchase of Insight Holdings Company, LLC resulted in a difference between the purchase price paid and the underlying book value of equity creating implied other intangible assets and implied goodwill. The implied other intangible assets will be amortized over a five-year period. The difference between the purchase price paid and the underlying book value of equity is stated as follows:
Equity in net assets |
|
173 |
| |
Implied other intangible assets |
|
5,964 |
| |
Implied goodwill |
|
5,113 |
| |
|
|
$ |
11,250 |
|
The Companys share of the loss is $159 which was applied to the initial $11,250 purchase resulting in an $11,091 carrying value for the Companys investment in Insight Holdings as of December 31, 2011.
The Companys share of the loss of Latin Card for the year ended December 31, 2011 was $256. The carrying value of the Companys investment in Latin Card is $18 as of December 31, 2011.
Note 22. Supplemental Guarantor Information
The Senior Secured Notes due 2019 (the Notes) contain various covenants that, subject to certain exceptions defined in the indenture governing the notes (the Indenture), limit the Companys ability to, among other things, engage in certain transactions with affiliates, pay dividends or distributions, redeem or repurchase capital stock, incur or assume liens or additional debt, and consolidate or merge with or into another entity or sell substantially all of its assets. The Company has optional redemption features on the Notes prior to their maturity which depending on the date of the redemption would require premiums to be paid in addition to all principal and interest due.
The Notes are guaranteed by all of CCFIs restricted subsidiaries existing as of April 29, 2011 (the date CCFI issued the Notes) and any subsequent restricted subsidiaries that guarantee CCFIs indebtedness or the indebtedness of any other subsidiary guarantor (the Subsidiary Guarantors), in accordance with the Indenture. CCFI is a holding company and has no independent assets or operations of its own. The guarantees under the Notes are full and unconditional and joint and several. There are no restrictions on the ability of CCFI or any of the Subsidiary Guarantors to obtain funds from its subsidiaries by dividend or loan, except for net worth requirements required by certain states in which the Company operates. Certain Subsidiary Guarantors are required to maintain net worth ranging from $5 to $1,000. The total net worth requirements of these Subsidiary Guarantors is $5.8 million. The Indenture contains certain affirmative and negative covenants applicable to CCFI and its Subsidiary Guarantors, including restrictions on their ability to incur additional indebtedness, consummate certain asset sales, make investments in entities that are not Restricted Subsidiaries (as defined in the Indenture), create liens on their assets, enter into certain affiliate transactions and make certain restricted payments, including restrictions on CCFIs ability to pay dividends on, or repurchase, its common stock.
As long as the $7,000 Alabama Revolving Credit Agreement remains outstanding, the Guarantee provided by our Alabama Subsidiary (the Alabama Guarantee), will be secured on a second-priority basis by the Shared Alabama Collateral; and provided further that any net proceeds resulting from realization upon the Collateral will be applied to repay the Designated Priority Obligations prior to any payments being made with respect to the Notes Obligations.
Note 23. Subsequent Events
On April 1, 2012, the Company acquired the equity interests, in the form of both membership units and stock of Direct Financial Solutions, LLC and its subsidiaries (DFS), as well as two other affiliated entities, Direct Financial Solutions of UK Limited and its subsidiary Cash Central UK Limited and DFS Direct Financial Solutions of Canada, Inc. and a related company, Reliant Software, Inc., which is owned by a relative of the sellers of DFS. The purchase price for the business was $22,000. Management is evaluating the purchase transaction and has not determined the allocation of the purchase price among the tangible and intangible assets.
On February 14, 2012, the Company authorized an increase to the maximum number of awards available under the 2011 Management Equity Incentive Plan to 2,941,746. The Company also issued 334,020 options and 35,130 restricted stock units with a per share exercise price of $19.95. The options vest ratably over a three year period or become fully vested in the event of a change in control as defined in the award agreement. The restricted stock units vest ratably over a three year period as defined in the award agreement.
Community Choice Financial Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 23. Subsequent Events (Continued)
On April 22, 2012, the Company entered into an Asset Purchase Agreement in which the Company agreed to acquire the assets of a retail consumer finance operator in the state of Florida. The purchase price is $45,500, which is subject to certain price adjustments not yet determined. The purchase was contingent on the completion of our initial public offering (IPO) by June 15, 2012. As discussed below, we suspended the IPO on May 7, 2012, and the purchase agreement terminated when the IPO was not completed by June 15, 2012.
The Companys board of directors and stockholders approved an amended and restated certificate of incorporation that will affect a six-for-one stock split of all the outstanding shares of common stock. On May 4, 2012, the Company amended and restated its certificate of incorporation to provide that the authorized capital stock will consist of 300,000 shares of common stock at $0.01 par value per share. Accordingly, all common share and per common share amounts for all periods presented in these consolidated financial statements and notes thereto, have been adjusted retroactively, where applicable, to reflect this stock split.
On May 7, 2012, the Company decided to not pursue the IPO due to market conditions and has since delisted. The total amount of fees incurred is approximately $2.3 million, and the Company expects to expense these fees in the second quarter of 2012.
Community Choice Financial Inc. and Subsidiaries
March 31, 2012 and December 31, 2011
(In thousands, except per share data)
|
|
March 31, |
|
December 31, |
| ||
|
|
(unaudited) |
|
|
| ||
Assets |
|
|
|
|
| ||
Current Assets |
|
|
|
|
| ||
Cash and cash equivalents |
|
$ |
107,399 |
|
$ |
65,635 |
|
Finance receivables, net |
|
93,213 |
|
120,451 |
| ||
Short-term investments, certificates of deposit |
|
1,110 |
|
1,110 |
| ||
Card related pre-funding and receivables |
|
14,442 |
|
12,910 |
| ||
Other current assets |
|
5,833 |
|
5,719 |
| ||
Deferred tax asset, net |
|
1,447 |
|
1,766 |
| ||
|
|
|
|
|
| ||
Total current assets |
|
223,444 |
|
207,591 |
| ||
Noncurrent Assets |
|
|
|
|
| ||
Leasehold improvements and equipment, net |
|
18,516 |
|
19,661 |
| ||
Goodwill |
|
255,433 |
|
255,953 |
| ||
Other intangible assets |
|
3,164 |
|
3,588 |
| ||
Security deposits |
|
1,619 |
|
1,591 |
| ||
Equity method investments |
|
10,842 |
|
11,109 |
| ||
Deferred tax asset, net |
|
1,203 |
|
1,475 |
| ||
Deferred debt issuance costs |
|
14,061 |
|
14,579 |
| ||
|
|
|
|
|
| ||
Total assets |
|
$ |
528,282 |
|
$ |
515,547 |
|
|
|
|
|
|
| ||
Liabilities and Stockholders Equity |
|
|
|
|
| ||
Current Liabilities |
|
|
|
|
| ||
Deferred revenue |
|
$ |
2,654 |
|
$ |
2,654 |
|
Accrued interest |
|
17,732 |
|
7,153 |
| ||
Money orders payable |
|
16,239 |
|
18,340 |
| ||
Accounts payable and accrued liabilities |
|
17,866 |
|
20,474 |
| ||
|
|
|
|
|
| ||
Total current liabilities |
|
54,491 |
|
48,621 |
| ||
Noncurrent Liabilities |
|
|
|
|
| ||
Notes payable |
|
395,000 |
|
395,000 |
| ||
Deferred revenue |
|
9,949 |
|
10,612 |
| ||
|
|
|
|
|
| ||
Total liabilities |
|
459,440 |
|
454,233 |
| ||
|
|
|
|
|
| ||
Commitments and Contingencies |
|
|
|
|
| ||
Stockholders Equity |
|
|
|
|
| ||
Preferred stock, par value $.01 per share, 3,000 shares authorized, no shares issued and outstanding |
|
|
|
|
| ||
Common stock, par value $.01 per share, 300,000 authorized shares and 7,982 outstanding shares at March 31, 2012 and December 31, 2011 |
|
80 |
|
80 |
| ||
Additional paid-in capital |
|
113,332 |
|
113,250 |
| ||
Retained deficit |
|
(44,570 |
) |
(52,016 |
) | ||
|
|
|
|
|
| ||
Total stockholders equity |
|
68,842 |
|
61,314 |
| ||
|
|
|
|
|
| ||
Total liabilities and stockholders equity |
|
$ |
528,282 |
|
$ |
515,547 |
|
See Notes to Consolidated Financial Statements.
Community Choice Financial Inc. and Subsidiaries
Consolidated Statements of Income
Three Months Ended March 31, 2012 and 2011
(In thousands)
(unaudited)
|
|
Three Months Ended |
| ||||
|
|
2012 |
|
2011 |
| ||
Revenues: |
|
|
|
|
| ||
Finance receivable fees |
|
$ |
54,560 |
|
$ |
36,152 |
|
Check cashing fees |
|
20,186 |
|
15,046 |
| ||
Card fees |
|
5,071 |
|
3,948 |
| ||
Other |
|
6,132 |
|
4,080 |
| ||
|
|
|
|
|
| ||
Total revenues |
|
85,949 |
|
59,226 |
| ||
|
|
|
|
|
| ||
Branch expenses: |
|
|
|
|
| ||
Salaries and benefits |
|
16,113 |
|
10,261 |
| ||
Provision for loan losses |
|
13,337 |
|
8,408 |
| ||
Occupancy |
|
5,508 |
|
3,827 |
| ||
Depreciation and amortization |
|
1,556 |
|
1,328 |
| ||
Other |
|
9,793 |
|
7,338 |
| ||
|
|
|
|
|
| ||
Total branch expenses |
|
46,307 |
|
31,162 |
| ||
|
|
|
|
|
| ||
Branch gross profit |
|
39,642 |
|
28,064 |
| ||
|
|
|
|
|
| ||
Corporate expenses |
|
14,356 |
|
10,282 |
| ||
Transaction expenses |
|
519 |
|
85 |
| ||
Depreciation and amortization |
|
1,056 |
|
286 |
| ||
Interest expense, net |
|
11,350 |
|
2,035 |
| ||
Income of equity method investees |
|
(21 |
) |
|
| ||
Nonoperating income, related party management fees |
|
(11 |
) |
(11 |
) | ||
|
|
|
|
|
| ||
Income before income taxes |
|
12,393 |
|
15,387 |
| ||
Provision for income taxes |
|
4,947 |
|
5,903 |
| ||
|
|
|
|
|
| ||
Net Income |
|
7,446 |
|
9,484 |
| ||
Net loss attributable to non-controlling interests |
|
|
|
(120 |
) | ||
|
|
|
|
|
| ||
Net income attributable to controlling interests |
|
$ |
7,446 |
|
$ |
9,604 |
|
See Notes to Consolidated Financial Statements.
Community Choice Financial Inc. and Subsidiaries
Consolidated Statement of Stockholders Equity
Three Months Ended March 31, 2012
(Dollars in thousands)
(unaudited)
|
|
|
|
|
|
Additional |
|
|
|
|
| ||||
|
|
Common Stock |
|
Paid-In |
|
Retained |
|
|
| ||||||
|
|
Shares |
|
Amount |
|
Capital |
|
Deficit |
|
Total |
| ||||
Balance, December 31, 2011 |
|
7,981,536 |
|
$ |
80 |
|
$ |
113,250 |
|
$ |
(52,016 |
) |
$ |
61,314 |
|
Stock-based compensation expense |
|
|
|
|
|
82 |
|
|
|
82 |
| ||||
Net income |
|
|
|
|
|
|
|
7,446 |
|
7,446 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
| ||||
Balance, March 31, 2012 |
|
7,981,536 |
|
$ |
80 |
|
$ |
113,332 |
|
$ |
(44,570 |
) |
$ |
68,842 |
|
See Notes to Consolidated Financial Statements.
Community Choice Financial Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Three Months Ended March 31, 2012 and 2011
(In thousands)
(unaudited)
|
|
Three Months Ended |
| ||||
|
|
2012 |
|
2011 |
| ||
Cash flows from operating activities |
|
|
|
|
| ||
Net income |
|
$ |
7,446 |
|
$ |
9,484 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
| ||
Provision for loan losses |
|
13,337 |
|
8,408 |
| ||
Loss on disposal of assets |
|
|
|
19 |
| ||
Income of equity method investees |
|
(21 |
) |
|
| ||
Depreciation |
|
1,900 |
|
1,508 |
| ||
Amortization of deferred financing cost |
|
518 |
|
221 |
| ||
Amortization of intangibles |
|
712 |
|
106 |
| ||
Deferred income taxes |
|
1,111 |
|
1,563 |
| ||
Stock-based compensation |
|
82 |
|
26 |
| ||
Changes in assets and liabilities: |
|
|
|
|
| ||
Prepaid money orders |
|
|
|
3,030 |
| ||
Card related pre-funding and receivables |
|
(1,532 |
) |
(919 |
) | ||
Other assets |
|
(142 |
) |
2,942 |
| ||
Deferred revenue |
|
(663 |
) |
(178 |
) | ||
Accrued interest |
|
10,579 |
|
|
| ||
Money orders payable |
|
(2,101 |
) |
2,650 |
| ||
Accounts payable and accrued expenses |
|
(2,608 |
) |
1,549 |
| ||
|
|
|
|
|
| ||
Net cash provided by operating activities |
|
28,618 |
|
30,409 |
| ||
|
|
|
|
|
| ||
Cash flows from investing activities |
|
|
|
|
| ||
Net receivables repaid |
|
13,901 |
|
6,216 |
| ||
Net acquired assets, net of cash |
|
|
|
(19,725 |
) | ||
Purchase of leasehold improvements and equipment |
|
(755 |
) |
(454 |
) | ||
|
|
|
|
|
| ||
Net cash provided by (used in) investing activities |
|
13,146 |
|
(13,963 |
) | ||
|
|
|
|
|
| ||
Cash flows from financing activities |
|
|
|
|
| ||
Net advances on lines of credit |
|
|
|
20,000 |
| ||
Repayment of notes payable |
|
|
|
(2,573 |
) | ||
Contributions for non-controlling interest |
|
|
|
284 |
| ||
|
|
|
|
|
| ||
Net cash provided by financing activities |
|
|
|
17,711 |
| ||
|
|
|
|
|
| ||
Net increase in cash and cash equivalents |
|
41,764 |
|
34,157 |
| ||
Cash and cash equivalents: |
|
|
|
|
| ||
Beginning |
|
65,635 |
|
39,780 |
| ||
|
|
|
|
|
| ||
Ending |
|
$ |
107,399 |
|
$ |
73,937 |
|
See Notes to Consolidated Financial Statements.
Community Choice Financial Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(Dollars in thousands, except per share data)
Note 1. Ownership, Nature of Business, and Significant Accounting Policies
Nature of business: Community Choice Financial Inc. (together with its consolidated subsidiaries, CCFI or the Company) was formed on April 6, 2011 under the laws of the State of Ohio by the shareholders of Checksmart Financial Holdings Inc. (together with its consolidated subsidiaries, Checksmart) to be the holding company of Checksmart Financial Holdings Corp. and to acquire the ownership interests of CCCS Corporate Holdings, Inc. (together with its consolidated subsidiaries, CCCS) through a merger. The contribution of equity from Checksmart to CCFI is considered to be a merger of entities under common control and as result does not change the basis in accounting. CCFI acquired CCCS through a merger on April 29, 2011 and the acquisition of CCCS has been treated as a business combination. Prior to the date of the acquisition of CCCS, the financial statements include only Checksmart Financial Holdings Inc. together with its consolidated subsidiaries. As of March 31, 2012, the Company owned and operated 435 stores in 14 states.
The Company is primarily engaged in the business of providing consumers check cashing and short-term consumer loans. Through a network of retail stores, the Company provides customers a variety of financial products and services, including short-term consumer loans, check cashing, prepaid debit cards, title loans, medium term loans and other services that address the specific needs of our individual customers.
A summary of the Companys significant accounting policies follows:
Basis of presentation: The accompanying interim unaudited consolidated financial statements of Community Choice Financial Inc. and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information. They do not include all information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. Although management believes that the disclosures are adequate to prevent the information from being misleading, the interim unaudited consolidated financial statements should be read in conjunction with the Companys audited financial statements for the year ended December 31, 2011. In the opinion of the Companys management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair statement of the Companys financial condition, have been included. The results for any interim period are not necessarily indicative of results to be expected for the year ending December 31, 2012.
Basis of consolidation: The accompanying consolidated financial statements include the accounts of Community Choice Financial Inc. and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.
Reclassifications: Certain amounts reported in the three months ended March 31, 2011 consolidated financial statements have been reclassed to conform to classifications presented in the three months ended March 31, 2012 consolidated financial statements, without affecting the previously reported net income or stockholders equity.
Use of estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Material estimates that
Community Choice Financial Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 1. Ownership, Nature of Business, and Significant Accounting Policies (Continued)
are particularly susceptible to change relate to the determination of the allowance for loan losses, the valuation of goodwill, the valuation of equity investments, the value of stock based compensation and the valuation of deferred tax assets and liabilities.
Business Segment: FASB Accounting Standards Codification (ASC) Topic 280 requires that a public enterprise report a measure of segment profit or loss, certain specific revenue and expense items, segment assets, information about the way operating segments were determined and other items. The Company reports operating segments in accordance with FASB ASC Topic 280. Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in determining how to allocate resources and assess performance. For purposes of disclosures required by ASC 280, the Company operates in one segment, retail financial services.
Revenue recognition: All of the Companys branch transactions are processed through its point-of-sale systems. These transactions include check cashing, bill payment, money transfer, money order sales, and other miscellaneous products and services. The full amount of the check cashing fee is recognized as revenue at the time of the transaction. The Company acts in an agency capacity regarding bill payment services, money transfers, card products, and money orders offered and sold at its branches. The Company records the net amount retained as revenue because the supplier is the primary obligor in the arrangement, the amount earned by the Company is fixed, and the supplier is determined to have the ultimate credit risk. Fees and direct costs incurred for the origination of finance receivables are deferred and amortized using the interest (actuarial) method over the term of each loan.
Advance fees on short-term consumer loans with terms between 14 to 30 days, title loans with terms up to 30 days and certain medium-term consumer loans with terms between 112 days and 180 days are recognized using the interest (actuarial) method over the term of each loan.
Title loans with terms between 30 days and 24 months, certain medium-term consumer loans with terms of 24 months, lines of credit, and loan participations are interest-bearing. Interest and fee income is recognized using the interest (actuarial) method.
As a result of the Companys charge-off policies, accounts are charged-off between 1and 90 days past due rather than being placed in nonaccrual status.
Finance receivables: Finance receivables consist of three categories of receivables, short term consumer loans, title loans, and medium term loans.
Short term consumer loan products provide customers with cash or a money order, typically ranging in size from $.1 to $1, in exchange for a promissory note with a maturity generally 14 to 30 days with an agreement to defer the presentment of the customers personal check for the aggregate amount of the advance plus fees. This form of lending is based on applicable laws and regulations which vary by state. Statutes vary from providing fees of 15% to 20% per $.1 borrowed, to providing interest at 25% per annum plus origination fees. The customers repay the cash advance by paying cash or allowing the check to be presented. For unsecured loans, the risk of repayment primarily relates to the customers ability to repay the loans.
Community Choice Financial Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 1. Ownership, Nature of Business, and Significant Accounting Policies (Continued)
Medium term loans provide customers with cash, typically ranging from $.1 to $2.5 in exchange for a promissory note with a maturity between 112 days and 24 months. These loans vary in their structure as the result of the regulatory environments in the states where they are offered. The loans are due in installments or provide for a line of credit with periodic monthly payments. In certain instances the Company also purchases loan participations in a third party lenders loan portfolio which are classified as medium-term finance receivables.
Title loan products provide customers with cash, typically ranging in size from $.75 to $2.5, in exchange for a promissory note with a maturity between 30 days and 24 months. The loan is secured with a lien on the customers vehicle title. The risk characteristics of secured loans primarily depend on the markets in which the Company operates and the regulatory requirements of each market. Risks associated with secured financings relate to the ability of the borrower to repay its loans and the value of the collateral underlying the loan should the borrower default on its payments.
Allowance for loan losses: Provisions for loan losses are charged to income in amounts sufficient to cover estimated losses in the loan portfolio. The factors used in assessing the overall adequacy of the allowance and the resulting provision for loan losses for finance receivables include an evaluation by product by market based on historical loan loss experience, overall portfolio quality, current economic conditions that may affect the borrowers ability to pay and managements judgement. While management uses the best information available to make its evaluation, future adjustments to the allowance may be necessary if there are significant changes in economic conditions.
For short term consumer loans, accounts are charged off when they become past due. The Companys policy dictates that, where a customer has provided a check for presentment upon the maturity of a loan, if the customer has not paid off the loan by the due date, the Company will deposit the customers check or draft the customers bank account for the amount due. If the check or draft is returned as uncollected, then all accrued fees and outstanding principal are charged-off as uncollectible.
For medium term loans which have a term of one year or less, the Companys policy requires that balances be charged off when accounts are 60 days past due on a contractual basis. For medium term loans which have an initial maturity of greater than one year, the Companys policy requires that balances be charged off when accounts are 90 days past due on a contractual basis.
For title loans which are 30 days in duration, the Companys policy requires that balances be charged off when accounts are 30 days past due on a contractual basis. For title loans which have terms ranging from 60 days to 1 year, the Companys policy dictates that balances be charged off when accounts are 60 days past due on a contractual basis. For title loans which have terms of greater than 1 year, the Companys policy requires that balances be charged off when accounts are 90 days past due on a contractual basis. The Company charges off 24 month installment loans when they are 90 days past due.
Recoveries of amounts previously charged off are recorded as income in the period in which they are received.
During 2011, the Company introduced additional medium-term loan products which resulted in a higher proportion of medium-term products in the Companys overall loan portfolio. Effective December 31, 2011, the Company modified its charge-off policies to align the policy with the
Community Choice Financial Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 1. Ownership, Nature of Business, and Significant Accounting Policies (Continued)
contractual terms of certain title loans and medium-term consumer loans. Prior to this date, all loans were charged-off when the loan became contractually past due. Based on additional information and analysis of current customer payment trends, management determined that the likelihood of receiving payment from a customer greatly diminishes when no payment has been received for 30 days on loans with a term of 30 days, 60 days on loans with a term of 60 days to 12 months, and 90 days for loans with terms greater than 12 months. Loans may be charged off earlier than the Companys policy based upon managements review of information for each delinquent or impaired loan. Loan participations are charged off after they become 30 days past due on a contractual basis.
In some instances, the Company may have debt-buying arrangements with third-party lenders. The Company accrues for this obligation through managements estimation of anticipated purchases based on expected losses in the lenders portfolio. This obligation is recorded as a current liability on the Companys consolidated balance sheet.
Goodwill and other intangibles: Goodwill, or cost in excess of fair value of net assets of the companies acquired, is recorded at its carrying value and is periodically evaluated for impairment. The Company tests the carrying value of goodwill and other intangible assets annually as of December 31 or when the events and circumstances warrant such a review. One of the methods for this review is performed using estimates of future cash flows. If the carrying value of goodwill or other intangible assets is considered impaired, an impairment charge is recorded for the amount by which the carrying value of the goodwill or intangible assets exceeds its fair value. Based upon the annual impairment testing performed by the Company, management has determined that goodwill is not impaired. Changes in estimates of cash flows and fair value, however, could affect the evaluation.
The Companys other intangible assets consists of non-compete agreements, customer lists and trade names. The amounts recorded for non-compete agreements, customer lists and trade names are amortized using the straight-line method over 5 years. Amortization expense for the three months ended March 31, 2012 and 2011 were $424 and $106, respectively.
Equity Method of Accounting of Investment in Latin Card Strategy and Insight Holding Company: The Company has an equity investment in Latin Card Strategy, LLC (Latin Card). Prior to May 2011, the Company had consolidated Latin Card based on a 57% ownership interest in Latin Card. In May 2011, the Companys membership units were reduced to 49% based on members arrangement and Latin Card was deconsolidated. The Company, effective May 2011, recorded an investment in Latin Card under the equity method of accounting. As of March 31, 2012, the Companys membership units were reduced to 39% based on the members agreement.
The Company also has an equity investment in Insight Holding Company, LLC (the parent company of the program manager for the prepaid card offered through CCFIs subsidiaries Insight Holdings). The Company has recorded the 22.5% investment in Insight Holdings under the equity method of accounting effective November 2011.
Investee companies that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity method of accounting in accordance with ASC 323-10. Whether or not the Company exercises significant influence with respect to an investee depends on an evaluation of several factors, including representation on the investee companys board of directors and
Community Choice Financial Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 1. Ownership, Nature of Business, and Significant Accounting Policies (Continued)
ownership level, which is generally a 20% to 50% interest in the voting securities of the investee company. Under the equity method of accounting, an investee companys accounts are not reflected within the Companys consolidated balance sheets and statements of income; however, the Companys share of the earnings or losses of the investee company is reflected in the caption Income of equity method investees in the consolidated statements of income. The Companys carrying value in an equity method Investee company is reflected in the caption Equity method investments in the Companys consolidated balance sheets.
Impairment of long-lived assets: The Company evaluates all long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. Impairment is recognized when the carrying amount of these assets cannot be recovered by the undiscounted net cash flows they will generate.
Income taxes: Deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. Income tax expense represents the tax obligations and the change in deferred tax assets and liabilities.
The Company has adopted the accounting standard on accounting for uncertainty in income taxes, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under this guidance, the Company may recognize the tax benefit from an uncertain tax position only if it is more-likely-than-not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has greater than 50% likelihood of being realized upon ultimate settlement. The guidance on accounting for uncertainty in income taxes also addresses de-recognition, classification, interest and penalties on income taxes, and accounting in interim periods. Interest and penalties on income taxes will be charged to income tax expense.
Transaction Expenses: Transaction expenses consist of costs directly associated with acquisitions, which are primarily bonus earnings, transaction advisory fees paid to the majority shareholder, and professional services, which are included in the non-branch expenses section on the consolidated statements of income.
Additionally, the Company has deferred legal and other transaction expenses related to a planned initial public offering (IPO) with the expectation that such expenses will be accounted for as a reduction of capital paid in excess of par. These deferred expenses totaling $2,005 at March 31, 2012 are included in other current assets on the consolidated balance sheet. Should the IPO not occur, these deferred expenses will be charged to income.
Governmental regulation: The Company is subject to various state and federal laws and regulations, which are subject to change and which may impose significant costs or limitations on the way the Company conducts or expands its business. Certain limitations include among other things
Community Choice Financial Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 1. Ownership, Nature of Business, and Significant Accounting Policies (Continued)
imposed limits on fee rates and other charges, the number of loans to a customer, a cooling off period, the number of permitted rollovers and required licensing and qualification.
Although states provide the primary regulatory framework under which the Company offers payday cash advance services and consumer loans, certain federal laws also impact the business. The Companys payday cash advance services and consumer loans are subject to federal laws and regulations, including the Truth-in-Lending Act (TILA), the Equal Credit Opportunity Act (ECOA), the Fair Credit Reporting Act (FCRA), the Fair Debt Collection Practices Act (FDCPA), the Gramm-Leach-Bliley Act (GLBA), the Bank Secrecy Act, the Money Laundering Control Act of 1986, the Money Laundering Suppression Act of 1994, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (the PATRIOT Act), and the regulations promulgated for each. Among other things, these laws require disclosure of the principal terms of each transaction to every customer, prohibit misleading advertising, protect against discriminatory lending practices, proscribe unfair credit practices and prohibit creditors from discriminating against credit applicants on the basis of race, sex, age or marital status. The GLBA and its implementing regulations generally require the Company to protect the confidentiality of its customers nonpublic personal information and to disclose to the Companys customers its privacy policy and practices.
At the federal level, in July 2010, the Dodd-Frank Act was signed into law. Among other things, this act created the Consumer Financial Protection Bureau CFPB which will have authority to regulate companies that provide consumer financial services. The CFPB became operative in July of 2011. On January 4, 2012, President Obama appointed Richard Cordray as Director of the Consumer Financial Protection Bureau. With this appointment, the CFPB now has the power and authority to oversee non-bank financial institutions as was provided for in the Dodd-Frank Act.
Fair value of financial instruments: Financial assets and liabilities measured at fair value are grouped in three levels. The levels prioritize the inputs used to measure the fair value of the assets or liabilities. These levels are:
· Level 1Quoted prices (unadjusted) in active markets for identical assets or liabilities.
· Level 2Inputs other than quoted prices that are observable for assets and liabilities, either directly or indirectly. These inputs include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are less attractive.
· Level 3Unobservable inputs for assets and liabilities reflecting the reporting entitys own assumptions.
The Company follows the provisions of ASC 820-10 which applies to all assets and liabilities that are being measured and reported on a fair value basis. ASC 820-10 requires disclosure that establishes a framework for measuring fair value within generally accepted accounting principles and expands disclosure about fair value measurements. This standard enables a reader of consolidated financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The standard
Community Choice Financial Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 1. Ownership, Nature of Business, and Significant Accounting Policies (Continued)
requires that assets and liabilities carried at fair value be classified and disclosed in one of the three categories.
In determining the appropriate levels, the Company performed a detailed analysis of the assets and liabilities that are subject to ASC 820-10. At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs are classified as Level 3.
The Companys financial instruments consist primarily of cash and cash equivalents, finance receivables, accounts payable, and notes payable. For all such instruments, other than the notes payable at March 31, 2012 and December 31, 2011, the carrying amounts in the Consolidated Financial Statements approximate their fair values. The Companys finance receivables are short term in nature and originated at prevailing market rates.
The fair value of the notes payable at March 31, 2012 and December 31, 2011 is determined based on the market yield on trades of the notes at the end of that reporting period. The estimated fair values of the Companys financial instruments are as follows:
|
|
March 31, 2012 |
|
December 31, 2011 |
| ||||||||
|
|
Carrying |
|
Fair |
|
Carrying |
|
Fair |
| ||||
Financial assets: |
|
|
|
|
|
|
|
|
| ||||
Level 2 inputs: |
|
|
|
|
|
|
|
|
| ||||
Cash and cash equivalents |
|
$ |
107,399 |
|
$ |
107,399 |
|
$ |
65,635 |
|
$ |
65,635 |
|
Finance receivables |
|
93,213 |
|
93,213 |
|
120,451 |
|
120,451 |
| ||||
Short-term investments, certificates of deposit |
|
1,110 |
|
1,110 |
|
1,110 |
|
1,110 |
| ||||
Financial liabilities: |
|
|
|
|
|
|
|
|
| ||||
Level 2 inputs: |
|
|
|
|
|
|
|
|
| ||||
Notes payable |
|
$ |
395,000 |
|
$ |
383,150 |
|
$ |
395,000 |
|
$ |
389,075 |
|
Accrued interest |
|
17,732 |
|
17,732 |
|
7,153 |
|
7,153 |
|
Recent Accounting Pronouncements: In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. This ASU establishes common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. GAAP and International Financial Reporting Standards (IFRS). This ASU is effective for fiscal years and interim periods beginning after December 15, 2011. The adoption of this guidance did not have a material impact on the Companys financial statements.
In September 2011, the FASB issued ASU No. 2011-08 IntangiblesGoodwill and Other (Topic 350): Testing Goodwill for Impairment. This ASU permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350. Under ASU 2011-08, the two-step goodwill impairment test is not required unless the more-likely-than-not threshold is met. For public entities, the amendments in ASU 2011-08 are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011, with early adoption permitted. The adoption of this guidance did not have a material impact on the Companys financial statements.
Subsequent events: The Company has evaluated its subsequent events (events occurring after March 31, 2012) through May 14, 2012, which represents the date the financial statements were issued and through June 22, 2012 for subsequent events disclosed in Note 15.
Community Choice Financial Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 2. Finance Receivables, Credit Quality Information and Allowance for Loan Losses
Finance receivables represent amounts due from customers for advances at March 31, 2012 and December 31, 2011 consisted of the following:
|
|
March |
|
December |
| ||
Short-term consumer loans |
|
$ |
69,144 |
|
$ |
91,460 |
|
Medium-term loans |
|
15,788 |
|
19,044 |
| ||
Title loans |
|
17,297 |
|
20,800 |
| ||
Gross receivables |
|
102,229 |
|
131,304 |
| ||
Unearned advance fees, net of deferred loan origination costs |
|
(4,003 |
) |
(5,227 |
) | ||
Finance receivables before allowance for loan losses |
|
98,226 |
|
126,077 |
| ||
Allowance for loan losses |
|
(5,013 |
) |
(5,626 |
) | ||
Finance receivables, net |
|
$ |
93,213 |
|
$ |
120,451 |
|
Changes in the allowance for the loan losses by product type for the three months ended March 31, 2012 are as follows:
|
|
Balance |
|
Provision |
|
Charge-Offs |
|
Recoveries |
|
Balance |
|
Finance |
|
Allowance as |
| ||||||
Short-term consumer loans |
|
$ |
2,504 |
|
$ |
7,052 |
|
$ |
(25,210 |
) |
$ |
17,574 |
|
$ |
1,920 |
|
$ |
69,144 |
|
2.78 |
% |
Medium-term loans |
|
2,018 |
|
3,051 |
|
(4,092 |
) |
1,118 |
|
2,095 |
|
15,788 |
|
13.27 |
% | ||||||
Title loans |
|
1,104 |
|
1,241 |
|
(2,947 |
) |
1,600 |
|
998 |
|
17,297 |
|
5.77 |
% | ||||||
|
|
$ |
5,626 |
|
$ |
11,344 |
|
$ |
(32,249 |
) |
$ |
20,292 |
|
$ |
5,013 |
|
$ |
102,229 |
|
4.90 |
% |
The provision for loan losses for the three months ended March 31, 2012 also includes card losses of $57, losses on tax loans of $314, and losses from returned items from check cashing of $1,002.
Changes in the allowance for the loan losses by product type for the three months ended March 31, 2011 are as follows:
|
|
Balance |
|
Provision |
|
Charge-Offs |
|
Recoveries |
|
Balance |
|
Finance |
|
Allowance as |
| ||||||
Short-term consumer loans |
|
$ |
1,746 |
|
$ |
4,775 |
|
$ |
(18,966 |
) |
$ |
14,818 |
|
$ |
2,373 |
|
$ |
55,781 |
|
4.25 |
% |
Medium-term loans |
|
987 |
|
1,245 |
|
(2,379 |
) |
863 |
|
716 |
|
9,015 |
|
7.94 |
% | ||||||
Title loans |
|
624 |
|
805 |
|
(1,650 |
) |
899 |
|
678 |
|
9,709 |
|
6.98 |
% | ||||||
|
|
$ |
3,357 |
|
$ |
6,825 |
|
$ |
(22,995 |
) |
$ |
16,580 |
|
$ |
3,767 |
|
$ |
74,505 |
|
5.06 |
% |
The provision for losses for the three months ended March 31, 2011 also includes card losses of $28, losses on tax loans of $458, and losses from returned items from check cashing of $742.
Community Choice Financial Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 2. Finance Receivables, Credit Quality Information and Allowance for Loan Losses (Continued)
Changes in the accrual for third-party lender losses for the three months ended March 31, 2012 and 2011 were as follows:
|
|
Three Months |
| ||||
|
|
2012 |
|
2011 |
| ||
Balance, beginning of period |
|
$ |
157 |
|
$ |
110 |
|
Provision for loan losses |
|
620 |
|
355 |
| ||
Charge-offs, net |
|
(630 |
) |
(380 |
) | ||
Balance, end of period |
|
$ |
147 |
|
$ |
85 |
|
The Company considers the near term repayment performance of finance receivables as its primary credit quality indicator. The Company typically does not perform credit checks through consumer reporting agencies. If a third-party lender provides the advance, the applicable third-party lender decides whether to approve the cash advance and establishes all of the underwriting criteria and terms, conditions, and features of the customer agreements.
The aging of receivables at March 31, 2012 and December 31, 2011 are as follows (in thousands):
|
|
March 31, 2012 |
|
December 31, 2011 |
| ||||||
Current finance receivables |
|
$ |
98,623 |
|
96.5 |
% |
$ |
126,814 |
|
96.6 |
% |
Past due finance receivables (1 - 30 days): |
|
|
|
|
|
|
|
|
| ||
Short-term consumer loans |
|
156 |
|
0.1 |
% |
293 |
|
0.2 |
% | ||
Medium-term loans |
|
1,237 |
|
1.2 |
% |
1,481 |
|
1.1 |
% | ||
Title loans |
|
1,417 |
|
1.4 |
% |
1,897 |
|
1.4 |
% | ||
Total past due finance receivables (1 - 30 days) |
|
2,810 |
|
2.7 |
% |
3,671 |
|
2.8 |
% | ||
Past due finance receivables (31 - 60 days): |
|
|
|
|
|
|
|
|
| ||
Short-term consumer loans |
|
|
|
|
|
|
|
|
| ||
Medium-term loans |
|
273 |
|
0.3 |
% |
289 |
|
0.2 |
% | ||
Title loans |
|
237 |
|
0.2 |
% |
395 |
|
0.3 |
% | ||
Total past due finance receivables (31 - 60 days) |
|
510 |
|
0.5 |
% |
684 |
|
0.5 |
% | ||
Past due finance receivables (61 - 90 days): |
|
|
|
|
|
|
|
|
| ||
Short-term consumer loans |
|
|
|
|
|
|
|
|
| ||
Medium-term loans |
|
228 |
|
0.2 |
% |
52 |
|
0.0 |
% | ||
Title loans |
|
58 |
|
0.1 |
% |
83 |
|
0.1 |
% | ||
Total past due finance receivables (61 - 90 days) |
|
286 |
|
0.3 |
% |
135 |
|
0.1 |
% | ||
Total delinquent |
|
3,606 |
|
3.5 |
% |
4,490 |
|
3.4 |
% | ||
|
|
$ |
102,229 |
|
100.0 |
% |
$ |
131,304 |
|
100.0 |
% |
Community Choice Financial Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 3. Related Party Transactions and Balances
On May 1, 2006, the Company entered into an Advisory Services and Monitoring Agreement with an affiliate of the majority stockholder. A quarterly fee is paid in consideration for ongoing management and other advisory services provided to the Company and its subsidiaries in the greater amount of a) $150 or b) 25% multiplied by 1.5% of the EBITDA for the previous twelve-month period. This agreement was amended to include total fees paid pursuant to this agreement for the three months ended March 31, 2012 and 2011 totaling $363 and $259, respectively, and are included with corporate expenses on the consolidated statement of income.
The Company has a management agreement with a related party in which the Company receives management fee revenue on a monthly basis for providing certain accounting functions to these parties. For the three months ended March 31, 2012 and 2011, management fee revenue from related parties totaled $11 and are included as nonoperating income, related party management fees on the consolidated statement of income. The Companys payroll department provides payroll administration for a related party and the related company is charged actual costs for payroll services.
At March 31, 2012 and December 31, 2011, the Company had $8 and $0, respectively, recorded as receivables from stockholders and other related parties and is included with other current assets on the Balance Sheet.
The Companys senior management has access to an aircraft owned by a related party. The Company rents the aircraft from this related party and all personal use of the aircraft is reimbursed to the Company. Total rent paid to this related party for usage of the aircraft totaled $27 and $32 for the three months ended March 31, 2012 and 2011, respectively, and are included with corporate expenses on the consolidated statement of income.
The corporate office and certain retail stores of the Company are leased from related parties. Rent paid to the related parties was $458 and $455 for the three months ended March 31, 2012 and 2011, respectively, and are included with occupancy expense on the consolidated statement of income.
Members of management had a noncontrolling, minority interest in a card program managing company until November 2011 when the Company purchased a 22.5% interest in Insight Holdings. The interest was purchased from the owners of Insight Holdings, two of which are management of the Company. The total purchase price of the 22.5% was $11,250, of which $7,500 was purchased directly from the members of management of the Company. As of March 31, 2012 and December 31, 2011, the Company, as an agent for the card program managing company had made net prepayments of $14,442 and $12,910, respectively, to the card program managing company for various items related to a product offering of the Company. These prepayments are included as card related pre-funding and receivables on the consolidated balance sheet. As additional consideration to Insight Holdings, the Company agreed to make available to Insight Holdings a revolving credit facility of $3,000.
On December 31, 2008 the Company entered into a $5,000 line of credit with a related party. The interest associated with the line of credit was 20% and matured in February 2011. Interest expense and unused line fees recognized on this borrowing totaled $-0- and $25 for the three months ended March 31, 2012 and 2011, respectively, and are included with net interest expense on the consolidated statement of income.
Community Choice Financial Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 4. Goodwill and Other Intangible Assets
The following table summarizes goodwill and other intangible assets as of March 31, 2012 and December 31, 2011:
|
|
March 31, |
|
December 31, |
| ||
Goodwill |
|
$ |
255,433 |
|
$ |
255,953 |
|
Other intangible assets: |
|
|
|
|
| ||
Non-compete agreements |
|
$ |
975 |
|
$ |
1,260 |
|
Trade names |
|
1,977 |
|
2,102 |
| ||
Customer lists |
|
212 |
|
226 |
| ||
|
|
$ |
3,164 |
|
$ |
3,588 |
|
The Company conducted its annual test for impairment of goodwill as of December 31, 2011 which resulted in no impairment of goodwill. The methodology for determining the fair value was a combination of quoted market prices, prices of comparable businesses, discounted cash flows and other valuation techniques.
The amount of tax goodwill at the acquisition date of the Company in 2006 exceeded the reported amount of goodwill for financial statement reporting purposes by approximately $50,965. The total estimated effect of the tax benefit attributable to tax goodwill in excess of the amount reported in these financial statements was approximately $31,237 which will reduce financial statement goodwill each year as the tax benefits are recognized. This benefit will be recognized over a 15-year period from the date of acquisition by recording deferred income tax expense and reducing the carrying amount of goodwill as those tax benefits occur. The tax benefit for each of the three months ended March 31, 2012 and 2011 was $521. The effect of the tax benefits for each subsequent quarter is expected to be $521 and will result in future reductions to the carrying amount of goodwill.
The amount of book goodwill at the acquisition date of CCCS exceeded the amount of tax goodwill by approximately $46,907. Differences arising for tax deductible goodwill will result in recognition of deferred tax liabilities.
Note 5. Pledged Assets and Notes Payable
Notes payable and credit lines at March 31, 2012 and December 31, 2011 consisted of the following:
|
|
March 31, |
|
December 31, |
| ||
$7,000 Revolving credit, secured, prime plus 1.00% with 5.00% floor, due July 2013, collateralized by all of Insight Capital, LLCs assets |
|
$ |
|
|
$ |
|
|
$40,000 Revolving credit, secured, interest rate as defined below, collateralized by all Company assets |
|
|
|
|
| ||
$395,000 Senior Secured Notes, 10.75%, collateralized by all Company assets, semi-annual interest payments with with principal due April 2019 |
|
395,000 |
|
395,000 |
| ||
|
|
395,000 |
|
395,000 |
| ||
Less current maturities |
|
|
|
|
| ||
Long-term portion |
|
$ |
395,000 |
|
$ |
395,000 |
|
Community Choice Financial Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 5. Pledged Assets and Notes Payable (Continued)
The 4-year, $40,000 revolving credit facility, at the Companys option, bears interest at either (a) LIBOR plus a margin of 5% or (b) an alternative base rate (determined as the greatest of the prime rate, the federal funds effective rate plus 0.5% or 1-month LIBOR plus 1%) plus a margin of 4%, and will mature on April 29, 2015. The Company selected the alternate base rate option for advances under this credit facility during 2011 and 2012.
The 3-month LIBOR rate at March 31, 2012 and December 31, 2011 was 0.58% and 0.53%, respectively, and the prime rate was 3.25% at March 31, 2012 and December 31, 2011.
Note 6. Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities at March 31, 2012 and December 31, 2011 consisted of the following:
|
|
March 31, |
|
December 31, |
| ||
Accounts payable |
|
$ |
78 |
|
$ |
808 |
|
Accrued payroll and benefits |
|
3,048 |
|
4,175 |
| ||
Compensated absences |
|
1,515 |
|
1,042 |
| ||
Wire transfers payable |
|
3,783 |
|
3,848 |
| ||
Accrual for third-party losses |
|
147 |
|
157 |
| ||
Income taxes payable |
|
2,735 |
|
1,908 |
| ||
Other |
|
6,560 |
|
8,536 |
| ||
|
|
$ |
17,866 |
|
$ |
20,474 |
|
Note 7. Concentrations of Credit Risks
The Companys portfolio of finance receivables is with customers living in fourteen states and consequently such customers ability to honor their contracts may be affected by economic conditions in these areas. Additionally, the Company is subject to regulation by federal and state governments that affect the products and services provided by the Company. The Companys financial position could be adversely affected to the extent that laws and regulations are passed that affect the Companys ability to offer loans or similar products in any of the states in which it operates.
Community Choice Financial Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 7. Concentrations of Credit Risks (Continued)
The following table summarizes the allocation of the portfolio balance by state at March 31, 2012 and December 31, 2011:
|
|
March 31, 2012 |
|
December 31, 2011 |
| ||||||
State |
|
Balance |
|
Percentage of |
|
Balance |
|
Percentage of |
| ||
Alabama |
|
$ |
9,280 |
|
9.1 |
% |
$ |
11,865 |
|
9.0 |
% |
Arizona |
|
9,626 |
|
9.4 |
|
13,226 |
|
10.1 |
| ||
California |
|
23,782 |
|
23.3 |
|
28,404 |
|
21.6 |
| ||
Florida |
|
1,483 |
|
1.5 |
|
2,027 |
|
1.5 |
| ||
Illinois |
|
2,006 |
|
2.0 |
|
2,707 |
|
2.1 |
| ||
Indiana |
|
3,547 |
|
3.5 |
|
5,149 |
|
3.9 |
| ||
Kansas |
|
1,450 |
|
1.4 |
|
1,789 |
|
1.4 |
| ||
Kentucky |
|
2,215 |
|
2.2 |
|
3,019 |
|
2.3 |
| ||
Michigan |
|
2,748 |
|
2.7 |
|
3,395 |
|
2.6 |
| ||
Missouri |
|
1,570 |
|
1.5 |
|
1,867 |
|
1.4 |
| ||
Ohio |
|
32,946 |
|
32.1 |
|
43,434 |
|
33.1 |
| ||
Oregon |
|
750 |
|
0.7 |
|
1,029 |
|
0.8 |
| ||
Utah |
|
2,832 |
|
2.8 |
|
4,204 |
|
3.2 |
| ||
Virginia |
|
7,994 |
|
7.8 |
|
9,189 |
|
7.0 |
| ||
Total |
|
$ |
102,229 |
|
100.0 |
% |
$ |
131,304 |
|
100.0 |
% |
Note 8. Contingencies
From time-to-time the Company is a defendant in various lawsuits and administrative proceedings wherein certain amounts are claimed or violations of law or regulations are asserted. In the opinion of the Companys management, these claims are without substantial merit and should not result in judgments which in the aggregate would have a material adverse effect on the Companys consolidated financial statements.
Note 9. Business Combinations
In April 2011, Community Choice Financial Inc., a newly formed holding company and CheckSmart Financial Holdings Corp., together with CCCS Corporate Holdings, Inc. and CCCS Holdings, LLC entities located in the western United States and certain other parties, executed an Agreement and Plan of Merger pursuant to which CCFI acquired all outstanding shares of both CheckSmart Financial Holdings Corp. and CCCS. The Combination was structured as a stock-for-stock transaction, in which the equity holders of CheckSmart and CCCS agreed to contribute the equity of the separate companies to CCFI in exchange for shares of the combined company. As a result of the transaction, the former equity holders of CheckSmart Financial Holdings Corp. and CCCS own approximately 77% and 23% of CCFI, respectively.
Community Choice Financial Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 9. Business Combinations (Continued)
In connection with the above transaction, Community Choice Financial Inc. issued $395,000 10.75% senior secured notes due 2019. The notes have an interest rate of 10.75% payable semi-annually and will mature on May 1, 2019. The proceeds were used to refinance existing debt, pay fees and expenses, and to finance a special dividend to shareholders and bonuses to management. The special dividend included $120,566 paid to its shareholders and the amount of management bonuses was $4,400.
In April 2011, the Company also entered into a 4-year, $40,000 revolving credit facility concurrent with the notes offering. The revolving credit facility, at the Companys option, bears interest at either (a) LIBOR plus a margin of 5% or (b) and alternative base rate (determined as the greatest of the prime rate, the federal funds effective rate plus 0.5% of 1-month LIBOR plus 1%) plus a margin of 4% and will mature on April 29, 2015.
Also concurrent with the notes offering, Insight Capital, LLC, a Company subsidiary, entered into a $7,000 revolving credit facility. The facility expires July 31, 2013 and is collateralized by all of Insights assets. The interest rate is prime plus 1%.
Transaction expenses incurred include both direct and indirect costs associated with merger and acquisition costs.
All assets of the Company are pledged as collateral on the senior secured notes and primary revolving credit facility. The agreements contain various restrictions, including maintaining certain financial ratios and certain other restrictions.
The fair value of the 1,842,000 shares issued as consideration paid for CCCS was determined based on a combination of the income approach, using a discounted cash flow model, and a market approach, which considers comparable companies and transactions. Under the income approach, the discounted cash flow model determines fair value based on the present value of estimated future cash flows over a specific projection period and a residual value related to future cash flows beyond the projection period. Both values are discounted using a rate which reflects the Companys best estimate of the weighted average cost of capital of a market participant, and is adjusted for appropriate risk factors. Under the market approach, valuation multiples are derived based on a selection of comparable companies and acquisition transactions, and applied to projected operating data to arrive at an indication of fair value.
Community Choice Financial Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 9. Business Combinations (Continued)
The following table summarizes the estimated fair value of assets acquired and liabilities assumed at the date of acquisition. The recognized amount of identifiable assets acquired and liabilities assumed have been adjusted for year-end adjustments to the acquired companys opening balance sheet.
Fair value of total consideration transferred |
|
$ |
55,192 |
|
Acquisition-related costs |
|
$ |
3,530 |
|
|
|
|
| |
Recognized amounts of identifiable assets acquired and liabilities assumed |
|
|
| |
Cash and cash equivalents |
|
$ |
22,892 |
|
Finance receivables |
|
13,660 |
| |
Prepaid expenses and other assets |
|
1,480 |
| |
Leasehold improvements and equipment |
|
7,161 |
| |
Identifiable intangible assets |
|
2,948 |
| |
Note payable |
|
(73,923 |
) | |
Other liabilities |
|
(20,654 |
) | |
Total indentifiable net assets |
|
(46,436 |
) | |
Goodwill |
|
101,628 |
| |
|
|
$ |
55,192 |
|
On March 21, 2011, the Company acquired ten loan stores in Illinois in an asset purchase. The purchase price was $19,725 in cash consideration. The purchase price was negotiated based upon a multiple of prior financial results and perceived opportunities. The results of operations have been included in the consolidated financial statements since the date of the acquisition. The following table summarizes the estimated fair value of assets acquired at the date of acquisition. The recognized amount of identifiable assets acquired and liabilities assumed have been adjusted to reflect year-end adjustments to the acquired companys opening balance sheet.
Fair value of total consideration transferred, cash |
|
$ |
19,725 |
|
Acquisition-related costs |
|
$ |
85 |
|
|
|
|
| |
Recognized amounts of identifiable assets acquired |
|
|
| |
Finance receivables |
|
$ |
1,912 |
|
Security deposits and other current assets |
|
30 |
| |
Leasehold improvements and equipment |
|
74 |
| |
Identifiable intangible assets |
|
265 |
| |
Total indentifiable net assets |
|
2,281 |
| |
Goodwill |
|
17,444 |
| |
|
|
$ |
19,725 |
|
Community Choice Financial Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 9. Business Combinations (Continued)
The unaudited pro forma revenue and earnings for the three months ended March 31, 2011 presented below is based upon combined financial statements of the acquisitions above and does not reflect any operating efficiencies or cost savings from the integration of these assets into our business.
|
|
Three Months |
| |
Total revenue |
|
$ |
79,583 |
|
Net income |
|
$ |
(5,416 |
) |
Note 10. Stock-Based Compensation
On May 1, 2006, the Company adopted the 2006 Management Equity Incentive Plan (the Plan) pursuant to which the Companys Board of Directors, or a duly-authorized committee thereof, may grant stock options, restricted stock, restricted stock units and stock appreciation rights to employees and consultants of the Company or its subsidiaries. CCFI amended the plan to increase the number of shares and to convert the number of shares in the 2006 plan to the 2011 plan. Options that have been granted under the Plan have been granted at an exercise price equal to (or greater than) the stocks fair market value at the date of the grant, with terms of 10 years and vesting generally over four to five years or on the occurrence of a liquidity event. On April 19, 2011, CCFI adopted the Plan to be effective as of April 29, 2011. The maximum number of shares that may be subject to awards under the Plan is 2,941,746 as of March 31, 2012.
The Company recognizes compensation costs in the financial statements for all share-based payments granted on or after May 1, 2006 based on the grant date fair value estimated. No options were outstanding prior to May 1, 2006.
The Plan allows for awards based on time, performance and market conditions. Compensation expense for awards based on time is expensed on a straight-line basis over the service period. Compensation expense for performance awards is recognized using the graded vesting method. Compensation expense for market conditions such as those conditioned on either a liquidity event condition or a specified performance condition have not been recognized and will be recognized upon consummation of the relevant market condition. At March 31, 2012, there were a total of 1,329,618 additional shares available for grant under the Plan.
The fair value of the option award is estimated on the date of grant using a lattice-based option valuation model. Because lattice-based option valuation models incorporate ranges of assumptions for inputs, those ranges are disclosed. Expected volatilities are based on the historical volatility of the stock of comparable public companies. The Company uses historical data to estimate option exercise and employee termination within the valuation model; separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The expected term of options granted is derived from the output of the option valuation model and represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.
Community Choice Financial Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 10. Stock-Based Compensation (Continued)
On February 14, 2012, the Company authorized an increase to the maximum number of awards available under the 2011 Management Equity Incentive Plan to 2,941,746. The Company also issued 334,020 options with a per share exercise price of $19.95 and 35,130 restricted stock units. The options vest ratably over a three year period or become fully vested in the event of a change in control as defined in the award agreement. The restricted stock units vest after three years.
The following weighted average assumptions were used by the Company for options granted during the three months ended March 31, 2012:
Risk-free interest rate |
|
0.85 |
% | |
Dividend yield |
|
0.00 |
% | |
Expected volatility |
|
55.00 |
% | |
Expected term (years) |
|
5.00 |
| |
Weighted average fair value of options granted |
|
$ |
4.97 |
|
Weighted average fair value of restricted stock units granted |
|
$ |
13.51 |
|
For the three months ended March 31, 2012 and 2011, the Company recorded stock-based compensation costs in the amount of $82 and $26, respectively. As of March 31, 2012 and December 31, 2011, unrecognized stock-based compensation costs to be recognized over future periods approximated $3,710 and $3,095, respectively. At March 31, 2012, the remaining unrecognized compensation expense is comprised of stock appreciation rights and options that vest solely upon a change in control and options that vest either over the requisite service period or a change in control. These amounts are $1,664 and $2,046 respectively. The remaining weighted-average period can not be determined because they vest upon an event not within the Companys control. The remaining compensation expense of $2,046 is expected to be recognized over a weighted-average period of 3.0 years. The total income tax benefit recognized in the income statement for the stock-based compensation arrangements was $-0- for the three months ended March 31, 2012 and 2011.
Stock option activity for the three months ended March 31, 2012 is as follows (these amounts have not been rounded in thousands):
|
|
Shares |
|
Weighted-Average |
|
Weighted-Average |
|
Aggregate |
| ||
Outstanding at December 31, 2011 |
|
950,034 |
|
$ |
7.14 |
|
7.2 |
|
N/A |
| |
Granted |
|
334,020 |
|
19.95 |
|
9.9 |
|
N/A |
| ||
Exercised |
|
|
|
|
|
|
|
N/A |
| ||
Forfeited or expired |
|
|
|
|
|
|
|
N/A |
| ||
Outstanding at March 31, 2012 |
|
1,284,054 |
|
$ |
10.47 |
|
7.7 |
|
N/A |
| |
Exercisable at March 31, 2012 |
|
379,788 |
|
$ |
7.24 |
|
6.0 |
|
$ |
669 |
|
Vested or expected to vest at March 31, 2012 |
|
379,788 |
|
$ |
7.24 |
|
6.0 |
|
$ |
(2,987 |
) |
Community Choice Financial Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 10. Stock-Based Compensation (Continued)
Restricted stock unit (RSU) activity for the three months ended March 31, 2012 is as follows (these amounts have not been rounded into thousands):
|
|
Shares |
|
Weighted-Average |
|
Weighted-Average |
|
Aggregate |
| ||
Outstanding at December 31, 2011 |
|
|
|
$ |
|
|
|
|
N/A |
| |
Granted |
|
35,130 |
|
$ |
13.51 |
|
2.9 |
|
N/A |
| |
Exercised |
|
|
|
|
|
|
|
N/A |
| ||
Forfeited or expired |
|
|
|
|
|
|
|
N/A |
| ||
Outstanding at March 31, 2012 |
|
35,130 |
|
$ |
13.51 |
|
2.9 |
|
N/A |
| |
Exercisable at March 31, 2012 |
|
|
|
$ |
|
|
|
|
$ |
|
|
Vested or expected to vest at March 31, 2012 |
|
35,130 |
|
$ |
13.51 |
|
2.9 |
|
$ |
316 |
|
Stock appreciation rights activity for the three months ended March 31, 2012 is as follows (these amounts have not been rounded into thousands):
|
|
Shares |
|
Weighted-Average |
|
Weighted-Average |
|
Aggregate |
| ||
Outstanding at December 31, 2011 |
|
292,944 |
|
$ |
|
|
5.5 |
|
N/A |
| |
Granted |
|
|
|
|
|
|
|
N/A |
| ||
Exercised |
|
|
|
|
|
|
|
N/A |
| ||
Forfeited or expired |
|
|
|
|
|
|
|
N/A |
| ||
Outstanding at March 31, 2012 |
|
292,944 |
|
$ |
|
|
5.3 |
|
N/A |
| |
Exercisable at March 31, 2012 |
|
201,108 |
|
$ |
|
|
4.9 |
|
$ |
219 |
|
Vested or expected to vest at March 31, 2012 |
|
201,108 |
|
$ |
|
|
4.9 |
|
$ |
219 |
|
Note 11. Income Taxes
Community Choice Financial Inc. and Subsidiaries file a consolidated federal income tax return. The Company files consolidated or separate state income tax returns as permitted by the individual states in which it operates. The effective tax rate for the three months ended March 31, 2012 and 2011 exceeds the statutory rate primarily due to certain acquisition costs that are deductible for financial statement reporting purposes but not deductible for tax purposes. The Company had no liability recorded for unrecognized tax benefits at March 31, 2012 and December 31, 2011.
On August 1, 2011, the Company was advised that the Internal Revenue Service had completed the examination of the Companys federal income tax returns for 2008. The income tax assessment was not material to the Companys consolidated financial statements.
Community Choice Financial Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 12. Transactions with Variable Interest Entities
The Company has a debt-buying arrangement with the lender whereby it purchases defaulted accounts. The Company accrues for this obligation through managements estimation of anticipated purchases based on expected losses in the lenders portfolio. This obligation is recorded as a current liability on the Companys consolidated balance sheet. The accrual for these obligations totaled $147 and $157 as of March 31, 2012 and December 31, 2011, respectively. The Company has determined that the vendor is a VIE but that the Company is not the primary beneficiary of this VIE. Therefore, the Company has not consolidated the lender in 2012 or 2011.
The Company acquired a 22.5% membership interest of Insight Holdings in 2011. As additional consideration to Insight Holdings, the Company agreed to make available to Insight Holdings a revolving credit facility of $3,000. The Company has determined that Insight Holdings is a VIE but that the Company is not the primary beneficiary of this VIE, and therefore, has not consolidated Insight in 2011. The investment in Insight is accounted for under the equity method.
Note 13. Equity Method Investment
The Company is accounting for the investment in Insight Holdings Company, LLC, a 22.5% owned affiliate, by the equity method of accounting under which the Companys share of the net income of the affiliate is recognized as income in the Companys statement of income and added to the investment account, and dividends received from the affiliate are treated as a reduction of the investment account.
The Companys share of the earnings of Insight Holdings for the three months ended March 31, 2012 was $23. The carrying value of the Companys investment in Insight Holdings is $10,827 as of March 31, 2012. Amortization expense recognized on implied intangible assets associated with the investment in Insight Holdings Company LLC for the three months ended March 31, 2012 was $288.
The Companys share of the loss of Latin Card for the three months ended March 31, 2012 was $2. The carrying value of the Companys investment in Latin Card is $16 as of March 31, 2012.
Note 14. Supplemental Guarantor Information
The Senior Secured Notes due 2019 (the Notes) contain various covenants that, subject to certain exceptions defined in the indenture governing the notes (the Indenture), limit the Companys ability to, among other things, engage in certain transactions with affiliates, pay dividends or distributions, redeem or repurchase capital stock, incur or assume liens or additional debt, and consolidate or merge with or into another entity or sell substantially all of its assets. The Company has optional redemption features on the Notes prior to their maturity which depending on the date of the redemption would require premiums to be paid in addition to all principal and interest due.
The Notes are guaranteed by all of CCFIs restricted subsidiaries existing as of April 29, 2011 (the date CCFI issued the notes) and any subsequent restricted subsidiaries that guarantee CCFIs indebtedness or the indebtedness of any other subsidiary guarantor (the Subsidiary Guarantors), in accordance with the Indenture. CCFI is a holding company and has no independent assets or operations of its own. The guarantees under the Notes are full and unconditional and joint and several. There are no restrictions on the ability of CCFI or any of the Subsidiary Guarantors to obtain funds from its subsidiaries by dividend or loan, except for net worth requirements required by certain states in which the Company operates. Certain Subsidiary Guarantors are required to maintain net worth ranging from $5 to $1,000. The total net worth requirements of these Subsidiary Guarantors is $5.8 million. The Indenture contains certain affirmative and negative covenants applicable to CCFI and its Subsidiary Guarantors, including restrictions on their ability to incur additional indebtedness, consummate certain asset sales, make investments in entities that are not Restricted Subsidiaries (as defined in the Indenture), create liens on their assets, enter into certain affiliate transactions and make certain restricted payments, including restrictions on CCFIs ability to pay dividends on, or repurchase, its common stock.
As long as the $7,000 Alabama Revolving Credit Agreement remains outstanding, the Guarantee provided by our Alabama Subsidiary (the Alabama Guarantee), will be secured on a second-priority basis by the Shared Alabama Collateral; and provided further that any net proceeds resulting from realization upon the Collateral will be applied to repay the Designated Priority Obligations prior to any payments being made with respect to the Notes Obligations.
Note 15. Subsequent Events
On April 1, 2012, the Company acquired the equity interests, in the form of both membership units and stock of Direct Financial Solutions, LLC and its subsidiaries (DFS), as well as two other affiliated entities, Direct Financial Solutions of UK Limited and its subsidiary Cash Central UK Limited and DFS Direct Financial Solutions of Canada, Inc. and a related company, Reliant Software, Inc., which is owned by a relative of the sellers of DFS. The purchase price for the business was $22,000. Management is evaluating the purchase transaction and has not determined the allocation of the purchase price among the tangible and intangible assets.
In April 2012, the company determined to reprice the exercise price of the options and restricted stock units granted in February 2012, effective as of the date on which a public offering price for the Companys common shares (the IPO Price) for the Companys initial public offering (IPO) is determined by the Company (the Pricing Date). The new exercise price is contingent on the IPO being consummated within 10 business days after the Pricing Date and not later than December 31, 2012, so that the exercise price for these awards on or after the Pricing Date is the IPO Price.
Community Choice Financial Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements (Continued)
(Dollars in thousands, except per share data)
Note 15. Subsequent Events (Continued)
On April 22, 2012, the Company entered into an Asset Purchase Agreement in which the Company agreed to acquire the assets of a retail consumer finance operator in the state of Florida. The purchase price is $45,500, which is subject to certain price adjustments not yet determined. The purchase was contingent on the completion of our initial public offering (IPO) by June 15, 2012. As discussed below, we suspended the IPO on May 7, 2012, and the purchase agreement terminated when the IPO was not completed by June 15, 2012.
The Companys board of directors and stockholders approved an amended and restated certificate of incorporation that will affect a six-for-one stock split of all the outstanding shares of common stock. On May 4, 2012, the Company amended and restated its certificate of incorporation to provide that the authorized capital stock will consist of 300,000 shares of common stock at $0.01 par value per share. Accordingly, all common share and per common share amounts for all periods presented in these consolidated financial statements and notes thereto, have been adjusted retroactively, where applicable, to reflect this stock split.
On May 7, 2012, the Company decided to not pursue the IPO due to market conditions and has since delisted. The total amount of fees incurred is approximately $2.3 million, and the Company expects to expense these fees in the second quarter of 2012.
|
|
McGladrey&Pullen, LLP |
|
|
Certified Public Accountants |
To the Board of Directors
CCCS Corporate Holdings, Inc.
Oakland, California
We have audited the accompanying consolidated balance sheets of CCCS Corporate Holdings, Inc. and Subsidiaries (the Company) as of December 31, 2010 and 2009, and the related consolidated statements of income, stockholders equity and cash flows for each of the three years in the period ended December 31, 2010. These consolidated financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of CCCS Corporate Holdings, Inc. and Subsidiaries as of December 31, 2010 and 2009, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2010, in conformity with accounting principles generally accepted in the United States of America.
/s/ McGladrey & Pullen, LLP
Chicago, Illinois
August 22, 2011
CCCS Corporate Holdings, Inc. and Subsidiaries
December 31, 2010 and 2009
(In thousands)
|
|
2010 |
|
2009 |
| ||
Assets |
|
|
|
|
| ||
Current assets |
|
|
|
|
| ||
Cash |
|
$ |
26,125 |
|
$ |
33,655 |
|
Advances and fees receivable, net |
|
14,416 |
|
12,230 |
| ||
Deferred income taxes |
|
724 |
|
642 |
| ||
Other current assets |
|
1,176 |
|
974 |
| ||
Total current assets |
|
42,441 |
|
47,501 |
| ||
Leasehold improvements and equipment, net |
|
7,363 |
|
5,672 |
| ||
Other assets |
|
|
|
|
| ||
Goodwill |
|
115,332 |
|
114,618 |
| ||
Other intangibles, net |
|
10,923 |
|
12,563 |
| ||
Other assets |
|
3,018 |
|
2,410 |
| ||
|
|
129,273 |
|
129,591 |
| ||
Total assets |
|
$ |
179,077 |
|
$ |
182,764 |
|
Liabilities and Stockholders Equity |
|
|
|
|
| ||
Current liabilities |
|
|
|
|
| ||
Current portion of long-term debt |
|
$ |
10,800 |
|
$ |
2,000 |
|
Accounts payable, accrued expenses and other payables |
|
9,552 |
|
13,385 |
| ||
Current portion of deferred revenue |
|
1,125 |
|
1,125 |
| ||
Total current liabilities |
|
21,477 |
|
16,510 |
| ||
Long-term liabilities |
|
|
|
|
| ||
Long-term debt, net of current portion |
|
69,223 |
|
86,023 |
| ||
Deferred rent |
|
631 |
|
520 |
| ||
Deferred revenue, net of current portion |
|
3,625 |
|
4,750 |
| ||
Deferred income taxes |
|
13,129 |
|
11,285 |
| ||
|
|
86,608 |
|
102,578 |
| ||
Total liabilities |
|
108,085 |
|
119,088 |
| ||
Commitments and contingencies |
|
|
|
|
| ||
Stockholders Equity |
|
|
|
|
| ||
Common Stock (par value $.01, 1,000 shares authorized, issued and outstanding in 2010 and 2009) |
|
|
|
|
| ||
Additional paid-in capital |
|
27,316 |
|
27,316 |
| ||
Retained earnings |
|
15,255 |
|
9,777 |
| ||
Accumulated other comprehensive income |
|
66 |
|
169 |
| ||
Total CCCS Corporate Holdings, Inc. stockholders equity |
|
42,637 |
|
37,262 |
| ||
Non-controlling interests |
|
28,355 |
|
26,414 |
| ||
Total equity |
|
70,992 |
|
63,676 |
| ||
Total liabilities and stockholders equity |
|
$ |
179,077 |
|
$ |
182,764 |
|
See Notes to Consolidated Financial Statements.
CCCS Corporate Holdings, Inc. and Subsidiaries
Consolidated Statements of Income
Years Ended December 31, 2010, 2009 and 2008
(In thousands)
|
|
2010 |
|
2009 |
|
2008 |
| |||
Revenue: |
|
|
|
|
|
|
| |||
Payroll advance fees, net |
|
$ |
32,278 |
|
$ |
25,799 |
|
$ |
25,016 |
|
Check cashing fees |
|
29,408 |
|
27,797 |
|
28,352 |
| |||
Other revenue |
|
12,402 |
|
9,787 |
|
9,752 |
| |||
|
|
74,088 |
|
63,383 |
|
63,120 |
| |||
Store expenses: |
|
|
|
|
|
|
| |||
Salaries and fringe benefits |
|
23,156 |
|
18,325 |
|
17,928 |
| |||
Occupancy costs |
|
8,470 |
|
5,932 |
|
5,856 |
| |||
Provision for losses from returned checks |
|
6,943 |
|
5,704 |
|
6,777 |
| |||
Other store expenses |
|
6,362 |
|
5,093 |
|
5,454 |
| |||
|
|
44,931 |
|
35,054 |
|
36,015 |
| |||
Stores gross profit |
|
29,157 |
|
28,329 |
|
27,105 |
| |||
Corporate and other expenses: |
|
|
|
|
|
|
| |||
Selling, general, and administrative expenses |
|
6,608 |
|
6,273 |
|
6,005 |
| |||
Non-recurring class action settlement costs |
|
|
|
2,313 |
|
|
| |||
Non-recurring debt acquisition costs |
|
|
|
107 |
|
|
| |||
Interest expense and finance fees |
|
4,436 |
|
4,646 |
|
7,927 |
| |||
Depreciation and amortization |
|
3,630 |
|
3,698 |
|
4,085 |
| |||
|
|
14,674 |
|
17,037 |
|
18,017 |
| |||
Income from continuing operations before provision for income taxes |
|
14,483 |
|
11,292 |
|
9,088 |
| |||
Provision for income taxes |
|
4,716 |
|
2,864 |
|
2,575 |
| |||
Income from continuing operations |
|
9,767 |
|
8,428 |
|
6,513 |
| |||
Loss from discontinued operations, net of benefit for income tax of $210, $0 and $0 (Note 12) |
|
(457 |
) |
|
|
|
| |||
Net income |
|
9,310 |
|
8,428 |
|
6,513 |
| |||
Net income attributable to non-controlling interest |
|
3,832 |
|
3,460 |
|
3,762 |
| |||
Net income attributable to CCCS Corporate Holdings, Inc. |
|
$ |
5,478 |
|
$ |
4,968 |
|
$ |
2,751 |
|
See Notes to Consolidated Financial Statements.
CCCS Corporate Holdings, Inc. and Subsidiaries
Consolidated Statements of Stockholders Equity
Years Ended December 31, 2010, 2009 and 2008
(In thousands)
|
|
Common Stock |
|
Additional |
|
Retained |
|
Non- |
|
Accumulative |
|
Comprehensive |
|
|
| |||||||||
|
|
Shares |
|
Amount |
|
Capital |
|
Earnings |
|
Interest |
|
(Loss) |
|
Income |
|
Total |
| |||||||
Balances, December 31, 2007 |
|
1,000 |
|
$ |
|
|
$ |
27,316 |
|
$ |
2,058 |
|
$ |
22,687 |
|
$ |
|
|
$ |
|
|
$ |
52,061 |
|
Equity-based compensation |
|
|
|
|
|
|
|
|
|
88 |
|
|
|
|
|
88 |
| |||||||
Tax distributions to non-controlling interests |
|
|
|
|
|
|
|
|
|
(2,065 |
) |
|
|
|
|
(2,065 |
) | |||||||
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Net income |
|
|
|
|
|
|
|
2,751 |
|
3,762 |
|
|
|
6,513 |
|
6,513 |
| |||||||
Effect of unrealized retained interest in assets sold |
|
|
|
|
|
|
|
|
|
|
|
340 |
|
340 |
|
340 |
| |||||||
Total comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
6,853 |
|
|
| ||||||
Balances, December 31, 2008 |
|
1,000 |
|
|
|
27,316 |
|
4,809 |
|
24,472 |
|
340 |
|
|
|
56,937 |
| |||||||
Equity-based compensation |
|
|
|
|
|
|
|
|
|
38 |
|
|
|
|
|
38 |
| |||||||
Tax distributions to non-controlling interests |
|
|
|
|
|
|
|
|
|
(1,556 |
) |
|
|
|
|
(1,556 |
) | |||||||
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Net income |
|
|
|
|
|
|
|
4,968 |
|
3,460 |
|
|
|
8,428 |
|
8,428 |
| |||||||
Effect of unrealized retained interest in assets sold |
|
|
|
|
|
|
|
|
|
|
|
(171 |
) |
(171 |
) |
(171 |
) | |||||||
Total comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
8,257 |
|
|
| ||||||
Balances, December 31, 2009 |
|
1,000 |
|
|
|
27,316 |
|
9,777 |
|
26,414 |
|
169 |
|
|
|
63,676 |
| |||||||
Equity-based compensation |
|
|
|
|
|
|
|
|
|
38 |
|
|
|
|
|
38 |
| |||||||
Tax distributions to non-controlling interests |
|
|
|
|
|
|
|
|
|
(1,929 |
) |
|
|
|
|
(1,929 |
) | |||||||
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Net income |
|
|
|
|
|
|
|
5,478 |
|
3,832 |
|
|
|
9,310 |
|
9,310 |
| |||||||
Effect of unrealized retained interest in assets sold |
|
|
|
|
|
|
|
|
|
|
|
(103 |
) |
(103 |
) |
(103 |
) | |||||||
Total comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
9,207 |
|
|
| ||||||
Balances, December 31, 2010 |
|
1,000 |
|
$ |
|
|
$ |
27,316 |
|
$ |
15,255 |
|
$ |
28,355 |
|
$ |
66 |
|
|
|
$ |
70,992 |
|
See Notes to Consolidated Financial Statements.
CCCS Corporate Holdings, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Years Ended December 31, 2010, 2009 and 2008
(In thousands)
|
|
2010 |
|
2009 |
|
2008 |
| |||
Cash Flows from Operating Activities |
|
|
|
|
|
|
| |||
Net income |
|
$ |
9,310 |
|
$ |
8,428 |
|
$ |
6,513 |
|
Depreciation and amortization |
|
3,630 |
|
3,698 |
|
4,085 |
| |||
Amortization of deferred financing costs |
|
541 |
|
541 |
|
541 |
| |||
Provision for losses from returned checks |
|
6,942 |
|
5,704 |
|
6,777 |
| |||
Change in fair value of interest rate swap |
|
|
|
(992 |
) |
233 |
| |||
Loss on disposition of assets |
|
476 |
|
115 |
|
140 |
| |||
Deferred income taxes |
|
1,762 |
|
1,174 |
|
1,595 |
| |||
Equity-based compensation |
|
38 |
|
38 |
|
88 |
| |||
Deferred rent |
|
111 |
|
87 |
|
77 |
| |||
Changes in unrealized retained interest in assets sold |
|
(103 |
) |
(171 |
) |
340 |
| |||
Changes in: |
|
|
|
|
|
|
| |||
Fees receivable, net |
|
(94 |
) |
30 |
|
(57 |
) | |||
Other current assets |
|
(26 |
) |
(420 |
) |
(108 |
) | |||
Other assets |
|
(113 |
) |
15 |
|
(223 |
) | |||
Accounts payable, accrued expenses and other payables |
|
(4,107 |
) |
1,157 |
|
(342 |
) | |||
Deferred income |
|
(1,125 |
) |
(375 |
) |
6,196 |
| |||
Net cash provided by operating activities |
|
17,242 |
|
19,029 |
|
25,855 |
| |||
Cash Flows from Investing Activities |
|
|
|
|
|
|
| |||
Acquisitions of assets of businesses, net of cash |
|
(3,131 |
) |
(11,073 |
) |
(1,730 |
) | |||
Acquisition of leasehold improvements and equipment |
|
(1,735 |
) |
(721 |
) |
(990 |
) | |||
Decreases in advances receivable |
|
(9,994 |
) |
(6,318 |
) |
(7,855 |
) | |||
Decrease (increase) in security deposits |
|
17 |
|
(58 |
) |
(57 |
) | |||
Net cash used in investing activities |
|
(14,843 |
) |
(18,170 |
) |
(10,632 |
) | |||
Cash Flows from Financing Activities |
|
|
|
|
|
|
| |||
Decrease in revolving loans, net |
|
|
|
|
|
(1,647 |
) | |||
Repayment of long-term debt |
|
(8,000 |
) |
(3,492 |
) |
(2,745 |
) | |||
Tax distributions to non-controlling interests |
|
(1,929 |
) |
(1,556 |
) |
(2,065 |
) | |||
Net cash used in financing activities |
|
(9,929 |
) |
(5,048 |
) |
(6,457 |
) | |||
Increase (decrease) in cash |
|
(7,530 |
) |
(4,189 |
) |
8,766 |
| |||
Cash: |
|
|
|
|
|
|
| |||
Beginning of year |
|
33,655 |
|
37,844 |
|
29,078 |
| |||
End of year |
|
$ |
26,125 |
|
$ |
33,655 |
|
$ |
37,844 |
|
CCCS Corporate Holdings, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Years Ended December 31, 2010, 2009 and 2008
(In thousands)
|
|
2010 |
|
2009 |
|
2008 |
| |||
Supplemental Disclosures of Cash Flow Information |
|
|
|
|
|
|
| |||
Interest paid |
|
$ |
3,789 |
|
$ |
4,214 |
|
$ |
6,769 |
|
Income taxes paid |
|
$ |
2,642 |
|
$ |
2,823 |
|
$ |
294 |
|
Supplemental Schedule of Noncash Investing and Financing Activities Business combinations |
|
|
|
|
|
|
| |||
Assets acquired |
|
$ |
4,006 |
|
$ |
12,643 |
|
$ |
1,730 |
|
Less cash acquired |
|
(709 |
) |
(720 |
) |
|
| |||
Purchase price, net of cash acquired |
|
3,297 |
|
11,923 |
|
1,730 |
| |||
Remainder of purchase price due to seller |
|
(166 |
) |
(850 |
) |
|
| |||
Purchase price paid |
|
$ |
3,131 |
|
$ |
11,073 |
|
$ |
1,730 |
|
See Notes to Consolidated Financial Statements.
CCCS Corporate Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in thousands)
Note 1. Nature of Operations and Significant Accounting Policies
Nature of operations: CCCS Corporate Holdings, Inc and Subsidiaries (the Company) operates in one line of business and provides retail financial services, such as check cashing, payroll advances, money orders, wire transfers and various other related services, for a fee. As of December 31, 2010 and 2009, respectively, business was conducted from 141 and 119 Company-owned and operated stores located in California and Oregon for which the premises are leased from various unrelated and related parties.
Basis of presentation: The accompanying consolidated financial statements include the accounts of the Company and its 80.1% owned subsidiary, CCCS Holdings, LLC, and its wholly-owned subsidiaries California Check Cashing Stores, LLC (CCCS LLC) and FastCash, Inc. (FastCash). All significant intercompany accounts and transactions have been eliminated in consolidation. The Company follows the measurement and presentation requirements for noncontrolling interests in consolidated financial statements. The noncontrolling interests represent the portion of the equity not attributable, directly or indirectly, to CCCS Corporate Holdings, Inc. The profit or loss not attributable, directly or indirectly, to CCCS Corporate Holdings, Inc. is allocated to the net income attributable to noncontrolling interests in the consolidated statements of income.
Accounting policies: The Company follows accounting standards established by the Financial Accounting Standards Board (the FASB) to ensure consistent reporting of financial condition, results of operations, and cash flows. References to Generally Accepted Accounting Principles (GAAP) in these notes are to the FASB Accounting Standards CodificationTM, sometimes referred to as the Codification or ASC.
Use of estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to change relate to the determination of the allowance for credit losses, impairment of goodwill and fair value of equity-based compensation.
Concentrations: Concentration of credit risk with respect to advances and fees receivable is limited due to the large number of customers comprising the customer base. However, the Company is exposed to a concentration of credit risk inherent in providing alternative financing programs to customers who may not be able to obtain traditional bank financing. The customers are concentrated in California and Oregon and economic conditions in these areas could impact the customers ability to pay the advance.
Revenue recognition: All of the Companys branch transactions are processed through its point-of-sale system. These transactions include check cashing, bill payment, money transfer, money order sales, and other miscellaneous products and services. The full amount of the check cashing fee is recognized as revenue at the time of the transaction with no allowance for anticipated returned checks. The Company acts in an agency capacity regarding bill payment services, money transfers, and money orders offered and sold at its branches. The Company records the net amount retained as revenue because the supplier is the primary obligor in the arrangement, the amount earned by the Company is fixed, and the supplier is determined to have the ultimate credit risk. Revenue from payroll advances,
CCCS Corporate Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands)
Note 1. Nature of Operations and Significant Accounting Policies (Continued)
which have terms ranging from 1 to 31 days (in California) and 31 to 40 days (in Oregon), are recognized on a constant yield basis ratably over the term of each advance. As a result of the Companys charge-off policy, all accounts are charged off between 1 and 30 days past due rather than being placed in nonaccrual status.
Cash: At times, the Company may maintain deposits with banks in amounts in excess of federal depository insurance limits, but believes any such amounts do not represent significant credit risk.
Advances and fees receivable: The Companys advances and fees receivable are recorded at amounts charged to customers for check cashing, payroll advances and loans presented on the consolidated balance sheets net of unearned revenue and the allowance for loan losses and doubtful accounts. The Companys allowances for loan losses and doubtful accounts are based on the amount of balances past due, historical charge-off experience, current collection patterns, current economic conditions and other information obtained regarding the financial condition of customers. Payroll advances and related fees are charged off immediately if not collected by the due date. Returned checks are generally charged off 30 to 60 days after return without success in collections. Consumer automobile loans and related fees are charged off immediately in the event of bankruptcy, death or pending legal action. Recoveries are recorded in the period in which they are received.
Leasehold improvements and equipment: Leasehold improvements and equipment are recorded at cost. Provisions for depreciation of depreciable assets are computed under the straight-line method over periods which approximate the estimated useful lives of the assets. Amortization of leasehold improvements is computed over the estimated useful lives of the assets or the term of the lease, whichever is shorter. The costs of assets retired or disposed of and the accumulated depreciation or amortization thereon are removed from the accounts with any gain or loss realized upon sale or disposal charged to the statements of operations. Significant improvements and betterments are capitalized while repairs and maintenance are expensed in the period incurred.
Deferred payroll and consumer automobile loan costs: Direct costs incurred for the origination of payroll and consumer automobile loans are deferred and amortized to payroll advance fee income and other revenue over the contractual lives of the loans using the interest method. Unamortized amounts are recognized in income at the time that loans are paid in full.
Deferred finance costs: Costs incurred in connection with obtaining financing are deferred and amortized as interest expense on a basis which approximates the effective interest rate over the life of the related debt. Deferred finance costs, included in other assets in the Companys consolidated balance sheets amounted to approximately $1,046 and $1,587 at December 31, 2010 and 2009, respectively, net of accumulated amortization of approximately $2,245 and $1,704, as of December 31, 2010 and 2009, respectively.
Goodwill and other intangibles: Under the provisions of ASC 350, Intangibles-Goodwill and Others, purchased goodwill is not amortized but is tested annually for impairment. Goodwill represents the excess cost over the fair value of tangible net assets of the Company and is recorded on the balance sheet. The Company reviews the carrying value of the goodwill and other indefinite life intangibles annually (October 1) and at other times when facts or circumstances indicate that the recorded amount of goodwill and other indefinite life intangibles may be impaired. If this review indicates that goodwill
CCCS Corporate Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands)
Note 1. Nature of Operations and Significant Accounting Policies (Continued)
and other indefinite life intangibles are not recoverable, the Companys carrying value of the goodwill and other indefinite life intangibles are reduced by the estimated shortfall. No impairment loss was recognized for 2010, 2009 or 2008.
In accordance with ASC 340, Other Assets and Deferred Costs, the Company reviews their long-lived assets periodically to determine potential impairment by comparing the carrying value of the long-lived assets with the estimated future net undiscounted cash flows expected to result from the use of the assets, including cash flows from disposition. Should the sum of the expected future net cash flows be less than the carrying value, the Company would recognize an impairment loss at that date. An impairment loss would be measured by comparing the amount by which the carrying value exceeds the fair value of the long-lived assets. Other intangibles consist of customer relationships, trademarks/trade names, non-compete agreement and software licenses.
Deferred revenue: The Company records upfront fees received under long-term agreements as deferred revenue and such upfront fees are recognized as revenue ratably over the lives of the respective agreements.
Accumulated other comprehensive income: The Companys accumulated other comprehensive income, as reflected in the accompanying consolidated statements of stockholders equity, consists of the difference between cost and fair value of unrecognized retained interest in assets sold.
Advertising: Costs incurred for producing and communicating advertising are charged to operations when incurred or the first time advertising takes place. Advertising expense for the years ended December 31, 2010, 2009 and 2008, respectively, amounted to approximately $1,265, $1,044 and $935.
Income taxes: The Company accounts for income taxes in accordance with ASC 740, Income Taxes. Under this standard, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amount and the tax basis of existing assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
The Company has not recorded a reserve for any tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company files tax returns in all appropriate jurisdictions, which include a federal tax return and state tax returns. Open tax years are 2006 to 2010, which statutes expire in 2011 to 2014, respectively. When and if applicable, potential interest and penalty costs are accrued as incurred, with expenses recognized in selling, general and administrative expenses in the consolidated statements of income. As of December 31, 2010 and 2009, the Company has no liability for unrecognized tax benefits.
New store costs: Start-up costs for new stores such as training, supplies and travel are expensed as incurred.
Store acquisitions: Store acquisitions are accounted for using the purchase method of accounting prescribed by ASC 805, Business Combinations. This method requires the allocation of the purchase price to individual tangible assets acquired, intangible assets acquired arising from contractual or legal
CCCS Corporate Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands)
Note 1. Nature of Operations and Significant Accounting Policies (Continued)
rights, and liabilities assumed based on their estimated fair values at the date of acquisition. The excess of the cost of acquired assets over the net amounts assigned to assets acquired and liabilities assumed is recognized as goodwill. Beginning January 1, 2009, any costs, including out-of-pocket or incremental costs directly related to the acquisition, such as fees paid to outside consultants for accounting, legal, or engineering investigations or for appraisals, are expensed as transaction costs in the accompanying consolidated statements of income.
Gain or loss on store closure: The Company closes stores in the normal course of business based on store performance, lease termination or unfavorable lease extension terms. For closed stores, a loss is recorded in other store expenses for the write-off of any remaining book value of leasehold improvements and equipment not transferred to other locations and any related closing costs. For stores sold to third parties, a gain or loss is recorded based on the amount received less the write-off of any remaining book value of leasehold improvements and equipment not sold or transferred to other locations and any related closing costs.
Store expenses: The direct costs incurred in operating the stores, excluding depreciation and amortization, are classified as store expenses and are deducted from total revenue to determine contribution attributable to the stores. Store expenses include salary and benefit expense of store employees, rent and other occupancy costs, armored and security costs, losses for returned checks net of recoveries, cash shortages, and other costs incurred by the stores.
Equity-based compensation: The Company applies ASC Topic 718, Stock Compensation, which addresses the accounting for equity-based employee plans. This standard requires that such transactions are accounted for using a fair-value-based method of accounting. Employee costs include all equity-based payments granted to employees based on the grant date estimated fair value over the service period.
Derivative instruments: The Company accounts for derivative instruments under the provisions of ASC 815, Derivatives and Hedging. ASC 815 requires all derivatives to be recognized as assets or liabilities on the balance sheet and measured at fair value. Changes in the fair value of derivatives are either recognized as income or expense or other comprehensive income (loss), depending on the designated purpose of the derivative.
Fair value of financial instruments: The Company accounts for fair value of financial instruments under the provisions of ASC 820, Fair Value Measurements and Disclosures. ASC 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurement. ASC 820 also emphasizes that fair value is a market based measurement, not an entity specific measurement, and sets out a fair value hierarchy with the highest priority being quoted prices in active markets. Under ASC 820, fair value measurements are disclosed by level within that hierarchy. ASC 820 applies to all assets and liabilities that are measured and reported on a fair value basis.
ASC 820 requires disclosure that establishes a framework for measuring fair value in GAAP, and expands disclosure about fair value measurements. This statement enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The statement
CCCS Corporate Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands)
Note 1. Nature of Operations and Significant Accounting Policies (Continued)
requires that assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:
Level 1. Quoted market prices in active markets for identical assets or liabilities.
Level 2. Observable market based inputs or unobservable inputs that are corroborated by market data.
Level 3. Unobservable inputs that are not corroborated by market data.
In determining the appropriate levels, the Company performs a detailed analysis of the assets and liabilities that are subject to ASC 820. At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs are classified as Level 3.
The estimated fair values of the Companys short-term financial instruments, including receivables and payables arising in the ordinary course of business, approximate their individual carrying amounts due to the relatively short period of time between their origination and expected realization. The recorded values of long-term debt approximate their fair values because the interest rates fluctuate or, if they are fixed, they are based on current rates offered to the Company for debt with similar terms and maturities.
The Companys retained interest in assets sold are carried at fair value and classified within Level 3 due to the lack of observable pricing data. The fair value of the Level 3 retained interest in assets sold is calculated with historical consumer collections data using a static pool analysis that has been discounted to address the appropriate risk profile. Results of the analysis may be adjusted, as appropriate, to reflect other market conditions or the perceived credit risk of the borrower.
Fair Value on a Recurring Basis
The table below presents the balances of assets measured at fair value on a recurring basis.
|
|
December 31, 2010 |
| ||||||||||
|
|
Total |
|
Level 1 |
|
Level 2 |
|
Level 3 |
| ||||
Retained interest in assets sold |
|
$ |
220 |
|
$ |
|
|
$ |
|
|
$ |
220 |
|
|
|
December 31, 2009 |
| ||||||||||
|
|
Total |
|
Level 1 |
|
Level 2 |
|
Level 3 |
| ||||
Retained interest in assets sold |
|
$ |
561 |
|
$ |
|
|
$ |
|
|
$ |
561 |
|
CCCS Corporate Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands)
Note 1. Nature of Operations and Significant Accounting Policies (Continued)
The table below sets forth a summary of changes in fair value of the Companys level 3 assets for the years ended December 31, 2010 and 2009.
|
|
2010 |
|
2009 |
| ||
Balance, beginning of year |
|
$ |
561 |
|
$ |
911 |
|
Total net gains (losses) included in: |
|
|
|
|
| ||
Net income |
|
667 |
|
926 |
| ||
Other comprehensive income |
|
103 |
|
171 |
| ||
Purchases, sales, issuances and settlements, net |
|
(1,111 |
) |
(1,447 |
) | ||
Balance, end of year |
|
$ |
220 |
|
$ |
561 |
|
Governmental regulation: The Company is subject to various state and federal laws and regulations, which are subject to change and which may impose significant costs or limitations on the way the Company conducts or expands its business. Certain limitations include among other things imposed limits on fee rates and other charges, the number of advances to a customer, a cooling off period (not applicable in California), the number of permitted rollovers (not applicable in California), and required licensing and qualification.
Although states provide the primary regulatory framework under which the Company offers payday cash advance services and consumer loans, certain federal laws also impact the business. The Companys payday cash advance services and consumer loans are subject to federal laws and regulations, including the Truth-in-Lending Act (TILA), the Equal Credit Opportunity Act (ECOA), the Fair Credit Reporting Act (FCRA), the Gramm-Leach-Bliley Act (GLBA) and the regulations promulgated for each. Among other things, these laws require disclosure of the principal terms of each transaction to every customer, prohibit misleading advertising, protect against discriminatory lending practices, proscribe unfair credit practices and prohibit creditors from discriminating against credit applicants on the basis of race, sex, age or marital status. The GLBA and its implementing regulations generally require the Company to protect the confidentiality of its customers nonpublic personal information and to disclose to the Companys customers its privacy policy and practices.
Additionally, various legislation has been proposed or introduced in the U.S. Congress and California legislature to further regulate the cash advance business. Congressional and Legislative members continue to receive pressure from customer advocates and other industry opposition groups to adopt such legislation.
Recent accounting pronouncements: In July 2010, the FASB issued Accounting Standard Update (ASU) No. 2010-20, Receivables (Topic 310): Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses (ASU 2010-20). The ASU amends FASB Accounting Standards Codification Topic 310, Receivables, to improve the disclosures that an entity provides about the credit quality of its financing receivables and the related allowance for credit losses. As a result of these amendments, an entity is required to disaggregate, by portfolio segment or class of financing receivable, certain existing disclosures and provide certain new disclosures about its financing receivables and related allowance for credit losses. For public entities, the disclosures as of the end of a reporting period are effective for interim and annual reporting periods ending on or after
CCCS Corporate Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands)
Note 1. Nature of Operations and Significant Accounting Policies (Continued)
December 15, 2010. The disclosures about activity that occurs during a reporting period are effective for interim and annual reporting periods beginning on or after December 15, 2010. The disclosures about the credit quality of the Companys receivables required by the ASU are in Note 2. As this ASU amends only the disclosure requirements for loans and the allowance for credit losses, the adoption of ASU No. 2010-20 did not have a significant impact on the Companys consolidated financial statements.
Subsequent events: The Company has evaluated subsequent events for potential recognition and /or disclosure through August 22, 2011, the date the consolidated financial statements were available to be issued.
Note 2. Advances and Fees Receivable, Credit Quality Information and Allowance for Losses
Advances and fees receivable, net, at December 31, 2010 and 2009, consist of:
|
|
2010 |
|
2009 |
| ||
Payroll and other advances receivable |
|
$ |
13,946 |
|
$ |
12,510 |
|
Consumer automobile advances receivable |
|
1,133 |
|
189 |
| ||
Returned checks receivable |
|
315 |
|
220 |
| ||
Commissions receivable |
|
496 |
|
403 |
| ||
Retained interest in assets sold |
|
100 |
|
354 |
| ||
Allowance for loan losses and doubtful accounts |
|
(719 |
) |
(631 |
) | ||
Unearned revenue, net of deferred costs |
|
(855 |
) |
(815 |
) | ||
|
|
$ |
14,416 |
|
$ |
12,230 |
|
Changes in the allowance for the loan losses and doubtful accounts by product type for the year ending December 31, 2010 are as follows:
|
|
Balance |
|
Provision |
|
Charge-Offs |
|
Recoveries |
|
Balance |
|
Finance |
|
Allowance |
| ||||||
Payroll and other advances receivable |
|
$ |
534 |
|
$ |
5,330 |
|
$ |
(77,749 |
) |
$ |
72,424 |
|
$ |
539 |
|
$ |
13,946 |
|
3.86 |
% |
Consumer automobile advances receivable* |
|
31 |
|
161 |
|
(106 |
) |
|
|
86 |
|
2,445 |
|
3.52 |
% | ||||||
Returned checks receivable |
|
66 |
|
1,451 |
|
(2,057 |
) |
634 |
|
94 |
|
315 |
|
29.84 |
% | ||||||
|
|
$ |
631 |
|
$ |
6,942 |
|
$ |
(79,912 |
) |
$ |
73,058 |
|
$ |
719 |
|
$ |
16,706 |
|
4.30 |
% |
* includes $1,312 classified in other assets
CCCS Corporate Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands)
Note 2. Advances and Fees Receivable, Credit Quality Information and Allowance for Losses (Continued)
Activity in the allowance for loan losses and doubtful accounts for the years ended December 31, 2009 and 2008, was as follows:
|
|
2009 |
|
2008 |
| ||
Balance, beginning of year |
|
$ |
298 |
|
$ |
300 |
|
Provision for losses from returned checks |
|
5,704 |
|
6,777 |
| ||
Charge-offs, net |
|
(5,371 |
) |
(6,779 |
) | ||
Balance, end of year |
|
$ |
631 |
|
$ |
298 |
|
The Company considers the near term repayment performance of finance receivables as its primary credit quality indicator. The Company does not perform credit checks through consumer reporting agencies. If a third-party lender provides the advance, the applicable third-party lender decides whether to approve the cash advance and establishes all of the underwriting criteria and terms, conditions, and features of the customer agreements. The due date depends on the product.
Aging of receivables are as follows:
|
|
December 31, 2010 |
| |
Current finance receivables |
|
$ |
14,941 |
|
Past due finance receivables (1-30 days) |
|
1,765 |
| |
|
|
$ |
16,706 |
|
Advances and fees include deferred advance costs of approximately $31 and $18 at December 31, 2010 and 2009, respectively. The effect of payroll advance costs on payroll advance fees for the years ended December 31, 2010, 2009 and 2008 was as follows:
|
|
2010 |
|
2009 |
|
2008 |
| |||
Payroll advance fees, gross |
|
$ |
33,211 |
|
$ |
26,569 |
|
$ |
25,731 |
|
Amortization of deferred payroll advance costs |
|
(933 |
) |
(770 |
) |
(715 |
) | |||
Payroll advance fees, net |
|
$ |
32,278 |
|
$ |
25,799 |
|
$ |
25,016 |
|
CCCS Corporate Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands)
Note 3. Leasehold Improvements and Equipment
Leasehold improvements and equipment, net, at December 31, 2010 and 2009 consist of:
|
|
2010 |
|
2009 |
|
Depreciable |
| ||
Fixtures and equipment |
|
$ |
6,479 |
|
$ |
5,742 |
|
2-9 years |
|
Leasehold improvements |
|
6,062 |
|
3,626 |
|
2-9 years |
| ||
Automobiles |
|
5 |
|
5 |
|
5 years |
| ||
Software |
|
397 |
|
247 |
|
5 years |
| ||
|
|
12,943 |
|
9,620 |
|
|
| ||
Accumulated depreciation and amortization |
|
(5,580 |
) |
(3,948 |
) |
|
| ||
|
|
$ |
7,363 |
|
$ |
5,672 |
|
|
|
Total depreciation and amortization expense amounted to approximately $1,710, $1,144 and $1,256 for the years ended December 31, 2010, 2009 and 2008, respectively.
Note 4. Intangible Assets
Intangible assets, net, at December 31, 2010 and 2009 consist of:
|
|
2010 |
|
2009 |
|
Estimated |
| ||
Gross carrying amount |
|
|
|
|
|
|
| ||
Customer relationships |
|
$ |
14,070 |
|
$ |
13,790 |
|
3-7 years |
|
Trademarks/tradenames |
|
7,000 |
|
7,000 |
|
Indefinite |
| ||
Non-compete agreements |
|
380 |
|
380 |
|
4 years |
| ||
Software licenses |
|
73 |
|
73 |
|
1 year |
| ||
Licensed tradename |
|
110 |
|
110 |
|
5 years |
| ||
|
|
21,633 |
|
21,353 |
|
|
| ||
Accumulated amortization |
|
(10,710 |
) |
(8,790 |
) |
|
| ||
|
|
$ |
10,923 |
|
$ |
12,563 |
|
|
|
Total amortization expense amounted to approximately $1,921, $2,553 and $2,828 for the years ended December 31, 2010, 2009 and 2008, respectively.
Amortization expense for future years is expected to be as follows:
2011 |
|
$ |
1,810 |
|
2012 |
|
1,467 |
| |
2013 |
|
261 |
| |
2014 |
|
166 |
| |
2015 |
|
144 |
| |
Thereafter |
|
75 |
| |
|
|
$ |
3,923 |
|
CCCS Corporate Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands)
Note 5. Other Assets
Other assets at December 31, 2010 and 2009 consist of:
|
|
2010 |
|
2009 |
| ||
Consumer automobile advances receivable |
|
$ |
1,312 |
|
$ |
219 |
|
Retained interest in assets sold |
|
119 |
|
207 |
| ||
Deferred financing fees, net |
|
1,046 |
|
1,587 |
| ||
Security deposits |
|
428 |
|
397 |
| ||
Other |
|
113 |
|
|
| ||
|
|
$ |
3,018 |
|
$ |
2,410 |
|
Note 6. Borrowings
CCCS LLC was obligated to various participating lenders under a First Lien Credit Agreement and a Second Lien Credit Agreement (collectively, the Credit Agreements), both of which were most recently amended March 15, 2007. These Credit Agreements provided for maximum borrowings of up to $145 million, represented by a $20 million revolving loan (including up to a $15 million Swingline commitment), a $77 million Tranche B Loan, and an $18 million Term Loan, plus an uncommitted incremental amount of up to $30 million, bearing interest at either the Alternate Base Rate plus the Applicable Margin or the Adjusted LIBOR Rate plus the Applicable Margin at CCCS LLCs election at the time of drawing on the loans. The interest rates on the Tranche B Loan and Term Loan ranged from 3.26 percent to 3.54 percent and 7.49 percent to 7.52 percent, respectively, as of December 31, 2010. Borrowings under the First Lien Credit Agreement required quarterly payments of principal of $192 or an annual payment of principal based on excess cash flow, as defined, whichever is greater, reduced by any Optional Prepayments occurring within 12 months preceding such prepayments, with final maturity September 29, 2012, and borrowings under the Second Lien Credit Agreement had final maturity September 29, 2013. The loans under the Credit Agreements were secured by substantially all of the assets of CCCS LLC and guaranteed by CCCS Holdings, LLC. The Credit Agreements contained various restrictions, including maintenance of certain financial ratios, limitations on capital expenditures and certain other restrictions. All amounts due under the Credit Agreements were paid in full upon completion of the transaction disclosed in Note 13.
Borrowings at December 31, 2010 and 2009, consist of the following:
|
|
2010 |
|
2009 |
| ||
Tranche B loans |
|
$ |
62,023 |
|
$ |
70,023 |
|
Second Lien loans |
|
18,000 |
|
18,000 |
| ||
|
|
80,023 |
|
88,023 |
| ||
Current maturities |
|
(10,800 |
) |
(2,000 |
) | ||
Long-term portion |
|
$ |
69,223 |
|
$ |
86,023 |
|
CCCS LLC previously entered into an interest rate swap agreement to convert a portion ($30 million notional amount, 5.19 percent fixed rate) of its floating notes payable to fixed rate debt. This derivative instrument was an economic hedge that had not been designated for hedge accounting
CCCS Corporate Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands)
Note 6. Borrowings (Continued)
treatment. This derivative instrument was reported at fair value with gains and losses recognized in the consolidated statements of income. The agreement was not renewed when it expired on October 26, 2009.
Note 7. Equity Based Compensation
CCCS Holdings, LLCs operating agreement provides for the granting of Class C membership units as incentives to key members of management. These incentive units vest ratably over a 24 to 48-month period provided that employment has not terminated.
A summary of Class C management incentive units for the years ended December 31, 2010, 2009 and 2008, is as follows:
|
|
Units |
|
Grant Date |
|
Units Vested |
| |
Outstanding, January 1, 2008 |
|
35.00 |
|
$ |
278 |
|
12.50 |
|
Granted |
|
2.50 |
|
22 |
|
|
| |
Outstanding, December 31, 2008 |
|
37.50 |
|
300 |
|
25.50 |
| |
Granted |
|
|
|
|
|
|
| |
Outstanding, December 31, 2009 |
|
37.50 |
|
300 |
|
30.00 |
| |
Granted |
|
|
|
|
|
|
| |
Outstanding, December 31, 2010 |
|
37.50 |
|
$ |
300 |
|
34.38 |
|
The value of the units granted during 2008 were determined based on the underlying equity value of CCCS Holdings, LLC at the date of grant. The compensation expense associated with these awards is recognized straight-line over the service period. During the years ended December 31, 2010, 2009 and 2008, the Company recorded $38, $38 and $88, respectively, of compensation expense related to these management incentive units and as of December 31, 2010, the total unrecognized compensation cost related to unvested management incentive units was approximately $27.
Note 8. Provision for Income Taxes
The provision for income taxes for the years ended December 31, 2010, 2009 and 2008, consist of the following:
|
|
2010 |
|
2009 |
|
2008 |
| |||
Current |
|
$ |
2,744 |
|
$ |
1,690 |
|
$ |
980 |
|
Deferred |
|
1,762 |
|
1,174 |
|
1,595 |
| |||
|
|
$ |
4,506 |
|
$ |
2,864 |
|
$ |
2,575 |
|
CCCS Corporate Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands)
Note 8. Provision for Income Taxes (Continued)
Income tax expense (benefit) has been allocated as follows:
|
|
2010 |
|
2009 |
|
2008 |
| |||
Continuing operations |
|
$ |
4,716 |
|
$ |
2,864 |
|
$ |
2,575 |
|
Discontinued operations |
|
(210 |
) |
|
|
|
| |||
|
|
$ |
4,506 |
|
$ |
2,864 |
|
$ |
2,575 |
|
A reconciliation of the provision (benefit) for income taxes with amounts determined by applying the statutory U.S. federal income tax rate to income before income taxes is as follows:
|
|
2010 |
|
2009 |
|
2008 |
| |||
Computed tax provision at the federal statutory rate |
|
$ |
4,697 |
|
$ |
3,839 |
|
$ |
3,090 |
|
State taxes net of federal benefit |
|
806 |
|
659 |
|
530 |
| |||
Effect of pass-through entities |
|
(1,533 |
) |
(1,384 |
) |
(1,505 |
) | |||
Permanent differences and other |
|
536 |
|
(250 |
) |
460 |
| |||
|
|
$ |
4,506 |
|
$ |
2,864 |
|
$ |
2,575 |
|
Under the asset and liability method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and its tax basis of existing assets and liabilities. At December 31, 2010 and 2009, the Companys deferred income tax assets and liabilities consisted of the following:
|
|
2010 |
|
2009 |
| ||
Deferred tax assets |
|
|
|
|
| ||
Advances and loans receivable |
|
$ |
247 |
|
$ |
217 |
|
Other |
|
511 |
|
546 |
| ||
|
|
758 |
|
763 |
| ||
Deferred tax liabilities |
|
|
|
|
| ||
Retained interest in loans sold |
|
(74 |
) |
(192 |
) | ||
Leasehold improvements and equipment |
|
(272 |
) |
(358 |
) | ||
Goodwill and intangible assets |
|
(12,817 |
) |
(10,856 |
) | ||
|
|
(13,163 |
) |
(11,406 |
) | ||
Net deferred tax liability |
|
$ |
(12,405 |
) |
$ |
(10,643 |
) |
CCCS Corporate Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands)
Note 8. Provision for Income Taxes (Continued)
The net deferred tax assets and (liabilities) are classified in the consolidated balance sheets as follows:
|
|
2010 |
|
2009 |
| ||
Current |
|
$ |
724 |
|
$ |
642 |
|
Noncurrent |
|
(13,129 |
) |
(11,285 |
) | ||
|
|
$ |
(12,405 |
) |
$ |
(10,643 |
) |
Note 9. Employee Benefit Plan
The Company maintains a 401(k) profit sharing plan for the benefit of all eligible employees. The plan, established under the provisions of section 401(k) of the Internal Revenue Code, provides for discretionary employer contributions. The Company provided for discretionary contributions of approximately $0, $713 and $598 for the years ended December 31, 2010, 2009 and 2008, respectively.
Note 10. Commitments and Contingencies
The Company leases retail and office space under operating leases with related and unrelated parties expiring in various years through 2033. The leases require the Company to pay additional rentals for increases in operating expenses and real estate taxes and contain renewal options. For financial statement purposes, base rent payments are being accounted for on a straight-line basis. Accordingly, the balance sheets reflect a liability for the excess of the expense charged compared to the amount paid. Total rent expense for operating leases amounted to approximately $5,815, $3,786 and $3,543 for the years ended December 31, 2010, 2009 and 2008, respectively, inclusive of approximately $486, $448 and $432 to related parties for the years ended December 31, 2010, 2009 and 2008, respectively.
Future minimum lease payments under noncancelable operating leases as of December 31, 2010 are as follows:
|
|
Related |
|
Third |
|
Total |
| |||
2011 |
|
$ |
476 |
|
$ |
5,255 |
|
$ |
5,731 |
|
2012 |
|
490 |
|
4,627 |
|
5,117 |
| |||
2013 |
|
|
|
3,334 |
|
3,334 |
| |||
2014 |
|
|
|
2,104 |
|
2,104 |
| |||
2015 |
|
|
|
886 |
|
886 |
| |||
Thereafter |
|
|
|
466 |
|
466 |
| |||
|
|
$ |
966 |
|
$ |
16,672 |
|
$ |
17,638 |
|
The Company has an advisory agreement with an affiliate of the Companys controlling member. The advisory agreement requires the Company to pay a management fee of the greater of $800 or 3 percent of EBITDA, as defined, annually through December 31, 2013. Management fee expense for the years ended December 31, 2010, 2009 and 2008 was $800 in all three years. Amounts included in
CCCS Corporate Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands)
Note 10. Commitments and Contingencies (Continued)
accounts payable related to this agreement were approximately $200 at both December 31, 2010 and 2009.
On February 19, 2010, a California court approved the terms of settlement and agreed upon procedures as set forth in a class action Settlement Agreement brought against the Company by current and former employees of the Company. An amount of $2,039 was accrued and included in accounts payable, accrued expenses and other payables in the accompanying consolidated balance sheet at December 31, 2009 relating to the amount of the settlement plus court costs and attorneys fees. The total cost of this judgment (paid in February 2010) was recognized during 2009 in the accompanying consolidated statement of income.
The Company is party to various other claims, legal actions and complaints arising in the ordinary course of business. In the opinion of management, all such matters are adequately covered by insurance, or, if not so covered, are without merit or are of such kind, or involve such amounts, that unfavorable disposition would not have a material effect on the Companys consolidated financial position or liquidity.
Note 11. Business Combinations
On March 24, 2010, the Company acquired the operations of 20 stores located in Southern California from a competitor for aggregate consideration of $2,662. On December 29, 2009, the Company acquired the operations of 22 stores located in California, Washington and Oregon from a competitor for aggregate consideration of $11,453. During 2010, 2009 and 2008, respectively, the Company also acquired the assets of various other check cashing stores located in California for aggregate cash consideration of $635, $470 and $1,730. The acquisitions are part of a long-term expansion strategy, and served to increase the Companys market presence in California. As a result of these transactions, the purchase price was allocated to certain acquired assets, including a number of identified intangibles in accordance with ASC 805. During 2010, 2009 and 2008, respectively, the goodwill of $787, $6,389 and $1,043 arising from these acquisitions consists largely of synergies and economies of scale expected from combining the operations and entering new markets.
CCCS Corporate Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands)
Note 11. Business Combinations (Continued)
The following table summarizes the consideration paid for the above mentioned acquisitions and the amounts of the assets acquired and liabilities assumed recognized at the respective acquisition dates:
|
|
2010 |
|
2009 |
|
2008 |
| |||
Consideration: |
|
|
|
|
|
|
| |||
Cash |
|
$ |
3,131 |
|
$ |
11,073 |
|
$ |
1,730 |
|
Due to seller |
|
166 |
|
850 |
|
|
| |||
|
|
$ |
3,297 |
|
$ |
11,923 |
|
$ |
1,730 |
|
Recognized amounts of identifiable assets acquired: |
|
|
|
|
|
|
| |||
Advances and fees receivable |
|
$ |
46 |
|
$ |
2,863 |
|
$ |
|
|
Other current assets |
|
68 |
|
|
|
|
| |||
Lease deposits |
|
49 |
|
48 |
|
|
| |||
Leasehold improvements, furniture and equipment |
|
2,067 |
|
1,400 |
|
687 |
| |||
Intangible assets |
|
280 |
|
1,223 |
|
|
| |||
Total identifiable net assets |
|
2,510 |
|
5,534 |
|
687 |
| |||
Goodwill |
|
787 |
|
6,389 |
|
1,043 |
| |||
|
|
$ |
3,297 |
|
$ |
11,923 |
|
$ |
1,730 |
|
Acquisition-related costs (included in selling, general and administrative expenses in the Companys consolidated statements of income) |
|
$ |
61 |
|
$ |
203 |
|
$ |
|
|
The acquired advances and fees receivable are payroll advances and have been recorded at fair value which approximates the contractual cash flows that are believed to be collectible because of the short-term nature of such receivables.
The acquired intangibles will be amortized over their useful lives, as estimated by management based on their intended use. The identifiable intangibles and useful lives for the 2010 and 2009 acquisitions are presented below. There were no identifiable assets acquired in the 2008 acquisitions.
|
|
Weighted Average |
|
2010 |
|
2009 |
| ||
Customer relationships |
|
6-7 years |
|
$ |
280 |
|
$ |
660 |
|
Tradename |
|
5 years |
|
|
|
110 |
| ||
Non-compete agreements |
|
4 years |
|
|
|
380 |
| ||
Software licenses |
|
1 years |
|
|
|
73 |
| ||
|
|
|
|
$ |
280 |
|
$ |
1,223 |
|
For income tax purposes, the intangibles and goodwill recognized will be deductible over 15 years.
All acquisitions in 2010, 2009 and 2008 were financed from the Companys cash reserves.
CCCS Corporate Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(Dollars in thousands)
Note 12. Discontinued Operations
Included in the December 29, 2009 acquisition described above were four stores in the State of Washington, under which the Company commenced operations on January 20, 2010. Due to a change in law provision in Washington effective January 1, 2010, it made the business wholly unprofitable. The Company continued operations and made the decision to close its stores in Washington, with the final day of operations being August 21, 2010. After winding up operations, licensing, and other real estate matters, the Company has no further plans to operate in Washington. There are no anticipated future cash flows to be generated from the operation, as there is no longer an operation and it is not expected that customers in Washington will migrate to other Company-owned stores.
As a result of the above the Company determined that the closing of these stores represented a discontinued operation and has reflected a loss from discontinued operations of $457, net of a benefit for income taxes of $210, in the statement of income for the year ended December 31, 2010. This loss is comprised of revenues earned for the period of $158 offset by store expenses of $599 and write-offs of related intangible assets of $226. There were no assets, liabilities, revenues or expenses associated with the Washington stores as of and for the year ended December 31, 2009.
Note 13. Subsequent Event
On March 17, 2011, the Company acquired the operations of a single payroll advance store in Hawthorne, California. The acquisition is part of a long-term expansion strategy and serves to increase the Companys market presence California. The Company paid approximately $754 for the assets acquired, including purchase of receivables and lease buy-out, utilizing cash generated from operations.
On April 13, 2011, the Company entered into an agreement and plan of merger pursuant to which Community Choice Financial Inc. (CCFI), a newly-formed holding company, expects to acquire all outstanding shares of CheckSmart Financial Holdings Corp. (CheckSmart) and all outstanding membership units of the Company. The transaction is structured as a stock-for-stock transaction, with the current equity holders of each of CheckSmart and the Company agreeing to contribute the equity of the separate companies to CCFI in exchange for shares CCFI. As a result of the transaction, the current equity holders of CheckSmart and the Company will own 77% and 23%, respectively, of CCFI. Immediately upon completion of the transaction, CCFI will declare a special dividend payable to its shareholders and pay bonuses to management in an aggregate amount of $125.0 million. On April 29, 2011, all requirements and conditions were met, including the successful completion of a secured senior notes offering in an amount sufficient to repay outstanding indebtedness of both CheckSmart and the Company, and the transaction was consummated as described. As a result of this transaction, the Company determined that an impairment of goodwill and intangible assets occurred in 2011 and recorded an impairment charge of approximately $28,986 during the three months ending March 31, 2011.
CCCS Corporate Holdings, Inc. and Subsidiaries
March 31, 2011 and December 31, 2010
(Dollars in thousands)
|
|
March 31, |
|
December 31, |
| ||
|
|
(unaudited) |
|
|
| ||
Assets |
|
|
|
|
| ||
Current Assets |
|
|
|
|
| ||
Cash |
|
$ |
25,260 |
|
$ |
26,125 |
|
Advances and fees receivable, net |
|
12,148 |
|
14,416 |
| ||
Other current assets |
|
357 |
|
1,176 |
| ||
Deferred income taxes |
|
240 |
|
724 |
| ||
Total current assets |
|
38,005 |
|
42,441 |
| ||
Noncurrent Assets |
|
|
|
|
| ||
Leasehold improvements and equipment, net |
|
7,160 |
|
7,363 |
| ||
Goodwill |
|
91,231 |
|
115,332 |
| ||
Other intangibles, net |
|
6,244 |
|
10,923 |
| ||
Other assets |
|
2,810 |
|
3,018 |
| ||
Total assets |
|
$ |
145,450 |
|
$ |
179,077 |
|
Liabilities and Stockholders Equity |
|
|
|
|
| ||
Current Liabilities |
|
|
|
|
| ||
Current portion of long-term debt |
|
$ |
18,400 |
|
$ |
10,800 |
|
Current portion of deferred revenue |
|
1,125 |
|
1,125 |
| ||
Accounts payable and accrued liabilities |
|
9,024 |
|
9,552 |
| ||
Total current liabilities |
|
28,549 |
|
21,477 |
| ||
Noncurrent Liabilities |
|
|
|
|
| ||
Notes payable |
|
55,523 |
|
69,223 |
| ||
Deferred rent |
|
713 |
|
631 |
| ||
Deferred revenue |
|
3,344 |
|
3,625 |
| ||
Deferred income taxes |
|
3,552 |
|
13,129 |
| ||
Total liabilities |
|
91,681 |
|
108,085 |
| ||
Commitments and Contingencies |
|
|
|
|
| ||
Stockholders Equity |
|
|
|
|
| ||
Common stock |
|
|
|
|
| ||
Additional paid-in capital |
|
27,316 |
|
27,316 |
| ||
Retained earnings |
|
1,895 |
|
15,255 |
| ||
Accumulated other comprehensive income |
|
46 |
|
66 |
| ||
Noncontrolling interests |
|
24,512 |
|
28,355 |
| ||
Total equity |
|
53,769 |
|
70,992 |
| ||
Total liabilities and stockholders equity |
|
$ |
145,450 |
|
$ |
179,077 |
|
See Notes to Unaudited Consolidated Financial Statements.
CCCS Corporate Holdings, Inc. and Subsidiaries
Consolidated Statements of Income
Three Months Ended March 31, 2011 and 2010
(Unaudited)
(Dollars in thousands)
|
|
Three Months Ended |
| ||||
|
|
2011 |
|
2010 |
| ||
Revenues: |
|
|
|
|
| ||
Payroll advance fees, net |
|
$ |
8,105 |
|
$ |
7,479 |
|
Check cashing fees |
|
7,428 |
|
7,582 |
| ||
Other revenue |
|
3,365 |
|
2,714 |
| ||
Total revenues |
|
18,898 |
|
17,775 |
| ||
Branch expenses: |
|
|
|
|
| ||
Salaries and fringe benefits |
|
5,941 |
|
5,467 |
| ||
Occupancy costs |
|
2,213 |
|
1,807 |
| ||
Provision for losses from returned checks |
|
1,202 |
|
1,741 |
| ||
Other store expenses |
|
1,577 |
|
1,441 |
| ||
Total store expenses |
|
10,933 |
|
10,456 |
| ||
Stores gross profit |
|
7,965 |
|
7,319 |
| ||
Selling, general and administrative expenses |
|
1,884 |
|
1,613 |
| ||
Interest expense and finance fees |
|
1,031 |
|
1,099 |
| ||
Depreciation and amortization |
|
954 |
|
815 |
| ||
Goodwill and other intangibles impairment |
|
28,986 |
|
|
| ||
Income (loss) from continuing operations before provision for income taxes |
|
(24,890 |
) |
3,792 |
| ||
Provision for income taxes |
|
(7,780 |
) |
1,691 |
| ||
Income (loss) from continuing operations |
|
(17,110 |
) |
2,101 |
| ||
Loss from discontinued operations |
|
|
|
(53 |
) | ||
Net Income (loss) |
|
$ |
(17,110 |
) |
$ |
2,048 |
|
Net Income (loss) attributable to non-controlling interest |
|
(3,750 |
) |
741 |
| ||
Net Income (loss) attributable to CCCS Corporate Holdings, Inc. |
|
$ |
(13,360 |
) |
$ |
1,307 |
|
See Notes to Unaudited Consolidated Financial Statements.
CCCS Corporate Holdings, Inc. and Subsidiaries
Consolidated Statements of Stockholders Equity
Three Months Ended March 31, 2011
(Unaudited)
(Dollars in thousands)
|
|
Common Stock |
|
Additional |
|
Retained |
|
Non- |
|
Accumulative |
|
Comprehensive |
|
|
| |||||||||
|
|
Shares |
|
Amount |
|
Capital |
|
Earnings |
|
Interest |
|
Income (Loss) |
|
Income (Loss) |
|
Total |
| |||||||
Balance, December 31, 2010 |
|
1,000 |
|
$ |
0 |
|
$ |
27,316 |
|
$ |
15,255 |
|
$ |
28,355 |
|
$ |
66 |
|
|
|
$ |
70,992 |
| |
Equity based compensation |
|
|
|
|
|
|
|
|
|
10 |
|
|
|
|
|
10 |
| |||||||
Tax distributions to non-controlling interests |
|
|
|
|
|
|
|
|
|
(103 |
) |
|
|
|
|
(103 |
) | |||||||
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Net income (loss) |
|
|
|
|
|
|
|
(13,360 |
) |
(3,750 |
) |
|
|
(17,110 |
) |
(17,110 |
) | |||||||
Effect of unrealized retained interest in assets sold |
|
|
|
|
|
|
|
|
|
|
|
(20 |
) |
(20 |
) |
(20 |
) | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(17,130 |
) |
|
| ||||||
Balance, March 31, 2011 |
|
1,000 |
|
$ |
0 |
|
$ |
27,316 |
|
$ |
1,895 |
|
$ |
24,512 |
|
$ |
46 |
|
|
|
$ |
53,769 |
| |
See Notes to Unaudited Consolidated Financial Statements.
CCCS Corporate Holdings, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Three Months Ended March 31, 2011 and 2010
(Unaudited)
(Dollars in thousands)
|
|
Three Months Ended |
| ||||
|
|
2011 |
|
2010 |
| ||
Cash Flows From Operating Activities |
|
|
|
|
| ||
Net income (loss) |
|
$ |
(17,110 |
) |
$ |
2,101 |
|
Gain (loss) from discontinued operations |
|
|
|
(53 |
) | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
| ||
Provision for loan losses |
|
1,202 |
|
1,740 |
| ||
Goodwill impairment |
|
28,986 |
|
|
| ||
Loss on disposal of assets |
|
|
|
35 |
| ||
Effect of unrealized retained interest in assets sold |
|
(20 |
) |
(42 |
) | ||
Depreciation |
|
488 |
|
346 |
| ||
Amortization of intangibles & deferred financing cost |
|
455 |
|
459 |
| ||
Deferred rent |
|
82 |
|
|
| ||
Equity based compensation |
|
10 |
|
10 |
| ||
Deferred income taxes |
|
(9,093 |
) |
670 |
| ||
Changes in assets and liabilities: |
|
|
|
|
| ||
Other assets |
|
1,027 |
|
876 |
| ||
Deferred revenue |
|
(281 |
) |
(281 |
) | ||
Accounts payable and accrued expenses |
|
(528 |
) |
(1,243 |
) | ||
Net cash provided by operating activitiescontinuing operations |
|
5,218 |
|
4,618 |
| ||
Cash Flows From Investing Activities |
|
|
|
|
| ||
Net receivables (originated) repaid |
|
1,066 |
|
89 |
| ||
Net acquired assets, net of cash |
|
(661 |
) |
(2,500 |
) | ||
Purchase of leasehold improvements and equipment |
|
(285 |
) |
(385 |
) | ||
Net cash provided by (used in) investing activitiescontinuing operations |
|
120 |
|
(2,796 |
) | ||
Cash Flows From Financing Activities |
|
|
|
|
| ||
Tax distributions to non-controlling interests |
|
(103 |
) |
(804 |
) | ||
Net payments of long-term debt |
|
(6,100 |
) |
(2,000 |
) | ||
Net cash used in financing activitiescontinuing operations |
|
(6,203 |
) |
(2,804 |
) | ||
Net decrease in cash and cash equivalents |
|
(865 |
) |
(982 |
) | ||
Cash and cash equivalents: |
|
|
|
|
| ||
Beginning |
|
26,125 |
|
33,655 |
| ||
Ending |
|
$ |
25,260 |
|
$ |
32,673 |
|
See Notes to Unaudited Consolidated Financial Statements.
CCCS Corporate Holdings, Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(Dollars in thousands)
Note 1. Nature of Operations and Significant Accounting Policies
Nature of operations: CCCS Corporate Holdings, Inc. and Subsidiaries (the Company) operates in one line of business and provides retail financial services, such as check cashing, payroll advances, money orders, wire transfers and various other related services, for a fee. As of March 31, 2011, the Company owned and operated 141 stores in California and Oregon.
Basis of presentation: The accompanying interim unaudited consolidated financial statements of CCCS Corporate Holdings, Inc. and Subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information. They do not include all information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. Although management believes that the disclosures are adequate to prevent the information from being misleading, the interim unaudited consolidated financial statements should be read in conjunction with the Companys audited financial statements for the year ended December 31, 2010. In the opinion of the Companys management, all adjustments consisting of normal recurring adjustments, considered necessary for a fair statement of the Companys financial condition, have been included. The results for any interim period are not necessarily indicative of results to be expected for the year ending December 31, 2011.
Basis of consolidation: The accompanying consolidated financial statements include the accounts of the Company and its 80.1% owned subsidiary, CCCS Holdings, LLC, and its wholly-owned subsidiaries California Check Cashing Stores, LLC (CCCS LLC) and FastCash, Inc. (FastCash). All significant intercompany accounts and transactions have been eliminated in consolidation.
The Company follows the measurement and presentation requirements for non-controlling interests in consolidated financial statements. The non-controlling interests represent the portion of the equity not attributable, directly or indirectly, to CCCS Corporate Holdings, Inc. The profit or loss not attributable, directly or indirectly, to CCCS Corporate Holdings, Inc. is allocated to the net income (loss) attributable to non-controlling interests in the consolidated statements of operations.
Use of estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to change relate to the determination of the allowance for loan losses, impairment of goodwill and fair value of equity-based compensation.
Concentrations: Concentration of credit risk with respect to advances and fees receivable is limited due to the large number of customers comprising the customer base. However, the Company is exposed to a concentration of credit risk inherent in providing alternative financing programs to customers who may not be able to obtain traditional bank financing. The customers are concentrated in California and Oregon and economic conditions in these areas could impact the customers ability to pay the advance.
Revenue recognition: All of the Companys branch transactions are processed through its point-of-sale system. These transactions include check cashing, bill payment, money transfer, money order sales, and other miscellaneous products and services. The full amount of the check cashing fee is recognized as revenue at the time of the transaction with no allowance for anticipated returned checks.
CCCS Corporate Holdings, Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements (Continued)
(Dollars in thousands)
Note 1. Nature of Operations and Significant Accounting Policies (Continued)
The Company acts in an agency capacity regarding bill payment services, money transfers, and money orders offered and sold at its branches. The Company records the net amount retained as revenue because the supplier is the primary obligor in the arrangement, the amount earned by the Company is fixed, and the supplier is determined to have the ultimate credit risk. Revenue from payroll advances, which have terms ranging from 1 to 31 days (in California) and 31 to 40 days (in Oregon), are recognized on a constant yield basis ratably over the term of each advance.
Advances and fees receivable: The Companys advances and fees receivable are recorded at amounts charged to customers for check cashing and payroll advances and presented on the consolidated balance sheets net of unearned revenue and the allowance for loan losses. Provision for loan losses are charged to income in amounts sufficient to cover estimated losses in the loan portfolio. All advances and fees receivable are evaluated collectively for impairment. The Companys allowances for loan losses are based on the amount of balances past due, historical charge-off experience, current collection patterns, current economic conditions and other information obtained regarding the financial condition of customers. Payroll advances and related fees are charged off immediately if not collected by the due date. Returned checks are generally charged off 30 to 60 days after a return item without success in collections. Recoveries are recorded in the period in which they are received.
As a result of the Companys charge-off policies, most accounts are charged-off rather than being placed in nonaccrual status and thus any impact to the consolidated financial statements is immaterial.
Deferred payroll advance costs: Direct costs incurred for the origination of payroll advances are deferred and amortized to payroll advance fee income over the contractual lives of the advances using the interest method. Unamortized amounts are recognized in income at the time that advances are paid in full.
Goodwill and other intangibles: Goodwill represents the excess cost over the fair value of tangible net assets of the Company and is recorded on the balance sheet. The Company tests the carrying value of the goodwill and other indefinite life intangibles annually or when the events and circumstances warrant such a review. If this review indicates that goodwill and other indefinite life intangibles are not recoverable, the Companys carrying value of the goodwill and other indefinite life intangibles are reduced by the estimated shortfall.
As a result of the transaction discussed in Note 12, impairment testing was performed by the Company and management has determined the goodwill is impaired. See Note 3 for further discussion.
In accordance with ASC 340, Other Assets and Deferred Costs, the Company reviews their long-lived assets periodically to determine potential impairment by comparing the carrying value of the long-lived assets with the estimated future net undiscounted cash flows expected to result from the use of the assets, including cash flows from disposition. Should the sum of the expected future net cash flows be less than the carrying value, the Company would recognize an impairment loss at that date. An impairment loss would be measured by comparing the amount by which the carrying value exceeds the fair value of the long-lived assets. Other intangibles consist of customer relationships, trademarks/trade names, non-compete agreement and software licenses.
CCCS Corporate Holdings, Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements (Continued)
(Dollars in thousands)
Note 1. Nature of Operations and Significant Accounting Policies (Continued)
Accumulated other comprehensive income: The Companys accumulated other comprehensive income, as reflected in the accompanying consolidated statement of stockholders equity, consists of the difference between cost and fair value of unrecognized retained interest in assets sold.
Income taxes: The Company accounts for income taxes in accordance with ASC 740, Income Taxes. Under this standard, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amount and the tax basis of existing assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
The Company has not recorded a reserve for any tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company files tax returns in all appropriate jurisdictions, which include a federal tax return and state tax returns. Open tax years are 2006 to 2010, which statutes expire in 2011 to 2014, respectively. When and if applicable, potential interest and penalty costs are accrued as incurred, with expenses recognized in selling, general and administrative expenses in the consolidated statements of operations. As of March 31, 2011 and December 31, 2010, the Company has no liability for unrecognized tax benefits.
Equity-based compensation: The Company applies ASC Topic 718, Stock Compensation, which addresses the accounting for equity-based employee plans. This standard requires that such transactions are accounted for using a fair-value-based method of accounting. Employee costs include all equity-based payments granted to employees based on the grant date estimated fair value over the service period.
Derivative instruments: The Company accounts for derivative instruments under the provisions of ASC 815, Derivatives and Hedging. ASC 815 requires all derivatives to be recognized as assets or liabilities on the balance sheet and measured at fair value. Changes in the fair value of derivatives are either recognized as income or expense or other comprehensive income (loss), depending on the designated purpose of the derivative.
Fair value of financial instruments: The Company accounts for fair value of financial instruments under the provisions of ASC 820, Fair Value Measurements and Disclosures. ASC 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurement. ASC 820 also emphasizes that fair value is a market based measurement, not an entity specific measurement, and sets out a fair value hierarchy with the highest priority being quoted prices in active markets. Under ASC 820, fair value measurements are disclosed by level within that hierarchy. ASC 820 applies to all assets and liabilities that are measured and reported on a fair value basis.
ASC 820 requires disclosure that establishes a framework for measuring fair value in GAAP, and expands disclosure about fair value measurements. This statement enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The statement
CCCS Corporate Holdings, Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements (Continued)
(Dollars in thousands)
Note 1. Nature of Operations and Significant Accounting Policies (Continued)
requires that assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:
Level 1. Quoted market prices in active markets for identical assets or liabilities.
Level 2. Observable market based inputs or unobservable inputs that are corroborated by market data.
Level 3. Unobservable inputs that are not corroborated by market data.
In determining the appropriate levels, the Company performs a detailed analysis of the assets and liabilities that are subject to ASC 820. At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs are classified as Level 3.
The estimated fair values of the Companys short-term financial instruments, including receivables and payables arising in the ordinary course of business, approximate their individual carrying amounts due to the relatively short period of time between their origination and expected realization. The recorded values of long-term debt approximate their fair values because the interest rates fluctuate or, if they are fixed, they are based on current rates offered to the Company for debt with similar terms and maturities.
The Companys retained interest in assets sold are carried at fair value and classified within Level 3 due to the lack of observable pricing data. The fair value of the Level 3 retained interest in assets sold is calculated with historical consumer collections data using a static pool analysis that has been discounted to address the appropriate risk profile. Results of the analysis may be adjusted, as appropriate, to reflect other market conditions or the perceived credit risk of the borrower.
Governmental regulation: The Company is subject to various state and federal laws and regulations, which are subject to change and which may impose significant costs or limitations on the way the Company conducts or expands its business. Certain limitations include among other things imposed limits on fee rates and other charges, the number of advances to a customer, a cooling off period (not applicable in California), the number of permitted rollovers (not applicable in California), and required licensing and qualification.
Although states provide the primary regulatory framework under which the Company offers payday cash advance services and consumer loans, certain federal laws also impact the business. The Companys payday cash advance services and consumer loans are subject to federal laws and regulations, including the Truth-in-Lending Act (TILA), the Equal Credit Opportunity Act (ECOA), the Fair Credit Reporting Act (FCRA), the Gramm-Leach-Bliley Act (GLBA) and the regulations promulgated for each. Among other things, these laws require disclosure of the principal terms of each transaction to every customer, prohibit misleading advertising, protect against discriminatory lending practices, proscribe unfair credit practices and prohibit creditors from discriminating against credit applicants on the basis of race, sex, age or marital status. The GLBA and its implementing regulations generally require the Company to protect the confidentiality of its customers nonpublic personal information and to disclose to the Companys customers its privacy policy and practices.
Additionally, various legislation has been proposed or introduced in the U.S. Congress and California legislature to further regulate the cash advance business. Congressional and Legislative
CCCS Corporate Holdings, Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements (Continued)
(Dollars in thousands)
Note 1. Nature of Operations and Significant Accounting Policies (Continued)
members continue to receive pressure from consumer advocates and other industry opposition groups to adopt such legislation.
On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted into law. This act established the semi-autonomous Consumer Financial Protection Bureau (CFPB) as a consumer watchdog to regulate mortgages, credit cards, payday loans and other financial products. Any changes in state or federal legislation regulating products and services offered by the Company could cause the Company to convert to selling a different product of service, reduce rates, or stop selling a specific product or service. Such changes could have significant adverse impacts on the business by reducing operating margins, eliminating geographic selling areas or curtailing expansion.
Recent accounting pronouncements: In July 2010, the FASB issued Accounting Standard Update No. 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses (ASU 2010-20). ASU 2010-20 amends the ASCs guidance on receivables by requiring more robust and disaggregated disclosure about the credit quality of an entitys loans and its allowances for loan losses. This update is effective for the Company for annual reporting periods ending after December 15, 2010. The adoption of this guidance did not have a significant impact on the Companys financial position, results of operations or cash flows.
Subsequent events: The Company has evaluated subsequent events (events occurring after March 31, 2011) through August 22, 2011, which represents the date the consolidated financial statements were available to be issued.
Note 2. Advances and Fees Receivables, Credit Quality Information and Allowance for Loan Losses
Advances and fees receivables represent amounts due from customers for advances at March 31, 2011 and December 31, 2010 consisted of the following:
|
|
March 31, |
|
December 31, |
| ||
Payroll and other advances receivable |
|
$ |
11,607 |
|
$ |
13,946 |
|
Consumer automobile advances receivable |
|
1,069 |
|
1,133 |
| ||
Returned checks receivable |
|
292 |
|
315 |
| ||
Commissions receivable |
|
476 |
|
496 |
| ||
Retained interest in assets sold |
|
81 |
|
100 |
| ||
Unearned advance fees, net of deferred loan costs |
|
(544 |
) |
(855 |
) | ||
Advanced Fees Receivables before Allowance for Loan Losses |
|
12,981 |
|
15,135 |
| ||
Allowance for loan losses |
|
(833 |
) |
(719 |
) | ||
|
|
$ |
12,148 |
|
$ |
14,416 |
|
CCCS Corporate Holdings, Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements (Continued)
(Dollars in thousands)
Note 2. Advances and Fees Receivables, Credit Quality Information and Allowance for Loan Losses (Continued)
Changes in the allowance for loan losses by product type for the three months ended March 31, 2011 was as follows:
Allowance For Loan Losses by Product Type
|
|
Balance |
|
Q1 |
|
Q1 |
|
Q1 |
|
Balance |
|
Finance |
|
Allowance as |
| ||||||
Payroll and other advances receivable |
|
$ |
539 |
|
$ |
950 |
|
$ |
(21,558 |
) |
$ |
20,677 |
|
$ |
608 |
|
$ |
11,607 |
|
5.24 |
% |
Consumer automobile advances receivable* |
|
86 |
|
45 |
|
0 |
|
0 |
|
131 |
|
2,307 |
|
5.68 |
% | ||||||
Returned checks receivable |
|
94 |
|
207 |
|
(412 |
) |
205 |
|
94 |
|
292 |
|
32.19 |
% | ||||||
|
|
$ |
719 |
|
$ |
1,202 |
|
$ |
(21,970 |
) |
$ |
20,882 |
|
$ |
833 |
|
$ |
14,206 |
|
5.86 |
% |
Changes in the allowance for loan losses for the three months ended March 31, 2010 was as follows:
|
|
Three Months |
| |
|
|
2010 |
| |
Balance, beginning of period |
|
$ |
631 |
|
Provision for loan losses |
|
1,741 |
| |
Charge-offs, net |
|
(1,762 |
) | |
Balance, end of period |
|
$ |
610 |
|
The Company considers the near term repayment performance of finance receivables as its primary credit quality indicator. The Company does not perform credit checks through consumer reporting agencies. If a third-party lender provides the advance, the applicable third-party lender decides whether to approve the cash advance and establishes all of the underwriting criteria and terms, conditions, and features of the customer agreements. The due date depends on the product.
Aging of Receivables are as follows (in thousands):
|
|
March 31, |
|
December 31, |
| ||
Current finance receivables |
|
$ |
13,180 |
|
$ |
14,941 |
|
Past due finance receivables (1-30 days) |
|
1,026 |
|
1,765 |
| ||
|
|
$ |
14,206 |
|
$ |
16,706 |
|
* includes $1,238 finance receivables classified in other assets.
CCCS Corporate Holdings, Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements (Continued)
(Dollars in thousands)
Note 3. Goodwill and Other Intangible Assets
The following table summarizes goodwill and other intangible assets as of March 31, 2011 and December 31, 2010:
|
|
March 31, |
|
December 31, |
| ||
Goodwill from acquisitions |
|
$ |
115,332 |
|
$ |
115,332 |
|
Intangible assets acquired from acquisitions |
|
|
|
|
| ||
Customer relationships |
|
14,733 |
|
14,070 |
| ||
Trademarks |
|
2,115 |
|
7,000 |
| ||
Non-compete |
|
380 |
|
380 |
| ||
Software licenses |
|
73 |
|
73 |
| ||
Licensed trade names |
|
110 |
|
110 |
| ||
Impairment of goodwill |
|
(24,101 |
) |
|
| ||
|
|
108,642 |
|
136,965 |
| ||
Accumulated amortization |
|
(11,167 |
) |
(10,710 |
) | ||
|
|
$ |
97,475 |
|
$ |
126,255 |
|
The Company tests the carrying value of the goodwill and other indefinite life intangibles annually or when the events and circumstances warrant such a review. If this review indicates that goodwill and other indefinite life intangibles are not recoverable, the Companys carrying value of the goodwill and other indefinite life intangibles are reduced by the estimated shortfall.
The Company entered into an agreement to merge with CheckSmart and the expected closing value indicated that the Companys carrying value of goodwill and other intangibles was impaired.
As a result of the transaction discussed in Note 12, the Company conducted a test for impairment of goodwill as of March 31, 2011. The impairment test of goodwill resulted in the impairment of goodwill totaling $24.1 million and an impairment of trademarks of $4.85 million. The methodology for determining the fair value was a combination of quoted market prices, prices of comparable businesses, discounted estimated cash flows and other valuation techniques.
Note 4. Pledged Assets and Debt
Debt at March 31, 2011 and December 31, 2010 consisted of the following:
|
|
March 31, |
|
December 31, |
| ||
Tranche B loans, secured, 3.26% - 3.54%, collateralized by all Company assets, quarterly principal payments of $192 and excess cash payments as defined in the agreement, with remaining balance due September 2012 |
|
$ |
55,923 |
|
$ |
62,023 |
|
Second Lien loans, secured, 7.49% - 7.52%, collateralized by all Company assets, interest only payments with remaining principal balance due September 2013 |
|
18,000 |
|
18,000 |
| ||
|
|
73,923 |
|
80,023 |
| ||
Less current maturities |
|
18,400 |
|
10,800 |
| ||
Long-term portion |
|
$ |
55,523 |
|
$ |
69,223 |
|
CCCS Corporate Holdings, Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements (Continued)
(Dollars in thousands)
Note 5. Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities at March 31, 2011 and December 31, 2010 consisted of the following:
|
|
March 31, |
|
December 31, |
| ||
Accounts payable |
|
$ |
464 |
|
$ |
504 |
|
Money orders payable |
|
2,718 |
|
4,058 |
| ||
Accrued interest |
|
106 |
|
135 |
| ||
Accrued payroll and benefits |
|
860 |
|
400 |
| ||
Wire transfers payable |
|
1,976 |
|
2,126 |
| ||
Other |
|
2,900 |
|
2,329 |
| ||
|
|
$ |
9,024 |
|
$ |
9,552 |
|
Note 6. Equity Based Compensation
CCCS Holdings, LLC Operating Agreement provides for the Board of Directors granting of Class C membership units as incentives to key members of management. These incentive units vest ratably over a 24 to 48-month period provided that employment has not terminated.
A summary of Class C management incentive units for the period ended March 31, 2011 is as follows:
|
|
Units |
|
Grant Date |
|
Units Vested |
| |
Outstanding, December 31, 2010 |
|
37.50 |
|
$ |
300 |
|
34.38 |
|
Granted |
|
|
|
|
|
|
| |
Outstanding, March 31, 2011 |
|
37.50 |
|
$ |
300 |
|
35.47 |
|
The compensation expense associated with these awards is recognized straight-line over the service period. During the three months ended March 31, 2011 and 2010, the Company recorded $10 of compensation expense in both periods related to these management incentive units; and as of March 31, 2011 and December 31, 2010, the total unrecognized compensation cost related to unvested management incentive units was approximately $18 and $27, respectively.
Note 7. Litigation
From time-to-time the Company is a defendant in various lawsuits and administrative proceedings wherein certain amounts are claimed or violations of law or regulations are asserted. In the opinion of the Companys management, these claims are without substantial merit and should not result in judgments which in the aggregate would have a material adverse effect on the Companys consolidated financial statements.
Note 8. Business Combination
On March 24, 2010, the Company acquired the operations of 20 stores located in Southern California from a competitor for aggregate consideration of $2,662. The acquisition was part of a long-term expansion strategy, and served to increase the Companys market presence in California. The purchase price was allocated to certain acquired assets, including a number of identified intangibles in accordance with ASC 805. The goodwill of $420 arising from this acquisition consists largely of synergies and economies of scale expected from combining the operations and entering new markets. All of the goodwill recognized is expected to be deductible for income tax purposes and will be deductible over 15 years.
CCCS Corporate Holdings, Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements (Continued)
(Dollars in thousands)
Note 8. Business Combination (Continued)
The following table summarizes the consideration paid for the above mentioned acquisition and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date:
Fair value of total consideration transferred, cash |
|
$ |
2,662 |
|
|
|
|
| |
Recognized amounts of identifiable assets acquired |
|
|
| |
Advance fees and receivables |
|
$ |
46 |
|
Other current assets and deposits |
|
117 |
| |
Leasehold improvements and equipment |
|
1,799 |
| |
Identifiable intangible assets |
|
280 |
| |
Total indentifiable net assets |
|
2,242 |
| |
Goodwill |
|
420 |
| |
|
|
$ |
2,662 |
|
The acquired advances and fees receivable are payroll advances and have been recorded at fair value which approximates the contractual cash flows that are believed to be collectible because of the short-term nature of such receivables.
The acquired intangibles will be amortized over their useful lives, as estimated by management based on their intended use.
The acquisition was financed from the Companys cash reserves.
Note 9. Income Taxes
The Company and its Subsidiaries file multiple federal income tax returns and a partnership return, where income is allocated to and reported in each non-controlling members federal and state income tax returns. No provision for federal or state income taxes is reflected in the consolidated financial statements to the extent that such income is required to be reporting by the non-controlling members. The Company files separate state income tax returns as permitted by the individual states in which it operates.
The Company had no liability recorded for unrecognized tax benefits at March 31, 2011 and December 31, 2010.
Note 10. Discontinued Operations
The Company commenced operations in four stores in the State of Washington on January 20, 2010. Due to a change in law provision in Washington effective January 1, 2010, it made the business wholly unprofitable. The Company continued operations and made the decision to close its stores in Washington, with the final day of operations being August 21, 2010. After winding up operations, licensing, and other real estate matters, the Company has no further plans to operate in Washington. There are no anticipated future cash flows to be generated from the operation, as there is no longer an operation and it is not expected that customers in Washington will migrate to other Company-owned stores.
CCCS Corporate Holdings, Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements (Continued)
(Dollars in thousands)
Note 10. Discontinued Operations (Continued)
Results from discontinued operations of Washington stores for the three months ended March 31, 2011 and 2010 were as follows:
|
|
Three Months Ended |
| ||||
|
|
2011 |
|
2010 |
| ||
Total Revenue |
|
$ |
|
|
$ |
57 |
|
Branch Expenses: |
|
|
|
|
| ||
Provision for loan losses |
|
|
|
(24 |
) | ||
Selling, general and administrative |
|
|
|
134 |
| ||
Total operating expenses |
|
|
|
110 |
| ||
Corporate expenses |
|
|
|
|
| ||
Net loss before income taxes |
|
|
|
(53 |
) | ||
Benefit for income taxes |
|
|
|
|
| ||
Loss from discontinued operations |
|
$ |
|
|
$ |
(53 |
) |
There were no significant non-cash assets or liabilities included in the balance sheets at March 31, 2011 and December 31, 2010.
Note 11. Commitments and Contingencies
The Company leases retail and office space under operating leases with related and unrelated parties expiring in various years through 2033. The leases require the Company to pay additional rentals for increases and operating expenses and real estate taxes and contain renewal options. Total rent expense to related parties for the three months ended March 31, 2011 and 2010 was $120 and $123, respectively.
The Company has an advisory agreement with an affiliate of the Companys controlling member. The advisory agreement requires the Company to pay a management fee of the greater of $800 or 3% of EBITDA, as defined, annually through December 31, 2013. Management fee expense for the three months ended March 31, 2011 and 2010 was $200 for both periods.
Note 12. Subsequent Events
In April 2011, Community Choice Financial Inc., (CCFI), a newly formed holding company and CheckSmart Financial Holdings Corp., (CheckSmart) together with CCCS Corporate Holdings, Inc. and CCCS Holdings, LLC entities (collectively, CCCS) located in the western United States and certain other parties executed an Agreement and Plan of Merger pursuant to which CCFI acquired all outstanding shares of both CheckSmart and CCCS. The transaction was structured as a stock-for-stock transaction, in which the equity holders of each of CheckSmart and CCCS agreed to contribute the equity of the separate companies to CCFI in exchange for shares of the combined company. As a result of the transaction, the equity holders of CheckSmart and CCCS own approximately 77% and 23% of CCFI, respectively.
CCCS Corporate Holdings, Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements (Continued)
(Dollars in thousands)
Note 12. Subsequent Events (Continued)
In connection with the above transaction, CCFI issued $395,000 8-year senior secured notes. The notes have an interest rate of 10.75% payable semi-annually and will mature on May 1, 2019. The proceeds were used to refinance existing debt, pay fees and expenses, and to finance a special dividend to shareholders and bonuses to management. The amount of special dividend was $120,566 and the amount of bonuses to management was $4,434.
In April 2011, CCFI also entered into a 4-year, $40,000 revolving credit facility concurrent with the notes offering. The revolving credit facility, at the Companys option, bears interest at either (a) LIBOR plus a margin of 5% or (b) an alternative base rate (determined as the greatest of the prime rate, the federal funds effective rate plus 0.5% or 1-month LIBOR plus 1%) plus a margin of 4%, and will mature on April 29, 2015.
Substantially all assets of the Company are pledged as collateral on the senior secured notes and revolving credit facility. The agreements contain various restrictions, including, in the case of the revolving credit facility, a requirement to maintain certain financial ratios, and certain other restrictions.
Community Choice Financial Inc.
OFFER TO EXCHANGE
Up to $395,000,000 aggregate principal amount of its 10.75% Senior Secured Notes due 201
registered under the Securities Act of 1933 for
any and all outstanding 10.75% Senior Secured Notes due 2019
PROSPECTUS
Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. By so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an underwriter with the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for restricted notes where such restricted notes were acquired by such broker-dealer as a result of market making activities or other trading activities. In addition, until , 201 , all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus.
PART II
Information Not Required in Prospectus
Item 20. Indemnification of Directors and Officers.
Alabama
Cash Central of Alabama, LLC and Insight Capital, LLC are limited liability companies organized under the laws of the State of Alabama.
Section 10A-5-1.04 of the Code of Alabama allows limited liability companies to indemnify a member, manager, or employee, or former member, manager, or employee of the limited liability company against expenses actually and reasonably incurred in connection with the defense of an action, suit, or proceeding, civil or criminal, in which the member, manager, or employee is made a party by reason of being or having been a member, manager, or employee of the limited liability company, except in relation to matters as to which the member, manager, or employee is determined in the action, suit, or proceeding to be liable for negligence or misconduct in the performance of duty; to make any other indemnification that is authorized by the governing documents of the limited liability company, or by a resolution adopted by the members after notice (unless notice is waived); to purchase and maintain insurance on behalf of any person who is or was a member, manager, or employee of the limited liability company against any liability asserted against and incurred by the member, manager, or employee in any capacity or arising out of the members, managers, or employees status as such, whether or not the limited liability company would have the power to indemnify the member, manager, or employee against that liability under the provisions of this section.
The Limited Liability Company Agreements of Cash Central of Alabama, LLC and Insight Capital, LLC provide, to the fullest extent permitted under the Code of Alabama, for the indemnification of any member, manager, officer or employee of the company from and against any and all claims and demands arising by reason of the fact that such person is, or was, a member, manager, officer or employee of the company.
Alaska
Cash Central of Alaska, LLC is a limited liability company incorporated under the laws of the State of Alaska.
Section 10.50.148 of the Alaska Revised Limited Liability Company Act provides that a limited limited liability company may indemnify a person who was, is, or is threatened to be made a party to a completed, pending, or threatened action or proceeding, whether civil, criminal, administrative, or investigative, other than an action by or in the right of the companya derivative action), by reason of the fact that the person is or was a manager, managing member, employee, or agent of the company, or is or was serving at the request of the company as a manager, managing member, employee, or agent of another limited liability company, partnership, joint venture, trust, or other enterprise. Indemnification may include reimbursement of expenses, attorney fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred by the person in connection with the action or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the company, and, with respect to a criminal action or proceeding, the person had no reasonable cause to believe the conduct was unlawful. The termination of an action or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, does not create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the company, and, with respect to a criminal action or proceeding, the person had reasonable cause to believe that the conduct was unlawful.
A similar standard is applicable in the case of derivative actions, except that indemnification only extends to expenses and attorneys fees actually and reasonably incurred in connection with the defense or settlement of such action if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the company. Indemnification may not be made in respect of any claim, issue, or matter as to which the person has been adjudged to be liable for negligence or misconduct in the performance of the persons duty to the company except to the extent that the court in which the action was brought determines upon application that, despite the adjudication of liability, in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for expenses that the court considers proper.
The Limited Liability Company Agreements of Cash Central of Alaska, LLC provides, to the fullest extent permitted under Alaska Revised Limited Liability Company Act, for the indemnification of any member, manager, officer or employee of the company from and against any and all claims and demands arising by reason of the fact that such person is, or was, a member, manager, officer or employee of the company.
California
CCCIS, Inc. and Fast Cash, Inc. are incorporated under the laws of the State of California.
Section 317 of the California General Corporation Law provides that a California corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, other than in certain derivative actions as described below, by reason of the fact that he or she is or was a director, officer, employee or other agent of the corporation, or is or was serving at the corporation, partnership, joint venture, trust or other enterprise, or was a director, officer, employee or agent of a corporation that was a predecessor corporation of the corporation or of another enterprise at the request of the predecessor corporation, against expenses, including attorneys fees, judgments, fines, settlements and other amounts actually or reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner he or she reasonably believed to be in the best interests of the corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was unlawful. In the case of a derivative action, no indemnification shall be made in respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation in the performance of his or her duty to the corporation and its shareholders unless and only to the extent that the court in which action or suit is or was pending shall determine that, in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnify for these expenses which this court shall deem proper. Section 317 further provides that to the extent that the director, officer, employee or agent of a corporation has been successful on the merits in defense of any action, suit or proceeding referred to above or in the defense of any claim, issue or matter, such person shall be indemnified against expenses, including attorneys fees, actually or reasonably incurred by him or her in connection with such defense.
The Bylaws of CCCIS, Inc. and Fast Cash, Inc. provide for the indemnification of their respective officers and directors to the fullest extent authorized under Californias General Corporation Law.
Cash Central of California, LLC is a limited liability company formed under the laws of the State of California.
Section 17003 of Californias Beverly-Killea Limited Liability Company Act states that a limited liability company organized under this section shall have all of the powers of a natural person in carrying out its business activities, including, without limitation, the power to indemnify or hold harmless any person.
The Limited Liability Company Agreements of Cash Central of California, LLC provides, to the fullest extent authorized by Californias Beverly-Killea Limited Liability Company Act, for the indemnification of any member, manager, officer or employee of the company from and against any and all claims and demands arising by reason of the fact that such person is, or was, a member, manager, officer or employee of the company.
Delaware
Buckeye Check Cashing of Michigan, Inc., CCCS Corporate Holdings, Inc., CheckSmart Financial Company, Checksmart Financial Holdings Corp. and Checksmart Money Order Services, Inc. are incorporated under the laws of the State of Delaware.
Section 145 of the Delaware General Corporation Law provides that a Delaware corporation may indemnify directors and officers as well as other employees and individuals against expenses (including attorneys fees), judgments, fines, and amounts paid in settlement in connection with specified actions, suits and proceedings, whether civil, criminal, administrative or investigative (other than action by or in the right of the corporationa derivative action), if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful. A similar standard is applicable in the case of derivative actions, except that indemnification only extends to expenses (including attorneys fees) incurred in connection with the defense or settlement of such action, and the statute requires court approval before there can be any indemnification where the person seeking indemnification has been found liable to the corporation. The statute provides that it is not exclusive of other indemnification that may be granted by a corporations certificate of incorporation, bylaws, disinterested director vote, stockholder vote, agreement, or otherwise.
The Certificates of Incorporation and Bylaws of Buckeye Check Cashing of Michigan, Inc., CCCS Corporate Holdings, Inc., CheckSmart Financial Company, Checksmart Financial Holdings Corp. and Checksmart Money Order Services, Inc. generally provide for the indemnification of their respective officers and directors to the fullest extent permitted under Delaware General Corporation Law.
ARH-Arizona, LLC, BCCI CA, LLC, Buckeye Check Cashing of California, LLC, Buckeye Check Cashing of Illinois, LLC, Buckeye Check Cashing of Kansas, LLC, Buckeye Check Cashing of Missouri, LLC, Buckeye Check Cashing of Texas, LLC, Buckeye Commercial Check Cashing of Florida, LLC, Buckeye Credit Solutions, LLC, Buckeye Lending Solutions of Arizona, LLC, Buckeye Lending Solutions, LLC, Buckeye Small Loans, LLC, Buckeye Title Loans of California, LLC, Buckeye Title Loans of Kansas, LLC, Buckeye Title Loans of Missouri, LLC, Buckeye Title Loans of Utah, LLC, Buckeye Title Loans of Virginia, LLC, California Check Cashing Stores, LLC, Cash Central of Delaware, LLC, CCCS Holdings, LLC, CheckSmart Financial, LLC, Community Choice Family Insurance Agency, LLC, CS-Arizona, LLC, Direct Financial Solutions, LLC, First Virginia Credit Solutions, LLC, First Virginia Financial Services, LLC and National Tax Lending, LLC are limited liability companies formed under the laws of the State of Delaware.
Section 18-108 of the Delaware Limited Liability Company Act provides, subject to standards and restrictions set forth in its limited liability company agreement, a limited liability company may, and shall have the power to, indemnify and hold harmless any member or manager or other person from and against any and all claims and demands whatsoever.
The Limited Liability Company Agreements of ARH-Arizona, LLC, BCCI CA, LLC, Buckeye Check Cashing of California, LLC, Buckeye Check Cashing of Illinois, LLC, Buckeye Check Cashing of Kansas, LLC, Buckeye Check Cashing of Missouri, LLC, Buckeye Check Cashing of Texas, LLC, Buckeye Commercial Check Cashing of Florida, LLC, Buckeye Credit Solutions, LLC, Buckeye Lending Solutions of Arizona, LLC, Buckeye Lending Solutions, LLC, Buckeye Small Loans, LLC, Buckeye Title Loans of California, LLC, Buckeye Title Loans of Kansas, LLC, Buckeye Title Loans of Missouri, LLC, Buckeye Title Loans of Utah, LLC, Buckeye Title Loans of Virginia, LLC, California Check Cashing Stores, LLC, Cash Central of Delaware, LLC, CCCS Holdings, LLC, CheckSmart Financial, LLC, Community Choice Family Insurance Agency, LLC, CS-Arizona, LLC, Direct Financial Solutions, LLC, First Virginia Credit Solutions, LLC, First Virginia Financial Services, LLC and National Tax Lending, LLC generally provide for the indemnification of their respective officers and directors to the fullest extent permitted under Delaware General Corporation Law as if the companies were Delaware corporations.
Hawaii
Cash Central of Hawaii, LLC is a limited liability company incorporated under the laws of the State of Hawaii.
Section 428-403 of the Hawaii Limited Liability Company Act states that a limited liability company shall reimburse a member or manager for payments made and indemnify a member or manager for liabilities incurred by the member or manager in the ordinary course of the business of the company or for the preservation of its business or property.
The Limited Liability Company Agreement of Cash Central of Hawaii, LLC provides, to the fullest extent authorized by the Hawaii Limited Liability Company Act, for the indemnification of any member, manager, officer or employee of the company from and against any and all claims and demands arising by reason of the fact that such person is, or was, a member, manager, officer or employee of the company.
Idaho
Cash Central of Idaho, LLC is a limited liability company incorporated under the laws of the State of Idaho.
Section 53-624 of the Idaho Limited Liability Company Act provides for indemnification of a member or manager for judgments, settlements, penalties, fines or expenses incurred in a proceeding to which a person is a party because the person is or was a member or manager.
The Limited Liability Company Agreement of Cash Central of Idaho, LLC provides, to the fullest extent authorized by the Idaho Limited Liability Company Act, for the indemnification of any member, manager, officer or employee of the company from and against any and all claims and demands arising by reason of the fact that such person is, or was, a member, manager, officer or employee of the company.
Kansas
Cash Central of Kansas, LLC is a limited liability company incorporated under the laws of the State of Kansas.
Section 17-7670 of the Kansas Limited Liability Company Act provides that a limited liability company may, and shall have the power to, indemnify and hold harmless any member or manager or other person from and against any and all claims and demands whatsoever. To the extent that a member, manager, officer, employee or agent has been successful on the merits or otherwise or the
defenses of any action, suits or proceeding, or in defense of any issue or matter therein, such director, officer, employee or agent shall be indemnified against expenses actually and reasonably incurred by such person in connection therewith, including attorney fees.
The Limited Liability Company Agreement of Cash Central of Kansas, LLC provides, to the fullest extent authorized by the Kansas Limited Liability Company Act, for the indemnification of any member, manager, officer or employee of the company from and against any and all claims and demands arising by reason of the fact that such person is, or was, a member, manager, officer or employee of the company.
Minnesota
Cash Central of Minnesota, LLC is a limited liability company incorporated under the laws of the State of Minnesota.
Under Section 322B.699 of the Minnesota Limited Liability Company Act, a limited liability company shall indemnify a person made or threatened to be made a party to a proceeding by reason of the former or present official capacity of the person against judgments, penalties, fines, including, without limitation, excise taxes assessed against the person with respect to an employee benefit plan, settlements, and reasonable expenses, including attorneys fees and disbursements, incurred by the person in connection with the proceeding, if, with respect to the acts or omissions of the person complained of in the proceeding, the person: (1) has not been indemnified by another organization or employee benefit plan for the same judgments, penalties, fines, including, without limitation, excise taxes assessed against the person with respect to an employee benefit plan, settlements, and reasonable expenses, including attorneys fees and disbursements, incurred by the person in connection with the proceeding with respect to the same acts or omissions; (2) acted in good faith; (3) received no improper personal benefit and section 322B.666 if applicable, has been satisfied; (4) in the case of a criminal proceeding, had no reasonable cause to believe the conduct was unlawful; and (5) in the case of acts or omissions occurring in the official capacity described in subdivision 1, paragraph (c), clause (1) or (2), reasonably believed that the conduct was in the best interests of the limited liability company, or in the case of acts or omissions occurring in the official capacity described in subdivision 1, paragraph (c), clause (3), reasonably believed that the conduct was not opposed to the best interests of the limited liability company. If the persons acts or omissions complained of in the proceeding relate to conduct as a director, officer, trustee, employee, or agent of an employee benefit plan, the conduct is not considered to be opposed to the best interests of the limited liability company if the person reasonably believed that the conduct was in the best interests of the participants or beneficiaries of the employee benefit plan.
The Limited Liability Company Agreement of Cash Central of Minnesota, LLC provides, to the fullest extent authorized by the Minnesota Limited Liability Company Act, for the indemnification of any member, manager, officer or employee of the company from and against any and all claims and demands arising by reason of the fact that such person is, or was, a member, manager, officer or employee of the company.
Missouri
Cash Central of Missouri, LLC is a limited liability company incorporated under the laws of the State of Missouri.
The Missouri Limited Liability Company Act is silent as to indemnification.
The Cash Central of Missouri, LLC Limited Liability Company Agreement provides, to the fullest extent authorized by the Missouri Limited Liability Company Act, for the indemnification of any member, manager, officer or employee of the company from and against any and all claims and demands arising by reason of the fact that such person is, or was, a member, manager, officer or employee of the company.
Nevada
Cash Central of Nevada, LLC is a limited liability company organized under the laws of the State of Nevada.
Under Sections 86.411 and 86.412 of Nevadas Limited Liability Company Act, a limited liability company may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a manager, member, employee or agent of the company, or is or was serving at the request of the company as a manager, member, employee or agent of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit or proceeding if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its
equivalent, does not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the limited liability company, and that, with respect to any criminal action or proceeding, he had reasonable cause to believe that his conduct was unlawful. To the extent that a manager, member, employee or agent of a limited liability company has been successful on the merits or otherwise in defense of any action, suit or proceeding or in defense of any claim, issue or matter therein, the company shall indemnify him against expenses, including attorneys fees, actually and reasonably incurred by him in connection with the defense.
If unsuccessful in defense of a third-party civil suit or a criminal suit, or if such a suit is settled, an Indemnitee may be indemnified under Nevada law against both (i) expenses, including attorneys fees, and (ii) judgments, fines, and amounts paid in settlement if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the registrant, and, with respect to any criminal action, had no reasonable cause to believe his or her conduct was unlawful.
If unsuccessful in defense of a suit brought by or in the right of the registrant, where the suit is settled, an Indemnitee may be indemnified under Nevada law only against expenses (including attorneys fees) actually and reasonably incurred in the defense or settlement of the suit if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the registrant except that if the Indemnitee is adjudged to be liable for a breach of fiduciary duty or misconduct, fraud, or a knowing violation of law in the performance of his or her duty to the registrant, he or she cannot be made whole even for expenses unless a court determines that he or she is fully and reasonably entitled to indemnification for such expenses. Also under Nevada law, expenses incurred by an officer or director in defending a civil or criminal action, suit, or proceeding may be paid by the registrant in advance of the final disposition of the suit, action, or proceeding upon receipt of an undertaking by or on behalf of the officer or director to repay such amount if it is ultimately determined that he or she is not entitled to be indemnified by the registrant. The registrant may also advance expenses incurred by other employees and agents of the registrant upon such terms and conditions, if any, that the board of directors of the registrant deems appropriate.
The Limited Liability Company Agreement of Cash Central of Nevada, LLC provides, to the fullest extent permitted by the Nevada Limited Liability Company Act, for the indemnification of any member, manager, officer or employee of the company from and against any and all claims and demands arising by reason of the fact that such person is, or was, a member, manager, officer or employee of the company.
North Dakota
Cash Central of North Dakota, LLC is a limited liability company incorporated under the laws of the State of North Dakota.
Section 10-32-99 of the North Dakota Limited Liability Company Act provides that a limited liability company shall indemnify a person made or threatened to be made a party to a proceeding by reason of the former or present official capacity of the person against judgments, penalties, fines, including without limitation, excise taxes assessed against the person with respect to an employee benefit plan, settlements, and reasonable expenses, including attorneys fees and disbursements, incurred by the person in connection with the proceeding if the person reasonably believed that the conduct was in the best interests of the limited liability company or not opposed to the best interests of the company and: (a) has not been indemnified by another organization or employee benefit plan for the same judgments, penalties, fines; (b) acted in good faith; (c) received no improper personal benefit; and in the case of a criminal proceeding, had no reasonable cause to believe the conduct was unlawful.
The Limited Liability Company Agreement of Cash Central of North Dakota, LLC Limited Liability Company Agreement provides, to the fullest extent authorized by the North Dakota Limited Liability Company Act, for the indemnification of any member, manager, officer or employee of the company from and against any and all claims and demands arising by reason of the fact that such person is, or was, a member, manager, officer or employee of the company.
Ohio
Community Choice Financial Inc., BCCI Management Company, Buckeye Check Cashing II, Inc., Buckeye Check Cashing of Arizona, Inc., Buckeye Check Cashing of Florida, Inc., Buckeye Check Cashing of Kentucky, Inc. Buckeye Check Cashing of Utah, Inc., Buckeye Check Cashing of Virginia, Inc., Buckeye Check Cashing, Inc., Buckeye Title Loans, Inc., Express Payroll Advance of Ohio, Inc. and Hoosier Check Cashing of Ohio, Ltd are incorporated under the laws of the State of Ohio.
Under Section 1701.13(E) of the Ohio General Corporation Law, generally, a corporation may indemnify or agree to indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, other than an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, trustee, officer, employee, member, manager, or agent of another corporation, domestic or foreign, nonprofit or for profit, a
limited liability company, or a partnership, joint venture, trust, or other enterprise, against expenses, including attorneys fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit, or proceeding, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, if he had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, he had reasonable cause to believe that his conduct was unlawful.
A corporation may also indemnify or agree to indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending, or completed action or suit by or in the right of the corporation to procure a judgment in its favor, by reason of the fact that he is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, trustee, officer, employee, member, manager, or agent of another corporation, domestic or foreign, nonprofit or for profit, a limited liability company, or a partnership, joint venture, trust, or other enterprise, against expenses, including attorneys fees, actually and reasonably incurred by him in connection with the defense or settlement of such action or suit, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made in respect of any of the following: (a) Any claim, issue, or matter as to which such person is adjudged to be liable for negligence or misconduct in the performance of his duty to the corporation unless, and only to the extent that, the court of common pleas or the court in which such action or suit was brought determines, upon application, that, despite the adjudication of liability, but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the court of common pleas or such other court shall deem proper; (b) Any action or suit in which the only liability asserted against a director is pursuant to section 1701.95 of the Revised Code.
The Articles of Incorporation of Community Choice Financial Inc., BCCI Management Company, Buckeye Check Cashing II, Inc., Buckeye Check Cashing of Arizona, Inc., Buckeye Check Cashing of Florida, Inc., Buckeye Check Cashing of Kentucky, Inc., Buckeye Check Cashing of Utah, Inc., Buckeye Check Cashing of Virginia, Inc., Buckeye Check Cashing, Inc., Buckeye Title Loans, Inc. and Express Payroll Advance of Ohio, Inc. provide for indemnification to the fullest extent permitted under the Ohio General Corporation Law.
Hoosier Check Cashing of Ohio, Ltd is a limited liability company organized under the laws of the State of Ohio.
Section 1705.32 of the Ohio Limited Liability Company Act provides that a limited liability company may indemnify or agree to indemnify any person who was or is a party, or who is threatened to be made a party, to any threatened, pending, or completed civil, criminal, administrative, or investigative action, suit, or proceeding, because he is or was a manager, member, partner, officer, employee, or agent of the company or is or was serving at the request of the company as a manager, director, trustee, officer, employee, or agent of another limited liability company, corporation, partnership, joint venture, trust, or other enterprise. The company may indemnify or agree to indemnify a person in that position against expenses, including attorneys fees, judgments, fines, and amounts paid in settlement that actually and reasonably were incurred by him in connection with the action, suit, or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the company and, in connection with any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.
The Limited Liability Company Agreement of Hoosier Check Cashing of Ohio, Ltd provides, to the fullest extent permitted by the Ohio Limited Liability Company Act, for the indemnification of any member, manager, officer or employee of the company from and against any and all claims and demands arising by reason of the fact that such person is, or was, a member, manager, officer or employee of the company.
South Dakota
Cash Central of South Dakota, LLC is a limited liability company incorporated under the laws of the State of South Dakota.
Section 47-34A-403 of the South Dakota Limited Liability Company Act states that a limited liability company shall reimburse a member or manager for payments made and indemnify a member or manager for liabilities incurred by the member or manager in the ordinary course of the business of the company or for the preservation of its business or property.
The Limited Liability Agreement of Cash Central of South Dakota, LLC provides, to the fullest extent authorized by the South Dakota Limited Liability Company Act, for the indemnification of any member, manager, officer or employee of the company from and against any and all claims and demands arising by reason of the fact that such person is, or was, a member, manager, officer or employee of the company.
Texas
Cash Central of Texas, LLC is a limited liability company incorporated under the laws of the State of Texas.
Section 2.20 of the Texas Limited Liability Company Act permits a limited liability company to indemnify members, managers, officers and other persons and purchase and maintain liability insurance for such persons, subject to such standards, and restrictions, if any, as are set forth in its articles of organization or in its regulation.
The Limited Liability Company Agreement of Cash Central of Texas, LLC provides, to the fullest extent permitted by the Texas Limited Liability Company Act, for the indemnification of any member, manager, officer or employee of the company from and against any and all claims and demands arising by reason of the fact that such person is, or was, a member, manager, officer or employee of the company.
Utah
Reliant Software, Inc. is a corporation incorporated under the laws of the state of Utah.
Pursuant to Section 902 of the Utah Revised Business Corporation Act (URBCA), a Utah corporation may indemnify a person who is or was a party in any proceeding because the person is or was a director of the corporation against liability incurred with respect to a proceeding if: (i) the conduct of the person was in good faith; (ii) the person reasonably believed that such conduct was in, or not opposed to, the best interests of the corporation; and (iii) in the case of any criminal proceeding, the person had no reasonable cause to believe the persons conduct was unlawful. Section 902 of the URBCA provides that indemnification of a director in connection with a proceeding by or in the right of the corporation is limited to reasonable expenses incurred in the proceeding. In addition, the corporation may not indemnify a director in connection with a proceeding in which the director was adjudged liable to the corporation. Pursuant to Section 903 of the URBCA, a Utah corporation, unless limited by its articles of incorporation, must indemnify a director who was successful, on the merits or otherwise, in the defense of any proceeding against reasonable expenses incurred by such person in connection with the proceeding. Pursuant to Section 907 of the URBCA, unless a corporations articles of incorporation provide otherwise, a Utah corporation may indemnify an officer, employee, fiduciary or agent of the corporation to the same extent as a director.
The Bylaws of Reliant Software, Inc. provide for the indemnification of its directors or officers to the fullest extent authorized by the URBCA.
Cash Central of Utah, LLC is a limited liability company organized under the laws of the State of Utah.
Section 48-2c-1802 of the Utah Revised Limited Liability Company Act permits a company to indemnify an individual made a party to a proceeding because he is or was a manager against liability incurred in the proceeding if: (a) his conduct was in good faith; (b) he reasonably believed that his conduct was in, or not opposed to, the companys best interests; and (c) in the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful.
The Amended Operating and Restated Agreement of Cash Central of Utah, LLC provides, to the fullest extent authorized by the Utah Revised Limited Liability Company Act, for the indemnification of any member, manager, officer or employee of the company from and against any and all claims and demands arising by reason of the fact that such person is, or was, a member, manager, officer or employee of the company.
Washington
Cash Central of Washington, LLC is a limited liability company incorporated under the laws of the State of Washington.
Section 25.15.040 of the Washington Limited Liability Company Act provides that a limited liability company agreement may contain provisions not inconsistent with law that: (a) eliminate or limit the personal liability of a member or manager to the limited liability company or its members for monetary damages for conduct as a member or manager, provided that such provisions shall not eliminate or limit the liability of a member or manager for acts or omissions that involve intentional misconduct or a knowing violation of law by a member or manager, for conduct of the member or manager, violating the Washington Limited Liability Company Act or for any transaction from which the member or manager will personally receive a benefit in money, property, or services to which the member or manager is not legally entitled; or (b) indemnify any member or manager from and against any judgments, settlements, penalties,
fines, or expenses incurred in a proceeding to which an individual is a party because he or she is, or was, a member or a manager, provided that no such indemnity shall indemnify a member or a manager from or on account of acts or omissions of the member or manager finally adjudged to be intentional misconduct or a knowing violation of law by the member or manager, conduct of the member or manager adjudged to be in violation of the Washington Limited Liability Company Act or any transaction with respect to which it was finally adjudged that such member or manager received a benefit in money, property, or services to which such member or manager was not legally entitled.
The Limited Liability Company Agreement of Cash Central of Washington, LLC provides, to the fullest extent authorized by the Washington Limited Liability Company Act, for the indemnification of any member, manager, officer or employee of the company from and against any and all claims and demands arising by reason of the fact that such person is, or was, a member, manager, officer or employee of the company.
Wisconsin
Cash Central of Wisconsin, LLC is a limited liability company incorporated under the laws of the State of Wisconsin.
Section 183.0106(2) of the Wisconsin Limited Liability Company Act permits a limited liability company to indemnify a member, manager, employee, officer or agent or any other person. Section 183.0403(2) provides that a company shall indemnify or allow reasonable expenses to and pay liabilities of each member and, if management of the limited liability company is vested in one or more managers, of each manager, incurred with respect to a proceeding if that member or manager was a party to the proceeding in the capacity of a member or manager.
The Limited Liability Company Agreement of Cash Central of Wisconsin, LLC provides, to the fullest extent authorized by the Wisconsin Limited Liability Company Act, for the indemnification of any member, manager, officer or employee of the company from and against any and all claims and demands arising by reason of the fact that such person is, or was, a member, manager, officer or employee of the company.
Wyoming
Cash Central of Wyoming, LLC is a limited liability company incorporated under the laws of the State of Wyoming.
Section 17-29-408 of the Wyoming Limited Liability Company Act provides that a company shall reimburse for any payment made and indemnify for any debt, obligation or other liability incurred by a member or a manager in the course of the member or managers activities on behalf of the company if, in making the payment or incurring the debt, obligation or other liability, the member or manager complied with the duties stated in Sections 17-29-405 and 17-29-409 of the Wyoming Limited Liability Company Act. A limited liability company may also purchase and maintain insurance on behalf of a member or manager of the company against liability asserted against or incurred by the member or manager in that capacity or arising from that status.
The Limited Liability Company Agreement of Cash Central of Wyoming, LLC provides, to the fullest extent authorized by the Wyoming Limited Liability Company Act, for the indemnification of any member, manager, officer or employee of the company from and against any and all claims and demands arising by reason of the fact that such person is, or was, a member, manager, officer or employee of the company.
Item 21. Exhibits and Financial Statement Schedules.
(a) Exhibits.
The following exhibits are included as exhibits to this Registration Statement.
Exhibit No. |
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Description |
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2.1 |
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Agreement and Plan of Merger, dated as of April 13, 2011, by and among CheckSmart Financial Holdings Corp., Community Choice Financial Inc., CCFI Merger Sub I Inc., CCFI Merger Sub II Inc., |
Exhibit No. |
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Description |
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the Seller Parties (as defined therein), the Seller Representative (as defined therein), CCCS Corporate Holdings, Inc., CCCS Holdings, LLC and CheckSmart Financial Company |
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2.2 |
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First Amendment to Agreement and Plan of Merger, dated as of April 28, 2011, by and among CheckSmart Financial Holdings Corp., Community Choice Financial Inc., CCFI Merger Sub I Inc., CCFI Merger Sub II Inc., the Seller Parties (as defined therein), the Seller Representative (as defined therein), CCCS Corporate Holdings, Inc., CCCS Holdings, LLC and CheckSmart Financial Company |
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3.1 |
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Articles of Incorporation of Community Choice Financial Inc. |
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3.2 |
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Code of Regulations of Community Choice Financial Inc. |
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3.3 |
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Certificate of Formation, filed May 7, 2010, of ARH-Arizona, LLC |
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3.4 |
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Amended and Restated Limited Liability Company Agreement of ARH-Arizona, LLC |
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3.5 |
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Certificate of Formation, filed April 2, 2007, of BCCI CA, LLC |
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3.6 |
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Amended and Restated Limited Liability Company Agreement of BCCI CA, LLC |
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3.7 |
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Articles of Incorporation, filed January 24, 2001, of BCCI Management Company |
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3.8 |
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Code of Regulations of BCCI Management Company |
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3.9 |
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Articles of Incorporation, filed October 15, 1996, of Buckeye Check Cashing II, Inc. |
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3.10 |
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Code of Regulations of Buckeye Check Cashing II, Inc. |
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3.11 |
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Articles of Incorporation, filed June 2, 2000, of Buckeye Check Cashing of Arizona, Inc. |
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3.12 |
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Code of Regulations of Buckeye Check Cashing of Arizona, Inc. |
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3.13 |
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Certificate of Formation, filed October 18, 2006, of Buckeye Check Cashing of California, LLC |
Exhibit No. |
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Description |
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3.14 |
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Amended and Restated Limited Liability Company Agreement of Buckeye Check Cashing of California, LLC |
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3.15 |
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Articles of Incorporation, filed April 20, 2000, of Buckeye Check Cashing of Florida, Inc. |
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3.16 |
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Code of Regulations of Buckeye Check Cashing of Florida, Inc. |
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3.17 |
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Certificate of Formation, filed January 17, 2011, of Buckeye Check Cashing of Illinois, LLC |
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3.18 |
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Amended and Restated Limited Liability Company Agreement of Buckeye Check Cashing of Illinois, LLC |
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3.19 |
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Certificate of Formation, filed May 12, 2006, of Buckeye Check Cashing of Kansas, LLC |
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3.20 |
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Amended and Restated Limited Liability Company Agreement of Buckeye Check Cashing of Kansas, LLC |
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3.21 |
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Articles of Incorporation, filed January 8, 2005, of Buckeye Check Cashing of Kentucky, Inc. |
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3.22 |
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Code of Regulations of Buckeye Check Cashing of Kentucky, Inc. |
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3.23 |
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Certificate of Incorporation, filed June 23, 2004, of Buckeye Check Cashing of Michigan, Inc. |
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3.24 |
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Bylaws of Buckeye Check Cashing of Michigan, Inc. |
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3.25 |
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Certificate of Formation, filed May 12, 2006, of Buckeye Check Cashing of Missouri, LLC |
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3.26 |
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Amended and Restated Limited Liability Company Agreement of Buckeye Check Cashing of Missouri, LLC |
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3.27 |
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Certificate of Formation, filed June 12, 2007, of Buckeye Check Cashing of Texas, LLC |
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3.28 |
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Amended and Restated Limited Liability Company Agreement of Buckeye Check Cashing of Texas, LLC |
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3.29 |
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Articles of Incorporation, filed July 26, 2004, of Buckeye Check Cashing of Utah, Inc. |
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3.30 |
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Code of Regulations of Buckeye Check Cashing of Utah, Inc. |
Exhibit No. |
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Description |
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3.31 |
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Articles of Incorporation, filed March 22, 2002, of Buckeye Check Cashing of Virginia, Inc. |
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3.32 |
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Code of Regulations of Buckeye Check Cashing of Virginia, Inc. |
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3.33 |
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Articles of Incorporation, filed January 20, 1987, of Buckeye Check Cashing, Inc. |
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3.34 |
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By-Laws of Buckeye Check Cashing Inc. |
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3.35 |
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Certificate of Formation, filed May 31, 2007, of Buckeye Commercial Check Cashing of Florida, LLC |
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3.36 |
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Amended and Restated Limited Liability Company Agreement of Buckeye Commercial Check Cashing of Florida, LLC |
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3.37 |
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Intentionally omitted |
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3.38 |
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Intentionally omitted |
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3.39 |
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Certificate of Formation, filed September 3, 2008, of Buckeye Credit Solutions, LLC |
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3.40 |
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Amended and Restated Limited Liability Company Agreement of Buckeye Credit Solutions, LLC |
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3.41 |
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Certificate of Formation, filed September 4, 2009, of Buckeye Lending Solutions of Arizona, LLC |
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3.42 |
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Amended and Restated Limited Liability Company Agreement of Buckeye Lending Solutions of Arizona, LLC |
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3.43 |
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Certificate of Formation, filed July 18, 2008, of Buckeye Lending Solutions, LLC |
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3.44 |
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Amended and Restated Limited Liability Company Agreement of Buckeye Lending Solutions, LLC |
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3.45 |
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Certificate of Formation, filed May 16, 2008, of Buckeye Small Loans, LLC |
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3.46 |
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Amended and Restated Limited Liability Company Agreement of Buckeye Small Loans, LLC |
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3.47 |
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Certificate of Formation, filed November 30, 2006, of Buckeye Title Loans of California, LLC |
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3.48 |
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Amended and Restated Limited Liability Company Agreement of Buckeye Title Loans of California, LLC |
Exhibit No. |
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Description |
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3.49 |
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Certificate of Formation, filed September 14, 2006, of Buckeye Title Loans of Kansas, LLC |
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3.50 |
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Amended and Restated Limited Liability Company Agreement of Buckeye Title Loans of Kansas, LLC |
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3.51 |
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Certificate of Formation, filed May 18, 2006, of Buckeye Title Loans of Missouri, LLC |
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3.52 |
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Amended and Restated Limited Liability Company Agreement of Buckeye Title Loans of Missouri, LLC |
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3.53 |
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Certificate of Formation, filed April 4, 2006, of Buckeye Title Loans of Utah, LLC |
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3.54 |
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Amended and Restated Limited Liability Company Agreement of Buckeye Title Loans of Utah, LLC |
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3.55 |
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Certificate of Formation, filed April 4, 2006, of Buckeye Title Loans of Virginia, LLC |
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3.56 |
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Amended and Restated Limited Liability Company Agreement of Buckeye Title Loans of Virginia, LLC |
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3.57 |
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Articles of Incorporation, filed November 9, 2005, of Buckeye Title Loans, Inc. |
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3.58 |
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Code of Regulations of Buckeye Title Loans, Inc. |
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3.59 |
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Certificate of Formation, filed July 13, 2006, of California Check Cashing Stores, LLC |
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3.60 |
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Amended and Restated Limited Liability Company Agreement of California Check Cashing Stores, LLC |
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3.61 |
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Articles of Organization, filed June 27, 2005, of Cash Central of Alabama, LLC (formerly known as Direct Financial Solutions of Alabama, LLC), as amended |
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3.62 |
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Amended and Restated Operating Agreement of Cash Central of Alabama, LLC |
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3.63 |
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Articles of Organization, filed June 16, 2005, of Cash Central of Alaska, LLC (formerly known as Direct Financial Solutions of Alaska LLC), as amended |
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3.64 |
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Amended and Restated Operating Agreement of Cash Central of Alaska, LLC |
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3.65 |
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Articles of Organization, filed June 21, 2005, of Cash Central of California, LLC (formerly known as Direct Financial Solutions of California LLC), as |
Exhibit No. |
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Description |
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amended |
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3.66 |
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Amended and Restated Operating Agreement of Cash Central of California, LLC |
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3.67 |
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Certificate of Formation, filed June 21, 2005, of Cash Central of Delaware, LLC (formerly known as Direct Financial Solutions of Delaware LLC), as amended |
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3.68 |
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Amended and Restated Limited Liability Company Agreement of Cash Central of Delaware, LLC |
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3.69 |
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Articles of Organization for Limited Liability Company, filed August 12, 2005, of Cash Central of Hawaii, LLC (formerly known as Direct Financial Solutions of Hawaii LLC), as amended |
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3.70 |
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Amended and Restated Operating Agreement of Cash Central of Hawaii, LLC |
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3.71 |
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Articles of Organization Limited Liability Company, filed June 27, 2005, of Cash Central of Idaho, LLC (formerly known as Direct Financial Solutions of Idaho LLC), as amended |
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3.72 |
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Amended and Restated Operating Agreement of Cash Central of Idaho, LLC |
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3.73 |
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Articles of Organization, filed June 20, 2005, of Cash Central of Kansas, LLC (formerly known as Direct Financial Solutions of Kansas LLC), as amended |
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3.74 |
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Amended and Restated Operating Agreement of Cash Central of Kansas, LLC |
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3.75 |
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Articles of Organization, filed September 18, 2008, of Cash Central of Minnesota, LLC |
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3.76 |
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Amended and Restated Operating Agreement of Cash Central of Minnesota, LLC |
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3.77 |
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Articles of Organization, filed June 21, 2005, of Cash Central of Missouri, LLC (formerly known as Direct Financial Solutions of Missouri LLC), as amended |
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3.78 |
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Amended and Restated Operating Agreement of Cash Central of Missouri, LLC |
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3.79 |
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Articles of Organization, filed August 8, 2005, of Cash Central of Nevada, LLC (formerly known as Direct Financial Solutions of Nevada LLC), as amended |
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3.80 |
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Amended and Restated Operating Agreement of Cash Central of Nevada, LLC |
Exhibit No. |
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Description |
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3.81 |
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Articles of Organization, filed August 1, 2005, of Cash Central of North Dakota, LLC (formerly known as Direct Financial Solutions of North Dakota LLC), as amended |
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3.82 |
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Amended and Restated Operating Agreement of Cash Central of North Dakota, LLC |
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|
|
3.83 |
|
Articles of Organization, filed June 28, 2005, of Cash Central of South Dakota, LLC (formerly known as Direct Financial Solutions of South Dakota LLC), as amended |
|
|
|
3.84 |
|
Amended and Restated Operating Agreement of Cash Central of South Dakota, LLC |
|
|
|
3.85 |
|
Certificate of Formation, filed April 10, 2006, of Cash Central of Texas, LLC (formerly known as Direct Financial Solutions of Texas LLC), as amended |
|
|
|
3.86 |
|
Amended and Restated Limited Liability Company Agreement of Cash Central of Texas, LLC |
|
|
|
3.87 |
|
Articles of Organization, filed June 20, 2005, of Cash Central of Utah, LLC (formerly known as Direct Financial Solutions of Utah, LLC), as amended |
|
|
|
3.88 |
|
Amended and Restated Operating Agreement of Cash Central of Utah, LLC |
|
|
|
3.89 |
|
Certificate of Formation, filed June 20, 2005, of Cash Central of Washington, LLC (formerly known as Direct Financial Solutions of Washington LLC), as amended |
|
|
|
3.90 |
|
Amended and Restated Limited Liability Company Agreement of Cash Central of Washington, LLC |
|
|
|
3.91 |
|
Articles of Organization, filed June 20, 2005, of Cash Central of Wisconsin, LLC (formely known as Direct Financial Solutions of Wisconsin LLC), as amended |
|
|
|
3.92 |
|
Amended and Restated Operating Agreement of Cash Central of Wisconsin, LLC |
|
|
|
3.93 |
|
Articles of Organization, filed August 5, 2005, of Cash Central of Wyoming, LLC (formerly known as Direct Financial Solutions of Wyoming LLC), as amended |
|
|
|
3.94 |
|
Amended and Restated Operating Agreement of Cash Central of Wyoming, LLC |
Exhibit No. |
|
Description |
|
|
|
3.95 |
|
Articles of Incorporation, filed September 23, 2005, of CCCIS, Inc. |
|
|
|
3.96 |
|
Amended and Restated Bylaws of CCCIS, Inc. |
|
|
|
3.97 |
|
Amended and Restated Certificate of Incorporation, filed April 29, 2011, of CCCS Corporate Holdings, Inc., as amended |
|
|
|
3.98 |
|
Amended and Restated Bylaws of CCCS Corporate Holdings, Inc. |
|
|
|
3.99 |
|
Certificate of Formation, filed July 13, 2006, of CCCS Holdings, LLC |
|
|
|
3.100 |
|
Amended and Restated Limited Liability Company Agreement of CCCS Holdings, LLC |
|
|
|
3.101 |
|
Certificate of Incorporation, filed April 25, 2006, of CheckSmart Financial Company |
|
|
|
3.102 |
|
Bylaws of CheckSmart Financial Company |
|
|
|
3.103 |
|
Amended and Restated Certificate of Incorporation, filed April 29, 2011, of Checksmart Financial Holdings Corp., as amended |
|
|
|
3.104 |
|
Amended and Restated Bylaws of CheckSmart Financial Holdings Corp. |
|
|
|
3.105 |
|
Certificate of Formation, filed February 26, 2007, of CheckSmart Financial, LLC |
|
|
|
3.106 |
|
Amended and Restated Limited Liability Company Agreement of CheckSmart Financial, LLC |
|
|
|
3.107 |
|
Intentionally omitted |
|
|
|
3.108 |
|
Intentionally omitted |
|
|
|
3.109 |
|
Certificate of Incorporation, filed February 18, 2009, of Checksmart Money Order Services, Inc. |
|
|
|
3.110 |
|
Bylaws of CheckSmart Money Order Services, Inc. |
|
|
|
3.111 |
|
Certificate of Formation, filed August 29, 2011, of Community Choice Family Insurance Agency, LLC (formerly known as Community Choice Family Insurance, LLC), as amended |
|
|
|
3.112 |
|
Amended and Restated Limited Liability Company Agreement of Community Choice Family Insurance Agency, LLC |
Exhibit No. |
|
Description |
|
|
|
3.113 |
|
Certificate of Formation, filed May 7, 2010, of CS-Arizona, LLC |
|
|
|
3.114 |
|
Amended and Restated Limited Liability Company Agreement of CS-Arizona, LLC |
|
|
|
3.115 |
|
Certificate of Formation and Certificate of Conversion, filed August 10, 2009, of Direct Financial Solutions, LLC (formerly known as Direct Financial Solutions, L.L.C. and Financial Denouement, LLC), as amended |
|
|
|
3.116 |
|
Amended and Restated Limited Liability Company Agreement of Direct Financial Solutions, LLC |
|
|
|
3.117 |
|
Articles of Incorporation, filed May 25, 2005, of Express Payroll Advance of Ohio, Inc. |
|
|
|
3.118 |
|
Code of Regulations of Express Payroll Advance of Ohio, Inc. |
|
|
|
3.119 |
|
Amended and Restated Articles of Incorporation, filed March 15, 2007, of Fast Cash, Inc., as amended |
|
|
|
3.120 |
|
Amended and Restated Bylaws of Fast Cash, Inc. |
|
|
|
3.121 |
|
Certificate of Formation, filed October 13, 2009, of First Virginia Credit Solutions, LLC |
|
|
|
3.122 |
|
Amended and Restated Limited Liability Company Agreement of First Virginia Credit Solutions, LLC |
|
|
|
3.123 |
|
Certificate of Formation, filed March 26, 2009, of First Virginia Financial Services, LLC |
|
|
|
3.124 |
|
Amended and Restated Limited Liability Company Agreement of First Virginia Financial Services, LLC |
|
|
|
3.125 |
|
Articles of Organization, filed October 19, 1995, of Hoosier Check Cashing of Ohio, Ltd |
|
|
|
3.126 |
|
Amended and Restated Operating Agreement of Hoosier Check Cashing of Ohio, Ltd |
|
|
|
3.127 |
|
Articles of Organization, filed September 18, 2003, of Insight Capital, LLC, as amended |
|
|
|
3.128 |
|
Amended and Restated Operating Agreement of Insight Capital, LLC |
|
|
|
3.129 |
|
Certificate of Formation, filed December 16, 2010, of National Tax Lending, LLC |
|
|
|
3.130 |
|
Amended and Restated Limited Liability Company Agreement of National Tax Lending, LLC |
|
|
|
3.131 |
|
Articles of Incorporation, filed November 24, 2006, of Reliant Software, Inc. |
Exhibit No. |
|
Description |
|
|
|
3.132 |
|
Bylaws of Reliant Software, Inc. |
|
|
|
4.1 |
|
Form of specimen common share certificate |
|
|
|
4.2 |
|
Indenture, dated as of April 29, 2011, among Community Choice Financial Inc., the Subsidiary Guarantors (as defined therein) and U.S. Bank National Association, as trustee and collateral agent, with respect to our 10.75% Senior Secured Notes due 2019 |
|
|
|
4.3 |
|
Revolving Credit Agreement, dated as of April 29, 2011, among Community Choice Financial Inc., the lenders party thereto and Credit Suisse AG, as administrative agent |
|
|
|
4.4 |
|
Amended and Restated Credit Agreement, dated as of April 29, 2011, by and between Insight Capital, LLC, and Republic Bank of Chicago |
|
|
|
4.5 |
|
First Modification to Amended and Restated Credit Agreement, dated as of July 31, 2011, by and between Insight Capital, LLC, and Republic Bank of Chicago |
|
|
|
4.6 |
|
Registration Rights Agreement, dated as of April 29, 2011, among Community Choice Financial Inc., the guarantors party thereto, Credit Suisse Securities (USA) LLC, Jefferies & Company, Inc. and Stephens Inc. |
|
|
|
4.7 |
|
First Supplemental Indenture, dated as of April 1, 2012, among Community Choice Financial Inc., the Guaranteeing Subsidiaries (as defined therein) and U.S. Bank National Association, as trustee |
|
|
|
5.1 |
|
Opinion of Jones Day |
|
|
|
5.2 |
|
Opinion of Kutak Rock LLP (Kansas) |
|
|
|
5.3 |
|
Opinion of Lindquist & Vennum PLLP |
|
|
|
5.4 |
|
Opinion of McCorriston Miller Mukai MacKinnon LLP |
|
|
|
5.5 |
|
Opinion of Serkland Law Firm |
|
|
|
5.6 |
|
Opinion of Sirote & Permutt PC |
|
|
|
5.7 |
|
Opinion of Stoel Rives LLP |
|
|
|
5.8 |
|
Opinion of Whyte, Hirschboeck Dudek S.C. |
|
|
|
5.9 |
|
Opinion of Kutak Rock LLP (Missouri) |
|
|
|
10.1 |
|
Shareholders Agreement, dated as of April 29, 2011, among Community Choice Financial Inc. and the Shareholders of Community Choice Financial Inc. |
|
|
|
10.2 |
|
Community Choice Financial Inc. 2011 Management Equity Incentive Plan, effective as of April 29, 2011 |
|
|
|
10.3 |
|
Advisory Services and Monitoring Agreement dated as of April 29, 2011, by and among Community Choice Financial Inc., CheckSmart Financial Company, California Check Cashing Stores, LLC, Diamond Castle Holdings, LLC and GGC Administration, LLC |
|
|
|
10.4 |
|
Employment Agreement, dated as of May 1, 2006, by and between CheckSmart Financial Company |
Exhibit No. |
|
Description |
|
|
|
|
|
and William E. Saunders, Jr., as amended three times to date, including (A) Restricted Share Award Agreement (2006 Management Equity Incentive Plan), dated as of May 1, 2006, between CheckSmart Financial Holdings Corp. and William E. Saunders, Jr., (B) Tandem Stock Option/Stock Unit Liquidity Event Award Agreement (2006 Management Equity Incentive Plan), dated as of May 1, 2006, between CheckSmart Financial Holdings Corp. and William E. Saunders, Jr. and (C) Confidentiality, Non-Competition and Intellectual Property agreement, dated as of May 1, 2006, between CheckSmart Financial Company and William E. Saunders, Jr.* |
|
|
|
10.5 |
|
Employment Agreement, dated as of May 1, 2006, by and between CheckSmart Financial Company and Kyle Hanson, as amended two times to date, including (A) Option Grant Award Agreement (2006 Management Equity Incentive Plan), dated as of May 9, 2006, between CheckSmart Financial Holdings Corp. and Kyle Hanson and (B) Confidentiality, Non-Competition and Intellectual Property agreement, dated as of May 1, 2006, between CheckSmart Financial Company and Kyle Hanson* |
|
|
|
10.6 |
|
Employment Agreement, dated as of May 1, 2006, by and between CheckSmart Financial Company and Chad Streff, as amended two times to date, including (A) Stock Appreciation Right Award Agreement (2006 Management Equity Incentive Plan), dated as of May 1, 2006, between CheckSmart Financial Holdings Corp. and Chad M. Streff and (B) Confidentiality, Non-Competition and Intellectual Property agreement, dated as of May 1, 2006, between CheckSmart Financial Company and Chad Streff* |
|
|
|
10.7 |
|
Employment Agreement, dated as of January 1, 2011, by and between CheckSmart Financial Company and Michael Durbin, including (A) Option Grant Award Agreement (2006 Management Equity Incentive Plan, as amended), dated as of December 31, 2010, between CheckSmart Financial Holdings Corp. and Michael Durbin and (B) Confidentiality, Non-Competition and Intellectual Property agreement, dated as of January 1, 2011, between CheckSmart Financial Company and Michael Durbin* |
|
|
|
10.8 |
|
Employment Agreement, dated as of April 1, 2011, by and between Community Choice Financial Inc. and Bridgette C. Roman, including Confidentiality, Non-Competition and Intellectual Property agreement, dated as of April 1, 2011, between Community Choice Financial Inc. and Bridgette C. |
Exhibit No. |
|
Description |
|
|
|
|
|
Roman* |
|
|
|
10.9 |
|
Option Grant Award Agreement (2006 Management Equity Incentive Plan), dated as of June 4, 2007, between CheckSmart Financial Holdings Corp. and Kyle Hanson* |
|
|
|
10.10 |
|
Form Option Grant Award Agreement (2006 Management Equity Incentive Plan, as amended), dated as of December 31, 2008, with CheckSmart Financial Holdings Corp.* |
|
|
|
10.11 |
|
Option Grant Award Agreement (2006 Management Equity Incentive Plan, as amended), dated as of December 31, 2008, between CheckSmart Financial Holdings Corp. and Bridgette Roman* |
|
|
|
10.12 |
|
Stock Appreciation Right Award Agreement (2006 Management Equity Incentive Plan, as amended), dated as of December 31, 2008, between CheckSmart Financial Holdings Corp. and Chad Streff* |
|
|
|
10.13 |
|
2012 Executive Compensation, Benefit and Severance Program* |
|
|
|
10.14 |
|
Form Option Grant Award Agreement (2011 Management Equity Incentive Plan)* |
|
|
|
10.15 |
|
Form Restricted Stock Unit Agreement (2011 Management Equity Incentive Plan)* |
|
|
|
10.16 |
|
Amendment to Shareholders Agreement among Community Choice Financial Inc. and the Shareholders of Community Choice Financial Inc., effective as of April 20, 2012 |
|
|
|
12.1 |
|
Statement of Computation of Ratio of Earnings to Fixed Charges |
|
|
|
21.1 |
|
Subsidiaries of Community Choice Financial Inc. Incorporated |
|
|
|
23.1 |
|
Consent of Independent Registered Public Accounting Firm |
|
|
|
23.2 |
|
Consent of Independent Registered Public Accounting Firm |
Exhibit No. |
|
Description |
|
|
|
23.3 |
|
Consent of Jones Day (included in Exhibit 5.1 hereto) |
|
|
|
23.4 |
|
Consent of Kutak Rock LLP (Kansas) (included in Exhibit 5.2 hereto) |
|
|
|
23.5 |
|
Consent of Lindquist & Vennum PLLP (included in Exhibit 5.3 hereto) |
|
|
|
23.6 |
|
Consent of McCorriston Miller Mukai MacKinnon LLP (included in Exhibit 5.4 hereto) |
|
|
|
23.7 |
|
Consent of Serkland Law Firm (included in Exhibit 5.5 hereto) |
|
|
|
23.8 |
|
Consent of Sirote & Permutt PC (included in Exhibit 5.6 hereto) |
|
|
|
23.9 |
|
Consent of Stoel Rives LLP (included in Exhibit 5.7 hereto) |
|
|
|
23.10 |
|
Consent of Whyte, Hirschboeck Dudek S.C. (included in Exhibit 5.8 hereto) |
|
|
|
23.11 |
|
Consent of Kutak Rock LLP (Missouri) (included in Exhibit 5.9 hereto) |
|
|
|
24.1 |
|
Power of Attorney with respect to Community Choice Financial Inc. (included in the signature pages hereto) |
|
|
|
24.2 |
|
Power of Attorney with respect to ARH-Arizona, LLC (included in the signature pages hereto) |
|
|
|
24.3 |
|
Power of Attorney with respect to BCCI CA, LLC (included in the signature pages hereto) |
|
|
|
24.4 |
|
Power of Attorney with respect to BCCI Management Company (included in the signature pages hereto) |
|
|
|
24.5 |
|
Power of Attorney with respect to Buckeye Check Cashing II, Inc. (included in the signature pages hereto) |
|
|
|
24.6 |
|
Power of Attorney with respect to Buckeye Check Cashing of Arizona, Inc. (included in the signature pages hereto) |
|
|
|
24.7 |
|
Power of Attorney with respect to Buckeye Check Cashing of California, LLC (included in the signature pages hereto) |
|
|
|
24.8 |
|
Power of Attorney with respect to Buckeye Check Cashing of Florida, Inc. (included in the signature pages hereto) |
|
|
|
24.9 |
|
Power of Attorney with respect to Buckeye Check Cashing of Illinois, LLC (included in the signature pages hereto) |
|
|
|
24.10 |
|
Power of Attorney with respect to Buckeye Check Cashing of Kansas, LLC (included in the signature pages hereto) |
|
|
|
24.11 |
|
Power of Attorney with respect to Buckeye Check Cashing of Kentucky, Inc. (included in the signature pages hereto) |
|
|
|
24.12 |
|
Power of Attorney with respect to Buckeye Check Cashing of Michigan, Inc. (included in the signature pages hereto) |
|
|
|
24.13 |
|
Power of Attorney with respect to Buckeye Check Cashing of Missouri, LLC(included in the signature pages hereto) |
|
|
|
24.14 |
|
Power of Attorney with respect to Buckeye Check Cashing of Texas, LLC (included in the signature pages hereto) |
Exhibit No. |
|
Description |
|
|
|
24.15 |
|
Power of Attorney with respect to Buckeye Check Cashing of Utah, Inc. (included in the signature pages hereto) |
|
|
|
24.16 |
|
Power of Attorney with respect to Buckeye Check Cashing of Virginia, Inc. (included in the signature pages hereto) |
|
|
|
24.17 |
|
Power of Attorney with respect to Buckeye Check Cashing, Inc. (included in the signature pages hereto) |
|
|
|
24.18 |
|
Power of Attorney with respect to Buckeye Commercial Check Cashing of Florida, LLC (included in the signature pages hereto) |
|
|
|
24.19 |
|
Intentionally omitted |
|
|
|
24.20 |
|
Power of Attorney with respect to Buckeye Credit Solutions, LLC (included in the signature pages hereto) |
|
|
|
24.21 |
|
Power of Attorney with respect to Buckeye Lending Solutions of Arizona, LLC (included in the signature pages hereto) |
|
|
|
24.22 |
|
Power of Attorney with respect to Buckeye Lending Solutions, LLC (included in the signature pages hereto) |
|
|
|
24.23 |
|
Power of Attorney with respect to Buckeye Small Loans, LLC (included in the signature pages hereto) |
|
|
|
24.24 |
|
Power of Attorney with respect to Buckeye Title Loans of California, LLC (included in the signature pages hereto) |
|
|
|
24.25 |
|
Power of Attorney with respect to Buckeye Title Loans of Kansas, LLC (included in the signature pages hereto) |
|
|
|
24.26 |
|
Power of Attorney with respect to Buckeye Title Loans of Missouri, LLC (included in the signature pages hereto) |
|
|
|
24.27 |
|
Power of Attorney with respect to Buckeye Title Loans of Utah, LLC (included in the signature pages hereto) |
|
|
|
24.28 |
|
Power of Attorney with respect to Buckeye Title Loans of Virginia, LLC (included in the signature pages hereto) |
|
|
|
24.29 |
|
Power of Attorney with respect to Buckeye Title Loans, Inc. (included in the signature pages hereto) |
Exhibit No. |
|
Description |
|
|
|
24.30 |
|
Power of Attorney with respect to California Check Cashing Stores, LLC (included in the signature pages hereto) |
|
|
|
24.31 |
|
Power of Attorney with respect to Cash Central of Alabama, LLC (included in the signature pages hereto) |
|
|
|
24.32 |
|
Power of Attorney with respect to Cash Central of Alaska, LLC (included in the signature pages hereto) |
|
|
|
24.33 |
|
Power of Attorney with respect to Cash Central of California, LLC (included in the signature pages hereto) |
|
|
|
24.34 |
|
Power of Attorney with respect to Cash Central of Delaware, LLC (included in the signature pages hereto) |
|
|
|
24.35 |
|
Power of Attorney with respect to Cash Central of Hawaii, LLC (included in the signature pages hereto) |
|
|
|
24.36 |
|
Power of Attorney with respect to Cash Central of Idaho, LLC (included in the signature pages hereto) |
|
|
|
24.37 |
|
Power of Attorney with respect to Cash Central of Kansas, LLC (included in the signature pages hereto) |
|
|
|
24.38 |
|
Power of Attorney with respect to Cash Central of Minnesota, LLC (included in the signature pages hereto) |
|
|
|
24.39 |
|
Power of Attorney with respect to Cash Central of Missouri, LLC (included in the signature pages hereto) |
|
|
|
24.40 |
|
Power of Attorney with respect to Cash Central of Nevada, LLC (included in the signature pages hereto) |
|
|
|
24.41 |
|
Power of Attorney with respect to Cash Central of North Dakota, LLC (included in the signature pages hereto) |
|
|
|
24.42 |
|
Power of Attorney with respect to Cash Central of South Dakota, LLC (included in the signature pages hereto) |
|
|
|
24.43 |
|
Power of Attorney with respect to Cash Central of Texas, LLC (included in the signature pages hereto) |
|
|
|
24.44 |
|
Power of Attorney with respect to Cash Central of Utah, LLC (included in the signature pages hereto) |
Exhibit No. |
|
Description |
|
|
|
24.45 |
|
Power of Attorney with respect to Cash Central of Washington, LLC (included in the signature pages hereto) |
|
|
|
24.46 |
|
Power of Attorney with respect to Cash Central of Wyoming, LLC (included in the signature pages hereto) |
|
|
|
24.47 |
|
Power of Attorney with respect to Cash Central of Wisconsin, LLC (included in the signature pages hereto) |
|
|
|
24.48 |
|
Power of Attorney with respect to CCCIS, Inc. (included in the signature pages hereto) |
|
|
|
24.49 |
|
Power of Attorney with respect to CCCS Corporate Holdings, Inc. (included in the signature pages hereto) |
|
|
|
24.50 |
|
Power of Attorney with respect to CCCS Holdings, LLC (included in the signature pages hereto) |
|
|
|
24.51 |
|
Power of Attorney with respect to CheckSmart Financial Company (included in the signature pages hereto) |
|
|
|
24.52 |
|
Power of Attorney with respect to Checksmart Financial Holdings Corp. (included in the signature pages hereto) |
|
|
|
24.53 |
|
Power of Attorney with respect to CheckSmart Financial, LLC (included in the signature pages hereto) |
|
|
|
24.54 |
|
Intentionally omitted |
|
|
|
24.55 |
|
Power of Attorney with respect to Checksmart Money Order Services, Inc. (included in the signature pages hereto) |
|
|
|
24.56 |
|
Power of Attorney with respect to Community Choice Family Insurance Agency, LLC(included in the signature pages hereto) |
|
|
|
24.57 |
|
Power of Attorney with respect to CS-Arizona, LLC (included in the signature pages hereto) |
|
|
|
24.58 |
|
Power of Attorney with respect to Direct Financial Solutions, LLC (included in the signature pages hereto) |
|
|
|
24.59 |
|
Power of Attorney with respect to Express Payroll Advance of Ohio, Inc. (included in the signature pages hereto) |
Exhibit No. |
|
Description |
|
|
|
24.60 |
|
Power of Attorney with respect to Fast Cash, Inc. (included in the signature pages hereto) |
|
|
|
24.61 |
|
Power of Attorney with respect to First Virginia Credit Solutions, LLC (included in the signature pages hereto) |
|
|
|
24.62 |
|
Power of Attorney with respect to First Virginia Financial Services, LLC (included in the signature pages hereto) |
|
|
|
24.63 |
|
Power of Attorney with respect to Hoosier Check Cashing of Ohio, Ltd (included in the signature pages hereto) |
|
|
|
24.64 |
|
Power of Attorney with respect to Insight Capital, LLC (included in the signature pages hereto) |
|
|
|
24.65 |
|
Power of Attorney with respect to National Tax Lending, LLC (included in the signature pages hereto) |
|
|
|
24.66 |
|
Power of Attorney with respect to Reliant Software, Inc. (included in the signature pages hereto) |
|
|
|
25.1 |
|
Statement of Eligibility of Trustee |
|
|
|
99.1 |
|
Form of Letter of Transmittal |
|
|
|
99.2 |
|
Form of Notice of Guaranteed Delivery |
|
|
|
99.3 |
|
Form of Letter to Clients |
|
|
|
99.4 |
|
Form of Letter to Nominees |
* Indicates a management contract or compensation plan or arrangement.
Item 22. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the Calculation of Registration Fee table in the effective registration statement.
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(6) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
(7) To respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of Form S-4, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.
(8) To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Dublin, State of Ohio, on the 22nd day of June, 2012.
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COMMUNITY CHOICE FINANCIAL INC. (Registrant) | |
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By: |
/s/ William E. Saunders |
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Name: William E. Saunders, Jr. |
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Title: Chief Executive Officer |
POWER OF ATTORNEY
Each person whose signature appears below authorizes Michael Durbin and Bridgette Roman or any of them, as his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, to execute in his name and on his behalf, in any and all capacities, this registrants Registration Statement on Form S-4 relating to the exchange offer and any amendments thereto (and any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments, including post-effective amendments thereto)), necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission in respect thereof, in connection with the registration of the securities which are the subject of such Registration Statement, which amendments may make such changes in such Registration Statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement on Form S-4 has been signed by the following persons in the capacities indicated and on the dates indicated.
Signature |
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Title |
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Date |
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Chief Executive Officer and Director |
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/s/ William E. Saunders |
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(Principal Executive Officer) |
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June 22, 2012 |
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William E. Saunders, Jr. |
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Chief Financial Officer |
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June 22, 2012 |
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/s/ Michael Durbin |
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(Principal Financial Officer and Principal Accounting Officer) |
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Michael Durbin |
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/s/ H. Eugene Lockhart |
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Chairman of the Board of Directors |
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June 22, 2012 |
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H. Eugene Lockhart |
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/s/ Lee A. Wright |
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Director |
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June 22, 2012 |
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Lee A. Wright |
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/s/ Michael Langer |
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Director |
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June 22, 2012 |
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Michael Langer |
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/s/ Felix Lo |
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Director |
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June 22, 2012 |
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Felix Lo |
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/s/ Andrew Rush |
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Director |
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June 22, 2012 |
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Andrew Rush |
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/s/ Eugene Schutt |
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Director |
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June 22, 2012 |
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Eugene Schutt |
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/s/ David M. Wittels |
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Director |
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June 22, 2012 | |
David M. Wittels |
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Dublin, State of Ohio, on the 22nd day of June, 2012.
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ARH-Arizona, LLC |
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BCCI CA, LLC |
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Buckeye Check Cashing of California, LLC |
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Buckeye Check Cashing of Illinois, LLC |
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Buckeye Check Cashing of Kansas, LLC |
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Buckeye Check Cashing of Missouri, LLC |
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Buckeye Check Cashing of Texas, LLC |
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Buckeye Commercial Check Cashing of Florida, LLC |
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Buckeye Credit Solutions, LLC |
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Buckeye Lending Solutions of Arizona, LLC |
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Buckeye Lending Solutions, LLC |
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Buckeye Small Loans, LLC |
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Buckeye Title Loans of California, LLC |
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Buckeye Title Loans of Kansas, LLC |
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Buckeye Title Loans of Missouri, LLC |
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Buckeye Title Loans of Utah, LLC |
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Buckeye Title Loans of Virginia, LLC |
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Checksmart Financial, LLC |
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CS-Arizona, LLC |
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First Virginia Credit Solutions, LLC |
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First Virginia Financial Services, LLC |
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Hoosier Check Cashing of Ohio, LTD |
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Insight Capital, LLC |
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National Tax Lending, LLC (Registrants) |
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By: |
/s/ William E. Saunders | |
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Name: |
William E. Saunders, Jr. |
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Title: |
Chief Executive Officer |
POWER OF ATTORNEY
Each person whose signature appears below authorizes Michael Durbin and Bridgette Roman or any of them, as his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, to execute in his name and on his behalf, in any and all capacities, this registrants Registration Statement on Form S-4 relating to the exchange offer and any amendments thereto (and any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments, including post-effective amendments thereto)), necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission in respect thereof, in connection with the registration of the securities which are the subject of such Registration Statement, which amendments may make such changes in such Registration Statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement on Form S-4 has been signed by the following persons in the capacities indicated and on the dates indicated.
Signature |
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Title |
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Date |
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Chief Executive Officer and Manager |
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/s/ William E. Saunders |
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(Principal Executive Officer) |
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June 22, 2012 |
William E. Saunders, Jr. |
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Chief Financial Officer, Treasurer, Senior Vice President and Manager |
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/s/ Michael Durbin |
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(Principal Financial Officer and Principal Accounting Officer) |
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June 22, 2012 |
Michael Durbin |
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/s/ Kyle Hanson |
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President and Manager |
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Kyle Hanson |
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June 22, 2012 |
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/s/ Chad Streff |
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Chief Compliance Officer, Chief Technology Officer, Senior Vice President and Manager |
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June 22, 2012 |
Chad Streff |
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/s/ Bridgette Roman |
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General Counsel, Secretary, Senior Vice President and Manager |
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Bridgette Roman |
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June 22, 2012 |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Dublin, State of Ohio, on the 22nd day of June, 2012.
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BCCI MANAGEMENT COMPANY |
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BUCKEYE CHECK CASHING II, INC. |
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BUCKEYE CHECK CASHING OF ARIZONA, INC. |
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BUCKEYE CHECK CASHING OF FLORIDA, INC. |
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BUCKEYE CHECK CASHING OF KENTUCKY, INC. |
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BUCKEYE CHECK CASHING OF MICHIGAN, INC. |
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BUCKEYE CHECK CASHING OF UTAH, INC. |
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BUCKEYE CHECK CASHING OF VIRGINIA, INC. |
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BUCKEYE CHECK CASHING, INC. |
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BUCKEYE TITLE LOANS, INC. |
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CHECKSMART FINANCIAL COMPANY |
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CHECKSMART MONEY ORDER SERVICES, INC. |
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EXPRESS PAYROLL ADVANCE OF OHIO, INC. (Registrants) |
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By: |
/s/ William E. Saunders | |
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Name: |
William E. Saunders, Jr. |
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Title: |
Chief Executive Officer |
POWER OF ATTORNEY
Each person whose signature appears below authorizes Michael Durbin and Bridgette Roman or any of them, as his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, to execute in his name and on his behalf, in any and all capacities, this registrants Registration Statement on Form S-4 relating to the exchange offer and any amendments thereto (and any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments, including post-effective amendments thereto)), necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission in respect thereof, in connection with the registration of the securities which are the subject of such Registration Statement, which amendments may make such changes in such Registration Statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement on Form S-4 has been signed by the following persons in the capacities indicated and on the dates indicated.
Signature |
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Title |
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Date |
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Chief Executive Officer and Director |
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/s/ William E. Saunders |
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(Principal Executive Officer) |
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June 22, 2012 |
William E. Saunders, Jr. |
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Chief Financial Officer, Treasurer, Senior Vice President and Director |
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/s/ Michael Durbin |
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(Principal Financial Officer and Principal Accounting Officer) |
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June 22, 2012 |
Michael Durbin |
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/s/ Kyle Hanson |
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President and Director |
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Kyle Hanson |
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June 22, 2012 |
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/s/ Chad Streff |
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Chief Compliance Officer, Chief Technology Officer, Senior Vice President and Director |
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June 22, 2012 |
Chad Streff |
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/s/ Bridgette Roman |
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General Counsel, Secretary, Senior Vice President and Director |
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Bridgette Roman |
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June 22, 2012 |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of North Logan, State of Utah, on the 22nd day of June, 2012.
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Direct Financial Solutions, LLC | ||
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Cash Central of Alabama, LLC | ||
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Cash Central of Alaska, LLC | ||
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Cash Central of California, LLC | ||
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Cash Central of Delaware, LLC | ||
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Cash Central of Hawaii, LLC | ||
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Cash Central of Kansas, LLC | ||
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Cash Central of Minnesota, LLC | ||
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Cash Central of Missouri, LLC | ||
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Cash Central of North Dakota, LLC | ||
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Cash Central of South Dakota, LLC | ||
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Cash Central of Texas, LLC | ||
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Cash Central of Utah, LLC | ||
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Cash Central of Washington, LLC | ||
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Cash Central of Wyoming, LLC | ||
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Cash Central of Wisconsin, LLC | ||
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(Registrants) | ||
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By: |
/s/ William E. Saunders | |
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Name: |
William E. Saunders, Jr. |
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Title: |
Chief Executive Officer |
POWER OF ATTORNEY
Each person whose signature appears below authorizes Michael Durbin and Bridgette Roman or any of them, as his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, to execute in his name and on his behalf, in any and all capacities, this registrants Registration Statement on Form S-4 relating to the exchange offer and any amendments thereto (and any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments, including post-effective amendments thereto)), necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission in respect thereof, in connection with the registration of the securities which are the subject of such Registration Statement, which amendments may make such changes in such Registration Statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement on Form S-4 has been signed by the following persons in the capacities indicated and on the dates indicated.
Signature |
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Title |
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Date |
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Chief Executive Officer and Manager |
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/s/ William E. Saunders |
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(Principal Executive Officer) |
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June 22, 2012 |
William E. Saunders, Jr. |
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Chief Financial Officer, Treasurer, Senior Vice President and |
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June 22, 2012 |
/s/ Michael Durbin |
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(Principal Financial Officer and Principal Accounting Officer) |
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Michael Durbin |
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/s/ Kyle Hanson |
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President and Manager |
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June 22, 2012 |
Kyle Hanson |
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/s/ Chad Streff |
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Chief Compliance Officer, Chief Technology Officer, Senior Vice President and Manager |
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June 22, 2012 |
Chad Streff |
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/s/ Bridgette Roman |
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General Counsel, Secretary, Senior Vice President and Manager |
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June 22, 2012 |
Bridgette Roman |
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/s/ Trevin G. Workman |
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Manager |
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June 22, 2012 |
Trevin G. Workman |
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/s/ S. Todd Jensen |
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Manager |
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June 22, 2012 |
S. Todd Jensen |
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of North Logan, State of Utah, on the 22nd day of June, 2012.
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Reliant Software, Inc. (Registrant) | ||
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By: |
/s/ William E. Saunders | |
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Name: |
William E. Saunders, Jr. |
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Title: |
Chief Executive Officer |
POWER OF ATTORNEY
Each person whose signature appears below authorizes Michael Durbin and Bridgette Roman or any of them, as his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, to execute in his name and on his behalf, in any and all capacities, this registrants Registration Statement on Form S-4 relating to the exchange offer and any amendments thereto (and any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments, including post-effective amendments thereto)), necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission in respect thereof, in connection with the registration of the securities which are the subject of such Registration Statement, which amendments may make such changes in such Registration Statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement on Form S-4 has been signed by the following persons in the capacities indicated and on the dates indicated.
Signature |
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Title |
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Date |
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Chief Executive Officer and Director |
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/s/ William E. Saunders |
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(Principal Executive Officer) |
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June 22, 2012 |
William E. Saunders, Jr. |
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/s/ Michael Durbin |
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Chief Financial Officer, Treasurer, Senior Vice President and Director |
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June 22, 2012 |
Michael Durbin |
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/s/ Kyle Hanson |
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President and Director |
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June 22, 2012 |
Kyle Hanson |
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/s/ Chad Streff |
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Chief Compliance Officer, Chief Technology Officer, Senior Vice President and Director |
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June 22, 2012 |
Chad Streff |
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/s/ Bridgette Roman |
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General Counsel, Secretary, Senior Vice President and Director |
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June 22, 2012 |
Bridgette Roman |
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/s/ Trevin G. Workman |
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Director |
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June 22, 2012 |
Trevin G. Workman |
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/s/ S. Todd Jensen |
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Director |
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June 22, 2012 |
S. Todd Jensen |
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of North Logan, State of Utah, on the 22nd day of June, 2012.
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Cash Central of Nevada, LLC | ||
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Cash Central of Idaho, LLC (Registrants) | ||
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By: |
/s/ Michael Durbin | |
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Name: |
Michael Durbin |
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Title: |
Chief Financial Officer, Treasurer, Senior Vice |
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President and Manager |
POWER OF ATTORNEY
Each person whose signature appears below authorizes Michael Durbin and Bridgette Roman or any of them, as his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, to execute in his name and on his behalf, in any and all capacities, this registrants Registration Statement on Form S-4 relating to the exchange offer and any amendments thereto (and any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments, including post-effective amendments thereto)), necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission in respect thereof, in connection with the registration of the securities which are the subject of such Registration Statement, which amendments may make such changes in such Registration Statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement on Form S-4 has been signed by the following persons in the capacities indicated and on the dates indicated.
Signature |
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Title |
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Date |
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Chief Financial Officer, Treasurer, Senior Vice President and Manager |
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/s/ Michael Durbin |
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(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |
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June 22, 2012 |
Michael Durbin |
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/s/ Bridgette Roman |
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General Counsel, Secretary, Senior Vice President and Manager |
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June 22, 2012 |
Bridgette Roman |
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/s/ Trevin G. Workman |
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Vice President and Manager |
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June 22, 2012 |
Trevin G. Workman |
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/s/ S. Todd Jensen |
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Vice President and Manager |
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June 22, 2012 |
S. Todd Jensen |
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Dublin, State of Ohio, on the 22nd day of June, 2012.
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COMMUNITY CHOICE FAMILY INSURANCE | ||
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AGENCY, LLC (Registrant) | ||
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By: |
/s/ Michael Durbin | |
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Name: |
Michael Durbin |
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Title: |
Chief Financial Officer, Treasurer, Senior Vice |
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President and Manager |
POWER OF ATTORNEY
Each person whose signature appears below authorizes Michael Durbin and Bridgette Roman or any of them, as his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, to execute in his name and on his behalf, in any and all capacities, this registrants Registration Statement on Form S-4 relating to the exchange offer and any amendments thereto (and any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments, including post-effective amendments thereto)), necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission in respect thereof, in connection with the registration of the securities which are the subject of such Registration Statement, which amendments may make such changes in such Registration Statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement on Form S-4 has been signed by the following persons in the capacities indicated and on the dates indicated.
Signature |
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Title |
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Date |
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Chief Financial Officer, Treasurer, Senior Vice President and Manager |
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/s/ Michael Durbin |
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(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |
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June 22, 2012 |
Michael Durbin |
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/s/ Bridgette Roman |
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General Counsel, Secretary, Senior Vice President and Manager |
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June 22, 2012 |
Bridgette Roman |
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/s/ Brandon Jones |
|
Manager |
|
June 22, 2012 |
Brandon Jones |
|
|
|
|
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Dublin, State of Ohio, on the 22nd day of June, 2012.
|
Checksmart Financial Holdings Corp. | ||
|
CCCS Corporate Holdings, Inc. (Registrants) | ||
|
| ||
|
| ||
|
By: |
/s/ William E. Saunders | |
|
|
Name: |
William E. Saunders, Jr. |
|
|
Title: |
Chief Executive Officer |
POWER OF ATTORNEY
Each person whose signature appears below authorizes Michael Durbin and Bridgette Roman or any of them, as his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, to execute in his name and on his behalf, in any and all capacities, this registrants Registration Statement on Form S-4 relating to the exchange offer and any amendments thereto (and any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments, including post-effective amendments thereto)), necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission in respect thereof, in connection with the registration of the securities which are the subject of such Registration Statement, which amendments may make such changes in such Registration Statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement on Form S-4 has been signed by the following persons in the capacities indicated and on the dates indicated.
Signature |
|
Title |
|
Date |
|
|
|
|
|
/s/ William E. Saunders |
|
Chief Executive Officer and Director (Principal Executive Officer) |
|
June 22, 2012 |
William E. Saunders, Jr. |
|
|
|
|
|
|
|
|
|
/s/ Michael Durbin |
|
Chief Financial Officer, Treasurer and Senior Vice President (Principal Financial Officer and Principal Accounting Officer) |
|
June 22, 2012 |
Michael Durbin |
|
|
|
|
|
|
|
|
|
/s/ H. Eugene Lockhart |
|
Chairman of the Board of Directors |
|
June 22, 2012 |
H. Eugene Lockhart |
|
|
|
|
|
|
|
|
|
/s/ Lee A. Wright |
|
Director |
|
June 22, 2012 |
Lee A. Wright |
|
|
|
|
/s/ Michael Langer |
|
Director |
|
June 22, 2012 |
Michael Langer |
|
|
|
|
|
|
|
|
|
/s/ Andrew Rush |
|
Director |
|
June 22, 2012 |
Andrew Rush |
|
|
|
|
|
|
|
|
|
/s/ David M. Wittels |
|
Director |
|
June 22, 2012 |
David M. Wittels |
|
|
|
|
|
|
|
|
|
/s/ Felix Lo |
|
Director |
|
June 22, 2012 |
Felix Lo |
|
|
|
|
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Dublin, State of Ohio, on the 22nd day of June, 2012.
|
CCCS Holdings, LLC | ||
|
California Check Cashing Stores, LLC (Registrants) | ||
|
| ||
|
| ||
|
By: |
/s/ William E. Saunders | |
|
|
Name: |
William E. Saunders, Jr. |
|
|
Title: |
Chief Executive Officer |
POWER OF ATTORNEY
Each person whose signature appears below authorizes Michael Durbin and Bridgette Roman or any of them, as his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, to execute in his name and on his behalf, in any and all capacities, this registrants Registration Statement on Form S-4 relating to the exchange offer and any amendments thereto (and any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments, including post-effective amendments thereto)), necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission in respect thereof, in connection with the registration of the securities which are the subject of such Registration Statement, which amendments may make such changes in such Registration Statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement on Form S-4 has been signed by the following persons in the capacities indicated and on the dates indicated.
Signature |
|
Title |
|
Date |
|
|
|
|
|
|
|
Chief Executive Officer and Manager |
|
|
/s/ William E. Saunders, |
|
(Principal Executive Officer) |
|
June 22, 2012 |
William E. Saunders, Jr. |
|
|
|
|
|
|
|
|
|
|
|
Chief Financial Officer, Treasurer, Senior Vice President and Manager |
|
June 22, 2012 |
/s/ Michael Durbin |
|
(Principal Financial Officer and Principal Accounting Officer) |
|
|
Michael Durbin |
|
|
|
|
|
|
|
|
|
/s/ Kyle Hanson |
|
President and Manager |
|
June 22, 2012 |
Kyle Hanson |
|
|
|
|
|
|
|
|
|
/s/ Chad Streff |
|
Chief Compliance Officer, Senior Vice President and Manager |
|
June 22, 2012 |
Chad Streff |
|
|
|
|
/s/ Bridgette Roman |
|
Secretary, Senior Vice President and Manager |
|
June 22, 2012 |
Bridgette Roman |
|
|
|
|
|
|
|
|
|
/s/ Lance Solomon |
|
Senior Vice President and Manager |
|
June 22, 2012 |
Lance Solomon |
|
|
|
|
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Dublin, State of Ohio, on the 22nd day of June, 2012.
|
CCCIS, INC. | ||
|
FAST CASH, INC. (Registrants) | ||
|
| ||
|
|
| |
|
By: |
/s/ William E. Saunders | |
|
|
Name: |
William E. Saunders, Jr. |
|
|
Title: |
Chief Executive Officer |
POWER OF ATTORNEY
Each person whose signature appears below authorizes Michael Durbin and Bridgette Roman or any of them, as his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, to execute in his name and on his behalf, in any and all capacities, this registrants Registration Statement on Form S-4 relating to the exchange offer and any amendments thereto (and any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments, including post-effective amendments thereto)), necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission in respect thereof, in connection with the registration of the securities which are the subject of such Registration Statement, which amendments may make such changes in such Registration Statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement on Form S-4 has been signed by the following persons in the capacities indicated and on the dates indicated.
Signature |
|
Title |
|
Date |
|
|
|
|
|
|
|
Chief Executive Officer and Director |
|
|
/s/ William E. Saunders |
|
(Principal Executive Officer) |
|
June 22, 2012 |
William E. Saunders, Jr. |
|
|
|
|
|
|
|
|
|
|
|
Chief Financial Officer, Treasurer, Senior Vice President and Director |
|
|
/s/ Michael Durbin |
|
(Principal Financial Officer and Principal Accounting Officer) |
|
June 22, 2012 |
Michael Durbin |
|
|
|
|
|
|
|
|
|
/s/ Kyle Hanson |
|
President and Director |
|
June 22, 2012 |
Kyle Hanson |
|
|
|
|
|
|
|
|
|
/s/ Chad Streff |
|
Chief Compliance Officer, Senior Vice President and Director |
|
June 22, 2012 |
Chad Streff |
|
|
|
|
/s/ Bridgette Roman |
|
Secretary, Senior Vice President and Director |
|
June 22, 2012 |
Bridgette Roman |
|
|
|
|
|
|
|
|
|
/s/ Lance Solomon |
|
Senior Vice President and Director |
|
June 22, 2012 |
Lance Solomon |
|
|
|
|
EXHIBIT INDEX
Exhibit No. |
|
Description |
|
|
|
2.1 |
|
Agreement and Plan of Merger, dated as of April 13, 2011, by and among CheckSmart Financial Holdings Corp., Community Choice Financial Inc., CCFI Merger Sub I Inc., CCFI Merger Sub II Inc., the Seller Parties (as defined therein), the Seller Representative (as defined therein), CCCS Corporate Holdings, Inc., CCCS Holdings, LLC and CheckSmart Financial Company |
|
|
|
2.2 |
|
First Amendment to Agreement and Plan of Merger, dated as of April 28, 2011, by and among CheckSmart Financial Holdings Corp., Community Choice Financial Inc., CCFI Merger Sub I Inc., CCFI Merger Sub II Inc., the Seller Parties (as defined therein), the Seller Representative (as defined therein), CCCS Corporate Holdings, Inc., CCCS Holdings, LLC and CheckSmart Financial Company |
|
|
|
3.1 |
|
Articles of Incorporation of Community Choice Financial Inc. |
|
|
|
3.2 |
|
Code of Regulations of Community Choice Financial Inc. |
|
|
|
3.3 |
|
Certificate of Formation, filed May 7, 2010, of ARH-Arizona, LLC |
|
|
|
3.4 |
|
Amended and Restated Limited Liability Company Agreement of ARH-Arizona, LLC |
|
|
|
3.5 |
|
Certificate of Formation, filed April 2, 2007, of BCCI CA, LLC |
|
|
|
3.6 |
|
Amended and Restated Limited Liability Company Agreement of BCCI CA, LLC |
|
|
|
3.7 |
|
Articles of Incorporation, filed January 24, 2001, of BCCI Management Company |
|
|
|
3.8 |
|
Code of Regulations of BCCI Management Company |
|
|
|
3.9 |
|
Articles of Incorporation, filed October 15, 1996, of Buckeye Check Cashing II, Inc. |
Exhibit No. |
|
Description |
|
|
|
3.10 |
|
Code of Regulations of Buckeye Check Cashing II, Inc. |
|
|
|
3.11 |
|
Articles of Incorporation, filed June 2, 2000, of Buckeye Check Cashing of Arizona, Inc. |
|
|
|
3.12 |
|
Code of Regulations of Buckeye Check Cashing of Arizona, Inc. |
|
|
|
3.13 |
|
Certificate of Formation, filed October 18, 2006, of Buckeye Check Cashing of California, LLC |
|
|
|
3.14 |
|
Amended and Restated Limited Liability Company Agreement of Buckeye Check Cashing of California, LLC |
|
|
|
3.15 |
|
Articles of Incorporation, filed April 20, 2000, of Buckeye Check Cashing of Florida, Inc. |
|
|
|
3.16 |
|
Code of Regulations of Buckeye Check Cashing of Florida, Inc. |
|
|
|
3.17 |
|
Certificate of Formation, filed January 17, 2011, of Buckeye Check Cashing of Illinois, LLC |
|
|
|
3.18 |
|
Amended and Restated Limited Liability Company Agreement of Buckeye Check Cashing of Illinois, LLC |
|
|
|
3.19 |
|
Certificate of Formation, filed May 12, 2006, of Buckeye Check Cashing of Kansas, LLC |
|
|
|
3.20 |
|
Amended and Restated Limited Liability Company Agreement of Buckeye Check Cashing of Kansas, LLC |
|
|
|
3.21 |
|
Articles of Incorporation, filed January 8, 2005, of Buckeye Check Cashing of Kentucky, Inc. |
|
|
|
3.22 |
|
Code of Regulations of Buckeye Check Cashing of Kentucky, Inc. |
|
|
|
3.23 |
|
Certificate of Incorporation, filed June 23, 2004, of Buckeye Check Cashing of Michigan, Inc. |
|
|
|
3.24 |
|
Bylaws of Buckeye Check Cashing of Michigan, Inc. |
|
|
|
3.25 |
|
Certificate of Formation, filed May 12, 2006, of Buckeye Check Cashing of Missouri, LLC |
|
|
|
3.26 |
|
Amended and Restated Limited Liability Company Agreement of Buckeye Check Cashing of Missouri, LLC |
|
|
|
3.27 |
|
Certificate of Formation, filed June 12, 2007, of Buckeye Check Cashing of Texas, LLC |
Exhibit No. |
|
Description |
|
|
|
3.28 |
|
Amended and Restated Limited Liability Company Agreement of Buckeye Check Cashing of Texas, LLC |
|
|
|
3.29 |
|
Articles of Incorporation, filed July 26, 2004, of Buckeye Check Cashing of Utah, Inc. |
|
|
|
3.30 |
|
Code of Regulations of Buckeye Check Cashing of Utah, Inc. |
|
|
|
3.31 |
|
Articles of Incorporation, filed March 22, 2002, of Buckeye Check Cashing of Virginia, Inc. |
|
|
|
3.32 |
|
Code of Regulations of Buckeye Check Cashing of Virginia, Inc. |
|
|
|
3.33 |
|
Articles of Incorporation, filed January 20, 1987, of Buckeye Check Cashing, Inc. |
|
|
|
3.34 |
|
By-Laws of Buckeye Check Cashing Inc. |
|
|
|
3.35 |
|
Certificate of Formation, filed May 31, 2007, of Buckeye Commercial Check Cashing of Florida, LLC |
|
|
|
3.36 |
|
Amended and Restated Limited Liability Company Agreement of Buckeye Commercial Check Cashing of Florida, LLC |
|
|
|
3.37 |
|
Intentionally omitted |
|
|
|
3.38 |
|
Intentionally omitted |
|
|
|
3.39 |
|
Certificate of Formation, filed September 3, 2008, of Buckeye Credit Solutions, LLC |
|
|
|
3.40 |
|
Amended and Restated Limited Liability Company Agreement of Buckeye Credit Solutions, LLC |
|
|
|
3.41 |
|
Certificate of Formation, filed September 4, 2009, of Buckeye Lending Solutions of Arizona, LLC |
|
|
|
3.42 |
|
Amended and Restated Limited Liability Company Agreement of Buckeye Lending Solutions of Arizona, LLC |
|
|
|
3.43 |
|
Certificate of Formation, filed July 18, 2008, of Buckeye Lending Solutions, LLC |
|
|
|
3.44 |
|
Amended and Restated Limited Liability Company Agreement of Buckeye Lending Solutions, LLC |
Exhibit No. |
|
Description |
|
|
|
3.45 |
|
Certificate of Formation, filed May 16, 2008, of Buckeye Small Loans, LLC |
|
|
|
3.46 |
|
Amended and Restated Limited Liability Company Agreement of Buckeye Small Loans, LLC |
|
|
|
3.47 |
|
Certificate of Formation, filed November 30, 2006, of Buckeye Title Loans of California, LLC |
|
|
|
3.48 |
|
Amended and Restated Limited Liability Company Agreement of Buckeye Title Loans of California, LLC |
|
|
|
3.49 |
|
Certificate of Formation, filed September 14, 2006, of Buckeye Title Loans of Kansas, LLC |
|
|
|
3.50 |
|
Amended and Restated Limited Liability Company Agreement of Buckeye Title Loans of Kansas, LLC |
|
|
|
3.51 |
|
Certificate of Formation, filed May 18, 2006, of Buckeye Title Loans of Missouri, LLC |
|
|
|
3.52 |
|
Amended and Restated Limited Liability Company Agreement of Buckeye Title Loans of Missouri, LLC |
|
|
|
3.53 |
|
Certificate of Formation, filed April 4, 2006, of Buckeye Title Loans of Utah, LLC |
|
|
|
3.54 |
|
Amended and Restated Limited Liability Company Agreement of Buckeye Title Loans of Utah, LLC |
|
|
|
3.55 |
|
Certificate of Formation, filed April 4, 2006, of Buckeye Title Loans of Virginia, LLC |
|
|
|
3.56 |
|
Amended and Restated Limited Liability Company Agreement of Buckeye Title Loans of Virginia, LLC |
|
|
|
3.57 |
|
Articles of Incorporation, filed November 9, 2005, of Buckeye Title Loans, Inc. |
|
|
|
3.58 |
|
Code of Regulations of Buckeye Title Loans, Inc. |
|
|
|
3.59 |
|
Certificate of Formation, filed July 13, 2006, of California Check Cashing Stores, LLC |
|
|
|
3.60 |
|
Amended and Restated Limited Liability Company Agreement of California Check Cashing Stores, LLC |
|
|
|
3.61 |
|
Articles of Organization, filed June 27, 2005, of Cash Central of Alabama, LLC (formerly known as Direct Financial Solutions of Alabama, LLC), as amended |
|
|
|
3.62 |
|
Amended and Restated Operating Agreement of Cash Central of Alabama, LLC |
Exhibit No. |
|
Description |
|
|
|
3.63 |
|
Articles of Organization, filed June 16, 2005, of Cash Central of Alaska, LLC (formerly known as Direct Financial Solutions of Alaska LLC), as amended |
|
|
|
3.64 |
|
Amended and Restated Operating Agreement of Cash Central of Alaska, LLC |
|
|
|
3.65 |
|
Articles of Organization, filed June 21, 2005, of Cash Central of California, LLC (formerly known as Direct Financial Solutions of California LLC), as amended |
|
|
|
3.66 |
|
Amended and Restated Operating Agreement of Cash Central of California, LLC |
|
|
|
3.67 |
|
Certificate of Formation, filed June 21, 2005, of Cash Central of Delaware, LLC (formerly known as Direct Financial Solutions of Delaware LLC), as amended |
|
|
|
3.68 |
|
Amended and Restated Limited Liability Company Agreement of Cash Central of Delaware, LLC |
|
|
|
3.69 |
|
Articles of Organization for Limited Liability Company, filed August 12, 2005, of Cash Central of Hawaii, LLC (formerly known as Direct Financial Solutions of Hawaii LLC), as amended |
|
|
|
3.70 |
|
Amended and Restated Operating Agreement of Cash Central of Hawaii, LLC |
|
|
|
3.71 |
|
Articles of Organization Limited Liability Company, filed June 27, 2005, of Cash Central of Idaho, LLC (formerly known as Direct Financial Solutions of Idaho LLC), as amended |
|
|
|
3.72 |
|
Amended and Restated Operating Agreement of Cash Central of Idaho, LLC |
|
|
|
3.73 |
|
Articles of Organization, filed June 20, 2005, of Cash Central of Kansas, LLC (formerly known as Direct Financial Solutions of Kansas LLC), as amended |
|
|
|
3.74 |
|
Amended and Restated Operating Agreement of Cash Central of Kansas, LLC |
|
|
|
3.75 |
|
Articles of Organization, filed September 18, 2008, of Cash Central of Minnesota, LLC |
|
|
|
3.76 |
|
Amended and Restated Operating Agreement of Cash Central of Minnesota, LLC |
|
|
|
3.77 |
|
Articles of Organization, filed June 21, 2005, of Cash Central of Missouri, LLC (formerly known as Direct Financial Solutions of Missouri LLC), as amended |
Exhibit No. |
|
Description |
|
|
|
3.78 |
|
Amended and Restated Operating Agreement of Cash Central of Missouri, LLC |
|
|
|
3.79 |
|
Articles of Organization, filed August 8, 2005, of Cash Central of Nevada, LLC (formerly known as Direct Financial Solutions of Nevada LLC), as amended |
|
|
|
3.80 |
|
Amended and Restated Operating Agreement of Cash Central of Nevada, LLC |
|
|
|
3.81 |
|
Articles of Organization, filed August 1, 2005, of Cash Central of North Dakota, LLC (formerly known as Direct Financial Solutions of North Dakota LLC), as amended |
|
|
|
3.82 |
|
Amended and Restated Operating Agreement of Cash Central of North Dakota, LLC |
|
|
|
3.83 |
|
Articles of Organization, filed June 28, 2005, of Cash Central of South Dakota, LLC (formerly known as Direct Financial Solutions of South Dakota LLC), as amended |
|
|
|
3.84 |
|
Amended and Restated Operating Agreement of Cash Central of South Dakota, LLC |
|
|
|
3.85 |
|
Certificate of Formation, filed April 10, 2006, of Cash Central of Texas, LLC (formerly known as Direct Financial Solutions of Texas LLC), as amended |
|
|
|
3.86 |
|
Amended and Restated Limited Liability Company Agreement of Cash Central of Texas, LLC |
|
|
|
3.87 |
|
Articles of Organization, filed June 20, 2005, of Cash Central of Utah, LLC (formerly known as Direct Financial Solutions of Utah, LLC), as amended |
|
|
|
3.88 |
|
Amended and Restated Operating Agreement of Cash Central of Utah, LLC |
|
|
|
3.89 |
|
Certificate of Formation, filed June 20, 2005, of Cash Central of Washington, LLC (formerly known as Direct Financial Solutions of Washington LLC), as amended |
|
|
|
3.90 |
|
Amended and Restated Limited Liability Company Agreement of Cash Central of Washington, LLC |
|
|
|
3.91 |
|
Articles of Organization, filed June 20, 2005, of Cash Central of Wisconsin, LLC (formely known as Direct Financial Solutions of Wisconsin LLC), as amended |
Exhibit No. |
|
Description |
|
|
|
3.92 |
|
Amended and Restated Operating Agreement of Cash Central of Wisconsin, LLC |
|
|
|
3.93 |
|
Articles of Organization, filed August 5, 2005, of Cash Central of Wyoming, LLC (formerly known as Direct Financial Solutions of Wyoming LLC), as amended |
|
|
|
3.94 |
|
Amended and Restated Operating Agreement of Cash Central of Wyoming, LLC |
|
|
|
3.95 |
|
Articles of Incorporation, filed September 23, 2005, of CCCIS, Inc. |
|
|
|
3.96 |
|
Amended and Restated Bylaws of CCCIS, Inc. |
|
|
|
3.97 |
|
Amended and Restated Certificate of Incorporation, filed April 29, 2011, of CCCS Corporate Holdings, Inc., as amended |
|
|
|
3.98 |
|
Amended and Restated Bylaws of CCCS Corporate Holdings, Inc. |
|
|
|
3.99 |
|
Certificate of Formation, filed July 13, 2006, of CCCS Holdings, LLC |
|
|
|
3.100 |
|
Amended and Restated Limited Liability Company Agreement of CCCS Holdings, LLC |
|
|
|
3.101 |
|
Certificate of Incorporation, filed April 25, 2006, of CheckSmart Financial Company |
|
|
|
3.102 |
|
Bylaws of CheckSmart Financial Company |
|
|
|
3.103 |
|
Amended and Restated Certificate of Incorporation, filed April 29, 2011, of Checksmart Financial Holdings Corp., as amended |
|
|
|
3.104 |
|
Amended and Restated Bylaws of CheckSmart Financial Holdings Corp. |
|
|
|
3.105 |
|
Certificate of Formation, filed February 26, 2007, of CheckSmart Financial, LLC |
|
|
|
3.106 |
|
Amended and Restated Limited Liability Company Agreement of CheckSmart Financial, LLC |
|
|
|
3.107 |
|
Intentionally omitted |
|
|
|
3.108 |
|
Intentionally omitted |
|
|
|
3.109 |
|
Certificate of Incorporation, filed February 18, 2009, of Checksmart Money Order Services, Inc. |
Exhibit No. |
|
Description |
|
|
|
3.110 |
|
Bylaws of CheckSmart Money Order Services, Inc. |
|
|
|
3.111 |
|
Certificate of Formation, filed August 29, 2011, of Community Choice Family Insurance Agency, LLC (formerly known as Community Choice Family Insurance, LLC), as amended |
|
|
|
3.112 |
|
Amended and Restated Limited Liability Company Agreement of Community Choice Family Insurance Agency, LLC |
|
|
|
3.113 |
|
Certificate of Formation, filed May 7, 2010, of CS-Arizona, LLC |
|
|
|
3.114 |
|
Amended and Restated Limited Liability Company Agreement of CS-Arizona, LLC |
|
|
|
3.115 |
|
Certificate of Formation and Certificate of Conversion, filed August 10, 2009, of Direct Financial Solutions, LLC (formerly known as Direct Financial Solutions, L.L.C. and Financial Denouement, LLC), as amended |
|
|
|
3.116 |
|
Amended and Restated Limited Liability Company Agreement of Direct Financial Solutions, LLC |
|
|
|
3.117 |
|
Articles of Incorporation, filed May 25, 2005, of Express Payroll Advance of Ohio, Inc. |
|
|
|
3.118 |
|
Code of Regulations of Express Payroll Advance of Ohio, Inc. |
|
|
|
3.119 |
|
Amended and Restated Articles of Incorporation, filed March 15, 2007, of Fast Cash, Inc., as amended |
|
|
|
3.120 |
|
Amended and Restated Bylaws of Fast Cash, Inc. |
|
|
|
3.121 |
|
Certificate of Formation, filed October 13, 2009, of First Virginia Credit Solutions, LLC |
|
|
|
3.122 |
|
Amended and Restated Limited Liability Company Agreement of First Virginia Credit Solutions, LLC |
|
|
|
3.123 |
|
Certificate of Formation, filed March 26, 2009, of First Virginia Financial Services, LLC |
|
|
|
3.124 |
|
Amended and Restated Limited Liability Company Agreement of First Virginia Financial Services, LLC |
|
|
|
3.125 |
|
Articles of Organization, filed October 19, 1995, of Hoosier Check Cashing of Ohio, Ltd |
|
|
|
3.126 |
|
Amended and Restated Operating Agreement of Hoosier Check Cashing of Ohio, Ltd |
|
|
|
3.127 |
|
Articles of Organization, filed September 18, 2003, of Insight Capital, LLC, as amended |
Exhibit No. |
|
Description |
|
|
|
3.128 |
|
Amended and Restated Operating Agreement of Insight Capital, LLC |
|
|
|
3.129 |
|
Certificate of Formation, filed December 16, 2010, of National Tax Lending, LLC |
|
|
|
3.130 |
|
Amended and Restated Limited Liability Company Agreement of National Tax Lending, LLC |
|
|
|
3.131 |
|
Articles of Incorporation, filed November 24, 2006, of Reliant Software, Inc. |
|
|
|
3.132 |
|
Bylaws of Reliant Software, Inc. |
|
|
|
4.1 |
|
Form of specimen common share certificate |
|
|
|
4.2 |
|
Indenture, dated as of April 29, 2011, among Community Choice Financial Inc., the Subsidiary Guarantors (as defined therein) and U.S. Bank National Association, as trustee and collateral agent, with respect to our 10.75% Senior Secured Notes due 2019 |
|
|
|
4.3 |
|
Revolving Credit Agreement, dated as of April 29, 2011, among Community Choice Financial Inc., the lenders party thereto and Credit Suisse AG, as administrative agent |
|
|
|
4.4 |
|
Amended and Restated Credit Agreement, dated as of April 29, 2011, by and between Insight Capital, LLC, and Republic Bank of Chicago |
|
|
|
4.5 |
|
First Modification to Amended and Restated Credit Agreement, dated as of July 31, 2011, by and between Insight Capital, LLC, and Republic Bank of Chicago |
|
|
|
4.6 |
|
Registration Rights Agreement, dated as of April 29, 2011, among Community Choice Financial Inc., the guarantors party thereto, Credit Suisse Securities (USA) LLC, Jefferies & Company, Inc. and Stephens Inc. |
|
|
|
4.7 |
|
First Supplemental Indenture, dated as of April 1, 2012, among Community Choice Financial Inc., the Guaranteeing Subsidiaries (as defined therein) and U.S. Bank National Association, as trustee |
|
|
|
5.1 |
|
Opinion of Jones Day |
|
|
|
5.2 |
|
Opinion of Kutak Rock LLP (Kansas) |
|
|
|
5.3 |
|
Opinion of Lindquist & Vennum PLLP |
|
|
|
5.4 |
|
Opinion of McCorriston Miller Mukai MacKinnon LLP |
|
|
|
5.5 |
|
Opinion of Serkland Law Firm |
|
|
|
5.6 |
|
Opinion of Sirote & Permutt PC |
|
|
|
5.7 |
|
Opinion of Stoel Rives LLP |
|
|
|
5.8 |
|
Opinion of Whyte, Hirschboeck Dudek S.C. |
|
|
|
5.9 |
|
Opinion of Kutak Rock LLP (Missouri) |
|
|
|
10.1 |
|
Shareholders Agreement, dated as of April 29, 2011, among Community Choice Financial Inc. and the Shareholders of Community Choice Financial Inc. |
Exhibit No. |
|
Description |
|
|
|
10.2 |
|
Community Choice Financial Inc. 2011 Management Equity Incentive Plan, effective as of April 29, 2011 |
|
|
|
10.3 |
|
Advisory Services and Monitoring Agreement dated as of April 29, 2011, by and among Community Choice Financial Inc., CheckSmart Financial Company, California Check Cashing Stores, LLC, Diamond Castle Holdings, LLC and GGC Administration, LLC |
|
|
|
10.4 |
|
Employment Agreement, dated as of May 1, 2006, by and between CheckSmart Financial Company and William E. Saunders, Jr., as amended three times to date, including (A) Restricted Share Award Agreement (2006 Management Equity Incentive Plan), dated as of May 1, 2006, between CheckSmart Financial Holdings Corp. and William E. Saunders, Jr., (B) Tandem Stock Option/Stock Unit Liquidity Event Award Agreement (2006 Management Equity Incentive Plan), dated as of May 1, 2006, between CheckSmart Financial Holdings Corp. and William E. Saunders, Jr. and (C) Confidentiality, Non-Competition and Intellectual Property agreement, dated as of May 1, 2006, between CheckSmart Financial Company and William E. Saunders, Jr.* |
|
|
|
10.5 |
|
Employment Agreement, dated as of May 1, 2006, by and between CheckSmart Financial Company and Kyle Hanson, as amended two times to date, including (A) Option Grant Award Agreement (2006 Management Equity Incentive Plan), dated as of May 9, 2006, between CheckSmart Financial Holdings Corp. and Kyle Hanson and (B) Confidentiality, Non-Competition and Intellectual Property agreement, dated as of May 1, 2006, between CheckSmart Financial Company and Kyle Hanson* |
|
|
|
10.6 |
|
Employment Agreement, dated as of May 1, 2006, by and between CheckSmart Financial Company and Chad Streff, as amended two times to date, including (A) Stock Appreciation Right Award Agreement (2006 Management Equity Incentive Plan), dated as of May 1, 2006, between CheckSmart Financial Holdings Corp. and Chad M. Streff and (B) Confidentiality, Non-Competition and Intellectual Property agreement, dated as of May 1, 2006, between CheckSmart Financial Company and Chad Streff* |
|
|
|
10.7 |
|
Employment Agreement, dated as of January 1, 2011, by and between CheckSmart Financial Company and Michael Durbin, including (A) Option Grant Award Agreement (2006 Management Equity Incentive Plan, as amended), dated as of December 31, 2010, between CheckSmart Financial Holdings |
Exhibit No. |
|
Description |
|
|
|
|
|
Corp. and Michael Durbin and (B) Confidentiality, Non-Competition and Intellectual Property agreement, dated as of January 1, 2011, between CheckSmart Financial Company and Michael Durbin* |
|
|
|
10.8 |
|
Employment Agreement, dated as of April 1, 2011, by and between Community Choice Financial Inc. and Bridgette C. Roman, including Confidentiality, Non-Competition and Intellectual Property agreement, dated as of April 1, 2011, between Community Choice Financial Inc. and Bridgette C. Roman* |
|
|
|
10.9 |
|
Option Grant Award Agreement (2006 Management Equity Incentive Plan), dated as of June 4, 2007, between CheckSmart Financial Holdings Corp. and Kyle Hanson* |
|
|
|
10.10 |
|
Form Option Grant Award Agreement (2006 Management Equity Incentive Plan, as amended), dated as of December 31, 2008, with CheckSmart Financial Holdings Corp.* |
|
|
|
10.11 |
|
Option Grant Award Agreement (2006 Management Equity Incentive Plan, as amended), dated as of December 31, 2008, between CheckSmart Financial Holdings Corp. and Bridgette Roman* |
|
|
|
10.12 |
|
Stock Appreciation Right Award Agreement (2006 Management Equity Incentive Plan, as amended), dated as of December 31, 2008, between CheckSmart Financial Holdings Corp. and Chad Streff* |
|
|
|
10.13 |
|
2012 Executive Compensation, Benefit and Severance Program* |
|
|
|
10.14 |
|
Form Option Grant Award Agreement (2011 Management Equity Incentive Plan)* |
|
|
|
10.15 |
|
Form Restricted Stock Unit Agreement (2011 Management Equity Incentive Plan)* |
|
|
|
10.16 |
|
Amendment to Shareholders Agreement among Community Choice Financial Inc. and the Shareholders of Community Choice Financial Inc., effective as of April 20, 2012 |
|
|
|
12.1 |
|
Statement of Computation of Ratio of Earnings to Fixed Charges |
Exhibit No. |
|
Description |
|
|
|
21.1 |
|
Subsidiaries of Community Choice Financial Inc. Incorporated |
|
|
|
23.1 |
|
Consent of Independent Registered Public Accounting Firm |
|
|
|
23.2 |
|
Consent of Independent Registered Public Accounting Firm |
|
|
|
23.3 |
|
Consent of Jones Day (included in Exhibit 5.1 hereto) |
|
|
|
23.4 |
|
Consent of Kutak Rock LLP (Kansas) (included in Exhibit 5.2 hereto) |
|
|
|
23.5 |
|
Consent of Lindquist & Vennum PLLP (included in Exhibit 5.3 hereto) |
|
|
|
23.6 |
|
Consent of McCorriston Miller Mukai MacKinnon LLP (included in Exhibit 5.4 hereto) |
|
|
|
23.7 |
|
Consent of Serkland Law Firm (included in Exhibit 5.5 hereto) |
|
|
|
23.8 |
|
Consent of Sirote & Permutt PC (included in Exhibit 5.6 hereto) |
|
|
|
23.9 |
|
Consent of Stoel Rives LLP (included in Exhibit 5.7 hereto) |
|
|
|
23.10 |
|
Consent of Whyte, Hirschboeck Dudek S.C. (included in Exhibit 5.8 hereto) |
|
|
|
23.11 |
|
Consent of Kutak Rock LLP (Missouri) (included in Exhibit 5.9 hereto) |
|
|
|
24.1 |
|
Power of Attorney with respect to Community Choice Financial Inc. (included in the signature pages hereto) |
|
|
|
24.2 |
|
Power of Attorney with respect to ARH-Arizona, LLC (included in the signature pages hereto) |
|
|
|
24.3 |
|
Power of Attorney with respect to BCCI CA, LLC (included in the signature pages hereto) |
|
|
|
24.4 |
|
Power of Attorney with respect to BCCI Management Company (included in the signature pages hereto) |
|
|
|
24.5 |
|
Power of Attorney with respect to Buckeye Check Cashing II, Inc. (included in the signature pages hereto) |
|
|
|
24.6 |
|
Power of Attorney with respect to Buckeye Check Cashing of Arizona, Inc. (included in the signature pages hereto) |
|
|
|
24.7 |
|
Power of Attorney with respect to Buckeye Check Cashing of California, LLC (included in the signature pages hereto) |
|
|
|
24.8 |
|
Power of Attorney with respect to Buckeye Check Cashing of Florida, Inc. (included in the signature pages hereto) |
|
|
|
24.9 |
|
Power of Attorney with respect to Buckeye Check Cashing of Illinois, LLC (included in the signature pages hereto) |
|
|
|
24.10 |
|
Power of Attorney with respect to Buckeye Check Cashing of Kansas, LLC (included in the signature pages hereto) |
|
|
|
24.11 |
|
Power of Attorney with respect to Buckeye Check Cashing of Kentucky, Inc. (included in the signature pages hereto) |
|
|
|
24.12 |
|
Power of Attorney with respect to Buckeye Check Cashing of Michigan, Inc. (included in the signature pages hereto) |
Exhibit No. |
|
Description |
|
|
|
24.13 |
|
Power of Attorney with respect to Buckeye Check Cashing of Missouri, LLC(included in the signature pages hereto) |
|
|
|
24.14 |
|
Power of Attorney with respect to Buckeye Check Cashing of Texas, LLC (included in the signature pages hereto) |
|
|
|
24.15 |
|
Power of Attorney with respect to Buckeye Check Cashing of Utah, Inc. (included in the signature pages hereto) |
|
|
|
24.16 |
|
Power of Attorney with respect to Buckeye Check Cashing of Virginia, Inc. (included in the signature pages hereto) |
|
|
|
24.17 |
|
Power of Attorney with respect to Buckeye Check Cashing, Inc. (included in the signature pages hereto) |
|
|
|
24.18 |
|
Power of Attorney with respect to Buckeye Commercial Check Cashing of Florida, LLC (included in the signature pages hereto) |
|
|
|
24.19 |
|
Intentionally omitted |
|
|
|
24.20 |
|
Power of Attorney with respect to Buckeye Credit Solutions, LLC (included in the signature pages hereto) |
|
|
|
24.21 |
|
Power of Attorney with respect to Buckeye Lending Solutions of Arizona, LLC (included in the signature pages hereto) |
|
|
|
24.22 |
|
Power of Attorney with respect to Buckeye Lending Solutions, LLC (included in the signature pages hereto) |
|
|
|
24.23 |
|
Power of Attorney with respect to Buckeye Small Loans, LLC (included in the signature pages hereto) |
|
|
|
24.24 |
|
Power of Attorney with respect to Buckeye Title Loans of California, LLC (included in the signature pages hereto) |
|
|
|
24.25 |
|
Power of Attorney with respect to Buckeye Title Loans of Kansas, LLC (included in the signature pages hereto) |
|
|
|
24.26 |
|
Power of Attorney with respect to Buckeye Title Loans of Missouri, LLC (included in the signature pages hereto) |
Exhibit No. |
|
Description |
|
|
|
24.27 |
|
Power of Attorney with respect to Buckeye Title Loans of Utah, LLC (included in the signature pages hereto) |
|
|
|
24.28 |
|
Power of Attorney with respect to Buckeye Title Loans of Virginia, LLC (included in the signature pages hereto) |
|
|
|
24.29 |
|
Power of Attorney with respect to Buckeye Title Loans, Inc. (included in the signature pages hereto) |
|
|
|
24.30 |
|
Power of Attorney with respect to California Check Cashing Stores, LLC (included in the signature pages hereto) |
|
|
|
24.31 |
|
Power of Attorney with respect to Cash Central of Alabama, LLC (included in the signature pages hereto) |
|
|
|
24.32 |
|
Power of Attorney with respect to Cash Central of Alaska, LLC (included in the signature pages hereto) |
|
|
|
24.33 |
|
Power of Attorney with respect to Cash Central of California, LLC (included in the signature pages hereto) |
|
|
|
24.34 |
|
Power of Attorney with respect to Cash Central of Delaware, LLC (included in the signature pages hereto) |
|
|
|
24.35 |
|
Power of Attorney with respect to Cash Central of Hawaii, LLC (included in the signature pages hereto) |
|
|
|
24.36 |
|
Power of Attorney with respect to Cash Central of Idaho, LLC (included in the signature pages hereto) |
|
|
|
24.37 |
|
Power of Attorney with respect to Cash Central of Kansas, LLC (included in the signature pages hereto) |
|
|
|
24.38 |
|
Power of Attorney with respect to Cash Central of Minnesota, LLC (included in the signature pages hereto) |
|
|
|
24.39 |
|
Power of Attorney with respect to Cash Central of Missouri, LLC (included in the signature pages hereto) |
|
|
|
24.40 |
|
Power of Attorney with respect to Cash Central of Nevada, LLC (included in the signature pages hereto) |
|
|
|
24.41 |
|
Power of Attorney with respect to Cash Central of North Dakota, LLC (included in the signature pages hereto) |
Exhibit No. |
|
Description |
|
|
|
24.42 |
|
Power of Attorney with respect to Cash Central of South Dakota, LLC (included in the signature pages hereto) |
|
|
|
24.43 |
|
Power of Attorney with respect to Cash Central of Texas, LLC (included in the signature pages hereto) |
|
|
|
24.44 |
|
Power of Attorney with respect to Cash Central of Utah, LLC (included in the signature pages hereto) |
|
|
|
24.45 |
|
Power of Attorney with respect to Cash Central of Washington, LLC (included in the signature pages hereto) |
|
|
|
24.46 |
|
Power of Attorney with respect to Cash Central of Wyoming, LLC (included in the signature pages hereto) |
|
|
|
24.47 |
|
Power of Attorney with respect to Cash Central of Wisconsin, LLC (included in the signature pages hereto) |
|
|
|
24.48 |
|
Power of Attorney with respect to CCCIS, Inc. (included in the signature pages hereto) |
|
|
|
24.49 |
|
Power of Attorney with respect to CCCS Corporate Holdings, Inc. (included in the signature pages hereto) |
|
|
|
24.50 |
|
Power of Attorney with respect to CCCS Holdings, LLC (included in the signature pages hereto) |
|
|
|
24.51 |
|
Power of Attorney with respect to CheckSmart Financial Company (included in the signature pages hereto) |
|
|
|
24.52 |
|
Power of Attorney with respect to Checksmart Financial Holdings Corp. (included in the signature pages hereto) |
|
|
|
24.53 |
|
Power of Attorney with respect to CheckSmart Financial, LLC (included in the signature pages hereto) |
|
|
|
24.54 |
|
Intentionally omitted |
|
|
|
24.55 |
|
Power of Attorney with respect to Checksmart Money Order Services, Inc. (included in the signature pages hereto) |
|
|
|
24.56 |
|
Power of Attorney with respect to Community Choice Family Insurance Agency, LLC(included in the signature pages hereto) |
|
|
|
24.57 |
|
Power of Attorney with respect to CS-Arizona, LLC (included in the signature pages hereto) |
Exhibit No. |
|
Description |
|
|
|
24.58 |
|
Power of Attorney with respect to Direct Financial Solutions, LLC (included in the signature pages hereto) |
|
|
|
24.59 |
|
Power of Attorney with respect to Express Payroll Advance of Ohio, Inc. (included in the signature pages hereto) |
|
|
|
24.60 |
|
Power of Attorney with respect to Fast Cash, Inc. (included in the signature pages hereto) |
|
|
|
24.61 |
|
Power of Attorney with respect to First Virginia Credit Solutions, LLC (included in the signature pages hereto) |
|
|
|
24.62 |
|
Power of Attorney with respect to First Virginia Financial Services, LLC (included in the signature pages hereto) |
|
|
|
24.63 |
|
Power of Attorney with respect to Hoosier Check Cashing of Ohio, Ltd (included in the signature pages hereto) |
|
|
|
24.64 |
|
Power of Attorney with respect to Insight Capital, LLC (included in the signature pages hereto) |
|
|
|
24.65 |
|
Power of Attorney with respect to National Tax Lending, LLC (included in the signature pages hereto) |
|
|
|
24.66 |
|
Power of Attorney with respect to Reliant Software, Inc. (included in the signature pages hereto) |
|
|
|
25.1 |
|
Statement of Eligibility of Trustee |
|
|
|
99.1 |
|
Form of Letter of Transmittal |
|
|
|
99.2 |
|
Form of Notice of Guaranteed Delivery |
|
|
|
99.3 |
|
Form of Letter to Clients |
|
|
|
99.4 |
|
Form of Letter to Nominees |
* Indicates a management contract or compensation plan or arrangement.
Exhibit 2.1
EXECUTION VERSION
AGREEMENT AND PLAN OF MERGER
by and among
CHECKSMART FINANCIAL HOLDINGS CORP.,
COMMUNITY CHOICE FINANCIAL INC.,
CCFI MERGER SUB I INC.,
CCFI MERGER SUB II INC.,
THE SELLER PARTIES,
THE SELLER REPRESENTATIVE,
CCCS CORPORATE HOLDINGS, INC.,
CCCS HOLDINGS, LLC
and
CHECKSMART FINANCIAL COMPANY
(solely for the purposes of Section 11.1(c))
Dated as of April 13, 2011
TABLE OF CONTENTS
|
|
Page |
|
|
|
ARTICLE 1: |
DEFINITIONS |
2 |
|
|
|
ARTICLE 2: |
THE MERGERS |
14 |
|
|
|
2.1 |
The Mergers |
14 |
2.2 |
Closing |
15 |
2.3 |
Effective Times |
15 |
2.4 |
Certificates of Incorporation and Bylaws |
16 |
2.5 |
Directors and Officers of the Buyer and Surviving Entities |
16 |
|
|
|
ARTICLE 3: |
EFFECT OF THE MERGERS ON THE EQUITY SECURITIES OF THE CONSTITUENT CORPORATIONS AND THEIR AFFILIATES |
17 |
|
|
|
3.1 |
Effect on Equity Securities of Checksmart Merger Sub and Checksmart |
17 |
3.2 |
Effect on Equity Securities of CCCS Merger Sub and the Company |
17 |
3.3 |
Contributions by CCCS Founders and Buyer |
18 |
3.4 |
Effect on Checksmart Options |
18 |
3.5 |
Effect on CCCS Holdings Options |
18 |
|
|
|
ARTICLE 4: |
DELIVERIES AND OTHER ACTIONS |
19 |
|
|
|
4.1 |
Deliveries by the Seller Parties |
19 |
4.2 |
Deliveries by the Buyer Parties |
21 |
|
|
|
ARTICLE 5: |
REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY AND ITS SUBSIDIARIES |
22 |
|
|
|
5.1 |
Existence and Good Standing |
22 |
5.2 |
Power |
22 |
5.3 |
Validity and Enforceability |
22 |
5.4 |
Capitalization |
23 |
5.5 |
No Conflict |
25 |
5.6 |
Required Governmental Filings and Consents |
25 |
5.7 |
Real Property |
25 |
5.8 |
Personal Property |
26 |
5.9 |
Litigation and Orders |
26 |
5.10 |
Compliance with Laws |
27 |
5.11 |
Conduct of Business |
28 |
5.12 |
Labor Matters |
29 |
TABLE OF CONTENTS
(continued)
|
|
Page |
|
|
|
5.13 |
Employee Benefit Plans |
31 |
5.14 |
Environmental |
34 |
5.15 |
Material Contracts |
35 |
5.16 |
Permits |
37 |
5.17 |
Intellectual Property |
37 |
5.18 |
Insurance |
39 |
5.19 |
Financial Statements |
39 |
5.20 |
Bank Accounts; Names |
40 |
5.21 |
Books and Records |
40 |
5.22 |
Indebtedness and Selling Expenses |
40 |
5.23 |
Taxes |
41 |
5.24 |
Related Party Transactions |
43 |
5.25 |
Brokers |
43 |
5.26 |
Certain Payments |
43 |
5.27 |
No Other Representations or Warranties |
43 |
5A.1 |
Existence and Good Standing |
44 |
5A.2 |
Validity and Enforceability |
44 |
5A.3 |
Title |
44 |
5A.4 |
No Conflict |
44 |
5A.5 |
Required Governmental Filings and Consents |
45 |
5A.6 |
Litigation |
45 |
5A.7 |
Brokers |
45 |
5A.8 |
Activities of the Company |
45 |
|
|
|
ARTICLE 6: |
REPRESENTATIONS AND WARRANTIES OF THE BUYER AND CHECKSMART |
46 |
|
|
|
6.1 |
Existence and Good Standing |
46 |
6.2 |
Power |
46 |
6.3 |
Validity and Enforceability |
46 |
6.4 |
Capitalization |
47 |
6.5 |
No Conflict |
48 |
TABLE OF CONTENTS
(continued)
|
|
Page |
|
|
|
6.6 |
Required Governmental Filings and Consents |
49 |
6.7 |
Real Property |
49 |
6.8 |
Personal Property |
50 |
6.9 |
Litigation and Orders |
50 |
6.10 |
Compliance with Laws |
51 |
6.11 |
Conduct of Business |
51 |
6.12 |
Labor Matters |
53 |
6.13 |
Employee Benefit Plans |
55 |
6.14 |
Environmental |
57 |
6.15 |
Material Contracts |
59 |
6.16 |
Permits |
60 |
6.17 |
Intellectual Property |
60 |
6.18 |
Insurance |
62 |
6.19 |
Financial Statements |
62 |
6.20 |
Bank Accounts; Names |
63 |
6.21 |
Books and Records |
63 |
6.22 |
Indebtedness |
63 |
6.23 |
Taxes |
63 |
6.24 |
Related Party Transactions |
65 |
6.25 |
Brokers |
66 |
6.26 |
Certain Payments |
66 |
6.27 |
No Other Representations or Warranties |
66 |
6.28 |
No Claims |
66 |
|
|
|
ARTICLE 7: |
COVENANTS |
67 |
|
|
|
7.1 |
Conduct of Business |
67 |
7.2 |
Notification of Changes; Other Actions |
68 |
7.3 |
No Solicitation |
69 |
7.4 |
Access to Information and Premises |
69 |
7.5 |
Antitrust Laws |
70 |
7.6 |
Commercially Reasonable Efforts; Cooperation |
71 |
TABLE OF CONTENTS
(continued)
|
|
Page |
|
|
|
7.7 |
High Yield Offering Documentation |
72 |
7.8 |
Confidentiality |
72 |
7.9 |
Dividend |
72 |
7.10 |
High Yield Offering |
72 |
7.11 |
Termination of Advisory Agreement |
73 |
|
|
|
ARTICLE 8: |
TAX MATTERS |
73 |
|
|
|
8.1 |
Transfer Taxes |
73 |
8.2 |
Cooperation; Audits |
73 |
8.3 |
Tax Sharing Agreements |
73 |
|
|
|
ARTICLE 9: |
CLOSING CONDITIONS |
74 |
|
|
|
9.1 |
Conditions to the Obligations of Each Party |
74 |
9.2 |
Conditions to the Buyer Parties Obligations |
74 |
9.3 |
Conditions to the Seller Parties Obligations |
75 |
|
|
|
ARTICLE 10: |
TERMINATION |
76 |
|
|
|
10.1 |
Termination |
76 |
10.2 |
Effect of Termination |
77 |
|
|
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ARTICLE 11: |
REMEDIES |
77 |
|
|
|
11.1 |
General Indemnification Obligation |
77 |
11.2 |
Notice and Opportunity to Defend |
79 |
11.3 |
Survivability; Limitations |
80 |
11.4 |
Exclusive Remedy; Specific Performance |
84 |
|
|
|
ARTICLE 12: |
MISCELLANEOUS |
84 |
|
|
|
12.1 |
Disclosure Schedules |
84 |
12.2 |
Further Assurances |
85 |
12.3 |
Press Release and Announcements |
85 |
12.4 |
Expenses |
85 |
12.5 |
No Assignment |
85 |
12.6 |
Headings |
85 |
12.7 |
Integration, Modification and Waiver |
85 |
12.8 |
Construction |
86 |
TABLE OF CONTENTS
(continued)
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Page |
|
|
|
12.9 |
Severability |
86 |
12.10 |
Notices |
86 |
12.11 |
Governing Law |
87 |
12.12 |
Counterparts |
87 |
12.13 |
Attorney-Client Privilege and Conflict Waiver |
87 |
12.14 |
Seller Representative |
88 |
LIST OF EXHIBITS AND ANNEXES
Exhibit A |
Form of Shareholders Agreement |
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|
Exhibit B |
Form of Non-Competition Agreement |
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|
Exhibit C-1 |
Form of Seller Release |
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|
Exhibit C-2 |
Form of Buyer Release |
|
|
Exhibit D |
Form of Advisory Agreement |
|
|
Exhibit 2.5 |
Directors and Officers of the Buyer and Surviving Entities |
|
|
Exhibit 3.1(b) |
Allocation of Checksmart Merger Consideration Shares |
|
|
Exhibit 3.2(b) |
Allocation of CCCS Merger Consideration Shares |
|
|
Exhibit 3.3(a) |
Allocation of CCCS Founders Merger Consideration Shares |
|
|
Exhibit 3.4 |
Options and New Options |
|
|
Annex I |
Pro Rata Share |
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this Agreement), dated as of April 13, 2011, is by and among: (i) CHECKSMART FINANCIAL HOLDINGS CORP., a Delaware corporation (Checksmart); (ii) COMMUNITY CHOICE FINANCIAL INC., an Ohio corporation (the Buyer); (iii) CCFI MERGER SUB I INC., a Delaware corporation (Checksmart Merger Sub); (iv) CCFI MERGER SUB II INC., a Delaware corporation (CCCS Merger Sub); (v) each of the stockholders of the Company identified on the signature pages hereto (each individually, a Company Stockholder and collectively, the Company Stockholders); (vi) each of CALIFORNIA CHECK CASHING STORES, INC., a California corporation (Eager Corp), CALIFORNIA CHECK CASHING STORES II, INC., a California corporation, and CALIFORNIA CHECK CASHING STORES IV, INC., a California corporation (collectively, the CCCS Founders and, together with the Company Stockholders, the Seller Parties; any of the CCCS Founders or the Company Stockholders may hereinafter be referred to individually as a Seller Party); (vii) GOLDEN GATE CAPITAL INVESTMENT FUND II, L.P., a Delaware limited partnership, as the representative of the Seller Parties (the Seller Representative); (viii) CCCS CORPORATE HOLDINGS, INC., a Delaware corporation (the Company); (ix) CCCS HOLDINGS, LLC, a Delaware limited liability company (CCCS Holdings); and (x) solely for the purposes of Section 11.1(c), CHECKSMART FINANCIAL COMPANY, a Delaware corporation (Checksmart Financial).
RECITALS
A. As of the date of this Agreement:
(i) The Checksmart Stockholders are the only stockholders of Checksmart.
(ii) Checksmart is the sole stockholder of the Buyer.
(iii) The Buyer is the sole stockholder of each of CCCS Merger Sub and Checksmart Merger Sub.
B. As of the date of this Agreement:
(i) The Company Stockholders are the only stockholders of the Company.
(ii) The Company and the CCCS Founders are the only members of CCCS Holdings.
(iii) CCCS Holdings is the sole member of CCCS Opco.
C. The parties hereto desire to effect a business combination whereby the Checksmart Stockholders and the Seller Parties become the only stockholders of the Buyer.
D. To effect such a business combination, the parties hereto desire to, among other things, cause:
(i) (a) Checksmart Merger Sub to merge with and into Checksmart, with Checksmart as the surviving entity (the Checksmart Merger) and (b) CCCS Merger Sub to merge with and into the Company, with the Company as the surviving entity (the CCCS Merger and, together with the Checksmart Merger, the Mergers), in each case, on the terms and conditions set forth in this Agreement and in accordance with the Delaware Limited Liability Company Act (the Delaware Act); and
(ii) (a) each of the CCCS Founders to contribute their equity securities in CCCS Holdings to the Buyer in exchange for equity securities in the Buyer and (b) thereafter, the Buyer to contribute such equity securities in CCCS Holdings to the Company.
E. Each of the Board of Directors of CCCS Merger Sub, and the Buyer, as the sole stockholder of CCCS Merger Sub, has approved this Agreement, the CCCS Merger and the other transactions contemplated by this Agreement.
F. Each of the Board of Directors of the Company, and the Company Stockholders, as the only stockholders of the Company, have approved this Agreement, the CCCS Merger and the other transactions contemplated by this Agreement.
G. Each of the Board of Directors of Checksmart Merger Sub, and the Buyer, as the sole stockholder of Checksmart Merger Sub, has approved this Agreement, the Checksmart Merger and the other transactions contemplated by this Agreement.
H. Each of the Board of Directors of Checksmart, and the Checksmart Stockholders, as the only stockholders of Checksmart, has approved this Agreement, the Checksmart Merger and the other transactions contemplated by this Agreement.
I. The parties hereto desire to make certain representations, warranties, covenants and agreements in connection with, and to prescribe various conditions to, the Mergers and the transactions contemplated thereby.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1: DEFINITIONS
Acquisition Proposal has the meaning set forth in Section 7.3.
Advisory Agreement has the meaning set forth in Section 4.1(o).
Affiliate of any Person means any Person directly or indirectly controlling, controlled by, or under common control with, any such Person and any controlling person of such Person,
where the term control means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
Agreement has the meaning set forth in the preamble.
Ancillary Agreements means the Shareholders Agreement, the Non-Competition Agreement, the Seller Release, the Advisory Agreement and each other document set forth in Sections 4.1 and 4.2 to be executed by a party hereto, in each case, only as applicable to the relevant party or parties to such Ancillary Agreement, as indicated by the context in which such term is used.
Antitrust Laws means the HSR Act, the Sherman Act, as amended, the Clayton Act, as amended and the Federal Trade Commission Act.
Basket Amount has the meaning set forth in Section 11.3(b).
Business Day means any date except a Saturday, Sunday or a United States Federal Reserve Bank holiday.
Buyer has the meaning set forth in the preamble.
Buyer Disclosure Schedules means the Schedules of the Buyer and Checksmart to this Agreement.
Buyer Indemnitee has the meaning set forth in Section 11.1(a).
Buyer Material Adverse Effect means any material adverse effect on the financial condition, liabilities, business, properties, assets, or results of operations of the Buyer, Checksmart and Checksmarts Subsidiaries, taken as a whole; provided, however, that none of the following shall be deemed to constitute and none of the following shall be taken into account in determining whether there has been, or would reasonably be expected to have, a Buyer Material Adverse Effect: any effect arising from or relating to (i) general business or economic conditions affecting the industries or markets in which the Buyer, Checksmart or any of Checksmarts Subsidiaries conducts business that do not disproportionately affect the Buyer, Checksmart and Checksmarts Subsidiaries, taken as a whole, compared to other companies in such industries or markets, (ii) any failure by the Buyer, Checksmart or any of Checksmarts Subsidiaries to meet its internal financial projections (provided that the underlying basis for the failure to meet such projections may be taken into account (unless otherwise excluded under clauses (i)(x) of this definition)), (iii) national or international political or social conditions, including the engagement by the United States or any other country or group in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon the United States or any other country or group, or any of their respective territories, possessions, or diplomatic or consular offices or upon any military installation, equipment or personnel of the United States or any other country or group, (iv) changes in GAAP, (v) changes in the financial, banking or securities markets (including any disruption thereof and any decline in the price of any security or any market index), (vi) changes in Law, (vii) the taking of any action contemplated by this Agreement or the Ancillary
Agreements, (viii) any act of God, including weather, fires, natural disasters and earthquakes, (ix) the taking of any action by the Buyer, Checksmart or any of Checksmarts Subsidiaries that has been approved in writing by the Seller Representative or (x) changes resulting from the announcement or execution of this Agreement or the transactions contemplated hereunder or the pendency or consummation of such transactions.
Buyer Parties means the Buyer, Checksmart, CCCS Merger Sub and Checksmart Merger Sub.
Buyer Parties Selling Expenses means all (a) unpaid costs, fees and expenses of outside professionals incurred by the Buyer, Checksmart, any of Checksmarts Subsidiaries, the Checksmart Stockholders or any of the Buyer Parties which any of such Persons has agreed to pay in connection with the transactions contemplated by this Agreement, including all legal fees, accounting, tax, broker, finder, financial advisor and investment banking fees and expenses and (b) severance obligations, retention bonuses, stay bonuses, sale bonuses or any other bonus or incentive compensation amounts owed by any of such Persons, in each case, that is payable pursuant to an agreement or arrangement in effect as of the Closing Date and the payment of which is triggered as a result of the transactions contemplated by this Agreement (including the employer portion of any payroll, social security, unemployment or similar Taxes imposed on such amounts).
Buyer Stock means the common stock, par value $0.01 per share, of the Buyer.
CCCS Certificate of Merger has the meaning set forth in Section 2.3(b).
CCCS Effective Time has the meaning set forth in Section 2.3(b).
CCCS Founders has the meaning set forth in the preamble.
CCCS Founders Merger Consideration Shares has the meaning set forth in Section 3.3(a).
CCCS Holdings has the meaning set forth in the preamble.
CCCS Holdings Units means all of the issued and outstanding equity interests of CCCS Holdings.
CCCS Merger has the meaning set forth in the recitals.
CCCS Merger Consideration Shares has the meaning set forth in Section 3.2(b).
CCCS Merger Filing has the meaning set forth in Section 2.3(b).
CCCS Merger Sub has the meaning set forth in the preamble.
CCCS Merger Sub Stock has the meaning set forth in Section 3.2(a).
CCCS Opco means California Check Cashing Stores, LLC, a Delaware limited liability company.
CCCS Surviving Entity has the meaning set forth in Section 2.1(b).
Checksmart has the meaning set forth in the preamble.
Checksmart Certificate of Merger has the meaning set forth in Section 2.3(a).
Checksmart Credit Agreement means the Credit Agreement among Checksmart, Checksmart Financial, Bear Stearns Corporate Lending Inc., RBS Securities Corporation and the other parties party thereto, dated as of May 1, 2006 (as amended).
Checksmart Effective Time has the meaning set forth in Section 2.3(a).
Checksmart Employee Plan has the meaning set forth in Section 6.13(a).
Checksmart Financial has the meaning set forth in the preamble.
Checksmart Financial Statements has the meaning set forth in Section 6.10(a).
Checksmart Indebtedness means the Indebtedness of Checksmart and its Subsidiaries under the Checksmart Credit Agreement.
Checksmart Interim Financial Statements has the meaning set forth in Section 6.19(a).
Checksmart Material Contract has the meaning set forth in Section 6.15(a).
Checksmart Material Permits has the meaning set forth in Section 6.16.
Checksmart Merger has the meaning set forth in the recitals.
Checksmart Merger Consideration Shares has the meaning set forth in Section 3.1(b).
Checksmart Merger Sub has the meaning set forth in the preamble.
Checksmart Merger Sub Stock has the meaning set forth in Section 3.1(a).
Checksmart Parties means the Buyer, Checksmart and Checksmarts Subsidiaries.
Checksmart Stock has the meaning set forth in Section 3.1(b).
Checksmart Stockholders means, collectively (i) James H. Frauenberg 1998 Trust, Dated 1/1/1998, (ii) James H. Frauenberg 1988 Decedents Trust, Dated 1/1/1998 As Amended, (iii) Michael W. Lenhart 1998 Trust, Dated 1/1/1998 As Amended, (iv) Michael W. Lenhart 1998 Decedents Trust, Dated 1/1/1998 As Amended, (v) Chad M. Streff, (vi) William E.
Saunders, Jr., (vii) Diamond Castle Partners IV, L.P., (viii) Diamond Castle Partners IV-A, L.P., and (ix) Deal Leaders Fund, L.P.
Checksmart Surviving Entity has the meaning set forth in Section 2.1(a).
Claims Notice has the meaning set forth in Section 11.2(a).
Closing has the meaning set forth in Section 2.2.
Closing Date has the meaning set forth in Section 2.2.
Code means the Internal Revenue Code of 1986, as amended, and the Treasury regulations promulgated thereunder.
Company has the meaning set forth in the preamble.
Company Credit Agreements means the (i) First Lien Credit Agreement, dated as of September 29, 2006 among CCCS Holdings, CCCS Opco, the lenders party thereto, the subsidiary guarantors party thereto, and the other parties party thereto (as amended) and (ii) Second Lien Credit Agreement, dated as of September 29, 2006 among CCCS Holdings, CCCS Opco, the lenders party thereto, the subsidiary guarantors party thereto, and the other parties party thereto (as amended).
Company Disclosure Schedules means the Schedules of the Seller Parties to this Agreement.
Company Employee Plan has the meaning set forth in Section 5.13(a).
Company Financial Statements has the meaning set forth in Section 5.19(a).
Company Indebtedness means the Indebtedness of the Company and its Subsidiaries under the Company Credit Agreements.
Company Interim Financial Statements has the meaning set forth in Section 5.19(a).
Company Material Adverse Effect means any material adverse effect on the financial condition, liabilities, business, properties, assets, or results of operations of the Company and its Subsidiaries, taken as a whole; provided, however, that none of the following shall be deemed to constitute and none of the following shall be taken into account in determining whether there has been, or would reasonably be expected to have, a Company Material Adverse Effect: any effect arising from or relating to (i) general business or economic conditions affecting the industries or markets in which the Company or any of its Subsidiaries conducts business that do not disproportionately affect the Company and its Subsidiaries, taken as a whole, compared to other companies in such industries or markets, (ii) any failure by the Company or its Subsidiaries to meet its internal financial projections (provided that the underlying basis for the failure to meet such projections may be taken into account (unless otherwise excluded under clauses (i)(x) of this definition)), (iii) national or international political or social conditions, including the engagement by the United States or any other country or group in hostilities, whether or not
pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon the United States or any other country or group, or any of their respective territories, possessions, or diplomatic or consular offices or upon any military installation, equipment or personnel of the United States or any other country or group, (iv) changes in GAAP, (v) changes in the financial, banking or securities markets (including any disruption thereof and any decline in the price of any security or any market index), (vi) changes in Law, (vii) the taking of any action contemplated by this Agreement or the Ancillary Agreements, (viii) any act of God, including weather, fires, natural disasters and earthquakes, (ix) the taking of any action by the Company or its Subsidiaries that has been approved in writing by the Buyer or (x) changes resulting from the announcement or execution of this Agreement or the transactions contemplated hereunder or the pendency or consummation of such transactions.
Company Material Contract has the meaning set forth in Section 5.15(a).
Company Material Permits has the meaning set forth in Section 5.16.
Company Stock has the meaning set forth in Section 3.1(b).
Company Stockholders has the meaning set forth in the preamble.
Contracts means all binding written contracts, agreements, leases, licenses, commitments, instruments, guarantees, bids, purchase orders and other binding understandings.
Controlled Group with respect to any Person means any corporation or trade or business (whether or not incorporated) (a) under common control within the meaning of Section 4001(b)(1) of ERISA with such Person or (b) that together with such Person is or was (at a relevant time with respect to which such Person has liability) treated as a single employer under Section 414(t) of the Code.
Copyrights means all copyrights, whether in published or unpublished works, databases, data collections and rights therein, mask work rights, software, web site content; rights to compilations, collective works and derivative works of any of the foregoing and moral rights in any of the foregoing; and registrations and applications for registration for any of the foregoing and any renewals or extensions thereof.
Debt Offering Misconduct means any (a) untrue statement of a material fact contained in any offering memorandum, prospectus, registration statement or indenture relating to the High Yield Offering (as amended or supplemented if Checksmart shall have furnished any amendments or supplements thereto) or caused by or relating to any omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (b) violation of any securities Law applicable to the Buyer, Checksmart or any of Checksmarts Subsidiaries in respect of the High Yield Offering; provided, however, that Debt Offering Misconduct (x) as it relates to the Buyer, Checksmart or any of Checksmarts Subsidiaries shall not include, but (y) as it relates to the Seller Parties, the Company or any of the Companys Subsidiaries shall mean, any such untrue statement or violation of Law if it was caused by or resulted from any untrue statement of a material fact (i) provided by any of the Seller Parties, the Company or any of the Companys Subsidiaries expressly for use in such offering memorandum prospectus, registration statement or indenture, or (ii) caused by or
relating to any omission by any of the Seller Parties, the Company or any of the Companys Subsidiaries to provide for use therein a material fact required to be stated therein or necessary to make the statements therein not misleading.
Delaware Act has the meaning set forth in the recitals.
Disclosure Schedules means the Buyer Disclosures Schedules and/or the Company Disclosure Schedules, as applicable.
Dividend has the meaning set forth in Section 7.9.
DOJ has the meaning set forth in Section 7.5(a).
Domain Names means Internet electronic addresses, uniform resource locators and alphanumeric designations associated therewith registered with or assigned by any domain name registrar, domain name registry or other domain name registration authority as part of an electronic address on the Internet and all applications for any of the foregoing.
Eager Corp has the meaning set forth in the preamble.
Employment Practices has the meaning set forth in Section 5.12(g).
Environment means soil, surface waters, groundwater, land, stream sediments, surface or subsurface strata, ambient air, indoor air or indoor air quality, including any material or substance used in the physical structure of any building or improvement.
Environmental Law means any Law relating to the pollution or protection of the Environment, including Releases of Hazardous Materials into the Environment or workplace health and safety relating to Releases of Hazardous Materials.
ERISA means the Employee Retirement Income Security Act of 1974, as amended.
Excluded Representations has the meaning set forth in Section 11.3(a).
Expiration Date has the meaning set forth in Section 11.3(a).
Foreign Plan means any Buyer Employee Plan or Company Employee Plan that is maintained outside of the United States.
FTC has the meaning set forth in Section 7.5(a).
GAAP means United States generally accepted accounting principles as in effect from time to time, consistently applied throughout the specified period.
General Enforceability Exceptions has the meaning set forth in Section 5.3(a).
Governmental Authority means any government or political subdivision or regulatory authority, whether federal, state, local or foreign, or any agency or instrumentality of any such
government or political subdivision or regulatory authority, or any federal state, local or foreign court or arbitrator.
Guarantee by any Person means any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing or otherwise expressly supporting financially in whole or in part the payment of any Indebtedness of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such other Person (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise) or (b) entered into for the purpose of assuring in any other manner the obligee of such Indebtedness of the payment of such Indebtedness or to protect such obligee against loss in respect of such Indebtedness (in whole or in part). The term Guarantee used as a verb has a correlative meaning.
Hazardous Material means any toxic substance, including asbestos and asbestos-containing materials, hazardous waste, hazardous material, hazardous substance, petroleum or petroleum-containing materials, radiation and radioactive materials, other harmful biological agents, and polychlorinated biphenyls as defined in any Environmental Law.
High Yield Documents has the meaning set forth in Section 7.7.
High Yield Offering has the meaning set forth in Section 9.1(c).
HSR Act means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
Indebtedness of any Person means (without duplication): either (a) any liability of any Person (i) for borrowed money, all accrued interest thereon and all fees, expenses, prepayment penalties and other charges with respect thereto, or (ii) under any reimbursement obligation relating to a letter of credit, bankers acceptance or note purchase facility, or (iii) evidenced by a bond, note, debenture or similar instrument (including a purchase money obligation, other than equipment leases entered into in the Ordinary Course of Business and recorded for accounting purposes by such Person as operating leases), or (iv) for the payment of money relating to leases that are required to be classified as a capitalized lease obligation in accordance with GAAP (other than equipment leases entered into in the Ordinary Course of Business and recorded for accounting purposes by such Person as operating leases), or (v) for all or any part of the deferred purchase price of property or services (other than trade payables and accrued expenses incurred in the Ordinary Course of Business), including any earnout or similar payments, or (vi) for settlement or termination obligations under interest rate swap, hedging or similar agreements or (b) any liability of others described in the preceding clause (a) that such Person has Guaranteed or that is expressly recourse to such Person or any of its assets or that is otherwise its legal liability or that is secured in whole or in part by the assets of such Person. For purposes of this Agreement, Indebtedness of a Person includes any and all accrued interest, prepayment premiums, make-whole premiums or penalties and fees or expenses (including attorneys fees) associated with the prepayment of any Indebtedness of such Person, and any and all
Indebtedness owed by such Person to any of its Affiliates (other than Indebtedness between such Person and its Subsidiaries).
Indemnified Party has the meaning set forth in Section 11.2(a).
Indemnifying Party has the meaning set forth in Section 11.2(a).
Information Systems means all computer hardware, databases and data storage systems, computer, data, database and communications networks (other than the Internet), architecture interfaces and firewalls (whether for data, voice, video or other media access, transmission or reception) and other apparatus used to create, store, transmit, exchange or receive information in any form.
Initial Public Offering means the Buyers first underwritten public offering and sale of shares of Buyer Stock for cash pursuant to an effective registration statement under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, other than pursuant to a registration statement on Form S-4 or Form S-8 or any similar or successor form.
Intellectual Property means Copyrights, Domain Names, Patents, Software, Trademarks and Trade Secrets.
Investment means any equity interest (including any convertible debt, options, warrants and similar instruments), of record or beneficially, directly or indirectly, in any Person.
IRCA has the meaning set forth in Section 5.12(d).
IRS means the United States Internal Revenue Service.
Knowledge of the Buyer means the actual knowledge of any of the Chief Executive Officer, President, Chief Financial Officer and General Counsel of Checksmart.
Knowledge of the Company means the actual knowledge of any of the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and In-House Counsel of CCCS Opco.
Law means any law, statute, code, ordinance, rule, regulation or other requirement of any Governmental Authority (including with respect to zoning).
Leased Real Property has the meaning set forth in Section 5.7(a).
Liability Claim has the meaning set forth in Section 11.2(a).
Lien means any mortgage, pledge, hypothecation, rights of others, claim, security interest, encumbrance, title defect, title retention agreement, voting trust agreement, interest, option, lien, charge or similar restrictions or limitations.
Litigation Conditions has the meaning set forth in Section 11.2(b).
Losses has the meaning set forth in Section 11.1(a).
Mergers has the meaning set forth in the recitals.
Merger Subs means, collectively, CCCS Merger Sub and Checksmart Merger Sub.
New Options has the meaning set forth in Section 3.4.
New Option Plan has the meaning set forth in Section 3.4.
Non-Competition Agreement has the meaning set forth in Section 4.1(b).
Object Code means computer software that is substantially or entirely in binary form and that is intended to be directly executable by a computer after suitable processing and linking but without any intervening steps of compilation or assembly.
Option Holders has the meaning set forth in Section 3.4.
Option Plan means the Checksmart Financial Holdings Corp. 2006 Management Equity Incentive Plan, effective as of May 1, 2006, as amended.
Options has the meaning set forth in Section 3.4.
Order means any order, judgment, injunction, assessment, award, decree, ruling, citation, charge or writ of any Governmental Authority.
Ordinary Course of Business means the ordinary course of business.
Owned Intellectual Property of any Person means all Intellectual Property owned by such Person.
Patents means all patents, industrial and utility models, industrial designs, petty patents, patents of importation, patents of addition, certificates of invention, and any other indicia of invention ownership issued or granted by any Governmental Authority, including all provisional applications, priority and other applications, divisionals, continuations (in whole or in part), extensions, reissues or re-examinations of any of the foregoing.
Permit means any permit, license, approval, qualification, consent or authorization issued by a Governmental Authority (including with respect to zoning).
Permitted Liens means (i) Liens for current Taxes by Governmental Authorities that are not due and payable as of the Closing Date or that are being contested in good faith through proper proceedings and which are reflected or reserved against in the Company Interim Financial Statements or Checksmart Interim Financial Statements, as applicable; (ii) inchoate mechanics and materialmens Liens for construction in progress and arising in the Ordinary Course of Business for sums not yet due and payable or the validity of which is being contested in good faith through proper proceedings; (iii) workmens, repairmens, warehousemens, landlords and carriers Liens arising in the Ordinary Course of Business for sums not yet due and payable or the validity of which is being contested in good faith through proper proceedings; (iv) with respect to the Leased Real Property, all matters of record, Liens and other imperfections of title
and encumbrances which individually or in the aggregate do not materially detract from the value or interfere with the present use of the Leased Real Property subject thereto or affected thereby; (v) non-exclusive licenses of Intellectual Property entered into in the Ordinary Course of Business; (vi) zoning, building and other applicable land use restrictions imposed by Governmental Authorities having jurisdiction over the Leased Real Property which are not violated in any material respect by the current use and operation of the Leased Real Property; (vii) purchase money Liens securing rental payments under personal property leases described on Schedule 5.15 or Schedule 6.15, as applicable; and (viii) other Liens arising in the Ordinary Course of Business which do not impair in any material respect the conduct of the business of the Company and its Subsidiaries, on the one hand, or the Buyer, Checksmart and Checksmarts Subsidiaries, on the other hand, as applicable.
Person means any individual, sole proprietorship, partnership, corporation, limited liability company, unincorporated society or association, trust or other entity.
Pre-Closing Tax Period means any Tax period ending on or before the Closing Date.
Proceeding means any demand, charge, complaint, action, suit, proceeding, arbitration, hearing, audit, investigation or claim of any kind (whether civil, criminal, administrative, investigative, informal or other, at law or in equity) commenced, filed, brought, conducted or heard by, against, to, of or before or otherwise involving, any Governmental Authority, arbitrator or any other Person.
Pro Rata Share means, with respect to each Seller Party, the percentage listed under the column Pro Rata Share opposite the name of such Seller Party on Annex I. For the avoidance of doubt, the Pro Rata Share of each Seller Party when combined with the Pro Rata Share of each other Seller Party shall equal, in the aggregate, 100%.
Real Property of any Person means any and all real property, any real property leaseholds and subleaseholds, purchase options, easements, licenses, rights to access and rights of way and any other real property otherwise owned, occupied or used by such Person.
Real Property Leases has the meaning set forth in Section 5.7(a).
Release means any releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, migrating, disposing or dumping of a Hazardous Material into the Environment (including the abandonment or discarding of barrels, containers and other closed receptacles containing any Hazardous Materials).
Seller Indemnitee has the meaning set forth in Section 11.1(d).
Seller Parties has the meaning set forth in the preamble.
Seller Parties Selling Expenses means all (a) unpaid costs, fees and expenses of outside professionals incurred by the Company, any of its Subsidiaries, or any of the Seller Parties which the Company, any of its Subsidiaries or any of the Seller Parties has agreed to pay in connection with the transactions contemplated by this Agreement, including all legal fees, accounting, tax, broker, finder, financial advisor and investment banking fees and expenses and
(b) severance obligations, retention bonuses, stay bonuses, sale bonuses or any other bonus or incentive compensation amounts owed by the Company. any of its Subsidiaries or any of the Seller Parties, in each case, that is payable pursuant to an agreement or arrangement in effect as of the Closing Date and the payment of which is triggered as a result of the transactions contemplated by this Agreement (including the employer portion of any payroll, social security, unemployment or similar Taxes imposed on such amounts).
Seller Representative has the meaning set forth in the preamble.
Seller Release has the meaning set forth in Section 4.1(m).
Shareholders Agreement has the meaning set forth in Section 4.1(a).
Software means all computer software and code, including assemblers, applets, compilers, Source Code, Object Code, development tools, design tools, user interfaces and data, in any form or format, however fixed.
Source Code means computer software that may be displayed or printed in human-readable form, including all related programmer comments, annotations, flowcharts, diagrams, help text, data and data structures, instructions, procedural, object-oriented or other human-readable code, and that is not intended to be executed directly by a computer without an intervening step of compilation or assembly.
Straddle Period has the meaning set forth in Section 8.1(a).
Subrogation Rights has the meaning set forth in Section 11.3(i).
Subsidiary or Subsidiaries of any Person means any other Person(s) of which more than 50% of the outstanding shares or other equity securities having ordinary voting power for the election of directors or managers (or comparable governing Persons) of such other Person(s) are at the time owned by such first Person, by one or more directly or indirectly wholly or partially owned subsidiaries of such first Person, or by such first Person and one or more such subsidiaries of such first Person, whether or not at the time the shares of any other class or classes or other equity securities of such other Person(s) shall have or might have voting power by reason of the happening of any contingency. For the avoidance of doubt, for purposes of this Agreement: (i) the Subsidiaries of the Company include CCCS Holdings, CCCS Opco and CCCS Opcos Subsidiaries; and (ii) the Subsidiaries of CCCS Holdings include CCCS Opco and CCCS Opcos Subsidiaries.
Surviving Entities has the meaning set forth in Section 2.1(b).
Tax means (a) any foreign, United States federal, state or local net income, alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad valorem, value added, transfer, escheat, abandoned or unclaimed property, franchise, profits, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental or windfall profit tax, custom, duty or other tax of any kind whatsoever, together with any interest, penalty, addition to tax or additional amount imposed thereon by any Law or Taxing Authority, whether disputed or not, (b) any liability for the payment of any amounts of any of the foregoing
types as a result of being a member of an affiliated, consolidated, combined or unitary group, or being a party to any agreement or arrangement whereby liability for payment of such amounts was determined or taken into account with reference to the liability of any other Person, (c) any liability for the payment of any amounts as a result of being a party to any tax sharing or allocation agreements or arrangements or with respect to the payment of any amounts of any of the foregoing types as a result of any express or implied obligation to indemnify any other Person, and (d) any liability for the payment of any of the foregoing types as a successor, transferee or otherwise.
Tax Basket Amount has the meaning set forth in Section 11.3(b).
Taxing Authority means any Governmental Authority responsible for the administration or the imposition of any Tax.
Tax Representations has the meaning set forth in Section 11.3(b).
Tax Returns means all Tax returns, statements, reports, elections, schedules, claims for refund, and forms (including estimated Tax or information returns and reports), including any supplement or attachment thereto and any amendment thereof.
Trademarks means trademarks, service marks, fictional business names, trade names, commercial names, certification marks, collective marks and other proprietary rights to any words, names, slogans, symbols, logos, devices or combinations thereof used to identify, distinguish and indicate the source or origin of goods or services; registrations, renewals and applications for registration; and the goodwill of the business associated with each of the foregoing.
Trade Secrets means anything that would constitute a trade secret under applicable law, including inventions (whether patentable or not), unregistered industrial designs, discoveries, improvements, ideas, designs, models, formulae, patterns, compilations, data collections, drawings, blueprints, devices, methods, techniques, processes, know-how, confidential information, proprietary information, customer lists and technical information.
Transfer Taxes has the meaning set forth in Section 8.1.
WARN Act has the meaning set forth in Section 5.12(c).
Workers has the meaning set forth in Section 5.12(b).
ARTICLE 2: THE MERGERS
2.1 The Mergers.
(a) Checksmart Merger. Subject to the terms and conditions of this Agreement, and in accordance with the Delaware Act, at the Checksmart Effective Time, Checksmart Merger Sub and Checksmart shall consummate the Checksmart Merger pursuant to which (i) Checksmart Merger Sub shall be merged with and into Checksmart and the separate existence of Checksmart Merger Sub shall thereupon cease,
(ii) Checksmart shall be the surviving entity in the Checksmart Merger (the Checksmart Surviving Entity), and (iii) the Checksmart Surviving Entity shall become a direct Subsidiary of the Buyer by virtue of the Buyer being its sole stockholder.
(b) CCCS Merger. Subject to the terms and conditions of this Agreement, and in accordance with the Delaware Act, at the CCCS Effective Time, CCCS Merger Sub and the Company shall consummate the CCCS Merger pursuant to which (i) CCCS Merger Sub shall be merged with and into the Company and the separate existence of CCCS Merger Sub shall thereupon cease, (ii) the Company shall be the surviving entity in the CCCS Merger (the CCCS Surviving Entity and, together with the Checksmart Surviving Entity, the Surviving Entities), and (iii) the CCCS Surviving Entity shall become a direct Subsidiary of the Buyer by virtue of the Buyer being its sole stockholder.
(c) Tax Treatment. The parties hereto intend that the transactions contemplated by this Agreement (including the contribution transactions described in Section 3.3) shall qualify as an exchange under the provisions of Section 351 of the Code and/or a reorganization under the provisions of Section 368 of the Code. Each of the parties hereto shall prepare and file all Returns in a manner consistent with such treatment except as otherwise required by Law.
2.2 Closing. The closing of the Mergers and the other transactions contemplated hereby (including the contribution transactions described in Section 3.3) (the Closing) shall take place at 10:00 a.m. (Eastern Time) on the Business Day immediately after the date that the conditions set forth in Article 9 are satisfied or waived (subject to applicable Law), unless another time or date is agreed to in writing by the parties hereto. The Closing shall take place remotely via the exchange of documents and signatures or shall be held at such location to which the parties to this Agreement agree in writing. The date on which the Closing occurs is hereinafter referred to as the Closing Date. For accounting and computational purposes, the Closing will be deemed to have occurred at 11:59 p.m. (Eastern Time) on the Closing Date.
2.3 Effective Times.
(a) Checksmart Effective Time. Prior to the CCCS Effective Time and preceding the CCCS Merger Filing, Checksmart Merger Sub and Checksmart shall (i) file a certificate of merger (the Checksmart Certificate of Merger) in such form as required by and executed in accordance with the relevant provisions of the Delaware Act, and (ii) make all other filings or recordings required under the Delaware Act to effect the Checksmart Merger. The Checksmart Merger shall become effective at such time as the Checksmart Certificate of Merger is duly filed with the Secretary of State of the State of Delaware, or at such subsequent date or time as Checksmart Merger Sub and Checksmart agree and specify in the Checksmart Certificate of Merger (the date and time the Checksmart Merger becomes effective being the Checksmart Effective Time). The Checksmart Merger shall have the effects set forth in the Delaware Act. Without limiting the generality of the foregoing and subject thereto, at the Checksmart Effective Time, all the property, rights, privileges, powers and franchises of both Checksmart Merger Sub and Checksmart shall be vested in the Checksmart Surviving Entity, and all debts,
liabilities and duties of both Checksmart Merger Sub and Checksmart shall become the debts, liabilities and duties of the Checksmart Surviving Entity.
(b) CCCS Effective Time. At the Closing, CCCS Merger Sub and the Company shall (i) file a certificate of merger (the CCCS Certificate of Merger) in such form as required by and executed in accordance with the relevant provisions of the Delaware Act, and (ii) make all other filings or recordings required under the Delaware Act to effect the CCCS Merger (the CCCS Merger Filing). The CCCS Merger shall become effective at such time as the CCCS Certificate of Merger is duly filed with the Secretary of State of the State of Delaware, or at such subsequent date or time as CCCS Merger Sub and the Company agree and specify in the CCCS Certificate of Merger (the date and time the CCCS Merger becomes effective being the CCCS Effective Time) (which CCCS Effective Time shall be following the Checksmart Effective Time). The CCCS Merger shall have the effects set forth in the Delaware Act. Without limiting the generality of the foregoing and subject thereto, at the CCCS Effective Time, all the property, rights, privileges, powers and franchises of both CCCS Merger Sub and the Company shall be vested in the CCCS Surviving Entity, and all debts, liabilities and duties of both CCCS Merger Sub and the Company shall become the debts, liabilities and duties of the CCCS Surviving Entity.
2.4 Certificates of Incorporation and Bylaws.
(a) Certificates of Incorporation. At the Checksmart Effective Time, the certificate of incorporation of Checksmart Merger Sub, as in effect immediately prior to the Checksmart Effective Time, shall become the certificate of incorporation of the Checksmart Surviving Entity until thereafter amended as provided therein or by the Delaware Act. At the CCCS Effective Time, the certificate of incorporation of CCCS Merger Sub, as in effect immediately prior to the CCCS Effective Time, shall become the certificate of incorporation of the CCCS Surviving Entity until thereafter amended as provided therein or by the Delaware Act.
(b) Bylaws. At the Checksmart Effective Time, the bylaws of Checksmart Merger Sub, as in effect immediately prior to the Checksmart Effective Time, shall become the bylaws of the Checksmart Surviving Entity until thereafter amended as provided therein or by the Delaware Act. At the CCCS Effective Time, the bylaws of CCCS Merger Sub, as in effect immediately prior to the CCCS Effective Time, shall become the bylaws of the CCCS Surviving Entity until thereafter amended as provided therein or by the Delaware Act.
2.5 Directors and Officers of the Buyer and Surviving Entities. From and after the CCCS Effective Time or the Checksmart Effective Time, as applicable, until the earlier of their death, resignation or removal or until their respective successors are duly elected and qualified, as the case may be, the Persons identified in Exhibit 2.5 shall be the directors and officers of each of the Buyer and the Surviving Entities.
ARTICLE 3: EFFECT OF THE MERGERS ON THE EQUITY SECURITIES OF THE CONSTITUENT CORPORATIONS AND THEIR AFFILIATES
3.1 Effect on Equity Securities of Checksmart Merger Sub and Checksmart.
(a) Checksmart Merger Sub Stock. At the Checksmart Effective Time, by virtue of the Checksmart Merger and without any action on the part of the holders of any holders of the common stock, par value $0.01 per share, of Checksmart Merger Sub (the Checksmart Merger Sub Stock), the Checksmart Merger shall have no effect on the Checksmart Merger Sub Stock issued and outstanding immediately prior to the Checksmart Effective Time and, at and after the Checksmart Effective Time, the Checksmart Merger Sub Stock shall remain outstanding and shall evidence the only issued and outstanding capital stock of the Checksmart Surviving Entity.
(b) Checksmart Stock. At the Checksmart Effective Time, by virtue of the Checksmart Merger and without any action on the part of the holders of the Class A common stock, par value $0.01 per share, and Class B non-voting common stock, par value $0.01 per share, of Checksmart (collectively, the Checksmart Stock), all of the shares of Checksmart Stock issued and outstanding immediately prior to the Checksmart Effective Time shall be converted into the right to receive, in the aggregate, 1,023,256 shares of Buyer Stock (the Checksmart Merger Consideration Shares). All such shares of Checksmart Stock, when so converted, shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist. At the Closing, the Buyer shall (i) cancel the Buyer Stock held by Checksmart immediately prior to the Checksmart Effective Time and (ii) issue the Checksmart Merger Consideration Shares to the Checksmart Stockholders pursuant to the allocation set forth on Exhibit 3.1(b).
3.2 Effect on Equity Securities of CCCS Merger Sub and the Company.
(a) CCCS Merger Sub Stock. At the CCCS Effective Time, by virtue of the CCCS Merger and without any action on the part of the holders of the common stock, par value $0.01 per share, of CCCS Merger Sub (the CCCS Merger Sub Stock), the CCCS Merger shall have no effect on the CCCS Merger Sub Stock issued and outstanding immediately prior to the CCCS Effective Time and, at and after the CCCS Effective Time, the CCCS Merger Sub Stock shall remain outstanding and shall evidence the only issued and outstanding capital stock of the CCCS Surviving Entity.
(b) Company Stock. At the CCCS Effective Time, by virtue of the CCCS Merger and without any action on the part of the holders of the common stock, par value $0.001 per share, of the Company (the Company Stock), all of the shares of Company Stock issued and outstanding immediately prior to the CCCS Effective Time shall be converted into the right to receive in the aggregate, 196,369 shares of Buyer Stock (the CCCS Merger Consideration Shares). All such shares of Company Stock, when so converted, shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist. At the Closing, the Buyer shall issue the CCCS Merger Consideration Shares to the Company Stockholders pursuant to the allocation set forth on Exhibit 3.2(b).
3.3 Contributions by CCCS Founders and Buyer. Concurrently with the CCCS Effective Time:
(a) Each of the CCCS Founders shall contribute all of the CCCS Holdings Units then held by such CCCS Founder to the Buyer and, in exchange therefor, the Buyer shall issue to the CCCS Founders, in the aggregate, 110,631 shares of Buyer Stock (the CCCS Founders Merger Consideration Shares). The allocation of the CCCS Founders Merger Consideration Shares among the CCCS Founders is set forth on Exhibit 3.3(a).
(b) Immediately thereafter, the Buyer shall contribute such CCCS Holdings Units held by the Buyer as a result of the contribution transactions described in Section 3.3(a) to the Company.
(c) Immediately after giving effect to the transactions described in Sections 3.1 and 3.2 and this Section 3.3, the issued and outstanding capital stock of the Buyer (and the holders thereof) shall be as set forth on Schedule 6.4(a).
3.4 Effect on Checksmart Options. At the Checksmart Effective Time, each outstanding option to purchase shares of Checksmart Stock identified on Exhibit 3.4, whether or not then exercisable (the Options), will be automatically converted into an option to purchase the number of shares of Buyer Stock (the New Options) set forth on Exhibit 3.4, and any options not listed on Exhibit 3.4 shall be terminated and cancelled without payment of any consideration. As of the Checksmart Effective Time, (i) the Buyer shall adopt the Option Plan as the management equity incentive plan of the Buyer (the New Option Plan), and (ii) Checksmart shall take all necessary and desirable action to terminate all stock option or similar plans of Checksmart and its Subsidiaries then in effect, including the Option Plan. From and after the Checksmart Effective Time, the New Options will be governed by the terms of the New Option Plan and the holders of the Options immediately prior to the Checksmart Effective Time (the Option Holders) will cease to have any rights with respect to the Options, except for the right to receive from the Buyer the New Options as set forth in this Section 3.4. Prior to the Checksmart Effective Time, Checksmart shall send a written notice to each of the Option Holders with respect to the conversion described in this Section 3.4. The foregoing conversion of Options to New Options shall comply with the requirements of Section 409A of the Code and shall not cause any conversion of Options to be treated as a grant of a new stock right or a change in the form of payment within the meaning of Treasury Regulation Section 1.409A-1(b)(5)(v)(D).
3.5 Effect on CCCS Holdings Options. As of the time immediately prior to the CCCS Effective Time and the Closing, each issued and outstanding Class C Unit (as defined in the Amended and Restated Limited Liability Company Agreement of CCCS Holdings dated as of September 29, 2006), whether or not then vested or exercisable, and all Management Incentive Unit Agreements relating to the Class C Units (and all related agreements executed in connection therewith), shall be terminated and cancelled without payment of any consideration therefor pursuant to agreements executed prior to the CCCS Effective Time by the holders of such issued and outstanding Class C Units.
ARTICLE 4: DELIVERIES AND OTHER ACTIONS
4.1 Deliveries by the Seller Parties. At the Closing, the applicable Seller Parties shall deliver, or cause to be delivered, to the Buyer Parties the following items:
(a) a copy of the Shareholders Agreement, in the form attached hereto as Exhibit A, by and among the Buyer, the Checksmart Stockholders and the Seller Parties (the Shareholders Agreement), duly executed by the Seller Parties;
(b) a copy of the Non-Competition Agreement (containing territorial restrictions with respect to the State of California only), in the form attached hereto as Exhibit B, by and between the Buyer and Rick Lake (the Non-Competition Agreement), duly executed by Rick Lake;
(c) a reasonably current long-form good standing certificate (or comparable document) for the Company issued by the Secretary of State of the State of Delaware and in each state in which the Company is qualified to do business as a foreign corporation;
(d) a reasonably current long-form good standing certificate (or comparable document) for each of the Companys Subsidiaries issued by the secretary of state of such Subsidiarys jurisdiction of incorporation or formation and in each state in which such Subsidiary is qualified to do business as a foreign corporation or limited liability company;
(e) a copy of the certificate of incorporation of the Company, certified by the Secretary of State of the State of Delaware, and a copy of the bylaws of the Company, certified by an officer of the Company;
(f) a copy of the certificate of incorporation or formation (or comparable organizational document) of each of the Companys Subsidiaries, certified by the secretary of state of such Subsidiarys jurisdiction of incorporation or formation, and a copy of the bylaws or limited liability company agreement (or comparable organizational document) of each of the Companys Subsidiaries, certified by an officer of such Subsidiary;
(g) the original corporate record books and stock or limited liability company unit transfer registers of the Company and each of the Companys Subsidiaries;
(h) a certificate of an officer of the Company, dated as of the Closing Date, setting forth in reasonably sufficient detail, the aggregate amount of the (i) Indebtedness of the Company and its Subsidiaries (including the Company Indebtedness) and (ii) Seller Parties Selling Expenses, in each case, indicating the amount of each individual component of Indebtedness or Seller Parties Selling Expenses and the Person to whom such Indebtedness or Seller Parties Selling Expense is owed, as of the Closing Date;
(i) certified copies of resolutions duly adopted by the Board of Directors of the Company, and the Company Stockholders, as the only stockholders of the Company, evidencing the taking of all corporate action necessary to authorize the execution,
delivery and performance of this Agreement and the consummation of the transactions contemplated hereby;
(j) payoff letters and appropriate termination statements under the Uniform Commercial Code to extinguish all Company Indebtedness and all Liens related thereto to the extent directed by the Buyer or its lenders;
(k) an amendment with respect to each of the Real Property Leases listed on Schedule 5.5 that (i) contains the consent of the landlord under each of such Real Property Leases to the transactions contemplated by this Agreement, (ii) provides that the aggregate per month rent under each of such Real Property Leases shall increase by 10% for the 12-month period beginning on January 1, 2013, (iii) provides that beginning January 1, 2014, the per-month rent under each of such Real Property Leases shall be adjusted on an annual basis according to a CPI-based inflation index (provided that the annual rent increase shall be capped at 8% and will be no less than 3%), and (iv) provides for an extension of the term of each of such Real Property Leases to December 31, 2019;
(l) written resignations of each manager, director and officer, as applicable, of the Company and each of the Companys Subsidiaries;
(m) a release, in the form attached hereto as Exhibit C-1, duly executed by (i) each of the CCCS Founders as it relates to CCCS Holdings and its Subsidiaries and (ii) each of the Company Stockholders as it relates to the Company and its Subsidiaries (in either case, the Seller Release);
(n) a non foreign person affidavit that complies with the requirements of Section 1445 of the Code, executed by each of the Seller Parties and in form and substance reasonably satisfactory to the Buyer;
(o) a copy of the Advisory Services and Monitoring Agreement, in the form attached hereto as Exhibit D, by and among the Buyer, Checksmart Financial, Diamond Castle Holdings, LLC, CCCS Opco and GGC Administration, LLC (the Advisory Agreement), duly executed by CCCS Opco and GGC Administration, LLC;
(p) stock certificates representing all of the issued and outstanding shares of Company Stock, accompanied by duly executed stock powers and all applicable stock transfer tax stamps attached and otherwise sufficient to transfer such shares pursuant to this Agreement free and clear of all Liens other than Liens arising under federal and state securities Laws;
(q) limited liability company interest certificates representing all of the CCCS Holdings Units owned by the CCCS Founders, accompanied by duly executed limited liability company interest powers (or if such interests are not certificated, instruments of assignment of the limited liability company interests being transferred pursuant to this Agreement in form and substance reasonably acceptable to the Buyer) and otherwise sufficient to transfer the CCCS Holdings Units owned by the CCCS Founders pursuant to this Agreement free and clear of all Liens other than Liens arising under federal and state securities Laws; and
(r) a certificate of an officer of CCCS Holdings, dated as of the Closing Date, attesting to the matters set forth in Sections 9.2(a) and (b).
4.2 Deliveries by the Buyer Parties. At the Closing, the applicable Buyer Parties shall deliver, or cause to be delivered, to the Seller Representative the following items:
(a) a copy of the Shareholders Agreement, duly executed by the Buyer and the Checksmart Stockholders;
(b) a reasonably current long-form good standing certificate (or comparable document) for the Buyer issued by the Secretary of State of the State of Ohio and in each state in which the Buyer is qualified to do business as a foreign corporation;
(c) a reasonably current long-form good standing certificate (or comparable document) for Checksmart issued by the Secretary of State of the State of Delaware and in each state in which Checksmart is qualified to do business as a foreign corporation;
(d) a copy of the articles of incorporation of the Buyer, certified by the Secretary of State of the State of Ohio, and a copy of the code of regulations of the Buyer, certified by an officer of the Buyer;
(e) a copy of the certificate of incorporation of Checksmart, certified by the Secretary of State of the State of Delaware, and a copy of the bylaws of Checksmart, certified by an officer of Checksmart;
(f) a certificate of an officer of the Buyer, dated as of the Closing Date, setting forth in reasonably sufficient detail, the aggregate amount of the (i) Indebtedness of the Buyer, Checksmart and Checksmarts Subsidiaries on a consolidated basis (including the Checksmart Indebtedness) and (ii) Buyer Parties Selling Expenses, in each case, indicating the amount of each individual component of Indebtedness or Buyer Parties Selling Expenses and the Person to whom such Indebtedness or Buyer Parties Selling Expense is owed, as of the Closing Date;
(g) certified copies of resolutions duly adopted by the Board of Directors and, as necessary, the stockholders or shareholders of each of the Buyer, Checksmart, CCCS Merger Sub and Checksmart Merger Sub, evidencing the taking of all corporate action necessary to authorize the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby;
(h) payoff letters and appropriate termination statements under the Uniform Commercial Code to extinguish all Checksmart Indebtedness and all Liens related thereto;
(i) a release, in the form attached hereto as Exhibit C-2, duly executed by Diamond Castle Partners IV, L.P., Diamond Castle Partners IV-A, L.P. and Deal Leaders Fund, L.P.
(j) a copy of the Advisory Agreement, duly executed by the Buyer, Checksmart Financial and Diamond Castle Holdings, LLC; and
(k) a certificate of an officer of the Buyer, on behalf of the Buyer Parties, dated as of the Closing Date, attesting to the matters set forth Sections 9.3(a) and (b).
ARTICLE 5: REPRESENTATIONS AND WARRANTIES
REGARDING THE COMPANY AND ITS SUBSIDIARIES
Except as set forth in the Company Disclosure Schedules, the Company represents and warrants to the Buyer Parties as follows:
5.1 Existence and Good Standing. The Company is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of Delaware and is duly authorized, qualified or licensed to do business as a foreign corporation in each of the jurisdictions set forth on Schedule 5.1, which are the only jurisdictions in which it is required to be so qualified, except to the extent the failure to be so qualified or licensed would not reasonably be expected to have a Company Material Adverse Effect. Each of CCCS Holdings and CCCS Opco is a limited liability company duly organized, validly existing and in good standing under the Laws of the State of Delaware and is duly authorized, qualified or licensed to do business as a foreign limited liability company in each of the jurisdictions set forth on Schedule 5.1, which are the only jurisdictions in which it is required to be so qualified, except to the extent the failure to be so qualified or licensed would not reasonably be expected to have a Company Material Adverse Effect. Each of CCCS Opcos Subsidiaries is a corporation duly incorporated, validly existing and in good standing under the Laws of its jurisdiction of incorporation and is duly authorized, qualified or licensed to do business as a foreign corporation in each of the jurisdictions set forth on Schedule 5.1, which are the only jurisdictions in which such Subsidiary is required to be so qualified, except to the extent the failure to be so qualified or licensed would not reasonably be expected to have a Company Material Adverse Effect. The Seller Parties have made available to the Buyer true, complete and correct copies of the certificate of formation or incorporation and limited liability company agreement or bylaws (or comparable organizational documents) of the Company and each of the Companys Subsidiaries, each as currently in effect and reflecting any and all amendments thereto. Such organizational documents are in full force and effect and neither the Company nor any of the Companys Subsidiaries is in violation of any provision thereof.
5.2 Power. Each of the Company and its Subsidiaries has the requisite limited liability company or corporate power and authority to (a) own, operate and lease its respective properties and assets as and where currently owned, operated and leased and (b) carry on its respective business as currently conducted, in each case, except as would not reasonably be expected to result in a Company Material Adverse Effect.
5.3 Validity and Enforceability. Each of the Company and CCCS Holdings has the requisite corporate or limited liability company power and authority to execute, deliver and perform its obligations under this Agreement and the Ancillary Agreements. The execution, delivery and performance of this Agreement and the Ancillary Agreements, and the consummation of the transactions contemplated hereby and thereby, have been duly and validly
authorized by all necessary corporate, limited liability company, stockholder or member action, on the part of each of the Company and CCCS Holdings. This Agreement and each of the Ancillary Agreements have been duly executed and delivered by the Company and CCCS Holdings and, assuming due authorization, execution and delivery by the other parties hereto and thereto, represent the legal, valid and binding obligation of the Company and CCCS Holdings, enforceable against the Company and CCCS Holdings in accordance with their respective terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, fraudulent conveyance and other similar Laws and principles of equity affecting creditors rights and legal and equitable remedies generally (the General Enforceability Exceptions).
5.4 Capitalization.
(a) The Company. The authorized capital stock of the Company consists of 1,000 shares of Company Stock, of which 1,000 shares are issued and outstanding, and all of which have been duly authorized and validly issued, are fully paid and non-assessable and were issued in compliance with all applicable securities Laws and any preemptive rights or rights of first refusal of any Person. The 1,000 issued and outstanding shares of Company Stock represent the only issued and outstanding shares of capital stock of the Company. No shares of capital stock are held by the Company as treasury stock. There are no outstanding options, warrants, rights, calls, subscriptions, claims of any character, agreements, obligations, convertible or exchangeable securities or other commitments, contingent or otherwise, of any kind obligating the Company to issue, directly or indirectly, any additional shares of its capital stock or other equity securities. Schedule 5.4(a) sets forth a true and complete statement of the capitalization of the Company as of the date hereof and as of the time immediately prior to the CCCS Merger. There are no Contracts relating to the issuance, sale, transfer or voting of any equity securities or other securities of the Company, and there is no obligation, contingent or otherwise, of the Company to repurchase, redeem or otherwise acquire any shares of capital stock or other equity securities of the Company or provide funds to, or make any investment in (in the form of a loan, capital contribution or otherwise), or provide any Guarantee with respect to the obligations of, any other Person. There are no bonds, debentures, notes or other Indebtedness of the Company having the right to vote or consent (or convertible into or exchangeable for securities of the Company having the right to vote or consent) on any matters on which the stockholders of the Company may vote. Except as set forth on Schedule 5.4(a), the Company has no Subsidiaries and no Investments.
(b) CCCS Holdings. Schedule 5.4(b) sets forth the authorized equity interests of CCCS Holdings and the equity interests of CCCS Holdings that are issued and outstanding. All of such issued and outstanding equity interests have been duly authorized and validly issued, and were issued in compliance with all applicable securities Laws and any preemptive rights or rights of first refusal of any Person. The equity interests of CCCS Holdings set forth on Schedule 5.4(b) indicated as being issued and outstanding represent the only issued and outstanding equity interests of CCCS Holdings. No equity interests are held by CCCS Holdings as treasury security. Except as set forth on Schedule 5.4(b), there are no outstanding options, warrants, rights, calls, subscriptions, claims of any character, agreements, obligations, convertible or
exchangeable securities or other commitments, contingent or otherwise, of any kind obligating CCCS Holdings to issue, directly or indirectly, any additional equity interests or other equity securities. Schedule 5.4(b) sets forth a true and complete statement of the capitalization of CCCS Holdings (including as to each member thereof and its equity interests therein) as of the date hereof and as of the time immediately prior to the contributions described in Section 3.3(a). Except as set forth on Schedule 5.4(b), there are no Contracts relating to the issuance, sale, transfer or voting of any equity interests or other securities of the CCCS Holdings, and there is no obligation, contingent or otherwise, of CCCS Holdings to repurchase, redeem or otherwise acquire any equity interests or other equity securities of CCCS Holdings or provide funds to, or make any investment in (in the form of a loan, capital contribution or otherwise), or provide any Guarantee with respect to the obligations of, any other Person. After giving effect to Section 3.5 and as of the time immediately prior to the Closing, there will be no issued and outstanding Class C Units (as defined in the Amended and Restated Limited Liability Company Agreement of CCCS Holdings dated as of September 29, 2006), and all Management Incentive Unit Agreements and other agreements related thereto will have been terminated. There are no bonds, debentures, notes or other Indebtedness of CCCS Holdings having the right to vote or consent (or convertible into or exchangeable for securities of CCCS Holdings having the right to vote or consent) on any matters on which the members of CCCS Holdings may vote. Except as set forth on Schedule 5.4(b), CCCS Holdings has no Subsidiaries and no Investments. CCCS Holdings has good and marketable title to all of the issued and outstanding equity interests of CCCS Opco, free and clear of all Liens other than Liens arising under federal and state securities Laws.
(c) Subsidiaries. Schedule 5.4(c) sets forth a true and complete statement of the capitalization of each of the Subsidiaries of CCCS Holdings (including the authorized capital stock or other equity securities of each such Subsidiary). All of the issued and outstanding equity securities of each such Subsidiary have been duly authorized and validly issued, are fully paid and non-assessable (as applicable) and were issued in compliance with all applicable securities Laws and any preemptive rights or rights of first refusal of any Person. No shares of capital stock or other equity securities are held by such Subsidiary as treasury security. There are no outstanding options, warrants, rights, calls, subscriptions, claims of any character, agreements, obligations, convertible or exchangeable securities or other commitments, contingent or otherwise, of any kind obligating any such Subsidiary to issue, directly or indirectly, any additional shares of its capital stock or other equity securities. There are no agreements, commitments or contracts relating to the issuance, sale, transfer or voting of any equity securities or other securities of any such Subsidiary. There is no obligation, contingent or otherwise, of any such Subsidiary to repurchase, redeem or otherwise acquire any shares of the capital stock or other equity securities of such Subsidiary or provide funds to, or make any investment in (in the form of a loan, capital contribution or otherwise), or provide any Guarantee with respect to the obligations of, any other Person. There are no bonds, debentures, notes or other Indebtedness of such Subsidiary having the right to vote or consent (or convertible into or exchangeable for securities of such Subsidiary having the right to vote or consent) on any matters on which the members or stockholders of such Subsidiary may vote. CCCS Opco has good and marketable title to all of the issued and
outstanding equity securities of its Subsidiaries, free and clear of all Liens other than Liens arising under federal and state securities Laws.
5.5 No Conflict. Except as set forth on Schedule 5.5, neither the execution and delivery of this Agreement or the Ancillary Agreements by the Company or CCCS Holdings, nor the performance by the Company or CCCS Holdings of its obligations hereunder or thereunder, will (a) violate or conflict with (i) the certificate of incorporation or bylaws (or comparable organizational documents), or certificate of formation or limited liability company agreement of the Company or any of its Subsidiaries or (ii) any Law or Order applicable to the Company or any of its Subsidiaries or by which any of its properties or assets are bound, which violation of any such Law or Order would reasonably be expected to result in a Company Material Adverse Effect, (b) violate, conflict with or result in a breach or termination of, or otherwise give any Person additional rights or compensation under, or the right to terminate or accelerate, or constitute (with notice or lapse of time, or both) a default under the terms of any Contract to which the Company or any of the Companys Subsidiaries is a party or by which any of its assets or properties are bound, in the case of any Contract individually, that would reasonably be expected to result in a Company Material Adverse Effect or (c) result in the creation or imposition of any Lien (other than restrictions under applicable securities Laws) with respect to, or otherwise have an adverse effect upon, any of the equity securities of the Company or any of its Subsidiaries (including the Company Stock and the CCCS Holdings Units) or the properties or assets of the Company or any of its Subsidiaries, in each case, that would reasonably be expected to result in a Company Material Adverse Effect.
5.6 Required Governmental Filings and Consents. Except (a) as set forth on Schedule 5.6,(b) as may be required under the HSR Act and (c) for the filing of the CCCS Certificate of Merger and the Checksmart Certificate of Merger with the Secretary of State of the State of Delaware, no consent, approval, order or authorization of, notice to, or registration, declaration or filing with, any Governmental Authority is required in connection with the execution and delivery by the Company or CCCS Holdings of this Agreement or the Ancillary Agreements or the consummation of the transactions contemplated hereby or thereby.
5.7 Real Property.
(a) Leased Real Property. Schedule 5.7(a) sets forth a true and complete description of all Real Property leased, licensed to or otherwise used or occupied (but not owned) (collectively, the Leased Real Property) by the Company and its Subsidiaries. To the Knowledge of the Company, the Company and each of its Subsidiaries, as applicable, has a valid and subsisting leasehold estate in such Leased Real Property. To the Knowledge of the Company, a true and correct summary of each such lease, license, or occupancy agreement, and any amendments thereto, with respect to such Leased Real Property (collectively, the Real Property Leases) has been made available to the Buyer, and no material changes have been made to any Real Property Leases since the date provided. All of the Leased Real Property is used or occupied by the Company or its Subsidiaries pursuant to a Real Property Lease. Except as set forth on Schedule 5.7(a), to the Knowledge of the Company, with respect to each Real Property Lease: (i) such Real Property Lease is a valid, binding and enforceable obligation of the Company or its Subsidiary party thereto in accordance with its terms, subject to the General
Enforceability Exceptions, and is in full force and effect, (ii) all rents, deposits and additional rents due pursuant to such Real Property Lease have been paid in full and no security deposit or portion thereof has been applied in respect of a material breach or material default under such Real Property Lease that has not been redeposited in full, (iii) there is no existing material breach or material default by the Company or its Subsidiary party thereto, or the lessor, under any such Real Property Lease, and no event has occurred that (with notice, lapse of time or both) would reasonably be expected to constitute such a material breach or material default under any such Real Property Lease by the Company or its Subsidiary party to such Real Property Lease or give the Company or its Subsidiary party thereto or the lessor thereunder the right to terminate, accelerate or modify in any material respect any such Real Property Lease, and (iv) neither the Company nor any of its Subsidiaries has received any notice that it is in material default under any such Real Property Lease which has not been cured in all material respects (it being understood that no representation or warranty is given hereby as to any notices required to be given or consents required to be obtained under any such Real Property Lease in connection with the transactions contemplated hereby). Except as disclosed on Schedule 5.7(a), no Affiliate of the Company or its Subsidiaries is the owner or lessor of any Leased Real Property. The Leased Real Property is in good condition and repair (subject to normal wear and tear). To the Knowledge of the Company, neither the Company nor any of its Subsidiaries has subleased, licensed or otherwise granted any Person the right to use or occupy any of the Leased Real Property. Neither the Company nor any of its Subsidiaries owns any interest in any real property.
(b) Absence of Violations. Except as set forth on Schedule 5.7(b), none of the leasing, occupancy or use of the Leased Real Property by the Company or its Subsidiaries is in violation of any Law in any material respect, including any building, zoning, environmental or other Law. To the Knowledge of the Company, the condition and use of the Leased Real Property by the Company and its Subsidiaries conforms to each certificate of occupancy and Company Material Permit issued in connection with the Leased Real Property. Each of the Company and its Subsidiaries has obtained all Permits necessary for and material to the operation of its business at the Leased Real Property.
5.8 Personal Property. Except as set forth on Schedule 5.8, to the Knowledge of the Company, each of the Company and its Subsidiaries has good and marketable title to, or a valid leasehold interest in, all of its respective tangible material personal property and material assets free and clear of all Liens other than Permitted Liens. To the Knowledge of the Company, the material tangible personal property and material assets of the Company and each of its Subsidiaries are free from defects and in good operating condition and repair (subject to normal wear and tear).
5.9 Litigation and Orders.
(a) Except as set forth on Schedule 5.9, there are no Proceedings pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries or their respective business, operations or assets. There are no Proceedings pending or, to the Knowledge of the Company, threatened that question the legality, validity or enforceability of this Agreement, the Ancillary Agreements or any of the
transactions contemplated hereby or thereby or that would, individually or in the aggregate, reasonably be expected to materially impair the ability of the Company or CCCS Holdings to perform on a timely basis its obligations under this Agreement or the Ancillary Agreements. Schedule 5.9 lists all Proceedings to which the Company or any of its Subsidiaries was a defendant or in which a counter claim was filed against the Company or any of its Subsidiaries during the past three (3) years (whether or not settled), in each case with a claimed (or counterclaimed, as applicable) amount in excess of $25,000. None of the pending or threatened Proceedings set forth on Schedule 5.9, if adversely determined, would reasonably be expected to result in a Company Material Adverse Effect.
(b) There is no Order to which the Company or any of its Subsidiaries, or any of the assets owned or used by the Company or any of its Subsidiaries, is subject. Each of the Company and its Subsidiaries have been in compliance in all material respects with all of the terms and requirements of each Order to which it, or any of the assets owned or used by it, is or has been subject. To the Knowledge of the Company, neither the Company nor any of its Subsidiaries has received any written notice from any Governmental Authority or any other Person regarding any actual or alleged violation of, or failure to comply in any material respect with, any term or requirement of any Order to which the Company or any of its Subsidiaries, or any of the assets owned or used by the Company or any of its Subsidiaries, is subject.
(c) There is no Order pending or, to the Knowledge of the Company, threatened against the Company or its Subsidiaries that charges the Company or its Subsidiaries with the (or indicates that any of such parties are in) violation of or noncompliance with any Law or Permit. There is no Order or Proceeding pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries that would give any Person the right to enjoin or rescind the transactions contemplated by this Agreement or otherwise prevent the consummation of the transactions contemplated hereby.
5.10 Compliance with Laws. Except as set forth on Schedule 5.10, each of the Company and its Subsidiaries is now, and has been for the past three (3) years, in compliance in all material respects with all applicable Laws and Orders, including the Bank Secrecy Act, U.S.A. Patriot Act, Gramm-Leach Bliley Act, Consumer Reporting Employment Clarification Act, Consumer Collection Credit Act, Fair Debt Collection Practices Act, Fair Credit Reporting Act, all truth-in lending related Laws, all anti-money laundering and know your customer Laws, all usury and consumer protection related Laws, and all debt collection Laws. Except as set forth on Schedule 5.10, to the Knowledge of the Company, neither the Company nor any of its Subsidiaries has received any written notice from any Governmental Authority or any other Person regarding (a) any actual or alleged violation of, or failure to comply in any material respect with, any applicable Law, or (b) any actual or alleged material obligation or material liability of the Company or any of its Subsidiaries under any applicable Law. Each of the Company and its Subsidiaries has implemented a written anti-money laundering compliance program that complies in all material respects with all applicable Laws (a true and correct copy of which has been made available to the Buyer), and has operated its business for the past three (3) years in compliance in all material respects with such program. Each of the Company and its
Subsidiaries has made available its form of truth and lending agreement and such other material forms that it uses in the Ordinary Course of Business (a true and correct copy of the current form of which has been made available to the Buyer) to each of its loan applicants.
5.11 Conduct of Business. Since December 31, 2010, the business and operations of the Company and each of its Subsidiaries have been conducted in the Ordinary Course of Business and since December 31, 2010 there has not occurred a Company Material Adverse Effect. Without limiting the generality of the foregoing, since December 31, 2010 and except as set forth on Schedule 5.11, neither the Company nor any of its Subsidiaries has:
(a) incurred or become subject to any Indebtedness greater than $100,000 except (i) current liabilities incurred in the Ordinary Course of Business, (ii) liabilities under Contracts entered into in the Ordinary Course of Business, and (iii) borrowings under the Company Credit Agreements;
(b) (i) Guaranteed the Indebtedness of any Person, (ii) cancelled any Indebtedness owed to it or (iii) released any claim possessed by it, in each case, in excess of $100,000 or outside the Ordinary Course of Business;
(c) made any material change in the Tax reporting or accounting principles, practices or policies, including with respect to (i) depreciation or amortization policies or rates or (ii) the payment of accounts payable or the collection of accounts receivable;
(d) changed, rescinded or made any material Tax election, filed any amended Tax Return, entered into any closing agreement, consented to any extension or waiver of the limitation period applicable to any Tax claim in excess of $100,000, settled any Tax claim or assessment in excess of $100,000 or surrendered any right to claim a Tax refund;
(e) suffered any theft, damage, destruction or loss (not covered by insurance) of or to any tangible asset or assets having a value in excess of $50,000 individually or $100,000 in the aggregate;
(f) other than in the Ordinary Course of Business, (i) increased the salary, wages or other compensation rates of any officer, employee, manager, director or consultant, other than pursuant to an agreement in existence on December 31, 2010, (ii) made or granted any increase in any Company Employee Plan, or amended or terminated any existing Company Employee Plan, or adopted any new Company Employee Plan other than as required by Law or an existing contract, (iii) paid any bonus, in cash or any other form, to any officer, employee, manager, director or consultant, or (iv) made any commitment or incurred any liability to any labor organization;
(g) sold, assigned, transferred (including transfers to any employees, stockholders, members or Affiliates), licensed or subjected to any Lien any tangible or intangible assets or properties having a value in excess of $50,000 individually or $100,000 in the aggregate, other than sales of inventory in the Ordinary Course of Business;
(h) authorized or made any capital expenditures or commitments therefor in excess of $50,000 individually or $100,000 in the aggregate;
(i) amended its certificate of formation or incorporation, limited liability company agreement or bylaws (or comparable organizational documents);
(j) declared or paid any dividends or distributions with respect to any equity securities or redeemed or purchased, directly or indirectly, any equity securities;
(k) issued or sold any equity securities or split, combined or subdivided any equity securities;
(l) instituted or settled any Proceeding that involved more than $100,000;
(m) made any write-off or write-down of or made any determination to write-off or write-down any of its assets and properties in excess of $100,000;
(n) entered into any amendment, modification, termination (partial or complete) or granted any waiver under or given any consent with respect to any Company Material Contract other than in the Ordinary Course of Business;
(o) licensed in or purchased any Intellectual Property that is material to its business or licensed out or otherwise permitted any Person to use any Owned Intellectual Property, in each case, other than in the Ordinary Course of Business;
(p) commenced or terminated any line of business; or
(q) agreed to do any of the foregoing.
5.12 Labor Matters.
(a) Union and Employee Contracts. Except as set forth on Schedule 5.12(a), neither the Company nor any of its Subsidiaries is a party to or bound by any union contract, collective bargaining agreement, employment contract, independent contractor agreement, consultation agreement or other similar type of contract. Neither the Company nor any of its Subsidiaries has agreed to recognize any union or other collective bargaining representative. To the Knowledge of the Company, no union or collective bargaining representative has been certified as representing the employees of the Company or any of its Subsidiaries. To the Knowledge of the Company, no organizational attempt has been made or threatened by or on behalf of any labor union or collective bargaining representative with respect to any employees of the Company or any of its Subsidiaries during the past three (3) years. Neither the Company nor any of its Subsidiaries has experienced any labor strike, dispute, slowdown or stoppage or any other material labor difficulty during the past three (3) years.
(b) List of Workers, Etc. To the Knowledge of the Company, Schedule 5.12(b) sets forth an accurate and complete list, as of the date of this Agreement, of all (i) employees (including each employees name, title or position, present annual or
hourly compensation, designation as exempt or nonexempt, and years of service), and (ii) individuals who are classified as independent contractors (including the respective compensation of each independent contractor) (such individuals described in clauses (i) and (ii) above are collectively referred to herein as Workers), in the case of clause (i) above, of the Company and its Subsidiaries, and in the case of clause (ii) above, who are currently performing services for the Company or its Subsidiaries. Neither the Company nor any of its Subsidiaries is delinquent in payments to any such Worker for any material wages, salaries, commissions, bonuses or other compensation for any services performed by any such Worker or for any other amounts required to be reimbursed by the Company or any of its Subsidiaries to any such Worker (including vacation, sick leave, other paid time off or severance pay). Except as set forth on Schedule 5.12(b), since December 31, 2010, neither the Company nor any of its Subsidiaries has increased the salary of any employee with an annual base salary of more than $100,000 by more than 7% or granted an increase in bonus of more than $5,000. Except as set forth on Schedule 5.12(b), neither the Company nor any of its Subsidiaries employs any employee who cannot be dismissed immediately, whether currently or immediately after the transactions contemplated by this Agreement and the Ancillary Agreements, without notice and without further liability to the Company or any of its Subsidiaries, as applicable, subject to applicable Laws relating to employment discrimination.
(c) WARN Act. The Company and its Subsidiaries are in compliance in all material respects with the Worker Adjustment and Retraining Notification Act (29 USC §2101) (the WARN Act) and any similar Laws regarding redundancies, reductions in force, mass layoffs and plant closings, including with respect to all obligations to promptly and correctly furnish all notices required to be given thereunder in connection with any redundancy, reduction in force, mass layoff or plant closing to affected employees, representatives, any state dislocated worker unit and local government officials, or any other Governmental Authority. Neither the Company nor any of its Subsidiaries has taken any action that would constitute a mass layoff or plant closing within the meaning of the WARN Act or would otherwise trigger notice requirements or liability under any other comparable state or local Law in the United States.
(d) IRCA. To the Knowledge of the Company, all current employees of the Company and any of its Subsidiaries who work in the United States are, and all former employees of the Company or any of its Subsidiaries who worked in the United States whose employment terminated, voluntarily or involuntarily, within the one (1) year prior to the Closing Date, were legally authorized to work in the United States. To the Knowledge of the Company, the Company and its Subsidiaries has completed and retained the necessary employment verification paperwork under the Immigration Reform and Control Act of 1986 (IRCA) for the employees hired prior to the Closing Date. The Company and each of its Subsidiaries is and has been for the past three (3) years in compliance in all material respects with both the employment verification provisions (including the paperwork and documentation requirements) and the anti-discrimination provisions of IRCA.
(e) Unemployment, Social Security and Other Benefits. Neither the Company nor any of its Subsidiaries is liable for any material payment to any trust or other fund or
to any Governmental Authority with respect to unemployment compensation benefits, social security or other benefits or obligations for employees (other than routine payments to be made in the Ordinary Course of Business). Except as set forth on Schedule 5.12(e), there are no pending claims against the Company or any of its Subsidiaries under any workers compensation plan or policy or for long term disability.
(f) Manuals, Handbooks, Policies, etc. To the Knowledge of the Company, true and complete copies have been made available to the Buyer of the material written personnel manuals, handbooks, policies, rules or procedures applicable to any employee of the Company or any of its Subsidiaries.
(g) Compliance and Investigations. Neither the Company nor any of its Subsidiaries is a party to, or otherwise bound by, any Order by or of any Governmental Authority relating to employees or employment practices other than wage garnishments. Except as set forth on Schedule 5.9, to the Knowledge of the Company, neither the Company nor its Subsidiaries nor any of their executive officers has received within the past three (3) years from any Governmental Authority responsible for the enforcement of labor or employment laws any notice of intent to conduct an investigation relating to the Company or any of its Subsidiaries and no such investigation is in progress. Except as set forth on Schedule 5.9, the Company and its Subsidiaries are in compliance in all material respects with all Laws respecting employment and employment practices, harassment, discrimination, retaliation, terms and conditions of employment, immigration, workers compensation, long term disability, occupational safety, plant closings, compensation and benefits, wages and hours, proper classification of employees and independent contractors, and the payment of social security and other Taxes (collectively, Employment Practices).
(h) Litigation With Workers. Except as set forth on Schedule 5.9, there are no material claims, disputes, grievances or controversies pending or, to the Knowledge of the Company, threatened involving any Worker or group of Workers. Except as set forth on Schedule 5.9, there are no charges, investigations, administrative proceedings or formal complaints relating to any Employment Practices pending or, to the Knowledge of the Company, threatened before the Equal Employment Opportunity Commission, the National Labor Relations Board, the U.S. Department of Labor, the U.S. Occupational Health and Safety Administration, the Workers Compensation Appeals Board or any other Governmental Authority against the Company or any of its Subsidiaries pertaining to any Worker.
5.13 Employee Benefit Plans.
(a) Schedule 5.13(a) sets forth a complete list of (i) all employee benefit plans, as defined in Section 3(3) of ERISA, (ii) all other material severance pay, salary continuation, bonus, incentive, stock option, retirement, pension, profit sharing or deferred compensation plans, contracts, programs, funds or arrangements of any kind and (iii) all other material employee benefit plans, contracts, programs, funds or arrangements (whether written or oral, qualified or nonqualified, funded or unfunded, foreign or domestic, currently effective or terminated) and any trust, escrow or similar agreement
related thereto, whether or not funded, in respect of any present or former employees, directors, managers, officers, members, stockholders, consultants, or independent contractors of the Company or any of its Subsidiaries or any member of their Controlled Group that are sponsored or maintained by the Company or any of its Subsidiaries or any member of their Controlled Group or with respect to which the Company or any of its Subsidiaries or any member of their Controlled Group has made or is required to make payments, transfers, or contributions or has any liability, including as a result of the Company or any of its Subsidiaries, together with any other Person who is a member of the Controlled Group, being treated as a single employer under Section 414 of the Code (all of the above being individually or collectively referred to as Company Employee Plan or Company Employee Plans, respectively). Neither the Company nor any of its Subsidiaries has any material liability with respect to any plan, arrangement or practice of the type described in the preceding sentence other than the Company Employee Plans.
(b) To the Knowledge of the Company, true and complete copies of the following materials have been made available to the Buyer, to the extent applicable: (i) all current plan documents for each Company Employee Plan or, in the case of an unwritten Company Employee Plan, a written description of such Company Employee Plan; (ii) all determination letters from the IRS with respect to any of the Company Employee Plans; (iii) all current summary plan descriptions, summaries of material modifications, annual reports and summary annual reports with respect to any of the Company Employee Plans; and (iv) all current trust agreements, insurance contracts and other documents relating to the funding or payment of benefits under any Company Employee Plan.
(c) Each Company Employee Plan has been maintained, operated and administered in compliance in all material respects with its terms and any related documents or agreements and in compliance in all material respects with all applicable Laws. To the Knowledge of the Company, there have been no non-exempt prohibited transactions or breaches of any of the duties imposed on fiduciaries (within the meaning of Section 3(21) of ERISA) by ERISA with respect to the Company Employee Plans that could result in any material liability or excise Tax under ERISA or the Code being imposed on the Company or any of its Subsidiaries.
(d) Each Company Employee Plan intended to be qualified under Section 401(a) of the Code is so qualified and has been determined by the IRS to be so qualified, or the IRS has issued a favorable opinion letter on the prototype document and, to the Knowledge of the Company, nothing has occurred since the date of any such determination that would reasonably be expected to give the IRS grounds to revoke such determination.
(e) No amount that could be received (whether in cash or property or vesting of property) as a result of any of the transactions contemplated by this Agreement by any employee, officer, manager or director of the Company, its Subsidiaries or any of their Affiliates who is a disqualified individual (as such term is defined in Treasury Regulation Section 1.280G-1) under any employment, severance or termination
agreement, other compensation arrangement or Company Employee Plan currently in effect would be characterized as an excess parachute payment (as such term is defined in Section 280G(b)(1) of the Code).
(f) Neither the Company nor its Subsidiaries nor any member of their Controlled Group has an obligation to contribute to or any liability with respect to a defined benefit plan as defined in Section 3(35) of ERISA, a pension plan subject to the funding standards of Section 302 of ERISA or Section 412 of the Code, a multiemployer plan as defined in Section 3(37) of ERISA or Section 414(f) of the Code or a multiple employer plan within the meaning of Section 210(a) of ERISA or Section 413(c) of the Code.
(g) With respect to each group health plan benefiting any current or former employee of the Company, its Subsidiaries or any member of their Controlled Group that is subject to Section 4980B of the Code, the Company, its Subsidiaries and each member of their Controlled Group has complied in all material respects with the continuation coverage requirements of Section 4980B of the Code and Part 6 of Subtitle B of Title I of ERISA.
(h) No Company Employee Plan is funded through a welfare benefit fund as defined in Section 419(e) of the Code, and no benefits under any Company Employee Plan are provided through a voluntary employees beneficiary association (within the meaning of subsection 501(c)(9) of the Code) or a supplemental unemployment benefit plan (within the meaning of Section 501(c)(17) of the Code).
(i) There is no pending or, to the Knowledge of the Company, threatened Proceeding of any kind before any Governmental Authority with respect to any Company Employee Plan (other than routine claims for benefits).
(j) Except as would not reasonably be expected to result in a material liability to the Company or any of its Subsidiaries, all (i) insurance premiums required to be paid with respect to, (ii) benefits, expenses and other amounts due and payable under, and (iii) contributions, transfers or payments required to be made to, any Company Employee Plan prior to the Closing Date will have been paid, made or accrued on or before the Closing Date. With respect to any insurance policy providing funding for benefits under any Company Employee Plan, to the Knowledge of the Company, there is no material liability of the Company or any of its Subsidiaries in the nature of a retroactive rate adjustment, loss sharing arrangement or other actual or contingent liability other than for premiums in the Ordinary Course of Business, nor would there be any such material liability if such insurance policy was terminated on the Closing Date.
(k) No Company Employee Plan provides post-employment welfare benefits other than coverage mandated by Law.
(l) The execution and performance of this Agreement and the Ancillary Agreements will not (i) constitute a stated triggering event under any Company Employee Plan that will result in any payment (whether of severance pay or otherwise)
becoming due from the Company or any of its Subsidiaries to any current or former officer, employee, manager, director or consultant (or dependents of such Persons) or (ii) accelerate the time of payment or vesting or increase the amount of compensation due to any current or former officer, employee, manager, director or consultant (or dependents of such Persons) of the Company or any of its Subsidiaries.
(m) Neither the Company nor its Subsidiaries has agreed or committed to institute any plan, program, arrangement or agreement for the benefit of employees or former employees of the Company or its Subsidiaries other than the Company Employee Plans, or to make any amendments to any of the Company Employee Plans. Subject to such constraints as may be imposed by Law, the Company or its Subsidiaries have the right to amend or terminate each Company Employee Plan that is a group retirement or group welfare benefit plan. No Company Employee Plan provides benefits to any Person who is not a current or former employee of the Company or its Subsidiaries, or the dependents or other beneficiaries of any such current or former employee. Neither the Company nor any of its Subsidiaries currently maintains, contributes to or is otherwise obligated under, any Foreign Plans.
(n) To the Knowledge of the Company, all contributions required to be paid with respect to workers compensation arrangements of the Company and its Subsidiaries have been made or accrued in accordance with GAAP as a liability in the Company Financial Statements.
(o) With respect to each Company Employee Plan that is a nonqualified deferred compensation plan subject to Section 409A of the Code, neither the Company nor any of its Subsidiaries has any obligation to any person to cause any such Company Employee Plan to comply with Section 409A of the Code or to provide any gross-up or similar payment to any person in the event any such Company Employee Plan fails to comply with Section 409A of the Code.
This Section 5.13 sets forth the sole representations and warranties of the Seller Parties with respect to ERISA and employee benefits, including all matters regarding the Company Employee Plan.
5.14 Environmental. To the Knowledge of the Company, except as set forth on Schedule 5.14:
(a) (i) There are no underground tanks and related pipes, pumps and other facilities at the Real Property of the Company or any of its Subsidiaries containing Hazardous Materials that are the responsibility of the Company or any of its Subsidiaries and that would reasonably be expected to give rise to a material liability of the Company or any of its Subsidiaries under any Environmental Law; and (ii) there is no asbestos nor any asbestos-containing materials used in, applied to or in any way incorporated in any building, structure or other form of improvement on the Real Property that are the responsibility of the Company or any of its Subsidiaries and that would reasonably be expected to give rise to a material liability of the Company or any of its Subsidiaries under any Environmental Law.
(b) Each of the Company and its Subsidiaries is presently, and for the past three (3) years has been in compliance in all material respects with all Environmental Laws applicable to the Real Property or to the Companys or any of the Companys Subsidiaries business operations.
(c) (i) Neither the Company or any of its Subsidiaries has generated, manufactured, refined, transported, treated, stored, handled, disposed, transferred, produced or processed any Hazardous Materials at or upon such Real Property, except in compliance in all material respects with all applicable Environmental Laws; and (ii) there has been no Release of any Hazardous Material by the Company or any of its Subsidiaries at such Real Property that would reasonably be expected to result in a material liability of the Company or any of its Subsidiaries under any Environmental Law.
(d) Neither the Company or any of its Subsidiaries has within the past three (3) years (i) entered into or been subject to any Order with respect to such Real Property; (ii) received notice under the citizen suit provisions of any Environmental Law; (iii) received any request for information, notice, demand letter, administrative inquiry or formal or informal complaint or claim with respect to any material liability under any Environmental Laws; or (iv) been subject to or threatened with any governmental or citizen enforcement action with respect to any material liability under any Environmental Law.
(e) (i) There currently are effective all material Permits required under any Environmental Law that are necessary for the Company and each of the Companys Subsidiaries activities and operations at such Real Property as currently conducted; and (ii) any applications for renewal of such material Permits have been submitted on a timely basis to the extent required under any Environmental Law.
(f) Neither the Company nor any of its Subsidiaries has contractually agreed to assume any material liability of any other Person relating to or arising from any Environmental Law.
(g) The Company has made available to the Buyer copies of all material documents, records and information in its possession or reasonable control concerning environmental, health or safety liabilities, including previously conducted environmental audits and documents regarding any Release or disposal of Hazardous Materials by the Company or any of its Subsidiaries at, upon or from such Real Property or formerly owned or leased property.
This Section 5.14 sets forth the sole representations and warranties of the Seller Parties with respect to environmental matters, including with respect to any Environmental Law, Hazardous Material, or Release.
5.15 Material Contracts.
(a) Schedule 5.15 sets forth each Contract (and in the case of an oral Contract, the material terms of such Contract) to which the Company or any of its
Subsidiaries is a party to or to which any of the assets the Company or any of its Subsidiaries are bound: (i) governing the borrowing of money or the Guarantee or the repayment thereof or granting of Liens (other than Permitted Liens) on any material property or asset of the Company or any of its Subsidiaries, in each case, in excess of $100,000; (ii) providing for the employment of any Person with annual compensation in excess of $100,000, except for any Contract for at-will employment which may be terminated on 60 days or less prior notice without liability to the Company or its Subsidiaries; (iii) containing covenants expressly limiting the freedom of the Company or any of its Subsidiaries to compete in any line of business or with any Person or in any geographic area or market; (iv) providing a license to the Company or its Subsidiaries to use any third party Intellectual Property (other than licenses for commercially available off-the-shelf Software) or providing to a third party a license to use any Intellectual Property; (v) with any directors, managers, officers, members or stockholders of the Company or its Subsidiaries; (vi) providing for the future or ongoing purchase, maintenance or acquisition, or the sale, lease or furnishing, of materials, supplies, merchandise, property or equipment (including computer hardware or software or other property or services), in each case in excess of $100,000 annually or $200,000 in the aggregate; (vii) granting to any Person a first-refusal, first-offer or similar preferential right to purchase or acquire any material right, asset or property of the Company or its Subsidiaries; (viii) providing for any offset, countertrade or barter arrangement in excess of $100,000 annually or $200,000 in the aggregate; (ix) containing a most favored nation pricing agreement or consignment arrangement with a customer or supplier; (x) involving a material distributor, sales representative, broker or advertising arrangement that by its express terms is not terminable by the Company or its Subsidiaries at will or by giving notice of 30 days or less, without liability; (xi) involving a joint venture or partnership or involving the sharing of profits, losses, costs or liability by the Company or any of its Subsidiaries with any other Person; (xii) involving management services, consulting services, independent contractor services, support services or any other similar services, in each case, in excess of $100,000 annually or $200,000 in the aggregate; (xiii) involving the acquisition of any business enterprise whether via stock or asset purchase or otherwise (but excluding the acquisition of inventory in the Ordinary Course of Business); (xiv) granting a power of attorney to any Person; (xv) with respect to a franchise agreement or arrangement; or (xvi) under which the amount payable by the Company or any of its Subsidiaries is based on a royalty or earn-out in excess of $100,000 annually or $200,000 in the aggregate (the Contracts described in clauses (i)-(xvi) are each, a Company Material Contract and collectively, the Company Material Contracts).
(b) To the Knowledge of the Company, the Company has made available to the Buyer true and complete copies of each written Company Material Contract, as amended. Each Company Material Contract is a valid, binding and enforceable obligation of the Company or any of its Subsidiaries, as applicable, and, to the Knowledge of the Company, the other parties thereto, enforceable in accordance with its terms, subject to the General Enforceability Exceptions. With respect to the Company Material Contracts listed on Schedule 5.15 (or required to be listed on Schedule 5.15): (i) neither the Company or any of its Subsidiaries nor, to the Knowledge of the Company, any other party thereto, is in material default under or in material violation of any such
Company Material Contract; (ii) to the Knowledge of the Company, no event has occurred that, with notice or lapse of time or both, would constitute such a material default or material violation; (iii) neither the Company nor any of its Subsidiaries has released any of its material rights under any such Company Material Contract; and (iv) to the Knowledge of the Company, no party to any such Company Material Contract has repudiated any of the material terms thereof or threatened in writing to terminate or cancel any such Company Material Contract.
5.16 Permits. Schedule 5.16 sets forth a true and complete list of all Permits held by the Company and its Subsidiaries and used by them in the conduct of their business which are material to their business (the Company Material Permits). Each of the Company and its Subsidiaries is in compliance in all material respects with the terms of the Company Material Permits and there is no pending or, to the Knowledge of the Company, threatened termination, expiration, suspension, withdrawal or revocation of any of such Company Material Permits. Except for the Permits set forth on Schedule 5.16, there are no Permits, whether written or oral, necessary or required for the conduct of the business of the Company and its Subsidiaries which are material to their business. Except as expressly stated otherwise on Schedule 5.16, (i) each Permit listed on Schedule 5.16 is valid and in full force and effect and any applications for renewal of such Permits have been submitted on a timely basis to the extent required by the applicable Governmental Agency and (ii) except as would not reasonably be expected to result in a Company Material Adverse Effect, none of such Permits will lapse, terminate or expire solely as a result of the performance of this Agreement by the Seller Parties, the Company or CCCS Holdings or the consummation of the transactions contemplated hereby (and, for the avoidance of doubt, without taking into account any action taken by the Buyer, Checksmart, Checksmarts Subsidiaries, the Company or the Companys Subsidiaries after the Closing, with respect to which no representation or warranty is hereby made).
5.17 Intellectual Property.
(a) Schedule 5.17 sets forth a complete and correct list of all the following Owned Intellectual Property of the Company and its Subsidiaries: (i) Patents, (ii) registered Copyrights and applications therefor; (iii) registered Trademarks and applications for registration of Trademarks; and (iv) Domain Name registrations and applications therefor. Neither the Company nor any of its Subsidiaries owns any Software. To the Knowledge of the Company, all fees associated with maintaining any Owned Intellectual Property required to be set forth on Schedule 5.17 have been paid in full in a timely manner to the proper Governmental Authority and no such fees are due within the 3-month period after the Closing Date. Except as would not reasonably be expected to result in a Company Material Adverse Effect, (x) all of the Owned Intellectual Property required to be listed on Schedule 5.17 has been registered with, filed in or issued by, as the case may be, the United States Patent and Trademark Office, the United States Copyright Office or other applicable filing office(s), domestic or foreign, to the extent necessary to ensure protection under any applicable Intellectual Property Law, and (y) such registrations, filings, issuances and other actions remain in full force and effect.
(b) Except pursuant to a Company Material Contract set forth on Schedule 5.15 or as otherwise set forth on Schedule 5.17, to the Knowledge of the Company, all of the Intellectual Property used by the Company and its Subsidiaries in the conduct of their business (other than commercially available off-the-shelf Software) is owned solely by the Company or any of its Subsidiaries and the Company and its Subsidiaries have the exclusive right to use and possess such Intellectual Property for the life thereof for any purpose, free from (i) any Liens (except for Permitted Liens) and (ii) any requirement of any past, present or future royalty payments, license fees, charges or other payments or conditions or restrictions whatsoever, in each case, in excess of $100,000 annually or $200,000 in the aggregate. Except pursuant to a Company Material Contract set forth on Schedule 5.15 or otherwise in the Ordinary Course of Business, neither the Company nor any of its Subsidiaries has licensed or otherwise granted any right to any Person under any Owned Intellectual Property or has otherwise agreed not to assert any such Owned Intellectual Property against any Person. To the Knowledge of the Company, no director, manager, officer, member, stockholder, employee, consultant, contractor, agent or other representative of the Company or any of its Subsidiaries owns or claims any material rights in (nor has any of them made application for) any Intellectual Property owned or used by the Company or any of its Subsidiaries that is material to its business.
(c) The operation of the Companys and each of its Subsidiarys business as currently conducted and the possession or use of the Owned Intellectual Property does not infringe, misappropriate, dilute, violate or otherwise conflict with any Intellectual Property right of any other Person nor does the operation of the Companys and its Subsidiaries business constitute unfair competition or deceptive or unfair trade practice. To the Knowledge of the Company, none of the Owned Intellectual Property is being infringed or otherwise used or available for use by any Person other than the Company and its Subsidiaries, except pursuant to a Company Material Contract listed on Schedule 5.15. For the avoidance of doubt, this Section 5.17(c) sets forth the only representation or warranty by the Seller Parties regarding infringement, misappropriation, dilution, violation or other conflict by the Company or any of its Subsidiaries with the Intellectual Property of any third party.
(d) No Proceeding is pending or, to the Knowledge of the Company, threatened, that (i) challenges the rights of the Company or its Subsidiaries in respect of any Owned Intellectual Property or (ii) asserts that the operation of the business of the Company and its Subsidiaries is infringing or otherwise in violation of any Intellectual Property, or is (except as set forth in a Company Material Contract listed on Schedule 5.15) required to pay any royalty, license fee, charge or other amount with regard to any Intellectual Property. None of the Owned Intellectual Property is or has in the past two (2) years been subject to any Order, and neither the Company nor any of its Subsidiaries has in the past two (2) years been subject to any Order in respect of any other Persons Intellectual Property.
(e) To the Knowledge of the Company, the Company and its Subsidiaries have complied in all material respects at all times during the past three (3) years with all relevant requirements of any applicable data protection Law or Order, including compliance with the Companys and its Subsidiaries own published data protection
policies, and requests from data subjects for access to data held by the Company or its Subsidiaries. Neither the Company nor any of its Subsidiaries has received any Order or other written notification from a Governmental Authority regarding non-compliance or violation of any data protection Law. To the Knowledge of the Company, no Person has claimed any compensation from the Company or any of its Subsidiaries for the loss of or unauthorized disclosure or transfer of personal data. The Company and its Subsidiaries use commercially reasonable means, consistent with common industry practices, to protect the security and integrity of all Information Systems used by the Company and its Subsidiaries.
This Section 5.17, together with part (iv) of Section 5.15(a) (and Section 5.15(b) in so far as it relates to part (iv) of Section 5.15(a)), sets forth the only representations or warranties of the Seller Parties regarding Intellectual Property.
5.18 Insurance. To the Knowledge of the Company, Schedule 5.18 sets forth a true and complete list (including all applicable premiums and deductibles) of all insurance policies to which the Company or any of its Subsidiaries is a party, named insured or otherwise the beneficiary of coverage. With respect to each such policy, to the Knowledge of the Company: (i) the policy is valid and enforceable and in full force and effect; (ii) the Company or such Subsidiary, as applicable, has paid all premiums due; (iii) there is no material breach or material default by the Company or such Subsidiary and the execution of this Agreement or the Ancillary Agreements and the consummation of the transactions contemplated hereby and thereby will not result in such material breach or material default; and (iv) no party to the policy has repudiated in writing any provision thereof. No written notice of cancellation or termination or non-renewal has been received by the Company or its Subsidiaries with respect to any such policy during the past two (2) years.
5.19 Financial Statements.
(a) Schedule 5.19(a) sets forth true and complete copies of (i) the audited consolidated balance sheet of CCCS Holdings and its Subsidiaries as of December 31, 2010, December 31, 2009 and December 31, 2008, and the related audited consolidated statement of income, members equity and cash flows for the fiscal years then ended, together with the notes thereto (collectively, the Company Financial Statements), and (ii) the unaudited consolidated balance sheet of CCCS Holdings and its Subsidiaries as of February 28, 2011, and the related unaudited consolidated statement of income for the two-month period then ended (the Company Interim Financial Statements).
(b) The Company Financial Statements present fairly, in all material respects, the financial position, results of operations, members equity and cash flows of the Company and its Subsidiaries at the dates and for the time periods indicated in accordance with GAAP. The Company Interim Financial Statements present fairly, in all material respects, the financial position and results of operations of the Company and its Subsidiaries at the date and for the period indicated in accordance with GAAP, consistent with the Company Financial Statements, except for the absence of footnote disclosure and the customary year-end adjustments. The Company Financial Statements and the Company Interim Financial Statements were derived from the books and records of the
Company and its Subsidiaries. To the Knowledge of the Company, there has been no, and there does not currently exist, any fraud, nor the existence of or allegation of financial improprieties that involves management of the Company or any of its Subsidiaries.
(c) Except as set forth on Schedule 5.19(c), to the Knowledge of the Company, neither the Company nor any of its Subsidiaries has any material liabilities (whether accrued, absolute, contingent, unliquidated or otherwise, whether due or to become due, whether known or unknown, regardless of when asserted) arising out of transactions or events entered into after the date of the Company Interim Financial Statements except (i) liabilities reflected or reserved against in the Company Interim Financial Statements, (ii) liabilities that have arisen after the date of the Company Interim Financial Statements in the Ordinary Course of Business (none of which relates to breach of Contract, breach of warranty, tort, infringement, or violation of Law or Environmental liability), (iii) liabilities incurred in connection with the transactions contemplated by this Agreement, (iv) liabilities arising pursuant to the terms of any Contract to which the Company or any of its Subsidiaries is a party or to which any of their assets are bound (other than liabilities resulting from any pre-Closing breach of such Contract by the Company or its Subsidiaries) or (v) liabilities set forth in the Company Disclosure Schedules, or which would be required to be so set out in the Company Disclosure Schedules if the representations and warranties set forth in this Article 5 which are qualified by Knowledge, materiality or Company Material Adverse Effect, or by monetary thresholds, or by date, time or temporal limitation, or by words of similar import, were not so qualified.
5.20 Bank Accounts; Names. Schedule 5.20 sets forth a true and complete list of (a) the name and address of each bank with which the Company or any of its Subsidiaries has an account or safe deposit box, (b) the name of each Person authorized to draw thereon or have access thereto and (c) the account number for each bank account of the Company or any of its Subsidiaries. All names under which the Company and its Subsidiaries do business are specified on Schedule 5.20, Schedule 5.17 or are listed on the Schedules to Section 5.4.
5.21 Books and Records. To the Knowledge of the Company, all books, records and accounts of the Company and its Subsidiaries are accurate and complete in all material respects and are maintained in accordance with commercially reasonable business practice and are in compliance in all material respects with applicable Laws. To the Knowledge of the Company, the corporate minute books and stock/limited liability company unit transfer registers of the Company and its Subsidiaries previously made available to the Buyer are true, correct and complete and accurately reflect, in each case, in all material respects, all corporate actions taken by the Company and its Subsidiaries during the periods represented thereby.
5.22 Indebtedness and Selling Expenses. Schedule 5.22 sets forth a true and complete list of the individual components (indicating the amount and the Person to whom such amount is owed) of all (a) Indebtedness outstanding with respect to the Company and any of its Subsidiaries as of the dates indicated thereon (including outstanding letters of credit) and (b) estimated Seller Parties Selling Expenses.
5.23 Taxes. Except as set forth on Schedule 5.23:
(a) All income and other material Tax Returns required to be filed with any Taxing Authority with respect to any Pre-Closing Tax Period by or on behalf of the Company or any of its Subsidiaries, to the extent required to be filed on or before the Closing Date, have been filed when due in accordance with all applicable Laws.
(b) All income and other material Tax Returns with respect to Pre-Closing Tax Periods completely and correctly reflect the facts regarding the income, business, assets, operations, activities and status of the Company and its Subsidiaries.
(c) Neither the Company nor any of its Subsidiaries is currently a beneficiary of any extension of time within which to file any Tax Return.
(d) All Taxes owed by the Company and its Subsidiaries (whether or not shown as due and payable on any Tax Return) have been timely paid to the appropriate Taxing Authority.
(e) The Company and its Subsidiaries have withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, member, stockholder or other Person.
(f) No income or other material Tax Return of the Company or any of its Subsidiaries with respect to any Pre-Closing Tax Period is currently being audited by any Taxing Authority.
(g) Neither the Company nor any of its Subsidiaries has any Tax liabilities with respect to the income, property and operations of the Company or any of its Subsidiaries, except for Tax liabilities (i) reflected in the Company Financial Statements or (ii) that have arisen after the date of the Company Financial Statements in the Ordinary Course of Business.
(h) Neither the Company nor any of its Subsidiaries has granted or has had granted on its behalf any extension or waiver of the statute of limitations period applicable to any Tax Return, which period (after giving effect to such extension or waiver) has not yet expired.
(i) There is no Proceeding now pending or, to the Knowledge of the Company, threatened against or with respect to the Company or any of its Subsidiaries in respect of any Tax.
(j) There are no Liens for Taxes upon the assets or properties of the Company or its Subsidiaries, except for Permitted Liens.
(k) Neither the Company nor any of its Subsidiaries has been a member of an affiliated, consolidated, combined or unitary group or participated in any other arrangement whereby any income, revenues, receipts, gain or loss was determined or taken into account for Tax purposes with reference to or in conjunction with any income,
revenues, receipts, gain, loss, asset or liability of any other Person other than a group of which the Company was the parent.
(l) Schedule 5.23 contains a list of all states (whether foreign or domestic) to which the Company or any of its Subsidiaries pays Taxes imposed on overall net income.
(m) Neither the Company nor any of its Subsidiaries has any liability for the Taxes of any Person (other than the Company or such Subsidiary) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign Law), as a transferee or successor, by contract, or otherwise.
(n) Neither the Company nor its Subsidiaries has received written notice of any claim by a Governmental Authority in a jurisdiction where the Company or any of its Subsidiaries does not file Tax Returns that it is or may be subject to taxation by that Governmental Authority.
(o) Neither the Company nor any of its Subsidiaries will be required to include any item of income in, or exclude any item of deduction from, taxable income for any period ending after the Closing Date (i) under Section 481 of the Code (or any similar provision of state, local or foreign Law) as a result of change in method of accounting for a Pre-Closing Tax Period, (ii) pursuant to the provisions of any agreement entered into with any Taxing Authority or pursuant to a closing agreement as defined in Section 7121 of the Code (or any similar provisions of state, local or foreign Law) executed on or prior to the Closing Date, (iii) as a result of the installment method of accounting, the completed contract method of accounting or the cash method of accounting with respect to a transaction that occurred prior to the Closing Date, (iv) as a result of any intercompany transactions or any excess loss account described in Section 1.1502-19 of the Treasury Regulations (or any similar provisions of state, local or foreign Law), (v) as a result of any prepaid amount received on or prior to the Closing Date or (vi) as a result of the discharge of any Indebtedness on or prior to the Closing Date under Section 108(i) of the Code.
(p) Neither the Company nor any of its Subsidiaries is a party to any Tax sharing, allocation or indemnity agreement or arrangement that would require the Company or any of its Subsidiaries to indemnify any other Person for Taxes.
(q) Neither the Company nor any of its Subsidiaries has distributed the stock of another Person, or has had its stock distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Section 355 of the Code.
(r) Neither the Company nor any of its Subsidiaries has participated in any reportable transaction as defined in Section 6707A of the Code or Treasury Regulation Section 1.6011-4 (or any predecessor provision).
(s) Neither the Company nor any of its Subsidiaries has entered into any transaction that would result in a substantial understatement of federal income Tax within the meaning of Section 6662 of the Code if the treatment claimed by the Company or any of its Subsidiaries were disallowed.
(t) CCCS Holdings (and any predecessor of CCCS Holdings) is and has been at all times during its existence taxed as a partnership for federal income tax purposes and taxed as a partnership in each state in which it files income Tax Returns.
(u) CCCS Opco (and any predecessor of CCCS Opco) is and has been at all times during its existence treated as a disregarded entity for federal income Tax purposes and for income Tax purposes in all states in which its income, business, assets, operations, activities or status are reported in any income Tax return.
This Section 5.23 sets forth the sole representations and warranties of the Seller Parties with respect to all Tax matters.
5.24 Related Party Transactions. To the Knowledge of the Company, except as set forth on Schedule 5.24, none of the Company, any of its Subsidiaries, the Seller Parties, nor any current or former manager, director, officer or employee of the Company or any of its Subsidiaries has any direct or indirect interest (a) in or is a manager, director, officer or employee of, any Person that is a client, customer, supplier, lessor, lessee, debtor, creditor or competitor of the Company or any of its Subsidiaries (other than 5% stock ownership of publicly traded entities) or (b) in any material property, asset or right that is owned or used by the Company or any of its Subsidiaries in the conduct of its business. Except as set forth on Schedule 5.24, there is no outstanding Indebtedness owed to the Company or any of its Subsidiaries by any current or former director, manager, officer, employee or consultant of the Company, any of its Subsidiaries or any of the Seller Parties or any of their Affiliates.
5.25 Brokers. Except as set forth on Schedule 5.25, no Person has acted directly or indirectly as a broker, finder or financial advisor for the Company or any of its Subsidiaries in connection with the negotiations relating to the transactions contemplated by this Agreement, and no Person is entitled to any fee or commission or like payment in respect thereof based in any way on any agreement, arrangement or understanding made by or on behalf of the Company or any of its Subsidiaries.
5.26 Certain Payments. To the Knowledge of the Company, none of the Company or any of its Subsidiaries, nor any director, manager, officer, employee, or other Person acting on behalf of any of them, has directly or indirectly (a) made any contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other payment to any Person, private or public, regardless of form, whether in money, property, or services (i) to obtain favorable treatment in securing business for the Company or any of its Subsidiaries, (ii) to pay for favorable treatment for business secured by the Company or any of its Subsidiaries, (iii) to obtain special concessions or for special concessions already obtained, for or in respect of the Company or any of its Subsidiaries, or (iv) in violation of any Law, or (b) established or maintained any fund or asset with respect to the Company or any of its Subsidiaries that has not be recorded in the books and records of the Company or any such Subsidiary.
5.27 No Other Representations or Warranties. Except as expressly set forth in this Article 5 and Article 5A, the Seller Parties make no other representation or warranty, express or implied, at law or in equity, and any such other representations or warranties are hereby expressly disclaimed including any implied representation or warranty as to condition,
merchantability, suitability or fitness for a particular purpose. Notwithstanding anything to the contrary herein, (a) none of the Seller Parties shall be deemed to make to the Buyer Parties any representation or warranty other than as expressly made by such Person in this Article 5 and Article 5A and (b) the Seller Parties make no representation or warranty to the Buyer Parties with respect to (i) any projections, estimates or budgets heretofore delivered to or made available to the Buyer Parties or their respective counsel, accountants or advisors of future revenues, expenses or expenditures or future results of operations of the Company or its Subsidiaries, or (ii) except as expressly covered by a representation and warranty contained in this Article 5 or Article 5A, any other information or documents (financial or otherwise) made available to the Buyer Parties or their respective counsel, accountants or advisors with respect to the Company or its Subsidiaries.
ARTICLE 5A: REPRESENTATIONS AND WARRANTIES
OF THE SELLER PARTIES
Except as set forth in the Company Disclosure Schedules attached hereto, each Seller Party severally and not jointly represents and warrants to the Buyer Parties as follows (provided that the representations and warranties contained in Section 5A.8 are made only by the Company Stockholders severally and not jointly):
5A.1 Existence and Good Standing. Such Seller Party is a corporation or limited liability company, as applicable, incorporated or organized, as applicable, validly existing and in good standing under the Laws of its jurisdiction of incorporation or organization, as applicable.
5A.2 Validity and Enforceability. Such Seller Party has the requisite corporate or limited liability company, as applicable, power and authority to execute, deliver and perform its obligations under this Agreement and the Ancillary Agreements. The execution, delivery and performance of this Agreement and the Ancillary Agreements, and the consummation of the transactions contemplated hereby and thereby, have been duly and validly authorized by all necessary corporate or limited liability company, as applicable, action, or stockholder or member action, as applicable, on the part of such Seller Party. This Agreement and each of the Ancillary Agreements have been duly executed and delivered by such Seller Party and, assuming due authorization, execution and delivery by the other parties hereto and thereto, represent the legal, valid and binding obligation of such Seller Party enforceable against such Seller Party in accordance with their respective terms, subject to the General Enforceability Exceptions.
5A.3 Title. Such Seller Party that is a Company Stockholder has good and marketable title to all of the shares of Company Stock owned by it as described on Schedule 5.4(a), free and clear of all Liens other than Liens arising under federal and state securities Laws. Such Seller Party that is a CCCS Founder has good and marketable title to all of the CCCS Holdings Units owned by it as described on Schedule 5.4(b), free and clear of all Liens other than Liens arising under federal and state securities Laws. The Company has good and marketable title to all of the CCCS Holdings Units owned by it as described on Schedule 5.4(b), free and clear of all Liens other than Liens arising under federal and state securities Laws.
5A.4 No Conflict. Except as set forth on Schedule 5A.4, neither the execution and delivery of this Agreement or the Ancillary Agreements by such Seller Party, nor the
performance by such Seller Party of its obligations hereunder or thereunder, will (a) violate or conflict with (i) the certificate of incorporation or bylaws (or comparable organizational documents), or certificate of formation or limited liability company agreement (or comparable organizational documents) of such Seller Party or (ii) any Law or Order applicable to such Seller Party or by which any of its properties or assets are bound, which violation of any such Law or Order would reasonably be expected to result in a material adverse effect on its ability to perform its obligations hereunder or thereunder, (b) violate, conflict with or result in a breach or termination of, or otherwise give any Person additional rights or compensation under, or the right to terminate or accelerate, or constitute (with notice or lapse of time, or both) a default under the terms of any Contract to which such Seller Party is a party or by which any of its properties or assets are bound, in the case of any such Contract individually, that would reasonably be expected to result in a material adverse effect on its ability to perform its obligations hereunder or thereunder, or (c) result in the creation or imposition of any Lien (other than restrictions under applicable securities Laws) with respect to, or otherwise have an adverse effect upon, the equity securities owned by such Seller Party.
5A.5 Required Governmental Filings and Consents. Except (a) as set forth on Schedule 5A.5, (b) as may be required under the HSR Act and (c) for the filing of the CCCS Certificate of Merger and the Checksmart Certificate of Merger with the Secretary of State of the State of Delaware, no consent, approval, order or authorization of, notice to, or registration, declaration or filing with, any Governmental Authority is required in connection with the execution and delivery by such Seller Party of this Agreement or the Ancillary Agreements or the consummation of the transactions contemplated hereby or thereby.
5A.6 Litigation. There is no Order or Proceeding pending or, to the knowledge of such Seller Party, threatened against such Seller Party that would give any Person the right to enjoin or rescind the transactions contemplated by this Agreement or otherwise prevent such Seller Party from complying with the terms of this Agreement.
5A.7 Brokers. Except as set forth on Schedule 5A.7, no Person has acted directly or indirectly as a broker, finder or financial advisor for such Seller Party in connection with the negotiations relating to the transactions contemplated by this Agreement, and no Person is entitled to any fee or commission or like payment in respect thereof based in any way on any agreement, arrangement or understanding made by or on behalf of such Seller Party.
5A.8 Activities of the Company. The Company was formed solely for the purpose of holding equity interests in CCCS Holdings and activities incidental thereto. Except for its ownership of equity interests in CCCS Holdings and activities incidental thereto, the Company has not conducted any business or operations. Except as set forth on Schedule 5.A.8 and except for its ownership of equity interests in CCCS Holdings, the Company has no assets. Except for any liability in respect of Taxes, the Company has no liabilities.
ARTICLE 6: REPRESENTATIONS AND WARRANTIES
OF THE BUYER AND CHECKSMART
Except as set forth in the Buyer Disclosure Schedules, the Buyer and Checksmart represent and warrant to the Seller Parties as follows:
6.1 Existence and Good Standing. The Buyer is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of Ohio and is duly authorized, qualified or licensed to do business as a foreign corporation in each of the jurisdictions set forth on Schedule 6.1, which are the only jurisdictions in which it is required to be so qualified, except to the extent the failure to be so qualified or licensed would not reasonably be expected to have a Buyer Material Adverse Effect. Each of the Merger Subs and Checksmart is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of Delaware. Checksmart is duly authorized, qualified or licensed to do business as a foreign corporation in each of the jurisdictions set forth on Schedule 6.1, which are the only jurisdictions in which it is required to be so qualified, except to the extent the failure to be so qualified or licensed would not reasonably be expected to have a Buyer Material Adverse Effect. Each of Checksmarts Subsidiaries is a corporation or limited liability company, as applicable, duly incorporated or formed, as applicable, validly existing and in good standing under the Laws of its jurisdiction of incorporation or formation, as applicable, and is duly authorized, qualified or licensed to do business as a foreign corporation or limited liability company, as applicable, in each jurisdiction in which the nature of its business makes such qualification necessary, other than in such jurisdictions where the failure to be so qualified or licensed would not reasonably be expected to have a Buyer Material Adverse Effect. The Buyer Parties have made available to the Seller Representative true, complete and correct copies of the certificate of incorporation or formation and bylaws or limited liability company agreement (or comparable organizational documents) of the Checksmart Parties, each as currently in effect and reflecting any and all amendments thereto. Such organizational documents are in full force and effect and none of the Checksmart Parties is in violation of any provision thereof.
6.2 Power. Each of the Checksmart Parties has the requisite corporate or limited liability company power and authority to (a) own, operate and lease its respective properties and assets as and where currently owned, operated and leased and (b) carry on its respective business as currently conducted, in each case, except as would not reasonably be expected to result in a Buyer Material Adverse Effect.
6.3 Validity and Enforceability. Each of the Buyer Parties has the requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement and the Ancillary Agreements. The execution, delivery and performance of this Agreement and the Ancillary Agreements, and the consummation of the transactions contemplated hereby and thereby, have been duly and validly authorized by all necessary corporate or stockholder action on the part of each of the Buyer Parties. This Agreement and each of the Ancillary Agreements have been duly executed and delivered by the Buyer Parties and, assuming due authorization, execution and delivery by the other parties hereto and thereto, represent the legal, valid and binding obligation of the Buyer Parties, enforceable against the Buyer Parties in accordance with their respective terms, subject to the General Enforceability Exceptions.
6.4 Capitalization.
(a) The Buyer. The authorized capital stock of the Buyer consists of 8,000,000 shares of Buyer Stock, of which one (1) share is issued and outstanding, which share has been duly authorized and validly issued, is fully paid and non-assessable and was issued in compliance with all applicable securities Laws and any preemptive rights or rights of first refusal of any Person. The one (1) issued and outstanding share of Buyer Stock represents the only issued and outstanding shares of capital stock of the Buyer. No shares of capital stock are held by the Buyer as treasury stock. There are no outstanding options, warrants, rights, calls, subscriptions, claims of any character, agreements, obligations, convertible or exchangeable securities or other commitments, contingent or otherwise, of any kind obligating the Buyer to issue, directly or indirectly, any additional shares of its capital stock or other equity securities. Schedule 6.4(a) sets forth a true and complete statement of the capitalization of the Buyer as of the date hereof and as of the time immediately following the Closing. There are no Contracts relating to the issuance, sale, transfer or voting of any equity securities or other securities of the Buyer, and there is no obligation, contingent or otherwise, of the Buyer to repurchase, redeem or otherwise acquire any shares of capital stock or other equity securities of the Buyer or provide funds to, or make any investment in (in the form of a loan, capital contribution or otherwise), or provide any Guarantee with respect to the obligations of, any other Person. There are no bonds, debentures, notes or other Indebtedness of the Buyer having the right to vote or consent (or convertible into or exchangeable for securities of the Buyer having the right to vote or consent) on any matters on which the shareholders of the Buyer may vote. Except as set forth on Schedule 6.4(a), the Buyer has no Subsidiaries and no Investments.
(b) Checksmart. The authorized capital stock of Checksmart consists of 1,200,000 shares of Checksmart Stock, of which 1,023,256 shares are issued and outstanding, and all of which have been duly authorized and validly issued, are fully paid and non-assessable and were issued in compliance with all applicable securities Laws and any preemptive rights or rights of first refusal of any Person. The 1,023,256 issued and outstanding shares of Checksmart Stock represent the only issued and outstanding shares of capital stock of Checksmart. No shares of capital stock are held by Checksmart as treasury stock. Except as set forth on Schedule 6.4(b), there are no outstanding options, warrants, rights, calls, subscriptions, claims of any character, agreements, obligations, convertible or exchangeable securities or other commitments, contingent or otherwise, of any kind obligating Checksmart to issue, directly or indirectly, any additional shares of its capital stock or other equity securities. Schedule 6.4(b) sets forth a true and complete statement of the capitalization of Checksmart as of the date hereof and as of the time immediately following the Closing. Except as set forth on Schedule 6.4(b), there are no Contracts relating to the issuance, sale, transfer or voting of any equity securities or other securities of Checksmart, and there is no obligation, contingent or otherwise, of Checksmart to repurchase, redeem or otherwise acquire any shares of capital stock or other equity securities of Checksmart or provide funds to, or make any investment in (in the form of a loan, capital contribution or otherwise), or provide any Guarantee with respect to the obligations of, any other Person. There are no bonds, debentures, notes or other Indebtedness of Checksmart having the right to vote or consent (or convertible into
or exchangeable for securities of Checksmart having the right to vote or consent) on any matters on which the stockholders of Checksmart may vote. Except as set forth on Schedule 6.4(b), Checksmart has no Subsidiaries and no Investments.
(c) Subsidiaries. All of the issued and outstanding equity securities of Checksmarts Subsidiaries have been duly authorized and validly issued, are fully paid and non-assessable (as applicable) and were issued in compliance with all applicable securities Laws and any preemptive rights or rights of first refusal of any Person. There are no outstanding options, warrants, rights, calls, subscriptions, claims of any character, agreements, obligations, convertible or exchangeable securities or other commitments, contingent or otherwise, of any kind obligating any such Subsidiary to issue, directly or indirectly, any additional shares of its capital stock or other equity securities. No shares of capital stock or equity interests, as applicable, are held by such Subsidiary as treasury stock or treasury security, as applicable. There are no agreements, commitments or contracts relating to the issuance, sale, transfer or voting of any equity securities or other securities of any such Subsidiary. There is no obligation, contingent or otherwise, of any such Subsidiary to repurchase, redeem or otherwise acquire any shares of the capital stock or other equity securities of such Subsidiary or provide funds to, or make any investment in (in the form of a loan, capital contribution or otherwise), or provide any Guarantee with respect to the obligations of, any other Person. There are no bonds, debentures, notes or other Indebtedness of such Subsidiary having the right to vote or consent (or convertible into or exchangeable for securities of such Subsidiary having the right to vote or consent) on any matters on which the members or stockholders of such Subsidiary may vote. Checksmart or Checksmart Financial has good and marketable title to all of the issued and outstanding equity securities of its respective Subsidiaries (other than with respect to Latin Card Strategy, LLC, in which it holds an approximately 53.8% ownership interest), free and clear of all Liens other than Liens arising under federal and state securities Laws.
(d) Each of the Merger Subs was formed solely for the purpose of effecting the transactions contemplated by this Agreement. Except as contemplated by this Agreement or the High Yield Offering (or any revolving credit facility made available in connection therewith or upon the closing thereof), since incorporation, neither of the Merger Subs has held any assets, incurred any liabilities or carried on any business activities.
6.5 No Conflict. Except as set forth on Schedule 6.5, neither the execution and delivery of this Agreement or the Ancillary Agreements by any of the Buyer Parties, nor the performance by any of the Buyer Parties of its obligations hereunder or thereunder, will (a) violate or conflict with (i) the certificate of incorporation or bylaws (or comparable organizational documents) or (ii) any Law or Order applicable to any of the Buyer Parties or by which any of its properties or assets are bound, which violation of any such Law or Order would reasonably be expected to result in a Buyer Material Adverse Effect, (b) violate, conflict with or result in a breach or termination of, or otherwise give any Person additional rights or compensation under, or the right to terminate or accelerate, or constitute (with notice or lapse of time, or both) a default under the terms of any Contract to which any of the Buyer Parties is a party or by which any of its assets or properties are bound, in the case of any Contract
individually, that would reasonably be expected to result in a Buyer Material Adverse Effect or (c) result in the creation or imposition of any Lien (other than restrictions under applicable securities Laws) with respect to, or otherwise have an adverse effect upon, any of the equity securities of any of the Buyer Parties or the properties or assets of any of the Buyer Parties, in each case, that would reasonably be expected to result in a Buyer Material Adverse Effect.
6.6 Required Governmental Filings and Consents. Except (a) as set forth on Schedule 6.6, (b) as may be required under the HSR Act, and (c) for the filing of the CCCS Certificate of Merger and the Checksmart Certificate of Merger with the Secretary of State of the State of Delaware, no consent, approval, order or authorization of, notice to, or registration, declaration or filing with, any Governmental Authority is required in connection with the execution and delivery by the Buyer Parties of this Agreement or the Ancillary Agreements or the consummation of the transactions contemplated hereby or thereby.
6.7 Real Property.
(a) Leased Real Property. Schedule 6.7(a) sets forth a true and complete description of all Leased Real Property of the Checksmart Parties. To the Knowledge of the Buyer, the applicable Checksmart Party has a valid and subsisting leasehold estate in such Leased Real Property. To the Knowledge of the Buyer, a true and correct copy of each Real Property Lease with respect to such Leased Real Property has been made available to the Seller Representative, and no material changes have been made to any Real Property Leases since the date provided. All of the Leased Real Property is used or occupied by the applicable Checksmart Party pursuant to a Real Property Lease. To the Knowledge of the Buyer, with respect to each Real Property Lease: (i) such Real Property Lease is a valid, binding and enforceable obligation of the applicable Checksmart Party in accordance with its terms, subject to the General Enforceability Exceptions, and is in full force and effect, (ii) all rents, deposits and additional rents due pursuant to such Real Property Lease have been paid in full and no security deposit or portion thereof has been applied in respect of a material breach or material default under such Real Property Lease that has not been redeposited in full, (iii) there is no existing material breach or material default by the applicable Checksmart Party, or the lessor, under any such Real Property Lease, and no event has occurred that (with notice, lapse of time or both) would reasonably be expected to constitute such a material breach or material default under any such Real Property Lease by the applicable Checksmart Party or give the applicable Checksmart Party or the lessor thereunder the right to terminate, accelerate or modify in any material respect any such Real Property Lease, and (iv) no Checksmart Party has received any notice that it is in material default under any such Real Property Lease which has not been cured in all material respects (it being understood that no representation or warranty is given hereby as to any notices required to be given or consents required to be obtained under any such Real Property Lease in connection with the transactions contemplated hereby). Except as disclosed on Schedule 6.7(a), no Affiliate of the Checksmart Parties is the owner or lessor of any Leased Real Property. The Leased Real Property is in good condition and repair (subject to normal wear and tear). To the Knowledge of the Buyer, no Checksmart Party has subleased, licensed or otherwise granted any Person the right to use or occupy any of the Leased Real Property. No Checksmart Party owns any interest in any real property.
(b) Absence of Violations. None of the leasing, occupancy or use of the Leased Real Property by the Checksmart Parties is in violation of any Law in any material respect, including any building, zoning, environmental or other Law. To the Knowledge of the Buyer, the condition and use of the Leased Real Property by the Checksmart Parties conforms to each certificate of occupancy and Checksmart Material Permit issued in connection with the Leased Real Property. Each of the Checksmart Parties has obtained all Permits necessary for and material to the operation of its business at the Leased Real Property.
6.8 Personal Property. To the Knowledge of the Buyer, each of the Checksmart Parties has good and marketable title to, or a valid leasehold interest in, all of its respective tangible material personal property and material assets free and clear of all Liens other than Permitted Liens. To the Knowledge of the Buyer, the material tangible personal property and material assets of the Checksmart Parties are free from defects and in good operating condition and repair (subject to normal wear and tear).
6.9 Litigation and Orders.
(a) Except as set forth on Schedule 6.9 (a) there are no Proceedings pending or, to the Knowledge of the Buyer, threatened against any of the Checksmart Parties or their respective business, operations or assets. There are no Proceedings pending or, to the Knowledge of the Buyer, threatened that question the legality, validity or enforceability of this Agreement, the Ancillary Agreements or any of the transactions contemplated hereby or thereby or that would, individually or in the aggregate, reasonably be expected to materially impair the ability of the Buyer Parties to perform on a timely basis their obligations under this Agreement or the Ancillary Agreements. Schedule 6.9 lists all Proceedings to which any Checksmart Party was a defendant or in which a counter claim was filed against any Checksmart Party during the past three (3) years (whether or not settled), in each case, with a claimed (or counterclaimed, as applicable) amount in excess of $25,000. None of the pending or threatened Proceedings set forth on Schedule 6.9, if adversely determined, would reasonably be expected to result in a Buyer Material Adverse Effect.
(b) There is no Order to which any Checksmart Party, or any of the assets owned or used by any Checksmart Party, is subject. Each of the Checksmart Parties has been in compliance in all material respects with all of the terms and requirements of each Order to which it, or any of the assets owned or used by it, is or has been subject. To the Knowledge of the Buyer, no Checksmart Party has received any written notice from any Governmental Authority or any other Person regarding any actual or alleged violation of, or failure to comply in any material respect with, any term or requirement of any Order to which it, or any of the assets owned or used by it, is subject.
(c) There is no Order pending or, to the Knowledge of the Buyer, threatened against any Checksmart Party that charges a Checksmart Party with the (or indicates that any of such parties are in) violation of or noncompliance with any Law or Permit. There is no Order or Proceeding pending or, to the Knowledge of the Buyer, threatened against any Checksmart Party that would give any Person the right to enjoin or rescind the
transactions contemplated by this Agreement or otherwise prevent the consummation of the transactions contemplated hereby.
6.10 Compliance with Laws. Except as set forth on Schedule 6.10, each of the Checksmart Parties is now, and has been for the past three (3) years, in compliance in all material respects with all applicable Laws and Orders, including the Bank Secrecy Act, U.S.A. Patriot Act, Gramm-Leach Bliley Act, Consumer Reporting Employment Clarification Act, Consumer Collection Credit Act, Fair Debt Collection Practices Act, Fair Credit Reporting Act, all truth-in lending related Laws, all anti-money laundering and know your customer Laws, all usury and consumer protection related Laws, and all debt collection Laws. Except as set forth on Schedule 6.10, to the Knowledge of the Buyer, no Checksmart Party has received any written notice from any Governmental Authority or any other Person regarding (a) any actual or alleged violation of, or failure to comply in any material respect with, any applicable Law, or (b) any actual or alleged material obligation or material liability of any Checksmart Party under any applicable Law. Each of the Checksmart Parties has implemented a written anti-money laundering compliance program that complies in all material respects with all applicable Laws (a true and correct copy of which has been made available to the Seller Representative), and has operated its business for the past three (3) years in compliance in all material respects with such program. Checksmart has made available its form of truth and lending agreement and such other material forms that it uses in the Ordinary Course of Business (a true and correct copy of the current form of which has been made available to the Seller Representative) to each of its loan applicants.
6.11 Conduct of Business. Since December 31, 2010, the business and operations of the Checksmart Parties have been conducted in the Ordinary Course of Business and since December 31, 2010, there has not occurred a Buyer Material Adverse Effect. Without limiting the generality of the foregoing, since December 31, 2010 and except as set forth on Schedule 6.11, none of the Checksmart Parties has:
(a) incurred or become subject to any Indebtedness greater than $100,000 except (i) current liabilities incurred in the Ordinary Course of Business, (ii) liabilities under Contracts entered into in the Ordinary Course of Business, and (iii) borrowings under the Checksmart Credit Agreement;
(b) (i) Guaranteed the Indebtedness of any Person, (ii) cancelled any Indebtedness owed to it or (iii) released any claim possessed by it, in each case, in excess of $100,000 or outside the Ordinary Course of Business;
(c) made any material change in the Tax reporting or accounting principles, practices or policies, including with respect to (i) depreciation or amortization policies or rates or (ii) the payment of accounts payable or the collection of accounts receivable;
(d) changed, rescinded or made any material Tax election, filed any amended Tax Return, entered into any closing agreement, consented to any extension or waiver of the limitation period applicable to any Tax claim in excess of $100,000, settled any Tax claim or assessment in excess of $100,000 or surrendered any right to claim a Tax refund;
(e) suffered any theft, damage, destruction or loss (not covered by insurance) of or to any tangible asset or assets having a value in excess of $50,000 individually or $100,000 in the aggregate;
(f) other than in the Ordinary Course of Business, (i) increased the salary, wages or other compensation rates of any officer, employee, manager, director or consultant, other than pursuant to an agreement in existence on December 31, 2010, (ii) made or granted any increase in any Checksmart Employee Plan, or amended or terminated any existing Checksmart Employee Plan, or adopted any new Checksmart Employee Plan other than as required by Law or an existing contract, (iii) paid any bonus, in cash or any other form, to any officer, employee, manager, director or consultant, or (iv) made any commitment or incurred any liability to any labor organization;
(g) sold, assigned, transferred (including transfers to any employees, stockholders, members or Affiliates), licensed or subjected to any Lien any tangible or intangible assets or properties having a value in excess of $50,000 individually or $100,000 in the aggregate, other than sales of inventory in the Ordinary Course of Business;
(h) authorized or made any capital expenditures or commitments therefor in excess of $50,000 individually or $100,000 in the aggregate;
(i) amended its certificate of formation or incorporation, limited liability company agreement or bylaws (or comparable organizational documents);
(j) declared or paid any dividends or distributions with respect to any equity securities or redeemed or purchased, directly or indirectly, any equity securities;
(k) issued or sold any equity securities or split, combined or subdivided any equity securities;
(l) instituted or settled any Proceeding that involved more than $100,000;
(m) made any write-off or write-down of or made any determination to write-off or write-down any of its assets and properties in excess of $100,000;
(n) entered into any amendment, modification, termination (partial or complete) or granted any waiver under or given any consent with respect to any Checksmart Material Contract other than in the Ordinary Course of Business;
(o) licensed in or purchased any Intellectual Property that is material to its business or licensed out or otherwise permitted any Person to use any Owned Intellectual Property, in each case, other than in the Ordinary Course of Business;
(p) commenced or terminated any line of business; or
(q) agreed to do any of the foregoing.
6.12 Labor Matters.
(a) Union and Employee Contracts. Except as set forth on Schedule 6.12(a), none of the Checksmart Parties is a party to or bound by any union contract, collective bargaining agreement, employment contract, independent contractor agreement, consultation agreement or other similar type of contract. None of the Checksmart Parties has agreed to recognize any union or other collective bargaining representative. To the Knowledge of the Buyer, no union or collective bargaining representative has been certified as representing the employees of the Checksmart Parties. To the Knowledge of the Buyer, no organizational attempt has been made or threatened by or on behalf of any labor union or collective bargaining representative with respect to any employees of the Checksmart Parties during the past three (3) years. None of the Checksmart Parties has experienced any labor strike, dispute, slowdown or stoppage or any other material labor difficulty during the past three (3) years.
(b) List of Workers, Etc. To the Knowledge of the Buyer, Schedule 6.12(b) sets forth an accurate and complete list, as of the date of this Agreement, of all (i) Workers that are employees of the Checksmart Parties (including each such Workers name, title or position, present annual or hourly compensation, designation as exempt or nonexempt and years of service), and (ii) Workers who are classified as independent contractors (including the respective compensation of each such Worker) currently performing services for the Checksmart Parties. None of the Checksmart Parties is delinquent in payments to any such Worker for any material wages, salaries, commissions, bonuses or other compensation for any services performed by any such Worker or for any other amounts required to be reimbursed by the Checksmart Parties to any such Worker (including vacation, sick leave, other paid time off or severance pay). Except as set forth on Schedule 6.12(b), since December 31, 2010, none of the Checksmart Parties has increased the salary of any employee with an annual base salary of more than $100,000 by more than 7% or granted an increase in bonus of more than $5,000. Except as set forth on Schedule 6.12(b), no Checksmart Party employs any employee who cannot be dismissed immediately, whether currently or immediately after the transactions contemplated by this Agreement and the Ancillary Agreements, without notice and without further liability to the applicable Checksmart Party, subject to applicable Laws relating to employment discrimination.
(c) WARN Act. The Checksmart Parties are in compliance in all material respects with the WARN Act and any similar Laws regarding redundancies, reductions in force, mass layoffs, and plant closings, including with respect to all obligations to promptly and correctly furnish all notices required to be given thereunder in connection with any redundancy, reduction in force, mass layoff or plant closing to affected employees, representatives, any state dislocated worker unit and local government officials, or any other Governmental Authority. No Checksmart Party has taken any action that would constitute a mass layoff or plant closing within the meaning of the WARN Act or would otherwise trigger notice requirements or liability under any other comparable state or local Law in the United States.
(d) IRCA. To the Knowledge of the Buyer, all current employees of the Checksmart Parties who work in the United States are, and all former employees of the Checksmart Parties who worked in the United States whose employment terminated, voluntarily or involuntarily, within the one (1) year prior to the Closing Date, were legally authorized to work in the United States. To the Knowledge of the Buyer, each of the Checksmart Parties has completed and retained the necessary employment verification paperwork under the IRCA for the employees hired prior to the Closing Date. Each of the Checksmart Parties is and has been for the past three (3) years in compliance in all material respects with both the employment verification provisions (including the paperwork and documentation requirements) and the anti-discrimination provisions of IRCA.
(e) Unemployment, Social Security and Other Benefits. None of the Checksmart Parties is liable for any material payment to any trust or other fund or to any Governmental Authority with respect to unemployment compensation benefits, social security or other benefits or obligations for employees (other than routine payments to be made in the Ordinary Course of Business). Except as set forth on Schedule 6.12(e), there are no pending claims against the Checksmart Parties under any workers compensation plan or policy or for long term disability.
(f) Manuals, Handbooks, Policies, etc. To the Knowledge of the Buyer, true and complete copies have been made available to the Seller Representative of the material written personnel manuals, handbooks, policies, rules or procedures applicable to any employee of the Checksmart Parties.
(g) Compliance and Investigations. None of the Checksmart Parties is a party to, or otherwise bound by, any Order by or of any Governmental Authority relating to employees or employment practices other than wage garnishments. Except as set forth on Schedule 6.9, to the Knowledge of the Buyer, none of the Checksmart Parties nor any of their executive officers has received within the past three (3) years from any Governmental Authority responsible for the enforcement of labor or employment laws any notice of intent to conduct an investigation relating to the Checksmart Parties and no such investigation is in progress. Except as set forth on Schedule 6.9, the Checksmart Parties are in compliance in all material respects with all Laws respecting Employment Practices.
(h) Litigation With Workers. Except as set forth on Schedule 6.9, there are no material claims, disputes, grievances or controversies pending or, to the Knowledge of the Buyer, threatened involving any Worker or group of Workers. Except as set forth on Schedule 6.9, there are no charges, investigations, administrative proceedings or formal complaints relating to any Employment Practices pending or, to the Knowledge of the Buyer, threatened before the Equal Employment Opportunity Commission, the National Labor Relations Board, the U.S. Department of Labor, the U.S. Occupational Health and Safety Administration, the Workers Compensation Appeals Board or any other Governmental Authority against the Checksmart Parties pertaining to any Worker.
6.13 Employee Benefit Plans.
(a) Schedule 6.13(a) sets forth a complete list of (i) all employee benefit plans, as defined in Section 3(3) of ERISA, (ii) all other material severance pay, salary continuation, bonus, incentive, stock option, retirement, pension, profit sharing or deferred compensation plans, contracts, programs, funds or arrangements of any kind and (iii) all other material employee benefit plans, contracts, programs, funds or arrangements (whether written or oral, qualified or nonqualified, funded or unfunded, foreign or domestic, currently effective or terminated) and any trust, escrow or similar agreement related thereto, whether or not funded, in respect of any present or former employees, directors, managers, officers, members, stockholders, consultants, or independent contractors of any of the Checksmart Parties or any member of their Controlled Group that are sponsored or maintained by any of the Checksmart Parties or any member of their Controlled Group or with respect to which any of the Checksmart Parties or any member of their Controlled Group has made or is required to make payments, transfers, or contributions or has any liability, including as a result of any of the Checksmart Parties, together with any other Person who is a member of the Controlled Group, being treated as a single employer under Section 414 of the Code (all of the above being individually or collectively referred to as Checksmart Employee Plan or Checksmart Employee Plans, respectively). None of the Checksmart Parties has any material liability with respect to any plan, arrangement or practice of the type described in the preceding sentence other than the Checksmart Employee Plans.
(b) To the Knowledge of the Buyer, true and complete copies of the following materials have been made available to the Seller Representative, to the extent applicable: (i) all current plan documents for each Checksmart Employee Plan or, in the case of an unwritten Checksmart Employee Plan, a written description of such Checksmart Employee Plan; (ii) all determination letters from the IRS with respect to any of the Checksmart Employee Plans; (iii) all current summary plan descriptions, summaries of material modifications, annual reports and summary annual reports with respect to any of the Checksmart Employee Plans; and (iv) all current trust agreements, insurance contracts and other documents relating to the funding or payment of benefits under any Checksmart Employee Plan.
(c) Each Checksmart Employee Plan has been maintained, operated and administered in compliance in all material respects with its terms and any related documents or agreements and in compliance in all material respects with all applicable Laws. To the Knowledge of the Buyer, there have been no non-exempt prohibited transactions or breaches of any of the duties imposed on fiduciaries (within the meaning of Section 3(21) of ERISA) by ERISA with respect to the Checksmart Employee Plans that could result in any material liability or excise Tax under ERISA or the Code being imposed on the Checksmart Parties.
(d) Each Checksmart Employee Plan intended to be qualified under Section 401(a) of the Code is so qualified and has been determined by the IRS to be so qualified, or the IRS has issued a favorable opinion letter on the prototype document and, to the Knowledge of the Buyer, nothing has occurred since the date of any such
determination that would reasonably be expected to give the IRS grounds to revoke such determination.
(e) No amount that could be received (whether in cash or property or vesting of property) as a result of any of the transactions contemplated by this Agreement by any employee, officer, manager or director of the Checksmart Parties or any of their Affiliates who is a disqualified individual (as such term is defined in Treasury Regulation Section 1.280G-1) under any employment, severance or termination agreement, other compensation arrangement or Checksmart Employee Plan currently in effect would be characterized as an excess parachute payment (as such term is defined in Section 280G(b)(1) of the Code).
(f) None of the Checksmart Parties nor any member of their Controlled Group has an obligation to contribute to or any liability with respect to a defined benefit plan as defined in Section 3(35) of ERISA, a pension plan subject to the funding standards of Section 302 of ERISA or Section 412 of the Code, a multiemployer plan as defined in Section 3(37) of ERISA or Section 414(f) of the Code or a multiple employer plan within the meaning of Section 210(a) of ERISA or Section 413(c) of the Code.
(g) With respect to each group health plan benefiting any current or former employee of any of the Checksmart Parties or any member of their Controlled Group that is subject to Section 4980B of the Code, the Checksmart Parties and each member of their Controlled Group has complied in all material respects with the continuation coverage requirements of Section 4980B of the Code and Part 6 of Subtitle B of Title I of ERISA.
(h) No Checksmart Employee Plan is funded through a welfare benefit fund as defined in Section 419(e) of the Code, and no benefits under any Checksmart Employee Plan are provided through a voluntary employees beneficiary association (within the meaning of subsection 501(c)(9) of the Code) or a supplemental unemployment benefit plan (within the meaning of Section 501(c)(17) of the Code).
(i) There is no pending or, to the Knowledge of the Buyer, threatened Proceeding of any kind before any Governmental Authority with respect to any Checksmart Employee Plan (other than routine claims for benefits.
(j) Except as would not reasonably be expected to result in a material liability to the Checksmart Parties, all (i) insurance premiums required to be paid with respect to, (ii) benefits, expenses and other amounts due and payable under, and (iii) contributions, transfers or payments required to be made to, any Checksmart Employee Plan prior to the Closing Date will have been paid, made or accrued on or before the Closing Date. With respect to any insurance policy providing funding for benefits under any Checksmart Employee Plan, to the Knowledge of the Buyer, there is no material liability of the Checksmart Parties in the nature of a retroactive rate adjustment, loss sharing arrangement or other actual or contingent liability other than for premiums in the
Ordinary Course of Business, nor would there be any such material liability if such insurance policy was terminated on the Closing Date.
(k) No Checksmart Employee Plan provides post-employment welfare benefits other than coverage mandated by Law.
(l) The execution and performance of this Agreement and the Ancillary Agreements will not (i) constitute a stated triggering event under any Checksmart Employee Plan that will result in any payment (whether of severance pay or otherwise) becoming due from any Checksmart Party to any current or former officer, employee, manager, director or consultant (or dependents of such Persons) or (ii) accelerate the time of payment or vesting or increase the amount of compensation due to any current or former officer, employee, manager, director or consultant (or dependents of such Persons) of the Checksmart Parties.
(m) None of the Checksmart Parties has agreed or committed to institute any plan, program, arrangement or agreement for the benefit of its employees or former employees other than the Checksmart Employee Plans, or to make any amendments to any of the Checksmart Employee Plans. Subject to such constraints as may be imposed by Law, the Checksmart Parties have the right to amend or terminate each Checksmart Employee Plan that is a group retirement or group welfare benefit plan. No Checksmart Employee Plan provides benefits to any Person who is not a current or former employee of the Checksmart Parties, or the dependents or other beneficiaries of any such current or former employee. None of the Checksmart Parties currently maintains, contributes to or is otherwise obligated under, any Foreign Plans.
(n) To the Knowledge of the Buyer, all contributions required to be paid with respect to workers compensation arrangements of the Checksmart Parties have been made or accrued in accordance with GAAP as a liability in the Checksmart Financial Statements.
(o) With respect to each Checksmart Employee Plan that is a nonqualified deferred compensation plan subject to Section 409A of the Code, none of the Checksmart Parties has any obligation to any person to cause any such Checksmart Employee Plan to comply with Section 409A of the Code or to provide any gross-up or similar payment to any person in the event any such Checksmart Employee Plan fails to comply with Section 409A of the Code.
This Section 6.13 sets forth the sole representations and warranties of the Buyer and Checksmart with respect to ERISA and employee benefits, including all matters regarding the Checksmart Employee Plan.
6.14 Environmental. To the Knowledge of the Buyer, except as set forth on Schedule 6.14:
(a) (i) There are no underground tanks and related pipes, pumps and other facilities at the Real Property of the Checksmart Parties containing Hazardous Materials that are the responsibility of the Checksmart Parties and that would reasonably be
expected to give rise to a material liability of the Checksmart Parties under any Environmental Law; and (ii) there is no asbestos nor any asbestos-containing materials used in, applied to or in any way incorporated in any building, structure or other form of improvement on such Real Property that are the responsibility of the Checksmart Parties and that would reasonably be expected to give rise to a material liability of the Checksmart Parties under any Environmental Law.
(b) Each of the Checksmart Parties is presently, and for the past three (3) years has been, in compliance in all material respects with all Environmental Laws applicable to such Real Property or to the Checksmart Parties business operations.
(c) (i) None of the Checksmart Parties has generated, manufactured, refined, transported, treated, stored, handled, disposed, transferred, produced or processed any Hazardous Materials at or upon such Real Property, except in compliance in all material respects with all applicable Environmental Laws; and (ii) there has been no Release of any Hazardous Material by the Checksmart Parties at such Real Property that would reasonably be expected to result in a material liability of the Checksmart Parties under any Environmental Law.
(d) None of the Checksmart Parties has within the past three (3) years (i) entered into or been subject to any Order with respect to such Real Property; (ii) received notice under the citizen suit provisions of any Environmental Law; (iii) received any request for information, notice, demand letter, administrative inquiry or formal or informal complaint or claim with respect to any material liability under any Environmental Laws; or (iv) been subject to or threatened with any governmental or citizen enforcement action with respect to any material liability under any Environmental Law.
(e) (i) There currently are effective all material Permits required under any Environmental Law that are necessary for the Checksmart Parties activities and operations at such Real Property as currently conducted; and (ii) any applications for renewal of such material Permits have been submitted on a timely basis to the extent required under any Environmental Law.
(f) None of the Checksmart Parties has contractually agreed to assume any material liability of any other Person relating to or arising from any Environmental Law.
(g) Checksmart has made available to the Seller Representative copies of all material documents, records and information in its possession or reasonable control concerning environmental, health or safety liabilities, including previously conducted environmental audits and documents regarding any Release or disposal of Hazardous Materials by the Checksmart Parties at, upon or from such Real Property or formerly owned or leased property.
This Section 6.14 sets forth the sole representations and warranties of the Buyer and Checksmart with respect to environmental matters, including with respect to any Environmental Law, Hazardous Material or Release.
6.15 Material Contracts.
(a) Schedule 6.15 sets forth each Contract (and in the case of an oral Contract, the material terms of such Contract) to which any of the Checksmart Parties is a party to or to which any of the assets the Checksmart Parties are bound: (i) governing the borrowing of money or the Guarantee or the repayment thereof or granting of Liens (other than Permitted Liens) on any material property or asset of the Checksmart Parties, in each case, in excess of $100,000; (ii) providing for the employment of any Person with annual compensation in excess of $100,000, except for any Contract for at-will employment which may be terminated on 60 days or less prior notice without liability to the applicable Checksmart Party; (iii) containing covenants expressly limiting the freedom of the Checksmart Parties to compete in any line of business or with any Person or in any geographic area or market; (iv) providing a license to the Checksmart Parties to use any third party Intellectual Property (other than licenses for commercially available off-the-shelf Software) or providing to a third party a license to use any Intellectual Property; (v) with any directors, managers, officers, members or stockholders of the Checksmart Parties; (vi) providing for the future or ongoing purchase, maintenance or acquisition, or the sale, lease or furnishing, of materials, supplies, merchandise, property or equipment (including computer hardware or software or other property or services), in each case in excess of $100,000 annually or $200,000 in the aggregate; (vii) granting to any Person a first refusal, first offer or similar preferential right to purchase or acquire any material right, asset or property of the Checksmart Parties; (viii) providing for any offset, countertrade or barter arrangement in excess of $100,000 annually or $200,000 in the aggregate; (ix) containing a most favored nation pricing agreement or consignment arrangement with a customer or supplier; (x) involving a material distributor, sales representative, broker or advertising arrangement that by its express terms is not terminable by any of the Checksmart Parties at will or by giving notice of 30 days or less, without liability; (xi) involving a joint venture or partnership or involving the sharing of profits, losses, costs or liability by any of the Checksmart Parties with any other Person; (xii) involving management services, consulting services, independent contractor services, support services or any other similar services, in each case, in excess of $100,000 annually or $200,000 in the aggregate; (xiii) involving the acquisition of any business enterprise whether via stock or asset purchase or otherwise (but excluding the acquisition of inventory in the Ordinary Course of Business); (xiv) granting a power of attorney to any Person; (xv) with respect to a franchise agreement or arrangement; or (xvi) under which the amount payable by any of the Checksmart Parties is based on a royalty or earn-out in excess of $100,000 annually or $200,000 in the aggregate (the Contracts described in clauses (i)-(xvi) are each, a Checksmart Material Contract and collectively, the Checksmart Material Contracts).
(b) To the Knowledge of the Buyer, Checksmart has made available to the Seller Representative true and complete copies of each written Checksmart Material Contract, as amended. Each Checksmart Material Contract is a valid, binding and enforceable obligation of the applicable Checksmart Party and, to the Knowledge of the Buyer, the other parties thereto, enforceable in accordance with its terms, subject to the General Enforceability Exceptions. With respect to the Checksmart Material Contracts listed on Schedule 6.15 (or required to be listed on Schedule 6.15): (i) neither the
Checksmart Party party thereto nor, to the Knowledge of the Buyer, any other party thereto, is in material default under or in material violation of any such Checksmart Material Contract; (ii) to the Knowledge of the Buyer, no event has occurred that, with notice or lapse of time or both, would constitute such a material default or material violation; (iii) none of the Checksmart Parties has released any of its material rights under any such Checksmart Material Contract; and (iv) to the Knowledge of the Buyer, no party to any such Checksmart Material Contract has repudiated any of the material terms thereof or threatened in writing to terminate or cancel any such Checksmart Material Contract.
6.16 Permits. Schedule 6.16 sets forth a true and complete list of all Permits held by the Checksmart Parties and used by them in the conduct of their business which are material to their business (the Checksmart Material Permits). Each of the Checksmart Parties is in compliance in all material respects with the terms of the Checksmart Material Permits and there is no pending or, to the Knowledge of the Buyer, threatened termination, expiration, suspension, withdrawal or revocation of any of such Checksmart Material Permits. Except for the Permits set forth on Schedule 6.16, there are no Permits, whether written or oral, necessary or required for the conduct of the business of the Checksmart Parties which are material to their business. Except as expressly stated otherwise on Schedule 6.16, (i) each Permit listed on Schedule 6.16 is valid and in full force and effect and any applications for renewal of such Permits have been submitted on a timely basis to the extent required by the applicable Governmental Agency and (ii) except as would not reasonably be expected to result in a Buyer Material Adverse Effect, none of such Permits will lapse, terminate or expire solely as a result of the performance of this Agreement by the Buyer Parties or the consummation of the transactions contemplated hereby (and, for the avoidance of doubt, without taking into account any action taken by the Seller Parties, the Company or the Companys Subsidiaries after the Closing, with respect to which no representation or warranty is hereby made).
6.17 Intellectual Property.
(a) Schedule 6.17 sets forth a complete and correct list of all the following Owned Intellectual Property of the Checksmart Parties: (i) Patents, (ii) registered Copyrights and applications therefor; (iii) registered Trademarks and applications for registration of Trademarks; (iv) Domain Name registrations and applications therefor; and (v) Software. None of the Checksmart Parties owns any Software. To the Knowledge of the Buyer, all fees associated with maintaining any Owned Intellectual Property required to be set forth on Schedule 6.17 have been paid in full in a timely manner to the proper Governmental Authority and no such fees are due within the 3-month period after the Closing Date. Except as would not reasonably be expected to result in a Buyer Material Adverse Effect, (x) all of the Owned Intellectual Property required to be listed on Schedule 6.17 has been registered with, filed in or issued by, as the case may be, the United States Patent and Trademark Office, the United States Copyright Office or other applicable filing office(s), domestic or foreign, to the extent necessary to ensure protection under any applicable Intellectual Property Law, and such registrations, filings, issuances and other actions remain in full force and effect.
(b) Except pursuant to a Checksmart Material Contract set forth on Schedule 6.15 or as otherwise set forth on Schedule 6.17, to the Knowledge of the Buyer, all of the Intellectual Property used by the Checksmart Parties in the conduct of their business (other than commercially available off-the-shelf Software) is owned solely by a Checksmart Party and the Checksmart Parties have the exclusive right to use and possess such Intellectual Property for the life thereof for any purpose, free from (i) any Liens (except for Permitted Liens) and (ii) any requirement of any past, present or future royalty payments, license fees, charges or other payments or conditions or restrictions whatsoever, in each case, in excess of $100,000 annually or $200,000 in the aggregate. Except pursuant to a Checksmart Material Contract set forth on Schedule 6.15 or otherwise in the Ordinary Course of Business, none of the Checksmart Parties has licensed or otherwise granted any right to any Person under any Owned Intellectual Property or has otherwise agreed not to assert any such Owned Intellectual Property against any Person. To the Knowledge of the Buyer, no director, manager, officer, member, stockholder, employee, consultant, contractor, agent or other representative of a Checksmart Party owns or claims any material rights in (nor has any of them made application for) any Intellectual Property owned or used by any of the Checksmart Parties that is material to its business.
(c) The operation of the Checksmart Parties business as currently conducted and the possession or use of the Owned Intellectual Property does not infringe, misappropriate, dilute, violate or otherwise conflict with any Intellectual Property right of any other Person nor does the operation of the Checksmart Parties business constitute unfair competition or deceptive or unfair trade practice. To the Knowledge of the Buyer, none of the Owned Intellectual Property is being infringed or otherwise used or available for use by any Person other than the Checksmart Parties, except pursuant to a Checksmart Material Contract listed on Schedule 6.15. For the avoidance of doubt, this Section 6.17(c) sets forth the only representation or warranty by the Buyer and Checksmart regarding infringement, misappropriation, dilution, violation or other conflict by the Checksmart Parties with the Intellectual Property of any third party.
(d) No Proceeding is pending or, to the Knowledge of the Buyer, threatened, that (i) challenges the rights of any of the Checksmart Parties in respect of any Owned Intellectual Property, or (ii) asserts that the operation of the business of the Checksmart Parties is infringing or otherwise in violation of any Intellectual Property, or is (except as set forth in a Checksmart Material Contract listed on Schedule 6.15) required to pay any royalty, license fee, charge or other amount with regard to any Intellectual Property. None of the Owned Intellectual Property is or has in the past two (2) years been subject to any Order, and none of the Checksmart Parties has in the past two (2) years been subject to any Order in respect of any other Persons Intellectual Property.
(e) To the Knowledge of the Buyer, the Checksmart Parties have complied in all material respects at all times during the past three (3) years with all relevant requirements of any applicable data protection Law or Order, including compliance with the Checksmart Parties own published data protection policies, and requests from data subjects for access to data held by any of the Checksmart Parties. None of the Checksmart Parties has received any Order or other written notification from a
Governmental Authority regarding non-compliance or violation of any data protection Law. To the Knowledge of the Buyer, no Person has claimed any compensation from any of the Checksmart Parties for the loss of or unauthorized disclosure or transfer of personal data. The Checksmart Parties use commercially reasonable means, consistent with common industry practices, to protect the security and integrity of all Information Systems used by the Checksmart Parties.
This Section 6.17, together with part (iv) of Section 6.15(a) (and Section 6.15(b) in so far as it relates to part (iv) of Section 6.15(a)), sets forth the only representations or warranties of the Buyer and Checksmart regarding Intellectual Property.
6.18 Insurance. To the Knowledge of the Buyer, Schedule 6.18 sets forth a true and complete list (including all applicable premiums and deductibles) of all insurance policies to which any Checksmart Party is a party, named insured or otherwise the beneficiary of coverage. With respect to each such policy, to the Knowledge of the Buyer: (i) the policy is valid and enforceable and in full force and effect; (ii) the applicable Checksmart Party has paid all premiums due; (iii) there is no material breach or material default by any Checksmart Party, and the execution of this Agreement or the Ancillary Agreements and the consummation of the transactions contemplated hereby and thereby will not result in such material breach or material default; and (iv) no party to the policy has repudiated in writing any provision thereof. No written notice of cancellation or termination or non-renewal has been received by any of the Checksmart Parties with respect to any such policy during the past two (2) years.
6.19 Financial Statements.
(a) Schedule 6.19 sets forth true and complete copies of (i) the audited consolidated balance sheet of Checksmart and its Subsidiaries as of December 31, 2010, December 31, 2009 and December 31, 2008, and the related audited consolidated statement of income, stockholders equity and cash flows for the fiscal years then ended, together with the notes thereto (collectively, the Checksmart Financial Statements), and (ii) the unaudited consolidated balance sheet of Checksmart and its Subsidiaries as of February 28, 2011, and the related unaudited consolidated statement of income for the two-month period then ended (the Checksmart Interim Financial Statements).
(b) The Checksmart Financial Statements present fairly, in all material respects, the financial position, results of operations, stockholders equity and cash flows of Checksmart and its Subsidiaries at the dates and for the time periods indicated in accordance with GAAP. The Checksmart Interim Financial Statements present fairly, in all material respects, the financial position and results of operations of Checksmart and its Subsidiaries at the date and for the period indicated in accordance with GAAP, consistent with the Checksmart Financial Statements, except for the absence of footnote disclosure and the customary year-end adjustments. The Checksmart Financial Statements and the Checksmart Interim Financial Statements were derived from the books and records of Checksmart and its Subsidiaries. To the Knowledge of the Buyer, there has been no, and there does not currently exist, any fraud, nor the existence of or allegation of financial improprieties that involves management of any of the Checksmart Parties.
(c) Except as set forth on Schedule 6.19(c), to the Knowledge of the Buyer, none of the Checksmart Parties has any material liabilities (whether accrued, absolute, contingent, unliquidated or otherwise, whether due or to become due, whether known or unknown, regardless of when asserted) arising out of transactions or events entered into after the date of the Checksmart Interim Financial Statements except (i) liabilities reflected or reserved against in the Checksmart Interim Financial Statements, (ii) liabilities that have arisen after the date of the Checksmart Interim Financial Statements in the Ordinary Course of Business (none of which relates to breach of Contract, breach of warranty, tort, infringement, or violation of Law or Environmental liability), (iii) liabilities incurred in connection with the transactions contemplated by this Agreement, (iv) liabilities arising pursuant to the terms of any Contract to which any Checksmart Party is a party or to which any of their assets are bound (other than liabilities resulting from any pre-Closing breach of such Contract by the applicable Checksmart Party) or (v) liabilities set forth in the Buyer Disclosure Schedules, or which would be required to be so set out in the Buyer Disclosure Schedules if the representations and warranties set forth in this Article 6 which are qualified by Knowledge, materiality or Buyer Material Adverse Effect, or by monetary thresholds, or by date, time or temporal limitation, or by words of similar import, were not so qualified.
6.20 Bank Accounts; Names. Schedule 6.20 sets forth a true and complete list of (a) the name and address of each bank with which any Checksmart Party has an account or safe deposit box, (b) the name of each Person authorized to draw thereon or have access thereto and (c) the account number for each bank account of the Checksmart Parties. All names under which the Checksmart Parties do business are specified on Schedule 6.20, Schedule 6.17 or are listed on the Schedules to Section 6.4.
6.21 Books and Records. To the Knowledge of the Buyer, all books, records and accounts of the Checksmart Parties are accurate and complete in all material respects and are maintained in accordance with commercially reasonable business practice and are in compliance in all material respects with applicable Laws. To the Knowledge of the Buyer, the corporate minute books and stock/limited liability company unit transfer registers of the Checksmart Parties previously made available to the Seller Representative are true, correct and complete and accurately reflect, in each case, in all material respects, all corporate actions taken by the Checksmart Parties during the periods represented thereby.
6.22 Indebtedness. Schedule 6.22 sets forth a true and complete list of the individual components (indicating the amount and the Person to whom such amount is owed) of all (a) Indebtedness outstanding with respect to the Checksmart Parties as of the dates indicated thereon (including outstanding letters of credit) and (b) estimated Buyer Parties Selling Expenses.
6.23 Taxes. Except as set forth on Schedule 6.23:
(a) All income and other material Tax Returns required to be filed with any Taxing Authority with respect to any Pre-Closing Tax Period by or on behalf of the
Checksmart Parties, to the extent required to be filed on or before the Closing Date, have been filed when due in accordance with all applicable Laws.
(b) All income and other material Tax Returns with respect to Pre-Closing Tax Periods completely and correctly reflect the facts regarding the income, business, assets, operations, activities and status of the Checksmart Parties.
(c) None of the Checksmart Parties is currently a beneficiary of any extension of time within which to file any Tax Return.
(d) All Taxes owed by the Checksmart Parties (whether or not shown as due and payable on any Tax Return) have been timely paid to the appropriate Taxing Authority.
(e) The Checksmart Parties have withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, member, stockholder or other Person.
(f) No income or other material Tax Return of the Checksmart Parties with respect to any Pre-Closing Tax Period is currently being audited by any Taxing Authority.
(g) None of the Checksmart Parties has any Tax liabilities with respect to the income, property and operations of the Checksmart Parties, except for Tax liabilities (i) reflected in the Checksmart Financial Statements or (ii) that have arisen after the date of the Checksmart Financial Statements in the Ordinary Course of Business.
(h) None of the Checksmart Parties has granted or has had granted on its behalf any extension or waiver of the statute of limitations period applicable to any Tax Return, which period (after giving effect to such extension or waiver) has not yet expired.
(i) There is no Proceeding now pending or, to the Knowledge of the Buyer, threatened against or with respect to any of the Checksmart Parties in respect of any Tax.
(j) There are no Liens for Taxes upon the assets or properties of the Checksmart Parties, except for Permitted Liens.
(k) None of the Checksmart Parties has been a member of an affiliated, consolidated, combined or unitary group or participated in any other arrangement whereby any income, revenues, receipts, gain or loss was determined or taken into account for Tax purposes with reference to or in conjunction with any income, revenues, receipts, gain, loss, asset or liability of any other Person other than a group of which Checksmart was the parent.
(l) Schedule 6.23 contains a list of all states (whether foreign or domestic) to which any of the Checksmart Parties pays Taxes imposed on overall net income.
(m) None of the Checksmart Parties has any liability for the Taxes of any Person (other than any other Checksmart Party) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign Law), as a transferee or successor, by contract, or otherwise.
(n) None of the Checksmart Parties has received written notice of any claim by a Governmental Authority in a jurisdiction where it does not file Tax Returns that it is or may be subject to taxation by that Governmental Authority.
(o) None of the Checksmart Parties will be required to include any item of income in, or exclude any item of deduction from, taxable income for any period ending after the Closing Date (i) under Section 481 of the Code (or any similar provision of state, local or foreign Law) as a result of change in method of accounting for a Pre-Closing Tax Period, (ii) pursuant to the provisions of any agreement entered into with any Taxing Authority or pursuant to a closing agreement as defined in Section 7121 of the Code (or any similar provisions of state, local or foreign Law) executed on or prior to the Closing Date, (iii) as a result of the installment method of accounting, the completed contract method of accounting or the cash method of accounting with respect to a transaction that occurred prior to the Closing Date, (iv) as a result of any intercompany transactions or any excess loss account described in Section 1.1502-19 of the Treasury Regulations (or any similar provisions of state, local or foreign Law), (v) as a result of any prepaid amount received on or prior to the Closing Date or (vi) as a result of the discharge of any Indebtedness on or prior to the Closing Date under Section 108(i) of the Code.
(p) None of the Checksmart Parties is a party to any Tax sharing, allocation or indemnity agreement or arrangement that would require it to indemnify any other Person for Taxes.
(q) None of the Checksmart Parties has distributed the stock of another Person, or has had its stock distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Section 355 of the Code.
(r) None of the Checksmart Parties has participated in any reportable transaction as defined in Section 6707A of the Code or Treasury Regulation Section 1.6011-4 (or any predecessor provision).
(s) None of the Checksmart Parties has entered into any transaction that would result in a substantial understatement of federal income Tax within the meaning of Section 6662 of the Code if the treatment claimed by the applicable Checksmart Party were disallowed.
This Section 6.23 sets forth the sole representations and warranties of the Buyer and Checksmart with respect to all Tax matters.
6.24 Related Party Transactions. To the Knowledge of the Buyer, except as set forth on Schedule 6.24, none of the Checksmart Parties, nor any current or former manager, director, officer or employee of the Checksmart Parties has any direct or indirect interest (a) in or is a
manager, director, officer or employee of, any Person that is a client, customer, supplier, lessor, lessee, debtor, creditor or competitor of any of the Checksmart Parties (other than 5% stock ownership of publicly traded entities) or (b) in any material property, asset or right that is owned or used by any of the Checksmart Parties in the conduct of its business. There is no outstanding Indebtedness owed to the any of the Checksmart Parties by any current or former director, manager, officer, employee or consultant of the Checksmart Parties or any of their Affiliates.
6.25 Brokers. No Person has acted directly or indirectly as a broker, finder or financial advisor for the Checksmart Parties in connection with the negotiations relating to the transactions contemplated by this Agreement, and no Person is entitled to any fee or commission or like payment in respect thereof based in any way on any agreement, arrangement or understanding made by or on behalf of the Checksmart Parties.
6.26 Certain Payments. To the Knowledge of the Buyer, no Checksmart Party nor any director, manager, officer, employee, or other Person acting on behalf of any Checksmart Party, has directly or indirectly (a) made any contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other payment to any Person, private or public, regardless of form, whether in money, property, or services (i) to obtain favorable treatment in securing business for a Checksmart Party, (ii) to pay for favorable treatment for business secured by a Checksmart Party, (iii) to obtain special concessions or for special concessions already obtained, for or in respect of a Checksmart Party, or (iv) in violation of any Law, or (b) established or maintained any fund or asset with respect to the Checksmart Parties that has not be recorded in the books and records of the Checksmart Parties.
6.27 No Other Representations or Warranties. Except as expressly set forth in this Article 6, the Buyer and Checksmart make no other representation or warranty, express or implied, at law or in equity, and any such other representations or warranties are hereby expressly disclaimed including any implied representation or warranty as to condition, merchantability, suitability or fitness for a particular purpose. Notwithstanding anything to the contrary herein, (a) neither the Buyer nor Checksmart shall be deemed to make to the Seller Parties any representation or warranty other than as expressly made by such Person in this Article 6 and (b) the Buyer and Checksmart make no representation or warranty to the Seller Parties with respect to (i) any projections, estimates or budgets heretofore delivered to or made available to the Seller Parties or their respective counsel, accountants or advisors of future revenues, expenses or expenditures or future results of operations of any of the Checksmart Parties, or (ii) except as expressly covered by a representation and warranty contained in this Article 6, any other information or documents (financial or otherwise) made available to the Seller Parties or their respective counsel, accountants or advisors with respect to any of the Checksmart Parties.
6.28 No Claims. To the Knowledge of the Buyer, (a) no Checksmart Stockholder has any action, demand, charge, complaint or claim of any kind against or involving the Buyer, Checksmart or Checksmarts Subsidiaries arising out of or in any way relating to any matter, cause or thing, act or failure to act whatsoever occurring at any time on or prior to the Closing, (b) there is no basis for any of the foregoing and (c) none of the Buyer, Checksmart or Checksmarts Subsidiaries will have any obligation or liability from and after the Closing with respect thereto.
ARTICLE 7: COVENANTS
7.1 Conduct of Business. Except as otherwise expressly contemplated by this Agreement or except as consented to by the other party, during the period from the date of this Agreement to the Closing, each of (i) the Company and CCCS Holdings shall (and each shall cause their Subsidiaries to), on the one hand, and (ii) the Buyer and Checksmart shall (and each shall cause their Subsidiaries to), on the other hand (A) carry on its business in the Ordinary Course of Business and in compliance in all material respects with all Laws, (B) maintain its material properties and other material assets in good working condition (ordinary wear and tear excepted), and (C) to the extent consistent therewith, use its commercially reasonable efforts to preserve intact its current business organization and to keep available the services of its current officers and other key employees and preserve its relationships with those Persons with which it has material business dealings. Without limiting the generality of the foregoing, except as expressly contemplated by this Agreement or set forth on Schedule 7.1, during the period from the date of this Agreement to the Closing, neither (x) the Company nor CCCS Holdings shall (and neither shall allow their Subsidiaries to), on the one hand, and (y) the Buyer nor Checksmart shall (and neither shall allow their Subsidiaries to), on the other hand:
(a) (i) declare, set aside or pay any dividends or distributions in respect of any of its equity securities, or redeem or purchase, directly or indirectly, any of its equity securities, (ii) exchange or reclassify any of its equity securities or (iii) issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for its equity securities;
(b) issue, deliver, sell, pledge or otherwise dispose of, or encumber or subject to any Lien, any of its equity securities, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such equity securities, voting securities or convertible securities;
(c) amend its certificate or articles of formation or incorporation, limited liability company agreement or bylaws or code of regulations (or comparable organizational documents);
(d) acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the assets or equity securities of, or by any other manner, any business or any Person;
(e) sell, lease, license, mortgage or otherwise encumber or subject to any Lien (other than Permitted Liens) or otherwise dispose of any of its material properties or material assets other than in the Ordinary Course of Business;
(f) (i) grant to any of its current or former managers, directors, officers or other employees any increase in compensation, bonus or other benefits, except for normal increases in the Ordinary Course of Business or as was required under any employment agreements or Company Employee Plan or Checksmart Employee Plan, in each case, in effect as of the date hereof and except for advances to such Persons for travel and business expense in the Ordinary Course of Business, (ii) grant to any such current or
former manager, director, officer or employee any increase in severance or termination pay, (iii) enter into, or amend, any employment, deferred compensation, consulting, severance, termination or indemnification agreement with any such current or former manager, director, officer or employee, or (iv) agree or commit to institute any plan, program, arrangement or agreement for the benefit of its employees or former employees other than the Company Employee Plans or Checksmart Employee Plans (as applicable), or to make any amendments to any of the Company Employee Plans or Checksmart Employee Plans (as applicable) except as required by Law;
(g) except for advances to employees for travel and business expenses and the endorsement of checks and extension of credit in the Ordinary Course of Business, incur any Indebtedness greater than $50,000 other than in the Ordinary Course of Business or under the Company Credit Agreements or the Checksmart Credit Agreement, as applicable;
(h) incur or commit to incur any capital expenditures or any obligations or liabilities in connection therewith in excess of $50,000 individually or $100,000 in the aggregate, unless the amount thereof does not exceed 110% of the amount budgeted therefor in the monthly budget made available to the other party;
(i) terminate, breach, modify in any material respect, amend in any material respect, issue any consent or waive any material rights under any Company Material Contract listed on Schedule 5.15 or Checksmart Material Contract listed on Schedule 6.15 (as applicable), or enter into any new Contract that would be required to be set forth on Schedule 5.15 or Schedule 6.15 (as applicable) if such Contract were in existence on the date hereof, in each case, other than in the Ordinary Course of Business or as required by Law, provided that the expiration in accordance with its terms of any such Material Contract shall not be prohibited hereby;
(j) institute or settle any Proceeding involving more than $50,000;
(k) make any write-off or write-down of or make any determination to write-off or write-down any of its assets or properties in excess of $50,000;
(l) (i) make any material change in the Tax reporting or accounting principles, practices or policies, including with respect to (A) depreciation or amortization policies or rates or (B) the payment of accounts payable or the collection of accounts receivable; (ii) settle or compromise any Tax liability; (iii) make, change or rescind any Tax election; (iv) surrender any right in respect of Taxes; or (v) consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; or
(m) authorize, or commit or agree to take, any of the foregoing actions.
7.2 Notification of Changes; Other Actions. Prior to the Closing, each of the Seller Parties, the Company and CCCS Holdings, on the one hand, and the Buyer Parties, on the other hand, shall promptly notify the other orally and in writing to the extent it becomes aware of (a) the occurrence, or failure to occur, of any event, the occurrence or failure to occur of which
would be likely to cause any of its representations or warranties contained in this Agreement to be untrue or inaccurate such that the condition set forth in Section 9.2(a) or 9.3(a), as applicable, would fail to be satisfied; (b) any failure to comply with or satisfy any covenant or agreement to be complied with or satisfied by it hereunder such that the condition set forth in Section 9.2(b) or 9.3(b), as applicable, would fail to be satisfied; (c) the occurrence of any event that would be reasonably likely to make the satisfaction of any of the conditions to Closing specified in Article 9 impossible; and (d) any change, event or condition of any character (whether or not covered by insurance) that, individually or in the aggregate, has had or would reasonably be expected to result in a Buyer Material Adverse Effect or Company Material Adverse Effect, as applicable. To the extent any such change, event or condition has occurred after the date hereof, the party making such notification may update its Disclosure Schedules to reflect any such change, event or condition for purposes of the indemnification obligations of the parties hereto pursuant to Article 11; provided, however, that such notification or update will not affect the representations, warranties, covenants or agreements of the parties for purposes of Article 9 or Article 10.
7.3 No Solicitation. None of the Seller Parties, the Company or CCCS Holdings shall, nor shall the Seller Parties or the Company authorize or permit the Company or any of the Companys Subsidiaries or any of the managers, directors, officers or employees of, or any investment banker, financial advisor, attorney, accountant or other representative retained by the Seller Parties or the Company or any of the Companys Subsidiaries, to directly or indirectly through another Person, (i) solicit, initiate or encourage (including by way of furnishing information), or take any other action designed to facilitate, any inquiries or the making of any proposal that constitutes any Acquisition Proposal or (ii) participate in any discussions or negotiations regarding any Acquisition Proposal. For purposes of this Agreement, Acquisition Proposal means any inquiry, proposal or offer from any Person relating to any (a) direct or indirect acquisition or purchase of all or substantially all of the business or assets of the Company or any of its Subsidiaries, (b) direct or indirect acquisition or purchase of 50% or more of any class of equity securities of the Company or any of its Subsidiaries, (c) tender offer or exchange offer that if consummated would result in any Person beneficially owning 50% or more of any class of equity securities of the Company or any of its Subsidiaries, or (d) merger, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving the Company or any of its Subsidiaries, other than the transactions contemplated by this Agreement. None of the Seller Parties, the Company nor CCCS Holdings shall, and none of the Seller Parties, the Company or CCCS Holdings shall allow the Company or any of its Subsidiaries to, approve or recommend any Acquisition Proposal or enter into any letter of intent, agreement in principle, acquisition agreement or other similar agreement related to any Acquisition Proposal. In addition, as applicable, the Seller Parties, the Company or CCCS Holdings shall promptly (i.e., within two (2) Business Days of receipt) advise the Buyer orally and in writing of any written request for information or of any Acquisition Proposal.
7.4 Access to Information and Premises. Each of the Company and CCCS Holdings, on the one hand, and the Buyer and Checksmart, on the other hand, shall afford to the other and to the officers, employees, accountants, counsel, financial advisors, environmental consultants and other representatives of such other party access, during normal business hours during the period prior to the Closing, to all of its and its Subsidiaries properties, books, contracts, commitments, personnel and records and all other information concerning its business,
properties and personnel as such other party may reasonably request; provided, however, that nothing in this Agreement will obligate any party to take actions that would unreasonably disrupt the normal course of its business or violate the terms of any applicable Law or any Contract to which it is a party or to which any of its assets are subject; and provided, further, that (a) the Buyer Parties shall not (and Checksmart shall cause its Subsidiaries not to) contact any material business relation of the Company or its Subsidiaries without the prior written approval (not to be unreasonably withheld, delayed or conditioned) of the Seller Representative and (b) none of the Seller Parties, the Company or CCCS Holdings shall not (and the Seller Parties and the Company shall cause the Company and its Subsidiaries not to) contact any material business relation of the Buyer Parties without the prior written approval (not to be unreasonably withheld, delayed or conditioned) of the Buyer. Prior to the Closing, each of the Company, on the one hand, and the Buyer, on the other hand, shall generally keep the other informed as to all material matters involving the operations and businesses of such other party and its Subsidiaries. Each of the Company, on the one hand, and Checksmart, on the other hand, shall authorize and direct its and its Subsidiaries appropriate directors, managers, officers and employees to discuss, on a regular basis during normal business hours, matters involving the operations and business of such party and its Subsidiaries with representatives of the other party, provided that the foregoing shall not unreasonably disrupt the conduct of such partys or its Subsidiaries business.
7.5 Antitrust Laws.
(a) Prior to the date of this Agreement, the appropriate parties have filed with the United States Federal Trade Commission (the FTC) and the United States Department of Justice Antitrust Division (the DOJ) the premerger notification and report form required for the transactions contemplated by this Agreement and any supplemental information requested in connection therewith pursuant to the HSR Act.
(b) Each of the parties hereto shall use their respective commercially reasonable efforts to (i) cause the waiting period under the HSR Act to expire or be terminated and (ii) avoid or eliminate each and every impediment under the Antitrust Laws asserted by any Governmental Authority, in each case, to cause the transactions contemplated by this Agreement to occur as soon as reasonably practicable, including promptly complying with any inquiries or requests for additional information from, and otherwise cooperating in good faith with, any Governmental Authority pursuant to the HSR Act; provided, however, that nothing in this Section 7.5 shall require, and such commercially reasonable efforts shall not include: (A) paying any amounts (other than the payment of filing fees and expenses and fees of counsel); (B) offering, negotiating, committing to or effecting, by consent decree, hold separate order or otherwise, the sale, divestiture, license or other disposition of any and all of the assets or business of any of the Buyer Parties, the Company or its Subsidiaries, or any of their respective Affiliates; (C) agreeing to any material restrictions on the activities of any of the parties hereto; or (D) contesting, defending and appealing any threatened or pending preliminary or permanent injunction or other Order or Law that would adversely affect the ability of any party hereto to consummate the transactions contemplated by this Agreement as soon as practicable.
(c) The parties hereto agree to instruct their respective counsel to cooperate with each other and use commercially reasonable efforts to facilitate and expedite the identification and resolution of any issues arising under the Antitrust Laws at the earliest practicable dates. The parties hereto shall consult and cooperate with one another, and consider in good faith the views of one another, in connection with, and, unless advised by outside counsel that doing so would reasonably be expected to violate applicable Law, provide to the other parties in advance, any analyses, appearances, presentations, memoranda, briefs, arguments, opinions and proposals made or submitted by or on behalf of any party hereto in connection with proceedings under or relating to any Antitrust Laws with respect to the transactions contemplated hereby. Without limiting the foregoing, the parties hereto agree to: (i) give each other reasonable advance notice of all meetings with any Governmental Authority relating to any Antitrust Laws with respect to the transactions contemplated hereby; (ii) give each other an opportunity to participate in each of such meetings; (iii) to the extent practicable, give each other reasonable advance notice of all substantive oral communications with any Governmental Authority relating to any Antitrust Laws; (iv) if any Governmental Authority initiates a substantive oral communication regarding any Antitrust Laws, promptly notify the other parties hereto of the substance of such communication; (v) provide each other with a reasonable advance opportunity to review and comment upon all written communications (including any analyses, presentations, memoranda, briefs, arguments, opinions and proposals) with a Governmental Authority regarding any Antitrust Laws; and (vi) provide each other with copies of all written communications to or from any Governmental Authority relating to any Antitrust Laws. Any such disclosures or provision of copies by one party to the other parties may be made on an outside counsel basis if appropriate. Notwithstanding anything in this Section 7.5 to the contrary, with respect to the matters covered in this Section 7.5, it is agreed that the Buyer and the Seller Representative shall consult in good faith with one another and jointly make all decisions, coordinate all discussions, negotiations and other proceedings with, and coordinate all activities with respect to any requests that may be made by, or any actions, consents, undertakings, approvals, or waivers that may be sought by, any Governmental Authority, including the manner in which to contest or otherwise respond, by litigation or otherwise, to objections to, or proceedings challenging, the consummation of the transactions contemplated by this Agreement.
7.6 Commercially Reasonable Efforts; Cooperation. Subject to Section 7.5, and upon the terms and subject to the conditions set forth in this Agreement, each of the parties hereto agrees to use commercially reasonable efforts to take all actions, and to do and to assist and cooperate with the other parties in doing all things, reasonably necessary, proper or advisable to (a) consummate and make effective, in the most expeditious manner practicable, the Mergers and the other transactions contemplated by this Agreement and (b) cause the conditions to Closing set forth in Article 9 to be satisfied (including the completion of the High Yield Offering), including (i) the applicable Seller Parties obtaining the consent of the landlord as required pursuant to Section 4.1(k), (ii) the defending of any Proceedings challenging this Agreement or the consummation of the transactions contemplated hereby, including seeking to have any stay or temporary restraining order entered by any Governmental Authority vacated or reversed, and (iii) the execution and delivery of any additional instruments necessary to complete the High Yield Offering, and consummate the transactions contemplated by, and to fully carry
out the purposes of, this Agreement. Notwithstanding anything to the contrary in this Agreement, no Seller Party shall be required to pay any amounts in connection with obtaining any such consent referred to in the preceding clause (i) unless required by applicable Law or pursuant to the terms of the Real Property Lease or other agreement between such Seller Party and such landlord. Following the Closing, each of the parties hereto agrees to cooperate with the other parties hereto in connection with, and give such other parties the opportunity to participate in, any and all communications with any Governmental Authority with respect to regulatory matters involving the Buyer, Checksmart, any of Checksmarts Subsidiaries, the Company or any of the Companys Subsidiaries.
7.7 High Yield Offering Documentation. Checksmart and the Buyer shall, upon the reasonable request of the Seller Representative, furnish the Seller Representative with true, complete and correct and, as applicable, executed copies of all material agreements and documents relating to the High Yield Offering (the High Yield Documents) and otherwise keep the Seller Representative reasonably informed of the status of the High Yield Offering (or any replacement financing), including by making available the officers and directors of Checksmart and, to the extent feasible, its advisors and legal, investment banking and accounting representatives, for regular discussions with the Seller Representative with respect thereto, provided that the foregoing shall not unreasonably disrupt the conduct of business of Checksmart or any of its Subsidiaries.
7.8 Confidentiality. At all times following the Closing, none of (a) the Seller Parties shall, directly or indirectly, disclose any Trade Secrets pertaining to the Company or its Subsidiaries, and (b) the Buyer Parties shall, directly or indirectly, disclose any Trade Secrets pertaining to the Buyer, Checksmart or its Subsidiaries, except, in each case, to the extent that such information is in the public domain or enters into the public domain other than by breach of this Agreement.
7.9 Dividend. In the event that the High Yield Offering is completed and yields proceeds equal to at least the sum of (x) the amount necessary to repay in full the Company Indebtedness and the Checksmart Indebtedness and (y) $10,000,000, then, immediately following the Closing, the Buyer will pay a dividend to the shareholders of the Buyer (as of the time immediately following the Closing) in an aggregate amount equal to at least the amount of such proceeds minus the sum of (a) the amount necessary to repay in the full the Company Indebtedness and the Checksmart Indebtedness plus (b) $10,000,000 (the Dividend).
7.10 High Yield Offering.
(a) The Buyer Parties shall use their commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper and advisable to consummate the High Yield Offering, and the Buyer confirms that its current intention is to consummate a High Yield Offering yielding sufficient proceeds to pay the Dividend. Without limiting the generality of the foregoing sentence, the Buyer Parties shall not take any action, or permit any of their Affiliates to take any action, to materially diminish the ability of any party to the High Yield Documents to consummate, or materially impair, prevent or delay any such partys ability to consummate the High Yield Offering, including taking any action that is intended or
would reasonably be expected to result in any of the conditions to any such partys obligations to consummate such High Yield Offering to not be satisfied.
(b) Without limiting the generality of Section 7.10(a), the Buyer Parties shall, at the Buyer Parties sole cost and expense, use commercially reasonable efforts to fully satisfy in all material respects, on a timely basis, all terms, conditions, representations and warranties set forth in the High Yield Documents. The Buyer Parties shall use commercially reasonable efforts to enter into the High Yield Documents as soon as reasonably practicable but in any event prior to or at the Closing so as to permit the consummation of the High Yield Offering at or prior to the Closing.
7.11 Termination of Advisory Agreement. Effective as of immediately prior to the Closing, the Company and/or its Subsidiaries shall take all actions necessary and appropriate to terminate that certain Advisory Agreement, dated September 29, 2006, between CCCS Holdings, CCCS Opco, and GGC Administration, LLC.
ARTICLE 8:TAX MATTERS
8.1 Transfer Taxes. All transfer, documentary, sales, use, stamp, registration, value added and other such Taxes and fees (including any penalties and interest) (Transfer Taxes) imposed on the Seller Parties, the Buyer, the Surviving Entities or the Company or any of its Subsidiaries in connection with or relating to the CCCS Merger or the contributions described in Section 3.3 will be borne and paid by the Seller Parties when due, and the Seller Parties, at their own expense, will cause to be filed all necessary Tax Returns and other documentation with respect to all such Transfer Taxes. All Transfer Taxes imposed on the Seller Parties, the Buyer, the Surviving Entities or the Company or any of its Subsidiaries in connection with or relating to the Checksmart Merger will be borne and paid by the Checksmart Stockholders when due, and the Checksmart Stockholders, at their own expense, will cause to be filed all necessary Tax Returns and other documentation with respect to all such Transfer Taxes.
8.2 Cooperation; Audits. In connection with the preparation of Tax Returns, audit examinations, and any administrative or judicial proceedings relating to the Tax liabilities imposed on the Buyer, the Surviving Entities or the Company or any of its Subsidiaries, the Buyer and the applicable Seller Parties shall cooperate fully with each other, including the furnishing or making available during normal business hours of records, personnel (as reasonably required), books of account, powers of attorney or other materials necessary or helpful for the preparation of such Tax Returns, the conduct of audit examinations or the defense of claims by Taxing Authorities as to the imposition of Taxes. The applicable Seller Parties shall deliver within five (5) days of the Buyers request therefor any information required to be reported by the Buyer, the Surviving Entities or the Company or any of its Subsidiaries pursuant to Section 6043A of the Code, in each case, to the extent within the possession or control of such Seller Parties.
8.3 Tax Sharing Agreements. All Tax allocation or sharing agreements, arrangements or similar Contracts (if any) with respect to or involving the Company or any of its Subsidiaries will be terminated as of the Closing Date and, after the Closing Date, neither the
Buyer, the Company or any of the Companys Subsidiaries shall be bound thereby or have any liability thereunder.
ARTICLE 9: CLOSING CONDITIONS
9.1 Conditions to the Obligations of Each Party. The obligations of each party hereto to consummate the transactions contemplated by this Agreement are subject to the satisfaction or waiver on or prior to the Closing Date of the following conditions:
(a) Governmental and Regulatory Approvals. The waiting period (including any extension thereof) applicable to the consummation of the transactions contemplated by this Agreement under the HSR Act or any other applicable Antitrust Law will have expired or been terminated.
(b) No Proceedings, Laws or Orders. No Proceedings will have been instituted to restrain, prohibit or delay the Mergers or any of the other transactions contemplated by this Agreement. No Law or Order of any kind will have been enacted, entered, promulgated or enforced by any Governmental Authority that would prohibit or delay the Mergers or the consummation of the other transactions contemplated by this Agreement or have the effect of making them illegal, and no Proceeding seeking to impose such an Order will be pending.
(c) High Yield Offering. The high yield offering of the Buyer (the High Yield Offering) shall have yielded sufficient aggregate proceeds, together with available excess cash, to repay in full the Company Indebtedness and the Checksmart Indebtedness, and shall otherwise have been completed to the satisfaction of the Buyer.
9.2 Conditions to the Buyer Parties Obligations. The obligations of the Buyer Parties to consummate the transactions contemplated by this Agreement are subject to the satisfaction or waiver on or prior to the Closing Date of the following conditions:
(a) Representations and Warranties. Each of the representations and warranties made in Articles 5 and 5A that are qualified by materiality will be true and correct in all respects and each of the representations and warranties made in Articles 5 and 5A that are not so qualified will be true and correct in all material respects (provided that the representations and warranties contained in Section 5.4 shall be true in all respects notwithstanding that such representations and warranties are not qualified by materiality), in each case, as if such representations or warranties were made on and as of the date of this Agreement and as of the Closing Date (except to the extent such representations and warranties speak as of a specific date or as of the date of this Agreement, in which case such representations and warranties will be so true and correct or so true and correct in all material respects, as the case may be, as of such specific date or as of the date of this Agreement, respectively).
(b) Performance of Agreements and Covenants. Each and all of the agreements and covenants of the Seller Parties, the Company and CCCS Holdings to be performed and complied with pursuant to this Agreement at or prior to the Closing (other than the agreements and covenants contained in Section 7.1(a) and (b)) will have been
duly performed in all material respects; and the agreements and covenants of the Company and CCCS Holdings set forth in Section 7.1(a) and (b) will have been duly performed in all respects.
(c) No Material Adverse Effect. Since the date of this Agreement, there shall have been no change, event or condition of any character that, individually or in the aggregate, has resulted in a Company Material Adverse Effect.
(d) Delivery of Documents. The Seller Parties shall have delivered or caused to be delivered to the Buyer Parties all of the documents required by Section 4.1.
(e) Indebtedness. As of the Closing Date, the aggregate principal amount of Company Indebtedness shall not be in excess of $77,500,000.
9.3 Conditions to the Seller Parties Obligations. The obligations of the Seller Parties to consummate the transactions contemplated by this Agreement are subject to the satisfaction or waiver on or prior to the Closing Date of the following conditions:
(a) Representations and Warranties. Each of the representations and warranties made by the Buyer and Checksmart contained in this Agreement that are qualified by materiality will be true and correct in all respects and each of the representations and warranties made by the Buyer and Checksmart contained in this Agreement that are not so qualified will be true and correct in all material respects (provided that the representations and warranties contained in Section 6.4(a) shall be true in all respects notwithstanding that such representations and warranties are not qualified by materiality), in each case, as if such representations or warranties were made on and as of the date of this Agreement and as of the Closing Date (except to the extent such representations and warranties speak as of a specific date or as of the date of this Agreement, in which case such representations and warranties will be so true and correct or so true and correct in all material respects, as the case may be, as of such specific date or as of the date of this Agreement, respectively).
(b) Performance of Agreements and Covenants. Each and all of the agreements and covenants of the Buyer Parties to be performed and complied with pursuant to this Agreement and the Ancillary Agreements at or prior to the Closing (other than the agreements and covenants of the Buyer Parties contained in Section 7.1(a) and (b)) shall have been duly performed in all material respects; and the agreements and covenants of the Buyer Parties contained in Section 7.1(a) and 7.1(b) shall have been performed and complied with in all respects.
(c) No Material Adverse Effect. Since the date of this Agreement, there shall have been no change, event or condition of any character that, individually or in the aggregate, has resulted in a Buyer Material Adverse Effect.
(d) Delivery of Documents. The Buyer Parties shall have delivered or caused to be delivered to the Seller Representative all of the documents required by Section 4.2.
(e) Indebtedness. As of the Closing Date, the aggregate principal amount of Checksmart Indebtedness shall not be in excess of $212,500,000.
ARTICLE 10:TERMINATION
10.1 Termination. This Agreement may be terminated at any time prior to the Closing:
(a) Written Agreement. By written agreement executed by the Buyer (on behalf of the Buyer Parties) and the Seller Representative.
(b) Drop Dead Date. By the Buyer (on behalf of the Buyer Parties) or the Seller Representative by written notice to the other at any time after June 30, 2011, if the Closing shall not have taken place on or before such date; provided, however, that the right to terminate this Agreement under this Section 10.1(b) shall not be available to any party whose failure to fulfill any obligation hereunder has been the cause of, or resulted in, the failure of the Closing to occur on or before such date.
(c) Order of Governmental Authority. By the Buyer (on behalf of the Buyer Parties) or the Seller Representative if a Governmental Authority issues a final non-appealable Order restraining, enjoining or otherwise prohibiting the Mergers or the consummation of the transactions contemplated by this Agreement; provided, however, that the right to terminate this Agreement under this Section 10.1(c) shall not be available to any party if such Order was primarily due to such partys breach of or failure to perform any provision of this Agreement.
(d) Breach of the Seller Parties, Companys or CCCS Holdings Representations and Other Obligations. By the Buyer (on behalf of the Buyer Parties) by written notice to the Seller Representative if any of the Seller Parties, the Company or CCCS Holdings shall have breached or failed to perform any of its representations, warranties, covenants or other agreements contained in this Agreement such that the condition in Section 9.2(a) or (b), as applicable, would fail to be satisfied, and such breach or failure to perform (i) is not cured within 20 days after written notice thereof or (ii) is incapable of being cured by the breaching or nonperforming party; provided, however, that the right to terminate this Agreement under this Section 10.1(d) shall not be available to the Buyer if any Buyer Party shall have breached or failed to perform any of its representations, warranties, covenants or other agreements contained in this Agreement such that the condition in Section 9.3(a) or (b), as applicable, would fail to be satisfied.
(e) Breach of the Buyer Parties Representations and Other Obligations. By the Seller Representative by written notice to the Buyer if any of the Buyer Parties shall have breached or failed to perform any of its representations, warranties, covenants or other agreements contained in this Agreement such that the condition in Section 9.3(a) or (b), as applicable, would fail to be satisfied, and such breach or failure to perform (i) is not cured within 20 days after written notice thereof or (ii) is incapable of being cured by the breaching or nonperforming party; provided, however, that the right to terminate this
Agreement under this Section 10.1(e) shall not be available to the Seller Representative if any Seller Party, the Company or CCCS Holdings shall have breached of failed to perform any of its representations, warranties, covenants or other agreements contained in this agreement such that the condition in Section 9.2(a) or (b) as applicable, would fail to be satisfied.
10.2 Effect of Termination. In the event that this Agreement is terminated pursuant to Section 10.1, all obligations of the parties under this Agreement shall terminate and none of the parties shall have any liability or obligation to any of the other parties other than (a) in respect of this Section 10.2 and Sections 12.3 through 12.13, inclusive, (b) by reason of a breach of any of the provisions of this Agreement prior to termination or (c) pursuant to that certain Nondisclosure and Confidentiality Agreement, dated as of July 6, 2010, between Diamond Castle Holdings, LLC and CCCS Opco. Subject to the foregoing sentence, and in the event that this Agreement shall be terminated pursuant to Section 10.1, each party shall pay all of its own costs and expenses incident to this Agreement.
ARTICLE 11:REMEDIES
11.1 General Indemnification Obligation.
(a) By Seller Parties/Pro Rata Share. Subject to the limitations and conditions set forth in Section 11.3, from and after the Closing, the Seller Parties shall severally and not jointly, in accordance with their respective Pro Rata Share, indemnify and hold harmless each of the Buyer Parties, the Surviving Entities, the Company, the Companys Subsidiaries and each of their respective officers, managers, directors, employees and agents (each, a Buyer Indemnitee; provided that, for the avoidance of doubt, for purposes of this Agreement, a Buyer Indemnitee shall not include any Seller Party) from and against any and all losses, liabilities, claims, damages, penalties, fines, judgments, awards, settlements, Taxes, costs, fees, expenses (including reasonable attorneys fees) and disbursements (collectively, Losses) suffered or incurred by such Buyer Indemnitee based upon, arising out of or otherwise in respect of: (i) any breach of any representation or warranty contained in Article 5 (including any Schedule or Exhibit attached hereto insofar as it relates thereto) (with respect to the representations and warranties in Section 5.23, only to the extent such Losses are with respect to a Pre-Closing Tax Period) (determined in each case without regard to any qualification with respect to any materiality, Company Material Adverse Effect or other similar qualification, other than any such qualification used in Section 5.1, 5.2, 5.5, 5.16 or 5.19, the first sentence of Section 5.11, the first parenthetical phrase in Section 5.15(a), or in the usage in Article 5 of the defined terms Company Material Permit or Company Material Contract), provided that any breach of any representation or warranty contained in Section 5.23 shall be determined without giving effect to the disclosure set forth in Schedule 5.23(f) or (i) (i.e., the Buyer Indemnitees shall be entitled to indemnification in respect of such matter notwithstanding the disclosure of such matter in Schedule 5.23(f) or (i)); (ii) any breach of any covenant or agreement of the Company or CCCS Holdings contained in this Agreement (including any Schedule or Exhibit attached hereto) (determined in each case without regard to any qualification with respect to any materiality, Company Material Adverse Effect or other similar qualification, other than
any such qualification used in Section 7.1 or 7.2 or in the usage in Section 7.1 or 7.2 of the defined terms Company Material Permit or Company Material Contract); (iii) any Transfer Taxes relating to the CCCS Merger or the contribution transactions described in Section 3.3; or (iv) any Debt Offering Misconduct.
(b) By Seller Party/Several. Subject to the limitations and conditions set forth in Section 11.3, from and after the Closing, each Seller Party shall severally and not jointly indemnify and hold harmless each Buyer Indemnitee from and against any and all Losses suffered or incurred by such Buyer Indemnitee based upon, arising out of or otherwise in respect of: (i) any breach of any representation or warranty contained in Article 5A (including any Schedule or Exhibit attached hereto insofar as it relates thereto) (determined in each case without regard to any qualification with respect to any materiality, material adverse effect or other similar qualification) made by such Seller Party; or (ii) any breach of any covenant or agreement of such Seller Party contained in this Agreement (including any Schedule or Exhibit attached hereto) (determined in each case without regard to any qualification with respect to any materiality, material adverse effect or other similar qualification).
(c) By the Buyer. The Buyer shall indemnify and hold harmless the Seller Parties and each of their respective officers, managers, directors, employees and agents (each, a Seller Indemnitee) from and against any and all Losses suffered or incurred by such Seller Indemnitee based upon, arising out of or otherwise in respect of: (i) any breach of any representation or warranty contained in Article 6 (including any Schedule or Exhibit attached hereto insofar as it relates thereto) (with respect to the representations and warranties in Section 6.23, only to the extent such Losses are with respect to a Pre-Closing Tax Period) (determined in each case without regard to any qualification with respect to any materiality, Buyer Material Adverse Effect or other similar qualification, other than any such qualification used in Section 6.1, 6.2, 6.5, 6.16 or 6.19, the first sentence of Section 6.11, the first parenthetical phrase in Section 6.15(a), or in the usage in Article 6 of the defined terms Checksmart Material Permit or Checksmart Material Contract), provided that any breach of any representation or warranty contained in Section 6.23 shall be determined without giving effect to the disclosure set forth on Schedule 6.23(f) (i.e., the Seller Indemnitees shall be entitled to indemnification in respect of such matter notwithstanding the disclosure of such matter on Schedule 6.23(f)); (ii) any breach of any covenant or agreement of the Buyer Parties contained in this Agreement (including any Schedule or Exhibit attached hereto) (determined in each case without regard to any qualification with respect to any materiality, Buyer Material Adverse Effect or other similar qualification, other than any such qualification used in Section 7.1 or 7.2 or in the usage in Section 7.1 or 7.2 of the defined terms Checksmart Material Permit or Checksmart Material Contract); (iii) any Transfer Taxes relating to the Checksmart Merger; or (iv) any Debt Offering Misconduct. Checksmart and Checksmart Financial shall be jointly and severally liable with the Buyer for all of the cash payment obligations of the Buyer contained in this Section 11.1(c).
11.2 Notice and Opportunity to Defend.
(a) Notice of Asserted Liability. As soon as is reasonably practicable after a Seller Indemnitee or a Buyer Indemnitee becomes aware of any direct or third party claim that such party has under Section 11.1 that may result in a Loss for which such party is entitled to indemnification hereunder (a Liability Claim), such party (the Indemnified Party) shall give notice of such Liability Claim (a Claims Notice) to the other party (the Indemnifying Party). A Claims Notice must describe the Liability Claim in reasonable detail and must indicate the amount, calculated in good faith and to the extent feasible, of the Loss that has been or may be suffered by the Indemnified Party. No delay in or failure to give a Claims Notice by the Indemnified Party to the Indemnifying Party pursuant to this Section 11.2(a) will adversely affect any of the other rights or remedies that the Indemnified Party has under this Agreement or alter or relieve the Indemnifying Party of its obligation to indemnify the Indemnified Party to the extent that such delay or failure has not materially prejudiced the Indemnifying Party.
(b) Opportunity to Defend. The Indemnifying Party has the right, exercisable by written notice to the Indemnified Party within 15 days after receipt of a Claims Notice from the Indemnified Party of the commencement or assertion of any Liability Claim in respect of which indemnity may be sought under this Article 11, to assume and conduct the defense of such Liability Claim in accordance with the limits set forth in this Agreement with counsel selected by the Indemnifying Party and reasonably acceptable to the Indemnified Party, provided that the (i) defense of such Liability Claim by the Indemnifying Party will not, in the reasonable judgment of the Indemnified Party, have a material adverse effect on the Indemnified Party; (ii) Liability Claim solely seeks (and continues to seek) monetary damages; (iii) Liability Claim does not include criminal charges; and (iv) Indemnifying Party expressly acknowledges in writing its responsibility for all Losses relating to such Liability Claim subject to indemnification by the Indemnifying Party under Section 11.1 (it being understood that the foregoing written acknowledgement may contain a reservation of the Indemnifying Partys right to dispute the entitlement to indemnification until such Liability Claim is proven to constitute Losses) (the conditions set forth in clauses (i) through (iv) are, collectively, the Litigation Conditions). If the Indemnifying Party does not assume the defense of a Liability Claim in accordance with this Section 11.2(b) within 15 days after receipt of a Claims Notice from the Indemnified Party of the commencement or assertion of any Liability Claim in respect of which indemnity may be sought under this Article 11, the Indemnified Party may continue to defend the Liability Claim. If the Indemnifying Party has assumed the defense of a Liability Claim as provided in this Section 11.2(b), the Indemnifying Party will not be liable for any legal expenses subsequently incurred by the Indemnified Party in connection with the defense of the Liability Claim; provided, however, that if any of the Litigation Conditions ceases to be met, the Indemnified Party may assume its own defense, and the Indemnifying Party will be liable for all reasonable costs or expenses paid or incurred thereafter in connection with such defense to the extent constituting Losses. The Indemnifying Party or the Indemnified Party, as the case may be, has the right to participate in (but not control), at its own expense, the defense of any Liability Claim that the other is defending as provided in this Agreement. The Indemnifying Party, if it has assumed the defense of any Liability Claim as provided in
this Agreement, may, without the prior written consent of the Indemnified Party, consent to a settlement of, or the entry of any judgment arising from, any such Liability Claim; provided, however, that the Indemnifying Party may not consent to any such settlement or judgment to the extent that any such settlement or judgment (I) does not include as an unconditional term thereof the giving by the claimant or the plaintiff to the Indemnified Party of a complete and irrevocable release from all liability in respect of such Liability Claim, (II) grants any injunctive or equitable relief or (III) may reasonably be expected to have an adverse effect on the affected business of the Indemnified Party. The Indemnified Party has the right to settle any Liability Claim, the defense of which has not been assumed by the Indemnifying Party, upon prior notice to the Indemnifying Party and, upon request of the Indemnifying Party, after discussion of such settlement with the Indemnifying Party, unless the defense of such Litigation Claim by the Indemnifying Party was not permitted due to the existence of the Litigation Conditions described in clause (i), (ii) or (iii) of the definition thereof, in which case the Indemnified Party shall be required to obtain the prior written consent of the Indemnifying Party (not to be unreasonably withheld, delayed or conditioned), prior to settling any such Liability Claim notwithstanding that the Indemnifying Party had not assumed the defense thereof.
(c) For purposes of this Section 11.2, (i) if the Seller Parties comprise the Indemnifying Party, any references to the Indemnifying Party (except provisions relating to an obligation to make or a right to receive any payments) will be deemed to refer to the Seller Representative and (ii) if the Seller Parties comprise the Indemnified Party, any references to the Indemnified Party (except provisions relating to an obligation to make or a right to receive any payments) will be deemed to refer to the Seller Representative.
(d) Notwithstanding the provisions of Section 12.11, each party consents to the non-exclusive jurisdiction of any court in which a Proceeding is brought by another Person not party to this Agreement against any Indemnified Party for purposes of any claim that such Indemnified Party may have under this Agreement with respect to the Proceeding or the matters alleged therein. Each party consents and agrees that process may be served on it with respect to such a claim anywhere in the United States of America.
11.3 Survivability; Limitations.
(a) The representations and warranties of each of the parties contained in this Agreement, and the covenants and agreements of each of the parties contained in this Agreement that are required by their respective terms to be performed or complied with at or prior to Closing, will survive for a period ending on the earliest of: (x) the 14-month anniversary of the Closing Date; (y) 60 days following delivery by the Buyers accounting firm of the audited financial statements of the Buyer for calendar year December 31, 2011; and (z) an Initial Public Offering (the Expiration Date); provided, however, that (i) the Expiration Date for any Liability Claim relating to a breach of the representations and warranties set forth in Sections 5.1 (Existence and Good Standing), 5.2 (Power), 5.3 (Validity and Enforceability), 5.4 (Capitalization), 5.11(j) (Distributions), 5.25 (Brokers), 5A.1 (Existence and Good Standing), 5A.2 (Validity and Enforceability), 5A.3 (Title), 5A.7 (Brokers), 5A.8 (Activities of the Company),
6.1 (Existence and Good Standing), 6.2 (Power), 6.3 (Validity and Enforceability), 6.4 (Capitalization), 6.11(j) (Distributions), 6.25 (Brokers) and 6.28 (No Claims) (collectively, the Excluded Representations) shall be the three (3) year anniversary of the Closing Date; and (ii) any Liability Claim pending on any Expiration Date for which a Claims Notice has been given in accordance with Section 11.2 on or before such Expiration Date may continue to be asserted and indemnified against until finally resolved. All of the covenants and agreements of each of the parties contained in this Agreement that by their terms are required to be performed after the Closing Date will survive after the Closing Date in accordance with their respective terms.
(b) Notwithstanding anything to the contrary contained herein: (i) no Indemnifying Party will have any liability to any one or more of the Indemnified Parties pursuant to Section 11.1(a), 11.1(b), or 11.1(c), as applicable (other than (x) as a result of any breach of any of the Excluded Representations (except the representations and warranties contained in Section 5.11(j) (Distributions) and 6.11(j) (Distributions), for which clause (iii) below will apply) or any breach of the covenants or agreements contained in Section 7.1(a) or (b) or this Article 11, (y) in respect of Transfer Taxes (in each of clauses (x) and (y), for which neither the Basket Amount limitation nor the Tax Basket Amount limitation will apply) and (z) as a result of any breach of the Tax Representations (for which the Tax Basket Amount limitation, and not the Basket Amount limitation, will apply)), until the aggregate amount payable by such Indemnifying Party to the Indemnified Parties in respect of all such Losses sustained by such Indemnified Parties exceeds $2,000,000 in the aggregate (the Basket Amount), in which case such Indemnifying Party will be liable in accordance with Section 11.1 for all such Losses to the extent exceeding the Basket Amount; (ii) no Indemnifying Party will have any liability to any one or more of the Indemnified Parties pursuant to Section 11.1(a) or 11.1(c), as applicable, as a result of any breach of the representations or warranties relating to income Taxes with respect to a Pre-Closing Tax Period set forth in Section 5.23 (Taxes) or 6.23 (Taxes), as applicable (such representations and warranties collectively, the Tax Representations), until the aggregate amount payable by such Indemnifying Party to the Indemnified Parties in respect of all such Losses sustained by such Indemnified Parties exceeds $500,000 in the aggregate (the Tax Basket Amount), in which case such Indemnifying Party will be liable in accordance with Section 11.1 for all such Losses to the extent exceeding the Tax Basket Amount; and (iii) no Indemnifying Party will have any liability to any one or more of the Indemnified Parties pursuant to Section 11.1(a) or 11.1(c), as applicable, as a result of any breach of the representations or warranties contained in Section 5.11(j) (Distributions) or 6.11(j) (Distributions), as applicable, until the aggregate amount payable by such Indemnifying Party to the Indemnified Parties in respect of all such Losses sustained by such Indemnified Parties exceeds $150,000 in the aggregate.
(c) Notwithstanding anything to the contrary contained herein: (i) the Seller Parties, on the one hand, and the Buyer, on the other hand, will not have any liability to any one or more of the Buyer Indemnitees or Seller Indemnitees, as the case may be, pursuant to Section 11.1(a), 11.1(b), or 11.1(c), as applicable (other than as a result of any breach of any of (x) the Excluded Representations, (y) the covenants or agreements contained in Section 7.1(a) or (b) or this Article 11 or (z) the Tax Representations, for
which, in the case of each of clauses (x), (y) and (z), the following limitation in this clause (i) will not apply), in excess of $5,000,000 in the aggregate (provided that with respect to liability pursuant to Section 11.1(a), no Seller Party shall be liable for more than its Pro Rata Share thereof); (ii) the Seller Parties, on the one hand, and the Buyer, on the other hand, will not have any liability to any one or more of the Buyer Indemnitees or Seller Indemnitees, as the case may be, pursuant to Section 11.1(a) or 11.1(c), as applicable, as a result of any breach of the Tax Representations in excess of $10,000,000 in the aggregate (provided that with respect to liability pursuant to Section 11.1(a), no Seller Party shall be liable for more than its Pro Rata Share thereof); and (iii) the aggregate liability of (A) each Seller Party under this Agreement and the transactions contemplated hereby shall not exceed the value of the Buyer Stock received by such Seller Party at the Closing (with each share of Buyer Stock having a deemed value as set forth in Section 11.1(d)) and (B) the Buyer (together with its joint and several indemnitors pursuant to the last sentence Section 11.1(c)) under this Agreement and the transactions contemplated hereby shall not exceed the aggregate value of the Buyer Stock received by the Seller Parties at the Closing (with each share of Buyer Stock having a deemed value as set forth in Section 11.1(d)).
(d) Notwithstanding anything to the contrary contained herein, any indemnification obligations of an Indemnifying Party in respect of a Liability Claim pursuant to this Article 11 may be satisfied in whole or in part, at such Indemnifying Partys option, through either (i) cash payment to the Indemnified Party or (ii) delivery of the requisite number of shares of Buyer Stock by the Indemnifying Party either (A) to the Buyer (in the event that an indemnification obligation is owed by a Seller Party/Seller Parties) or (B) to the applicable Seller Party/Seller Parties (in the event that an indemnification obligation is owed by the Buyer). For purposes of determining the requisite number of shares of Buyer Stock required to satisfy any such indemnification obligations, each share of Buyer Stock shall have a deemed value of (x) $250 minus (y) the amount of the Dividend paid with respect to one share of Buyer Stock pursuant to Section 7.9, and such deemed value shall not change after the date hereof. Any cash payments made to a Seller Indemnitee pursuant to this Section 11.3(d) shall be effected by wire transfer of immediately available funds to an account designated in writing by the Seller Representative, and the Seller Representative solely shall be responsible for the allocation, if any, of such payment among the Seller Indemnitees.
(e) Notwithstanding anything to the contrary contained herein, the amount of any Losses payable under this Article 11 by the Indemnifying Party shall be reduced by (i) any and all amounts actually received by the Indemnified Party in connection with the facts giving rise to the right of indemnification under applicable insurance policies or from any other Person alleged to be responsible therefor (net of any expenses and any premium increases actually incurred by the Indemnified Party as a result of pursuing such claim) and (ii) any Tax benefit actually realized by an Indemnified Party whereby such Indemnified Party actually realizes a net reduction in its Tax liability as a result of the payment of any Losses in the taxable year in which the indemnification payment is made or any prior taxable year, net of any increase in Tax liability as a result of the indemnification payment. If the Indemnified Party actually receives any amounts under applicable insurance policies or from any other Person alleged to be responsible for any
Losses or actually realizes a Tax benefit in respect of a Loss subsequent to an indemnification payment by the Indemnifying Party, then such Indemnified Party shall promptly reimburse the Indemnifying Party for any payment made or expense incurred by such Indemnifying Party in connection with providing such indemnification up to the amount received by the Indemnified Party, net of any expense incurred by such Indemnified Party in collecting such amount.
(f) Notwithstanding anything to the contrary contained herein, no Losses shall be payable to an Indemnified Party pursuant to this Article 11 that constitute indirect, special, incidental, consequential, punitive or exemplary damages (or other similar damages designed to punish or deter wrongful conduct), including loss of future revenue or income, indirect damages resulting in diminution in value, or loss of business reputation or opportunity, provided that any damages paid by any Indemnified Party to a third party shall be deemed direct damages.
(g) Notwithstanding anything to the contrary contained herein, the limitations set forth in this Section 11.3 shall not apply to any Losses incurred by an Indemnified Party which are due to any fraudulent acts committed by any Indemnifying Party.
(h) Any Indemnified Party shall take commercially reasonable steps to mitigate its Losses as soon as reasonably practicable after such party becomes aware of any event or condition that results in or would reasonably be expected to result in any such Losses.
(i) If an Indemnifying Party makes any indemnification payment to an Indemnified Party in respect of any Losses, then the Indemnifying Party shall be entitled to exercise, and shall be subrogated to, any rights and remedies (including rights of indemnity, rights of contribution and other rights of recovery) that the Indemnified Party may have against any other person with respect to any Losses to which such indemnification payment is directly related, so long as the Indemnified Party is not adversely affected thereby (Subrogation Rights); provided, however, that to the extent that such indemnification payment made by the Indemnifying Party was not sufficient to indemnify the Indemnified Party in full against such Losses (i.e., the limitations of this Section 11.3 reduced or otherwise limited the Indemnified Partys recovery from the Indemnifying Parties for such Losses), the Indemnifying Party shall be entitled to exercise Subrogation Rights (i) only with respect to that portion of such Losses in which the Indemnified Party received indemnification payment from the Indemnifying Party and (ii) only after the Indemnified Party has exercised its rights and remedies against such Person and received payment with respect to that portion of such Losses in which the Indemnified Party did not receive payment from the Indemnifying Party.
(j) In calculating the amount of any Losses, the amount of such Losses claimed by a Buyer Indemnitee under Section 11.1(a) or (b) for a breach of any representation or warranty in Article 5 or 5A, or by a Seller Indemnitee under Section 11.1(c) for a breach of any representation or warranty in Article 6, in each case, shall be reduced to the extent that the breach or the facts and circumstances thereof giving rise to
such Loss was actually known prior to the Closing Date by such Buyer Indemnitee or Seller Indemnitee, as applicable.
(k) The amount of Losses payable by the Buyer to the Seller Parties in respect of a Loss payable to a third party that is indemnifiable hereunder shall be calculated as the product of (x) the amount of the Loss paid by the Buyer to such third party and (y) a fraction (i) the numerator of which is the number of shares of Buyer Stock held by such Seller Parties at such time and (ii) the denominator of which is the number of shares of Buyer Stock held by Persons other than such Seller Parties at such time (it being agreed, for avoidance of doubt, that the foregoing shall apply only where there is a payment made by the Buyer in respect of a Loss payable to a third party (as opposed to a claim by a Seller Indemnitee for Losses sustained by it)). The amount of Losses payable by the Seller Parties to the Buyer in respect of a Loss payable to a third party that is indemnifiable hereunder shall be calculated as the amount equal to the amount of the Loss paid by the Buyer to such third party.
(l) For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Seller Party hereby waives any cause of action or other claim whatsoever it has or may have against the Company in respect of a breach of the representations and warranties made by the Company in Article 5 (it being agreed that such Seller Party is not a Buyer Indemnitee with respect to such breach) and hereby releases the Company from any and all liability to such Seller Party with respect to a breach of such representations and warranties.
11.4 Exclusive Remedy; Specific Performance. Each Indemnified Partys rights to indemnification as set forth in this Article 11 shall be such Indemnified Partys exclusive remedy with respect to any and all claims against an Indemnifying Party arising out of or relating to this Agreement, except (a) with respect to Losses arising from claims of fraudulent acts and (b) that an Indemnified Party may seek and obtain appropriate injunctive or other equitable relief to prevent breaches of this Agreement or to enforce specifically the terms and provisions contained herein, and for payment of the legal and other costs and expenses incurred in enforcing its rights under this Agreement.
ARTICLE 12: MISCELLANEOUS
12.1 Disclosure Schedules. The Disclosure Schedules shall be subject to the following terms and conditions: (a) any item disclosed in any particular Schedule of the Buyer Disclosure Schedules or the Company Disclosure Schedules shall be deemed to be disclosed in any other Schedule of the Buyer Disclosure Schedules or the Company Disclosure Schedules, respectively, to the extent its relevance or appropriateness is reasonably apparent on the face of such disclosure; (b) the Disclosure Schedules are qualified by this Agreement and shall not be construed as indicating that any item set forth therein is required to be disclosed, nor shall any disclosure be construed as an admission that such information is material with respect to the disclosing party; (c) any item disclosed in the Company Financial Statements or the Checksmart Financial Statements shall be deemed to be disclosed in any other Schedule of the Company Disclosure Schedules or the Buyer Disclosure Schedules, respectively, to the extent its relevance or appropriateness is reasonably apparent on the face of such disclosure; (d) disclosures
contained in the Disclosure Schedules which refer to a document are qualified in their entirety by reference to the text of such document; and (e) headings and introductory language have been inserted in each Schedule to the Disclosure Schedules for convenience of reference only and shall to no extent have the effect of amending or changing the express description of the Sections as set forth in this Agreement.
12.2 Further Assurances. From and after the Closing Date, at the reasonable request of a party hereto, the other parties hereto shall execute and deliver, or cause to be executed and delivered, to the requesting party such other agreements or instruments, in addition to those required by this Agreement, as the requesting party may reasonably request, in order to implement the transactions contemplated by this Agreement.
12.3 Press Release and Announcements. No party hereto may issue any press release or other public announcement relating to the subject matter of this Agreement or any Ancillary Agreement or the transactions contemplated hereby or thereby without the prior approval of the Buyer (on behalf of the Buyer Parties) and the Seller Representative; provided, however, that, nothing in this Section 12.3 will preclude any party from making any disclosures (a) necessary and proper in conjunction with the filing of any Tax Return or other document required to be filed in connection with making or obtaining (as the case may be) consents from any Governmental Authority or (b) reasonably necessary in order to consummate the High Yield Offering, including customary press releases, the preparation and use of an offering memorandum, and the presentation of a customary road show presentation.
12.4 Expenses. Each of the parties shall bear their respective expenses incurred or to be incurred in connection with the execution and delivery of this Agreement and the Ancillary Agreements and the consummation of the transactions contemplated hereby and thereby; provided, however, that (a) the Buyer will bear and pay at the Closing any and all Buyer Parties Selling Expenses and Seller Parties Selling Expenses and (b) any Transfer Taxes shall be borne and paid in accordance with Section 8.1; and provided, further, that if this Agreement is terminated, the obligation of each party to bear its own expenses will be subject to any rights of such party arising from any breach of this Agreement by another party.
12.5 No Assignment. The rights and obligations of the parties hereunder may not be assigned without the prior written consent of the other parties hereto. Notwithstanding the previous sentence, any of the Buyer Parties may, without the consent of the other parties hereto, collaterally assign their respective rights under this Agreement to any secured lender of any of the Buyer Parties or to any Affiliate of the Buyer Parties in connection with a secured loan arrangement, provided that no such assignment shall affect the assignors obligations hereunder.
12.6 Headings. The headings contained in this Agreement are included for purposes of convenience only, and do not affect the meaning or interpretation of this Agreement. Unless the context indicates otherwise, all references to any Article, Section, Schedule, Exhibit or Annex in this Agreement refer to the corresponding Article or Section of, or Schedule or Exhibit or Annex to, this Agreement.
12.7 Integration, Modification and Waiver. This Agreement, together with the Exhibits, Annexes, Schedules and certificates, agreements or other instruments delivered under
or in connection with this Agreement, constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior understandings of the parties. No supplement, modification or amendment of this Agreement will be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement will be deemed to be or will constitute a continuing waiver. No waiver will be binding unless executed in writing by the party making the waiver.
12.8 Construction. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement must be construed as if drafted jointly by the parties and no presumption or burden of proof must arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. The word including means including without limitation. Any reference to the singular in this Agreement also includes the plural and vice versa. Any reference to any federal, state, county, local or foreign Law shall be deemed also to refer to all rules and regulations promulgated thereunder and any amendments thereto, unless the context requires otherwise.
12.9 Severability. If any provision of this Agreement or the application of any provision of this Agreement to any party or circumstance is, to any extent, adjudged invalid or unenforceable, the application of the remainder of such provision to such party or circumstance and the application of the remainder of this Agreement will not be affected thereby.
12.10 Notices. All notices and other communications required or permitted under this Agreement must be in writing and will be deemed to have been duly given (a) when delivered in person, (b) when dispatched by electronic facsimile transfer (if confirmed in writing by mail simultaneously dispatched), (c) one (1) Business Day after having been dispatched by a nationally recognized overnight courier service or (d) five (5) Business Days after being sent by registered or certified mail, return receipt requested, postage prepaid, to the appropriate party at the address or facsimile number specified below:
If to the Seller Representative on behalf of the Seller Parties:
Golden Gate Capital Investment Fund II, L.P.
One Embarcadero Center, Suite 3900
San Francisco, CA 94111
Attention: Chief Operating Officer
Facsimile No.: 415-983-2701
with a copy to:
Kirkland & Ellis LLP
555 California Street
San Francisco, CA 94104
Attention: Stephen D. Oetgen
Facsimile No.: 415-439-1500
If to the Buyer Parties, the Company or any of the Companys Subsidiaries:
c/o Community Choice Financial Inc.
7000 Post Road, Suite 200
Dublin, OH 43016
Attention: Bridgette Roman, General Counsel
Facsimile No.: (614) 760-4054
with a copy to:
Jones Day
325 John H. McConnell Blvd., Suite 600
Columbus, OH 43215
Attention: Randall M. Walters
Facsimile No.: (614) 461-4198
Any party may change its address or facsimile number for the purposes of this Section 12.10 by giving notice as provided in this Agreement.
12.11 Governing Law. This Agreement will be governed by and construed and enforced in accordance with the laws of the State of Delaware without regard to principles of conflicts of law. Each party hereto irrevocably submits to the exclusive jurisdiction of the courts of the Delaware Court of Chancery or courts of the United States located in the State of Delaware for the purposes of any Proceeding arising out of this Agreement or the transactions contemplated hereby. Each party hereby agrees to commence any such Proceeding only in such courts, and irrevocably and unconditionally waives any objection to the laying of venue of any Proceeding in any such court and waives and agrees not to plead or claim in any such court that any such Proceeding brought in any such court has been brought in an inconvenient forum. Each party further agrees that service of any process, summons, notice or document by U.S. registered mail to such partys respective address set forth above shall be effective service of process for any Proceeding with respect to any matters to which it has submitted to jurisdiction in this Section 12.11. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
12.12 Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. Delivery of an executed signature page to this Agreement by facsimile or electronic transmission will be effective as delivery of a manually executed counterpart to this Agreement.
12.13 Attorney-Client Privilege and Conflict Waiver. In connection with any dispute that may arise between the Seller Representative (whether in its capacity as such or as a Seller Party) or any of its Affiliates, on the one hand, and the Buyer or the Company or any of their Affiliates, on the other hand, in connection with this Agreement or the transactions contemplated
hereby, Buyer will not, and will cause the Company not to, seek to have Kirkland & Ellis LLP disqualified from representing the Seller Representative (or any of its Affiliates).
12.14 Seller Representative.
(a) By virtue of its execution of this Agreement, each Seller Party designates and irrevocably appoints the Seller Representative as such Seller Partys agent and attorney-in-fact for the following purposes of this Agreement with the full power and authority on such Seller Partys behalf: (i) to take all actions contemplated to be taken by the Seller Representative as set forth in the provisions of this Agreement, and (ii) to negotiate, settle, compromise and otherwise handle all claims for indemnification made by any Indemnified Party pursuant to Section 11.1, with the sole exception of any indemnification to be provided by Eager Corp (which shall only be negotiated, settled, compromised or otherwise handled by Eager Corp, it being agreed that only Eager Corp shall have the authority to negotiate, settle or compromise any claim for indemnification with respect to which Eager Corp has any liability). All decisions within the scope of the preceding sentence by Seller Representative shall be binding upon each Seller Party (other than Eager Corp solely with respect to clause (ii) thereof), and no such Seller Party shall have any right to object, dissent, protest or otherwise contest the same.
(b) The Seller Representative may delegate its authority as the Seller Representative to any one of the Seller Parties (or their Affiliates) for a fixed or indeterminate period of time upon not fewer than five (5) Business Days prior written notice to the Buyer in accordance with Section 12.10. Each successor Seller Representative has all of the power, authority, rights and privileges conferred by this Agreement upon the original Seller Representative, and the term Seller Representative as used in this Agreement includes any successor Seller Representative.
(c) A decision, act, consent or instruction of the Seller Representative acting on behalf of the Seller Parties in accordance with the provisions hereof (including, for the avoidance of doubt, clause (ii) of Section 12.14(a)) constitutes a decision of all such Seller Parties (except where the context otherwise requires) and is final, binding and conclusive upon such Seller Parties, and the Buyer Parties and any Indemnified Party may rely upon any such decision, act, consent or instruction of the Seller Representative as being the decision, act, consent or instruction of such Seller Parties. The Buyer Indemnitees are hereby relieved from, and the Seller Parties (other than Eager Corp) shall indemnify and hold the Buyer Indemnitees harmless from, any liability to any Person for any acts done by any of them in accordance with such decision, act, consent or instruction of the Seller Representative. The Buyer Indemnitees may for all purposes of this Agreement treat every notice, payment or any other action directed to the Seller Representative as if such notice, payment or other action had been directed to such Seller Party.
(d) The Seller Representative will have no liability to any Seller Party on behalf of whom it is acting for any act done or omitted under this Agreement as the Seller Representative while acting in good faith and not in a manner constituting wanton misconduct, and any act done or omitted pursuant to the advice of counsel will be
conclusive evidence of such good faith. The Seller Parties (other than Eager Corp) will severally indemnify and hold harmless the Seller Representative from and against any Losses the Seller Representative may suffer as a result of any such action or omission.
(e) This appointment and grant of power and authority by the Seller Parties to the Seller Representative pursuant to this Section 12.14 is coupled with an interest, is in consideration of the mutual covenants made in this Agreement, is irrevocable and may not be terminated by the act of any Seller Party or by operation of law, whether upon the death or incapacity of any Seller Party, or by the occurrence of any other event.
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[Signatures on the Following Pages]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.
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CHECKSMART FINANCIAL HOLDINGS CORP. | ||
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/s/ Bridgette C. Roman | |
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Bridgette C. Roman |
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Secretary |
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COMMUNITY CHOICE FINANCIAL INC. | ||
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/s/ Bridgette C. Roman | |
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Bridgette C. Roman |
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Secretary |
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CCFI MERGER SUB I INC. | ||
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/s/ Bridgette C. Roman | |
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Bridgette C. Roman |
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Secretary |
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CCFI MERGER SUB II INC. | ||
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Secretary |
[Signature Page to Merger Agreement]
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GOLDEN GATE CAPITAL INVESTMENT FUND II, L.P., | |||||
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as a Company Stockholder and as the Seller Representative | |||||
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Golden Gate Capital Management II, L.L.C. | ||||
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/s/ David Dominick | ||||
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By: |
David Dominik | |||
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Its: |
Managing Director | |||
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| |||
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| |||||
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GOLDEN GATE CAPITAL INVESTMENT | |||||
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FUND II-A, L.P., | |||||
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GOLDEN GATE CAPITAL INVESTMENT | |||||
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FUND II (AI), L.P., | |||||
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GOLDEN GATE CAPITAL INVESTMENT | |||||
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FUND II-A (AI), L.P., | |||||
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GOLDEN GATE CAPITAL ASSOCIATES | |||||
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II-QP, LLC, | |||||
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and | |||||
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GOLDEN GATE CAPITAL ASSOCIATES | |||||
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II-AI, LLC, | |||||
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as Company Stockholders | |||||
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| |||||
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By: |
Golden Gate Capital Management II, L.L.C. | ||||
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Its: |
Authorized Representative | ||||
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| ||||
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|
/s/ David Dominick | ||||
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By: |
David Dominik | |||
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Its: |
Managing Director | |||
[Signature Page to Merger Agreement]
|
CCG AV, L.L.C. Series A, | ||||
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CCG AV, L.L.C. Series C, | ||||
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CCG AV, L.L.C. Series G, | ||||
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and | ||||
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CCG AV, L.L.C. Series I, | ||||
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as Company Stockholders | ||||
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| |||
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By: |
Golden Gate Capital Management, L.L.C. | |||
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Its: |
Authorized Representative | |||
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| ||||
|
|
/s/ David Dominick | |||
|
|
By: |
David Dominik | ||
|
|
Its: |
Managing Director | ||
|
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| ||
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| ||||
|
CALIFORNIA CHECK CASHING STORES, INC. | ||||
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|
| |||
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By: |
/s/ Jonathan Eager | |||
|
|
Name: |
Jonathan Eager | ||
|
|
Title: |
President | ||
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|
|
| ||
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| |||
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CALIFORNIA CHECK CASHING STORES II, INC. | ||||
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| |||
|
By: |
/s/ Mark Tavill | |||
|
|
Name: |
Mark Tavill | ||
|
|
Title: |
President | ||
|
|
|
| ||
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| |||
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CALIFORNIA CHECK CASHING STORES IV, INC. | ||||
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|
| |||
|
By: |
/s/ Richard Lake | |||
|
|
Name: |
Richard Lake | ||
|
|
Title: |
President | ||
[Signature Page to Merger Agreement]
|
CCCS CORPORATE HOLDINGS, INC. | ||
|
|
| |
|
By: |
/s/ John Knoll | |
|
|
Name: |
John Knoll |
|
|
Title: |
Secretary |
|
|
|
|
|
|
| |
|
CCCS HOLDINGS, LLC | ||
|
|
| |
|
By: |
/s/ Lance Solomon | |
|
|
Name: |
Lance Solomon |
|
|
Title: |
President |
|
|
|
|
|
|
| |
|
Solely for the purposes of Section 11.1(c): | ||
|
| ||
|
CHECKSMART FINANCIAL COMPANY | ||
|
|
| |
|
By: |
/s/ Bridgette C. Roman | |
|
|
Name: |
Bridgette C. Roman |
|
|
Title: |
Secretary |
[Signature Page to Merger Agreement]
Exhibit 2.2
FIRST AMENDMENT TO
AGREEMENT AND PLAN OF MERGER
THIS FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER (this Amendment) is made and entered into as of April 28, 2011 by and among (i) CHECKSMART FINANCIAL HOLDINGS CORP., a Delaware corporation; (ii) COMMUNITY CHOICE FINANCIAL INC., an Ohio corporation; (iii) CCFI MERGER SUB I INC., a Delaware corporation; (iv) CCFI MERGER SUB II INC., a Delaware corporation; (v) each of the stockholders of the Company identified on the signature pages hereto; (vi) each of CALIFORNIA CHECK CASHING STORES, INC., a California corporation, CALIFORNIA CHECK CASHING STORES II, INC., a California corporation, and CALIFORNIA CHECK CASHING STORES IV, INC., a California corporation; (vii) GOLDEN GATE CAPITAL INVESTMENT FUND II, L.P., a Delaware limited partnership, as the representative of the Seller Parties; (viii) CCCS CORPORATE HOLDINGS, INC., a Delaware corporation; and (ix) CCCS HOLDINGS, LLC, a Delaware limited liability company; and (x) solely for the purposes of Section 11.1(c) of the Merger Agreement, CHECKSMART FINANCIAL COMPANY, a Delaware corporation.
RECITALS
A. The parties hereto are party to that certain Agreement and Plan of Merger, dated as of April 13, 2011 (the Merger Agreement).
B. Pursuant to Section 12.7 of the Merger Agreement, the parties hereto desire to amend the Merger Agreement as specifically provided in this Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements set forth in this Amendment and the Merger Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each of the parties hereto agrees as follows:
1. Defined Terms. Unless otherwise defined in this Amendment, initially capitalized words used in this Amendment have the meanings given to them in the Merger Agreement.
2. Amendment to Exhibit 3.4 of Merger Agreement. Exhibit 3.4 of the Merger Agreement is hereby amended and restated in its entirety to read as set forth on Exhibit 3.4 to this Amendment.
3. Amendment to Schedule 6.4(b) of Merger Agreement. The table set forth under the heading Options issued by Checksmart as of the date of this Agreement on Schedule 6.4(b) of the Buyer Disclosure Schedules to the Merger Agreement is hereby amended and restated in its entirety to read as follows:
Options issued by Checksmart as of the date of this Agreement:
Individual Name |
|
Outstanding Options to Purchase |
|
William E. Saunders, Jr. |
|
58,336 |
|
Kyle Hanson |
|
33,721 |
|
Michael Durbin |
|
21,500 |
|
Chad M. Streff |
|
35,454 |
|
Robert Grieser |
|
2,000 |
|
Louis Nash |
|
2,000 |
|
Bridgette Roman |
|
2,000 |
|
Greyson Eves |
|
3,244 |
|
Pagle Helterbrand |
|
3,244 |
|
4. Continuance of Merger Agreement; Single Document. Except as specifically amended by this Amendment, all provisions of the Merger Agreement shall remain in full force and effect. The Merger Agreement, as amended by this Amendment, shall hereafter be read as a single, integrated document, incorporating the changes effected by this Amendment.
5. Governing Law. This Amendment will be governed by and construed and enforced in accordance with the laws of the State of Delaware without regard to principles of conflicts of law.
6. Counterparts and Facsimile Signatures. This Amendment may be executed in any number of counterparts, each of which will be deemed to be an original and all of which, when taken together, will be deemed to constitute one and the same instrument. Facsimile and signatures transmitted by other electronic means shall evidence the binding agreement of each of the parties hereto and shall, for all purposes, have the same legal effect as manual signatures.
[REMAINDER OF PAGE BLANK SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, this Amendment has been signed by or on behalf of each of the parties as of the day first above written.
|
CHECKSMART FINANCIAL HOLDINGS CORP. | ||
|
| ||
|
By: |
/s/ Bridgette C. Roman | |
|
|
Name: |
Bridgette C. Roman |
|
|
Title: |
Secretary |
|
| ||
|
| ||
|
COMMUNITY CHOICE FINANCIAL INC. | ||
|
| ||
|
By: |
/s/ Bridgette C. Roman | |
|
|
Name: |
Bridgette C. Roman |
|
|
Title: |
Secretary |
|
| ||
|
| ||
|
CCFI MERGER SUB I INC. | ||
|
| ||
|
By: |
/s/ Bridgette C. Roman | |
|
|
Name: |
Bridgette C. Roman |
|
|
Title: |
Secretary |
|
| ||
|
| ||
|
CCFI MERGER SUB II INC. | ||
|
| ||
|
By: |
/s/ Bridgette C. Roman | |
|
|
Name: |
Bridgette C. Roman |
|
|
Title: |
Secretary |
[Signature Page to First Amendment to Merger Agreement]
[Signature Page to First Amendment to Merger Agreement]
|
CCG AV, L.L.C. Series A, | |||
|
CCG AV, L.L.C. Series C, | |||
|
CCG AV, L.L.C. Series G, | |||
|
and | |||
|
CCG AV, L.L.C. Series I, | |||
|
as Company Stockholders | |||
|
| |||
|
By: |
Golden Gate Capital Management, L.L.C. | ||
|
Its: |
Authorized Representative | ||
|
|
| ||
|
|
/s/ David Dominick | ||
|
|
By: |
David Dominik | |
|
|
Its: |
Managing Director | |
|
| |||
|
| |||
|
CALIFORNIA CHECK CASHING STORES, INC. | |||
|
| |||
|
By: |
/s/ Jonathan Eager | ||
|
|
Name: |
Jonathan Eager | |
|
|
Title: |
President | |
|
| |||
|
| |||
|
CALIFORNIA CHECK CASHING STORES II, INC. | |||
|
| |||
|
By: |
/s/ Mark Tavill | ||
|
|
Name: |
Mark Tavill | |
|
|
Title: |
President | |
|
| |||
|
| |||
|
CALIFORNIA CHECK CASHING STORES IV, INC. | |||
|
| |||
|
By: |
/s/ Richard Lake | ||
|
|
Name: |
Richard Lake | |
|
|
Title: |
President | |
[Signature Page to First Amendment to Merger Agreement]
|
CCCS CORPORATE HOLDINGS, INC. | ||
|
| ||
|
By: |
/s/ Ken Diekroeger | |
|
|
Name: |
Ken Diekroeger |
|
|
Title: |
|
|
| ||
|
| ||
|
CCCS HOLDINGS, LLC | ||
|
| ||
|
By: |
/s/ Lance Solomon | |
|
|
Name: |
Lance Solomon |
|
|
Title: |
President and CFO |
|
| ||
|
| ||
|
Solely for the purposes of Section 11.1(c) of the Merger Agreement: | ||
|
| ||
|
CHECKSMART FINANCIAL COMPANY | ||
|
| ||
|
By: |
/s/ Bridgette C. Roman | |
|
|
Name: |
Bridgette C. Roman |
|
|
Title: |
Secretary |
[Signature Page to First Amendment to Merger Agreement]
Exhibit 3.4
Options and New Options
Name |
|
Options (Outstanding |
|
New Options (Options |
|
William E. Saunders, Jr. |
|
58,336 |
|
58,336 |
|
Kyle Hanson |
|
33,721 |
|
42,076 |
|
Michael Durbin |
|
21,500 |
|
42,100 |
|
Chad M. Streff |
|
35,454 |
|
48,824 |
|
Robert Grieser |
|
2,000 |
|
2,000 |
|
Louis Nash |
|
2,000 |
|
2,000 |
|
Bridgette Roman |
|
2,000 |
|
2,000 |
|
Greyson Eves |
|
3,244 |
|
4,914 |
|
Pagle Helterbrand |
|
3,244 |
|
4,914 |
|
Total |
|
161,499 |
|
207,164 |
|
If the Dividend paid pursuant to Section 7.9 of the Agreement is exactly $125,000,000, then the strike prices of the New Options will be as set forth in the following table; provided, however, that if the Dividend paid pursuant to Section 7.9 of the Agreement is not exactly $125,000,000, then the strike prices of the New Options set forth below will not be valid.
Management Options |
|
# Options (3) |
|
Strike (4) |
| |
Time Vesting (1) |
|
40,986 |
|
$ |
52.86 |
|
Other Time Options |
|
10,242 |
|
$ |
63.18 |
|
Time Vesting (Vested) |
|
61,418 |
|
$ |
36.00 |
|
Performance (2) |
|
52,418 |
|
$ |
36.00 |
|
Other Performance (2) |
|
42,100 |
|
$ |
49.61 |
|
(1) Currently 80% vested (will be fully vested as of 5/1/2011)
(2) Vest upon return of capital to DCP
(3)* Revised # of options equal to current # of options multiplied by ratio (pre-dividend price / post-dividend price)
(4)* Revised strike prices equal to current strike prices divided by ratio (pre-dividend price / post-dividend price)
*Note: Options in the table above with a strike price of $36.00 have not been adjusted.
Exhibit 3.1
DATE: |
|
DOCUMENT ID |
|
DESCRIPTION |
|
FILING |
|
EXPED |
|
PENALTY |
|
CERT |
|
COPY |
|
05/04/2012 |
|
201212500003 |
|
DOMESTIC/AMENDMENT TO ARTICLES (AMD) |
|
100,050.00 |
|
300.00 |
|
|
|
.00 |
|
5.00 |
|
Receipt
This is not a bill. Please do not remit payment.
C.T. CORPORATION SYSTEM
JAMES H. TANKS, III
4400 EASTON COMMONS WAY, SUITE 125
COLUMBUS, OH 43219
STATE OF OHIO
CERTIFICATE
Ohio Secretary of State, Jon Husted
2010806
It is hereby certified that the Secretary of State of Ohio has custody of the business records for
COMMUNITY CHOICE FINANCIAL INC.
and, that said business records show the filing and recording of:
Document(s) |
|
Document No(s): |
DOMESTIC/AMENDMENT TO ARTICLES |
|
201212500003 |
|
Witness my hand and the seal of the Secretary of State at Columbus, Ohio this 4th day of May, A.D. 2012. | |
United States of America |
|
/s/ Jon Husted |
State of Ohio |
|
|
Office of the Secretary of State |
|
Ohio Secretary of State |
|
RECEIVED |
|
SECRETARY OF STATE |
|
|
|
2012 MAY -4 AM 8:03 |
|
|
|
CLIENT SERVICE CENTER |
Form 540 Prescribed by: |
Mail this form to one of the following: | |
JON HUSTED |
| |
Ohio Secretary of State |
Regular Filing (non expedite) | |
|
P.O. Box 1329 | |
Central Ohio: (614) 466-3910 |
Columbus, OH 43216 | |
Toll Free: (877) SOS-FILE (767-3453) |
| |
www.OhioSecretaryofState.gov |
Expedite Filing (Two-business day processing time requires an additional $100.00). | |
|
P.O. Box 1390 | |
|
Columbus, OH 43216 |
Certificate of Amendment
(For-Profit, Domestic Corporation)
Filing Fee: $50
Check appropriate box:
x Amendment to existing Articles of Incorporation (125-AMDS)
o Amended and Restated Articles (122-AMAP) - The following articles supersede the existing articles and all amendments thereto.
Complete the following information:
Name of Corporation |
Community Choice Financial Inc. |
|
|
Charter Number |
2010806 |
Check one box below and provide information as required:
o The articles are hereby amended by the Incorporators. Pursuant to Ohio Revised Code section 1701.70(A), Incorporators may adopt an amendment to the articles by a writing signed by them if initial directors are not named in the articles or elected and before subscriptions to shares have been received.
o The articles are hereby amended by the Directors. Pursuant to Ohio Revised Code section 1701.70 (A), directors may adopt amendments if initial directors were named in articles or elected, but subscriptions to shares have not been received. Also, Ohio Revised Code section 1701.70(B) sets forth additional cases in which directors may adopt an amendment to the articles.
The resolution was adopted pursuant to Ohio Revised Code section 1701.70(B) (In this space insert the number 1 through 10 to provide basis for adoption.) |
|
x The articles are hereby amended by the Shareholders pursuant to Ohio Revised Code section 1701.71.
A copy of the resolution of amendment is attached to this document.
Note: If amended articles were adopted, they must set forth all provisions required in original articles except that articles amended by directors or shareholders need not contain any statement with respect to initial stated capital. See Ohio Revised Code section 1701.04 for required provisions.
Required
Must be signed by all Incorporators, if amended by Incorporators, or an authorized officer if amended by directors or shareholders, pursuant to Ohio Revised Code section 1701.73(B) and (C).
If authorized representative is an individual, then they must sign in the signature box and print their name in the Print Name box. |
|
/s/ Bridgette C. Roman |
|
Signature | |
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| |
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By (if applicable) |
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|
If authorized representative is a business entity, not an individual, then please print the business name in the signature box, an authorized representative of the business entity must sign in the By box and print their name in the Print Name box. |
|
Bridgette C. Roman |
|
Print Name | |
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| |
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| |
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| |
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Signature | |
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By (if applicable) |
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Print Name |
AMENDMENT TO ARTICLES OF INCORPORATION
OF COMMUNITY CHOICE FINANCIAL INC.
RESOLVED, that Article FOURTH, Section 1 of the Articles of Incorporation of Community Choice Financial Inc. is hereby amended in its entirety to read as follows:
Section 1. The aggregate number of shares which the Corporation is authorized to issue shall be Three Hundred Three Million (303,000,000), consisting of Three Hundred Million (300,000,000) common shares, par value $0.01 per share (Common Shares), and Three Million (3,000,000) preferred shares, par value $0.01 per share (Preferred Shares).
Upon this amendment (this Amendment) becoming effective (the Effective Time), each Common Share issued and outstanding or held by the Corporation as treasury stock immediately prior to the Effective Time shall be and automatically is changed into 6 Common Shares, and each certificate that theretofore represented Common Shares shall thereafter represent such number of Common Shares into which the Common Shares represented by such certificate have been changed into.
This Amendment shall become effective upon filing with the Secretary of State of the State of Ohio.
Exhibit A
AMENDMENT TO ARTICLES OF INCORPORATION
OF COMMUNITY CHOICE FINANCIAL INC.
RESOLVED, that Article FOURTH, Section 1 of the Articles of Incorporation of Community Choice Financial Inc. is hereby amended in its entirety to read as follows:
Section 1. The aggregate number of shares which the Corporation is authorized to issue shall be Three Hundred Three Million (303,000,000), consisting of Three Hundred Million (300,000,000) common shares, par value $0.01 per share (Common Shares), and Three Million (3,000,000) preferred shares, par value $0.01 per share (Preferred Shares).
Upon this amendment (this Amendment) becoming effective (the Effective Time), each Common Share issued and outstanding or held by the Corporation as treasury stock immediately prior to the Effective Time shall be and automatically is changed into 6 Common Shares, and each certificate that theretofore represented Common Shares shall thereafter represent such number of Common Shares into which the Common Shares represented by such certificate have been changed into.
This Amendment shall become effective upon filing with the Secretary of State of the State of Ohio.
COMMUNITY CHOICE FINANCIAL INC.
Written Action of the Shareholders Without a Meeting
April 30, 2012
Pursuant to Section 1701.54 of the Ohio Revised Code, the following actions are taken by all of the shareholders (the Shareholders) of Community Choice Financial Inc., an Ohio corporation (the Company), by unanimous written consent without a meeting, effective as of April 30, 2012. Such actions are taken with the same force and effect as if they had been unanimously adopted at a duly convened meeting of the Shareholders.
Approval of Amendment to Articles of Incorporation
WHEREAS, in connection with the Companys initial public offering (the IPO), the Board of Directors (the Board) of the Company has recommended adopting an amendment to the Articles of Incorporation of the Company (the Articles of Incorporation) in the form attached as Exhibit A hereto (the Amendment).
NOW THEREFORE BE IT RESOLVED, that pursuant to Section 1701.69 of the Ohio Revised Code, the Shareholders hereby adopt and approve the Amendment;
FURTHER RESOLVED, that the officers of the Company are, and each of them hereby is, authorized, empowered and directed to execute and acknowledge the Amendment for and on behalf and in the name of the Company;
FURTHER RESOLVED, that the officers of the Company are, and each of them hereby is, authorized, empowered and directed to file the Amendment with the Secretary of State of the State of Ohio;
FURTHER RESOLVED, that, at any time prior to the filing of the Amendment with the Secretary of State of the State of Ohio, the Board may abandon the Amendment without further action by the Shareholders; and
FURTHER RESOLVED, that the number of shares of Common Shares (as defined in the Articles of Incorporation) underlying any convertible or derivative securities of the Company, and any equity-based grants and awards granted thereunder, will be equitably adjusted as necessary to reflect the split described in the Amendment.
Adjustment to Exercise Price of Certain Options
WHEREAS, pursuant to the Companys 2011 Management Equity Incentive Plan, as amended to date (the 2011 Plan), on February 13, 2012, certain of the Companys employees were granted nonqualified Options (as defined in the 2011 Plan) as described on Exhibit B hereto (the February Options);
WHEREAS, the February Options were granted with an Exercise Price of $119.68 per Share (the terms Exercise Price and Share are used herein as defined in the 2011 Plan) (the Original Exercise Price);
WHEREAS, the Original Exercise Price for the February Options does not take into account any stock split or similar transaction that the Company has engaged in or may engage in prior to consummating the IPO;
WHEREAS, in furtherance of the 2011 Plans stated purposes to attract and retain the best available personnel, to provide additional incentive to persons who provide services to the Company and its subsidiaries, and to promote the success of the Companys business, the Board has deemed it advisable and in the Companys best interest to amend the terms of the February Options solely to lower the Original Exercise Price for the February Options, as more fully described below (Reprice the February Options);
WHEREAS, the Compensation Committee of the Board (the Committee) has the authority under the 2011 Plan to Reprice the February Options without the consent of Participants (as defined in the 2011 Plan) holding the February Options because such modification to the February Options will not impair the Participants rights or increase the Participants obligations under the February Options, will not impair the economic value of the February Options and will not adversely affect in any material respect the rights granted to any Participant under the February Options;
WHEREAS, the Committee has determined to Reprice the February Options, effective on the date on which the public offering price for Common Shares (the IPO Price) for the IPO is determined by the Company (the Pricing Date), as long as the IPO is consummated within 10 business days after the Pricing Date and not later than December 31, 2012, so that the Exercise Price for the February Options on and after the Pricing Date (the New Exercise Price) is the IPO Price;
WHEREAS, the New Exercise Price for the February Options does take into account any stock split or similar transaction that the Company has engaged in or may engage in prior to consummating the IPO, including the stock split contemplated by the Amendment;
WHEREAS, the Committee has determined in good faith that the New Exercise Price will represent the fair value of the Common Shares as of the Pricing Date; and
WHEREAS, Mr. Saunders, a member of the Board, has disclosed to the Board that he holds a total of 14,409 February Options, the Original Exercise Price of which will be reduced as a result of the actions contemplated herein and the Board has acknowledged that the actions contemplated herein will personally benefit Mr. Saunders.
NOW, THEREFORE, BE IT RESOLVED, that the Shareholders hereby ratify and approve the Committees action by which the Original Exercise Price for each of the February Options described on Exhibit B hereto was modified to equal, effective on the Pricing Date as long as the IPO is consummated within 10 business days after the Pricing Date and not later than December 31, 2012, the New Exercise Price, and the Shareholders hereby acknowledge that no further action on the part of the Shareholders, the Board or the Committee or any holder of the February Options will be required to effect such modification;
FURTHER RESOLVED that the Shareholders hereby approve and ratify the Committees determination that the New Exercise Price will represent the fair value of the Common Shares as of the Pricing Date;
FURTHER RESOLVED, that the Shareholders hereby approve and ratify the Committees action authorizing the officers of the Company to prepare a written communication to each holder of the February Options, in such form and substance as determined by such officers (the Communication), that informs such holder of the New Exercise Price for the February Options, and the Shareholders hereby acknowledge that the Communication shall be an amendment to the award agreement evidencing such holders February Options;
FURTHER RESOLVED, that the officers of the Company are, and each of them hereby is, authorized for and on behalf of the Company to execute and deliver, with such additions, deletions, changes or modifications as such officers executing the same shall approve, any agreements or other documents necessary or desirable to effect the Committees action to Reprice the February Options, with such execution and delivery to conclusively evidence the authorization and approval thereof by the Committee, and are each hereby authorized and empowered to cause the Company to perform its obligations and exercise its rights related to the February Options, and to take any other action and make any such filings as such officer deems necessary or desirable in connection with the Committees action to Reprice the February Options, and the consummation of the transactions contemplated thereby and by the above resolutions;
FURTHER RESOLVED, that any actions previously taken or caused to be taken by any of the officers of the Company in connection with any of the matters contemplated by the foregoing resolutions are hereby acknowledged to be duly authorized acts performed on behalf of the Company and are hereby ratified, confirmed and adopted as such;
FURTHER RESOLVED, that if in connection with any action authorized by the foregoing resolutions any particular form of resolutions shall be required by governmental authorities or others, such form of resolutions shall be deemed to be adopted, and any officer of the Company may certify the same to have been duly adopted as of the date of this Action by Unanimous Written Consent and to be in full force and effect, provided that the officer of the Company certifying the same shall cause a copy of such resolutions to be inserted in the corporate records of the Company; and
FURTHER RESOLVED, that this Action by Unanimous Written Consent may be executed in two or more counterparts, each of which may be deemed an original, but all of which together, when filed in the corporate records of the Company, shall be deemed one instrument.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the undersigned Shareholders of the Company hereby consent to, and approve and adopt, the foregoing resolutions effective as of the last date of execution set forth below.
Diamond Castle Partners IV, L.P. |
|
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|
|
/s/ [ILLEGIBLE] |
|
Date: |
April 30, 2012 |
By: |
|
|
|
|
|
|
|
|
|
|
|
Diamond Castle Partners IV-A, L.P. |
|
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/s/ [ILLEGIBLE] |
|
Date: |
April 30, 2012 |
By: |
|
|
|
|
|
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|
|
|
|
|
Deal Leaders Fund L.P. |
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April 30, 2012 |
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#2010806
UNITED STATES OF AMERICA,
STATE OF OHIO,
OFFICE OF THE SECRETARY OF STATE
I, Jon Husted, Secretary of State of the State of Ohio, do hereby certify that the foregoing is a true and correct copy, consisting of 9 pages, as taken from the original record now in my official custody as Secretary of State.
WITNESS my hand and official seal at Columbus, Ohio, this 25th day of May A.D. 2012. | ||
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/s/ Jon Husted | ||
JON HUSTED | ||
Secretary Of State | ||
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By: |
[ILLEGIBLE] |
NOTICE: This is an official certification only when reproduced in red ink
DATE: |
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FILING |
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COPY |
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04/07/2011 |
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201109700017 |
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DOMESTIC ARTICLES/FOR PROFIT (ARF) |
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22,600.00 |
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300.00 |
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Receipt
This is not a bill. Please do not remit payment.
SCHOTTENSTEIN, ZOX, DUNN
250 WEST STREET, SUITE 700
COLUMBUS, OH 43215
STATE OF OHIO
CERTIFICATE
Ohio Secretary of State, Jon Husted
2010806
It is hereby certified that the Secretary of State of Ohio has custody of the business records for
COMMUNITY CHOICE FINANCIAL INC.
and, that said business records show the filing and recording of:
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DOMESTIC ARTICLES/FOR PROFIT |
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201109700017 |
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Witness my hand and the seal of the Secretary of State at Columbus, Ohio this 6th day of April, A.D. 2011. | |
United States of America |
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/s/ Jon Husted |
State of Ohio |
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Office of the Secretary of State |
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Ohio Secretary of State |
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RECEIVED |
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SECRETARY OF STATE |
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2011 APR -6 PM 4:07 |
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CLIENT SERVICE CENTER |
Prescribed by: Ohio Secretary of State Central Ohio: (614) 466-3910 Toll Free: 1-877-SOS-FILE (1-877-767-3453) |
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x Yes |
PO Box 1390 |
www.sos.state.oh.us |
Columbus, OH 43216 | ||
e-mail: busserv@sos.state.oh.us |
*** Requires an additional fee of $100 *** | ||
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INITIAL ARTICLES OF INCORPORATION
(For Domestic Profit or Nonprofit)
Filing Fee $125.00
THE UNDERSIGNED HEREBY STATES THE FOLLOWING:
(CHECK ONLY ONE (1) BOX)
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Articles of Incorporation Profit |
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Articles of Incorporation Professional (170-ARP) | |
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ORC 1701 |
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ORC 1702 |
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ORC 1785 |
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Complete the general information in this section for the box checked above.
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Name of Corporation |
Community Choice Financial Inc. | ||||
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SECOND: |
Location |
Dublin |
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Complete the information in this section if box (2) or (3) is checked. Completing this section is optional if box (1) is checked.
THIRD: |
Purpose for which corporation is formed |
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See attached. |
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Complete the information in this section if box (1) or (3) is checked.
FOURTH: The number of shares which the corporation is authorized to have outstanding (Please state if shares are common or | |||||
preferred and their par value if any) |
see attached |
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FIFTH: The following are the names and addresses of the individuals who are to serve as initial Directors.
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REQUIRED |
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Must be authenticated |
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(signed) by an authorized |
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representative |
/s/ Bridgette C. Roman |
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4/6/11 |
(See Instructions) |
Authorized Representative |
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Bridgette C. Roman |
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Complete the information in this section if box (1) (2) or (3) is checked.
ORIGINAL APPOINTMENT OF STATUTORY AGENT
The undersigned, being at least a majority of the incorporators of Community Choice Financial Inc. hereby appoint the following to be statutory agent upon whom any process, notice or demand required or permitted by statute to be served upon the corporation may be served. The complete address of the agent is
Mercury Agent Company |
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250 West Street, Suite 700 |
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NOTE: P.O. Box Addresses are NOT acceptable. | ||||
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Columbus |
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43215 |
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/s/ [ILLEGIBLE] |
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ACCEPTANCE OF APPOINTMENT
The Undersigned, Mercury Agent Company, named herein as the Statutory agent for, Community Choice Financial Inc., hereby acknowledges and accepts the appointment of statutory agent for said entity.
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/s/ Heidi Bowman |
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(Statutory Agent). |
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Heidi Bowman, Secretary to Mercury Agent Company |
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COMMUNITY CHOICE FINANCIAL INC.
ATTACHMENT TO ARTICLES OF INCORPORATION
THIRD: The purpose for which the Corporation is formed is to engage in any lawful act or activity for which corporations may be formed under Chapter 1701 of the Ohio Revised Code.
FOURTH:
Section 1. The aggregate number of shares which the Corporation is authorized to issue shall be Eight Million (8,000,000), consisting of Five Million (5,000,000) common shares, par value $0.01 per share (Common Shares), and Three Million (3,000,000) preferred shares, par value $0.01 per share (Preferred Shares).
Section 2. The express terms and provisions of the Common Shares are as follows:
(a) The rights of the Common Shares shall be subject in all respects to the rights and preferences of the Preferred Shares, in the manner and to the extent provided in this Article Fourth.
(b) The Common Shares shall rank junior to the Preferred Shares with respect to the payment of dividends. Subject to the restrictions or limitations contained in the express terms and provisions of all shares ranking senior to the Common Shares with respect to the payment of dividends, dividends may be declared and paid upon the Common Shares out of the assets of the Corporation available for dividends remaining after there shall have been paid or declared and set apart for payment full dividends on all shares ranking senior to the Common Shares with respect to the payment of dividends, but only when and as determined by the Board of Directors of the Corporation.
(c) The Common Shares shall rank junior to the Preferred Shares with respect to payment upon the dissolution, liquidation or sale of all or substantially all of the assets of the Corporation. Upon the dissolution, liquidation or sale of all or substantially all of the assets of the Corporation, after there shall have been paid to or set apart for holders of all shares ranking senior to the Common Shares the full preferential amounts to which they are respectively entitled, the holders of the Common Shares shall be entitled to receive pro rata all of the remaining assets of the Corporation available for distribution to the Corporations shareholders.
(d) The holders of Common Shares shall be entitled to one vote for each Common Share held by them respectively.
Section 3. The Board of Directors of the Corporation shall have the authority by resolution to issue Preferred Shares from time to time on such terms as the Board of Directors may determine, by adoption of amendments to these Articles of Incorporation, and to divide the Preferred Shares into one or more series and, in connection with the creation of any such series, to determine and fix by the resolution or resolutions providing for the Preferred Shares of such series:
(a) the distinctive designation of such series, the number of Preferred Shares which shall constitute such series, which number may be increased or decreased (but not below the number of Preferred Shares then outstanding) from time to time by action of the Board of Directors, and the stated value thereof, if different from the par value thereof;
(b) the dividend rate, the times of payment of dividends on the Preferred Shares of such series, whether dividends shall be cumulative or noncumulative, and, if cumulative, from what date or dates, and the preference or relation which such dividends shall bear to the dividends payable on any shares of any other class or of any other series of Preferred Shares;
(c) the price or prices at which, and the terms and conditions on which, the Preferred Shares of such series may be redeemed;
(d) whether or not the Preferred Shares of such series shall be entitled to the benefit of a retirement or sinking fund to be applied to the purchase or redemption of such Preferred Shares or for dividends or distributions on such Preferred Shares and, if so entitled, the amount of such fund and the terms and provisions relative to the operation thereof;
(e) whether or not the Preferred Shares of such series shall be convertible into, or exchangeable for, any other shares of the Corporation or any other securities and, if so convertible or exchangeable, the conversion price or prices, or the rates of exchange and any adjustments thereof, at which such conversion or exchange may be made, and any other terms and conditions of such conversion or exchange;
(f) the rights of Preferred Shares of such series in the event of voluntary or involuntary liquidation, dissolution or winding up of, or upon any distribution of the assets of, the Corporation;
(g) whether or not the Preferred Shares of such series shall have priority over or parity with or be junior to the shares of any other class or series in any respect, or shall be entitled to the benefit of limitations restricting (i) the creation of indebtedness of the Corporation, (ii) the issuance of shares of any other class or series having priority over or being on a parity with the Preferred Shares of such series in any respect, or (iii) the payment of dividends on, the making of other distributions in respect of, or the purchase or redemption of shares of any other class or series on a parity with or ranking junior to the Preferred Shares of such series as to dividends or distributions, and the terms of any such restrictions, or any other restriction with respect to shares of any other class or series on a parity with or ranking junior to the Preferred Shares of such series in any respect;
(h) whether the Preferred Shares of such series shall have voting rights in addition to any voting rights provided by law and, if so, the terms of such voting rights, which may be full or limited; and
(i) any other powers, designations, preferences and relative, participating, optional or other special rights of the Preferred Shares of such series, and the qualifications, limitations or restrictions thereof, to the full extent now or hereafter permitted by law.
The powers, designations, preferences and relative, participating, optional and other special rights of each series of Preferred Shares, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series of Preferred Shares at any time outstanding. All Preferred Shares of any one series shall be identical in all respects with all other Preferred Shares of such series, except that Preferred Shares of any one series issued at different times may differ as to the dates from which dividends thereon shall be cumulative.
SIXTH: The Board of Directors of the Corporation shall have the power to cause the Corporation from time to time and at any time to purchase, hold, sell, transfer or otherwise deal with (A) shares of any class or series issued by the Corporation, (B) any security or other obligation of the Corporation which may confer upon the holder thereof the right to convert the same into shares of any class or series authorized by these Articles of Incorporation, and (C) any security or other obligation which may confer upon the holder thereof the right to purchase shares of any class or series authorized by these Articles of Incorporation. The Corporation shall have the right to repurchase shares of any class or series issued by the Corporation, if and when any shareholder desires to sell such shares or on the happening of any event requiring any shareholder to sell such shares. The authority granted in this Article Sixth shall not limit the plenary authority of the directors to purchase, hold, sell, transfer or otherwise deal with shares of any class or series, securities or other obligations issued by the Corporation or authorized by these Articles of Incorporation.
SEVENTH: No holder of any shares of the Corporation shall have the right to vote cumulatively in the election of directors.
EIGHTH:
Section 1. Notwithstanding any provision of the Ohio Revised Code now or hereafter in force requiring for any purpose the vote, consent, waiver or release of the holders of shares of the Corporation entitling them to exercise a designated proportion (but less than all) of the voting power of the Corporation or of any class or classes of shares of the Corporation, such action, unless otherwise expressly required by statute, these Articles of Incorporation or the Regulations of the Corporation, may be taken by the vote, consent, waiver or release of the holders of shares of the Corporation entitling them to exercise not less than a majority of the voting power of the Corporation or of such class or classes of shares of the Corporation.
Section 2. These Articles of Incorporation may be amended at a meeting of shareholders held for such purpose by the affirmative vote of the holders of shares entitling them to exercise not less than a majority of the voting power of the Corporation on such proposal, unless otherwise expressly required by statute, and by the affirmative vote of shares of any particular class that is required by these Articles of Incorporation or by statute.
Section 3. The Regulations of the Corporation may be amended, or new regulations may be adopted, at a meeting of shareholders held for such purpose, by the affirmative vote of the holders of shares entitling them to exercise not less than a majority of the voting power of the Corporation on such proposal, or without a meeting by the written consent of the holders of shares entitling them to exercise not less than a majority of the voting power of the Corporation on such proposal. In addition, unless a provision of the Ohio Revised Code reserves such
authority to shareholders of the Corporation, the Regulations of the Corporation may be amended, or new regulations may be adopted, by the directors of the Corporation; provided, however, that the foregoing shall not divest shareholders of the Corporation of the power, or limit the shareholders power, to amend the Regulations of the Corporation or adopt new regulations.
NINTH: At each meeting of the shareholders for the election of directors, a nominee shall be elected to the Board of Directors if the votes cast for such nominees election exceed the votes cast against such nominees election; provided, however, that the nominees receiving the greatest number of votes shall be elected to the Board of Directors at any such meeting of the shareholders for which (A) the secretary of the Corporation receives a notice that a shareholder has nominated a person for election to the Board of Directors in compliance with the advance notice requirements for shareholder nominees for directors set forth in Section 1.09 and Section 1.11 of Article I of the Regulations of the Corporation and (B) such nomination has not been withdrawn by such shareholder on or prior to the tenth day preceding the date the Corporation first mails its notice of meeting for such meeting to the shareholders. Directors need not be shareholders.
#2010806
UNITED STATES OF AMERICA,
STATE OF OHIO,
OFFICE OF THE SECRETARY OF STATE
I, Jon Husted, Secretary of State of the State of Ohio, do hereby certify that the foregoing is a true and correct copy, consisting of 8 pages, as taken from the original record now in my official custody as Secretary of State.
WITNESS my hand and official seal at Columbus, Ohio, this 25th day of May A.D. 2012. | ||
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/s/ Jon Husted | ||
JON HUSTED | ||
Secretary Of State | ||
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By: |
/s/ [ILLEGIBLE] |
NOTICE: This is an official certification only when reproduced in red ink
Exhibit 3.2
REGULATIONS OF
COMMUNITY CHOICE FINANCIAL INC.
ARTICLE I
MEETINGS OF SHAREHOLDERS
Section 1.01. Annual Meetings. An annual meeting of shareholders for the election of directors, for the consideration of reports to be laid before such meeting, and for the transaction of such other business as may properly come before such meeting shall be held on such date as may be fixed from time to time by the directors.
Section 1.02. Special Meetings. Except as otherwise provided in the Articles of Incorporation of the Corporation (as amended from time to time, the Articles) or these Regulations and subject to the rights of the holders of any class or series of preferred shares of the Corporation, special meetings of the shareholders may be called only for a proper purpose under applicable law and only by:
(A) the chairman of the board, the chief executive officer, the president, or, in case of the presidents death, absence or disability, the vice president, if any, authorized to exercise the authority of the president;
(B) the directors by action at a meeting, or a majority of the incumbent directors acting without a meeting; or
(C) the holders of at least 25% of all shares of the Corporation outstanding and entitled to vote thereat.
Section 1.03. Place of Meetings. Each meeting of shareholders shall be held at the principal office of the Corporation, unless otherwise provided by action of the directors. Meetings of shareholders may be held at any place either within or without the State of Ohio. If authorized by the directors, a meeting of shareholders may be held solely by means of communications equipment as authorized by applicable law.
Section 1.04. Notice of Meetings.
(A) Unless waived, written notice stating the time, place, if any, and purposes of a meeting of the shareholders, and the means, if any, by which shareholders can be present and vote at the meeting through the use of communications equipment, shall be given either by personal delivery or by mail, overnight delivery service, or any other means of communication authorized by the shareholder to whom the notice is given, not less than seven nor more than 60 days before the date of the meeting to every shareholder of record entitled to notice of the meeting by or at the direction of the chairman of the board, the chief executive officer, the president, the secretary, or another officer of the Corporation expressly authorized by action of the directors to give such notice. If mailed or sent by overnight delivery service, such notice shall be addressed to the shareholder at such shareholders address as it appears on the records of the Corporation. If sent by another means of communication authorized by the shareholder, the
notice shall be sent to the address furnished by the shareholder for those transmissions. Subject to the provisions of Section 1.10(B) of these Regulations, notice of adjournment of a meeting need not be given if the time and place, if any, to which the meeting is adjourned and the means, if any, by which shareholders can be present and vote at the adjourned meeting through the use of communications equipment are fixed and announced at such meeting. In the event of a transfer of shares after the record date for determining the shareholders who are entitled to receive notice of a meeting of shareholders, it shall not be necessary to give notice to the transferee.
(B) Person(s) permitted by Section 1.02 of these Regulations to call a special meeting of shareholders may do so by delivering a request in writing either in person or by registered mail to the president or the secretary of the Corporation, specifying the purpose or the purposes for which the person(s) properly making such request have called such meeting. Upon receipt of such request and determining that the special meeting of shareholders is being called for a proper purpose under the provisions of the Articles, these Regulations and applicable law, the officer shall cause to be given to the shareholders entitled thereto notice of a meeting to be held on a date not less than seven nor more than 60 days after the receipt of such request, as the officer may fix. If the notice is not given within 15 days after the receipt of such request by the president or the secretary, then the person(s) properly calling the meeting may fix the time of the meeting and give notice thereof in accordance with Section 1.04(A) of these Regulations, or cause the notice to be so given by any designated representative.
Section 1.05. Waiver of Notice. Notice of the time, place, if any, and purposes of any meeting of shareholders may be waived in writing, either before or after the holding of such meeting, by any shareholder, which writing shall be filed with or entered upon the records of such meeting. The attendance of any shareholder at any meeting of shareholders without protesting, prior to or at the commencement of the meeting, the lack of proper notice shall be deemed a waiver by such shareholder of notice of such meeting. Electronic mail or an electronic or other transmission capable of authentication that appears to have been sent by a shareholder and that contains a waiver by such shareholder is a writing for purposes of this Section 1.05.
Section 1.06. Quorum.
(A) At any meeting of shareholders, the presence, in person, by proxy, or by the use of communications equipment, of the holders, of record on the record date for such meeting, of shares entitling them to exercise a majority of the voting power of the Corporation shall be necessary to constitute a quorum for such meeting or at any adjournment thereof.
(B) Except as otherwise provided in Section 1.07(B)(2) of these Regulations in respect of adjournment, no action may be taken at any meeting of shareholders, or at any adjournment thereof, unless a quorum is present.
(C) If a quorum is present at a meeting of shareholders, it cannot be broken by the subsequent withdrawal of one or more shareholders or their proxies or by any decrease in the number of shares represented at the meeting.
(D) Notwithstanding the foregoing provisions of this Section 1.06, where a separate vote by a class or series or classes or series of shares is required, a majority of the outstanding shares of such class or series or classes or series, present in person, by proxy or by the use of communications equipment, shall constitute a quorum entitled to take action with respect to that vote on that matter.
Section 1.07. Votes Required.
(A) Directors may be elected only by such vote as is provided for in the Articles.
(B) Subject to the provisions of Section 1.07(C) of these Regulations, any other proposal submitted to the shareholders at a meeting can be authorized or approved only by the affirmative vote of the holders of the greater of (i) a majority of the shares required to constitute a quorum for such meeting and (ii) a majority of the shares voted on such proposal; provided, however, that:
(1) no action required by applicable law, the Articles or these Regulations to be authorized or taken by the holders of a designated proportion of the shares may be authorized or taken by a lesser proportion; and
(2) the holders of a majority of the voting shares represented at a meeting, whether or not a quorum is present, or the officer of the Corporation acting as chairman of the meeting, may adjourn such meeting from time to time; and at such adjourned meeting, any business may be transacted as if the meeting had been held as originally noticed.
(C) Notwithstanding the provisions of Section 1.07(B) of these Regulations, where a separate vote by a class or series of shares is required on any proposal and a quorum is present at any meeting of the shareholders, the proposal can be authorized or approved only by the affirmative vote of the holders of a majority of the shares of such class or series voted on such proposal; provided, however, that no action required by applicable law, the Articles or these Regulations to be authorized or taken by the holders of a designated proportion of the shares of such class or series may be authorized or taken by a lesser proportion.
Section 1.08. Conduct of the Meeting. The chairman of the board or, in the absence or disability of the chairman of the board, the chief executive officer or, in the chief executive officers absence or disability, the president or, in the absence or disability of the president, any vice president or, in the absence of the chairman of the board, the chief executive officer, the president and any vice president, a chairman chosen by the holders of a majority of the voting shares represented and entitled to vote at a meeting of the shareholders, shall act as chairman of the meeting. The secretary or, if the secretary not be present, the assistant secretary shall act as secretary of the meeting. If neither the secretary nor an assistant secretary is present, the chairman of the meeting shall appoint a secretary of the meeting.
Section 1.09. Order of Business.
(A) Annual Meetings of Shareholders. At any annual meeting of the shareholders, only such nominations of persons for election to the Board of Directors shall be made, and only such other business shall be conducted or considered, as shall have been properly brought before
the annual meeting of shareholders. For nominations to be properly made at an annual meeting of shareholders, and proposals of other business to be properly brought before an annual meeting of shareholders, nominations and proposals of other business must be (1) specified in the Corporations notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (2) otherwise properly brought before the annual meeting of shareholders by or at the direction of the Board of Directors (or any committee designated by the Board of Directors) or (3) otherwise properly requested to be brought before the annual meeting of shareholders by a shareholder of the Corporation in accordance with these Regulations and applicable law. For nominations of persons for election to the Board of Directors or proposals of other business to be properly requested by a shareholder to be brought before an annual meeting of shareholders, a shareholder must (a) be a shareholder of record at the time of giving of notice of such annual meeting of shareholders by or at the direction of the Board of Directors and at the time of the annual meeting of shareholders, (b) be entitled to vote at such annual meeting of shareholders and (c) comply with the procedures set forth in these Regulations as to such nomination or proposal of other business. The immediately preceding sentence shall be the exclusive means for a shareholder to make nominations or other business proposals (other than matters properly brought under Rule 14a-8 or Rule 14a-11 promulgated by the Securities and Exchange Commission (the SEC) under the Securities Exchange Act of 1934, as amended (the Exchange Act), and included in the Corporations notice of meeting) before an annual meeting of shareholders.
(B) Special Meetings of Shareholders. When the annual meeting of shareholders is not held or directors are not elected thereat, directors may be elected at a special meeting duly called for that purpose. At any special meeting of the shareholders, only such nominations of persons for election to the Board of Directors at a special meeting properly called for that purpose shall be made, and only such other business shall be conducted or considered as shall have been properly brought before the special meeting of shareholders. For nominations to be properly made at a special meeting of shareholders at which directors are to be elected, and proposals of other business to be properly brought before a special meeting of shareholders, nominations and proposals of other business must be (1) specified in the Corporations notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (2) otherwise properly brought before the special meeting of shareholders by or at the direction of the Board of Directors (or any committee designated by the Board of Directors) or (3) otherwise properly requested to be brought before the special meeting of shareholders by the holders of at least 25% of all shares of the Corporation outstanding and entitled to vote at the special meeting of shareholders in accordance with these Regulations. For nominations of persons for election to the Board of Directors at a special meeting of shareholders properly called for that purpose, or proposals of other business, to be properly requested by a shareholder to be brought before a special meeting of shareholders, a shareholder must (a) be a shareholder of record at the time of giving of notice of such special meeting of shareholders and at the time of the special meeting of shareholders, (b) be entitled to vote at the special meeting of shareholders, and (c) comply with the procedures set forth in these Regulations as to such nomination or proposal of other business. The immediately preceding sentence shall be the exclusive means for a shareholder to make nominations or other business proposals (other than matters properly brought under Rule 14a-8 or Rule 14a-11 under the Exchange Act and included in the Corporations notice of meeting) before a special meeting of shareholders.
(C) General. Except as otherwise provided by applicable law, the Articles or these Regulations, the chairman of the meeting shall have the power to determine whether a nomination or any other business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with these Regulations and, if any proposed nomination or other business is not in compliance with these Regulations, to declare that no action shall be taken on such nomination or other proposal and such nomination or other proposal shall be disregarded.
Section 1.10. Fixing Record Date.
(A) In order that the Corporation may determine the shareholders entitled to (1) receive notice of or to vote at a meeting of shareholders, (2) receive payment of any dividend or distribution, (3) receive or exercise rights of purchase of or subscription for, or exchange or conversion of, shares or other securities, subject to contract rights with respect to the shares or securities, or (4) participate in the execution of written consents, waivers or releases, the directors may fix a record date which shall not be a date earlier than the date on which the record date is fixed and which record date may be a maximum of 60 days preceding the date of the meeting of the shareholders, or the date fixed for the payment of any dividend or distribution or the receipt or the exercise of rights, as the case may be. If for any reason the Board of Directors shall not have fixed a record date for any such purpose, the record date for such purpose shall be determined as provided by applicable law.
(B) The record date for the purpose of determining the shareholders entitled to receive notice of or to vote at a meeting of shareholders shall continue to be the record date for all adjournments of such meeting, unless the directors, subject to the limitations set forth in Section 1.10(A) of these Regulations, fix a new record date. If a new record date is so fixed, notice of the record date and the date to which the meeting has been adjourned shall be given to shareholders of record as of that date in accordance with the requirements applicable to a newly called meeting.
Section 1.11. Advance Notice of Shareholder Nominations and Business.
(A) Annual Meetings of Shareholders. Without qualification or limitation, subject to Section 1.11(C)(4) of these Regulations, for any nomination of any person for election to the Board of Directors to be properly made or any other business to be properly brought before an annual meeting of shareholders by a shareholder pursuant to Section 1.09(A) of these Regulations, the shareholder must have given timely notice thereof and timely updates and supplements thereof in writing to the secretary of the Corporation and such other business must otherwise be a proper matter for shareholder action. To be timely, a shareholders notice shall be delivered to the secretary of the Corporation at the principal executive offices of the Corporation not earlier than the close of business on the 120th day, and not later than the close of business on the 90th day, prior to the first anniversary of the preceding years annual meeting of shareholders; provided, however, that in the event that the date of the annual meeting of shareholders is more than 30 days before or more than 60 days after such anniversary date, notice by the shareholder must be so delivered not earlier than the close of business on the 120th day prior to the date of such annual meeting of shareholders and not later than the close of business on the later of the 90th day prior to the date of such annual meeting of shareholders or,
if the first public announcement of the date of such annual meeting of shareholders is less than 100 days prior to the date of such annual meeting of shareholders, the 10th day following the day on which public announcement of the date of such annual meeting of shareholders is first made by the Corporation. In no event shall any adjournment or postponement of an annual meeting of shareholders, or the public announcement thereof, commence a new time period for the giving of a shareholders notice as described above.
Notwithstanding anything in the immediately preceding paragraph to the contrary, in the event that the number of directors to be elected to the Board of Directors is increased by the Board of Directors, and there is no public announcement by the Corporation naming all of the nominees for director or specifying the size of the increased Board of Directors at least 100 days prior to the first anniversary of the preceding years annual meeting of shareholders, a shareholders notice required by this Section 1.11(A) shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the secretary of the Corporation at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the Corporation.
In addition, to be timely, a shareholders notice shall further be updated and supplemented, if necessary, so that the information provided or required to be provided in such notice shall be true and correct as of the record date for the annual meeting of shareholders and as of the date that is ten business days prior to the annual meeting of shareholders or any adjournment or postponement thereof, and such update and supplement shall be delivered to the secretary of the Corporation at the principal executive offices of the Corporation not later than five business days after the record date for the annual meeting of shareholders in the case of the update and supplement required to be made as of the record date, and not later than eight business days prior to the date for the annual meeting of shareholders or any adjournment or postponement thereof in the case of the update and supplement required to be made as of ten business days prior to the annual meeting of shareholders or any adjournment or postponement thereof.
(B) Special Meetings of Shareholders. Subject to Section 1.11(C)(4) of these Regulations, in the event a special meeting of shareholders is called, in accordance with Section 1.02 and Section 1.09(B) of these Regulations, for the purpose of electing one or more directors to the Board of Directors, any shareholder may nominate a person or persons (as the case may be) for election to such position(s) to be elected as specified in the notice calling the special meeting of shareholders, provided that the shareholder gives timely notice thereof and timely updates and supplements thereof in writing to the secretary of the Corporation. In order to be timely, a shareholders notice shall be delivered to the secretary of the Corporation at the principal executive offices of the Corporation not earlier than the close of business on the 120th day prior to the date of such special meeting of shareholders and not later than the close of business on the later of the 90th day prior to the date of such special meeting of shareholders or, if the first public announcement of the date of such special meeting of shareholders is less than 100 days prior to the date of such special meeting of shareholders, the 10th day following the day on which public announcement is first made of the date of the special meeting of shareholders and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall any adjournment or postponement of a special meeting of shareholders, or the public
announcement thereof, commence a new time period for the giving of a shareholders notice as described above.
In addition, to be timely, a shareholders notice shall further be updated and supplemented, if necessary, so that the information provided or required to be provided in such notice shall be true and correct as of the record date for the special meeting of shareholders and as of the date that is ten business days prior to the special meeting of shareholders or any adjournment or postponement thereof, and such update and supplement shall be delivered to the secretary of the Corporation at the principal executive offices of the Corporation not later than five business days after the record date for the special meeting of shareholders in the case of the update and supplement required to be made as of the record date, and not later than eight business days prior to the date for the special meeting of shareholders or any adjournment or postponement thereof in the case of the update and supplement required to be made as of ten business days prior to the special meeting of shareholders or any adjournment or postponement thereof.
(C) Other Provisions.
(1) To be in proper form, a shareholders notice (whether given pursuant to Section 1.09(A) or Section 1.09(B) of these Regulations) to the secretary of the Corporation must include the following, as applicable:
(a) As to the shareholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made, a shareholders notice must set forth: (i) the name and address of such shareholder, as they appear on the Corporations books, of such beneficial owner, if any, and of their respective affiliates or associates or others acting in concert therewith; (ii)(A) the class or series and number of shares of the Corporation which are, directly or indirectly, owned beneficially and of record by such shareholder, such beneficial owner and their respective affiliates or associates or others acting in concert therewith; (B) any option, warrant, convertible security, share appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the Corporation or with a value derived in whole or in part from the value of any class or series of shares of the Corporation, or any derivative or synthetic arrangement having the characteristics of a long position in any class or series of shares of the Corporation, or any contract, derivative, swap or other transaction or series of transactions designed to produce economic benefits and risks that correspond substantially to the ownership of any class or series of shares of the Corporation, including due to the fact that the value of such contract, derivative, swap or other transaction or series of transactions is determined by reference to the price, value or volatility of any class or series of shares of the Corporation, whether or not such instrument, contract or right shall be subject to settlement in the underlying class or series of shares of the Corporation, through the delivery of cash or other property, or otherwise, and without regard as to whether the shareholder of record, the beneficial owner, if any, or any affiliates or associates or others acting in concert therewith, may have entered into transactions that hedge or mitigate the economic effect of such instrument, contract or right or any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the Corporation (any of the foregoing, a Derivative Instrument) directly or indirectly owned beneficially by such shareholder, the beneficial owner, if any, or any affiliates or
associates or others acting in concert therewith; (C) any proxy, contract, arrangement, understanding, or relationship pursuant to which such shareholder has a right to vote any class or series of shares of the Corporation; (D) any agreement, arrangement, understanding, relationship or otherwise, including any repurchase or similar so-called share borrowing agreement or arrangement, engaged in, directly or indirectly, by such shareholder, the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership or otherwise) of any class or series of the shares of the Corporation by, manage the risk of share price changes for, or increase or decrease the voting power of, such shareholder with respect to any class or series of the shares of the Corporation, or which provides, directly or indirectly, the opportunity to profit or share in any profit derived from any decrease in the price or value of any class or series of the shares of the Corporation (any of the foregoing, Short Interests); (E) any rights to dividends on the shares of the Corporation owned beneficially by such shareholder that are separated or separable from the underlying shares of the Corporation; (F) any proportionate interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such shareholder is a general partner or, directly or indirectly, beneficially owns an interest in a general partner of such general or limited partnership; (G) any performance related fees (other than an asset-based fee) that such shareholder is entitled to based on any increase or decrease in the value of shares of the Corporation or Derivative Instruments, if any, including, without limitation, any such interests held by members of such shareholders immediate family sharing the same household; (H) any significant equity interests or any Derivative Instruments or Short Interests in any principal competitor of the Corporation held by such shareholder; and (I) any direct or indirect interest of such shareholder in any contract with the Corporation, any affiliate of the Corporation or any principal competitor of the Corporation (including, in any such case, any employment agreement, collective bargaining agreement or consulting agreement); and (iii) any other information relating to such shareholder and beneficial owner, if any, that would be required to be disclosed in a proxy statement and form of proxy or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder;
(b) If the notice relates to any business other than a nomination of a director or directors that the shareholder proposes to bring before the meeting, a shareholders notice must, in addition to the matters set forth in paragraph (a) above, also set forth: (i) a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest of such shareholder and beneficial owner, if any, in such business; (ii) the text of the proposal or business (including the text of any resolutions proposed for consideration); and (iii) a description of all agreements, arrangements and understandings between such shareholder and beneficial owner, if any, and any other person or persons (including their names) in connection with the proposal of such business by such shareholder;
(c) As to each person, if any, whom the shareholder proposes to nominate for election or reelection to the Board of Directors, a shareholders notice must, in addition to the matters set forth in paragraph (a) above, also set forth: (i) all information relating to such person that would be required to be disclosed in a proxy statement and form of proxy or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and
regulations promulgated by the SEC thereunder (including such persons written consent to being named in the proxy statement as a nominee and to serving as a director if elected); and (ii) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among such shareholder and beneficial owner, if any, and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed nominee, and his or her respective affiliates and associates, or others acting in concert therewith, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC if the shareholder making the nomination and any beneficial owner on whose behalf the nomination is made, if any, or any affiliate or associate thereof or person acting in concert therewith, were the registrant for purposes of Item 404 and the nominee were a director or executive officer of such registrant; and
(d) The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as an independent director of the Corporation or that could be material to a reasonable shareholders understanding of the independence, or lack thereof, of such nominee.
(2) For purposes of these Regulations, public announcement shall mean disclosure in a press release reported by a national news service or in a document publicly filed by the Corporation with the SEC pursuant to Section 13, 14 or 15(d) of the Exchange Act and the rules and regulations promulgated by the SEC thereunder.
(3) Notwithstanding the provisions of these Regulations, a shareholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations promulgated by the SEC thereunder with respect to the matters set forth in these Regulations; provided, however, that any references in these Regulations to the Exchange Act or the rules and regulations promulgated by the SEC thereunder are not intended to and shall not limit the requirements applicable to nominations or proposals as to any other business to be considered pursuant to Section 1.09 of these Regulations.
(4) Nothing in these Regulations shall be deemed to affect any rights (i) of shareholders to request inclusion of proposals in the Corporations proxy statement pursuant to Rule 14a-8 under the Exchange Act, (ii) of shareholders to request inclusion of nominees in the Corporations proxy statement pursuant to Rule 14a-11 under the Exchange Act or (iii) of the holders of any series of Preferred Shares if and to the extent provided for under applicable law, the Articles or these Regulations. Subject to Rule 14a-8 and Rule 14a-11 under the Exchange Act, nothing in these Regulations shall be construed to permit any shareholder, or give any shareholder the right, to include or have disseminated or described in the Corporations proxy statement any nomination of director or directors or any other business proposal.
Section 1.12. Proxies. At meetings of the shareholders, any shareholder entitled to vote thereat may be represented and may vote by a proxy or proxies appointed by a writing signed, or a verifiable communication authorized, by such shareholder, but such writing or verifiable
communication must be filed with the secretary of the meeting before such proxy shall be allowed to vote thereunder.
Section 1.13. Inspectors of Election. In advance of any meeting of shareholders, the directors may appoint one or more inspectors of election to act at such meeting or any adjournment thereof. If inspectors are not so appointed, the officer of the Corporation acting as chairman of any such meeting may make such appointment. In case any person appointed as inspector fails to appear or act, the vacancy may be filled only by appointment made by the directors in advance of such meeting or, if not so filled, at the meeting by the officer of the Corporation acting as chairman of such meeting. No other person or persons may appoint or require the appointment of inspectors of election. The inspectors shall: (A) determine the number of shares outstanding, the voting rights with respect to each, the shares represented at the meeting, the existence of a quorum, and the authenticity, validity and effect of proxies; (B) receive votes, ballots, consents, waivers, or releases; (C) hear and determine all challenges and questions arising in connection with the vote; (D) count and tabulate all votes, consents, waivers, and releases; (E) determine and announce the result; and (F) do such acts as are proper to conduct the election or vote with fairness to all shareholders, or otherwise required by applicable law. On request, the inspectors shall make a report in writing of any challenge, question, or matter determined by them and execute a certificate of any fact found by them. The certificate of the inspectors shall be prima facie evidence of the facts stated therein and of the vote as certified by them.
ARTICLE II
DIRECTORS
Section 2.01. Authority and Qualifications. Except where applicable law, the Articles or these Regulations otherwise provide, all authority of the Corporation shall be vested in and exercised by or under the direction of its directors.
Section 2.02. Authorized Number of Directors; Term of Office.
(A) Until changed in accordance with the provisions of these Regulations, the authorized number of directors of the Corporation (exclusive of directors to be elected by the holders of any one or more series of preferred shares voting separately as a class or classes) shall not be less than three nor more than thirteen, the exact number of directors to be such number as may be fixed from time to time within the limits set forth above in accordance with the provisions of this Section 2.02 (provided that where all shares of the Corporation are owned of record by one or two shareholders, the number of directors may be less than three but not less than the number of shareholders).
(B) The authorized number of directors may be fixed or changed at a meeting of the shareholders properly called for the purpose of electing directors.
(C) The directors may fix or change the authorized number of directors and may fill any directors office that is created by an increase in the authorized number of directors.
(D) No reduction in the authorized number of directors shall of itself have the effect of shortening the term of any incumbent director.
Section 2.03. Nominations.
(A) Subject to the provisions of Section 2.08 of these Regulations, nominations for the election of directors may be made by the Board of Directors or any committee designated by the Board of Directors or by any shareholder entitled to vote for the election of directors at the applicable meeting of shareholders. Such nominations, if not made by the Board of Directors or its designated committee, shall be made in accordance with the procedures set forth in Section 1.09 and Section 1.11 of these Regulations.
(B) Notice of nominations which are proposed by the Board of Directors or its designated committee shall be given on behalf of the Board of Directors or such committee by the chairman of the meeting.
(C) The chairman of the meeting may, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the required procedures, and if the chairman should so determine, the chairman shall so declare to the meeting and the defective nomination shall be disregarded.
Section 2.04. Election.
(A) Directors may be elected at an annual meeting of shareholders or at a special meeting called for the purpose of electing directors in accordance with the provisions of Section 1.02 and Section 1.09(B) of these Regulations.
(B) The election of directors shall be by ballot (1) whenever the number of candidates exceeds the number of directors to be elected or (2) if requested by the officer of the Corporation acting as chairman of the meeting or by the holders of a majority of the voting shares represented and entitled to vote at such meeting, but the election shall otherwise be by voice vote.
Section 2.05. Removal by Shareholders. Subject to the provisions of Section 2.08 of these Regulations, all the directors, all the directors of a particular class, or any individual director may be removed from office by the shareholders, without assigning any cause, by the vote of the holders of not less than a majority of the voting power of the Corporation entitling them to elect directors in place of those to be removed; provided, however, that if the directors are classified, the shareholders may effect any such removal only for cause. In case of any removal pursuant to this Section 2.05, and subject to the provisions of Section 2.03 of these Regulations, a new director may be elected at the same meeting for the unexpired term of each director removed. Failure to elect a director to fill the unexpired term of any director removed shall be deemed to create a vacancy in the Board of Directors.
Section 2.06. Resignations. Any director of the Corporation may resign at any time by giving written notice or notice by electronic transmission to the chairman of the board or the secretary of the Corporation. Such resignation shall take effect at the time specified therein, and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
Section 2.07. Vacancies. Subject to the provisions of Section 2.08 of these Regulations, the remaining directors, though less than a majority of the whole authorized number of directors, may, by the vote of a majority of their number, fill any vacancy in the Board of Directors for the unexpired term.
Section 2.08. Election of Directors by Holders of Preferred Shares. Notwithstanding the foregoing provisions of this Article II, whenever the holders of any one or more series of preferred shares issued by the Corporation shall have the right, voting separately as a series or separately as a class with one or more such other series, to elect directors at an annual or special meeting of shareholders, the election, term of office, removal and other features of such directorships shall be governed by the terms of the Articles applicable thereto. Except as otherwise expressly provided in the terms of such series as set forth in the Articles, the number of directors that may be so elected by the holders of any such series of preferred shares shall be elected for terms expiring at the next annual meeting of shareholders, and vacancies among directors so elected by the separate vote of the holders of any such series of preferred shares shall be filled by the affirmative vote of a majority of the remaining directors elected by such series or, if there are no such remaining directors, by the holders of such series in the same manner in which the holders of such series initially elected a director.
Section 2.09. Meetings.
(A) A regular annual meeting of the Board of Directors shall be held each year at the same place as and immediately following the adjournment of the annual meeting of shareholders, or at such other place and time as shall theretofore have been determined by the Board of Directors, and notice of such meeting need not be given. At its regular annual meeting, the Board of Directors shall organize itself and elect the officers of the Corporation for the ensuing year, and may transact any other business.
(B) Regular meetings of the Board of Directors may be held at such intervals at such time as shall from time to time be determined by the Board of Directors. After such determination and notice thereof has been once given to each person then a member of the Board of Directors, regular meetings may be held at such intervals and time and place without further notice being given.
(C) Special meetings of the Board of Directors may be called at any time by the Board of Directors or by the chairman of the board or by a majority of the directors then in office to be held on such day and at such time as shall be specified by the person or persons calling the meeting.
(D) All meetings of directors shall be held at the principal office of the Corporation unless the directors from time to time otherwise determine.
(E) Regular or special meetings of the directors may be held through any communications equipment if all persons participating can hear each other, and participation in a meeting pursuant to this provision shall constitute presence at such meeting.
Section 2.10. Notice of Meetings. Unless waived, notice of each special meeting or, where required, each regular meeting, of the Board of Directors shall be given to each of the
directors either: (A) by personal delivery or by mail, overnight delivery service, or any other means of communication authorized by the director, if such notice is given at least two days before the meeting; or (B) orally, either in person or by telephone, not later than the day before the meeting. Such notice shall state the place, date and hour of the meeting and, if it is a special meeting, the purpose or purposes for which the meeting is called. At any meeting of the Board of Directors at which every director shall be present, even though without such notice, any business may be transacted. Any acts or proceedings taken at a meeting of the Board of Directors not validly called or constituted may be made valid and fully effective by ratification at a subsequent meeting which shall be legally and validly called or constituted. Notice of any regular meeting of the Board of Directors need not state the purpose of the meeting and, at any regular meeting duly held, any business may be transacted. If the notice of a special meeting shall state as a purpose of the meeting the transaction of any business that may come before the meeting, then at the meeting any business may be transacted.
Section 2.11. Waiver of Notice. Notice of the place, if any, and time of any meeting of the directors may be waived in writing, either before or after the holding of such meeting, by any director, which writing shall be filed with or entered upon the records of the meeting. The attendance of any director at any meeting of the directors without protesting, prior to or at the commencement of such meeting, the lack of proper notice shall be deemed a waiver by the director of such notice. Electronic mail or an electronic or other transmission capable of authentication that appears to have been sent by a director and that contains a waiver by such director is a writing for the purposes of this Section 2.11.
Section 2.12. Quorum; Vote Required.
(A) A majority of the whole authorized number of directors shall be necessary to constitute a quorum for a meeting of the directors, except that a majority of the directors in office shall constitute a quorum for filling a vacancy in the Board of Directors. If a quorum is present at a meeting of the directors, it cannot be broken by the subsequent withdrawal of one or more directors.
(B) The affirmative vote of a majority of the directors present at a meeting at which a quorum is present is the act of the Board of Directors, unless the vote of a greater number of the directors is required by applicable law, the Articles, these Regulations or any bylaws adopted by the directors.
Section 2.13. Committees.
(A) The directors may create an executive committee or any other committee of directors, to consist of one or more of the directors, and may delegate to any such committee any of the authority of the directors, however conferred, other than the authority to fill vacancies among the directors or in any committee of the directors and other than the authority to amend these Regulations or adopt new regulations. Any act or authorization of any act by the executive committee or any other committee within the authority delegated to it shall be as effective for all purposes as the act or authorization of the directors. The directors may appoint one or more directors as alternate members of any committee, who may take the place of any absent member or members at any meeting of the particular committee. Unless otherwise provided in the
Articles, these Regulations or the resolution of the Board of Directors creating the committee, a committee may create one or more subcommittees, each subcommittee to consist of one or more members of the committee, and may delegate to a subcommittee any or all of the powers and authority of the committee.
(B) The executive committee or any other committee of directors shall serve at the pleasure of the directors, shall act only in the intervals between meetings of the directors, and shall be subject to the control and direction of the directors.
(C) No notice of a meeting of the executive committee or of any other committee of directors shall be required. A meeting of the executive committee or of any other committee of directors may be called as contemplated by the provisions of the charter of such executive committee or other committee of directors. Meetings of the executive committee or of any other committee of directors may be held through any communications equipment if all persons participating can hear each other, and participation in such a meeting shall constitute presence thereat.
Section 2.14. Bylaws. The directors may adopt, and amend from time to time, bylaws for their own government, which bylaws shall not be inconsistent with applicable law, the Articles or these Regulations.
ARTICLE III
OFFICERS
Section 3.01. General Provisions. The principal officers of the Corporation shall be the chief executive officer (who shall be a director), a chief financial officer, a chief compliance officer, a president, such number of vice presidents as the Board of Directors may from time to time determine, a secretary and a treasurer. Any two or more offices may be held by the same person, except the offices of president and vice president or the offices of president and secretary, but no officer shall execute, acknowledge, or verify any instrument in more than one capacity if such instrument is required by applicable law or by the Articles or these Regulations to be executed, acknowledged or verified by two or more officers.
Section 3.02. Election, Terms of Office, and Qualification. The officers of the Corporation named in Section 3.01 of these Regulations shall be elected by the Board of Directors for an indeterminate term and shall hold office at the pleasure of the Board of Directors.
Section 3.03. Additional Officers, Agents, etc. In addition to the officers mentioned in Section 3.01 of these Regulations, the Corporation may have such other officers or agents as the Board of Directors may deem necessary and may appoint, each of whom shall hold office for such period, have such authority and perform such duties as the Board of Directors may from time to time determine. The Board of Directors may delegate to any officer the power to appoint any subordinate officers or agents. In the absence of any officer of the Corporation, or for any other reason the Board of Directors may deem sufficient, the Board of Directors may delegate,
for the time being, the powers and duties, or any of them, of such officer to any other officer, or to any director.
Section 3.04. Removal. Except as set forth below, any officer of the Corporation may be removed, either with or without cause, at any time, by resolution adopted by the Board of Directors at any meeting, the notice (or waivers of notice) of which shall have specified that such removal action was to be considered. Any officer appointed not by the Board of Directors but by an officer or committee to which the Board of Directors shall have delegated the power of appointment may be removed, with or without cause, by the committee or superior officer (including successors) who made the appointment, or by any committee or officer upon whom such power of removal may be conferred by the Board of Directors.
Section 3.05. Resignations. Any officer may resign at any time by giving written notice to the Board of Directors, or to the chairman of the board, the chief executive officer, the president or the secretary. Any such resignation shall take effect at the time specified therein, and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
Section 3.06. Vacancies. A vacancy in any office because of death, resignation, removal, disqualification, or otherwise, shall be filled in the manner prescribed in these Regulations for regular appointments or elections to such office.
ARTICLE IV
DUTIES OF THE OFFICERS
Section 4.01. Chairman of the Board. The chairman of the board shall have general supervision over the property, business and affairs of the Corporation and over its several officers, subject, however, to the control of the Board of Directors. The chairman of the board shall, if present, preside at all meetings of the shareholders and of the Board of Directors. The chairman of the board may sign, with the secretary, treasurer or any other proper officer of the Corporation thereunto authorized by the Board of Directors, certificates for shares in the Corporation. The chairman of the board may also sign, execute and deliver in the name of the Corporation all deeds, mortgages, bonds, leases, contracts or other instruments either when specially authorized by the Board of Directors or when required or deemed necessary or advisable by the chairman of the board in the conduct of the Corporations normal business, except in cases where the signing and execution thereof shall be expressly delegated by these Regulations or the Board of Directors to some other officer or agent of the Corporation or shall be required by applicable law or otherwise to be signed or executed by some other officer or agent, and the chairman of the board may cause the seal of the Corporation, if any, to be affixed to any instrument requiring the same.
Section 4.02. Chief Executive Officer. The chief executive officer shall be the principal executive officer of the Corporation and shall perform such duties as are conferred upon the chief executive officer by these Regulations or as may from time to time be assigned to the chief executive officer by the chairman of the board or the Board of Directors. The chief executive officer shall have the same power as the president to sign, execute and deliver in the name of the
Corporation all deeds, mortgages, bonds, leases, contracts and other instruments either when specially authorized by the Board of Directors or when required or deemed necessary or advisable by the chief executive officer in the ordinary course of the Corporations normal business, except in cases where the signing and execution thereof shall be expressly delegated by these Regulations to some other officer or agent of the Corporation or shall be required by applicable law or otherwise to be signed or executed by some other officer or agent, and the chief executive officer may cause the seal of the Corporation, if any, to be affixed to any instrument requiring the same. During the absence or disability of the president, the chief executive officer shall exercise all of the powers and perform all of the duties of the president except as otherwise provided by applicable law. Unless otherwise provided in the Corporate Governance Guidelines of the Corporation, the chief executive officer shall, during the absence or disability of the chairman of the board, preside at meetings of the shareholders and of the Board of Directors.
Section 4.03. President. The president shall be the principal operating and administrative officer of the Corporation. If there is no chief executive officer, the president shall exercise all of the powers and perform all of the duties of the chief executive officer. The president shall perform such duties as are conferred upon the president by these Regulations or as may from time to time be assigned to the president by the chairman of the board, the chief executive officer or the Board of Directors. The president may sign, with the secretary, treasurer or other proper officer of the Corporation thereunto authorized by the Board of Directors, certificates for shares in the Corporation. The president may also sign, execute and deliver in the name of the Corporation all deeds, mortgages, bonds, leases, contracts or other instruments either when specially authorized by the Board of Directors or when required or deemed necessary or advisable by the president in the ordinary conduct of the Corporations normal business, except in cases where the signing and execution thereof shall be expressly delegated by these Regulations to some other officer or agent of the Corporation or shall be required by applicable law or otherwise to be signed or executed by some other officer or agent, and the president may cause the seal of the Corporation, if any, to be affixed to any instrument requiring the same. Unless otherwise provided in the Corporate Governance Guidelines of the Corporation, the president shall, in the absence or disability of each of the chairman of the board and the chief executive officer, preside at meetings of the shareholders and of the Board of Directors.
Section 4.04. Vice Presidents. The vice presidents shall perform such duties as are conferred upon them by these Regulations or as may from time to time be assigned to them by the Board of Directors, the chairman of the board, the chief executive officer or the president. At the request of the chairman of the board or the chief executive officer, in the absence or disability of the president, the vice president designated by the chairman of the board or the chief executive officer, as appropriate, shall perform the duties of the president, and when so acting, shall have all of the powers of the president.
Section 4.05. Treasurer. The treasurer shall be the custodian of all funds and securities of the Corporation. Whenever so directed by the Board of Directors, the treasurer shall render a statement of the cash and other accounts of the Corporation, and the treasurer shall cause to be entered regularly in the books and records of the Corporation to be kept for such purpose full and accurate accounts of the Corporations receipts and disbursements. The treasurer shall have such other powers and shall perform such other duties as may from time to time be assigned to the
treasurer by the Board of Directors, the chairman of the board, the chief executive officer or the president.
Section 4.06. Secretary. The secretary shall record and keep the minutes of all meetings of the shareholders and of the Board of Directors in a book to be kept for that purpose. The secretary shall be the custodian of, and shall make or cause to be made the proper entries in, the minute book of the Corporation and such other books and records as the Board of Directors may direct. The secretary shall be the custodian of the seal of the Corporation, if any, and shall affix such seal to such contracts, instruments and other documents as the Board of Directors or any committee thereof may direct. The secretary shall have such other powers and shall perform such other duties as may from time to time be assigned to the secretary by the Board of Directors, the chairman of the board, the chief executive officer or the president.
ARTICLE V
SHARES AND TRANSFERS OF SHARES
Section 5.01. Uncertificated Shares; Share Certificates. To the extent permitted by applicable law and unless otherwise provided by the Articles, the Board of Directors may provide by resolution that some or all of any or all classes and series of shares of the Corporation shall be issued in uncertificated form pursuant to customary arrangements for issuing shares in such uncertificated form. Any such resolution shall not apply to shares then represented by a certificate until such certificate is surrendered to the Corporation, nor shall such a resolution apply to a certificated share issued in exchange for an uncertificated share. Within a reasonable time after the issuance or transfer of uncertificated shares, the Corporation shall send to the registered owner of the shares a written notice containing the information required to be set forth or stated on certificates pursuant to applicable law. Notwithstanding the foregoing, upon the written request of a holder of shares of the Corporation delivered to the secretary of the Corporation, such holder is entitled to receive one or more certificates representing the shares of the Corporation held by such holder. Any such share certificate shall be signed by the chairman of the board, the president or a vice president and by the secretary, an assistant secretary, the treasurer or an assistant treasurer of the Corporation. When a share certificate is countersigned by an incorporated transfer agent or registrar, the signature of any officer of the Corporation may be facsimile, engraved, stamped or printed. In case any officer whose manual or facsimile signature is affixed to any share certificate ceases to be such officer before such share certificate is delivered by the Corporation, the share certificate may nevertheless be issued and delivered by the Corporation with the same effect as if such officer had not ceased to be such at the date of its delivery. Any certificate representing the shares of the Corporation shall be in such form as shall be approved by the Board of Directors and shall conform to the requirements of the laws of the State of Ohio and any other applicable laws, rules and regulations.
Section 5.02. Transfer of Shares. Transfers of uncertificated shares shall be made on the books of the Corporation only by the holder thereof in person or by attorney upon presentment of proper evidence of succession, assignation or authority to transfer in accordance with customary procedures for transferring shares in uncertificated form. Transfers of certificated shares shall be made on the books of the Corporation only by the person named in the certificate, or by an attorney lawfully constituted in writing, and upon surrender and cancellation of a certificate or
certificates for a like number of shares of the same class or series, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require. No transfer of shares shall be valid until such transfer shall have been made upon the books of the Corporation. Subject to the provisions of the Articles and these Regulations, the Board of Directors may prescribe such additional rules and regulations as it may deem appropriate relating to the issue, transfer and registration of shares of the Corporation.
Section 5.03. Lost, Wrongfully Taken or Destroyed Certificates. Except as otherwise provided by applicable law, where the owner of a certificate evidencing shares of the Corporation claims that such certificate has been lost, destroyed or wrongfully taken, the directors must cause the Corporation to issue a substitute certificate or substitute shares in uncertificated form in place of the original certificate if the owner:
(A) so requests before the Corporation has notice that such original certificate has been acquired by a protected purchaser;
(B) files with the Corporation, unless waived by the directors, an indemnity bond, with surety or sureties satisfactory to the Corporation, in such sums as the directors may, in their discretion, deem reasonably sufficient as indemnity against any loss or liability that the Corporation may incur by reason of the issuance of each such substitute certificate or substitute shares in uncertificated form; and
(C) satisfies any other reasonable requirements which may be imposed by the directors, in their discretion.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 6.01. Indemnification.
(A) The Corporation shall indemnify and hold harmless any person (an Indemnitee) who is or was a director or officer of the Corporation and who is or was a party or is threatened to be made a party to, or is or was involved or threatened to be involved (as a deponent, witness or otherwise) in, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, arbitrative, administrative or investigative, by reason of the fact that the Indemnitee is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director, trustee, officer, employee, partner, member, manager or agent of another corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise, from and against any expenses (including, without limitation, attorneys fees, filing fees, court reporters fees, expert witness fees and transcript costs), costs, liability, judgments, fines, excise taxes assessed with respect to employee benefit plans, penalties and amounts paid in settlement to the fullest extent permitted or authorized by the laws of the State of Ohio as they may exist from time to time.
(B) The right to indemnification conferred in this Article VI shall also include the right to be paid by the Corporation the expenses incurred in connection with any such proceeding
in advance of its final disposition to the fullest extent permitted or authorized by the laws of the State of Ohio as they may exist from time to time.
(C) Notwithstanding the foregoing, except as to claims to enforce rights conferred on an Indemnitee by this Article VI that may be brought, initiated or otherwise asserted by an Indemnitee pursuant to Section 6.02 of these Regulations, the Corporation shall not be required by this Section 6.01 to indemnify, or advance expenses to, an Indemnitee in connection with any claim (including, without limitation, any original claim, counterclaim, cross-claim or third-party claim) in any proceeding, which claim is brought, initiated or otherwise asserted by the Indemnitee, unless the bringing, initiation or assertion of the claim in the proceeding by the Indemnitee is or was authorized or ratified by the Board of Directors of the Corporation.
(D) The Corporation may, by action of its Board of Directors, provide indemnification to such of the employees and agents of the Corporation to such extent and to such effect as the Board of Directors shall determine to be appropriate and authorized by the laws of the State of Ohio as they may exist from time to time.
Section 6.02. Right of Indemnitee to Bring Suit. If a claim by an Indemnitee for indemnification, including a claim by an Indemnitee for advancement of expenses, under this Article VI is not paid in full by the Corporation within 60 days after a written claim has been received by the Corporation, the Indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the Indemnitee shall be entitled to be indemnified for all the expenses (including, without limitation, attorneys fees) actually and reasonably incurred by the Indemnitee in prosecuting such claim in enforcing the Indemnitees rights under this Article VI.
Section 6.03. Article VI Not Exclusive. The indemnification provided by this Article VI shall not be exclusive of, and shall be in addition to, any other rights to which any person seeking indemnification may be entitled under the Articles, these Regulations, any agreement, a vote of shareholders or disinterested directors, or otherwise, both as to action in such persons official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee, trustee, partner, member, manager or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
Section 6.04. Insurance. The Corporation may purchase and maintain insurance, or furnish similar protection, including, but not limited to, trust funds, letters of credit or self-insurance, for or on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, trustee, officer, employee, partner, member, manager or agent of another corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such persons status as such, whether or not the Corporation would have the obligation or the power to indemnify such person against such liability under the provisions of this Article VI. Insurance may be purchased from or maintained with a person in which the Corporation has a financial interest.
Section 6.05. Construction. For the purposes of this Article VI, references to the Corporation include in addition to the resulting entity, any constituent entity (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers and employees or agents or persons holding comparable positions, so that any person who is or was a director or officer of or held a comparable position with such constituent entity or is or was serving at the request of such constituent entity as a director, trustee, officer, employee, partner, member, manager or agent of another corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise shall stand in the same position under the provisions of this Article VI with respect to the resulting or surviving entity as such person would have with respect to such constituent entity if its separate existence had continued.
Section 6.06. Contractual Nature. The provisions of this Article VI shall be deemed to be a contract between the Corporation and each director and officer who serves in such capacity at any time while this Article VI is in effect. Neither any repeal or modification of this Article VI or, to the fullest extent permitted by the laws of the State of Ohio, any repeal or modification of laws, shall affect any rights or obligations then existing with respect to any state of facts then or theretofore existing or any action, suit or proceeding theretofore or thereafter brought based in whole or in part upon any such state of facts.
ARTICLE VII
MISCELLANEOUS
Section 7.01. Amendments. These Regulations may only be amended in accordance with the provisions of the Articles.
Section 7.02. Actions Without a Meeting. Anything contained in these Regulations to the contrary notwithstanding, except as provided in the Articles, any action which may be authorized or taken at a meeting of the shareholders or of the directors or of a committee of the directors, as the case may be, may be authorized or taken without a meeting with the affirmative vote or approval of, and in a writing or writings signed by, that proportion of the shareholders or of the directors or of the committee of the directors, as the case may be, required by then applicable law. All such writings shall be filed with or entered upon the records of the Corporation. Electronic mail or an electronic or other transmission capable of authentication that appears to have been sent by a person described in the preceding sentence and that contains an affirmative vote or approval of that person is a signed writing for the purposes of this Section 7.02. The date on which that electronic mail or electronic or other transmission is sent is the date on which the writing is signed.
Exhibit 3.3
STATE of DELAWARE
LIMITED LIABILITY COMPANY
CERTIFICATE of FORMATION
· First: The name of the limited liability company is ARH-Arizona, LLC
· Second: The address of its registered office in the State of Delaware is 2711 Centerville Road Suite 400 in the City of Wilmington, DE 19808. The name of its Registered agent at such address is Corporation Service Company
· Third: (Use this paragraph only if the company is to have a specific effective date of dissolution: The latest date on which the limited liability company is to dissolve is .)
· Fourth: (Insert any other matters the members determine to include herein.)
In Witness Whereof, the undersigned have executed this Certificate of Formation this 7th day of May, 2010.
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By : |
/s/ Heidi Bowman |
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Authorized Person(s) |
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Name: |
Heidi Bowman |
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Typed or Printed |
State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 12:53 PM 05/07/2010 |
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FILED 12:07 PM 05/07/2010 |
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SRV 100476765 - 4820848 FILE |
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Exhibit 3.4
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
ARH-ARIZONA, LLC
a Delaware Limited Liability Company
Dated as of April 20, 2012
THE MEMBERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
ARH-ARIZONA, LLC
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of ARH-Arizona, LLC (the Company) is made, adopted and entered into effective as of April 20, 2012, by CheckSmart Financial Company, a Delaware corporation, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Limited Liability Company Agreement of ARH-Arizona, LLC, effective as of May 3, 2010 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 18 of the Delaware Corporation Laws Annotated (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Delaware on May 7, 2010. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in a limited liability company agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is ARH-Arizona, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 7001 Post Road, Suite 200, Dublin, Ohio 43016. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Delaware in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Delaware in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Limited Liability Company Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means CheckSmart Financial Company, a Delaware corporation, or any Person that acquires all of the equity interests of the Company from CheckSmart Financial Company.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST
The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto, including, without limitation, all decisions required or permitted to be made by the Sole Member under this Agreement and all decisions required or permitted to be made by the Company as a member, partner or other beneficial owner of any other Person. Notwithstanding the foregoing or anything in this Agreement to the contrary, the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take.
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager or Officer). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation
or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be five (5) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure
of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 18-303(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, nor the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, director or stockholder of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the Delaware General Corporation Law as if the Company were a Delaware corporation, as the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the Delaware General Corporation Law as if the Company were a Delaware corporation, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, director, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such
suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Certificate of Formation, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members directors, officers or stockholders, or a Manager, an Officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 18-304 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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Exhibit 3.5
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State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 11:51 AM 04/02/2007 |
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FILED 11:30 AM 04/02/2007 |
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SRV 070387084 - 4327520 FILE |
STATE of DELAWARE
LIMITED LIABILITY COMPANY
CERTIFICATE of FORMATION
· First: The name of the limited liability company is BCCI CA, LLC
· Second: The address of its registered office in the State of Delaware is 2711 Centerville Road Suite 400 in the City of Wilmington, DE 19808. The name of its Registered agent at such address is Corporation Service Company
· Third: (Use this paragraph only if the company is to have a specific effective date of dissolution: The latest date on which the limited liability company is to dissolve is .)
· Fourth: (Insert any other matters the members determine to include herein.)
In Witness Whereof, the undersigned have executed this Certificate of Formation this 2nd day of April, 2007.
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By: |
/s/ Heidi Bowman |
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Authorized Person(s) |
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Name: |
Heidi Bowman |
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Typed or Printed |
Exhibit 3.6
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BCCI CA, LLC
a Delaware Limited Liability Company
Dated as of April 20, 2012
THE MEMBERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BCCI CA, LLC
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of BCCI CA, LLC (the Company) is made, adopted and entered into effective as of April 20, 2012, by CheckSmart Financial Company, a Delaware corporation, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Limited Liability Company Agreement of BCCI CA, LLC, effective as of April 2, 2007 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 18 of the Delaware Corporation Laws Annotated (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Delaware on April 2, 2007. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in a limited liability company agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is BCCI CA, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 7001 Post Road, Suite 200, Dublin, Ohio 43016. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Delaware in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Delaware in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Limited Liability Company Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means CheckSmart Financial Company, a Delaware corporation, or any Person that acquires all of the equity interests of the Company from CheckSmart Financial Company.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST
The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto, including, without limitation, all decisions required or permitted to be made by the Sole Member under this Agreement and all decisions required or permitted to be made by the Company as a member, partner or other beneficial owner of any other Person. Notwithstanding the foregoing or anything in this Agreement to the contrary, the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take.
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager or Officer). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation
or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be five (5) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure
of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 18-303(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, nor the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, director or stockholder of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the Delaware General Corporation Law as if the Company were a Delaware corporation, as the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the Delaware General Corporation Law as if the Company were a Delaware corporation, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, director, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such
suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Certificate of Formation, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members directors, officers or stockholders, or a Manager, an Officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 18-304 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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Exhibit 3.7
ARTICLES OF INCORPORATION
OF
BCCI MANAGEMENT COMPANY
The undersigned, a citizen of the United States, desiring to form a corporation for profit under the General Corporation Act of Ohio, does certify:
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FIRST: |
The name of said corporation shall be |
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BCCI Management Company |
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SECOND: |
The place in Ohio where its principal office is to be located is Dublin, Franklin County, Ohio. |
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THIRD: |
The purpose of said corporation is to engage in any lawful act or activity for which corporations may be formed under Sections 1701.01 through 1701.98, inclusive, of the Ohio Revised Code. |
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FOURTH: |
The maximum number of shares which the corporation is authorized to have outstanding shall be eight hundred and fifty (850), all of which shares shall be common without par value. |
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The corporation, through its Board of Directors, shall have the right and power to repurchase any of its outstanding shares at such price and upon such terms as may be agreed upon between the corporation and the selling shareholder or shareholders. |
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SIXTH: |
The Board of Directors is hereby authorized to fix and determine whether any surplus, and, if any, what part of the surplus, however created or arising, shall be used or disposed of or declared in dividends or paid to shareholders, and, without action by the shareholders, to use and apply surplus, or any part thereof, or such part of the stated capital of the corporation as is permitted under the provisions of Section 1701.35 of the Ohio Revised Code, or any statute of like tenor or effect which is hereafter enacted, at any time, or from time to time, in the purchase or acquisition of shares of any class, voting trust certificates for shares, bonds, debentures, notes, script, warrants, obligations, evidences of indebtedness of the corporation, or other securities of the corporation, to such extent or amount and in such manner and upon such terms as the Board of Directors shall deem expedient. |
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No person shall be disqualified from being a director of the corporation because he or she is or may be a party to, and no director of the corporation shall be disqualified from entering into, any contract or other transaction to which the corporation is or may be a party. No contract or other transaction to which the corporation is or may be a party shall be void or voidable for the reason that any director or officer or other agent of the corporation is a party thereto, or otherwise has any direct or indirect interest in such contract or transaction or in any other party thereto, or for reason that any interested director or officer or other agent of the corporation authorizes or participates in authorization of such contract or transaction, (a) if the material facts as to such interest are disclosed or are otherwise known to the Board of Directors or |
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applicable committee of directors at the time the contract or transaction is authorized, and at least a majority of the disinterested directors or disinterested members of the committee vote for or otherwise take action authorizing such contract or transaction, even though such disinterested directors or members are less than a quorum, or (b) if the contract or transaction (i) is not less favorable to the corporation than an arms length contract or transaction in which no director or officer or other agent of the corporation has any interest or (ii) is otherwise fair to the corporation as of the time it is authorized. Any interested director may be counted in determining the presence of a quorum at any meeting of the Board of Directors or any committee thereof which authorizes the contract or transaction. |
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EIGHTH: |
The provisions of Section 1701.13(E)(5)(a) of the Ohio Revised Code or any statute of like tenor or effect which is hereafter enacted shall not apply to the corporation. The corporation shall, to the fullest extent not prohibited by any provision of applicable law other than Section 1701.13(E)(5)(a) of the Ohio Revised Code or any statute of like tenor or effect which is hereafter enacted, indemnify each director and officer against any and all costs and expenses (including attorney fees, judgments, fines, penalties, amounts paid in settlement, and other disbursements) actually and reasonably incurred by or imposed upon such person in connection with any action, suit, investigation or proceeding (or any claim or other matter therein), whether civil, criminal, administrative or otherwise in nature, including any settlements thereof or any appeals therein, with respect to which such person is named or otherwise becomes or is threatened to be made a party by reason of being or at any time having been a director or officer of the corporation, or by any reason of being or at any time having been, while such a director or officer, an employee or other agent of the corporation or, at the direction or request of the corporation, a director, trustee, officer, administrator, manager, employee, adviser or other agent of or fiduciary for any other corporation, partnership, trust, venture or other entity or enterprise including any employee benefit plan. |
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The corporation shall indemnify any other person to the extent such person shall be entitled to indemnification under Ohio law by reason of being successful on the merits or otherwise in defense of an action to which such person is named a party by reason of being an employee or other agent of the corporation, and the corporation may further indemnify any such person if it is determined on a case by case basis by the Board of Directors that indemnification is proper in the specific case. |
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Notwithstanding anything to the contrary in these Articles of Incorporation, no person shall be indemnified to the extent, if any, it is determined by the Board of Directors or by written opinion of legal counsel designated by the Board of Directors for such purpose that indemnification is contrary to applicable law. |
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NINTH: |
Notwithstanding any provisions of the Ohio Revised Code, now or hereafter in force, requiring for any purpose the vote or consent of the holders of shares entitling them to exercise two-thirds (2/3) or any other proportion of the voting power of the corporation or of any class or classes of shares thereof, such action, unless otherwise expressly required by statute, may be taken by the vote or consent of the holders of shares entitling them to exercise a majority of the voting power of the corporation or of such class of shares thereof. |
IN WITNESS WHEREOF, the undersigned has hereunto set its hand this day of January, 2001.
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INCORPORATOR: |
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James H. Frauenberg |
ORIGINAL APPOINTMENT OF AGENT
The undersigned, being the incorporator of BCCI Management Company, hereby appoints as its agent James H. Frauenberg to act as agent upon whom any process, notice or demand required or permitted by statute to be served upon the corporation may be served. His complete address is 5720 Avery Road, Dublin, Ohio 43016.
Dated: January , 2001 |
INCORPORATOR: |
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James H. Frauenberg |
ACCEPTANCE OF STATUTORY AGENT
The undersigned hereby accepts the original appointment as statutory agent for BCCI Management Company on the day of January, 2001.
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James H. Frauenberg |
Exhibit 3.8
CODE OF REGULATIONS
OF
BCCI MANAGEMENT COMPANY
ARTICLE I - MEETING OF SHAREHOLDERS
(a) Annual Meetings. An annual meeting of shareholders, for the election of Directors, for the consideration of any reports and for the transaction of such other business as may be brought before the meeting, shall be held on the first Monday of the fourth month following the close of the Corporations fiscal year or on such other date as may be designated by the Board of Directors.
(b) Special Meetings. Special meetings of the shareholders of this corporation shall be called by the Secretary, pursuant to a resolution of the Board of Directors, or upon written request of two Directors, or by shareholders representing 25% of the shares issued and entitled to vote. Calls for special meetings shall specify the time, place and object or objects thereof, and no business other than that specified in the call therefor shall be considered at any such meetings.
(c) Notice of Meetings. A written or printed notice of the annual or any special meetings of the shareholders, stating the time and place, and in case of special meetings, the objects thereof, shall be given to each shareholder entitled to vote at such meeting appearing on the books of the corporation, by mailing same to the shareholders address as same appears on the records of the corporation or of its Transfer Agent or Agents, at least ten (10) days before any such meeting; provided, however, that no failure or irregularity of notice of any annual meeting shall invalidate the same or any proceeding thereat. It shall be the responsibility of the Secretary to mail such notice.
(d) Quorum. Those shareholders present in person or by proxy entitling them to exercise a majority of the voting power shall constitute a quorum for any meeting of shareholders. In the event of an absence of a quorum at any meeting or any adjournment thereof, a majority of those present in person or by proxy and entitled to vote may adjourn such meeting from time to time. At any adjourned meeting at which a quorum may be present, any business may be transacted which might have been transacted at the meeting as originally called.
(e) Place of Meetings. The annual or any special meetings of shareholders may be held at such place or places within or without the State of Ohio, as may be specified in the notice of any such meetings.
(f) Proxies. At any meeting of shareholders, any person who is entitled to attend, or to vote thereat, and to execute consents, waivers or releases, may be represented at such meeting or vote thereat, and execute consents, waivers and releases, and exercise any of such persons other rights, by proxy or proxies appointed by a writing signed by such person and submitted to the Secretary at or before such meeting. Voting by proxy or proxies shall be governed by all of the provisions of Ohio
law, including the provisions relating to the sufficiency of the writing, the duration of the validity of the proxy or proxies, and the power of substitution and revocation.
ARTICLE II - SHARES
(a) Certificates. Certificates evidencing the ownership of shares of the corporation shall be issued to those entitled to them by transfer or otherwise. Each certificate for shares shall bear a distinguishing number, the signature of the Chairman of the Board or the President or a Vice President and the signature of the Secretary, an Assistant Secretary, the Treasurer, or an Assistant Treasurer of the corporation, and such recitals as may be required by law. The certificates for shares shall be of such tenor and design as the Board of Directors from time to time may adopt.
(b) Transfers. The shares of the corporation shall be assignable and transferable only on the books and records of the corporation by the registered owner, or by the registered owners duly authorized attorney, upon surrender of the certificate duly and properly endorsed with proper evidence of authority to transfer. The corporation shall issue a new certificate for the shares surrendered to the person or persons entitled thereto.
(c) Lost, Stolen or Destroyed Certificates. The holder of any shares in the corporation shall immediately notify the Secretary of any lost, stolen or destroyed certificate, and the corporation may issue a new certificate in the place of any certificate alleged to have been lost, stolen or destroyed. The Board of Directors may, at its discretion, require the owner of a lost, stolen or destroyed certificate or the owners legal representative to give the corporation a bond on such terms and with such sureties as it may direct, to indemnify the corporation against any claim that may be made against it on account of the alleged lost, stolen or destroyed certificate. The Board of Directors may, however, at its discretion, refuse to issue any such new certificate except pursuant to legal proceedings in a court having jurisdiction over such matter pursuant to Ohio law.
ARTICLE III - DIRECTORS
(a) Number and Term. The number of members of the Board of Directors shall be determined pursuant to law, or by resolution of the shareholders entitled to vote, but where said resolution provides for less than three (3) Directors, the number of Directors shall not be less than the number of shareholders.
The Directors shall hold office until the expiration of the term for which they were elected and shall continue in office until their respective successors shall have been duly elected and qualified.
(b) Vacancies. A resignation from the Board of Directors shall be deemed to take effect upon its receipt by the Secretary, unless some other time is specified therein. The acceptance of any resignation shall not be necessary to make it effective unless so specified in the resignation. In case of any vacancy in the Board of Directors, the remaining Directors, even though they may be less than a quorum of the entire number of Directors constituting a full Board, may at any duly convened
meeting, except as hereinafter provided, elect a successor to hold office for the unexpired portion of the term of the Director whose place shall be vacant, and until the election and qualification of a successor.
(c) Regular Meetings. Regular meetings of the Board of Directors shall be held monthly on such dates as the Board may designate.
(d) Special Meetings. Special meetings of the Board of Directors shall be called by the Secretary and held at the request of the President or two (2) of the Directors.
(e) Notice of Meetings. The Secretary shall give notice of each meeting of the Board of Directors, whether regular or special, to each member of the Board.
(f) Quorum. A majority of the Directors in office at the time shall constitute a quorum at all meetings thereof.
(g) Place of Meetings. The Board of Directors may hold its meetings at such place or places within or without the State of Ohio as the Board may, from time to time, determine.
(h) Compensation. Directors, as such, shall not receive any stated salary for their services, but, on resolution of the Board, a fixed sum for expenses of attendance, if any, may be allowed for attendance at each meeting, regular or special, provided that nothing herein contained shall be construed to preclude any Director from serving the corporation in any other capacity and receiving compensation therefor. Members of either executive or special committees may be allowed such compensation as the Board of Directors may determine for attending committee meetings.
(i) Liability. The provisions of Section 1701.59(D) of the Ohio Revised Code, or any statute of like tenor or effect which is hereafter enacted, shall not apply in any action brought by or in the right of the corporation against a Director.
ARTICLE IV - ELECTION OF OFFICERS
At the first meeting of the Board of Directors in each year (at which a quorum shall be present) held next after the annual meeting of the shareholders, and at any special meeting for such purpose, as provided in Article III(d), the Board of Directors shall elect the officers of the corporation. It may also appoint an executive committee or other committees and define their powers and duties.
ARTICLE V - OFFICERS
The officers of this corporation shall include a President, a Vice President, a Secretary, a Treasurer, and such other officers as the Board of Directors may, from time to time, elect, all of
whom may or may not be Directors. Said officers shall be chosen by the Board of Directors, and shall hold office for one (1) year, or until their successors are elected and qualified.
Any officer or employee elected or appointed by the Board of Directors, other than a Director, may be removed at any time for any reason upon vote of the majority of the whole Board of Directors.
ARTICLE VI - DUTIES OF OFFICERS
(a) President. The President shall preside at all meetings of shareholders and Directors. The President shall exercise, subject to the control of the Board of Directors and the shareholders of the corporation, a general supervision over the affairs of the corporation, and shall perform generally all duties incident to the office and such other duties as may be assigned to the President from time to time by the Board of Directors.
(b) Vice President. The Vice President shall perform all duties of the President in the Presidents absence or during the Presidents inability to act, and shall have such further duties as may be assigned to the Vice President by the Board of Directors.
(c) Secretary. The Secretary shall keep the minutes of all proceedings of the Board of Directors and of the shareholders and make a proper record of same, which shall be attested to by the Secretary, and shall have such further duties as may be assigned to the Secretary by the Board of Directors.
(d) Treasurer. The Treasurer shall have the custody of the funds and securities of the corporation which may come into the Treasurers hands, and shall do with the same as may be ordered by the Board of Directors. When necessary or proper, the Treasurer may endorse on behalf of the corporation, for collection, checks, notes and other obligations. The Treasurer shall deposit the funds of the corporation to its credit in such hands and depositories as the Board of Directors may, from time to time, designate. The Treasurer shall also have such further duties as may be assigned to him by the Board of Directors.
ARTICLE VII - ORDER OF BUSINESS - SHAREHOLDER MEETINGS
1. Call meeting to order.
2. Selection of Chairman and Secretary.
3. Proof of notice of meeting.
4. Roll call, including filing of proxies with the Secretary.
5. Appointment of Tellers.
6. Reading and disposal of previously unapproved minutes.
7. Reports of officers and committees.
8. If annual meeting, or meeting called for that purpose, election of Directors.
9. Unfinished business.
10. New business.
11. Adjournment.
This order may be changed by the affirmative vote of a majority in interest of the shareholders present.
ARTICLE VIII - AMENDMENTS
These Regulations may be adopted, amended or repealed by the affirmative vote of a majority of the shares empowered to vote thereon at any meeting called and held for that purpose, notice of which meeting has been given pursuant to law, or without a meeting by the written assent of the owners of two-thirds of the shares of the corporation entitled to vote thereon.
The undersigned shareholders hereby adopt the foregoing Code of Regulations this day of May, 2012.
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SHAREHOLDERS: |
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James H. Frauenberg, as Trustee of the James H. Frauenberg 1998 Trust, dated 01/01/98, as amended |
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Frederick L. Fisher, as Trustee of the James H. Frauenberg 1998 Descendants Trust, dated 01/01/98, as amended |
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Michael W. Lenhart, as Trustee of the Michael W. Lenhart 1998 Trust, dated 01/01/98, as amended |
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Frederick L. Fisher, as Trustee of the Michael W. Lenhart 1998 Descendants Trust, dated 01/01/98, as amended |
Exhibit 3.9
ARTICLES OF INCORPORATION
BUCKEYE CHECK CASHING II, INC.
The undersigned, a citizen of the United States, desiring to form a corporation for profit under the General Corporation Act of Ohio, does certify:
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The name of said corporation shall be Buckeye Check Cashing II, Inc. |
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The place in Ohio where its principal office is to be located is Dublin, Franklin, County, Ohio. |
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The purpose of said corporation is to engage in any lawful act or activity for which corporations may be formed under Sections 1701.01 through 1701.98, inclusive, of the Ohio Revised Code. |
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FOURTH: |
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The maximum number of shares which the corporation is authorized to have outstanding shall be eight hundred fifty (850), all of which shares shall be common without par value. |
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The corporation, through its Board of Directors, shall have the right and power to repurchase any of its outstanding shares at such price and upon such terms as may be agreed upon between the corporation and the selling shareholder or shareholders. |
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The Board of Directors is hereby authorized to fix and determine whether any surplus, and, if any, what part of the surplus, however created or arising, shall be used or disposed of or declared in dividends or paid to shareholders, and, without action by the shareholders, to use and apply surplus, or any part thereof, or such part of the stated capital of the corporation as is permitted under the provisions of Section 1701.35 of the Ohio Revised Code, or any statute of like tenor or effect which is hereafter enacted, at any time, or from time to time, in the purchase or acquisition of shares of any class, voting trust certificates for shares, bonds, debentures, notes, script, warrants, obligations, evidences of indebtedness of the corporation, or other securities of the corporation, to such extent or amount and in such manner and upon such terms as the Board of Directors shall deem expedient. |
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SEVENTH: |
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No person shall be disqualified from being a director of the corporation because he or she is or may be a party to, and no director of the corporation shall be disqualified from entering into, any contract or |
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other transaction to which the corporation is or may be a party. No contract or other transaction to which the corporation is or may be a party shall be void or voidable for the reason that any director or officer or other agent of the corporation is a party thereto, or otherwise has any direct or indirect interest in such contract or transaction or in any other party thereto, or for reason that any interested director or officer or other agent of the corporation authorizes or participates in authorization of such contract or transaction, (a) if the material facts as to such interest are disclosed or are otherwise known to the Board of Directors or applicable committee of directors at the time the contract or transaction is authorized, and at least a majority of the disinterested directors or disinterested members of the committee vote for or otherwise take action authorizing such contract or transaction, even though such disinterested directors or members are less than a quorum, or (b) if the contract or transaction (i) is not less favorable to the corporation than an arms length contract or transaction in which no director or officer or other agent of the corporation has any interest or (ii) is otherwise fair to the corporation as of the time it is authorized. Any interested director may be counted in determining the presence of a quorum at any meeting of the Board of Directors or any committee thereof which authorizes the contract or transaction. |
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The provisions of Section 1701.13(E)(5)(a) of the Ohio Revised Code or any statute of like tenor or effect which is hereafter enacted shall not apply to the corporation. The corporation shall, to the fullest extent not prohibited by any provision of applicable law other than Section 1701.13(E)(5)(a) of the Ohio Revised Code or any statute of like tenor or effect which is hereafter enacted, indemnify each director and officer against any and all costs and expenses (including attorney fees, judgments, fines, penalties, amounts paid in settlement, and other disbursements) actually and reasonably incurred by or imposed upon such person in connection with any action, suit, investigation or proceeding (or any claim or other matter therein), whether civil, criminal, administrative or otherwise in nature, including any settlements thereof or any appeals therein, with respect to which such person is named or otherwise becomes or is threatened to be made a party by reason of being or at any time having been a director or officer of the corporation, or by any reason of being or at any time having been, while such a director or officer, an employee or other agent of the corporation or, at the direction or request of the corporation, a director, trustee, officer, administrator, manager, employee, adviser or other agent of or fiduciary for any other corporation, partnership, trust, venture or other entity or enterprise including any employee benefit plan. |
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The corporation shall indemnify any other person to the extent such person shall be entitled to indemnification under Ohio law by reason of being successful on the merits or otherwise in defense of an action to which such person is named a party by reason of being an employee or other agent of the corporation, and the corporation may further indemnify any such person if it is determined on a case by case basis by the Board of Directors that indemnification is proper in the specific case. |
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Notwithstanding anything to the contrary in these Articles of Incorporation, no person shall be indemnified to the extent, if any, it is determined by the Board of Directors or by written opinion of legal counsel designated by the Board of Directors for such purpose that indemnification is contrary to applicable law. |
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NINTH: |
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Notwithstanding any provisions of the Ohio Revised Code, now or hereafter in force, requiring for any purpose the vote or consent of the holders of shares entitling them to exercise two-thirds (2/3) or any other proportion of the voting power of the corporation or of any class or classes of shares thereof, such action, unless otherwise expressly required by statute, may be taken by the vote or consent of the holders of shares entitling them to exercise a majority of the voting power of the corporation or of such class of shares thereof. |
IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of October, 1996.
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/s/ Kathleen B. Bunce |
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Kathleen B. Bunce, Incorporator |
Exhibit 3.10
CODE OF REGULATIONS
OF
BUCKEYE CHECK CASHING II, INC.
ARTICLE
I - MEETING OF SHAREHOLDERS
(a) Annual Meetings. An annual meeting of shareholders, for the election of Directors, for the consideration of any reports and for the transaction of such other business as may be brought before the meeting, shall be held on the first Monday of the fourth month following the close of the Corporations fiscal year or on such other date as may be designated by the Board of Directors.
(b) Special Meetings. Special meetings of the shareholders of this corporation shall be called by the Secretary, pursuant to a resolution of the Board of Directors, or upon written request of two Directors, or by shareholders representing 25% of the shares issued and entitled to vote. Calls for special meetings shall specify the time, place and object or objects thereof, and no business other than that specified in the call therefor shall be considered at any such meetings.
(c) Notice of Meetings. A written or printed notice of the annual or any special meetings of the shareholders, stating the time and place, and in case of special meetings, the objects thereof, shall be given to each shareholder entitled to vote at such meeting appearing on the books of the corporation, by mailing same to the shareholders address as same appears on the records of the corporation or of its Transfer Agent or Agents, at least ten (10) days before any such meeting; provided, however, that no failure or irregularity of notice of any annual meeting shall invalidate the same or any proceeding thereat. It shall be the responsibility of the Secretary to mail such notice.
(d) Quorum. Those shareholders present in person or by proxy entitling them to exercise a majority of the voting power shall constitute a quorum for any meeting of shareholders. In the event of an absence of a quorum at any meeting or any adjournment thereof, a majority of those present in person or by proxy and entitled to vote may adjourn such meeting from time to time. At any adjourned meeting at which a quorum may be present, any business may be transacted which might have been transacted at the meeting as originally called.
(e) Place of Meetings. The annual or any special meetings of shareholders may be held at such place or places within or without the State of Ohio, as may be specified in the notice of any such meetings.
(f) Proxies. At any meeting of shareholders, any person who is entitled to attend, or to vote thereat, and to execute consents, waivers or releases, may be represented at such meeting or vote thereat, and execute consents, waivers and releases, and exercise any of such persons other rights, by proxy or proxies appointed by a writing signed by such person and submitted to the Secretary at or before such meeting. Voting
by proxy or proxies shall be governed by all of the provisions of Ohio law, including the provisions relating to the sufficiency of the writing, the duration of the validity of the proxy or proxies, and the power of substitution and revocation.
ARTICLE II - SHARES
(a) Certificates. Certificates evidencing the ownership of shares of the corporation shall be issued to those entitled to them by transfer or otherwise. Each certificate for shares shall bear a distinguishing number, the signature of the Chairman of the Board or the President or a Vice President and the signature of the Secretary, an Assistant Secretary, the Treasurer, or an Assistant Treasurer of the corporation, and such recitals as may be required by law. The certificates for shares shall be of such tenor and design as the Board of Directors from time to time may adopt.
(b) Transfers. The shares of the corporation shall be assignable and transferable only on the books and records of the corporation by the registered owner, or by the registered owners duly authorized attorney, upon surrender of the certificate duly and properly endorsed with proper evidence of authority to transfer. The corporation shall issue a new certificate for the shares surrendered to the person or persons entitled thereto.
(c) Lost, Stolen or Destroyed Certificates. The holder of any shares in the corporation shall immediately notify the Secretary of any lost, stolen or destroyed certificate, and the corporation may issue a new certificate in the place of any certificate alleged to have been lost, stolen or destroyed. The Board of Directors may, at its discretion, require the owner of a lost, stolen or destroyed certificate or the owners legal representative to give the corporation a bond on such terms and with such sureties as it may direct, to indemnify the corporation against any claim that may be made against it on account of the alleged lost, stolen or destroyed certificate. The Board of Directors may, however, at its discretion, refuse to issue any such new certificate except pursuant to legal proceedings in a court having jurisdiction over such matter pursuant to Ohio law.
ARTICLE III - DIRECTORS
(a) Number and Term. The number of members of the Board of Directors shall be determined pursuant to law, or by resolution of the shareholders entitled to vote, but where said resolution provides for less than three (3) Directors, the number of Directors shall not be less than the number of shareholders.
The Directors shall hold office until the expiration of the term for which they were elected and shall continue in office until their respective successors shall have been duly elected and qualified.
(b) Vacancies. A resignation from the Board of Directors shall be deemed to take effect upon its receipt by the Secretary, unless some other time is specified therein. The acceptance of any resignation shall not be necessary to make it effective unless so specified in the resignation. In case of any vacancy in the Board of Directors, the remaining Directors, even though they may be less than a quorum of the entire number of
Directors constituting a full Board, may at any duly convened meeting, except as hereinafter provided, elect a successor to hold office for the unexpired portion of the term of the Director whose place shall be vacant, and until the election and qualification of a successor.
(c) Regular Meetings. Regular meetings of the Board of Directors shall be held monthly on such dates as the Board may designate.
(d) Special Meetings. Special meetings of the Board of Directors shall be called by the Secretary and held at the request of the President or two (2) of the Directors.
(e) Notice of Meetings. The Secretary shall give notice of each meeting of the Board of Directors, whether regular or special, to each member of the Board.
(f) Quorum. A majority of the Directors in office at the time shall constitute a quorum at all meetings thereof.
(g) Place of Meetings. The Board of Directors may hold its meetings at such place or places within or without the State of Ohio as the Board may, from time to time, determine.
(h) Compensation. Directors, as such, shall not receive any stated salary for their services, but, on resolution of the Board, a fixed sum for expenses of attendance, if any, may be allowed for attendance at each meeting, regular or special, provided that nothing herein contained shall be construed to preclude any Director from serving the corporation in any other capacity and receiving compensation therefor. Members of either executive or special committees may be allowed such compensation as the Board of Directors may determine for attending committee meetings.
(i) Liability. The provisions of Section 1701.59(D) of the Ohio Revised Code, or any statute of like tenor or effect which is hereafter enacted, shall not apply in any action brought by or in the right of the corporation against a Director.
ARTICLE IV - ELECTION OF OFFICERS
At the first meeting of the Board of Directors in each year (at which a quorum shall be present) held next after the annual meeting of the shareholders, and at any special meeting for such purpose, as provided in Article III(d), the Board of Directors shall elect the officers of the corporation. It may also appoint an executive committee or other committees and define their powers and duties.
ARTICLE V - OFFICERS
The officers of this corporation shall include a President, a Vice President, a Secretary, a Treasurer, and such other officers as the Board of Directors may, from time to time, elect, all of whom may or may not be Directors. Said officers shall be chosen by
the Board of Directors, and shall hold office for one (1) year, or until their successors are elected and qualified.
Any officer or employee elected or appointed by the Board of Directors, other than a Director, may be removed at any time for any reason upon vote of the majority of the whole Board of Directors.
ARTICLE VI - DUTIES OF OFFICERS
(a) President. The President shall preside at all meetings of shareholders and Directors. The President shall exercise, subject to the control of the Board of Directors and the shareholders of the corporation, a general supervision over the affairs of the corporation, and shall perform generally all duties incident to the office and such other duties as may be assigned to the President from time to time by the Board of Directors.
(b) Vice President. The Vice President shall perform all duties of the President in the Presidents absence or during the Presidents inability to act, and shall have such further duties as may be assigned to the Vice President by the Board of Directors.
(c) Secretary. The Secretary shall keep the minutes of all proceedings of the Board of Directors and of the shareholders and make a proper record of same, which shall be attested to by the Secretary, and shall have such further duties as may be assigned to the Secretary by the Board of Directors.
(d) Treasurer. The Treasurer shall have the custody of the funds and securities of the corporation which may come into the Treasurers hands, and shall do with the same as may be ordered by the Board of Directors. When necessary or proper, the Treasurer may endorse on behalf of the corporation, for collection, checks, notes and other obligations. The Treasurer shall deposit the funds of the corporation to its credit in such hands and depositories as the Board of Directors may, from time to time, designate. The Treasurer shall also have such further duties as may be assigned to him by the Board of Directors.
ARTICLE VII - ORDER OF BUSINESS - SHAREHOLDER MEETINGS
1. Call meeting to order.
2. Selection of Chairman and Secretary.
3. Proof of notice of meeting.
4. Roll call, including filing of proxies with the Secretary.
5. Appointment of Tellers.
6. Reading and disposal of previously unapproved minutes.
7. Reports of officers and committees.
8. If annual meeting, or meeting called for that purpose, election of Directors.
9. Unfinished business.
10. New business.
11. Adjournment.
This order may be changed by the affirmative vote of a majority in interest of the shareholders present.
ARTICLE VIII - AMENDMENTS
These Regulations may be adopted, amended or repealed by the affirmative vote of a majority of the shares empowered to vote thereon at any meeting called and held for that purpose, notice of which meeting has been given pursuant to law, or without a meeting by the written assent of the owners of two-thirds of the shares of the corporation entitled to vote thereon.
The undersigned shareholders hereby adopt the foregoing Code of Regulations this 15th day of October, 1996.
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SHAREHOLDERS: |
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/s/ James H. Frauenberg |
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James H. Frauenberg |
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/s/ Michael W. Lenhart |
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Michael W. Lenhart |
Exhibit 3.11
ARTICLES OF INCORPORATION
OF
BUCKEYE CHECK CASHING OF ARIZONA, INC.
The undersigned, a citizen of the United States, desiring to form a corporation for profit under the General Corporation Act of Ohio, does certify:
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The name of said corporation shall be |
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BUCKEYE CHECK CASHING OF ARIZONA, INC. |
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SECOND: |
The place in Ohio where its principal office is to be located is Dublin, Franklin County, Ohio. |
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THIRD: |
The purpose of said corporation is to engage in any lawful act or activity for which corporations may be formed under Sections 1701.01 through 1701.98, inclusive, of the Ohio Revised Code. |
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FOURTH: |
The maximum number of shares which the corporation is authorized to have outstanding shall be eight hundred fifty (850), all of which shares shall be common without par value. |
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The corporation, through its Board of Directors, shall have the right and power to repurchase any of its outstanding shares at such price and upon such terms as may be agreed upon between the corporation and the selling shareholder or shareholders. |
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SIXTH: |
The Board of Directors is hereby authorized to fix and determine whether any surplus, and, if any, what part of the surplus, however created or arising, shall be used or disposed of or declared in dividends or paid to shareholders, and, without action by the shareholders, to use and apply surplus, or any part thereof, or such part of the stated capital of the corporation as is permitted under the provisions of Section 1701.35 of the Ohio Revised Code, or any statute of like tenor or effect which is hereafter enacted, at any time, or from time to time, in the purchase or acquisition of shares of any class, voting trust certificates for shares, bonds, debentures, notes, script, warrants, obligations, evidences of indebtedness of the corporation, or other securities of the corporation, to such extent or amount and in such manner and upon such terms as the Board of Directors shall deem expedient. |
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No person shall be disqualified from being a director of the corporation because he or she is or may be a party to, and no director of the corporation shall be disqualified from entering into, any contract or other transaction to which the corporation is or may be a party. No contract or other transaction to which the corporation is or may be a party shall be void or voidable for the reason that any director or officer or other agent of the corporation is a party thereto, or otherwise has any direct or indirect interest in such contract or transaction or in any other party thereto, or for reason that any interested director or officer or other agent of the corporation authorizes or participates in authorization of such contract or transaction, (a) if the material facts as to such interest are disclosed or are otherwise known to the Board of Directors or applicable committee of directors at the time the contract or transaction is authorized, and at least a majority of the disinterested directors or disinterested members of the committee vote for or otherwise take action authorizing such contract or transaction, even though such disinterested directors or members are less than a quorum, or (b) if the contract or transaction (i) is not less favorable to the corporation than an arms length contract or transaction in which no director or officer or other agent of the corporation has any interest or (ii) is otherwise fair to the corporation as of the time it is authorized. Any interested director may be counted in determining the presence of a quorum at any meeting of the Board of Directors or any committee thereof which authorizes the contract or transaction. |
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EIGHTH: |
The provisions of Section 1701.13(E)(5)(a) of the Ohio Revised Code or any statute of like tenor or effect which is hereafter enacted shall not apply to the corporation. The corporation shall, to the fullest extent not prohibited by any provision of applicable law other than Section 1701.13(E)(5)(a) of the Ohio Revised Code or any statute of like tenor or effect which is hereafter enacted, indemnify each director and officer against any and all costs and expenses (including attorney fees, judgments, fines, penalties, amounts paid in settlement, and other disbursements) actually and reasonably incurred by or imposed upon such person in connection with any action, suit, investigation or proceeding (or any claim or other matter therein), whether civil, criminal, administrative or otherwise in nature, including any settlements thereof or any appeals therein, with respect to which such person is named or otherwise becomes or is threatened to be made a party by reason of being or at any time having been a director or officer of the corporation, or by any reason of being or at any time having been, while such a director or officer, an employee or other agent of the corporation or, at the direction or request of the corporation, a director, trustee, officer, administrator, manager, employee, adviser or other agent of or fiduciary for any other |
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The corporation shall indemnify any other person to the extent such person shall be entitled to indemnification under Ohio law by reason of being successful on the merits or otherwise in defense of an action to which such person is named a party by reason of being an employee or other agent of the corporation, and the corporation may further indemnify any such person if it is determined on a case by case basis by the Board of Directors that indemnification is proper in the specific case. |
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Notwithstanding anything to the contrary in these Articles of Incorporation, no person shall be indemnified to the extent, if any, it is determined by the Board of Directors or by written opinion of legal counsel designated by the Board of Directors for such purpose that indemnification is contrary to applicable law. |
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NINTH: |
Notwithstanding any provisions of the Ohio Revised Code, now or hereafter in force, requiring for any purpose the vote or consent of the holders of shares entitling them to exercise two-thirds (2/3) or any other proportion of the voting power of the corporation or of any class or classes of shares thereof, such action, unless otherwise expressly required by statute, may be taken by the vote or consent of the holders of shares entitling them to exercise a majority of the voting power of the corporation or of such class of shares thereof. |
IN WITNESS WHEREOF, I have hereunto set my hand this day of May, 2000.
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James H. Frauenberg, Incorporator |
ORIGINAL APPOINTMENT OF AGENT
The undersigned, being the incorporator of Buckeye Check Cashing of Arizona, Inc., hereby appoints as its agent, James H. Frauenberg, to act as agent upon whom any process, notice or demand required or permitted by statute to be served upon the corporation may be served. His complete address is 6321 Irelan Place, Dublin, Ohio 43016.
Dated: May , 2000 |
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James H. Frauenberg, Incorporator |
ACCEPTANCE OF STATUTORY AGENT
The undersigned hereby accepts the original appointment as statutory agent for Buckeye Check Cashing of Arizona, Inc. on the day of May, 2000.
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James H. Frauenberg |
Exhibit 3.12
CODE OF REGULATIONS
OF
BUCKEYE CHECK CASHING OF ARIZONA, INC.
ARTICLE
I - MEETING OF SHAREHOLDERS
(a) Annual Meetings. An annual meeting of shareholders, for the election of Directors, for the consideration of any reports and for the transaction of such other business as may be brought before the meeting, shall be held on the first Monday of the fourth month following the close of the Corporations fiscal year or on such other date as may be designated by the Board of Directors.
(b) Special Meetings. Special meetings of the shareholders of this corporation shall be called by the Secretary, pursuant to a resolution of the Board of Directors, or upon written request of two Directors, or by shareholders representing 25% of the shares issued and entitled to vote. Calls for special meetings shall specify the time, place and object or objects thereof, and no business other than that specified in the call therefor shall be considered at any such meetings.
(c) Notice of Meetings. A written or printed notice of the annual or any special meetings of the shareholders, stating the time and place, and in case of special meetings, the objects thereof, shall be given to each shareholder entitled to vote at such meeting appearing on the books of the corporation, by mailing same to the shareholders address as same appears on the records of the corporation or of its Transfer Agent or Agents, at least ten (10) days before any such meeting; provided, however, that no failure or irregularity of notice of any annual meeting shall invalidate the same or any proceeding thereat. It shall be the responsibility of the Secretary to mail such notice.
(d) Quorum. Those shareholders present in person or by proxy entitling them to exercise a majority of the voting power shall constitute a quorum for any meeting of shareholders. In the event of an absence of a quorum at any meeting or any adjournment thereof, a majority of those present in person or by proxy and entitled to vote may adjourn such meeting from time to time. At any adjourned meeting at which a quorum may be present, any business may be transacted which might have been transacted at the meeting as originally called.
(e) Place of Meetings. The annual or any special meetings of shareholders may be held at such place or places within or without the State of Ohio, as may be specified in the notice of any such meetings.
(f) Proxies. At any meeting of shareholders, any person who is entitled to attend, or to vote thereat, and to execute consents, waivers or releases, may be represented at such meeting or vote thereat, and execute consents, waivers and releases, and exercise any of such persons other rights, by proxy or proxies appointed by a writing signed by such person and submitted to the Secretary at or before such meeting. Voting by proxy or proxies shall be governed by all of the provisions of Ohio
law, including the provisions relating to the sufficiency of the writing, the duration of the validity of the proxy or proxies, and the power of substitution and revocation.
ARTICLE II - SHARES
(a) Certificates. Certificates evidencing the ownership of shares of the corporation shall be issued to those entitled to them by transfer or otherwise. Each certificate for shares shall bear a distinguishing number, the signature of the Chairman of the Board or the President or a Vice President and the signature of the Secretary, an Assistant Secretary, the Treasurer, or an Assistant Treasurer of the corporation, and such recitals as may be required by law. The certificates for shares shall be of such tenor and design as the Board of Directors from time to time may adopt.
(b) Transfers. The shares of the corporation shall be assignable and transferable only on the books and records of the corporation by the registered owner, or by the registered owners duly authorized attorney, upon surrender of the certificate duly and properly endorsed with proper evidence of authority to transfer. The corporation shall issue a new certificate for the shares surrendered to the person or persons entitled thereto.
(c) Lost, Stolen or Destroyed Certificates. The holder of any shares in the corporation shall immediately notify the Secretary of any lost, stolen or destroyed certificate, and the corporation may issue a new certificate in the place of any certificate alleged to have been lost, stolen or destroyed. The Board of Directors may, at its discretion, require the owner of a lost, stolen or destroyed certificate or the owners legal representative to give the corporation a bond on such terms and with such sureties as it may direct, to indemnify the corporation against any claim that may be made against it on account of the alleged lost, stolen or destroyed certificate. The Board of Directors may, however, at its discretion, refuse to issue any such new certificate except pursuant to legal proceedings in a court having jurisdiction over such matter pursuant to Ohio law.
ARTICLE III - DIRECTORS
(a) Number and Term. The number of members of the Board of Directors shall be determined pursuant to law, or by resolution of the shareholders entitled to vote, but where said resolution provides for less than three (3) Directors, the number of Directors shall not be less than the number of shareholders.
The Directors shall hold office until the expiration of the term for which they were elected and shall continue in office until their respective successors shall have been duly elected and qualified.
(b) Vacancies. A resignation from the Board of Directors shall be deemed to take effect upon its receipt by the Secretary, unless some other time is specified therein. The acceptance of any resignation shall not be necessary to make it effective unless so specified in the resignation. In case of any vacancy in the Board of Directors, the remaining Directors, even though they may be less than a quorum of the entire number of Directors constituting a full Board, may at any duly convened meeting, except as hereinafter provided, elect a successor to hold office for the unexpired portion of
the term of the Director whose place shall be vacant, and until the election and qualification of a successor.
(c) Regular Meetings. Regular meetings of the Board of Directors shall be held monthly on such dates as the Board may designate.
(d) Special Meetings. Special meetings of the Board of Directors shall be called by the Secretary and held at the request of the President or two (2) of the Directors.
(e) Notice of Meetings. The Secretary shall give notice of each meeting of the Board of Directors, whether regular or special, to each member of the Board.
(f) Quorum. A majority of the Directors in office at the time shall constitute a quorum at all meetings thereof.
(g) Place of Meetings. The Board of Directors may hold its meetings at such place or places within or without the State of Ohio as the Board may, from time to time, determine.
(h) Compensation. Directors, as such, shall not receive any stated salary for their services, but, on resolution of the Board, a fixed sum for expenses of attendance, if any, may be allowed for attendance at each meeting, regular or special, provided that nothing herein contained shall be construed to preclude any Director from serving the corporation in any other capacity and receiving compensation therefor. Members of either executive or special committees may be allowed such compensation as the Board of Directors may determine for attending committee meetings.
(i) Liability. The provisions of Section 1701.59(D) of the Ohio Revised Code, or any statute of like tenor or effect which is hereafter enacted, shall not apply in any action brought by or in the right of the corporation against a Director.
ARTICLE IV - ELECTION OF OFFICERS
At the first meeting of the Board of Directors in each year (at which a quorum shall be present) held next after the annual meeting of the shareholders, and at any special meeting for such purpose, as provided in Article III(d), the Board of Directors shall elect the officers of the corporation. It may also appoint an executive committee or other committees and define their powers and duties.
ARTICLE V - OFFICERS
The officers of this corporation shall include a President, a Vice President, a Secretary, a Treasurer, and such other officers as the Board of Directors may, from time to time, elect, all of whom may or may not be Directors. Said officers shall be chosen by the Board of Directors, and shall hold office for one (1) year, or until their successors are elected and qualified.
Any officer or employee elected or appointed by the Board of Directors, other than a Director, may be removed at any time for any reason upon vote of the majority of the whole Board of Directors.
ARTICLE VI - DUTIES OF OFFICERS
(a) President. The President shall preside at all meetings of shareholders and Directors. The President shall exercise, subject to the control of the Board of Directors and the shareholders of the corporation, a general supervision over the affairs of the corporation, and shall perform generally all duties incident to the office and such other duties as may be assigned to the President from time to time by the Board of Directors.
(b) Vice President. The Vice President shall perform all duties of the President in the Presidents absence or during the Presidents inability to act, and shall have such further duties as may be assigned to the Vice President by the Board of Directors.
(c) Secretary. The Secretary shall keep the minutes of all proceedings of the Board of Directors and of the shareholders and make a proper record of same, which shall be attested to by the Secretary, and shall have such further duties as may be assigned to the Secretary by the Board of Directors.
(d) Treasurer. The Treasurer shall have the custody of the funds and securities of the corporation which may come into the Treasurers hands, and shall do with the same as may be ordered by the Board of Directors. When necessary or proper, the Treasurer may endorse on behalf of the corporation, for collection, checks, notes and other obligations. The Treasurer shall deposit the funds of the corporation to its credit in such hands and depositories as the Board of Directors may, from time to time, designate. The Treasurer shall also have such further duties as may be assigned to him by the Board of Directors.
ARTICLE VII - ORDER OF BUSINESS - SHAREHOLDER MEETINGS
1. Call meeting to order.
2. Selection of Chairman and Secretary.
3. Proof of notice of meeting.
4. Roll call, including filing of proxies with the Secretary.
5. Appointment of Tellers.
6. Reading and disposal of previously unapproved minutes.
7. Reports of officers and committees.
8. If annual meeting, or meeting called for that purpose, election of Directors.
9. Unfinished business.
10. New business.
11. Adjournment.
This order may be changed by the affirmative vote of a majority in interest of the shareholders present.
ARTICLE VIII - AMENDMENTS
These Regulations may be adopted, amended or repealed by the affirmative vote of a majority of the shares empowered to vote thereon at any meeting called and held for that purpose, notice of which meeting has been given pursuant to law, or without a meeting by the written assent of the owners of two-thirds of the shares of the corporation entitled to vote thereon.
The undersigned shareholders hereby adopts the foregoing Code of Regulations this day of June, 2000.
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SHAREHOLDERS: |
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James H. Frauenberg, as Trustee of the James H. Frauenberg 1998 Trust, dated 01/01/98, as amended |
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Fredrick L. Fisher, as Trustee of the James H. Frauenberg 1998 Descendants Trust, dated 01/01/98, as amended |
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Michael W. Lenhart, as Trustee of the Michael W. Lenhart 1998 Trust, dated 01/01/98, as amended |
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Fredrick L. Fisher, as Trustee of the Michael W. Lenhart 1998 Descendants Trust, dated 01/01/98, as amended |
Exhibit 3.13
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State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 04:14 PM 10/18/2006 |
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FILED 04:09 PM 10/18/2006 |
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SRV 060957221 - 4237357 FILE |
STATE of DELAWARE
LIMITED LIABILITY COMPANY
CERTIFICATE of FORMATION
· First: The name of the limited liability company is Buckeye Check Cashing of California, LLC
· Second: The address of its registered office in the State of Delaware is 2711 Centerville Road Suite 400 in the City of Wilmington, DE 19808. The name of its Registered agent at such address is Corporation Service Company
· Third: (Use this paragraph only if the company is to have a specific effective date of dissolution: The latest date on which the limited liability company is to dissolve is .)
· Fourth: (Insert any other matters the members determine to include herein.)
In Witness Whereof, the undersigned have executed this Certificate of Formation this 18th day of October, 2006.
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By: |
/s/ Heidi Bowman |
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Authorized Person(s) | |
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Name: |
Heidi Bowman | |
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Typed or Printed |
Exhibit 3.14
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE CHECK CASHING OF CALIFORNIA, LLC
a Delaware Limited Liability Company
Dated as of April 20, 2012
THE MEMBERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE CHECK CASHING OF CALIFORNIA, LLC
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of Buckeye Check Cashing of California, LLC (the Company) is made, adopted and entered into effective as of April 20, 2012, by CheckSmart Financial Company, a Delaware corporation, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Limited Liability Company Agreement of Buckeye Check Cashing of California, LLC, effective as of October 19, 2006 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 18 of the Delaware Corporation Laws Annotated (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Delaware on October 18, 2006. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in a limited liability company agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Buckeye Check Cashing of California, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 7001 Post Road, Suite 200, Dublin, Ohio 43016. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Delaware in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Delaware in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Limited Liability Company Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means CheckSmart Financial Company, a Delaware corporation, or any Person that acquires all of the equity interests of the Company from CheckSmart Financial Company.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST
The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto, including, without limitation, all decisions required or permitted to be made by the Sole Member under this Agreement and all decisions required or permitted to be made by the Company as a member, partner or other beneficial owner of any other Person. Notwithstanding the foregoing or anything in this Agreement to the contrary, the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take.
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager or Officer). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation
or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be five (5) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure
of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 18-303(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, nor the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, director or stockholder of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the Delaware General Corporation Law as if the Company were a Delaware corporation, as the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the Delaware General Corporation Law as if the Company were a Delaware corporation, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, director, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such
suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Certificate of Formation, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members directors, officers or stockholders, or a Manager, an Officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 18-304 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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Exhibit 3.15
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RECEIVED |
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APR 20 2000 |
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J. KENNETH BLACKWELL |
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SECRETARY OF STATE |
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ARTICLES OF INCORPORATION |
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OF |
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BUCKEYE CHECK CASHING OF FLORIDA, INC. |
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The undersigned, a citizen of the United States, desiring to form a corporation for profit under the General Corporation Act of Ohio, does certify:
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The name of said corporation shall be BUCKEYE CHECK CASHING OF FLORIDA, INC. |
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SECOND: |
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The place in Ohio where its principal office is to be located is Dublin, Franklin County, Ohio. |
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THIRD: |
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The purpose of said corporation is to engage in any lawful act or activity for which corporations may be formed under Sections 1701.01 through 1701.98, inclusive, of the Ohio Revised Code. |
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FOURTH: |
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The maximum number of shares which the corporation is authorized to have outstanding shall be eight hundred fifty (850), all of which shares shall be common without par value. |
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The corporation, through its Board of Directors, shall have the right and power to repurchase any of its outstanding shares at such price and upon such terms as may be agreed upon between the corporation and the selling shareholder or shareholders. |
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The Board of Directors is hereby authorized to fix and determine whether any surplus, and, if any, what part of the surplus, however created or arising, shall be used or disposed of or declared in dividends or paid to shareholders, and, without action by the shareholders, to use and apply surplus, or any part thereof, or such part of the stated capital of the corporation as is permitted under the provisions of Section 1701.35 of the Ohio Revised Code, or any statute of like tenor or effect which is hereafter enacted, at any time, or from time to time, in the purchase or acquisition of shares of any class, voting trust certificates for shares, bonds, debentures, notes, script, warrants, obligations, evidences of indebtedness of the corporation, or other securities of the corporation, to such extent or amount and in such manner and upon such terms as the Board of Directors shall deem expedient. |
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No person shall be disqualified from being a director of the corporation because he or she is or may be a party to, and no director of the corporation shall be disqualified from entering into, any contract or other transaction to which the corporation is or may be a party. No contract or other transaction to which the corporation is or may be a party shall be void or voidable for the reason that any director or officer or other agent of the corporation is a party thereto, or otherwise has any direct or indirect interest in such contract or transaction or in any other party thereto, or for reason that any interested director or officer or other agent of the corporation authorizes or participates in authorization of such contract or transaction, (a) if the material facts as to such interest are disclosed or are otherwise known to the Board of Directors or applicable committee of directors at the time the contract or transaction is authorized, and at least a majority of the disinterested directors or disinterested members of the committee vote for or otherwise take action authorizing such contract or transaction, even though such disinterested directors or members are less than a quorum, or (b) if the contract or transaction (i) is not less favorable to the corporation than an arms length contract or transaction in which no director or officer or other agent of the corporation has any interest or (ii) is otherwise fair to the corporation as of the time it is authorized. Any interested director may be counted in determining the presence of a quorum at any meeting of the Board of Directors or any committee thereof which authorizes the contract or transaction. |
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The provisions of Section 1701.13(E)(5)(a) of the Ohio Revised Code or any statute of like tenor or effect which is hereafter enacted shall not apply to the corporation. The corporation shall, to the fullest extent not prohibited by any provision of applicable law other than Section 1701.13(E)(5)(a) of the Ohio Revised Code or any statute of like tenor or effect which is hereafter enacted, indemnify each director and officer against any and all costs and expenses (including attorney fees, judgments, fines, penalties, amounts paid in settlement, and other disbursements) actually and reasonably incurred by or imposed upon such person in connection with any action, suit, investigation or proceeding (or any claim or other matter therein), whether civil, criminal, administrative or otherwise in nature, including any settlements thereof or any appeals therein, with respect to which such person is named or otherwise becomes or is threatened to be made a party by reason of being or at any time having been a director or officer of the corporation, or by any reason of being or at any time having been, while such a director or officer, an employee or other agent of the corporation or, at the direction or request of the corporation, a director, trustee, officer, administrator, manager, employee, adviser or other agent of or fiduciary for any other corporation, partnership, trust, venture or other entity or enterprise including any employee benefit plan. |
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corporation, partnership, trust, venture or other entity or enterprise Including any employee benefit plan. |
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The corporation shall indemnify any other person to the extent such person shall be entitled to indemnification under Ohio law by reason of being successful on the merits or otherwise in defense of an action to which such person is named a party by reason of being an employee or other agent of the corporation, and the corporation may further indemnify any such person if it is determined on a case by case basis by the Board of Directors that indemnification is proper in the specific case. |
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Notwithstanding anything to the contrary in these Articles of Incorporation, no person shall be Indemnified to the extent, if any, it is determined by the Board of Directors or by written opinion of legal counsel designated by the Board of Directors for such purpose that Indemnification is contrary to applicable law. |
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NINTH: |
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Notwithstanding any provisions of the Ohio Revised Code, now or hereafter in force, requiring for any purpose the vote or consent of the holders of shares entitling them to exercise two-thirds (2/3) or any other proportion of the voting power of the corporation or of any class or classes of shares thereof, such action, unless otherwise expressly required by statute, may be taken by the vote or consent of the holders of shares entitling them to exercise a majority of the voting power of the corporation or of such class of shares thereof. |
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IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of April, 2000.
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/s/ James H. Frauenberg |
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James H. Frauenberg, Incorporator |
Exhibit 3.16
CODE OF REGULATIONS
OF
BUCKEYE CHECK CASHING OF FLORIDA, INC.
ARTICLE
I - MEETING OF SHAREHOLDERS
(a) Annual Meetings. An annual meeting of shareholders, for the election of Directors, for the consideration of any reports and for the transaction of such other business as may be brought before the meeting, shall be held on the first Monday of the fourth month following the close of the Corporations fiscal year or on such other date as may be designated by the Board of Directors.
(b) Special Meetings. Special meetings of the shareholders of this corporation shall be called by the Secretary, pursuant to a resolution of the Board of Directors, or upon written request of two Directors, or by shareholders representing 25% of the shares issued and entitled to vote. Calls for special meetings shall specify the time, place and object or objects thereof, and no business other than that specified in the call therefor shall be considered at any such meetings.
(c) Notice of Meetings. A written or printed notice of the annual or any special meetings of the shareholders, stating the time and place, and in case of special meetings, the objects thereof, shall be given to each shareholder entitled to vote at such meeting appearing on the books of the corporation, by mailing same to the shareholders address as same appears on the records of the corporation or of its Transfer Agent or Agents, at least ten (10) days before any such meeting; provided, however, that no failure or irregularity of notice of any annual meeting shall invalidate the same or any proceeding thereat. It shall be the responsibility of the Secretary to mail such notice.
(d) Quorum. Those shareholders present in person or by proxy entitling them to exercise a majority of the voting power shall constitute a quorum for any meeting of shareholders. In the event of an absence of a quorum at any meeting or any adjournment thereof, a majority of those present in person or by proxy and entitled to vote may adjourn such meeting from time to time. At any adjourned meeting at which a quorum may be present, any business may be transacted which might have been transacted at the meeting as originally called.
(e) Place of Meetings. The annual or any special meetings of shareholders may be held at such place or places within or without the State of Ohio, as may be specified in the notice of any such meetings.
(f) Proxies. At any meeting of shareholders, any person who is entitled to attend, or to vote thereat, and to execute consents, waivers or releases, may be represented at such meeting or vote thereat, and execute consents, waivers and releases,
and exercise any of such persons other rights, by proxy or proxies appointed by a writing signed by such person and submitted to the Secretary at or before such meeting. Voting by proxy or proxies shall be governed by all of the provisions of Ohio law, including the provisions relating to the sufficiency of the writing, the duration of the validity of the proxy or proxies, and the power of substitution and revocation.
ARTICLE II - SHARES
(a) Certificates. Certificates evidencing the ownership of shares of the corporation shall be issued to those entitled to them by transfer or otherwise. Each certificate for shares shall bear a distinguishing number, the signature of the Chairman of the Board or the President or a Vice President and the signature of the Secretary, an Assistant Secretary, the Treasurer, or an Assistant Treasurer of the corporation, and such recitals as may be required by law. The certificates for shares shall be of such tenor and design as the Board of Directors from time to time may adopt.
(b) Transfers. The shares of the corporation shall be assignable and transferable only on the books and records of the corporation by the registered owner, or by the registered owners duly authorized attorney, upon surrender of the certificate duly and properly endorsed with proper evidence of authority to transfer. The corporation shall issue a new certificate for the shares surrendered to the person or persons entitled thereto.
(c) Lost, Stolen or Destroyed Certificates. The holder of any shares in the corporation shall immediately notify the Secretary of any lost, stolen or destroyed certificate, and the corporation may issue a new certificate in the place of any certificate alleged to have been lost, stolen or destroyed. The Board of Directors may, at its discretion, require the owner of a lost, stolen or destroyed certificate or the owners legal representative to give the corporation a bond on such terms and with such sureties as it may direct, to indemnify the corporation against any claim that may be made against it on account of the alleged lost, stolen or destroyed certificate. The Board of Directors may, however, at its discretion, refuse to issue any such new certificate except pursuant to legal proceedings in a court having jurisdiction over such matter pursuant to Ohio law.
ARTICLE III - DIRECTORS
(a) Number and Term. The number of members of the Board of Directors shall be determined pursuant to law, or by resolution of the shareholders entitled to vote, but where said resolution provides for less than three (3) Directors, the number of Directors shall not be less than the number of shareholders.
The Directors shall hold office until the expiration of the term for which they were elected and shall continue in office until their respective successors shall have been duly elected and qualified.
(b) Vacancies. A resignation from the Board of Directors shall be deemed to take effect upon its receipt by the Secretary, unless some other time is specified therein.
The acceptance of any resignation shall not be necessary to make it effective unless so specified in the resignation. In case of any vacancy in the Board of Directors, the remaining Directors, even though they may be less than a quorum of the entire number of Directors constituting a full Board, may at any duly convened meeting, except as hereinafter provided, elect a successor to hold office for the unexpired portion of the term of the Director whose place shall be vacant, and until the election and qualification of a successor.
(c) Regular Meetings. Regular meetings of the Board of Directors shall be held monthly on such dates as the Board may designate.
(d) Special Meetings. Special meetings of the Board of Directors shall be called by the Secretary and held at the request of the President or two (2) of the Directors.
(e) Notice of Meetings. The Secretary shall give notice of each meeting of the Board of Directors, whether regular or special, to each member of the Board.
(f) Quorum. A majority of the Directors in office at the time shall constitute a quorum at all meetings thereof.
(g) Place of Meetings. The Board of Directors may hold its meetings at such place or places within or without the State of Ohio as the Board may, from time to time, determine.
(h) Compensation. Directors, as such, shall not receive any stated salary for their services, but, on resolution of the Board, a fixed sum for expenses of attendance, if any, may be allowed for attendance at each meeting, regular or special, provided that nothing herein contained shall be construed to preclude any Director from serving the corporation in any other capacity and receiving compensation therefor. Members of either executive or special committees may be allowed such compensation as the Board of Directors may determine for attending committee meetings.
(i) Liability. The provisions of Section 1701.59(D) of the Ohio Revised Code, or any statute of like tenor or effect which is hereafter enacted, shall not apply in any action brought by or in the right of the corporation against a Director.
ARTICLE IV - ELECTION OF OFFICERS
At the first meeting of the Board of Directors in each year (at which a quorum shall be present) held next after the annual meeting of the shareholders, and at any special meeting for such purpose, as provided in Article III(d), the Board of Directors shall elect the officers of the corporation. It may also appoint an executive committee or other committees and define their powers and duties.
ARTICLE V - OFFICERS
The officers of this corporation shall include a President, a Vice President, a Secretary, a Treasurer, and such other officers as the Board of Directors may, from time to time, elect, all of whom may or may not be Directors. Said officers shall be chosen by the Board of Directors, and shall hold office for one (1) year, or until their successors are elected and qualified.
Any officer or employee elected or appointed by the Board of Directors, other than a Director, may be removed at any time for any reason upon vote of the majority of the whole Board of Directors.
ARTICLE VI - DUTIES OF OFFICERS
(a) President. The President shall preside at all meetings of shareholders and Directors. The President shall exercise, subject to the control of the Board of Directors and the shareholders of the corporation, a general supervision over the affairs of the corporation, and shall perform generally all duties incident to the office and such other duties as may be assigned to the President from time to time by the Board of Directors.
(b) Vice President. The Vice President shall perform all duties of the President in the Presidents absence or during the Presidents inability to act, and shall have such further duties as may be assigned to the Vice President by the Board of Directors.
(c) Secretary. The Secretary shall keep the minutes of all proceedings of the Board of Directors and of the shareholders and make a proper record of same, which shall be attested to by the Secretary, and shall have such further duties as may be assigned to the Secretary by the Board of Directors.
(d) Treasurer. The Treasurer shall have the custody of the funds and securities of the corporation which may come into the Treasurers hands, and shall do with the same as may be ordered by the Board of Directors. When necessary or proper, the Treasurer may endorse on behalf of the corporation, for collection, checks, notes and other obligations. The Treasurer shall deposit the funds of the corporation to its credit in such hands and depositories as the Board of Directors may, from time to time, designate. The Treasurer shall also have such further duties as may be assigned to him by the Board of Directors.
ARTICLE VII - ORDER OF BUSINESS - SHAREHOLDER MEETINGS
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Call meeting to order. |
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Selection of Chairman and Secretary. |
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Proof of notice of meeting. |
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Roll call, including filing of proxies with the Secretary. |
5. |
Appointment of Tellers. |
6. |
Reading and disposal of previously unapproved minutes. |
7. |
Reports of officers and committees. |
8. |
If annual meeting, or meeting called for that purpose, election of Directors. |
9. |
Unfinished business. |
10. |
New business. |
11. |
Adjournment. |
This order may be changed by the affirmative vote of a majority in interest of the shareholders present.
ARTICLE VIII - AMENDMENTS
These Regulations may be adopted, amended or repealed by the affirmative vote of a majority of the shares empowered to vote thereon at any meeting called and held for that purpose, notice of which meeting has been given pursuant to law, or without a meeting by the written assent of the owners of two-thirds of the shares of the corporation entitled to vote thereon.
The undersigned shareholders hereby adopts the foregoing Code of Regulations this 20th day of April, 2000.
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SHAREHOLDERS: |
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/s/ James H. Frauenberg |
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James H. Frauenberg, as Trustee of |
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the James H. Frauenberg 1998 Trust, |
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dated 01/01/98, as amended |
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Fredrick L. Fisher, as Trustee of |
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the James H. Frauenberg 1998 Descendants |
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Trust, dated 01/01/98, as amended |
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/s/ Michael W. Lenhart |
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Michael W. Lenhart, as Trustee of |
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the Michael W. Lenhart 1998 Trust, |
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dated 01/01/98, as amended |
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Fredrick L. Fisher, as Trustee of |
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the Michael W. Lenhart 1998 Descendants |
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Trust, dated 01/01/98, as amended |
Exhibit 3.17
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State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 09:23 AM 01/18/2011 |
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FILED 08:20 AM 01/18/2011 |
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SRV 110049234 - 4927910 FILE |
STATE of DELAWARE
LIMITED LIABILITY COMPANY
CERTIFICATE of FORMATION
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First: The name of the limited liability company is Buckeye Check Cashing of Illinois, LLC |
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Second: The address of its registered office in the State of Delaware is 2711 Centerville Road Suite 400 in the City of Wilmington, DE 19808. The name of its Registered agent at such address is Corporation Service Company |
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Third: (Use this paragraph only if the company is to have a specific effective date of dissolution: The latest date on which the limited liability company is to dissolve is .) |
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Fourth: (Insert any other matters the members determine to include herein.) |
In Witness Whereof, the undersigned have executed this Certificate of Formation this 17th day of January, 2011.
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By: |
/s/ Heidi K. Bowman |
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Authorized Person(s) |
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Name: |
Heidi K. Bowman |
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Typed or Printed |
Exhibit 3.18
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE CHECK CASHING OF ILLINOIS, LLC
a Delaware Limited Liability Company
Dated as of April 20, 2012
THE MEMBERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE CHECK CASHING OF ILLINOIS, LLC
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of Buckeye Check Cashing of Illinois, LLC (the Company) is made, adopted and entered into effective as of April 20, 2012, by CheckSmart Financial Company, a Delaware corporation, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Limited Liability Company Agreement of Buckeye Check Cashing of Illinois, LLC, effective as of January 18, 2011 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 18 of the Delaware Corporation Laws Annotated (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Delaware on January 18, 2011. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in a limited liability company agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Buckeye Check Cashing of Illinois, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 7001 Post Road, Suite 200, Dublin, Ohio 43016. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Delaware in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Delaware in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Limited Liability Company Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means CheckSmart Financial Company, a Delaware corporation, or any Person that acquires all of the equity interests of the Company from CheckSmart Financial Company.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST
The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto, including, without limitation, all decisions required or permitted to be made by the Sole Member under this Agreement and all decisions required or permitted to be made by the Company as a member, partner or other beneficial owner of any other Person. Notwithstanding the foregoing or anything in this Agreement to the contrary, the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take.
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager or Officer). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation
or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be five (5) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure
of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 18-303(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, nor the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, director or stockholder of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the Delaware General Corporation Law as if the Company were a Delaware corporation, as the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the Delaware General Corporation Law as if the Company were a Delaware corporation, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, director, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such
suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Certificate of Formation, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members directors, officers or stockholders, or a Manager, an Officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 18-304 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
*** Remainder of page intentionally left blank ***
Exhibit 3.19
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State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 07:31 PM 05/12/2006 |
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FILED 06:37 PM 05/12/2006 |
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SRV 060454198 - 4158370 FILE |
STATE of DELAWARE
LIMITED LIABILITY COMPANY
CERTIFICATE of FORMATION
· First: The name of the limited liability company is Buckeye Check Cashing of Kansas, LLC
· Second: The address of its registered office in the State of Delaware is 2711 Centerville Road Suite 400 in the City of Wilmington, DE 19808. The name of its Registered agent at such address is Corporation Service Company
· Third: (Use this paragraph only if the company is to have a specific effective date of dissolution: The latest date on which the limited liability company is to dissolve is .)
· Fourth: (Insert any other matters the members determine to include herein.)
In Witness Whereof, the undersigned have executed this Certificate of Formation this 12th day of May, 2006.
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By: |
/s/ Heidi K. Bowman |
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Authorized Person(s) |
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Name: |
Heidi K. Bowman |
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Typed or Printed |
Exhibit 3.20
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE CHECK CASHING OF KANSAS, LLC
a Delaware Limited Liability Company
Dated as of April 20, 2012
THE MEMBERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE CHECK CASHING OF KANSAS, LLC
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of Buckeye Check Cashing of Kansas, LLC (the Company) is made, adopted and entered into effective as of April 20, 2012, by CheckSmart Financial Company, a Delaware corporation, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Limited Liability Company Agreement of Buckeye Check Cashing of Kansas, LLC, effective as of May 15, 2006 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 18 of the Delaware Corporation Laws Annotated (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Delaware on May 12, 2006. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in a limited liability company agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Buckeye Check Cashing of Kansas, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 7001 Post Road, Suite 200, Dublin, Ohio 43016. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Delaware in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Delaware in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Limited Liability Company Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means CheckSmart Financial Company, a Delaware corporation, or any Person that acquires all of the equity interests of the Company from CheckSmart Financial Company.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST
The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto, including, without limitation, all decisions required or permitted to be made by the Sole Member under this Agreement and all decisions required or permitted to be made by the Company as a member, partner or other beneficial owner of any other Person. Notwithstanding the foregoing or anything in this Agreement to the contrary, the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take.
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager or Officer). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation
or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be five (5) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure
of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 18-303(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, nor the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, director or stockholder of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the Delaware General Corporation Law as if the Company were a Delaware corporation, as the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the Delaware General Corporation Law as if the Company were a Delaware corporation, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, director, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such
suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Certificate of Formation, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members directors, officers or stockholders, or a Manager, an Officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 18-304 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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Exhibit 3.21
Prescribed by J. Kenneth Blackwell Ohio Secretary of State Central Ohio: (614) 466-3910 Toll Free: 1-877-sos-FILE (1-877-767-3453) Expedite this Form: (Select One) Mail Form to one of the Following: PO Box 1390 Yes Columbus, OH 43216 Requires an additional fee of $100 PO Box 670 No Columbus, OH 43216 www.state.oh.us/sos e-mail: busserv@sos.state.oh.us INITIAL ARTICLES OF INCORPORATION (For Domestic Profit or Non-Profit) Filling Fee $125.00 THE UNDERSIGNED HEREBY STATES THE FOLLOWING: (CHECK ONLY ONE(1) BOX) (1) Articles of Incorporation Profit (113-ARF) ORC 1701 (2) Articles of Incorporation Non-Profit (114-ARN) ORC 1702 (3) Articles of Incorporation Professional (170-ARP) Profession ORC 1785 Complete the general information in this section for the box checked above. FIRST: Name of Corporation BUCKEYE CHECK CASHING OF KENTUCKY, INC. SECOND: Location Columbus (City) Franklin (County) Effective Date (Optional) (mm/dd/yyyy) Date specified can be no more than 90 days after date of filing. If a date is specified, the date must be a date on or after the date of filing. Check here if additional provisions are attached Complete the information in this section if box (2) or (3) is checked. Completing this section is optional if box (1) is checked. THIRD: Purpose for which corporation is formed The purpose of said corporation is formed The purpose of said Corporation is to engage in any lawful act or activity for which corporations may be formed under Sections 1701.01 through 1701.98, inclusive, of the Ohio Revised Code. Complete the information in this section if box (1) or (3) is checked. FOURTH: The number of shares which the corporation is authorized to have outstanding (Please state if shares are common or preferred and their par value if any) 1,500 (No. of Shares) Common (Type) No par value (Par value) (Refer to instructions if needed) |
Completing the information in this section is optional FIFTH: The following are the names and addresses of the individuals who are to serve as initial Directors. (Name) (Street) NOTE: P.O. Box Addresses are NOT acceptable. (City) (State) (Zip Code) (Name) (Street) NOTE: P.O. Box Addresses are NOT acceptable. (City) (State) (Zip Code) (Name) (Street) NOTE: P.O. Box Addresses are NOT acceptable. (City) (State) (Zip Code) REQUIRED Must be authenticated (signed) by an authorized representative (See Instructions) Mercury Agent Company Authorized Representative 1/8/2005 Date Mercury Agent Company, an Ohio corporation By: Sharon K. Ferguson, Secretary Authorized Representative Date Print Name Authorized Representative Date Print Name |
Complete the information in this section if box (1) (2) or (3) is checked. ORIGINAL APPOINTMENT OF STATUTORY AGENT The undersigned, being at least a majority of the incorporators of Buckeye Check Cashing of Kentucky, Inc. hereby appoint the following to be statutory agent upon whom any process, notice or demand required or permitted by statute to be served upon the corporation may be served. The complete address of the agent is Mercury Agent Company (Name) 250 West Street, Suite 700 (Street) Note P.O. Box addresses are NOT acceptable. Columbus, ohio 43215 (City) (Zip Code) Must be authenticated by an authorized representative Mercury Agent Company 1/8/2005 Authorized Representative Date Mercury Agent Company, an Ohio corporation By: Sharon K. Ferguson, Secretary Authorized Representative Date ACCEPTANCE OF APPOINTMENT The Undersigned, MERCURY AGENT COMPANY, named herein as the Statutory agent for, Buckeye Check Cashing of Kentucky, Inc. , hereby acknowledges and accepts the appointment of statutory agent for said entity. Signature: Sharon K. Ferguson, Secretary |
SIXTH: The corporation, through its Board of Directors, shall have the right and power to repurchase any of its outstanding shares at such price and upon such terms as may be agreed upon between the corporation and the selling shareholder or shareholders.
SEVENTH: The Board of Directors is hereby authorized to fix and determine whether any surplus, and, if any, what part of the surplus, however created or arising, shall be used or disposed of or declared in dividends or paid to shareholders, and, without action by the shareholders, to use and apply surplus, or any part thereof, or such part of the stated capital of the corporation as is permitted under the provisions of Section 1701.35 of the Ohio Revised Code, or any statute of like tenor or effect which is hereafter enacted, at any time, or from time to time, in the purchase or acquisition of shares of any class, voting trust certificates for shares, bonds, debentures, notes, script, warrants, obligations, evidences of indebtedness of the corporation, or other securities of the corporation, to such extent or amount and in such manner and upon such terms as the Board of Directors shall deem expedient.
EIGHTH: No person shall be disqualified from being a director of the corporation because he or she is or may be a party to, and no director of the corporation shall be disqualified from entering into, any contract or other transaction to which the corporation is or may be a party. No contract or other transaction to which the corporation is or may be a party shall be void or voidable for the reason that any director or officer or other agent of the corporation is a party thereto, or otherwise has any direct or indirect interest in such contract or transaction or in any other party thereto, or for reason that any interested director or officer or other agent of the corporation authorizes or participates in authorization of such contract or transaction, (a) if the material facts as to such interest are disclosed or are otherwise known to the Board of Directors or applicable committee of directors at the time the contract or transaction is authorized, and at least a majority of the disinterested directors or disinterested members of the committee vote for or otherwise take action authorizing such contract or transaction, even though such disinterested directors or members are less than a quorum, or (b) if the contract or transaction (i) is not less favorable to the corporation than an arms length contract or transaction in which no director or officer or other agent of the corporation has any interest or (ii) is otherwise fair to the corporation as of the time it is authorized. Any interested director may be counted in determining the presence of a quorum at any meeting of the Board of Directors or any committee thereof which authorizes the contract or transaction.
NINTH: The provisions of Section 1701.13(E)(5)(a) of the Ohio Revised Code or any statute of like tenor or effect which is hereafter enacted shall not apply to the corporation. The corporation shall, to the fullest extent not
prohibited by any provision of applicable law other than Section 1701.13(E)(5)(a) of the Ohio Revised Code or any statute of like tenor or effect which is hereafter enacted, indemnify each director and officer against any and all costs and expenses (including attorney fees, judgments, fines, penalties, amounts paid in settlement, and other disbursements) actually and reasonably incurred by or imposed upon such person in connection with any action, suit, investigation or proceeding (or any claim or other matter therein), whether civil, criminal, administrative or otherwise in nature, including any settlements thereof or any appeals therein, with respect to which such person is named or otherwise becomes or is threatened to be made a party by reason of being or at any time having been a director or officer of the corporation, or by any reason of being or at any time having been, while such a director or officer, an employee or other agent of the corporation or, at the direction or request of the corporation, a director, trustee, officer, administrator, manager, employee, adviser or other agent of or fiduciary for any other corporation, partnership, trust, venture or other entity or enterprise including any employee benefit plan.
The corporation shall indemnify any other person to the extent such person shall be entitled to indemnification under Ohio law by reason of being successful on the merits or otherwise in defense of an action to which such person is named a party by reason of being an employee or other agent of the corporation, and the corporation may further indemnify any such person if it is determined on a case by case basis by the Board of Directors that indemnification is proper in the specific case.
Notwithstanding anything to the contrary in these Articles of Incorporation, no person shall be indemnified to the extent, if any, it is determined by the Board of Directors or by written opinion of legal counsel designated by the Board of Directors for such purpose that indemnification is contrary to applicable law.
TENTH: Notwithstanding any provisions of the Ohio Revised Code, now or hereafter in force, requiring for any purpose the vote or consent of the holders of shares entitling them to exercise two-thirds (2/3) or any other proportion of the voting power of the corporation or of any class or classes of shares thereof, such action, unless otherwise expressly required by statute, may be taken by the vote or consent of the holders of shares entitling them to exercise a majority of the voting power of the corporation or of such class of shares thereof.
Exhibit 3.22
CODE OF REGULATIONS
OF
BUCKEYE CHECK CASHING OF KENTUCKY, INC.
ARTICLE I - MEETING OF SHAREHOLDERS
(a) Annual Meetings. An annual meeting of shareholders, for the election of Directors, for the consideration of any reports and for the transaction of such other business as may be brought before the meeting, shall be held on the first Monday of the fourth month following the close of the Corporations fiscal year or on such other date as may be designated by the Board of Directors.
(b) Special Meetings. Special meetings of the shareholders of this corporation shall be called by the Secretary, pursuant to a resolution of the Board of Directors, or upon written request of two Directors, or by shareholders representing 25% of the shares issued and entitled to vote. Calls for special meetings shall specify the time, place and object or objects thereof, and no business other than that specified in the call therefor shall be considered at any such meetings.
(c) Notice of Meetings. A written or printed notice of the annual or any special meetings of the shareholders, stating the time and place, and in case of special meetings, the objects thereof, shall be given to each shareholder entitled to vote at such meeting appearing on the books of the corporation, by mailing same to the shareholders address as same appears on the records of the corporation or of its Transfer Agent or Agents, at least ten (10) days before any such meeting; provided, however, that no failure or irregularity of notice of any annual meeting shall invalidate the same or any proceeding thereat. It shall be the responsibility of the Secretary to mail such notice.
(d) Quorum. Those shareholders present in person or by proxy entitling them to exercise a majority of the voting power shall constitute a quorum for any meeting of shareholders. In the event of an absence of a quorum at any meeting or any adjournment thereof, a majority of those present in person or by proxy and entitled to vote may adjourn such meeting from time to time. At any adjourned meeting at which a quorum may be present, any business may be transacted which might have been transacted at the meeting as originally called.
(e) Place of Meetings. The annual or any special meetings of shareholders may be held at such place or places within or without the State of Ohio, as may be specified in the notice of any such meetings.
(f) Proxies. At any meeting of shareholders, any person who is entitled to attend, or to vote thereat, and to execute consents, waivers or releases, may be represented at such meeting or vote thereat, and execute consents, waivers and releases, and exercise any of such persons other rights, by proxy or proxies appointed by a writing signed by such person and submitted to the Secretary at or before such meeting. Voting by proxy or proxies shall be governed by all of
the provisions of Ohio law, including the provisions relating to the sufficiency of the writing, the duration of the validity of the proxy or proxies, and the power of substitution and revocation.
ARTICLE II - SHARES
(a) Certificates. Certificates evidencing the ownership of shares of the corporation shall be issued to those entitled to them by transfer or otherwise. Each certificate for shares shall bear a distinguishing number, the signature of the Chairman of the Board or the President or a Vice President and the signature of the Secretary, an Assistant Secretary, the Treasurer, or an Assistant Treasurer of the corporation, and such recitals as may be required by law. The certificates for shares shall be of such tenor and design as the Board of Directors from time to time may adopt.
(b) Transfers. The shares of the corporation shall be assignable and transferable only on the books and records of the corporation by the registered owner, or by the registered owners duly authorized attorney, upon surrender of the certificate duly and properly endorsed with proper evidence of authority to transfer. The corporation shall issue a new certificate for the shares surrendered to the person or persons entitled thereto.
(c) Lost, Stolen or Destroyed Certificates. The holder of any shares in the corporation shall immediately notify the Secretary of any lost, stolen or destroyed certificate, and the corporation may issue a new certificate in the place of any certificate alleged to have been lost, stolen or destroyed. The Board of Directors may, at its discretion, require the owner of a lost, stolen or destroyed certificate or the owners legal representative to give the corporation a bond on such terms and with such sureties as it may direct, to indemnify the corporation against any claim that may be made against it on account of the alleged lost, stolen or destroyed certificate. The Board of Directors may, however, at its discretion, refuse to issue any such new certificate except pursuant to legal proceedings in a court having jurisdiction over such matter pursuant to Ohio law.
ARTICLE III - DIRECTORS
(a) Number and Term. The number of members of the Board of Directors shall be determined pursuant to law, or by resolution of the shareholders entitled to vote, but where said resolution provides for less than three (3) Directors, the number of Directors shall not be less than the number of shareholders. The Directors shall hold office until the expiration of the term for which they were elected and shall continue in office until their respective successors shall have been duly elected and qualified.
(b) Vacancies. A resignation from the Board of Directors shall be deemed to take effect upon its receipt by the Secretary, unless some other time is specified therein. The acceptance of any resignation shall not be necessary to make it effective unless so specified in the resignation. In case of any vacancy in the Board of Directors, the remaining Directors, even though they may be less than a quorum of the entire number of Directors constituting a full
Board, may at any duly convened meeting, except as hereinafter provided, elect a successor to hold office for the unexpired portion of the term of the Director whose place shall be vacant, and until the election and qualification of a successor.
(c) Regular Meetings. Regular meetings of the Board of Directors shall be held monthly on such dates as the Board may designate.
(d) Special Meetings. Special meetings of the Board of Directors shall be called by the Secretary and held at the request of the President or two (2) of the Directors.
(e) Notice of Meetings. The Secretary shall give notice of each meeting of the Board of Directors, whether regular or special, to each member of the Board.
(f) Quorum. A majority of the Directors in office at the time shall constitute a quorum at all meetings thereof.
(g) Place of Meetings. The Board of Directors may hold its meetings at such place or places within or without the State of Ohio as the Board may, from time to time, determine.
(h) Compensation. Directors, as such, shall not receive any stated salary for their services, but, on resolution of the Board, a fixed sum for expenses of attendance, if any, may be allowed for attendance at each meeting, regular or special, provided that nothing herein contained shall be construed to preclude any Director from serving the corporation in any other capacity and receiving compensation therefor. Members of either executive or special committees may be allowed such compensation as the Board of Directors may determine for attending committee meetings.
(i) Liability. The provisions of Section 1701.59(D) of the Ohio Revised Code, or any statute of like tenor or effect which is hereafter enacted, shall not apply in any action brought by or in the right of the corporation against a Director.
ARTICLE IV - ELECTION OF OFFICERS
At the first meeting of the Board of Directors in each year (at which a quorum shall be present) held next after the annual meeting of the shareholders, and at any special meeting for such purpose, as provided in Article III(d), the Board of Directors shall elect the officers of the corporation. It may also appoint an executive committee or other committees and define their powers and duties.
ARTICLE V - OFFICERS
The officers of this corporation shall include a President, a Vice President, a Secretary, a Treasurer, and such other officers as the Board of Directors may, from time to time, elect, all of whom may or may not be Directors. Said officers shall be chosen by the Board of Directors, and shall hold office for one (1) year, or until their successors are elected and qualified.
Any officer or employee elected or appointed by the Board of Directors, other than a Director, may be removed at any time for any reason upon vote of the majority of the whole Board of Directors.
ARTICLE VI - DUTIES OF OFFICERS
(a) President. The President shall preside at all meetings of shareholders and Directors. The President shall exercise, subject to the control of the Board of Directors and the shareholders of the corporation, a general supervision over the affairs of the corporation, and shall perform generally all duties incident to the office and such other duties as may be assigned to the President from time to time by the Board of Directors.
(b) Vice President. The Vice President shall perform all duties of the President in the Presidents absence or during the Presidents inability to act, and shall have such further duties as may be assigned to the Vice President by the Board of Directors.
(c) Secretary. The Secretary shall keep the minutes of all proceedings of the Board of Directors and of the shareholders and make a proper record of same, which shall be attested to by the Secretary, and shall have such further duties as may be assigned to the Secretary by the Board of Directors.
(d) Treasurer. The Treasurer shall have the custody of the funds and securities of the corporation which may come into the Treasurers hands, and shall do with the same as may be ordered by the Board of Directors. When necessary or proper, the Treasurer may endorse on behalf of the corporation, for collection, checks, notes and other obligations. The Treasurer shall deposit the funds of the corporation to its credit in such hands and depositories as the Board of Directors may, from time to time, designate. The Treasurer shall also have such further duties as may be assigned to him by the Board of Directors.
ARTICLE VII - ORDER OF BUSINESS - SHAREHOLDER MEETINGS
1. Call meeting to order.
2. Selection of Chairman and Secretary.
3. Proof of notice of meeting.
4. Roll call, including filing of proxies with the Secretary.
5. Appointment of Tellers.
6. Reading and disposal of previously unapproved minutes.
7. Reports of officers and committees.
8. If annual meeting, or meeting called for that purpose, election of Directors.
9. Unfinished business.
10. New business.
11. Adjournment.
This order may be changed by the affirmative vote of a majority in interest of the shareholders present.
ARTICLE VIII - AMENDMENTS
These Regulations may be adopted, amended or repealed by the affirmative vote of a majority of the shares empowered to vote thereon at any meeting called and held for that purpose, notice of which meeting has been given pursuant to law, or without a meeting by the written assent of the owners of two-thirds of the shares of the corporation entitled to vote thereon.
The undersigned shareholders hereby adopts the foregoing Code of Regulations this 8th day of February 2005.
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SHAREHOLDERS: |
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James H. Frauenberg, as Trustee of |
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the James H. Frauenberg 1998 Trust, |
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dated 01/01/98, as amended |
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Susan D. Rector, as Trustee of |
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the James H. Frauenberg 1998 Descendants |
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Trust, dated 01/01/98, as amended |
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Michael W. Lenhart, as Trustee of |
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the Michael W. Lenhart 1998 Trust, |
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dated 01/01/98, as amended |
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Susan D. Rector, as Trustee of |
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the Michael W. Lenhart 1998 Descendants |
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Trust, dated 01/01/98, as amended |
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Chad M. Streff |
Exhibit 3.23
State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 01:41 PM 06/23/2004 |
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FILED 01:27 PM 06/23/2004 |
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SRV 040463341 - 3819996 FILE |
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STATE of DELAWARE
CERTIFICATE of INCORPORATION
A STOCK CORPORATION
· First: The name of this Corporation is Buckeye Check Cashing of Michigan, Inc.
· Second: Its registered office in the State of Delaware is to be located at 2711 Centerville Road, Suite 400 Street, in the City of Wilmington County of New Castle Zip Code 19808. The registered agent in charge thereof is Corporation Service Company
· Third: The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.
· Fourth: The amount of the total authorized capital stock of this corporation is One Thousand Dollars ($1,000) divided into 1,000 shares of One Dollars ($1.00) each.
· Fifth: The name and mailing address of the incorporator are as follows:
Name Mercury Agent Company
Mailing Address 250 West Street, Suite 700
Columbus, Ohio Zip Code 43215
· I, The Undersigned, for the purpose of forming a corporation under the laws of the State of Delaware, do make, file and record this Certificate, and do certify that the facts herein stated are true, and I have accordingly hereunto set my hand this 23rd day of June, A.D. 2004.
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INCORPORATOR: | |
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Mercury Agent Company, an Ohio corporation | |
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By: |
/s/ Sharon K. Ferguson |
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Sharon K. Ferguson, Secretary |
Exhibit 3.24
BYLAWS
OF
BUCKEYE CHECK CASHING OF MICHIGAN, INC.
(a Delaware corporation)
ARTICLE I
STOCKHOLDERS
Section 1.1: Annual Meetings. An annual meeting of stockholders shall be held for the election of directors at such date, time and place, either within or without the State of Delaware, as the Board of Directors shall each year fix. Any other proper business may be transacted at the annual meeting.
Section 1.2: Special Meetings. Special meetings of the stockholders, for any purpose or purposes described in the notice of the meeting, may be called only by (a) the Board of Directors, (b) the Chairman of the Board, (c) the President and shall be held at such place, on such date, and at such time as they shall fix, or (d) stockholder(s) holding shares representing at least twenty-five percent (25%) of the votes entitled to vote at such meeting. Business transacted at special meetings shall be confined to the purpose or purposes stated in the notice.
Section 1.3: Notice of Meetings. Written notice of all meetings of stockholders shall be given stating the place, date and time of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise required by applicable law or the Certificate of Incorporation of the Corporation as currently in effect (the Certificate of Incorporation), such notice shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting, by leaving such notice with him or her or at his or her residence or usual place of business, or by depositing it postage prepaid in the United States mail, directed to each stockholder at his or her address as it appears on the records of the Corporation. An affidavit of the Secretary, Assistant Secretary, or transfer agent of the Corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. No notice need be given to any person with whom communication is unlawful or to any person who has waived such notice either (a) in writing (which writing need not specify the business to be transacted at, or the purpose of, the meeting) signed by such person before or after the time of the meeting or (b) by attending the meeting except for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.
Section 1.4: Adjournments. Any meeting of stockholders may adjourn from time to time to reconvene at the same or another place, and notice need not be given of any such adjourned meeting if the time, date and place thereof are announced at the meeting at which the adjournment is taken; provided, however, that if the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, then a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at
the meeting. At the adjourned meeting the Corporation may transact any business that might have been transacted at the original meeting.
Section 1.5: Quorum. At each meeting of stockholders the holders of a majority of the shares of stock entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum for the transaction of business, except if otherwise required by applicable law. Where a separate vote by a class, series or classes is required, a majority of the shares of such class, series or classes then outstanding and entitled to vote present in person or by proxy shall constitute a quorum entitled to take action with respect to that vote on that matter. If a quorum shall fail to attend any meeting, the chairman of the meeting or the holders of a majority of the shares entitled to vote who are present, in person or by proxy, at the meeting may adjourn the meeting. Shares of the Corporations stock belonging to the Corporation (or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation are held, directly or indirectly, by the Corporation), shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the Corporation or any other corporation to vote any shares of the Corporations stock held by it in a fiduciary capacity.
Section 1.6: Organization. Meetings of stockholders shall be presided over by such person as the Board of Directors may designate, or, in the absence of such a person, the Chairman of the Board, or, in the absence of such person, the President of the Corporation, or, in the absence of such person, such person as may be chosen by the holders of a majority of the shares entitled to vote who are present, in person or by proxy, at the meeting. Such person shall be chairman of the meeting and, subject to Section 1.11 hereof, shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of discussion as seems to him or her to be in order. The Secretary of the Corporation shall act as secretary of the meeting, but in his or her absence the chairman of the meeting may appoint any person to act as secretary of the meeting.
Section 1.7: Voting; Proxies. Unless otherwise provided by law or the Certificate of Incorporation, and subject to the provisions of Section 1.8 hereof, each stockholder shall be entitled to one (1) vote for each share of stock held by such stockholder of record according to the records of the Corporation. Persons holding stock in a fiduciary capacity shall be entitled to vote the shares so held. Persons whose stock is pledged shall be entitled to vote, unless the pledgor in a transfer on the books of the Corporation has expressly empowered the pledgee to vote the pledged shares, in which case only the pledgee or his or her proxy shall be entitled to vote. Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for such stockholder by proxy. Such a proxy may be prepared, transmitted and delivered in any manner permitted by applicable law.
Voting at meetings of stockholders need not be by written ballot unless such is demanded at the meeting before voting begins by a stockholder or stockholders holding shares representing at least ten percent (10%) of the votes entitled to vote at such meeting, or by such stockholders or stockholders proxy; provided, however, that an election of directors shall be by written ballot if demand is so made by any stockholder at the meeting before voting begins. If a vote is to be
taken by written ballot, then each such ballot shall state the name of the stockholder or proxy voting and such other information as the chairman of the meeting deems appropriate.
Unless otherwise provided in the Certificate of Incorporation or a Certificate of Designation relating to a series of Preferred Stock, directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. Unless otherwise provided by applicable law, the Certificate of Incorporation or these Bylaws, every matter other than the election of directors shall be decided by the affirmative vote of the holders of a majority of the shares of stock entitled to vote thereon that are present in person or represented by proxy at the meeting and are voted for or against the matter.
Section 1.8 Action at Meeting. When a quorum is present at any meeting, action of the stockholders on any matter properly brought before such meeting, other than the election of directors, shall require, and may be effected by, the affirmative vote of the holders of a majority in interest of the stock present or represented by proxy and entitled to vote on the subject matter, except where a different vote is expressly required by law, the Certificate of Incorporation or these Bylaws, in which case such express provision shall govern and control. The election of directors shall be determined by a plurality of votes cast.
Section 1.9: Fixing Date for Determination of Stockholders of Record. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors and which shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action. If no record date is fixed by the Board of Directors, then the record date shall be as provided by applicable law. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.
Section 1.10: List of Stockholders Entitled to Vote. A complete list of stockholders entitled to vote at any meeting of stockholders, arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in the name of each stockholder, shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present at the meeting.
Section 1.11: Inspectors of Elections.
(a) Applicability. Unless otherwise provided in the Corporations Certificate of Incorporation or required by the Delaware General Corporation Law of the State of Delaware, the following provisions of this Section 1.11 shall apply only if and when the Corporation has a class of voting stock that is: (i) listed on a national securities exchange; (ii) authorized for quotation on an interdealer quotation system of a registered national securities association; or (iii) held of record by more than 2,000 stockholders; in all other cases, observance of the provisions of this Section 1.11 shall be optional, and at the discretion of the Corporation.
(b) Appointment. The Corporation shall, in advance of any meeting of stockholders, appoint one or more inspectors of election to act at the meeting and make a written report thereof. The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting.
(c) Inspectors Oath. Each inspector of election, before entering upon the discharge of the his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability.
(d) Duties of Inspectors. At a meeting of stockholders, the inspectors of election shall (i) ascertain the number of shares outstanding and the voting power of each share, (ii) determine the shares represented at a meeting and the validity of proxies and ballots, (iii) count all votes and ballots, (iv) determine and retain for a reasonable period of time a record of the disposition of any challenges made to any determination by the inspectors, and (v) certify their determination of the number of shares represented at the meeting, and their count of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of the duties of the inspectors.
(e) Opening and Closing of Polls. The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced by the inspectors at the meeting. No ballot, proxies or votes, nor any revocations thereof or changes thereto, shall be accepted by the inspectors after the closing of the polls unless the Court of Chancery upon application by a stockholder shall determine otherwise.
(f) Determinations. In determining the validity and counting of proxies and ballots, the inspectors shall be limited to an examination of the proxies, any envelopes submitted with those proxies, any information provided in connection with proxies in accordance with Section 212(c)(2) of the Delaware General Corporation Law, ballots and the regular books and records of the Corporation, except that the inspectors may consider other reliable information for the limited purpose of reconciling proxies and ballots submitted by or on behalf of banks,
brokers, their nominees or similar persons which represent more votes than the holder of a proxy is authorized by the record owner to cast or more votes than the stockholder holds of record. If the inspectors consider other reliable information for the limited purpose permitted herein, the inspectors at the time they make their certification of their determinations pursuant to this Section 1.11 shall specify the precise information considered by them, including the person or persons from whom they obtained the information, when the information was obtained, the means by which the information was obtained and the basis for the inspectors belief that such information is accurate and reliable.
Section 1.12: Notice of Stockholder Business; Nominations.
(a) Nominations of persons for election to the Board of Directors and the proposal of business to be considered by the stockholders shall be made at a meeting of stockholders (i) pursuant to the Corporations notice of such meeting, (ii) by or at the direction of the Board of Directors or (iii) by any stockholder of the Corporation who was a stockholder of record at the time of giving of the notice provided for in this Section 1.12, who is entitled to vote at such meeting and who complies with the notice procedures set forth in this Section 1.12.
(b) For nominations or other business to be properly brought before a meeting by a stockholder pursuant to clause (iii) of subparagraph (a) of this Section 1.12, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and such other business must otherwise be a proper matter for stockholder action. To be timely, a stockholders notice must be delivered to the Secretary at the principal executive offices of the Corporation not less than sixty (60) days nor more than ninety (90) days prior to the first anniversary of the preceding years annual meeting of stockholders; provided, however, that in the event that the date of the annual meeting is more than thirty (30) days before or more than sixty (60) days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the ninetieth (90th) day prior to such annual meeting and not later than the close of business on the later of the sixtieth (60th) day prior to such annual meeting or the tenth (10th) day following the day on which public announcement of the date of such meeting is first made by the Corporation. Such stockholders notice shall set forth: (i) as to each person whom the stockholder proposes to nominate for election or reelection as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, including such persons written consent to being named in the proxy statement as a nominee and to serving as a director if elected; (ii) as to any other business that the stockholder proposes to bring before the meeting, a brief description of such business, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (iii) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf
the nomination or proposal is made (1) the name and address of such stockholder, as they appear on the Corporations books, and of such beneficial owner, and (2) the class and number of shares of the Corporation that are owned beneficially and held of record by such stockholder and such beneficial owner.
(c) At the request of the Board of Directors any person nominated by the Board of Directors for election as a director shall furnish to the Secretary of the Corporation that information required to be set forth in a stockholders notice of nomination which pertains to the nominee. No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 1.12. The chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by the Bylaws, and if he or she should so determine, he or she shall so declare to the meeting and the defective nominated shall be disregarded.
ARTICLE II
BOARD OF DIRECTORS
Section 2.1: Number; Qualifications. The Board of Directors shall consist of not less than one and no more than seven directors, the specific number to be set by resolution of the Board. No decrease in the authorized number of directors constituting the Board of Directors shall shorten the term of any incumbent director. Directors need not be stockholders of the Corporation.
Section 2.2: Election; Resignation; Vacancies. Directors shall be elected at each annual meeting of stockholders or by written consent of the stockholders in lieu of an annual meeting as provided for in Section 211 of the General Corporation Law of the State of Delaware to hold office until the next annual meeting. Each director, including a director elected to fill a vacancy, shall hold office until his or her successor is elected and qualified or until his or her earlier resignation or removal.
Any director may resign at any time upon written notice to the attention of the Secretary of the Corporation. When one or more directors so resigns and the resignation is effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as provided in this section in the filling of other vacancies.
Unless otherwise provided in the Certificate of Incorporation or these Bylaws:
(a) Vacancies and newly created directorships resulting from any increase in the authorized number of directors elected by all of the stockholders having the right to vote as a single class may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director.
(b) Whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more directors by the provisions of the Certificate of Incorporation or a Certificate of Designation, vacancies and newly created directorships of such class or classes or series may be filled by a majority of the directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected.
If at any time, by reason of death or resignation or other cause, the Corporation should have no directors in office, then any officer or any stockholder or an executor, administrator, trustee or guardian of a stockholder, or other fiduciary entrusted with like responsibility for the person or estate of a stockholder, may call a special meeting of stockholders in accordance with the provisions of the Certificate of Incorporation or these Bylaws, or may apply to the Court of Chancery for a decree summarily ordering an election as provided in Section 211 of the General Corporation Law of the State of Delaware.
If, at the time of filling any vacancy or any newly created directorship, the directors then in office constitute less than a majority of the whole Board of Directors (as constituted immediately prior to any such increase), then the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten percent (10%) of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorship, or to replace the directors chosen by the directors then in office as aforesaid, which election shall be governed by the provisions of Section 211 of the General Corporation Law of Delaware as far as applicable.
Section 2.3: Regular Meetings. Regular meetings of the Board of Directors may be held at such places, within or without the State of Delaware, and at such times as the Board of Directors may from time to time determine. Notice of regular meetings need not be given if the date, times and places thereof are fixed by resolution of the Board of Directors.
Section 2.4: Special Meetings. Special meetings of the Board of Directors may be called by the Chairman of the Board, the President or a majority of the members of the Board of Directors then in office and may be held at any time, date or place, within or without the State of Delaware, as the person or persons calling the meeting shall fix. Notice of the time, date and place of such meeting shall be given, orally or in writing, by the person or persons calling the meeting to all directors at least four (4) days before the meeting if the notice is mailed, or at least forty-eight (48) hours before the meeting if such notice is given by telephone, hand delivery, telegram, telex, mailgram, facsimile or similar communication method. Unless otherwise indicated in the notice, any and all business may be transacted at a special meeting.
Section 2.5: Telephonic Meetings Permitted. Members of the Board of Directors, or any committee of the Board, may participate in a meeting of the Board or such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to conference telephone or similar communications equipment shall constitute presence in person at such meeting.
Section 2.6: Quorum; Vote Required for Action. At all meetings of the Board of Directors a majority of the total number of authorized directors shall constitute a quorum for the transaction of business. Except as otherwise provided herein or in the Certificate of Incorporation, or as required by law, the vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors.
Section 2.7: Organization. Meetings of the Board of Directors shall be presided over by the Chairman of the Board, or in his or her absence by the President, or in his or her absence by a chairman chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his or her absence the chairman of the meeting may appoint any person to act as secretary of the meeting.
Section 2.8: Written Action by Directors. Any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board or such committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee, respectively.
Section 2.9: Powers. The Board of Directors may, except as otherwise required by law or the Certificate of Incorporation, exercise all such powers and do all such acts and things as may be exercised or done by the Corporation.
Section 2.10: Compensation of Directors. Directors, as such, may receive, pursuant to a resolution of the Board of Directors, fees and other compensation for their services as directors, including without limitation their services as members of committees of the Board of Directors.
ARTICLE III
COMMITTEES
Section 3.1: Committees. The Board of Directors may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting of such committee who are not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member. Any such committee, to the extent provided in a resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers that may require it; but no such committee shall have the power or authority in reference to (a) approving or adopting, or recommending to the stockholders, any action or matter expressly required by the General Corporation Law of the State of Delaware to be submitted to stockholders for approval or (b) adopting, amending or repealing any Bylaw of the Corporation.
Section 3.2: Committee Rules. Unless the Board of Directors otherwise provides, each committee designated by the Board may make, alter and repeal rules for the conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner as the Board of Directors conducts its business pursuant to Article II of these Bylaws.
ARTICLE IV
OFFICERS
Section 4.1: Generally. The officers of the Corporation shall consist of a Chief Executive Officer and/or a President, a Secretary, a Treasurer and such other officers, including a Chairman of the Board of Directors, Chief Operating Officer, Chief Financial Officer and/or one or more Vice Presidents, as may from time to time be appointed by the Board of Directors. All officers shall be elected by the Board of Directors; provided, however, that the Board of Directors may empower the Chief Executive Officer of the Corporation to appoint officers other than the Chairman of the Board, the Chief Executive Officer, the Chief Operating Officer, the President, the Chief Financial Officer or the Treasurer. Each officer shall hold office until his or her successor is elected and qualified or until his or her earlier resignation or removal. Any number of offices may be held by the same person. Any officer may resign at any time upon written notice to the Corporation. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise may be filled by the Board of Directors.
Section 4.2: Chief Executive Officer. Subject to the control of the Board of Directors and such supervisory powers, if any, as may be given by the Board of Directors, the powers and duties of the Chief Executive Officer of the Corporation are:
(a) To act as the general manager and, subject to the control of the Board of Directors, to have general supervision, direction and control of the business and affairs of the Corporation;
(b) To preside at all meetings of the stockholders;
(c) To call meetings of the stockholders to be held at such times and, subject to the limitations prescribed by law or by these Bylaws, at such places as he or she shall deem proper; and
(d) To affix the signature of the Corporation to all deeds, conveyances, mortgages, guarantees, leases, obligations, bonds, certificates and other papers and instruments in writing which have been authorized by the Board of Directors or which, in the judgment of the Chief Executive Officer, should be executed on behalf of the Corporation; to sign certificates for shares of stock of the Corporation; and, subject to the direction of the Board of Directors, to have general charge of the property of the Corporation and to supervise and control all officers, agents and employees of the Corporation. The President shall be the Chief Executive Officer of the Corporation unless the Board of Directors shall designate another officer to be the Chief Executive Officer. If there is no President, and the Board of Directors has not designated any other officer to be
the Chief Executive Officer, then the Chairman of the Board shall be the Chief Executive Officer.
Section 4.3: Chairman of the Board. The Chairman of the Board shall have the power to preside at all meetings of the Board of Directors and shall have such other powers and duties as provided in these Bylaws and as the Board of Directors may from time to time prescribe.
Section 4.4: Vice Chairman of the Board. The Vice Chairman of the Board shall have the power to preside at all meetings of the Board of Directors in the event of the absence or disability of the Chairman of the Board, and shall have such other powers and duties as provided in these Bylaws and as the Board of Directors may from time to time prescribe.
Section 4.5: President. The President shall be the Chief Executive Officer of the Corporation unless the Board of Directors shall have designated another officer as the Chief Executive Officer of the Corporation. Subject to the provisions of these Bylaws and to the direction of the Board of Directors, and subject to the supervisory powers of the Chief Executive Officer (if the Chief Executive Officer is an officer other than the President), and subject to such supervisory powers and authority as may be given by the Board of Directors to the Chairman of the Board, and/or to any other officer, the President shall have the responsibility for the general management of the control of the business and affairs of the Corporation and the general supervision and direction of all of the officers, employees and agents of the Corporation (other than the Chief Executive Officer, if the Chief Executive Officer is an officer other than the President) and shall perform all duties and have all powers that are commonly incident to the office of President or that are delegated to the President by the Board of Directors.
Section 4.6: Vice President. Each Vice President shall have all such powers and duties as are commonly incident to the office of Vice President, or that are delegated to him or her by the Board of Directors or the Chief Executive Officer. A Vice President may be designated by the Board to perform the duties and exercise the powers of the Chief Executive Officer and/or President in the event of the Chief Executive Officers and/or Presidents absence or disability.
Section 4.7: Chief Financial Officer. Subject to the direction of the Board of Directors and the President, the Chief Financial Officer shall perform all duties and have all powers that are commonly incident to the office of chief financial officer.
Section 4.8: Chief Operating Officer. Subject to the direction of the Board of Directors and the President, the Chief Operating Officer shall perform all duties and have all powers that are commonly incident to the office of chief operating officer.
Section 4.9: Treasurer. The Treasurer shall have custody of all monies and securities of the Corporation. The Treasurer shall make such disbursements of the funds of the Corporation as are authorized and shall render from time to time an account of all such transactions. The Treasurer shall also perform such other duties and have such other powers as are commonly incident to the office of Treasurer, or as the Board of Directors or the President may from time to time prescribe.
Section 4.10: Secretary. The Secretary shall issue or cause to be issued all authorized notices for, and shall keep, or cause to be kept, minutes of all meetings of the stockholders and the Board of Directors. The Secretary shall have charge of the corporate minute books and similar records and shall perform such other duties and have such other powers as are commonly incident to the office of Secretary, or as the Board of Directors or the President may from time to time prescribe.
Section 4.11: Delegation of Authority. The Board of Directors may from time to time delegate the powers or duties of any officer to any other officers or agents, notwithstanding any provision hereof.
Section 4.12: Removal. Any officer of the Corporation shall serve at the pleasure of the Board of Directors and may be removed at any time, with or without cause, by the Board of Directors. Such removal shall be without prejudice to the contractual rights of such officer, if any, with the Corporation.
ARTICLE V
STOCK
Section 5.1: Certificates. Every holder of stock shall be entitled to have a certificate signed by or in the name of the Corporation by the Chairman or Vice-Chairman of the Board of Directors, or the President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, of the Corporation, certifying the number of shares owned by such stockholder in the Corporation. Any or all of the signatures on the certificate may be a facsimile.
Section 5.2: Lost, Stolen or Destroyed Stock Certificates; Issuance of New Certificates. The Corporation may issue a new certificate of stock in the place of any certificate previously issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or such owners legal representative, to agree to indemnify the Corporation and/or to give the Corporation a bond sufficient to indemnify it, against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate.
Section 5.3: Other Regulations. The issue, transfer, conversion and registration of stock certificates shall be governed by such other regulations as the Board of Directors may establish.
ARTICLE VI
INDEMNIFICATION
Section 6.1 Indemnification of Officers and Directors. Each person who was or is made a party to, or is threatened to be made a party to, or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a proceeding), by reason of the fact that he or she (or a person of whom he or she is the legal representative), is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a
director, officer or employee of another corporation, or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, shall be indemnified and held harmless by the Corporation to the fullest extent permitted by the General Corporation Law of the State of Delaware, against all expenses, liability and loss (including attorneys fees, judgments, fines, and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith, and such indemnification shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that the Corporation shall indemnify any such person seeking indemnity in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation.
Section 6.2: Advance of Expenses. The Corporation shall pay all expenses (including attorneys fees) incurred by such a director or officer in defending any such proceeding as they are incurred in advance of its final disposition; provided, however, that if the Delaware General Corporation Law then so requires, the payment of such expenses incurred by such a director or officer in advance of the final disposition of such proceeding shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such director or officer, to repay all amounts so advanced if it should be determined ultimately that such director or officer is not entitled to be indemnified under this Article VI or otherwise; and provided, further, that the Corporation shall not be required to advance any expenses to a person against whom the Corporation directly brings a claim, in a proceeding, alleging that such person has breached his or her duty of loyalty to the Corporation, committed an act or omission not in good faith or that involves intentional misconduct or a knowing violation of law, or derived an improper personal benefit from a transaction.
Section 6.3: Non-Exclusivity of Rights. The rights conferred on any person in this Article VI shall not be exclusive of any other right that such person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, Bylaw, agreement, vote or consent of stockholders or disinterested directors, or otherwise. Additionally, nothing in this Article VI shall limit the ability of the Corporation, in its discretion, to indemnify or advance expenses to persons whom the Corporation is not obligated to indemnify or advance expenses pursuant to this Article VI. The Board of Directors of the Corporation shall have the power to delegate to such officer or other person as the Board of Directors shall specify the determination of whether indemnification shall be given to any person pursuant to this Section 6.3.
Section 6.4: Indemnification Contracts. The Board of Directors is authorized to cause the Corporation to enter into indemnification contracts with any director, officer, employee or agent of the Corporation, or any person serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including employee benefit plans, providing indemnification rights to such person. Such rights may be greater than those provided in this Article VI.
Section 6.5: Effect of Amendment. Any amendment, repeal or modification of any provision of this Article VI shall be prospective only, and shall not adversely affect any right or
protection conferred on a person pursuant to this Article VI and existing at the time of such amendment, repeal or modification.
ARTICLE VII
NOTICES
Section 7.1: Notice. Except as otherwise specifically provided herein or required by law, all notices required to be given pursuant to these Bylaws shall be in writing and may in every instance be effectively given by hand delivery (including use of a delivery service), by depositing such notice in the mail, postage prepaid, or by sending such notice by prepaid telegram, telex, overnight express courier, mailgram or facsimile. Any such notice shall be addressed to the person to whom notice is to be given at such persons address as it appears on the records of the Corporation. The notice shall be deemed given (a) in the case of hand delivery, when received by the person to whom notice is to be given or by any person accepting such notice on behalf of such person, (b) in the case of delivery by mail, upon deposit in the mail, (c) in the case of delivery by overnight express courier, on the first business day after such notice is dispatched, and (d) in the case of delivery via telegram, telex, mailgram, or facsimile, when dispatched.
Section 7.2: Waiver of Notice. Whenever notice is required to be given under any provision of these Bylaws, a written waiver of notice, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors or members of a committee of directors need be specified in any written waiver of notice.
ARTICLE VIII
INTERESTED DIRECTORS
Section 8.1: Interested Directors; Quorum. No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof that authorizes the contract or transaction, or solely because his, her or their votes are counted for such purpose, if: (a) the material facts as to his, her or their relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board of Directors or committee in good faith authorizes the contract or transaction by the affirmative vote of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; (b) the material facts as to his, her or their relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders;
or (c) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified by the Board of Directors, a committee thereof, or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.
ARTICLE IX
MISCELLANEOUS
Section 9.1: Fiscal Year. The fiscal year of the Corporation shall be determined by resolution of the Board of Directors.
Section 9.2: Seal. The Board of Directors may provide for a corporate seal, which shall have the name of the Corporation inscribed thereon and shall otherwise be in such form as may be approved from time to time by the Board of Directors.
Section 9.3: Form of Records. Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account and minute books, may be kept on, or be in the form of, magnetic tape, diskettes, photographs, microphotographs or any other information storage device, provided that the records so kept can be converted into clearly legible form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect the same.
Section 9.4: Reliance Upon Books and Records. A member of the Board of Directors, or a member of any committee designated by the Board of Directors shall, in the performance of his or her duties, be fully protected in relying in good faith upon records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of the Corporations officers or employees, or committees of the Board of Directors, or by any other person as to matters the member reasonably believes are within such other persons professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.
Section 9.5: Certificate of Incorporation Governs. In the event of any conflict between the provisions of the Corporations Certificate of Incorporation and these Bylaws, the provisions of the Certificate of Incorporation shall govern.
Section 9.6: Severability. If any provision of these Bylaws shall be held to be invalid, illegal, unenforceable or in conflict with the provisions of the Corporations Certificate of Incorporation, then such provision shall nonetheless be enforced to the maximum extent possible consistent with such holding and the remaining provisions of these Bylaws (including without limitation, all portions of any section of these Bylaws containing any such provision held to be invalid, illegal, unenforceable or in conflict with the Certificate of Incorporation, that are not themselves invalid, illegal, unenforceable or in conflict with the Certificate of Incorporation) shall remain in full force and effect.
ARTICLE X
AMENDMENT
Section 10.1: Amendments. The Bylaws of the Corporation may be adopted, amended or repealed by the stockholders entitled to vote; provided, however, that the Corporation has, in its Certificate of Incorporation, conferred the power to adopt, amend or repeal Bylaws upon the directors. The fact that such power has been so conferred upon the directors shall not divest the stockholders of the power, nor limit their power to adopt, amend or repeal Bylaws.
[end of document]
Exhibit 3.25
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State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 07:31 PM 05/12/2006 |
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FILED 06:35 PM 05/12/2006 |
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SRV 060454189 - 4158368 FILE |
STATE of DELAWARE
LIMITED LIABILITY COMPANY
CERTIFICATE of FORMATION
· First: The name of the limited liability company is Buckeye Check Cashing of Missouri, LLC
· Second: The address of its registered office in the State of Delaware is 2711 Centerville Road Suite 400 in the City of Wilmington, DE 19808. The name of its Registered agent at such address is Corporation Service Company
· Third: (Use this paragraph only if the company is to have a specific effective date of dissolution: The latest date on which the limited liability company is to dissolve is .)
· Fourth: (Insert any other matters the members determine to include herein.)
In Witness Whereof, the undersigned have executed this Certificate of Formation this 12th day of May, 2006.
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By: |
/s/ Heidi K. Bowman | |
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Authorized Person(s) | |
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Name: |
Heidi K. Bowman | |
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Typed or Printed | |
Exhibit 3.26
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE CHECK CASHING OF MISSOURI, LLC
a Delaware Limited Liability Company
Dated as of April 20, 2012
THE MEMBERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE CHECK CASHING OF MISSOURI, LLC
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of Buckeye Check Cashing of Missouri, LLC (the Company) is made, adopted and entered into effective as of April 20, 2012, by CheckSmart Financial Company, a Delaware corporation, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Limited Liability Company Agreement of Buckeye Check Cashing of Missouri, LLC, effective as of May 15, 2006 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 18 of the Delaware Corporation Laws Annotated (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Delaware on May 12, 2006. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in a limited liability company agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Buckeye Check Cashing of Missouri, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 7001 Post Road, Suite 200, Dublin, Ohio 43016. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Delaware in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Delaware in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Limited Liability Company Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means CheckSmart Financial Company, a Delaware corporation, or any Person that acquires all of the equity interests of the Company from CheckSmart Financial Company.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST
The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto, including, without limitation, all decisions required or permitted to be made by the Sole Member under this Agreement and all decisions required or permitted to be made by the Company as a member, partner or other beneficial owner of any other Person. Notwithstanding the foregoing or anything in this Agreement to the contrary, the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take.
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager or Officer). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation
or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be five (5) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure
of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 18-303(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, nor the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, director or stockholder of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the Delaware General Corporation Law as if the Company were a Delaware corporation, as the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the Delaware General Corporation Law as if the Company were a Delaware corporation, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, director, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such
suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Certificate of Formation, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members directors, officers or stockholders, or a Manager, an Officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 18-304 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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Exhibit 3.27
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State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 05:02 PM 06/12/2007 |
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FILED 04:48 PM 06/12/2007 |
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SRV 070700819 - 4369403 FILE |
STATE of DELAWARE
LIMITED LIABILITY COMPANY
CERTIFICATE of FORMATION
· First: The name of the limited liability company is Buckeye Check Cashing of Texas, LLC
· Second: The address of its registered office in the State of Delaware is 2711 Centerville Rd. Suite 400 in the City of Wilmington. The name of its Registered agent at such address is Corporation Service Company
· Third: (Use this paragraph only if the company is to have a specific effective date of dissolution: The latest date on which the limited liability company is to dissolve is .)
· Fourth: (Insert any other matters the members determine to include herein.)
In Witness Whereof, the undersigned have executed this Certificate of Formation this 12th day of June, 2007.
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By: |
/s/ William E. Saunders | |
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Authorized Person(s) | |
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Name: |
William E. Saunders | |
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Typed or Printed | |
Exhibit 3.28
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE CHECK CASHING OF TEXAS, LLC
a Delaware Limited Liability Company
Dated as of April 20, 2012
THE MEMBERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE CHECK CASHING OF TEXAS, LLC
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of Buckeye Check Cashing of Texas, LLC (the Company) is made, adopted and entered into effective as of April 20, 2012, by CheckSmart Financial Company, a Delaware corporation, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Limited Liability Company Agreement of Buckeye Check Cashing of Texas, LLC, effective as of June 12, 2007 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 18 of the Delaware Corporation Laws Annotated (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Delaware on June 12, 2007. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in a limited liability company agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Buckeye Check Cashing of Texas, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 7001 Post Road, Suite 200, Dublin, Ohio 43016. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Delaware in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Delaware in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Limited Liability Company Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means CheckSmart Financial Company, a Delaware corporation, or any Person that acquires all of the equity interests of the Company from CheckSmart Financial Company.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST
The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto, including, without limitation, all decisions required or permitted to be made by the Sole Member under this Agreement and all decisions required or permitted to be made by the Company as a member, partner or other beneficial owner of any other Person. Notwithstanding the foregoing or anything in this Agreement to the contrary, the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take.
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager or Officer). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation
or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be five (5) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure
of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 18-303(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, nor the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, director or stockholder of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the Delaware General Corporation Law as if the Company were a Delaware corporation, as the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the Delaware General Corporation Law as if the Company were a Delaware corporation, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, director, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such
suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Certificate of Formation, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members directors, officers or stockholders, or a Manager, an Officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 18-304 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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Exhibit 3.29
Prescribed by J. Kenneth Blackwell Ohio Secretary of State Central Ohio: (614) 466-3910 Toll Free: 1-877-SOS-FILE (1-877-767-3453) Expedite this Form: (Select one) Mail Form to one of the Following: PO Box 1390 Yes Columbus, OH 43216 Requires an additional fee of $100 PO Box 670 No Columbus, OH 43216 www.state.oh.us/sos e-mail: busserv@sos.state.oh.us INITIAL ARTICLES OF INCORPORATION (For Domestic Profit or Non-Profit ) Filling Fee $125.00 THE UNDERSIGNED HEREBY STATES THE FOLLOWING: (CHECK ONLY ONE(1) BOX) (1) Articles of Incorporation Profit (113-ARF) ORC 1701 (2) Articles of Incorporation Non-Profit (114-ARN) ORC 1702 (3) Articles of Incorporation Professional (170-ARP) Profession ORC 1785 Complete the general information in this section for the box checked above. FIRST: Name of Corporation Buckeye Check Cashing of Utah,Inc. SECOND: Location Dublin (City) Franklin (County) Effective Date (Optional) (mm/dd/yyyy) Date specified can be no more than 90 days after date of filling. If a date is specified, the date must be a date on or after the date of filling. Check here if additional provisions are attached Complete the information in this section if box (2) or (3) is checked. Completing this section is optional if box (1) is checked. THIRD: Purpose for which corporation is formed The Purpose of said corporation is to engage in any lawful act or activity for which corporations may be formed under Sections 1701.01 through 1701.98, inclusive, of the Ohio Revised Code. Complete the information in this section if box (1) or (3) is checked. FOURTH: The number of shares which the corporation is authorized to have outstanding (Please state if shares are common or preferred and their par value if any) 1,500 (No. of Shares) Common (Type) No par value (Par Value) (Refer to instructions if needed) |
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Completing the information in this section is optional FIFTH: The following are the names and addresses of the individuals who are to serve as initial Directors. (Name) (Street) NOTE: P.O. Box Addresses are NOT acceptable. (City) (State) (Zip Code) (Name) (Street) NOTE: P.O. Box Addresses are NOT acceptable. (City) (State) (Zip Code) (Name) (Street) NOTE: P.O. Box Addresses are NOT acceptable. (City) (State) (Zip Code) REQUIRED Must be authenticated (signed) by an authorized Representative (See Instructions) Mercury Agent Company Authorized Representative July 26, 2004 Date Mercury Agent Company, an Ohio corporation By: Sharon K. Ferquson, Secretary Authorized Representative Date Print Name Authorized Representative Date Print Name |
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Complete the Information in this section If box (1) (2) or (3) is checked. ORIGINAL APPOINTMENT OF STATUTORY AGENT The undersigned, being at least a majority of the incorporators of Buckeye Check Cashing of Utah, Inc. hereby appoint the following to be statutory agent upon whom any process, notice or demand required or permitted by statute to be served upon the corporation may be served. The complete address of the agent is Mercury Agent Company (Name) 250 West Street, Suite 700 (Street) Columbus, Ohio 43215 (City) (Zip Code) Must be authenticated by an authorized representative Mercury agent Company July 26, 2004 Authorized Representative Date Mercury Agent Company, an Ohio corporation By: Sharon K, Ferguson, Secretary Authorized Representative Date ACCEPTANCE OF APPOINTMENT The Undersigned, Sharon K, Ferguson, Secretary of Mercury Agent Company, named herein as the Statutory agent for, Buckeye Check Cashing of Utah, Inc, , hereby acknowledges and accepts the appointment of statutory agent for said entity. Signature: (Statutory Agent) |
SIXTH: The corporation, through its Board of Directors, shall have the right and power to repurchase any of its outstanding shares at such price and upon such terms as may be agreed upon between the corporation and the selling shareholder or shareholders.
SEVENTH: The Board of Directors is hereby authorized to fix and determine whether any surplus, and, if any, what part of the surplus, however created or arising, shall be used or disposed of or declared in dividends or paid to shareholders, and, without action by the shareholders, to use and apply surplus, or any part thereof, or such part of the stated capital of the corporation as is permitted under the provisions of Section 1701.35 of the Ohio Revised Code, or any statute of like tenor or effect which is hereafter enacted, at any time, or from time to time, in the purchase or acquisition of shares of any class, voting trust certificates for shares, bonds, debentures, notes, script, warrants, obligations, evidences of indebtedness of the corporation, or other securities of the corporation, to such extent or amount and in such manner and upon such terms as the Board of Directors shall deem expedient.
EIGHTH: No person shall be disqualified from being a director of the corporation because he or she is or may be a party to, and no director of the corporation shall be disqualified from entering into, any contract or other transaction to which the corporation is or may be a party. No contract or other transaction to which the corporation is or may be a party shall be void or voidable for the reason that any director or officer or other agent of the corporation is a party thereto, or otherwise has any direct or indirect interest in such contract or transaction or in any other party thereto, or for reason that any interested director or officer or other agent of the corporation authorizes or participates in authorization of such contract or transaction, (a) if the material facts as to such interest are disclosed or are otherwise known to the Board of Directors or applicable committee of directors at the time the contract or transaction is authorized, and at least a majority of the disinterested directors or disinterested members of the committee vote for or otherwise take action authorizing such contract or transaction, even though such disinterested directors or members are less than a quorum, or (b) if the contract or transaction (i) is not less favorable to the corporation than an arms length contract or transaction in which no director or officer or other agent of the corporation has any interest or (ii) is otherwise fair to the corporation as of the time it is authorized. Any interested director may be counted in determining the presence of a quorum at any meeting of the Board of Directors or any committee thereof which authorizes the contract or transaction.
NINTH: The provisions of Section 1701.13(E)(5)(a) of the Ohio Revised Code or any statute of like tenor or effect which is hereafter enacted shall not apply to the corporation. The corporation shall, to the fullest extent not
prohibited by any provision of applicable law other than Section 1701.13(E)(5)(a) of the Ohio Revised Code or any statute of like tenor or effect which is hereafter enacted, indemnify each director and officer against any and all costs and expenses (including attorney fees, judgments, fines, penalties, amounts paid in settlement, and other disbursements) actually and reasonably incurred by or imposed upon such person in connection with any action, suit, investigation or proceeding (or any claim or other matter therein), whether civil, criminal, administrative or otherwise in nature, including any settlements thereof or any appeals therein, with respect to which such person is named or otherwise becomes or is threatened to be made a party by reason of being or at any time having been a director or officer of the corporation, or by any reason of being or at any time having been, while such a director or officer, an employee or other agent of the corporation or, at the direction or request of the corporation, a director, trustee, officer, administrator, manager, employee, adviser or other agent of or fiduciary for any other corporation, partnership, trust, venture or other entity or enterprise including any employee benefit plan.
The corporation shall indemnify any other person to the extent such person shall be entitled to indemnification under Ohio law by reason of being successful on the merits or otherwise in defense of an action to which such person is named a party by reason of being an employee or other agent of the corporation, and the corporation may further indemnify any such person if it is determined on a case by case basis by the Board of Directors that indemnification is proper in the specific case.
Notwithstanding anything to the contrary in these Articles of Incorporation, no person shall be indemnified to the extent, if any, it is determined by the Board of Directors or by written opinion of legal counsel designated by the Board of Directors for such purpose that indemnification is contrary to applicable law.
TENTH: Notwithstanding any provisions of the Ohio Revised Code, now or hereafter in force, requiring for any purpose the vote or consent of the holders of shares entitling them to exercise two-thirds (2/3) or any other proportion of the voting power of the corporation or of any class or classes of shares thereof, such action, unless otherwise expressly required by statute, may be taken by the vote or consent of the holders of shares entitling them to exercise a majority of the voting power of the corporation or of such class of shares thereof.
Exhibit 3.30
CODE OF REGULATIONS
OF
BUCKEYE CHECK CASHING OF UTAH, INC.
ARTICLE I - MEETING OF SHAREHOLDERS
(a) Annual Meetings. An annual meeting of shareholders, for the election of Directors, for the consideration of any reports and for the transaction of such other business as may be brought before the meeting, shall be held on the first Monday of the fourth month following the close of the Corporations fiscal year or on such other date as may be designated by the Board of Directors.
(b) Special Meetings. Special meetings of the shareholders of this corporation shall be called by the Secretary, pursuant to a resolution of the Board of Directors, or upon written request of two Directors, or by shareholders representing 25% of the shares issued and entitled to vote. Calls for special meetings shall specify the time, place and object or objects thereof, and no business other than that specified in the call therefor shall be considered at any such meetings.
(c) Notice of Meetings. A written or printed notice of the annual or any special meetings of the shareholders, stating the time and place, and in case of special meetings, the objects thereof, shall be given to each shareholder entitled to vote at such meeting appearing on the books of the corporation, by mailing same to the shareholders address as same appears on the records of the corporation or of its Transfer Agent or Agents, at least ten (10) days before any such meeting; provided, however, that no failure or irregularity of notice of any annual meeting shall invalidate the same or any proceeding thereat. It shall be the responsibility of the Secretary to mail such notice.
(d) Quorum. Those shareholders present in person or by proxy entitling them to exercise a majority of the voting power shall constitute a quorum for any meeting of shareholders. In the event of an absence of a quorum at any meeting or any adjournment thereof, a majority of those present in person or by proxy and entitled to vote may adjourn such meeting from time to time. At any adjourned meeting at which a quorum may be present, any business may be transacted which might have been transacted at the meeting as originally called.
(e) Place of Meetings. The annual or any special meetings of shareholders may be held at such place or places within or without the State of Ohio, as may be specified in the notice of any such meetings.
(f) Proxies. At any meeting of shareholders, any person who is entitled to attend, or to vote thereat, and to execute consents, waivers or releases, may be represented at such meeting or vote thereat, and execute consents, waivers and releases, and exercise any of such persons other rights, by proxy or proxies appointed by a writing signed by such person and submitted to the Secretary at or before such meeting. Voting by proxy or proxies shall be governed by all of the provisions of Ohio
law, including the provisions relating to the sufficiency of the writing, the duration of the validity of the proxy or proxies, and the power of substitution and revocation.
ARTICLE II - SHARES
(a) Certificates. Certificates evidencing the ownership of shares of the corporation shall be issued to those entitled to them by transfer or otherwise. Each certificate for shares shall bear a distinguishing number, the signature of the Chairman of the Board or the President or a Vice President and the signature of the Secretary, an Assistant Secretary, the Treasurer, or an Assistant Treasurer of the corporation, and such recitals as may be required by law. The certificates for shares shall be of such tenor and design as the Board of Directors from time to time may adopt.
(b) Transfers. The shares of the corporation shall be assignable and transferable only on the books and records of the corporation by the registered owner, or by the registered owners duly authorized attorney, upon surrender of the certificate duly and properly endorsed with proper evidence of authority to transfer. The corporation shall issue a new certificate for the shares surrendered to the person or persons entitled thereto.
(c) Lost, Stolen or Destroyed Certificates. The holder of any shares in the corporation shall immediately notify the Secretary of any lost, stolen or destroyed certificate, and the corporation may issue a new certificate in the place of any certificate alleged to have been lost, stolen or destroyed. The Board of Directors may, at its discretion, require the owner of a lost, stolen or destroyed certificate or the owners legal representative to give the corporation a bond on such terms and with such sureties as it may direct, to indemnify the corporation against any claim that may be made against it on account of the alleged lost, stolen or destroyed certificate. The Board of Directors may, however, at its discretion, refuse to issue any such new certificate except pursuant to legal proceedings in a court having jurisdiction over such matter pursuant to Ohio law.
ARTICLE III - DIRECTORS
(a) Number and Term. The number of members of the Board of Directors shall be determined pursuant to law, or by resolution of the shareholders entitled to vote, but where said resolution provides for less than three (3) Directors, the number of Directors shall not be less than the number of shareholders. The Directors shall hold office until the expiration of the term for which they were elected and shall continue in office until their respective successors shall have been duly elected and qualified.
(b) Vacancies. A resignation from the Board of Directors shall be deemed to take effect upon its receipt by the Secretary, unless some other time is specified therein. The acceptance of any resignation shall not be necessary to make it effective unless so specified in the resignation. In case of any vacancy in the Board of Directors, the remaining Directors, even though they may be less than a quorum of the entire number of Directors constituting a full Board, may at any duly convened meeting, except as hereinafter provided, elect a successor to hold office for the unexpired portion of
the term of the Director whose place shall be vacant, and until the election and qualification of a successor.
(c) Regular Meetings. Regular meetings of the Board of Directors shall be held monthly on such dates as the Board may designate.
(d) Special Meetings. Special meetings of the Board of Directors shall be called by the Secretary and held at the request of the President or two (2) of the Directors.
(e) Notice of Meetings. The Secretary shall give notice of each meeting of the Board of Directors, whether regular or special, to each member of the Board.
(f) Quorum. A majority of the Directors in office at the time shall constitute a quorum at all meetings thereof.
(g) Place of Meetings. The Board of Directors may hold its meetings at such place or places within or without the State of Ohio as the Board may, from time to time, determine.
(h) Compensation. Directors, as such, shall not receive any stated salary for their services, but, on resolution of the Board, a fixed sum for expenses of attendance, if any, may be allowed for attendance at each meeting, regular or special, provided that nothing herein contained shall be construed to preclude any Director from serving the corporation in any other capacity and receiving compensation therefor. Members of either executive or special committees may be allowed such compensation as the Board of Directors may determine for attending committee meetings.
(i) Liability. The provisions of Section 1701.59(D) of the Ohio Revised Code, or any statute of like tenor or effect which is hereafter enacted, shall not apply in any action brought by or in the right of the corporation against a Director.
ARTICLE IV - ELECTION OF OFFICERS
At the first meeting of the Board of Directors in each year (at which a quorum shall be present) held next after the annual meeting of the shareholders, and at any special meeting for such purpose, as provided in Article III(d), the Board of Directors shall elect the officers of the corporation. It may also appoint an executive committee or other committees and define their powers and duties.
ARTICLE V - OFFICERS
The officers of this corporation shall include a President, a Vice President, a Secretary, a Treasurer, and such other officers as the Board of Directors may, from time to time, elect, all of whom may or may not be Directors. Said officers shall be chosen by the Board of Directors, and shall hold office for one (1) year, or until their successors are elected and qualified.
Any officer or employee elected or appointed by the Board of Directors, other than a Director, may be removed at any time for any reason upon vote of the majority of the whole Board of Directors.
ARTICLE VI - DUTIES OF OFFICERS
(a) President. The President shall preside at all meetings of shareholders and Directors. The President shall exercise, subject to the control of the Board of Directors and the shareholders of the corporation, a general supervision over the affairs of the corporation, and shall perform generally all duties incident to the office and such other duties as may be assigned to the President from time to time by the Board of Directors.
(b) Vice President. The Vice President shall perform all duties of the President in the Presidents absence or during the Presidents inability to act, and shall have such further duties as may be assigned to the Vice President by the Board of Directors.
(c) Secretary. The Secretary shall keep the minutes of all proceedings of the Board of Directors and of the shareholders and make a proper record of same, which shall be attested to by the Secretary, and shall have such further duties as may be assigned to the Secretary by the Board of Directors.
(d) Treasurer. The Treasurer shall have the custody of the funds and securities of the corporation which may come into the Treasurers hands, and shall do with the same as may be ordered by the Board of Directors. When necessary or proper, the Treasurer may endorse on behalf of the corporation, for collection, checks, notes and other obligations. The Treasurer shall deposit the funds of the corporation to its credit in such hands and depositories as the Board of Directors may, from time to time, designate. The Treasurer shall also have such further duties as may be assigned to him by the Board of Directors.
ARTICLE VII - ORDER OF BUSINESS - SHAREHOLDER MEETINGS
1. Call meeting to order.
2. Selection of Chairman and Secretary.
3. Proof of notice of meeting.
4. Roll call, including filing of proxies with the Secretary.
5. Appointment of Tellers.
6. Reading and disposal of previously unapproved minutes.
7. Reports of officers and committees.
8. If annual meeting, or meeting called for that purpose, election of Directors.
9. Unfinished business.
10. New business.
11. Adjournment.
This order may be changed by the affirmative vote of a majority in interest of the shareholders present.
ARTICLE VIII - AMENDMENTS
These Regulations may be adopted, amended or repealed by the affirmative vote of a majority of the shares empowered to vote thereon at any meeting called and held for that purpose, notice of which meeting has been given pursuant to law, or without a meeting by the written assent of the owners of two-thirds of the shares of the corporation entitled to vote thereon.
The undersigned shareholders hereby adopts the foregoing Code of Regulations this 27th day of July, 2004.
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SHAREHOLDERS: |
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James H. Frauenberg, as Trustee of |
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the James H. Frauenberg 1998 Trust, |
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dated 01/01/98, as amended |
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Susan D. Rector, as Trustee of |
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the James H. Frauenberg 1998 Descendants |
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Trust, dated 01/01/98, as amended |
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Michael W. Lenhart, as Trustee of |
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the Michael W. Lenhart 1998 Trust, |
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dated 01/01/98, as amended |
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Susan D. Rector, as Trustee of |
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the Michael W. Lenhart 1998 Descendants |
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Trust, dated 01/01/98, as amended |
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Chad M. Streff |
Exhibit 3.31
ARTICLES OF INCORPORATION
OF
BUCKEYE CHECK CASHING OF VIRGINIA, INC.
The undersigned, a citizen of the United States, desiring to form a corporation for profit under the General Corporation Act of Ohio, does certify:
FIRST: The name of said corporation shall be
Buckeye Check Cashing of Virginia, Inc.
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The place in Ohio where its principal office is to be located is Dublin, Franklin County, Ohio. |
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THIRD: |
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The purpose of said corporation is to engage in any lawful act or activity for which corporations may be formed under Sections 1701.01 through 1701.98, inclusive, of the Ohio Revised Code. |
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FOURTH: |
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The maximum number of shares which the corporation is authorized to have outstanding shall be fifteen hundred (1,500), all of which shares shall be common without par value. |
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FIFTH: |
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The corporation, through its Board of Directors, shall have the right and power to repurchase any of its outstanding shares at such price and upon such terms as may be agreed upon between the corporation and the selling shareholder or shareholders. |
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SIXTH: |
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The Board of Directors is hereby authorized to fix and determine whether any surplus, and, if any, what part of the surplus, however created or arising, shall be used or disposed of or declared in dividends or paid to shareholders, and, without action by the shareholders, to use and apply surplus, or any part thereof, or such part of the stated capital of the corporation as is permitted under the provisions of Section 1701.35 of the Ohio Revised Code, or any statute of like tenor or effect which is hereafter enacted, at any time, or from time to time, in the purchase or acquisition of shares of any class, voting trust certificates for shares, bonds, debentures, notes, script, warrants, obligations, evidences of indebtedness of the corporation, or other securities of the corporation, to such extent or amount and in such manner and upon such terms as the Board of Directors shall deem expedient. |
SEVENTH: |
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No person shall be disqualified from being a director of the corporation because he or she is or may be a party to, and no director of the corporation shall be disqualified from entering into, any contract or other transaction to which the corporation is or may be a party. No contract or other transaction to which the corporation is or may be a party shall be void or voidable for the reason that any director or officer or other agent of the corporation is a party thereto, or otherwise has any direct or indirect interest in such contract or transaction or in any other party thereto, or for reason that any interested director or officer or other agent of the corporation authorizes or participates in authorization of such contract or transaction, (a) if the material facts as to such interest are disclosed or are otherwise known to the Board of Directors or applicable committee of directors at the time the contract or transaction is authorized, and at least a majority of the disinterested directors or disinterested members of the committee vote for or otherwise take action authorizing such contract or transaction, even though such disinterested directors or members are less than a quorum, or (b) if the contract or transaction (i) is not less favorable to the corporation than an arms length contract or transaction in which no director or officer or other agent of the corporation has any interest or (ii) is otherwise fair to the corporation as of the time it is authorized. Any interested director may be counted in determining the presence of a quorum at any meeting of the Board of Directors or any committee thereof which authorizes the contract or transaction. |
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EIGHTH: |
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The provisions of Section 1701.13(E)(5)(a) of the Ohio Revised Code or any statute of like tenor or effect which is hereafter enacted shall not apply to the corporation. The corporation shall, to the fullest extent not prohibited by any provision of applicable law other than Section 1701.13(E)(5)(a) of the Ohio Revised Code or any statute of like tenor or effect which is hereafter enacted, indemnify each director and officer against any and all costs and expenses (including attorney fees, judgments, fines, penalties, amounts paid in settlement, and other disbursements) actually and reasonably incurred by or imposed upon such person in connection with any action, suit, investigation or proceeding (or any claim or other matter therein), whether civil, criminal, administrative or otherwise in nature, including any settlements thereof or any appeals therein, with respect to which such person is named or otherwise becomes or is threatened to be made a party by reason of being or at any time having been a director or officer of the corporation, or by any reason of being or at any time having been, while such a director or officer, an employee or other agent of the corporation or, at the direction or request of the corporation, a director, trustee, officer, administrator, manager, employee, adviser or other agent of or fiduciary for any other corporation, partnership, trust, venture or other entity or enterprise including any employee benefit plan. |
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The corporation shall indemnify any other person to the extent such person shall be entitled to indemnification under Ohio law by reason of being successful on the merits or otherwise in defense of an action to which such person is named a party by reason of being an employee or other agent of the corporation, and the corporation may further indemnify any such person if it is determined on a case by case basis by the Board of Directors that indemnification is proper in the specific case.
Notwithstanding anything to the contrary in these Articles of Incorporation, no person shall be indemnified to the extent, if any, it is determined by the Board of Directors or by written opinion of legal counsel designated by the Board of Directors for such purpose that indemnification is contrary to applicable law. |
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NINTH: |
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Notwithstanding any provisions of the Ohio Revised Code, now or hereafter in force, requiring for any purpose the vote or consent of the holders of shares entitling them to exercise two-thirds (2/3) or any other proportion of the voting power of the corporation or of any class or classes of shares thereof, such action, unless otherwise expressly required by statute, may be taken by the vote or consent of the holders of shares entitling them to exercise a majority of the voting power of the corporation or of such class of shares thereof. |
IN WITNESS WHEREOF, I have hereunto set my hand this day of March, 2002.
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James H. Frauenberg, Incorporator |
ORIGINAL APPOINTMENT OF AGENT
The undersigned, being the incorporator of Buckeye Check Cashing of Virginia, Inc., hereby appoints as its agent, James H. Frauenberg, to act as agent upon whom any process, notice or demand required or permitted by statute to be served upon the corporation may be served. His complete address is 5720 Avery Road, Dublin, Ohio 43016.
Dated: March , 2002
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James H. Frauenberg, Incorporator |
ACCEPTANCE OF STATUTORY AGENT
The undersigned hereby accepts the original appointment as statutory agent for Buckeye Check Cashing of Virginia, Inc. on the day of March, 2002.
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James H. Frauenberg |
Exhibit 3.32
CODE OF REGULATIONS
OF
BUCKEYE CHECK CASHING OF VIRGINIA, INC.
ARTICLE I - MEETING OF SHAREHOLDERS
(a) Annual Meetings. An annual meeting of shareholders, for the election of Directors, for the consideration of any reports and for the transaction of such other business as may be brought before the meeting, shall be held on the first Monday of the fourth month following the close of the Corporations fiscal year or on such other date as may be designated by the Board of Directors.
(b) Special Meetings. Special meetings of the shareholders of this corporation shall be called by the Secretary, pursuant to a resolution of the Board of Directors, or upon written request of two Directors, or by shareholders representing 25% of the shares issued and entitled to vote. Calls for special meetings shall specify the time, place and object or objects thereof, and no business other than that specified in the call therefor shall be considered at any such meetings.
(c) Notice of Meetings. A written or printed notice of the annual or any special meetings of the shareholders, stating the time and place, and in case of special meetings, the objects thereof, shall be given to each shareholder entitled to vote at such meeting appearing on the books of the corporation, by mailing same to the shareholders address as same appears on the records of the corporation or of its Transfer Agent or Agents, at least ten (10) days before any such meeting; provided, however, that no failure or irregularity of notice of any annual meeting shall invalidate the same or any proceeding thereat. It shall be the responsibility of the Secretary to mail such notice.
(d) Quorum. Those shareholders present in person or by proxy entitling them to exercise a majority of the voting power shall constitute a quorum for any meeting of shareholders. In the event of an absence of a quorum at any meeting or any adjournment thereof, a majority of those present in person or by proxy and entitled to vote may adjourn such meeting from time to time. At any adjourned meeting at which a quorum may be present, any business may be transacted which might have been transacted at the meeting as originally called.
(e) Place of Meetings. The annual or any special meetings of shareholders may be held at such place or places within or without the State of Ohio, as may be specified in the notice of any such meetings.
(f) Proxies. At any meeting of shareholders, any person who is entitled to attend, or to vote thereat, and to execute consents, waivers or releases, may be represented at such meeting or vote thereat, and execute consents, waivers and releases, and exercise any of such persons other rights, by proxy or proxies appointed by a writing signed by such person and submitted to the Secretary at or before such meeting. Voting by proxy or proxies shall be governed by all of the provisions of Ohio law, including the provisions relating to the sufficiency of the writing, the duration of the validity of the proxy or proxies, and the power of substitution and revocation.
ARTICLE II - SHARES
(a) Certificates. Certificates evidencing the ownership of shares of the corporation shall be issued to those entitled to them by transfer or otherwise. Each certificate for shares shall bear a distinguishing number, the signature of the Chairman of the Board or the President or a Vice President and the signature of the Secretary, an Assistant Secretary, the Treasurer, or an Assistant Treasurer of the corporation, and such recitals as may be required by law. The certificates for shares shall be of such tenor and design as the Board of Directors from time to time may adopt.
(b) Transfers. The shares of the corporation shall be assignable and transferable only on the books and records of the corporation by the registered owner, or by the registered owners duly authorized attorney, upon surrender of the certificate duly and properly endorsed with proper evidence of authority to transfer. The corporation shall issue a new certificate for the shares surrendered to the person or persons entitled thereto.
(c) Lost, Stolen or Destroyed Certificates. The holder of any shares in the corporation shall immediately notify the Secretary of any lost, stolen or destroyed certificate, and the corporation may issue a new certificate in the place of any certificate alleged to have been lost, stolen or destroyed. The Board of Directors may, at its discretion, require the owner of a lost, stolen or destroyed certificate or the owners legal representative to give the corporation a bond on such terms and with such sureties as it may direct, to indemnify the corporation against any claim that may be made against it on account of the alleged lost, stolen or destroyed certificate. The Board of Directors may, however, at its discretion, refuse to issue any such new certificate except pursuant to legal proceedings in a court having jurisdiction over such matter pursuant to Ohio law.
ARTICLE III - DIRECTORS
(a) Number and Term. The number of members of the Board of Directors shall be determined pursuant to law, or by resolution of the shareholders entitled to vote, but where said resolution provides for less than three (3) Directors, the number of Directors shall not be less than the number of shareholders.
The Directors shall hold office until the expiration of the term for which they were elected and shall continue in office until their respective successors shall have been duly elected and qualified.
(b) Vacancies. A resignation from the Board of Directors shall be deemed to take effect upon its receipt by the Secretary, unless some other time is specified therein. The acceptance of any resignation shall not be necessary to make it effective unless so specified in the resignation. In case of any vacancy in the Board of Directors, the remaining Directors, even though they may be less than a quorum of the entire number of Directors constituting a full Board, may at any duly convened meeting, except as hereinafter provided, elect a successor to hold office for the unexpired portion of the term of the Director whose place shall be vacant, and until the election and qualification of a successor.
(c) Regular Meetings. Regular meetings of the Board of Directors shall be held monthly on such dates as the Board may designate.
(d) Special Meetings. Special meetings of the Board of Directors shall be called by the Secretary and held at the request of the President or two (2) of the Directors.
(e) Notice of Meetings. The Secretary shall give notice of each meeting of the Board of Directors, whether regular or special, to each member of the Board.
(f) Quorum. A majority of the Directors in office at the time shall constitute a quorum at all meetings thereof.
(g) Place of Meetings. The Board of Directors may hold its meetings at such place or places within or without the State of Ohio as the Board may, from time to time, determine.
(h) Compensation. Directors, as such, shall not receive any stated salary for their services, but, on resolution of the Board, a fixed sum for expenses of attendance, if any, may be allowed for attendance at each meeting, regular or special, provided that nothing herein contained shall be construed to preclude any Director from serving the corporation in any other capacity and receiving compensation therefor. Members of either executive or special committees may be allowed such compensation as the Board of Directors may determine for attending committee meetings.
(i) Liability. The provisions of Section 1701.59(D) of the Ohio Revised Code, or any statute of like tenor or effect which is hereafter enacted, shall not apply in any action brought by or in the right of the corporation against a Director.
ARTICLE IV - ELECTION OF OFFICERS
At the first meeting of the Board of Directors in each year (at which a quorum shall be present) held next after the annual meeting of the shareholders, and at any special meeting for such purpose, as provided in Article III(d), the Board of Directors shall elect the officers of the corporation. It may also appoint an executive committee or other committees and define their powers and duties.
ARTICLE V - OFFICERS
The officers of this corporation shall include a President, a Vice President, a Secretary, a Treasurer, and such other officers as the Board of Directors may, from time to time, elect, all of whom may or may not be Directors. Said officers shall be chosen by the Board of Directors, and shall hold office for one (1) year, or until their successors are elected and qualified.
Any officer or employee elected or appointed by the Board of Directors, other than a Director, may be removed at any time for any reason upon vote of the majority of the whole Board of Directors.
ARTICLE VI - DUTIES OF OFFICERS
(a) President. The President shall preside at all meetings of shareholders and Directors. The President shall exercise, subject to the control of the Board of Directors and the shareholders of the corporation, a general supervision over the affairs of the corporation, and shall perform generally all duties incident to the office and such other duties as may be assigned to the President from time to time by the Board of Directors.
(b) Vice President. The Vice President shall perform all duties of the President in the Presidents absence or during the Presidents inability to act, and shall have such further duties as may be assigned to the Vice President by the Board of Directors.
(c) Secretary. The Secretary shall keep the minutes of all proceedings of the Board of Directors and of the shareholders and make a proper record of same, which shall be attested to by the Secretary, and shall have such further duties as may be assigned to the Secretary by the Board of Directors.
(d) Treasurer. The Treasurer shall have the custody of the funds and securities of the corporation which may come into the Treasurers hands, and shall do with the same as may be ordered by the Board of Directors. When necessary or proper, the Treasurer may endorse on behalf of the corporation, for collection, checks, notes and other obligations. The Treasurer shall deposit the funds of the corporation to its credit in such hands and depositories as the Board of Directors
may, from time to time, designate. The Treasurer shall also have such further duties as may be assigned to him by the Board of Directors.
ARTICLE VII - ORDER OF BUSINESS - SHAREHOLDER MEETINGS
1. Call meeting to order.
2. Selection of Chairman and Secretary.
3. Proof of notice of meeting.
4. Roll call, including filing of proxies with the Secretary.
5. Appointment of Tellers.
6. Reading and disposal of previously unapproved minutes.
7. Reports of officers and committees.
8. If annual meeting, or meeting called for that purpose, election of Directors.
9. Unfinished business.
10. New business.
11. Adjournment.
This order may be changed by the affirmative vote of a majority in interest of the shareholders present.
ARTICLE VIII - AMENDMENTS
These Regulations may be adopted, amended or repealed by the affirmative vote of a majority of the shares empowered to vote thereon at any meeting called and held for that purpose, notice of which meeting has been given pursuant to law, or without a meeting by the written assent of the owners of two-thirds of the shares of the corporation entitled to vote thereon.
The undersigned shareholders hereby adopts the foregoing Code of Regulations this day of March, 2002.
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SHAREHOLDERS: |
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James H. Frauenberg, as Trustee of |
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the James H. Frauenberg 1998 Trust, |
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dated 01/01/98, as amended |
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Fredrick L. Fisher, as Trustee of |
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the James H. Frauenberg 1998 Descendants |
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Trust, dated 01/01/98, as amended |
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Michael W. Lenhart, as Trustee of |
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the Michael W. Lenhart 1998 Trust, |
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dated 01/01/98, as amended |
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Fredrick L. Fisher, as Trustee of |
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the Michael W. Lenhart 1998 Descendants |
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Trust, dated 01/01/98, as amended |
Exhibit 3.33
ARTICLES OF INCORPORATION |
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OF |
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BUCKEYE CHECK CASHING INC. |
December 15, 1986
The undersigned, who is a citizen of the United States, desiring to form a corporation for profit under the Ohio General Corporation law, does hereby certify:
FIRST: The name of the corporation shall be Buckeye Check Cashing Inc.
SECOND: The place in Ohio where the principal office is to be located is the City of Dublin, County of Delaware.
THIRD: The purpose or purposes for which it is formed are:
a. Generally, consistent with the provisions of §1701.04(A)(3) of the Ohio Revised Code, to engage in any lawful act or activity for which corporations may be formed under §1701.01 through §1701.98, inclusive, of the Revised Code.
FOURTH: The maximum number of shares of all classes which the corporation is authorized to have outstanding is Seven Hundred Fifty (750) common without par value.
FIFTH: The amount of stated capital with which the corporation will begin business shall not be less than Five Hundred and 00/100 Dollars ($500.00).
SIXTH: The Board of Directors is hereby authorized to fix and determine, and to vary, the amount of working capital of the corporation, to determine whether any, and, if any, what part of the surplus, however created or arising, shall be used or disposed of, or declared in dividends, or paid to shareholders, and without action by the shareholders, to use and apply such surplus, or any part thereof, or such part of the stated capital of the corporation as is permitted under the provisions of
§1701.35 of the Ohio Revised Code, or any statute of like tenor or effect which is hereinafter enacted, at any time, or from time to time, in the purchase or acquisition of shares of any class, voting-trust certificates for shares, bonds, debentures, notes, scrip, warrants, obligations, evidences of indebtedness of the corporation, or other securities of the corporation, to such extent or amount and in such manner and upon such terms as the Board of Directors shall deem expedient.
SEVENTH: Every statute of the State of Ohio hereafter enacted, whereby the rights or privileges of shareholders of a corporation organized under the General Corporation Law of said State are increased, diminished, or in any way affected, or whereby effect is given to any action authorized, ratified or approved by less than all the shareholders of any such corporation, shall apply to the corporation and shall be binding upon every shareholder thereof to the same extent as if such statute had been in force at the date of the filing of these Articles of Incorporation.
EIGHTH: A director or officer of the corporation shall not be disqualified by his office from dealing or contracting with the corporation as a vendor, purchaser, employee, agent or otherwise. No transaction or contract or act of the corporation shall be void or voidable or in any way affected or invalidated by reason of the fact that any director or officer, or any firm of which any director or officer is a member, or any corporation of which any director or officer is a shareholder, director or trustee, or any trust of which any director or officer is a trustee or beneficiary, is in any way interested in such transaction or contract or act. No director or officer shall be accountable or responsible to the corporation for or in respect to any transaction or contract or act of the corporation or for any gains or profits directly or indirectly realized by him by reason of the fact that he or any firm of which he is a member or any corporation of which he is a shareholder, director or trustee, or any trust of which he is a trustee or beneficiary, is interested in said transaction, contract or act; provided the fact that such director or officer or such firm or such corporation or such trust is so interested shall have been disclosed or shall have been known to the Board of Directors or such members thereof as shall be present at any meeting of the Board of Directors at which action upon such contract or transaction or act shall have been taken. Any director may be counted in determining the existence of a quorum at any meeting of the Board of Directors which shall authorize or take action in respect to any such contract or transaction or act, and may vote thereat to authorize, ratify or approve any such contract or transaction or act, and any officer of the corporation may take any action within the scope of his authority respecting such
contract or transaction or act with like force and effect as if he or any firm of which he is a member, or any corporation of which he is a shareholder, director or trustee, or any trust of which he is a trustee or beneficiary, were not interested in such transaction or contract or act. Without limiting or qualifying the foregoing, if in any judicial or other inquiry, suit, cause or proceeding, the question of whether a director or officer of the corporation has acted in good faith is material, then not withstanding any statute or rule of law or of equity to the contrary (if any there be), his good faith shall be presumed, in the absence of proof to the contrary by clear and convincing evidence.
NINTH: The corporation shall indemnify any person who was or is a party or is threatened to be made a party, to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, other than an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, trustee, officer, employee, or agent of another corporation, domestic or foreign, non-profit or for profit, partnership, joint venture, trust or other enterprise, against expenses, including attorneys fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit, or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, he had reasonable cause to believe that his conduct was unlawful.
The corporation shall indemnify any person who was or is a party, or is threatened to be made a party to any threatened, pending, or completed action or suit by or in the right of the corporation to procure a judgement in its favor by reason of the fact that he is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, trustee, officer, employee, or agent of another corporation, domestic or foreign, non-profit or for profit, partnership, joint venture, trust, or other enterprise against expenses, including attorneys fees, actually and reasonably incurred by him in connection with the defense, or
settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made in respect to any claim, issue, or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the corporation unless, and only to the extent that the Court of Common Pleas, or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability, but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the Court of Common Pleas or such other court shall deem proper.
To the extent that a director, trustee, officer, employee, or agent has been successful on the merits or otherwise in defense of any action, suit, or proceeding, referred to in the above two paragraphs, or in defense of any claim, issue, or matter therein, he shall be indemnified against expenses, including attorneys fees, actually and reasonably incurred by him in connection therewith.
Any indemnification under the first two paragraphs of this Article Ninth, unless ordered by a court, shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, trustee, officer, employee, or agent is proper in the circumstance because he has met the applicable standard of conduct set forth in the first two paragraphs of this Article Ninth. Such determination shall be made
(a) by a majority vote of a quorum consisting of directors of the indemnifying corporation who were not and are not parties to or threatened with any such action, suit, or proceeding, or
(b) if such quorum is not obtainable or if a majority vote of a quorum of disinterested directors so directs, in a written opinion by independent legal counsel other than an attorney, or a firm having associated with it an attorney, who has been retained by or who has performed services for the corporation, or any person to be indemnified within the past five years, or
(c) by the shareholders, or
(d) by the Court of Common Pleas or the court in which such action, suit or proceeding was brought.
Any determination made by the disinterested directors under provision (a) above or by independent legal counsel under provision (b) above, of this subdivision shall be promptly communicated to the person who threatened or brought the action or suit, by or in the right of the corporation under the second paragraph of this Article Ninth, and within ten days after receipt of such notification, such person shall have the right to petition the Court of Common Pleas or the court in which such action, suit or proceeding was brought to review the reasonableness of such determination.
Expenses, including attorneys fees, incurred in defending any action, suit, or proceeding referred to in the first two paragraphs of this Article Ninth, may be paid by the corporation in advance of the final disposition of such action, suit, or proceeding, as authorized by the directors in the specific case upon receipt of an undertaking by or on behalf of the director, trustee, officer, employee, or agent to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the corporation as authorized in this Article Ninth.
The indemnification provided by this Article Ninth shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under the Articles or the Regulations or any agreement, vote of shareholders or disinterested directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, trustee, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.
The corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, trustee, officer, employee or agent of another corporation, domestic or foreign, non-profit or for profit, partnership, joint venture, trust, or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under this section.
TENTH: Notwithstanding any provision of any statute of the State of Ohio, now or hereafter in force, requiring for any purpose the vote of the holders of shares entitling them to exercise two-thirds or any other proportion of the voting power of the corporation or of any class or classes of shares thereof, any action, unless otherwise expressly required by statute, may
Exhibit 3.34
CODE OF BY-LAWS
CODE OF BY-LAWS
Table of Contents
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ARTICLE I. |
Meetings of Board |
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§1. |
Organization of Meetings |
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§2. |
Place of Meetings |
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§3. |
Regular Meetings |
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§4. |
Special Meetings |
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§5. |
Order of Business |
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ARTICLE II. |
Deposits and Bank Accounts |
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ARTICLE III. |
Amendment of Code of By-Laws |
2 |
CODE OF BY-LAWS
ARTICLE I
MEETINGS OF BOARD
Section 1. Organization of Meetings.
At each meeting of the Board of Directors, the President or, in his absence, a Chairman chosen by a majority of the Directors present, shall act as Chairman, and the Secretary of the Company, or, if the Secretary not be present, any person whom the Chairman of the meeting shall appoint, shall act as Secretary of the meeting.
Section 2. Place of Meetings.
The meetings of the Board shall be held at such place or places, within or without the State of Ohio, as may from time to time be fixed by the Board of Directors, or as shall be specified or fixed in the respective notices or waivers of notice thereof.
Section 3. Regular Meetings.
Regular meetings of the Board will not be held unless this Code of By-Laws shall be amended to provide therefor.
Section 4. Special Meetings.
Special meetings of the Board of Directors shall be held whenever called by the President, or by any two Directors. Every Director shall furnish the Secretary of the Company with an address to which notice of meetings and all other corporate notices may be served on or mailed to him. Unless waived before, at or after the meeting, as hereinafter provided, notice of each such meeting shall be given by the President or the persons calling such meetings to each Director in any of the following ways:
(a) By orally informing him of the meeting in person or by telephone not later than two days before the date of the meeting.
(b) By personal delivery to him not later than two days before the date of the meeting of written notice hereof.
(c) By mailing written notice to him or by sending notice to him by telegram, cablegram or radiogram, postage or other costs prepaid, addressed to him at the address furnished by him to the Secretary of the Company, or to
such other address as the person sending the notice shall know to be correct. Such notice shall be posted or dispatched a sufficient length of time before the meeting so that in the ordinary course of the mail or the transmission of telegrams, cablegrams or radiograms delivery thereof would normally be made to him not later than two days before the date of the meeting.
Unless otherwise required by the Articles of Incorporation, the Code of Regulations, this Code of By-Laws or the laws of the State of Ohio (for example, see the provisions of the Code of Regulations with respect to the election or removal of Directors), the notice of any meeting need not specify the purpose or purposes thereof. Notice of any meeting of the Board may be waived by any Director, either before, at or after the meeting, in writing or by telegram, cablegram or radiogram.
Section 5. Order of Business.
The order of business at meetings of the Board shall be such as the Chairman may prescribe or follow, subject, however, to him being overruled with respect thereto by a majority of the members of the Board present.
ARTICLE II
DEPOSITS AND BANK ACCOUNTS
Such general and special bank accounts shall be opened with, and all funds of the Company not otherwise employed shall be deposited from time to time to the credit of the Company in, such banks, trust companies or other depositaries as this Board may designate or select for the purpose.
ARTICLE III
AMENDMENT OF CODE OF BY-LAWS
At any meeting of the Board, notice of which shall have been given or waived, as required by this Code of By-Laws, this Code may be amended or repealed in whole or in part, or new By-Laws added thereto and adopted, by the affirmative vote of a majority of all of the Directors of the Company.
Exhibit 3.35
State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 01:44 PM 05/31/2007 |
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FILED 01:36 PM 05/31/2007 |
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SRV 070652470 - 4362020 FILE |
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STATE of DELAWARE
LIMITED LIABILITY COMPANY
CERTIFICATE of FORMATION
· First: The name of the limited liability company is Buckeye Commercial Check Cashing of Florida, LLC
· Second: The address of its registered office in the State of Delaware is 2711 Centerville Road Suite 400 in the City of Wilmington, DE 19808. The name of its Registered agent at such address is Corporation Service Company
· Third: (Use this paragraph only if the company is to have a specific effective date of dissolution: The latest date on which the limited liability company is to dissolve is .)
· Fourth: (Insert any other matters the members determine to include herein.)
In Witness Whereof, the undersigned have executed this Certificate of Formation this 31st day of May, 2007.
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By: |
/s/ Heidi Bowman |
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Authorized Person(s) |
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Name: |
Heidi Bowman |
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Typed or Printed |
Exhibit 3.36
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE COMMERCIAL CHECK CASHING OF FLORIDA, LLC
a Delaware Limited Liability Company
Dated as of April 20, 2012
THE MEMBERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE COMMERCIAL CHECK CASHING OF FLORIDA, LLC
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of Buckeye Commercial Check Cashing of Florida, LLC (the Company) is made, adopted and entered into effective as of April 20, 2012, by CheckSmart Financial Company, a Delaware corporation, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Limited Liability Company Agreement of Buckeye Commercial Check Cashing of Florida, LLC, effective as of May 31, 2007 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 18 of the Delaware Corporation Laws Annotated (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Delaware on May 31, 2007. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in a limited liability company agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Buckeye Commercial Check Cashing of Florida, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 7001 Post Road, Suite 200, Dublin, Ohio 43016. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Delaware in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Delaware in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Limited Liability Company Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means CheckSmart Financial Company, a Delaware corporation, or any Person that acquires all of the equity interests of the Company from CheckSmart Financial Company.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST
The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto, including, without limitation, all decisions required or permitted to be made by the Sole Member under this Agreement and all decisions required or permitted to be made by the Company as a member, partner or other beneficial owner of any other Person. Notwithstanding the foregoing or anything in this Agreement to the contrary, the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take.
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager or Officer). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation
or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be five (5) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure
of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 18-303(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, nor the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, director or stockholder of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the Delaware General Corporation Law as if the Company were a Delaware corporation, as the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the Delaware General Corporation Law as if the Company were a Delaware corporation, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, director, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such
suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Certificate of Formation, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members directors, officers or stockholders, or a Manager, an Officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 18-304 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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Exhibit 3.39
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State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 02:53 PM 09/03/2008 |
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FILED 02:52 PM 09/03/2008 |
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SRV 080922805 - 4595244 FILE |
STATE of DELAWARE
LIMITED LIABILITY COMPANY
CERTIFICATE of FORMATION
· First: The name of the limited liability company is Buckeye Credit Solutions. LLC
· Second: The address of its registered office in the State of Delaware is 2711 Centerville Road Suite 400 in the City of Wilmington, DE 19808. The name of its Registered agent at such address is Corporation Service Company
· Third: (Use this paragraph only if the company is to have a specific effective date of dissolution: The latest date on which the limited liability company is to dissolve is .)
· Fourth: (Insert any other matters the members determine to include herein.)
In Witness Whereof, the undersigned have executed this Certificate of Formation this 2nd day of September, 2008.
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By: |
/s/ Heidi Bowman |
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Authorized Person(s) |
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Name: |
Heidi Bowman |
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Typed or Printed |
Exhibit 3.40
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE CREDIT SOLUTIONS, LLC
a Delaware Limited Liability Company
Dated as of April 20, 2012
THE MEMBERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE CREDIT SOLUTIONS, LLC
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of Buckeye Credit Solutions, LLC (the Company) is made, adopted and entered into effective as of April 20, 2012, by CheckSmart Financial Company, a Delaware corporation, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Limited Liability Company Agreement of Buckeye Credit Solutions, LLC, effective as of September 4, 2008 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 18 of the Delaware Corporation Laws Annotated (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Delaware on September 3, 2008. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in a limited liability company agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Buckeye Credit Solutions, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 7001 Post Road, Suite 200, Dublin, Ohio 43016. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Delaware in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Delaware in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Limited Liability Company Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means CheckSmart Financial Company, a Delaware corporation, or any Person that acquires all of the equity interests of the Company from CheckSmart Financial Company.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST
The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto, including, without limitation, all decisions required or permitted to be made by the Sole Member under this Agreement and all decisions required or permitted to be made by the Company as a member, partner or other beneficial owner of any other Person. Notwithstanding the foregoing or anything in this Agreement to the contrary, the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take.
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager or Officer). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation
or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be five (5) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure
of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 18-303(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, nor the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, director or stockholder of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the Delaware General Corporation Law as if the Company were a Delaware corporation, as the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the Delaware General Corporation Law as if the Company were a Delaware corporation, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, director, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such
suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Certificate of Formation, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members directors, officers or stockholders, or a Manager, an Officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 18-304 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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Exhibit 3.41
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State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 12:01 PM 09/04/2009 |
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FILED 11:55 AM 09/04/2009 |
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SRV 09835235 - 4727676 FILE |
STATE of DELAWARE
LIMITED LIABILITY COMPANY
CERTIFICATE of FORMATION
First: The name of the limited liability company is Buckeye Lending Solutions of Arizona, LLC
Second: The address of its registered office in the State of Delaware is 2711 Centerville Road, Suite 400 in the City of Wilmington Zip code 19808. The name of its Registered agent at such address is Corporation Service Company
Third: (Use this paragraph only if the company is to have a specific effective date of dissolution: The latest date on which the limited liability company is to dissolve is .)
Fourth: (Insert any other matters the members determine to include herein.)
In Witness Whereof, the undersigned have executed this Certificate of Formation this 4th day of September, 2009.
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By: |
/s/ Heidi Bowman |
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Authorized Person (s) |
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Name: |
Heidi Bowman |
Exhibit 3.42
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE LENDING SOLUTIONS OF ARIZONA, LLC
a Delaware Limited Liability Company
Dated as of April 20, 2012
THE MEMBERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE LENDING SOLUTIONS OF ARIZONA, LLC
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of Buckeye Lending Solutions of Arizona, LLC (the Company) is made, adopted and entered into effective as of April 20, 2012, by CheckSmart Financial Company, a Delaware corporation, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Limited Liability Company Agreement of Buckeye Lending Solutions of Arizona, LLC, effective on or around September 4, 2009 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 18 of the Delaware Corporation Laws Annotated (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Delaware on September 4, 2009. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in a limited liability company agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Buckeye Lending Solutions of Arizona, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 7001 Post Road, Suite 200, Dublin, Ohio 43016. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Delaware in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Delaware in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Limited Liability Company Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means CheckSmart Financial Company, a Delaware corporation, or any Person that acquires all of the equity interests of the Company from CheckSmart Financial Company.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST
The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto, including, without limitation, all decisions required or permitted to be made by the Sole Member under this Agreement and all decisions required or permitted to be made by the Company as a member, partner or other beneficial owner of any other Person. Notwithstanding the foregoing or anything in this Agreement to the contrary, the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take.
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager or Officer). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation
or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be five (5) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure
of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 18-303(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, nor the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, director or stockholder of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the Delaware General Corporation Law as if the Company were a Delaware corporation, as the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the Delaware General Corporation Law as if the Company were a Delaware corporation, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, director, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such
suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Certificate of Formation, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members directors, officers or stockholders, or a Manager, an Officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 18-304 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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Exhibit 3.43
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State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 02:18 PM 07/18/2008 |
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FILED 01:56 PM 07/18/2008 |
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SRV 080798545 - 4577042 FILE |
STATE of DELAWARE
LIMITED LIABILITY COMPANY
CERTIFICATE of FORMATION
First: The name of the limited liability company is Buckeye Lending Solutions, LLC
Second: The address of its registered office in the State of Delaware is 2711 Centerville Road, Suite 400 in the City of Wilmington Zip code 19808. The name of its Registered agent at such address is Corporation Service Company
Third: (Use this paragraph only if the company is to have a specific effective date of dissolution: The latest date on which the limited liability company is to dissolve is .)
Fourth: (Insert any other matters the members determine to include herein.)
In Witness Whereof, the undersigned have executed this Certificate of Formation this 18th day of July, 2008.
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By: |
/s/ Heidi K. Bowman |
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Authorized Person (s) |
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Name: |
Heidi K. Bowman |
Exhibit 3.44
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE LENDING SOLUTIONS, LLC
a Delaware Limited Liability Company
Dated as of April 20, 2012
THE MEMBERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE LENDING SOLUTIONS, LLC
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of Buckeye Lending Solutions, LLC (the Company) is made, adopted and entered into effective as of April 20, 2012, by CheckSmart Financial Company, a Delaware corporation, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Limited Liability Company Agreement of Buckeye Lending Solutions, LLC, effective as of July 23, 2008 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 18 of the Delaware Corporation Laws Annotated (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Delaware on July 18, 2008. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in a limited liability company agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Buckeye Lending Solutions, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 7001 Post Road, Suite 200, Dublin, Ohio 43016. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Delaware in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Delaware in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Limited Liability Company Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means CheckSmart Financial Company, a Delaware corporation, or any Person that acquires all of the equity interests of the Company from CheckSmart Financial Company.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST
The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto, including, without limitation, all decisions required or permitted to be made by the Sole Member under this Agreement and all decisions required or permitted to be made by the Company as a member, partner or other beneficial owner of any other Person. Notwithstanding the foregoing or anything in this Agreement to the contrary, the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take.
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager or Officer). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation
or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be five (5) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure
of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 18-303(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, nor the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, director or stockholder of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the Delaware General Corporation Law as if the Company were a Delaware corporation, as the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the Delaware General Corporation Law as if the Company were a Delaware corporation, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, director, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such
suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Certificate of Formation, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members directors, officers or stockholders, or a Manager, an Officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 18-304 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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Exhibit 3.45
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State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 02:25 PM 05/16/2008 |
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FILED 02:24 PM 05/16/2008 |
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SRV 080559656 - 4548781 FILE |
STATE of DELAWARE
LIMITED LIABILITY COMPANY
CERTIFICATE of FORMATION
· First: The name of the limited liability company is Buckeye Small Loans, LLC
· Second: The address of its registered office in the State of Delaware is 2711 Centerville Road Suite 400 in the City of Wilmington, DE 19808. The name of its Registered agent at such address is Corporation Service Company
· Third: (Use this paragraph only if the company is to have a specific effective date of dissolution: The latest date on which the limited liability company is to dissolve is .)
· Fourth: (Insert any other matters the members determine to include herein.)
In Witness Whereof, the undersigned have executed this Certificate of Formation this 16th day of May, 2008.
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By: |
/s/ Heidi Bowman |
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Authorized Person(s) |
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Name: |
Heidi Bowman |
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Typed or Printed |
Exhibit 3.46
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE SMALL LOANS, LLC
a Delaware Limited Liability Company
Dated as of April 20, 2012
THE MEMBERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE SMALL LOANS, LLC
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of Buckeye Small Loans, LLC (the Company) is made, adopted and entered into effective as of April 20, 2012, by CheckSmart Financial Company, a Delaware corporation, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Limited Liability Company Agreement of Buckeye Small Loans, LLC, effective as of May 19, 2008 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 18 of the Delaware Corporation Laws Annotated (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Delaware on May 16, 2008. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in a limited liability company agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Buckeye Small Loans, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 7001 Post Road, Suite 200, Dublin, Ohio 43016. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Delaware in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Delaware in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Limited Liability Company Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means CheckSmart Financial Company, a Delaware corporation, or any Person that acquires all of the equity interests of the Company from CheckSmart Financial Company.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST
The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto, including, without limitation, all decisions required or permitted to be made by the Sole Member under this Agreement and all decisions required or permitted to be made by the Company as a member, partner or other beneficial owner of any other Person. Notwithstanding the foregoing or anything in this Agreement to the contrary, the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take.
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager or Officer). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation
or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be five (5) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure
of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 18-303(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, nor the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, director or stockholder of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the Delaware General Corporation Law as if the Company were a Delaware corporation, as the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the Delaware General Corporation Law as if the Company were a Delaware corporation, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, director, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such
suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Certificate of Formation, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members directors, officers or stockholders, or a Manager, an Officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 18-304 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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Exhibit 3.47
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State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 04:32 PM 11/30/2006 |
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FILED 04:21 PM 11/30/2006 |
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SRV 061094995 - 4259528 FILE |
STATE of DELAWARE
LIMITED LIABILITY COMPANY
CERTIFICATE of FORMATION
· First: The name of the limited liability company is Buckeye Title Loans of California, LLC
· Second: The address of its registered office in the State of Delaware is 2711 Centerville Road Suite 400 in the City of Wilmington, DE 19808. The name of its Registered agent at such address is Corporation Service Company
· Third: (Use this paragraph only if the company is to have a specific effective date of dissolution: The latest date on which the limited liability company is to dissolve is .)
· Fourth: (Insert any other matters the members determine to include herein.)
In Witness Whereof, the undersigned have executed this Certificate of Formation this 30th day of November, 2006.
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By: |
/s/ Heidi Bowman |
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Authorized Person(s) |
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Name: |
Heidi Bowman |
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Typed or Printed |
Exhibit 3.48
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE TITLE LOANS OF CALIFORNIA, LLC
a Delaware Limited Liability Company
Dated as of April 20, 2012
THE MEMBERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE TITLE LOANS OF CALIFORNIA, LLC
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of Buckeye Title Loans of California, LLC (the Company) is made, adopted and entered into effective as of April 20, 2012, by CheckSmart Financial Company, a Delaware corporation, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Limited Liability Company Agreement of Buckeye Title Loans of California, LLC, effective as of December 1, 2006 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 18 of the Delaware Corporation Laws Annotated (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Delaware on November 30, 2006. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in a limited liability company agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Buckeye Title Loans of California, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 7001 Post Road, Suite 200, Dublin, Ohio 43016. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Delaware in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Delaware in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Limited Liability Company Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means CheckSmart Financial Company, a Delaware corporation, or any Person that acquires all of the equity interests of the Company from CheckSmart Financial Company.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST
The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto, including, without limitation, all decisions required or permitted to be made by the Sole Member under this Agreement and all decisions required or permitted to be made by the Company as a member, partner or other beneficial owner of any other Person. Notwithstanding the foregoing or anything in this Agreement to the contrary, the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take.
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager or Officer). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation
or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be five (5) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure
of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 18-303(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, nor the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, director or stockholder of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the Delaware General Corporation Law as if the Company were a Delaware corporation, as the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the Delaware General Corporation Law as if the Company were a Delaware corporation, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, director, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such
suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Certificate of Formation, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members directors, officers or stockholders, or a Manager, an Officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 18-304 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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Exhibit 3.49
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State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 05:06 PM 09/14/2006 |
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FILED 03:36 PM 09/14/2006 |
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SRV 060850576 - 4219880 FILE |
STATE of DELAWARE
LIMITED LIABILITY COMPANY
CERTIFICATE of FORMATION
· First: The name of the limited liability company is Buckeye Title Loans of Kansas, LLC
· Second: The address of its registered office in the State of Delaware is 2711 Centerville Road Suite 400 in the City of Wilmington, DE 19808. The name of its Registered agent at such address is Corporation Service Company
· Third: (Use this paragraph only if the company is to have a specific effective date of dissolution: The latest date on which the limited liability company is to dissolve is .)
· Fourth: (Insert any other matters the members determine to include herein.)
In Witness Whereof, the undersigned have executed this Certificate of Formation this 14th day of September, 2006.
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By: |
/s/ Heidi Bowman |
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Authorized Person(s) |
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Name: |
Heidi Bowman |
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Typed or Printed |
Exhibit 3.50
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE TITLE LOANS OF KANSAS, LLC
a Delaware Limited Liability Company
Dated as of April 20, 2012
THE MEMBERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE TITLE LOANS OF KANSAS, LLC
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of Buckeye Title Loans of Kansas, LLC (the Company) is made, adopted and entered into effective as of April 20, 2012, by CheckSmart Financial Company, a Delaware corporation, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Limited Liability Company Agreement of Buckeye Title Loans of Kansas, LLC, effective as of September 15, 2006 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 18 of the Delaware Corporation Laws Annotated (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Delaware on September 14, 2006. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in a limited liability company agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Buckeye Title Loans of Kansas, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 7001 Post Road, Suite 200, Dublin, Ohio 43016. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Delaware in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Delaware in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Limited Liability Company Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means CheckSmart Financial Company, a Delaware corporation, or any Person that acquires all of the equity interests of the Company from CheckSmart Financial Company.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST
The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto, including, without limitation, all decisions required or permitted to be made by the Sole Member under this Agreement and all decisions required or permitted to be made by the Company as a member, partner or other beneficial owner of any other Person. Notwithstanding the foregoing or anything in this Agreement to the contrary, the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take.
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager or Officer). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation
or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be five (5) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure
of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 18-303(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, nor the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, director or stockholder of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the Delaware General Corporation Law as if the Company were a Delaware corporation, as the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the Delaware General Corporation Law as if the Company were a Delaware corporation, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, director, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such
suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Certificate of Formation, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members directors, officers or stockholders, or a Manager, an Officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 18-304 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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Exhibit 3.51
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State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 10:11 AM 05/18/2006 |
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FILED 09:52 AM 05/18/2006 |
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SRV 060472317 - 4160824 FILE |
STATE of DELAWARE
LIMITED LIABILITY COMPANY
CERTIFICATE of FORMATION
· First: The name of the limited liability company is Buckeye Title Loans of Missouri, LLC
· Second: The address of its registered office in the State of Delaware is 2711 Centerville Road Suite 400 in the City of Wilmington, DE 19808. The name of its Registered agent at such address is Corporation Service Company
· Third: (Use this paragraph only if the company is to have a specific effective date of dissolution: The latest date on which the limited liability company is to dissolve is .)
· Fourth: (Insert any other matters the members determine to include herein.)
In Witness Whereof, the undersigned have executed this Certificate of Formation this 18th day of May, 2006.
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By: |
/s/ Heidi Bowman |
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Authorized Person(s) |
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Name: |
Heidi Bowman |
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Typed or Printed |
Exhibit 3.52
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE TITLE LOANS OF MISSOURI, LLC
a Delaware Limited Liability Company
Dated as of April 20, 2012
THE MEMBERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE TITLE LOANS OF MISSOURI, LLC
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of Buckeye Title Loans of Missouri, LLC (the Company) is made, adopted and entered into effective as of April 20, 2012, by CheckSmart Financial Company, a Delaware corporation, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Limited Liability Company Agreement of Buckeye Title Loans of Missouri, LLC, effective as of May 19, 2006 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 18 of the Delaware Corporation Laws Annotated (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Delaware on May 18, 2006. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in a limited liability company agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Buckeye Title Loans of Missouri, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 7001 Post Road, Suite 200, Dublin, Ohio 43016. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Delaware in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Delaware in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Limited Liability Company Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means CheckSmart Financial Company, a Delaware corporation, or any Person that acquires all of the equity interests of the Company from CheckSmart Financial Company.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST
The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto, including, without limitation, all decisions required or permitted to be made by the Sole Member under this Agreement and all decisions required or permitted to be made by the Company as a member, partner or other beneficial owner of any other Person. Notwithstanding the foregoing or anything in this Agreement to the contrary, the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take.
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager or Officer). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation
or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be five (5) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure
of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 18-303(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, nor the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, director or stockholder of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the Delaware General Corporation Law as if the Company were a Delaware corporation, as the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the Delaware General Corporation Law as if the Company were a Delaware corporation, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, director, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such
suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Certificate of Formation, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members directors, officers or stockholders, or a Manager, an Officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 18-304 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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Exhibit 3.53
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State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 01:24 PM 04/04/2006 |
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FILED 12:36 PM 04/04/2006 |
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SRV 060315539 - 4136672 FILE |
STATE of DELAWARE
LIMITED LIABILITY COMPANY
CERTIFICATE of FORMATION
· First: The name of the limited liability company is Buckeye Title Loans of Utah, LLC
· Second: The address of its registered office in the State of Delaware is 2711 Centerville Road Suite 400 in the City of Wilmington, DE 19808. The name of its Registered agent at such address is Corporation Service Company
· Third: (Use this paragraph only if the company is to have a specific effective date of dissolution: The latest date on which the limited liability company is to dissolve is .)
· Fourth: (Insert any other matters the members determine to include herein.)
In Witness Whereof, the undersigned have executed this Certificate of Formation this 3rd day of April, 2006.
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By: |
/s/ James H. Frauenberg |
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Authorized Person(s) |
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Name: |
James H. Frauenberg |
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Typed or Printed |
Exhibit 3.54
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE TITLE LOANS OF UTAH, LLC
a Delaware Limited Liability Company
Dated as of April 20, 2012
THE MEMBERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE TITLE LOANS OF UTAH, LLC
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of Buckeye Title Loans of Utah, LLC (the Company) is made, adopted and entered into effective as of April 20, 2012, by CheckSmart Financial Company, a Delaware corporation, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Limited Liability Company Agreement of Buckeye Title Loans of Utah, LLC, effective as of April 30, 2006 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 18 of the Delaware Corporation Laws Annotated (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Delaware on April 4, 2006. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in a limited liability company agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Buckeye Title Loans of Utah, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 7001 Post Road, Suite 200, Dublin, Ohio 43016. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Delaware in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Delaware in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Limited Liability Company Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means CheckSmart Financial Company, a Delaware corporation, or any Person that acquires all of the equity interests of the Company from CheckSmart Financial Company.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST
The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto, including, without limitation, all decisions required or permitted to be made by the Sole Member under this Agreement and all decisions required or permitted to be made by the Company as a member, partner or other beneficial owner of any other Person. Notwithstanding the foregoing or anything in this Agreement to the contrary, the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take.
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager or Officer). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation
or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be five (5) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure
of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 18-303(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, nor the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, director or stockholder of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the Delaware General Corporation Law as if the Company were a Delaware corporation, as the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the Delaware General Corporation Law as if the Company were a Delaware corporation, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, director, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such
suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Certificate of Formation, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members directors, officers or stockholders, or a Manager, an Officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 18-304 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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Exhibit 3.55
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State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 01:23 PM 04/04/2006 |
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FILED 12:35 PM 04/04/2006 |
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SRV 060315525 - 4136668 FILE |
STATE of DELAWARE
LIMITED LIABILITY COMPANY
CERTIFICATE of FORMATION
· First: The name of the limited liability company is Buckeye Title Loans of Virginia, LLC
· Second: The address of its registered office in the State of Delaware is 2711 Centerville Road Suite 400 in the City of Wilmington, DE 19808. The name of its Registered agent at such address is Corporation Service Company
· Third: (Use this paragraph only if the company is to have a specific effective date of dissolution: The latest date on which the limited liability company is to dissolve is .)
· Fourth: (Insert any other matters the members determine to include herein.)
In Witness Whereof, the undersigned have executed this Certificate of Formation this 3day of April, 2006.
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By: |
/s/ James H.Frauenberg |
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Authorized Person(s) |
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Name: |
James H.Frauenberg |
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Typed or Printed |
Exhibit 3.56
SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE TITLE LOANS OF VIRGINIA, LLC
a Delaware Limited Liability Company
Dated as of April 20, 2012
THE MEMBERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BUCKEYE TITLE LOANS OF VIRGINIA, LLC
This SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of Buckeye Title Loans of Virginia, LLC (the Company) is made, adopted and entered into effective as of April 20, 2012, by CheckSmart Financial Company, a Delaware corporation, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Amended and Restated Limited Liability Company Agreement of Buckeye Title Loans of Virginia, LLC, effective as of April 30, 2006 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 18 of the Delaware Corporation Laws Annotated (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Delaware on April 4, 2006. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in a limited liability company agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Buckeye Title Loans of Virginia, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 7001 Post Road, Suite 200, Dublin, Ohio 43016. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Delaware in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Delaware in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Second Amended and Restated Limited Liability Company Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means CheckSmart Financial Company, a Delaware corporation, or any Person that acquires all of the equity interests of the Company from CheckSmart Financial Company.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST
The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto, including, without limitation, all decisions required or permitted to be made by the Sole Member under this Agreement and all decisions required or permitted to be made by the Company as a member, partner or other beneficial owner of any other Person. Notwithstanding the foregoing or anything in this Agreement to the contrary, the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take.
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager or Officer). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation
or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be five (5) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure
of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 18-303(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, nor the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, director or stockholder of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the Delaware General Corporation Law as if the Company were a Delaware corporation, as the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the Delaware General Corporation Law as if the Company were a Delaware corporation, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, director, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such
suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Certificate of Formation, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members directors, officers or stockholders, or a Manager, an Officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 18-304 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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Exhibit 3.57
Prescribed by J. Kenneth Blackwell |
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Expedite this Form: (Select one) | ||
Ohio Secretary of State |
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Mail Form to one of the Following: | ||
Central Ohio: (614) 466-3910 |
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PO Box 1390 | |
Toll Free: 1-877-SOS-FILE (1-877-767-3453) |
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PO Box 670 |
e-mail: busserv@sos.state.oh.us |
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INITIAL ARTICLES OF INCORPORATION
(For Domestic Profit or Non-Profit )
Filling Fee $125.00
THE UNDERSIGNED HEREBY STATES THE FOLLOWING:
(CHECK ONLY ONE(1) BOX)
(1) xArticles of Incorporation |
(2) oArticles of Incorporation |
(3) oArticles of Incorporation Professional |
(113-ARF) |
(114-ARN) |
Profession |
ORC 1701 |
ORC 1702 |
ORC 1785 |
Complete the general information in this section for the box checked above. | |||||
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FIRST: |
Name of Corporation |
Buckeye Title Loans,Inc. | |||
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Dublin |
Franklin | ||
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The purpose of said corporation is to engage in any lawful act or activity for which corporations may be formed under Sections 1701.01 through 1701.98, inclusive, of the Ohio Revised Code. | ||
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FOURTH: The number of shares which the corporations is authorized to have outstanding (Please state if shares are common or | ||||
preferred and their par value if any) |
1,500 |
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FIFTH: The following are the names and addresses of the individuals who are to serve as initial Directors.
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REQUIRED |
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Mercury Agent Company |
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November 9, 2005 | |
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Authorized Representative |
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Mercury Agent Company, an Ohio corporation |
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Adele Camper, Secretary |
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ORIGINAL APPOINTMENT OF STATUTORY AGENT
The undersigned, being at least a majority of the incorporators of Buckeye Title Loans, Inc. hereby appoint the following to be statutory agent upon whom any process, notice or demand required or permitted by statute to be served upon the corporation may be served. The complete address of the agent is
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Mercury Agent Company |
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(Name) 250 West Street, Suite 700 |
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Columbus, Ohio 43215 |
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Mercury Agent Company |
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November 9, 2005 | ||
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Mercury Agent Company, an Ohio corporation |
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Adele Camper, Secretary |
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ACCEPTANCE OF APPOINTMENT | ||||
The Undersigned, Adele Camper, Secretary of Mercury Agent Company, named herein as the Statutory agent for, Buckeye Title Loans, Inc. , hereby acknowledges and accepts the appointment of statutory agent for said entity. | ||||||
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Adele Camper, Secretary | ||||
SIXTH: The corporation, through its Board of Directors, shall have the right and power to repurchase any of its outstanding shares at such price and upon such terms as may be agreed upon between the corporation and the selling shareholder or shareholders.
SEVENTH: The Board of Directors is hereby authorized to fix and determine whether any surplus, and, if any, what part of the surplus, however created or arising, shall be used or disposed of or declared in dividends or paid to shareholders, and, without action by the shareholders, to use and apply surplus, or any part thereof, or such part of the stated capital of the corporation as is permitted under the provisions of Section 1701.35 of the Ohio Revised Code, or any statute of like tenor or effect which is hereafter enacted, at any time, or from time to time, in the purchase or acquisition of shares of any class, voting trust certificates for shares, bonds, debentures, notes, script, warrants, obligations, evidences of indebtedness of the corporation, or other securities of the corporation, to such extent or amount and in such manner and upon such terms as the Board of Directors shall deem expedient.
EIGHTH: No person shall be disqualified from being a director of the corporation because he or she is or may be a party to, and no director of the corporation shall be disqualified from entering into, any contract or other transaction to which the corporation is or may be a party. No contract or other transaction to which the corporation is or may be a party shall be void or voidable for the reason that any director or officer or other agent of the corporation is a party thereto, or otherwise has any direct or indirect interest in such contract or transaction or in any other party thereto, or for reason that any interested director or officer or other agent of the corporation authorizes or participates in authorization of such contract or transaction, (a) if the material facts as to such interest are disclosed or are otherwise known to the Board of Directors or applicable committee of directors at the time the contract or transaction is authorized, and at least a majority of the disinterested directors or disinterested members of the committee vote for or otherwise take action authorizing such contract or transaction, even though such disinterested directors or members are less than a quorum, or (b) if the contract or transaction (i) is not less favorable to the corporation than an arms length contract or transaction in which no director or officer or other agent of the corporation has any interest or (ii) is otherwise fair to the corporation as of the time it is authorized. Any interested director may be counted in determining the presence of a quorum at any meeting of the Board of Directors or any committee thereof which authorizes the contract or transaction.
NINTH: The provisions of Section 1701.13(E)(5)(a) of the Ohio Revised Code or any statute of like tenor or effect which is hereafter enacted shall not apply
to the corporation. The corporation shall, to the fullest extent not prohibited by any provision of applicable law other than Section 1701.13(E)(5)(a) of the Ohio Revised Code or any statute of like tenor or effect which is hereafter enacted, indemnify each director and officer against any and all costs and expenses (including attorney fees, judgments, fines, penalties, amounts paid in settlement, and other disbursements) actually and reasonably incurred by or imposed upon such person in connection with any action, suit, investigation or proceeding (or any claim or other matter therein), whether civil, criminal, administrative or otherwise in nature, including any settlements thereof or any appeals therein, with respect to which such person is named or otherwise becomes or is threatened to be made a party by reason of being or at any time having been a director or officer of the corporation, or by any reason of being or at any time having been, while such a director or officer, an employee or other agent of the corporation or, at the direction or request of the corporation, a director, trustee, officer, administrator, manager, employee, adviser or other agent of or fiduciary for any other corporation, partnership, trust, venture or other entity or enterprise including any employee benefit plan.
The corporation shall indemnify any other person to the extent such person shall be entitled to indemnification under Ohio law by reason of being successful on the merits or otherwise in defense of an action to which such person is named a party by reason of being an employee or other agent of the corporation, and the corporation may further indemnify any such person if it is determined on a case by case basis by the Board of Directors that indemnification is proper in the specific case.
Notwithstanding anything to the contrary in these Articles of Incorporation, no person shall be indemnified to the extent, if any, it is determined by the Board of Directors or by written opinion of legal counsel designated by the Board of Directors for such purpose that indemnification is contrary to applicable law.
TENTH: Notwithstanding any provisions of the Ohio Revised Code, now or hereafter in force, requiring for any purpose the vote or consent of the holders of shares entitling them to exercise two-thirds (2/3) or any other proportion of the voting power of the corporation or of any class or classes of shares thereof, such action, unless otherwise expressly required by statute, may be taken by the vote or consent of the holders of shares entitling them to exercise a majority of the voting power of the corporation or of such class of shares thereof.
Exhibit 3.58
CODE OF REGULATIONS
OF
BUCKEYE TITLE LOANS, INC.
ARTICLE I - MEETING OF SHAREHOLDERS
(a) Annual Meetings. An annual meeting of shareholders, for the election of Directors, for the consideration of any reports and for the transaction of such other business as may be brought before the meeting, shall be held on the first Monday of the fourth month following the close of the Corporations fiscal year or on such other date as may be designated by the Board of Directors.
(b) Special Meetings. Special meetings of the shareholders of this corporation shall be called by the Secretary, pursuant to a resolution of the Board of Directors, or upon written request of two Directors, or by shareholders representing 25% of the shares issued and entitled to vote. Calls for special meetings shall specify the time, place and object or objects thereof, and no business other than that specified in the call therefor shall be considered at any such meetings.
(c) Notice of Meetings. A written or printed notice of the annual or any special meetings of the shareholders, stating the time and place, and in case of special meetings, the objects thereof, shall be given to each shareholder entitled to vote at such meeting appearing on the books of the corporation, by mailing same to the shareholders address as same appears on the records of the corporation or of its Transfer Agent or Agents, at least ten (10) days before any such meeting; provided, however, that no failure or irregularity of notice of any annual meeting shall invalidate the same or any proceeding thereat. It shall be the responsibility of the Secretary to mail such notice.
(d) Quorum. Those shareholders present in person or by proxy entitling them to exercise a majority of the voting power shall constitute a quorum for any meeting of shareholders. In the event of an absence of a quorum at any meeting or any adjournment thereof, a majority of those present in person or by proxy and entitled to vote may adjourn such meeting from time to time. At any adjourned meeting at which a quorum may be present, any business may be transacted which might have been transacted at the meeting as originally called.
(e) Place of Meetings. The annual or any special meetings of shareholders may be held at such place or places within or without the State of Ohio, as may be specified in the notice of any such meetings.
(f) Proxies. At any meeting of shareholders, any person who is entitled to attend, or to vote thereat, and to execute consents, waivers or releases, may be represented at such meeting or vote thereat, and execute consents, waivers and releases, and exercise any of such persons other rights, by proxy or proxies appointed by a writing signed by such person and submitted to
the Secretary at or before such meeting. Voting by proxy or proxies shall be governed by all of the provisions of Ohio law, including the provisions relating to the sufficiency of the writing, the duration of the validity of the proxy or proxies, and the power of substitution and revocation.
ARTICLE II - SHARES
(a) Certificates. Certificates evidencing the ownership of shares of the corporation shall be issued to those entitled to them by transfer or otherwise. Each certificate for shares shall bear a distinguishing number, the signature of the Chairman of the Board or the President or a Vice President and the signature of the Secretary, an Assistant Secretary, the Treasurer, or an Assistant Treasurer of the corporation, and such recitals as may be required by law. The certificates for shares shall be of such tenor and design as the Board of Directors from time to time may adopt.
(b) Transfers. The shares of the corporation shall be assignable and transferable only on the books and records of the corporation by the registered owner, or by the registered owners duly authorized attorney, upon surrender of the certificate duly and properly endorsed with proper evidence of authority to transfer. The corporation shall issue a new certificate for the shares surrendered to the person or persons entitled thereto.
(c) Lost, Stolen or Destroyed Certificates. The holder of any shares in the corporation shall immediately notify the Secretary of any lost, stolen or destroyed certificate, and the corporation may issue a new certificate in the place of any certificate alleged to have been lost, stolen or destroyed. The Board of Directors may, at its discretion, require the owner of a lost, stolen or destroyed certificate or the owners legal representative to give the corporation a bond on such terms and with such sureties as it may direct, to indemnify the corporation against any claim that may be made against it on account of the alleged lost, stolen or destroyed certificate. The Board of Directors may, however, at its discretion, refuse to issue any such new certificate except pursuant to legal proceedings in a court having jurisdiction over such matter pursuant to Ohio law.
ARTICLE III - DIRECTORS
(a) Number and Term. The number of members of the Board of Directors shall be determined pursuant to law, or by resolution of the shareholders entitled to vote, but where said resolution provides for less than three (3) Directors, the number of Directors shall not be less than the number of shareholders. The Directors shall hold office until the expiration of the term for which they were elected and shall continue in office until their respective successors shall have been duly elected and qualified.
(b) Vacancies. A resignation from the Board of Directors shall be deemed to take effect upon its receipt by the Secretary, unless some other time is specified therein. The acceptance of any resignation shall not be necessary to make it effective unless so specified in the resignation. In case of any vacancy in the Board of Directors, the remaining Directors, even
though they may be less than a quorum of the entire number of Directors constituting a full Board, may at any duly convened meeting, except as hereinafter provided, elect a successor to hold office for the unexpired portion of the term of the Director whose place shall be vacant, and until the election and qualification of a successor.
(c) Regular Meetings. Regular meetings of the Board of Directors shall be held monthly on such dates as the Board may designate.
(d) Special Meetings. Special meetings of the Board of Directors shall be called by the Secretary and held at the request of the President or two (2) of the Directors.
(e) Notice of Meetings. The Secretary shall give notice of each meeting of the Board of Directors, whether regular or special, to each member of the Board.
(f) Quorum. A majority of the Directors in office at the time shall constitute a quorum at all meetings thereof.
(g) Place of Meetings. The Board of Directors may hold its meetings at such place or places within or without the State of Ohio as the Board may, from time to time, determine.
(h) Compensation. Directors, as such, shall not receive any stated salary for their services, but, on resolution of the Board, a fixed sum for expenses of attendance, if any, may be allowed for attendance at each meeting, regular or special, provided that nothing herein contained shall be construed to preclude any Director from serving the corporation in any other capacity and receiving compensation therefor. Members of either executive or special committees may be allowed such compensation as the Board of Directors may determine for attending committee meetings.
(i) Liability. The provisions of Section 1701.59(D) of the Ohio Revised Code, or any statute of like tenor or effect which is hereafter enacted, shall not apply in any action brought by or in the right of the corporation against a Director.
ARTICLE IV - ELECTION OF OFFICERS
At the first meeting of the Board of Directors in each year (at which a quorum shall be present) held next after the annual meeting of the shareholders, and at any special meeting for such purpose, as provided in Article III(d), the Board of Directors shall elect the officers of the corporation. It may also appoint an executive committee or other committees and define their powers and duties.
ARTICLE V - OFFICERS
The officers of this corporation shall include a President, a Vice President, a Secretary, a Treasurer, and such other officers as the Board of Directors may, from time to time, elect, all of whom may or may not be Directors. Said officers shall be chosen by the Board of Directors, and shall hold office for one (1) year, or until their successors are elected and qualified.
Any officer or employee elected or appointed by the Board of Directors, other than a Director, may be removed at any time for any reason upon vote of the majority of the whole Board of Directors.
ARTICLE VI - DUTIES OF OFFICERS
(a) President. The President shall preside at all meetings of shareholders and Directors. The President shall exercise, subject to the control of the Board of Directors and the shareholders of the corporation, a general supervision over the affairs of the corporation, and shall perform generally all duties incident to the office and such other duties as may be assigned to the President from time to time by the Board of Directors.
(b) Vice President. The Vice President shall perform all duties of the President in the Presidents absence or during the Presidents inability to act, and shall have such further duties as may be assigned to the Vice President by the Board of Directors.
(c) Secretary. The Secretary shall keep the minutes of all proceedings of the Board of Directors and of the shareholders and make a proper record of same, which shall be attested to by the Secretary, and shall have such further duties as may be assigned to the Secretary by the Board of Directors.
(d) Treasurer. The Treasurer shall have the custody of the funds and securities of the corporation which may come into the Treasurers hands, and shall do with the same as may be ordered by the Board of Directors. When necessary or proper, the Treasurer may endorse on behalf of the corporation, for collection, checks, notes and other obligations. The Treasurer shall deposit the funds of the corporation to its credit in such hands and depositories as the Board of Directors may, from time to time, designate. The Treasurer shall also have such further duties as may be assigned to him by the Board of Directors.
ARTICLE VII - ORDER OF BUSINESS - SHAREHOLDER MEETINGS
1. Call meeting to order.
2. Selection of Chairman and Secretary.
3. Proof of notice of meeting.
4. Roll call, including filing of proxies with the Secretary.
5. Appointment of Tellers.
6. Reading and disposal of previously unapproved minutes.
7. Reports of officers and committees.
8. If annual meeting, or meeting called for that purpose, election of Directors.
9. Unfinished business.
10. New business.
11. Adjournment.
This order may be changed by the affirmative vote of a majority in interest of the shareholders present.
ARTICLE VIII - AMENDMENTS
These Regulations may be adopted, amended or repealed by the affirmative vote of a majority of the shares empowered to vote thereon at any meeting called and held for that purpose, notice of which meeting has been given pursuant to law, or without a meeting by the written assent of the owners of two-thirds of the shares of the corporation entitled to vote thereon.
The undersigned shareholders hereby adopt the foregoing Code of Regulations this 9th day of November, 2005.
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SHAREHOLDERS: |
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James H. Frauenberg, as Trustee of |
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the James H. Frauenberg 1998 Trust, |
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dated 01/01/98, as amended |
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Susan D. Rector, as Trustee of |
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the Frauenberg 1998 Descendants |
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Trust, dated 01/01/98, as amended |
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Michael W. Lenhart, as Trustee of |
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the Michael W. Lenhart 1998 Trust, |
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dated 01/01/98, as amended |
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Susan D. Rector, as Trustee of |
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the Lenhart 1998 Descendants |
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Trust, dated 01/01/98, as amended |
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Chad M. Streff |
Exhibit 3.59
CERTIFICATE OF FORMATION
OF
CALIFORNIA CHECK CASHING STORES, LLC
The undersigned, an authorized natural person, for the purpose of forming a limited liability company, under the provisions and subject to the requirements of the Delaware Limited Liability Company Act, hereby certifies that:
1. The name of the limited liability company is California Check Cashing Stores, LLC (the Company).
2. The name and address of the registered agent and the registered office of the Company required to be maintained by Section 104 of the Delaware Limited Liability Company Act are National Registered Agents, Inc. 160 Greentree Drive, Suite 101, Dover, Delaware 19904. County of Kent.
IN WITNESS WHEREOF, the undersigned has caused this Certificate of Formation to be duly executed as of this 13th day of July, 2006.
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/s/ Kate Cregor |
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Kate Cregor, Authorized Person |
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State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 07:35 PM 07/13/2006 |
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FILED 07:06 PM 07/13/2006 |
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SRV 060667473 - 4190065 FILE |
Exhibit 3.60
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
CALIFORNIA CHECK CASHING STORES, LLC
a Delaware Limited Liability Company
Dated as of April 29, 2011
THE MEMBERSHIP INTERESTS OF CALIFORNIA CHECK CASHING STORES, LLC SHALL BE SECURITIES GOVERNED BY ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, ARTICLE 8 OF THE DELAWARE UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT. THE MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
CALIFORNIA CHECK CASHING STORES, LLC
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of California Check Cashing Stores, LLC (the Company) is made, adopted and entered into effective as of the 29th day of April, 2011, by CCCS Holdings, LLC, a Delaware limited liability company, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Amended and Restated Operating Agreement of California Check Cashing Stores, LLC, dated as of September 29, 2006, as amended, to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) that certain Amended and Restated Operating Agreement of California Check Cashing Stores, LLC, dated as of September 29, 2006, as amended, is hereby further amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 18 of the Delaware Corporation Laws Annotated, as amended from time to time (the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Delaware on July 13, 2006. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in a limited liability company agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is California Check Cashing Stores, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 7001 Post Road, Suite 200, Dublin, Ohio 43016. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Delaware in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Delaware in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Delaware shall be National Registered Agents, Inc. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Delaware shall be c/o National Registered Agents, Inc., 160 Greenwood Drive, Suite 101, Dover, Delaware 19904, Kent County. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Agreement means this Amended and Restated Limited Liability Company Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
GAAP means United States generally accepted accounting principles as in effect from time to time.
Indemnified Parties has the meaning set forth in Section 5.4(a).
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.1.
Membership Interest Certificate has the meaning set forth in Section 2.2.
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Sole Member means CCCS Holdings, LLC, a Delaware limited liability company, or any Person that acquires all of the equity interests of the Company from CCCS Holdings, LLC.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST CERTIFICATE
2.1 Capital Contribution; Membership Interest. The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement, as evidenced by a Membership Interest Certificate (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
2.2 Membership Interest Certificate. The Membership Interest of the Sole Member will be evidenced by a certificate of limited liability company interest issued by the Company (the Membership Interest Certificate). The Membership Interest shall be a security governed by Article 8 of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Article 8 of the Delaware Uniform Commercial Code, as currently in effect. Each Membership Interest Certificate shall bear the following legend:
The membership interest represented by this certificate is a security within the meaning of, and shall be governed by, Article 8 of the Uniform Commercial Code as adopted and in effect in the State of Delaware.
This Section 2.2 shall not be amended and no such purported amendment to this Section 2.2 shall be effective until, to the extent necessary, all outstanding Membership Interest Certificates have been surrendered for re-issuance with any conforming changes required as a result of such amendment.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto. Notwithstanding the foregoing or anything in this Agreement to the contrary, the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take.
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers of the Company shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation or removal, as applicable. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her, as applicable, written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company shall be exercised by such officers as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their
respective offices. Each Officer of the Company shall hold office at the pleasure of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3 of this Agreement.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Proof of Failure to Satisfy Standard of Conduct. The Sole Member, any Manager and any Officer shall not be deemed to have violated any standard of conduct under this Section 5 unless such violation is proved by clear and convincing evidence in an action brought against the Sole Member, any Manager or any Officer in a court of competent jurisdiction. The termination of any action, suit or proceeding by judgment, order, settlement or upon a plea of nolo contendere or its equivalent shall not of itself constitute proof or create a presumption that the appropriate standard of conduct has been violated.
5.2 Liability to the Company. The Sole Member, any Manager and any Officer shall not be liable to the Company in damages for any action that the Sole Member, any Manager or any Officer takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.3 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 18-303(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.4 Indemnification.
(a) The Company shall indemnify, defend and hold harmless the Sole Member, any Manager and any Officer (collectively, the Indemnified Parties) to
the fullest extent provided by, or permissible under, Section 18-108 of the LLC Law, or any successor statute. The Company is hereby authorized to take any and all further action to effectuate any indemnification of the Indemnified Parties that any Delaware limited liability company may have power to take with respect to the indemnification of its members, managers and officers by any agreement or otherwise. This Section 5.4(a) shall be interpreted in all respects to expand such power to indemnify to the maximum extent permissible to any Delaware limited liability company with regard to the particular facts of each case, and not in any way to limit any statutory or other power to indemnify, or any right of any individual to indemnification. Expenses, including, without limitation, attorneys fees, incurred by the Indemnified Parties in defending any proceeding shall be paid by the Company in advance of the final disposition of such proceeding, upon receipt of any undertaking by or on behalf of the Indemnified Parties to repay such amount if it shall be ultimately determined that it is not entitled to be indemnified by the Company as authorized in this Section 5. No repeal, amendment or modification of this Section 5.4(a) shall affect any rights or obligations then existing hereunder with respect to any state of facts then or theretofore existing or any action, suit or proceeding theretofore or thereafter brought or threatened based in whole or in part upon any such state of facts. This Section 5.4(a) is intended for the benefit of the Company and the Indemnified Parties.
(b) Authorized agents and employees of the Company shall be indemnified by the Company only if and to the extent, if any, approved by the Managers or specifically required by applicable law.
(c) The provisions of this Section 5 shall survive any termination of this Agreement.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member. All financials statements shall be prepared in accordance with GAAP.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 18-304 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Limited Liability Company Agreement of California Check Cashing Stores, LLC as of the date first written above.
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CCCS HOLDINGS, LLC | |
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By: |
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Name: |
Bridgette C. Roman |
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Title: |
Secretary |
Exhibit 3.61
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# 465681 | |
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Posted by: |
Checked by: |
ARTICLES OF ORGANIZATION
OF
DIRECT FINANCIAL SOLUTIONS OF ALABAMA LLC
BY AGREEMENT, the undersigned Organizer, on behalf of the Members who desire to form a limited liability company pursuant to the Alabama Limited Liability Company Act (hereinafter referred to as the Act), hereby sets forth the following Articles of Organization for such limited liability company (hereinafter referred to as the Company);
ARTICLE 1 NAME
The name of the Company is Direct Financial Solutions of Alabama LLC.
ARTICLE 2 PERIOD OF DURATION
The period of duration of the Company shall be perpetual.
ARTICLE 3 PURPOSE
The purposes for which the Company is organized are to engage in any lawful business activities for which limited liability companies may be organized pursuant to the Act.
ARTICLE 4 REGISTERED OFFICE AND AGENT
The name of the original Registered Agent of the Company is Murfee Gewin, located at 2527 College Street, Montgomery, Alabama 36106.
ARTICLE 5 MANAGEMENT
The management of the Company shall be vested in one or more Managers. The names and street addresses of the initial Managers, who will serve until a successor is elected, are as follows:
NAME |
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ADDRESS |
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Todd Jensen |
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89 East 1400 North |
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RECEIVED |
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Logan, Utah 84341 |
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JUN 27 2005 |
Mari-Catherine Vinton |
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89 East 1400 North |
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Logan, Utah 84341 |
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SECRETARY OF STATE |
ARTICLE 6 ORGANIZER
The Organizer of the Company, who is not a member of the Company, is:
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ADDRESS |
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Trevin G. Workman, Esq. |
503 West 2600 South, Suite 200 |
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Bountiful, Utah 84010 |
ARTICLE 7 ADDITIONAL MEMBERS
Additional members may be admitted as members of the Company upon the unanimous consent of the Members as have been previously admitted. An interest of a Member in the Company may only be adjusted, transferred or assigned in accordance with the provisions of the Operating Agreement of the Company. If all of the Members of the Company do not consent to a transfer or assignment, the transferee has no right to participate in the management of the business or affairs of the Company or become a Member and is only entitled to receive the transferors share of profits or other compensation.
ARTICLE 8 AUTHORITY
No Member shall have authority to act on behalf of or bind the Company without the written approval of the Manager. Only the Manager of the Company, as indicated above, or successor(s) as Manager, and those given authority by such written approval may sign contracts or other instruments on behalf of the Company.
ARTICLE 9 LIABILITY
Neither the Members, Managers, Employees, nor Agents of the Company shall be personally liable for any debt, obligation, or liability of the Company nor of any Member, Manager, Employee, or Agent of the Company. Neither shall the Company be liable for any debts, obligations, or liablities of any Member, Manager, Employee, or Agent.
In WITNESS WHEREOF, the Organizer has executed this Agreement this 20th day of June, 2005.
CERTIFIED COPY |
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I hereby certify this document was filed in Montgomery County, Alabama on 6/23/05 in Book Corp 257 Page 332-333 |
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ORGANIZER: |
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State of Alabama Montgomery Co | ||||
Reese McKinney. Jr. |
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Trevin G. Workman |
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6/23/05 2:55:45 PM Abstract# 38954 | ||||
Judge of Probate |
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Trevin G. Workman |
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Reese McKinney. Jr. | ||||
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LLC(Limited Liability Corp) |
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40.00 | |
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Index Fee |
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5.00 |
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80.00 per page fee |
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0.00 |
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Recording Fee |
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35.00 |
STATE OF ALABAMA DOMESTIC LIMITED LIABILITY COMPANY GUIDELINES ARTICLES OF AMENDMENT TO ARTICLES OF ORGANIZATION Instructions STEP1: WITHIN 30 DAYS OF A NAME CHANGE, FALSE OR ERRONEOUS STATEMENT IN THE ARTICLES OF ORGANIZATION, CHANGE IN THE PERIOD OF DURATION, OR A CHANGE IN ANY STATEMENT IN THE ARTICLES OF ORORGANIZATION, AN AMENDMENT SHOULD BE FILED TO REFLECT THE OCCURRENCE OF THE EVENT(S). STEP2: FILE THE ORIGINAL AND TWO COPIES IN THE COUNTY WHERE THE ORIGINAL ARTICLES OF ORGANZATION ARE FILED. THE SECRETARY OF STATES FILING IS Fee $0. PLEASE CONTACT THE JUDGE OF PROBATE TO VERIFY THE PROBATE FILING FEE. PURSUANT TO 10-12-11 OF THE ALABANA LIMITED LIABILITY COMPANY ACT, THE UNDERSIGNED HEREBY ADOPTS THE FOLLOWING ARTICLES OF AMENDMENT: Article i The name of the limited liability company: Direct Financial Solutions of Alabama LLC Article ii The date of filing of the articles of organization: 6/23/05 Article iii The following amendment was adopted in the manner provided for by the Alabama Limited Liability Act: See Exhibit A Article IV The amendment, consistent with the Limited Liability Company Act, was approved by a majority vote of the members entitled to vote or in accordance with the requirements set forth in the articles of by law. RECEIVED DATE 5/15/07 MAY 30 2007 Trevin Workman, Manager SECRETARY OF STATE Type or Print Name of Member Signature of Member |
Exhibit A
MEMORANDUM OF ACTION
TAKEN BY THE MEMBERS
OF
DIRECT FINANCIAL SOLUTIONS OF ALABAMA, LLC
In accordance with the Alabama Code Annotated and the Operating Agreement of the Company, the following action is taken without a meeting by the Members of Direct Financial Solutions of Alabama, LLC, an Alabama limited liability company, and is consented to by all of the Members of the Company, which is sufficient to approve actions of the Company, as evidenced by their signatures below:
RESOLVED, that Todd Jensen and Mari-Catherine Vinton resigned as Managers of the Company.
FURTHER RESOLVED, that Trevin G. Workman be and hereby is elected as Manager of the Company to act in all matters as defined for the role of a Manager in the Operating Agreement of the Company and is specifically directed to complete and forward all necessary Lending License Applications and supporting information on behalf of the Company as expeditiously as possible.
DATED as of the 15th day of August, 2005. |
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MEMBER: |
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DIRECT FINANCIAL SOLUTIONS, LLC |
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/s/ Trevin G. Workman |
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Trevin G. Workman, Manager |
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CERTIFIED COPY |
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I hereby certify this document was filed in Montgomery Country, Alabama on 5/24/07 in Book 272 Page 496-497 |
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STATE OF ALA | |||
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I CERTIFY THIS INSTRUMENT | |||
/s/ Reese McKinney Jr |
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WAS FILED ON | |||
Judge of Probate |
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CORP 00272 PG 0496-0497 2007 May 24 | |||
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6.00 | |
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REC FEE |
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10.00 | |
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CERT |
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CHECK TOTAL |
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16.00 | |
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61163 |
Clerk: RITAL 11:37AM | ||
STATE OF ALABAMA DOMESTIC LIMITED LIABILITY COMPANY GUIDELINES ARTICLES OF AMENDMENT TO ARITCLES OF ORGANIZATION Instructions STEP 1: WITHIN 30 DAYS OF A NAME CHANGE, FALSE OR ERROMEOUS STATEMENT IN THE ORGANIZATION, CHANGE IN THE PERIOD OF DURATION, OR A CHANGE IN ANY STATEMENT IN THE ARTICLES OF ORGANNIZATION, AN AMENDMENT SHOULD BE FILED TO REFLECT THE OCCURENCE OF THE EVENT(S). STEP 2: FILE THE ORIGINAL AND TWO COPIES IN THE COUNTY WHERE THE ORIGINAL ARTICLES OF ORGANIZATION ARE FILED, THE SECRETARY OF STATES FILING FEE IN $0. PLEASE CONTACT THE JUDGE OF PROBATE TO VERIFY THE PROBATE FILING . PURSUANT TO 10-12-11 OF THE ALABAMA LIMITED LIABILITY COMPANY ACT, THE HEREBY ADOPTS THE FOLLOWING ARTICLES OF AMENDMENT: Article i The name of the limited liability company: Direct Financial Solutions of Alabama LLC Article ii The date of filing of the articles of organization: 6/23/05 Article iii The following amendment was adopted in the provided for by the Alabama Limted Liability Act: The name of the limited liability company is changed from Direct Financial Solutions of Alabama LLC to Cash Central of Alabama LLC. Article iv The amendment, consistent with the Limited Liability Company Act, was approved by a majority vote of the members entitled to vote or in accordance with the requirements set forth in the articles of organization and prescribed by law. STATE OF ALA MONTGOMERY CO I, CERTIFY THIS INSTRUMENT WAS FILED ON CORP 00272 PG 0496-0584 2007 May 29 02 58PM REESE MCKINNEY JR. JUDGE OF PROBATE INDEX $5.00 DATE May 15, 2007S REC FEE $10.00 Trevin Workman Manager CERT $0.00 Type of Printname of Member CHECK TOTAL $15.00 Signature of Member 51511 Clerk: RITAL 11:37AM CERTIFY COPY I herby certify this document was filed in Montgomery Country, Alabama on 5/29/2007 in book 272 page 564 |
STATE OF ALABAMA #465-681 POSTED BY: CHECKED BY: JH II DOMESTIC LIMITED LIABILITY COMPANY GUIDELINES ARTICLES AMENDMENT TO ARTICLES OF ORGANIZATION INSTRUCTION STEP 1: WITHIN 30 DAYS OF A NAME CHANGE, FALSE OR ERRONEOUS STATEMENT IN THE ARTICLES OF ORGANIZATION, CHANGE IN THE PERIOD OF DURATION, OR A CHANGE IN ANY STATEMENT IN THE ARTICLES OF ORGANIZATION, AN AMENDMENT SHOULD BE FILED TO REFLECT THE OCCURRENCE OF THE EVENT(S). STEP 2: FILE THE ORIGINAL AND TWO COPIES IN THE COUNTY WHERE THE ORIGINAL ARTICLES OF ORGANIZATION ARE FILED. THE SERVICE OF STATES FILING FEE IS &0. PLEASE CONTACT THE JUDGE OF PROBATE TO VERIFY THE PROBATE FILING FEE. PURSUANT TO 10-12-11 OF THE ALABAMA LIMITED LIABILITY COMPANY ACT, THE UNDERSIGNED HEREBY ADOPTS THE FOLLOWING ARTICLES OF AMENDMENT: Article I The name of the imited liability company Cash Central of Alabama, LLC Article II The date of filing of the articles of organization: 6/23/05 Article III The following amendment was adopted in the manner provided for by the Alabama Limited Liabity Act: Remove Todd Jefferson and mari Catherine Vinton as members, Add Direct Financial solution, LLC as the sole member Article IV The amendment, consistent with the Limited Liability Company Act, was approved bya a majority vote of the members entitled to vote or in accordance with the requirements set forth in the articles of organization and prescribed by law. DATE 10/5/07 Trevin Workman, Manager Type or Print Name of Member Signature of Member STATE OF ALAMONTGOMERY CO. I CERTIFY THIS INSTRUMENT WAS FILED ON CORP 00275 PO 0366 2007 Oct 15 08:00AM REESE MCKINNEY JR. JUDGE OF PROBATE INDEX $5.00 REC FEE $10.00 CERT $0.00 CHECK TOTAL $1500 61993 Clerk LESLIE 08:00AM CERTIFIED COPY I hereby certify this document was filed in Montgomery County, Alabama on 10/08/07 Book 275 Page 375 Judge of Probalc
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Exhibit 3.62
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
CASH CENTRAL OF ALABAMA, LLC
an Alabama Limited Liability Company
Dated as of April 1, 2012
THE MEMBERSHIP INTERESTS OF CASH CENTRAL OF ALABAMA, LLC SHALL BE SECURITIES GOVERNED BY ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, ARTICLE 8 OF THE ALABAMA UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT. THE MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
CASH CENTRAL OF ALABAMA, LLC
This AMENDED AND RESTATED OPERATING AGREEMENT (this Agreement) of Cash Central of Alabama, LLC (the Company) is made, adopted and entered into effective as of April 1, 2012, by Direct Financial Solutions, LLC, a Delaware limited liability company, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Amended and Restated Operating Agreement for Direct Financial Solutions of Alabama, LLC (n/k/a Cash Central of Alabama, LLC), effective as of March 31, 2006 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 5 of Title 10A of the Alabama Limited Liability Company Law (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Alabama on June 25, 2005. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in an operating agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Cash Central of Alabama, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 84 East 2400 North, North Logan, Utah 84341. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Alabama in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Alabama.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Alabama in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Alabama shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Alabama shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Operating Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
CCFI Manager means any of William E. Saunders, Jr., Kyle Hanson, Chad Streff, Michael Durbin or Bridgette Roman, or their respective alternates or successors, as appointed from time to time in accordance with Section 4.1.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.1.
Membership Interest Certificate has the meaning set forth in Section 2.2.
Ministerial Acts means (i) completing, executing and filing annual reports on behalf of the Company as required in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (ii) ordinary course acts required in connection with obtaining or maintaining the licensure of the Company in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (iii) executing any contract that by its terms is less than 12 months in length and represents a financial obligation of the Company of less than $5,000 in the aggregate, or (iv) any other act that is approved in writing by any CCFI Manager (other than the individual Manager requesting to take such other act).
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means Direct Financial Solutions, LLC, a Delaware limited liability company, or any Person that acquires all of the equity interests of the Company from Direct Financial Solutions, LLC.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST CERTIFICATE
2.1 Capital Contribution; Membership Interest. The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement, as evidenced by a Membership Interest Certificate (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
2.2 Membership Interest Certificate. The Membership Interest of the Sole Member will be evidenced by a certificate of limited liability company interest issued by the Company in substantially the form attached as Exhibit A to this Agreement (the Membership Interest Certificate). The Membership Interest shall be a security governed by Article 8 of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Article 8 of the Alabama Uniform Commercial Code, as currently in effect. Each Membership Interest Certificate shall bear the following legend:
This certificate evidences an interest in Cash Central of Alabama, LLC and shall be a security governed by Article 8 of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Article 8 of the Alabama Uniform Commercial Code, as currently in effect.
This Section 2.2 shall not be amended and no such purported amendment to this Section 2.2 shall be effective until, to the extent necessary, all outstanding Membership Interest Certificates have been surrendered for re-issuance with any conforming changes required as a result of such amendment.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers
shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto. Notwithstanding the foregoing or anything in this Agreement to the contrary: (y) the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take; and (z) none of the actions described in the foregoing clauses (i) through (iv) of this Section 4.1(a), other than Ministerial Acts, may be taken by any individual Manager on behalf of the Company without first obtaining the approval required pursuant to Section 4.1(e) or (f).
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that (i) at least three (3) of the Managers constituting such a quorum must be a CCFI Manager, and (ii) if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority (which act of the majority must, for the avoidance of doubt, always include the vote of at least one (1) CCFI Manager) of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be seven (7) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
Trevin G. Workman
S. Todd Jensen
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the
Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 10A-5-3.02 of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, manager or member of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the LLC Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security
Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the LLC Law, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the LLC Law. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the LLC Law, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Certificate of Formation, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members managers, officers or members, a Manager, an Officer, or an employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the
provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 10A-5-6.06 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Alabama without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Operating Agreement of Cash Central of Alabama, LLC as of the date first written above.
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EXHIBIT A
Form of Membership Interest Certificate
THE INTEREST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. ACCORDINGLY, SUCH INTEREST MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
THIS CERTIFICATE EVIDENCES AN INTEREST IN CASH CENTRAL OF ALABAMA, LLC AND SHALL BE A SECURITY GOVERNED BY ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, ARTICLE 8 OF THE ALABAMA UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT.
No.
CASH CENTRAL OF ALABAMA, LLC
An Alabama Limited Liability Company
Membership Interest Certificate
This certifies that [ ] is the owner of the Membership Interest representing [ ]% membership equity interest in Cash Central of Alabama, LLC (the Company), subject to the terms of the Amended and Restated Operating Agreement of Cash Central of Alabama, LLC, made and entered into as of April 1, 2012, as the same may be amended from time to time in accordance with its terms (the Agreement).
This Membership Interest Certificate may be transferred by the lawful holders hereof only in accordance with the provisions of the Agreement and applicable law.
THIS SECURITY IS SUBJECT TO THE PROVISIONS OF THE AGREEMENT.
IN WITNESS WHEREOF, the Company has caused this Membership Interest Certificate to be issued this day of , .
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FOR VALUE RECEIVED, , the of the Company does hereby sell, assign and transfer unto:
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the Membership Interest evidenced by the within Membership Interest Certificate, and does hereby irrevocably constitute an appoint attorney-in-fact to transfer the said Membership Interest on the books of the within-named Company, with the full power of substitution in the premises.
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NOTICE: The signature to this assignment must correspond with the name as written upon the face of the Membership Interest Certificate in every particular, without alternation or enlargement or any change whatsoever.
Exhibit 3.63
[LOGO] State of Alaska Corporations, Business and Professional Licensing CORPORATION SECTION PO Box 110808 Juneau, AK 99811-0808 AK Entity #: 94621 Date Filed: 06/16/2005 07:49 AM State of Alaska Department of Commerce ARTICLES OF ORGANIZATION Online Filing (Domestic Limited Liability Company) The undersigned person(s) of the age of 18 years or more, acting as organizers of a limited liability company under the Alaska Limited Liability Act (AS 10.50) hereby adopt the following Articles of Organization: Article 1. Name of the Limited Liability Company. The name of a limited liability company must contain the words limited liability company or the abbreviation L.L.C., or LLC: Direct Financial Solutions of Alaska LLC Article 2. The purpose for which the company is organized. A limited liability company may list any lawful as its purpose: Any lawful purpose Article 3. Registered Agent Name and Address: Name: Shanley, Thomas E Mailing Address: 2929 Linda Ave Juneau, AK 99803 Physical Address if Mailing Address is a Post Office Box: Article 4. Duration: Check this box if the duration is perpetual: If the duration is not perpetual, list the latest date upon which the Limited Liability Company is to dissolve: Article 5. Management: Check this box if the company will be managed by a manager. Article 6. Optional Provisions: One or more organizer shall sign the Articles of Organization for a limited liability company. Name of Organizer Online Signature of Organizer Trevin G. Workman Trevin G. Workman Date Submitted Online June 16, 2005 |
[LOGO] AK Entity #: 94621 Date Filed: 05/25/2007 12:00 AM State of Alaska Department of Commerce Department of Commerce, Community, and Economic Development Corporations, Business and Professional Licensing CORPORATIONS SECTION PO Box 110808 Juneau AK 99811-0808 ARTICLES OF AMENDMENT (Domestic Limited Liability Company) The undersigned person(s) of the age of 18 years or more, acting as organizers of a limited liability company under the Alaska Limited Liability Act (AS 10.50) hereby adopt the following Articles of amendment. 1. Name of the Company (as It Is currently stated on the Certificate of organization): Alaska Entity #: Direct Financial Solutions of Alaska LLC 94621 2. Amended Name of Company (if changing the name of the company): Cash Central of Alaska, LLC 3. Date of Organization: 06/16/2005 4. Amendments to the Articles of Organization are as follows: Attach an additional 81/2 x 11 page for continuation of previous article and/or additional articles. Please indicate which article you are continuing. 5. Date the amendment(s) to the Articles of Organization were adopted: May 1, 2007 Signature of Manager, Member or Attorney-in-Fact Printed Name Title Date If you have specific legal questions or concerns about this filing, you are strongly advised to consult an attorney or other professional to assist you. Mail the Articles of Amendment and the $25.00 filing fee (in U.S. dollars) to: State of Alaska Corporations Section PO Box 110808 Juneau AK 99801 For additional Information or forms please visit our web site at: www.corporations.alaska.gov State of Alaska Filing Changes 1 Page(s) 08-446 (Rev. 9/05) alh Trevin Workman Manager 05/15/2007 T0714944048 |
Exhibit 3.64
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
CASH CENTRAL OF ALASKA, LLC
an Alaska Limited Liability Company
Dated as of April 1, 2012
THE MEMBERSHIP INTERESTS OF CASH CENTRAL OF ALASKA, LLC SHALL BE SECURITIES GOVERNED BY ARTICLE 8 (INVESTMENT SECURITIES) OR THE EQUIVALENT ARTICLE OR CHAPTER OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, CHAPTER 8 OF THE ALASKA UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT. THE MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
CASH CENTRAL OF ALASKA, LLC
This AMENDED AND RESTATED OPERATING AGREEMENT (this Agreement) of Cash Central of Alaska, LLC (the Company) is made, adopted and entered into effective as of April 1, 2012, by Direct Financial Solutions, LLC, a Delaware limited liability company, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Amended and Restated Operating Agreement for Direct Financial Solutions of Alaska, LLC (n/k/a Cash Central of Alaska, LLC), effective as of March 31, 2006 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of the Alaska Revised Limited Liability Company Act (Title 10, Chapter 50 of the Alaska Statutes) (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Articles of Organization of the Company (the Articles of Organization) were filed with the Corporations Section of the Division of Corporations, Business and Professional Licensing of the State of Alaska on June 16, 2005. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in an operating agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Cash Central of Alaska, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 84 East 2400 North, North Logan, Utah 84341. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Articles of Organization in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Articles of Organization have been filed with the Corporations Section of the Division of Corporations, Business and Professional Licensing of the State of Alaska in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Alaska.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Alaska in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Alaska shall be as set forth in the Articles of Organization. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Alaska shall be as set forth in the Articles of Organization. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Operating Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Articles of Organization has the meaning set forth in Section 1.1.
CCFI Manager means any of William E. Saunders, Jr., Kyle Hanson, Chad Streff, Michael Durbin or Bridgette Roman, or their respective alternates or successors, as appointed from time to time in accordance with Section 4.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.1.
Membership Interest Certificate has the meaning set forth in Section 2.2.
Ministerial Acts means (i) completing, executing and filing annual reports on behalf of the Company as required in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (ii) ordinary course acts required in connection with obtaining or maintaining the licensure of the Company in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (iii) executing any contract that by its terms is less than 12 months in length and represents a financial obligation of the Company of less than $5,000 in the aggregate, or (iv) any other act that is approved in writing by any CCFI Manager (other than the individual Manager requesting to take such other act).
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means Direct Financial Solutions, LLC, a Delaware limited liability company, or any Person that acquires all of the equity interests of the Company from Direct Financial Solutions, LLC.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST CERTIFICATE
2.1 Capital Contribution; Membership Interest. The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement, as evidenced by a Membership Interest Certificate (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
2.2 Membership Interest Certificate. The Membership Interest of the Sole Member will be evidenced by a certificate of limited liability company interest issued by the Company in substantially the form attached as Exhibit A to this Agreement (the Membership Interest Certificate). The Membership Interest shall be a security governed by Article 8 (Investment Securities) or the equivalent Article or Chapter of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Chapter 8 of the Alaska Uniform Commercial Code, as currently in effect. Each Membership Interest Certificate shall bear the following legend:
This certificate evidences an interest in Cash Central of Alaska, LLC and shall be a security governed by Article 8 (Investment Securities) or the equivalent Article or Chapter of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Chapter 8 of the Alaska Uniform Commercial Code, as currently in effect.
This Section 2.2 shall not be amended and no such purported amendment to this Section 2.2 shall be effective until, to the extent necessary, all outstanding Membership Interest Certificates have been surrendered for re-issuance with any conforming changes required as a result of such amendment.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax
purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto. Notwithstanding the foregoing or anything in this Agreement to the contrary: (y) the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take; and (z) none of the actions described in the foregoing clauses (i) through (iv) of this Section 4.1(a), other than Ministerial Acts, may be taken by any individual Manager on behalf of the Company without first obtaining the approval required pursuant to Section 4.1(e) or (f).
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that (i) at least three (3) of the Managers constituting such a quorum must be a CCFI Manager, and (ii) if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority (which act of the majority must, for the avoidance of doubt, always include the vote of at least one (1) CCFI Manager) of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be seven (7) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
Trevin G. Workman
S. Todd Jensen
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the
Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 265 of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, manager or member of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the LLC Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security
Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the LLC Law, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the LLC Law. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the LLC Law, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Articles of Organization, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members managers, officers or members, a Manager, an Officer, or an employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the
provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 225(a) or (b) of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Alaska without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Articles of Organization, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Operating Agreement of Cash Central of Alaska, LLC as of the date first written above.
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EXHIBIT A
Form of Membership Interest Certificate
THE INTEREST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. ACCORDINGLY, SUCH INTEREST MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
THIS CERTIFICATE EVIDENCES AN INTEREST IN CASH CENTRAL OF ALASKA, LLC AND SHALL BE A SECURITY GOVERNED BY ARTICLE 8 (INVESTMENT SECURITIES) OR THE EQUIVALENT ARTICLE OR CHAPTER OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, CHAPTER 8 OF THE ALASKA UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT.
No.
CASH CENTRAL OF ALASKA, LLC
An Alaska Limited Liability Company
Membership Interest Certificate
This certifies that [ ] is the owner of the Membership Interest representing [ ]% membership equity interest in Cash Central of Alaska, LLC (the Company), subject to the terms of the Amended and Restated Operating Agreement of Cash Central of Alaska, LLC, made and entered into as of April 1, 2012, as the same may be amended from time to time in accordance with its terms (the Agreement).
This Membership Interest Certificate may be transferred by the lawful holders hereof only in accordance with the provisions of the Agreement and applicable law.
THIS SECURITY IS SUBJECT TO THE PROVISIONS OF THE AGREEMENT.
IN WITNESS WHEREOF, the Company has caused this Membership Interest Certificate to be issued this day of , .
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FOR VALUE RECEIVED, , the of the Company does hereby sell, assign and transfer unto:
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the Membership Interest evidenced by the within Membership Interest Certificate, and does hereby irrevocably constitute an appoint attorney-in-fact to transfer the said Membership Interest on the books of the within-named Company, with the full power of substitution in the premises.
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NOTICE: The signature to this assignment must correspond with the name as written upon the face of the Membership Interest Certificate in every particular, without alternation or enlargement or any change whatsoever.
Exhibit 3.65
LIMITED LIABILITY COMPANY ARTICLES OF ORGANIZATION 2 0 0 5 1 7 9 1 0 2 3 2 File # - FILED In the office of the Secretary of State of the State of California JUN 2 1 2005. This Space For Filing Use Only A $70.00 filing fee must accompany this form. IMPORTANT Read instructions before completing this form. ENTITY NAME (End the name with the words 'Limited Liability Company," Ltd. Liability Co., or the abbreviations LLC" or "L.L.C.) 1. NAME OF LIMITED LIABILITY COMPANY Direct Financial Solutions of California LLC PURPOSE (The following statement is required by statute and may not be altered ) 2. THE PURPOSE OF THE LIMITED LIABILITY COMPANY IS TO ENGAGE IN ANY LAWFUL ACT OR ACTIVITY FOR WHICH A LIMITED LIABILITY COMPANY MAY BE ORGANIZED UNDER THE BEVERLY-KILLEA LIMITED LIABILITY COMPANY ACT. INITIAL AGENT FOR SERVICE OF PROCESS (If the agent is an individual, the agent must reside in California and both Items 3 and 4 must be completed. If the agent is a corporation, the agent must have on file with the California Secretary of State a certificate pursuant to Corporations Code section 1505 and Item 3 must be completed (leave Item 4 blank). 3. NAME OF INITIAL AGENT FOR SERVICE OF PROCESS Pacific Corporate Title Services 4. IF AN INDIVIDUAL, ADDRESS OF INITIAL AGENT FOR SERVICE OF PROCESS IN CALIFORNIA CITY STATE ZIP CODECACA MANAGEMENT (Check only one) 5 THE LIMITED LIABILITY COMPANY WILL BE MANAGED BY: ONE MANAGER 1/ MORE THAN ONE MANAGER ALL LIMITED LIABILITY COMPANY MEMBER(S) ADDITIONAL INFORMATION 6. ADDITIONAL INFORMATION SET FORTH ON THE ATTACHED PAGES, IF ANY, IS INCORPORATED HEREIN BY THIS REFERENCE AND MADE A PART OF THIS CERTIFICATE. EXECUTION 7. I DECLARE I AM THE PERSON WHO EXECUTED THIS INSTRUMENT, WHICH EXECUTION IS MY ACT AND DEED. I .-- 6/16/2005 SIGNATURE OF 0RGANIZER DATE Trevin G. Workman - TYPE OR PRINT NAME OF ORGANIZER RETURN TO (Enter the name and the address of the person or firm to whom a copy of the filed document should be returned.) 8. NAME Trevin G. Workman FIRM Smurthwaite & Workman, LLC ADDRESS 503 W. 2600 S., Suite 200 CITY/STATE/ZIP Bountiful, UT 84010 LLC-1 (REV 03/2005) APPROVED BY SECRETARY OF STATE
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State of California Secretary of State LIMITED LIABILITY COMPANY CERTIFICATE OF AMENDMENT A $30.00 filing fee must accompany this form. instructions before completing this form. In the office of State of the State of California MAY 2 9 2007 This Space For Filing Use Only 1. SECRETARY OF STATE FILE NUMBER 200517910232 2. NAME OF LIMITED LIABILITY COMPANY Direct Financial Solutions of California LLC 3.COMPLETE ONLY THE SECTIONS WHERE INFORMATION IS BEING CHANGED. ADDITIONAL PAGES MAY BE ATTACHED IF NECESSARY. A. LIMITED LIABILITY COMPANY NAME (END THE NAME WITH THE WORDS LIMITED LIABILITY COMPANY." LTD LIABILITY CO OR THE ABBREVIATIONS LLC OR LLD) Cash Central of California, LLC B. THE LIMITED LIABILITY COMPANY WILL BE MANAGED BY (CHECK ONE); ONE MANAGER LIABILITY COMPANY MEMBER(S) C. AMENDMENT TO TEXT OF THE ARTICLES OF ORGANIZATION: D. OTHER MATTERS TO BE INCLUDED IN THIS CERTIFICATE MAY BE SET FORTH ON SEPARATE ATTACHED PAGES AND ARE MADE CERTIFICATE. OTHER MATTERS MAY INCLUDE A CHANGE IN THE LATEST DATE ON WHICH THE LIMITED LIABILITY COMPANY IS TO DISSOLVE OR ANY CHANGE IN THE EVENTS THAT WILL CAUSE THE DISSOLUTION. M ALL LIMITED 4. FUTURE EFFECTIVE DATE, IF ANY: MONTH DAY YEAR 5. NUMBER OF PAGES ATTACHED, 6. IF ANY: IT IS HEREBY THAT I AM THE PERSON WHO EXECUTED THIS INSTRUMENT, WHICH EXECUTION IS MY ACT AND DEED. SIGNATURE OF AUTHORIZED PERSON Trevin Workman, Manager DATE TYPE OR PRINT NAME AND TITLE OF AUTHORIZED PERSON RETURN TO: 1 NAME Trevin Workman FIRM Cash Central of California. LLC ADDRESS 84 East 2400 North CITY/STATE Logan, UT ZIP CODE 84341 SEC/STATE FORM LLC-2 (Rev. 03/2005) - FILING FEE $30 00 APPROVED BY SECRETARY OF STATE |
Exhibit 3.66
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
CASH CENTRAL OF CALIFORNIA, LLC
a California Limited Liability Company
Dated as of April 1, 2012
THE MEMBERSHIP INTERESTS OF CASH CENTRAL OF CALIFORNIA, LLC SHALL BE SECURITIES GOVERNED BY ARTICLE 8 (INVESTMENT SECURITIES) OR THE EQUIVALENT ARTICLE OR DIVISION OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, DIVISION 8 OF THE CALIFORNIA UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT. THE MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
CASH CENTRAL OF CALIFORNIA, LLC
This AMENDED AND RESTATED OPERATING AGREEMENT (this Agreement) of Cash Central of California, LLC (the Company) is made, adopted and entered into effective as of April 1, 2012, by Direct Financial Solutions, LLC, a Delaware limited liability company, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Amended and Restated Operating Agreement for Direct Financial Solutions of California, LLC (n/k/a Cash Central of California, LLC), effective as of March 31, 2006 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of the Beverly-Killea Limited Liability Company Act (California Corporations Code §§17000-17656) (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Articles of Organization of the Company (the Articles of Organization) were filed with the Secretary of State of California on June 21, 2005. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in an operating agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Cash Central of California, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 84 East 2400 North, North Logan, Utah 84341. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Articles of Organization in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Articles of Organization have been filed in the office of the Secretary of State of California in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of California.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than California in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in California shall be as set forth in the Articles of Organization. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in California shall be as set forth in the Articles of Organization. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Operating Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Articles of Organization has the meaning set forth in Section 1.1.
CCFI Manager means any of William E. Saunders, Jr., Kyle Hanson, Chad Streff, Michael Durbin or Bridgette Roman, or their respective alternates or successors, as appointed from time to time in accordance with Section 4.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.1.
Membership Interest Certificate has the meaning set forth in Section 2.2.
Ministerial Acts means (i) completing, executing and filing annual reports on behalf of the Company as required in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (ii) ordinary course acts required in connection with obtaining or maintaining the licensure of the Company in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (iii) executing any contract that by its terms is less than 12 months in length and represents a financial obligation of the Company of less than $5,000 in the aggregate, or (iv) any other act that is approved in writing by any CCFI Manager (other than the individual Manager requesting to take such other act).
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means Direct Financial Solutions, LLC, a Delaware limited liability company, or any Person that acquires all of the equity interests of the Company from Direct Financial Solutions, LLC.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST CERTIFICATE
2.1 Capital Contribution; Membership Interest. The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement, as evidenced by a Membership Interest Certificate (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
2.2 Membership Interest Certificate. The Membership Interest of the Sole Member will be evidenced by a certificate of limited liability company interest issued by the Company in substantially the form attached as Exhibit A to this Agreement (the Membership Interest Certificate). The Membership Interest shall be a security governed by Article 8 (Investment Securities) or the equivalent Article or Division of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Division 8 of the California Uniform Commercial Code, as currently in effect. Each Membership Interest Certificate shall bear the following legend:
This certificate evidences an interest in Cash Central of California, LLC and shall be a security governed by Article 8 (Investment Securities) or the equivalent Article or Division of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Division 8 of the California Uniform Commercial Code, as currently in effect.
This Section 2.2 shall not be amended and no such purported amendment to this Section 2.2 shall be effective until, to the extent necessary, all outstanding Membership Interest Certificates have been surrendered for re-issuance with any conforming changes required as a result of such amendment.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax
purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto. Notwithstanding the foregoing or anything in this Agreement to the contrary: (y) the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take; and (z) none of the actions described in the foregoing clauses (i) through (iv) of this Section 4.1(a), other than Ministerial Acts, may be taken by any individual Manager on behalf of the Company without first obtaining the approval required pursuant to Section 4.1(e) or (f).
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that (i) at least three (3) of the Managers constituting such a quorum must be a CCFI Manager, and (ii) if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority (which act of the majority must, for the avoidance of doubt, always include the vote of at least one (1) CCFI Manager) of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be seven (7) Managers, which Managers shall be as follows:
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William E. Saunders, Jr. |
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Kyle Hanson |
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Chad Streff |
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Michael Durbin |
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Bridgette Roman |
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Trevin G. Workman |
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S. Todd Jensen |
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the
Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Sections 17158(a) and 17101(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, manager or member of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the LLC Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security
Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the LLC Law, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the LLC Law. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the LLC Law, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Articles of Organization, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members managers, officers or members, a Manager, an Officer, or an employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the
provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Articles of Organization, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Operating Agreement of Cash Central of California, LLC as of the date first written above.
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DIRECT FINANCIAL SOLUTIONS, LLC | |
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By: |
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Name: |
Bridgette C. Roman |
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Title: |
Manager |
EXHIBIT A
Form of Membership Interest Certificate
THE INTEREST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. ACCORDINGLY, SUCH INTEREST MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
THIS CERTIFICATE EVIDENCES AN INTEREST IN CASH CENTRAL OF CALIFORNIA, LLC AND SHALL BE A SECURITY GOVERNED BY ARTICLE 8 (INVESTMENT SECURITIES) OR THE EQUIVALENT ARTICLE OR DIVISION OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, DIVISION 8 OF THE CALIFORNIA UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT.
No.
CASH CENTRAL OF CALIFORNIA, LLC
A California Limited Liability Company
Membership Interest Certificate
This certifies that [ ] is the owner of the Membership Interest representing [ ]% membership equity interest in Cash Central of California, LLC (the Company), subject to the terms of the Amended and Restated Operating Agreement of Cash Central of California, LLC, made and entered into as of April 1, 2012, as the same may be amended from time to time in accordance with its terms (the Agreement).
This Membership Interest Certificate may be transferred by the lawful holders hereof only in accordance with the provisions of the Agreement and applicable law.
THIS SECURITY IS SUBJECT TO THE PROVISIONS OF THE AGREEMENT.
IN WITNESS WHEREOF, the Company has caused this Membership Interest Certificate to be issued this day of , .
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CASH CENTRAL OF CALIFORNIA, LLC | |
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Name: |
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Manager |
FOR VALUE RECEIVED, , the of the Company does hereby sell, assign and transfer unto:
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(print or type name of assignee) |
the Membership Interest evidenced by the within Membership Interest Certificate, and does hereby irrevocably constitute an appoint attorney-in-fact to transfer the said Membership Interest on the books of the within-named Company, with the full power of substitution in the premises.
Dated as of: |
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Name: |
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In presence of: |
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NOTICE: The signature to this assignment must correspond with the name as written upon the face of the Membership Interest Certificate in every particular, without alternation or enlargement or any change whatsoever.
Exhibit 3.67
State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 08:00 AM 06/21/2005 |
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FILED 08:00 AM 06/21/2005 |
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SRV 050516149 - 3988505 FILE |
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CERTIFICATE OF FORMATION
OF
DIRECT FINANCIAL SOLUTIONS OF DELAWARE LLC
BY AGREEMENT, the undersigned Organizer, on behalf of the Members who desire to form a limited liability company pursuant to the Limited Liability Company Act of Delaware (hereinafter referred to as the Act), hereby set forth the following Certificate of Formation for such limited liability company (hereinafter referred to as the Company):
ARTICLE 1 NAME
The name of the Company is Direct Financial Solutions of Delaware LLC.
ARTICLE 2 PURPOSE
The purposes for which the Company is organized are to engage in any lawful business activities for which limited liability companies may be organized pursuant to the Act.
ARTICLE 3 REGISTERED OFFICE AND AGENT
The name of the original Registered Agent of the Company is Registered Agents Legal Services, LLC, located at 1220 N. Market Street, Suite 806, Wilmington, Delaware 19801.
ARTICLE 4 MANAGEMENT
The management of the Company shall be vested in one or more Managers. The name and street address of the initial Managers, who will serve until a successor is elected, is as follows:
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ADDRESS |
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Todd Jensen |
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89 East 1400 North |
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Logan, Utah 84341 |
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Mari-Catherine Vinton |
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89 East 1400 North |
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Logan, Utah 84341 |
CERTIFICATE OF FORMATION
ARTICLE 5 AUTHORITY
No Member shall have authority to act on behalf of or bind the Company without the written approval of the Manager. Only the Manager of the Company, as indicated above, or successor(s) as Manager, and those given authority by such written approval may sign contracts or other instruments on behalf of the Company.
ARTICLE 6 LIABILITY
Neither the Members, Managers, Employees, nor Agents of the Company shall be personally liable for any debt, obligation, or liability of the Company nor of any other Member, Manager, Employee, or Agent of the Company. Neither shall the Company be liable for any debts, obligations, or liabilities of any Member, Manager, Employee, or Agent.
IN WITNESS WHEREOF, the Organizer has hereunto executed this Certificate of Formation this 16th day of June, 2005.
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ORGANIZER: |
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/s/ Trevin G. Workman |
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Trevin G. Workman |
CERTIFICATE OF FORMATION
STATE OF DELAWARE
CERTIFICATE OF AMENDMENT
1. Name of Limited Liability Company: Direct Financial Solutions of Delaware LLC
2. The Certificate of Formation of the limited liability company is hereby amended as follows: ARTICLE 4. The Address for the company is 89 East 24080 North Logan, Utah 84341.
IN WITNESS WHEREOF, the undersigned have executed this Certificate on the 2 day of April, A.D. 2006.
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By: |
/s/ Trevin G. Workman |
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Authorized Person(s) | |
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Name: |
Trevin G. Workman - Manager |
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Print or Type |
State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 08:00 AM 05/02/2006 |
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FILED 08:00 AM 05/02/2006 |
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SRV 060411047 - 3988505 FILE |
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State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 08:00 AM 05/25/2007 |
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FILED 08:00 AM 05/25/2007 |
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SRV 070628771 - 3988505 FILE |
STATE OF DELAWARE
CERTIFICATE OF AMENDMENT
1. Name of Limited Liability Company: Direct Financial Solutions of Delaware LLC
2. The Certificate of Formation of the limited liability company is hereby amended as follows: The name of the Limited Liability Company is changed from Direct Financial Solutions of Delaware LLC to Cash Central of Delaware, LLC.
IN WITNESS WHEREOF, the undersigned have executed this Certificate on the 15th day of May, A.D. 2007.
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/s/ Trevin G. Workman | |
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Trevin G. Workman | |
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Exhibit 3.68
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
CASH CENTRAL OF DELAWARE, LLC
a Delaware Limited Liability Company
Dated as of April 1, 2012
THE MEMBERSHIP INTERESTS OF CASH CENTRAL OF DELAWARE, LLC SHALL BE SECURITIES GOVERNED BY ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, ARTICLE 8 OF THE DELAWARE UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT. THE MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
CASH CENTRAL OF DELAWARE, LLC
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of Cash Central of Delaware, LLC (the Company) is made, adopted and entered into effective as of April 1, 2012, by Direct Financial Solutions, LLC, a Delaware limited liability company, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Amended and Restated Operating Agreement for Direct Financial Solutions of Delaware, LLC (n/k/a Cash Central of Delaware, LLC), effective as of March 31, 2006 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 18 of the Delaware Corporation Laws Annotated (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Delaware on June 21, 2005. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in a limited liability company agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Cash Central of Delaware, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 84 East 2400 North, North Logan, Utah 84341. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Delaware in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Delaware in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Limited Liability Company Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
CCFI Manager means any of William E. Saunders, Jr., Kyle Hanson, Chad Streff, Michael Durbin or Bridgette Roman, or their respective alternates or successors, as appointed from time to time in accordance with Section 4.1.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.1.
Membership Interest Certificate has the meaning set forth in Section 2.2.
Ministerial Acts means (i) completing, executing and filing annual reports on behalf of the Company as required in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (ii) ordinary course acts required in connection with obtaining or maintaining the licensure of the Company in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (iii) executing any contract that by its terms is less than 12 months in length and represents a financial obligation of the Company of less than $5,000 in the aggregate, or (iv) any other act that is approved in writing by any CCFI Manager (other than the individual Manager requesting to take such other act).
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means Direct Financial Solutions, LLC, a Delaware limited liability company, or any Person that acquires all of the equity interests of the Company from Direct Financial Solutions, LLC.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST CERTIFICATE
2.1 Capital Contribution; Membership Interest. The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement, as evidenced by a Membership Interest Certificate (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
2.2 Membership Interest Certificate. The Membership Interest of the Sole Member will be evidenced by a certificate of limited liability company interest issued by the Company in substantially the form attached as Exhibit A to this Agreement (the Membership Interest Certificate). The Membership Interest shall be a security governed by Article 8 of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Article 8 of the Delaware Uniform Commercial Code, as currently in effect. Each Membership Interest Certificate shall bear the following legend:
This certificate evidences an interest in Cash Central of Delaware, LLC and shall be a security governed by Article 8 of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Article 8 of the Delaware Uniform Commercial Code, as currently in effect.
This Section 2.2 shall not be amended and no such purported amendment to this Section 2.2 shall be effective until, to the extent necessary, all outstanding Membership Interest Certificates have been surrendered for re-issuance with any conforming changes required as a result of such amendment.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers
shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto. Notwithstanding the foregoing or anything in this Agreement to the contrary: (y) the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take; and (z) none of the actions described in the foregoing clauses (i) through (iv) of this Section 4.1(a), other than Ministerial Acts, may be taken by any individual Manager on behalf of the Company without first obtaining the approval required pursuant to Section 4.1(e) or (f).
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that (i) at least three (3) of the Managers constituting such a quorum must be a CCFI Manager, and (ii) if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority (which act of the majority must, for the avoidance of doubt, always include the vote of at least one (1) CCFI Manager) of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be seven (7) Managers, which Managers shall be as follows:
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William E. Saunders, Jr. |
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Kyle Hanson |
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Chad Streff |
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Michael Durbin |
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Bridgette Roman |
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Trevin G. Workman |
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S. Todd Jensen |
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as
generally pertain to their respective offices. Each Officer shall hold office at the pleasure of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 18-303(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, manager or member of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the Delaware General Corporation Law as if the Company were a Delaware corporation, as the same
exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the Delaware General Corporation Law as if the Company were a Delaware corporation, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable
standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Certificate of Formation, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members managers, officers or members, a Manager, an Officer, or an employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 18-304 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Limited Liability Company Agreement of Cash Central of Delaware, LLC as of the date first written above.
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EXHIBIT A
Form of Membership Interest Certificate
THE INTEREST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. ACCORDINGLY, SUCH INTEREST MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
THIS CERTIFICATE EVIDENCES AN INTEREST IN CASH CENTRAL OF DELAWARE, LLC AND SHALL BE A SECURITY GOVERNED BY ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, ARTICLE 8 OF THE DELAWARE UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT.
No.
CASH CENTRAL OF DELAWARE, LLC
A Delaware Limited Liability Company
Membership Interest Certificate
This certifies that [ ] is the owner of the Membership Interest representing [ ]% membership equity interest in Cash Central of Delaware, LLC (the Company), subject to the terms of the Amended and Restated Limited Liability Company Agreement of Cash Central of Delaware, LLC, made and entered into as of April 1, 2012, as the same may be amended from time to time in accordance with its terms (the Agreement).
This Membership Interest Certificate may be transferred by the lawful holders hereof only in accordance with the provisions of the Agreement and applicable law.
THIS SECURITY IS SUBJECT TO THE PROVISIONS OF THE AGREEMENT.
IN WITNESS WHEREOF, the Company has caused this Membership Interest Certificate to be issued this day of , .
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FOR VALUE RECEIVED, , the of the Company does hereby sell, assign and transfer unto:
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the Membership Interest evidenced by the within Membership Interest Certificate, and does hereby irrevocably constitute an appoint attorney-in-fact to transfer the said Membership Interest on the books of the within-named Company, with the full power of substitution in the premises.
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NOTICE: The signature to this assignment must correspond with the name as written upon the face of the Membership Interest Certificate in every particular, without alternation or enlargement or any change whatsoever.
Exhibit 3.69
[LOGO] FILED 05/25/2007 08:50AM Business Registration Division DEPT. OF COMMERCE AND CONSUMER AFFAIRS State of Hawaii STATE OF HAWAII DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS Business Registration Division 335 Merchant Street Mailing Address: P.O. Box 40, Honolulu, Hawaii 96810 Phone No. (808) 586-2727 FORM LLC-2 12/2006 ARTICLES OF AMENDMENT TO CHANGE LIMITED LIABILITY COMPANY NAME 39560C5 (Section 428-204, Hawaii Revised Statutes)PLEASE TYPE OR PRINT LEGIBLY IN BLACK INK The undersigned, for the purpose of amending the Articles of Organization, do hereby certify as follows: 1. The present name of the limited liability company is: Direct Financial Solutions of Hawaii LLC 2. The name of the limited liability company is changed to: Cash Central of Hawaii, LLC 3. The amendment was adopted with the consent of all, or a lesser number of, the members of the limited liability company as authorized by the operating agreement. We certify, under the penalties set forth in the Hawaii Uniform Limited Liability Company Act, that we have read the above statements and that the same are true and correct. Signed this 15th day of May, 2007 Trevin Workman, Manager (Type/Print Name & Title) (Type/Print Name & Title) (Signature) (Signature) Instructions: Articles must be typewritten or printed in black ink, and must be legible. The articles must be signed and certified by at least one manager of a manager-managed company or by at least one member of a member-managed company. All signatures must be in black ink. Submit original articles together with the appropriate fee. Line 1. State the full name of the limited liability company prior to the change. Line 2. State the new name of the limited liability company. The company name must contain the words Limited Liability Company, or the abbreviation, L.L.C. or LLC. Filing Fees: Filing fee ($25.00) is not refundable. Make checks payable to DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS. Dishonored Check ($15 fee plus interest charge). For any questions call (808) 586-2727. Neighbor islands may call the following numbers followed by 6-2727 and the # sign: Kauai 274-3141; Maui 984-2400; Hawaii 974-4000, Lanai & Molokai 1-800-468-4644 (toll free). Fax: (808) 586-2733 Email Address: breg@dcca.hawaii.gov |
[LOGO] FILED 09/09/2005 09:23 AM Business Registration Division DEPT. OF COMMERCE AND CONSUMER AFFAIRS State of Hawaii STATE OF HAWAII DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS Business Registration Division 335 Merchant Street Mailing Address: P.O. Box 40, Honolulu, Hawaii 96810 FORM LLC-1 1/2005 ARTICLES OF ORGANIZATION FOR LIMITED LIABILITY COMPANY (Section 428-203. Hawaii Revised Statutes) PLEASE TYPE OR PRINT LEGIBLY IN BLACK INK The undersigned, for the purpose of forming a limited liability company under the laws of the State of Hawaii, do hereby make and execute these Articles of Organization:I The name of the company shall be: Direct Financial Solutions of Hawaii LLC (The name must contam the words Limited Liability Company or the abbreviation LLC or LLC) II The mailing address of the initial principal office is: 1188 Bishop Street Suite 2212, Honolulu, HI 96813 III The company shall have and continuously maintain in the State of Hawaii an agent and street address of the agent for service of process on the company. The agent may be an individual resident of Hawaii. a domestic entity. or a foreign entity authorized to transact or conduct affairs in this State, whose business office is identical with the registered office. a. The name of the companys initial agent for service of process is. Nancy Akamu (Name of Registered Agent) (State or Country) b. The street address of the initial registered office in this State is: 1188 Bishop Street Suite 2212, Honolulu, HI 96813 IV The name and address of each organizer is: Richard G. Smurthwaite 503 West 2600 South, Suite 200 Bountiful, UT 84010 |
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[LOGO] FORM LLC-1 1/2005 The period of duration is (check one). At-will For a specified term to expire on: (Month Day Year) VI The company is (check one): Manager-managed, and the names and addresses of the initial managers are listed below. (Number of initial members: 1) Member-managed, and the names and addresses of the initial members are listed below. Trevin G, Workman 89 East 1400 North, Logan, UT 84341 VII The members of the company (check one). Shall not be liable for the debts, obligations and liabilities of the company. Shall be liable for some or all, as stated below, of the specified debts, obligations and liabilities of the company, and have consented in writing to the adoption of this provision or to be bound by this provision. We certify, under the penalties set forth in the Hawaii Uniform Limited Liability Company Act, that we have read the above statements and that the same are true and correct. Signed this 12th day of August 2005 Richard G. Smurthwaite (Type/Print Name of Organizer) Type/Print Name of Organizer (Signature of Organizer) (Signature of Organizer) SEE INSTRUCTIONS PAGE. The articles must be signed and certified by at least one organizer of the company. |
Exhibit 3.70
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
CASH CENTRAL OF HAWAII, LLC
a Hawaii Limited Liability Company
Dated as of June 19, 2012
THE MEMBERSHIP INTERESTS OF CASH CENTRAL OF HAWAII, LLC SHALL BE SECURITIES GOVERNED BY ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, ARTICLE 8 OF THE HAWAII UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT. THE MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
CASH CENTRAL OF HAWAII, LLC
This AMENDED AND RESTATED OPERATING AGREEMENT (this Agreement) of Cash Central of Hawaii, LLC (the Company) is made, adopted and entered into effective as of June 19, 2012, by Direct Financial Solutions, LLC, a Delaware limited liability company, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Amended and Restated Operating Agreement for Cash Central of Hawaii, LLC, effective as of April 1, 2012 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of the Uniform Limited Liability Company Act (Hawaii Revised Statutes Title 23A, Chapter 428) (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Articles of Organization of the Company (the Articles of Organization) were filed with the State of Hawaii Department of Commerce and Consumer Affairs, Business Registration Division on September 9, 2005. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in an operating agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Cash Central of Hawaii, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 84 East 2400 North, North Logan, Utah 84341. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Articles of Organization in accordance with the LLC Law and shall continue in existence at will, unless sooner dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Articles of Organization have been filed with the State of Hawaii Department of Commerce and Consumer Affairs, Business Registration Division in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Hawaii.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Hawaii in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Hawaii shall be as set forth in the Articles of Organization. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Hawaii shall be as set forth in the Articles of Organization. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Operating Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Articles of Organization has the meaning set forth in Section 1.1.
CCFI Manager means any of William E. Saunders, Jr., Kyle Hanson, Chad Streff, Michael Durbin or Bridgette Roman, or their respective alternates or successors, as appointed from time to time in accordance with Section 4.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.1.
Membership Interest Certificate has the meaning set forth in Section 2.2.
Ministerial Acts means (i) completing, executing and filing annual reports on behalf of the Company as required in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (ii) ordinary course acts required in connection with obtaining or maintaining the licensure of the Company in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (iii) executing any contract that by its terms is less than 12 months in length and represents a financial obligation of the Company of less than $5,000 in the aggregate, or (iv) any other act that is approved in writing by any CCFI Manager (other than the individual Manager requesting to take such other act).
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means Direct Financial Solutions, LLC, a Delaware limited liability company, or any Person that acquires all of the equity interests of the Company from Direct Financial Solutions, LLC.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST CERTIFICATE
2.1 Capital Contribution; Membership Interest. The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement, as evidenced by a Membership Interest Certificate (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
2.2 Membership Interest Certificate. The Membership Interest of the Sole Member will be evidenced by a certificate of limited liability company interest issued by the Company in substantially the form attached as Exhibit A to this Agreement (the Membership Interest Certificate). The Membership Interest shall be a security governed by Article 8 of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Article 8 of the Hawaii Uniform Commercial Code, as currently in effect. Each Membership Interest Certificate shall bear the following legend:
This certificate evidences an interest in Cash Central of Hawaii, LLC and shall be a security governed by Article 8 of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Article 8 of the Hawaii Uniform Commercial Code, as currently in effect.
This Section 2.2 shall not be amended and no such purported amendment to this Section 2.2 shall be effective until, to the extent necessary, all outstanding Membership Interest Certificates have been surrendered for re-issuance with any conforming changes required as a result of such amendment.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers
shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto. Notwithstanding the foregoing or anything in this Agreement to the contrary: (y) the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take; and (z) none of the actions described in the foregoing clauses (i) through (iv) of this Section 4.1(a), other than Ministerial Acts, may be taken by any individual Manager on behalf of the Company without first obtaining the approval required pursuant to Section 4.1(e) or (f).
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that (i) at least three (3) of the Managers constituting such a quorum must be a CCFI Manager, and (ii) if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority (which act of the majority must, for the avoidance of doubt, always include the vote of at least one (1) CCFI Manager) of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be seven (7) Managers, which Managers shall be as follows:
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S. Todd Jensen |
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the
Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 428-303(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, manager or member of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the LLC Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security
Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the LLC Law, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the LLC Law. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the LLC Law, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Articles of Organization, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members managers, officers or members, a Manager, an Officer, or an employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the
provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 428-601(6) of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Hawaii without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Articles of Organization, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Operating Agreement of Cash Central of Hawaii, LLC as of the date first written above.
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EXHIBIT A
Form of Membership Interest Certificate
THE INTEREST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. ACCORDINGLY, SUCH INTEREST MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
THIS CERTIFICATE EVIDENCES AN INTEREST IN CASH CENTRAL OF HAWAII, LLC AND SHALL BE A SECURITY GOVERNED BY ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, ARTICLE 8 OF THE HAWAII UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT.
No.
CASH CENTRAL OF HAWAII, LLC
A Hawaii Limited Liability Company
Membership Interest Certificate
This certifies that [ ] is the owner of the Membership Interest representing [ ]% membership equity interest in Cash Central of Hawaii, LLC (the Company), subject to the terms of the Amended and Restated Operating Agreement of Cash Central of Hawaii, LLC, made and entered into as of April 1, 2012, as the same may be amended from time to time in accordance with its terms (the Agreement).
This Membership Interest Certificate may be transferred by the lawful holders hereof only in accordance with the provisions of the Agreement and applicable law.
THIS SECURITY IS SUBJECT TO THE PROVISIONS OF THE AGREEMENT.
IN WITNESS WHEREOF, the Company has caused this Membership Interest Certificate to be issued this day of , .
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FOR VALUE RECEIVED, , the of the Company does hereby sell, assign and transfer unto:
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the Membership Interest evidenced by the within Membership Interest Certificate, and does hereby irrevocably constitute an appoint attorney-in-fact to transfer the said Membership Interest on the books of the within-named Company, with the full power of substitution in the premises.
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NOTICE: The signature to this assignment must correspond with the name as written upon the face of the Membership Interest Certificate in every particular, without alternation or enlargement or any change whatsoever.
Exhibit 3.71
ARTICLES OF ORGANIZATION LIMITED LIABILITY COMPANY (Instructions on back of application) FILED EFFECTIVE 1. The name of the limited liability company is: Direct Financial Solutions of Idaho, LLC 2. The street address of the initial registered office is: 5527 Kendall Street, Boise, Idaho 83706 and the name of the initial registered agent at the above address is: Record Search & information Services, Inc. 3. The mailing address for future correspondence is: 89 East 1400 North, Logan, Utah 84341 4. Management of the limited liability company will be vested in: Manager(s) or Member(s) (please check the appropriate box) 5. If management is to be vested in one or more manager(s), list the name(s) and address(es) of at least one initial manager. If management is to be vested in the member(s), list the name(s) and address(es) of at least one initial member. Name Address Todd Jensen 89 East 1400 North, Logan, Utah 84341 Mari-Catherine Vinton 89 East 1400 North, Logan, Utah 84341 6. Signature of at least one person responsible for forming the limited liability company: Signature: /s/ Todd Jensen Secretary of State use only Typed Name: Todd Jensen Capacity: Manager IDAHO SECRETARY OF STATE 06/27/2005 05:00 Signature: /s/ Mari-Catherine Vinton CK: 1859 CT: 198884 BH: 818269 Typed Name: Mari-Catherine Vinton 1 P 108.88 = 188.88 ORGAN LLC 2 Capacity: Manager |
FILED EFFECTIVE ARTICLES OF AMENDMENT TO 2007 MAY 23 AM 8:20 ARTICLES OF ORGANIZATION LIMITED LIABILITY COMPANY (Instructions on back of application) SECRETARY OF STATE STATE OF IDAHO 1. The name of the limited liability company is: Direct Financial Solutions of Idaho LLC If the LLC has been administratively dissolved and the name is no longer available for use, #3 below must include an amendment of name. 2. The date the articles of organization were filed was: 6/27/2005 COMPLETE ONLY THE APPLICABLE ITEMS 3. The name of the limited liability company is amended to read: Cash Central of Idaho, LLC 4. The management of the limited liability company shall henceforth be vested in: Manager(s) Members 5. The information on the managers/members shall be amended as follows: Name Address Add Delete Other 6. Signature of atleast one manager, if any, or at least one member. Signature: /s/ Trevin Workman Secretary of State use only Typed Name: Trevin Workman Capacity: Manager IDAHO SECRETARY OF STATE Signature: 05/23/2007 05:00 Typed Name: CK: 5661 CT: 191388 DH: 105542 Capacity: 1: 38.08 = 30.08 ORGAN AMEN 2 |
Exhibit 3.72
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
CASH CENTRAL OF IDAHO, LLC
an Idaho Limited Liability Company
Dated as of April 1, 2012
THE MEMBERSHIP INTERESTS OF CASH CENTRAL OF IDAHO, LLC SHALL BE SECURITIES GOVERNED BY ARTICLE 8 (INVESTMENT SECURITIES) OR THE EQUIVALENT ARTICLE OR CHAPTER OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, CHAPTER 8 OF THE IDAHO UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT. THE MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
CASH CENTRAL OF IDAHO, LLC
This AMENDED AND RESTATED OPERATING AGREEMENT (this Agreement) of Cash Central of Idaho, LLC (the Company) is made, adopted and entered into effective as of April 1, 2012, by Direct Financial Solutions, LLC, a Delaware limited liability company, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Amended and Restated Operating Agreement for Direct Financial Solutions of Idaho, LLC (n/k/a Cash Central of Idaho, LLC), effective as of March 31, 2006 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of the Idaho Uniform Limited Liability Company Law (Title 30, Chapter 6 of Idaho Statutes) (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Organization of the Company (the Certificate of Organization) was filed with the Secretary of State of Idaho on June 27, 2005. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in an operating agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Cash Central of Idaho, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 84 East 2400 North, North Logan, Utah 84341. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Organization in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Organization has been filed in the office of the Secretary of State of Idaho in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Idaho.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Idaho in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Idaho shall be as set forth in the Certificate of Organization. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Idaho shall be as set forth in the Certificate of Organization. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Operating Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
CCFI Manager means any of Michael Durbin or Bridgette Roman, or their respective alternates or successors, as appointed from time to time in accordance with Section 4.1.
Certificate of Organization has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.1.
Membership Interest Certificate has the meaning set forth in Section 2.2.
Ministerial Acts means (i) completing, executing and filing annual reports on behalf of the Company as required in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (ii) ordinary course acts required in connection with obtaining or maintaining the licensure of the Company in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (iii) executing any contract that by its terms is less than 12 months in length and represents a financial obligation of the Company of less than $5,000 in the aggregate, or (iv) any other act that is approved in writing by any CCFI Manager (other than the individual Manager requesting to take such other act).
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means Direct Financial Solutions, LLC, a Delaware limited liability company, or any Person that acquires all of the equity interests of the Company from Direct Financial Solutions, LLC.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST CERTIFICATE
2.1 Capital Contribution; Membership Interest. The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement, as evidenced by a Membership Interest Certificate (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
2.2 Membership Interest Certificate. The Membership Interest of the Sole Member will be evidenced by a certificate of limited liability company interest issued by the Company in substantially the form attached as Exhibit A to this Agreement (the Membership Interest Certificate). The Membership Interest shall be a security governed by Article 8 (Investment Securities) or the equivalent Article or Chapter of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Chapter 8 of the Idaho Uniform Commercial Code, as currently in effect. Each Membership Interest Certificate shall bear the following legend:
This certificate evidences an interest in Cash Central of Idaho, LLC and shall be a security governed by Article 8 (Investment Securities) or the equivalent Article or Chapter of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Chapter 8 of the Idaho Uniform Commercial Code, as currently in effect.
This Section 2.2 shall not be amended and no such purported amendment to this Section 2.2 shall be effective until, to the extent necessary, all outstanding Membership Interest Certificates have been surrendered for re-issuance with any conforming changes required as a result of such amendment.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax
purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto. Notwithstanding the foregoing or anything in this Agreement to the contrary: (y) the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take; and (z) none of the actions described in the foregoing clauses (i) through (iv) of this Section 4.1(a), other than Ministerial Acts, may be taken by any individual Manager on behalf of the Company without first obtaining the approval required pursuant to Section 4.1(e) or (f).
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that (i) at least two (2) of the Managers constituting such a quorum must be a CCFI Manager, and (ii) if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority (which act of the majority must, for the avoidance of doubt, always include the vote of at least one (1) CCFI Manager) of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be four (4) Managers, which Managers shall be as follows:
Michael Durbin
Bridgette Roman
Trevin G. Workman
S. Todd Jensen
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 30-6-304 of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, manager or member of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the LLC Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to
Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the LLC Law, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the LLC Law. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the LLC Law, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right
which any Person may have or hereafter acquire under any law, the Certificate of Organization, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members managers, officers or members, a Manager, an Officer, or an employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 30-6-602 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Idaho without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Organization, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Operating Agreement of Cash Central of Idaho, LLC as of the date first written above.
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EXHIBIT A
Form of Membership Interest Certificate
THE INTEREST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. ACCORDINGLY, SUCH INTEREST MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
THIS CERTIFICATE EVIDENCES AN INTEREST IN CASH CENTRAL OF IDAHO, LLC AND SHALL BE A SECURITY GOVERNED BY ARTICLE 8 (INVESTMENT SECURITIES) OR THE EQUIVALENT ARTICLE OR CHAPTER OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, CHAPTER 8 OF THE IDAHO UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT.
No.
CASH CENTRAL OF IDAHO, LLC
An Idaho Limited Liability Company
Membership Interest Certificate
This certifies that [ ] is the owner of the Membership Interest representing [ ]% membership equity interest in Cash Central of Idaho, LLC (the Company), subject to the terms of the Amended and Restated Operating Agreement of Cash Central of Idaho, LLC, made and entered into as of April 1, 2012, as the same may be amended from time to time in accordance with its terms (the Agreement).
This Membership Interest Certificate may be transferred by the lawful holders hereof only in accordance with the provisions of the Agreement and applicable law.
THIS SECURITY IS SUBJECT TO THE PROVISIONS OF THE AGREEMENT.
IN WITNESS WHEREOF, the Company has caused this Membership Interest Certificate to be issued this day of , .
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FOR VALUE RECEIVED, , the of the Company does hereby sell, assign and transfer unto:
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the Membership Interest evidenced by the within Membership Interest Certificate, and does hereby irrevocably constitute an appoint attorney-in-fact to transfer the said Membership Interest on the books of the within-named Company, with the full power of substitution in the premises.
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NOTICE: The signature to this assignment must correspond with the name as written upon the face of the Membership Interest Certificate in every particular, without alternation or enlargement or any change whatsoever.
Exhibit 3.73
Contact Information Kansas Secretary of State Ron Thornburgh Memorial Hall, 1st Floor Topeka, KS 66612-1594 (785) 296-4564 kssos@kssos.org www.kssos.org KANSAS SECRETARY OF STATE Kansas Limited Liability Company DL All Information must be completed or this document will not be accepted for filling. 1. Name of the limited liability company (must include limited liability company, limited company, LLC or LC): Direct Financial Solutions of Kansas LLC 2. Name and address of resident agent and registered office in Kansas: Address must be a street address. A post office box is unacceptable. 06-20-2005 051 0955 3800760 14:32:00 $165.00 01 PP 01143647 Kelly S. Hodge 223 West 6th Junction City Kansas 66441 Name Street address City State Zip PROFESSIONAL LIMITED LIABILITY COMPANIES ONLY:(See instruction below) If the LLC is organized to excercise the powers of a professional association, state the professional purpose of the LLC: If the LLC is organized to excercise powers of a professional association or corporation, the LLC must file a certificate from the licensing board of the profession, stating that each LLC member is duly licensed to practice that profession and that the proposed company name has been approved. The following professions are authorized to create a professional LLC: architect, attorney-at-law, certified public accountant, chiropractor, clinical marriage and family therapist, clinical professional counselor, clinical psychotherapist, dentist, engineer, geologist, land surveyor, landscape architect, licensed psychologist, occupational therapist, optometrist, osteopathic physician or surgeon, pharmacist, physician, physician assistant, surgeon or doctor of medicine, podiatrist, real estate broker or salesperson, registered physical therapist, registered professional nurse, specialist in clinical social work, veterinarian. I declare under penalty of perjury under the laws of the state of Kansas that the foregoing is true and correct. Executed on the 18th of June 2005 Day Month Year Organizer LLC Mailing Information Where would you like the Secretary of States office to send official mail? If no address is given, the mail will be sent to the LLCs registered office. 89 East 1400 North Logan Utah 84341 USA Street address City State Zip Country The mail should be addressed to the following named individual:Todd Jensen Instruction Submit this form with the $165 filing fee. Notice: There is a $25 service fee for all returned checks. Articles of Organization 51 K.S.A 17-7673 |
Contact Information Kansas Secretary of State Ron Thornburgh Memorial Hall, 1st Floor 120 S.W. 10th Avenue Topeka, KS 66612-1594 (785) 296-4564 Kssos@kssos.org www.kssos.org KANSAS SECRETARY OF STATE Kansas Limited Liability Company CL Certificate of Amendment 53-14 All Information must be completed or this document will not be accepted for filing. 1.Name of the limited liability company: Direct Financial Solutions of Kansas LLC Name must match the name on record with the secretary of state 2. The limited liability company amends its articles of organization as follows: 05-23-2007 2850 01 053 014 AA FILED: 3800760 11:29:00 $35.00 1 FILED BY KS 505 01848395 The name of the Limited Liability Company is Changed from Direct Financial Solutions of Kansas LLC to Cash Central of Kansas, LLC. I declare under penalty of perjury under the laws of the state of Kansas that the foregoing is true and correct. Exceuted on the 15th of May 2007 Day Month Year Authorized person Instruction Submit this form with the $35 filing fee. Notice: There is a$25 service fee for all returned checks. |
Exhibit 3.74
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
CASH CENTRAL OF KANSAS, LLC
a Kansas Limited Liability Company
Dated as of April 1, 2012
THE MEMBERSHIP INTERESTS OF CASH CENTRAL OF KANSAS, LLC SHALL BE SECURITIES GOVERNED BY ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, ARTICLE 8 OF THE KANSAS UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT. THE MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
CASH CENTRAL OF KANSAS, LLC
This AMENDED AND RESTATED OPERATING AGREEMENT (this Agreement) of Cash Central of Kansas, LLC (the Company) is made, adopted and entered into effective as of April 1, 2012, by Direct Financial Solutions, LLC, a Delaware limited liability company, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Amended and Restated Operating Agreement for Direct Financial Solutions of Kansas, LLC (n/k/a Cash Central of Kansas, LLC), effective as of March 31, 2006 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of the Kansas Revised Limited Liability Company Act (Chapter 17, Article 76 of Kansas Statutes Annotated) (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Articles of Organization of the Company (the Articles of Organization) were filed with the Secretary of State of Kansas on June 20, 2005. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in an operating agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Cash Central of Kansas, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 84 East 2400 North, North Logan, Utah 84341. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Articles of Organization in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Articles of Organization have been filed in the office of the Secretary of State of Kansas in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Kansas.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Kansas in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Kansas shall be as set forth in the Articles of Organization. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Kansas shall be as set forth in the Articles of Organization. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Operating Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Articles of Organization has the meaning set forth in Section 1.1.
CCFI Manager means any of William E. Saunders, Jr., Kyle Hanson, Chad Streff, Michael Durbin or Bridgette Roman, or their respective alternates or successors, as appointed from time to time in accordance with Section 4.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.1.
Membership Interest Certificate has the meaning set forth in Section 2.2.
Ministerial Acts means (i) completing, executing and filing annual reports on behalf of the Company as required in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (ii) ordinary course acts required in connection with obtaining or maintaining the licensure of the Company in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (iii) executing any contract that by its terms is less than 12 months in length and represents a financial obligation of the Company of less than $5,000 in the aggregate, or (iv) any other act that is approved in writing by any CCFI Manager (other than the individual Manager requesting to take such other act).
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means Direct Financial Solutions, LLC, a Delaware limited liability company, or any Person that acquires all of the equity interests of the Company from Direct Financial Solutions, LLC.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST CERTIFICATE
2.1 Capital Contribution; Membership Interest. The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement, as evidenced by a Membership Interest Certificate (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
2.2 Membership Interest Certificate. The Membership Interest of the Sole Member will be evidenced by a certificate of limited liability company interest issued by the Company in substantially the form attached as Exhibit A to this Agreement (the Membership Interest Certificate). The Membership Interest shall be a security governed by Article 8 of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Article 8 of the Kansas Uniform Commercial Code, as currently in effect. Each Membership Interest Certificate shall bear the following legend:
This certificate evidences an interest in Cash Central of Kansas, LLC and shall be a security governed by Article 8 of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Article 8 of the Kansas Uniform Commercial Code, as currently in effect.
This Section 2.2 shall not be amended and no such purported amendment to this Section 2.2 shall be effective until, to the extent necessary, all outstanding Membership Interest Certificates have been surrendered for re-issuance with any conforming changes required as a result of such amendment.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers
shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto. Notwithstanding the foregoing or anything in this Agreement to the contrary: (y) the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take; and (z) none of the actions described in the foregoing clauses (i) through (iv) of this Section 4.1(a), other than Ministerial Acts, may be taken by any individual Manager on behalf of the Company without first obtaining the approval required pursuant to Section 4.1(e) or (f).
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that (i) at least three (3) of the Managers constituting such a quorum must be a CCFI Manager, and (ii) if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority (which act of the majority must, for the avoidance of doubt, always include the vote of at least one (1) CCFI Manager) of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be seven (7) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
Trevin G. Workman
S. Todd Jensen
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as
generally pertain to their respective offices. Each Officer shall hold office at the pleasure of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 17-7688(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, manager or member of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the LLC Law, as the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the LLC Law, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the LLC Law. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the LLC Law, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by
the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Articles of Organization, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members managers, officers or members, a Manager, an Officer, or an employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 17-7689 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Kansas without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Articles of Organization, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Operating Agreement of Cash Central of Kansas, LLC as of the date first written above.
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EXHIBIT A
Form of Membership Interest Certificate
THE INTEREST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. ACCORDINGLY, SUCH INTEREST MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
THIS CERTIFICATE EVIDENCES AN INTEREST IN CASH CENTRAL OF KANSAS, LLC AND SHALL BE A SECURITY GOVERNED BY ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, ARTICLE 8 OF THE KANSAS UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT.
No.
CASH CENTRAL OF KANSAS, LLC
A Kansas Limited Liability Company
Membership Interest Certificate
This certifies that [ ] is the owner of the Membership Interest representing [ ]% membership equity interest in Cash Central of Kansas, LLC (the Company), subject to the terms of the Amended and Restated Operating Agreement of Cash Central of Kansas, LLC, made and entered into as of April 1, 2012, as the same may be amended from time to time in accordance with its terms (the Agreement).
This Membership Interest Certificate may be transferred by the lawful holders hereof only in accordance with the provisions of the Agreement and applicable law.
THIS SECURITY IS SUBJECT TO THE PROVISIONS OF THE AGREEMENT.
IN WITNESS WHEREOF, the Company has caused this Membership Interest Certificate to be issued this day of , .
CASH CENTRAL OF KANSAS, LLC
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FOR VALUE RECEIVED, , the of the Company does hereby sell, assign and transfer unto:
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the Membership Interest evidenced by the within Membership Interest Certificate, and does hereby irrevocably constitute an appoint attorney-in-fact to transfer the said Membership Interest on the books of the within-named Company, with the full power of substitution in the premises.
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In presence of: ___________________________ |
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NOTICE: The signature to this assignment must correspond with the name as written upon the face of the Membership Interest Certificate in every particular, without alternation or enlargement or any change whatsoever.
Exhibit 3.75
MINNESOTA SECRETARY OF STATE ARTICLES OF ORGANIZATION FOR A LIMITED LIABILITY COMPANY MINNESOTA STATUTES CHAPTER 322B Filing Fee: $160.00 READ THE INSTRUCTIONS BEFORE COMPLETING THIS FORM 1.Name of Company: Cash Central of Minnesota, LLC (The company name must include the words limited Liability Company or the abbreviation LLC) 2.Registered Office Address: (P.O. Box is Unacceptable) Capitol Professional Building, 590 Park Street, Suite 6 St.Paul MN 55103 Complete Street Address or Rural Route and Rural Route Box Number City State Zip Code 3.Name of Registered Agent (optional): Premier Corporate Services, Inc. 4.Business Mailing Address: (if different from registered office address) 84 East 2400 North North Logan UT 84341 Address City State Zip Code 5.Desired Duration of LLC: (in years) (If you do not complete this item, a perpetual duration is assumed by law.) 6.Does this LLC own, lease or have any interest in agricultural land or land capable of being farmed? (Check One) Yes No 7.Name and Address of Organizer(s): Name (Print) Complete Address Signature Street City State Zip Trevin G. Workman 84 East 2400 North North Logan, Utah 84341 STATE OF MINNESOTA DEPARTMENT OF STATE FILED SEP 18 2008 Secretary of State 8. List a name, daytime phone number, and e-mail address of a person who can be contacted about this form Trevin G. Workman 435-774-8270 Contact Name Phone Number Trevin@cashcentral.com E-Mail Address [ILLEGIBLE] |
Exhibit 3.76
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
CASH CENTRAL OF MINNESOTA, LLC
a Minnesota Limited Liability Company
Dated as of April 1, 2012
THE MEMBERSHIP INTERESTS OF CASH CENTRAL OF MINNESOTA, LLC SHALL BE SECURITIES GOVERNED BY ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, REVISED ARTICLE 8 OF THE MINNESOTA UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT. THE MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
CASH CENTRAL OF MINNESOTA, LLC
This AMENDED AND RESTATED OPERATING AGREEMENT (this Agreement) of Cash Central of Minnesota, LLC (the Company) is made, adopted and entered into effective as of April 1, 2012, by Direct Financial Solutions, LLC, a Delaware limited liability company, as the sole member of the Company (the Sole Member), pursuant to Section 322B.603 of the LLC Law (as defined below).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Operating Agreement for Cash Central of Minnesota, LLC, effective as of September 1, 2008 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 322B of the Minnesota Statutes (The Minnesota Limited Liability Company Act) (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Articles of Organization of the Company (the Articles of Organization) were filed with the Secretary of State of Minnesota on September 18, 2008. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in an operating agreement or bylaws or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Cash Central of Minnesota, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Board of Governors.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 84 East 2400 North, North Logan, Utah 84341. The principal office of the Company may be relocated from time to time by determination of the Board of Governors. The Company may maintain offices at such other place or places as the Board of Governors deems advisable.
1.5 Term. The term of the Company commenced upon the filing of the Articles of Organization in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Articles of Organization have been filed in the office of the Secretary of State of Minnesota in accordance with the provisions of the LLC Law. The Board of Governors shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Minnesota.
(b) The Board of Governors shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Minnesota in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Minnesota shall be as set forth in the Articles of Organization. The Board of Governors may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Minnesota shall be as set forth in the Articles of Organization. The Board of Governors may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Board of Governors shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Operating Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Articles of Organization has the meaning set forth in Section 1.1.
Board of Governors means the group of individuals appointed by the Sole Member as the governors of the Company in accordance with Section 4.1. As used herein, each member of the Board of Governors shall be a Governor.
CCFI Governors means any of William E. Saunders, Jr., Kyle Hanson, Chad Streff, Michael Durbin or Bridgette Roman, or their respective alternates or successors, as appointed from time to time in accordance with Section 4.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means those individuals appointed by the Board of Governors as managers of the Company in accordance with Section 4.3.
Membership Interest has the meaning set forth in Section 2.1.
Membership Interest Certificate has the meaning set forth in Section 2.2.
Ministerial Acts means (i) completing, executing and filing annual reports on behalf of the Company as required in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (ii) ordinary course acts required in connection with obtaining or maintaining the licensure of the Company in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (iii) executing any contract that by its terms is less than 12 months in length and represents a financial obligation of the Company of less than $5,000 in the aggregate, or (iv) any other act that is approved in writing by any CCFI Governor (other than the individual Governor requesting to take such other act).
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means Direct Financial Solutions, LLC, a Delaware limited liability company, or any Person that acquires all of the equity interests of the Company from Direct Financial Solutions, LLC.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST CERTIFICATE
2.1 Capital Contribution; Membership Interest. The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement, as evidenced by a Membership Interest Certificate (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
2.2 Membership Interest Certificate. The Membership Interest of the Sole Member will be evidenced by a certificate of limited liability company interest issued by the Company in substantially the form attached as Exhibit A to this Agreement (the Membership Interest Certificate). The Membership Interest shall be a security governed by Article 8 of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Revised Article 8 of the Minnesota Uniform Commercial Code, as currently in effect. Each Membership Interest Certificate shall bear the following legend:
This certificate evidences an interest in Cash Central of Minnesota, LLC and shall be a security governed by Article 8 of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Revised Article 8 of the Minnesota Uniform Commercial Code, as currently in effect.
This Section 2.2 shall not be amended and no such purported amendment to this Section 2.2 shall be effective until, to the extent necessary, all outstanding Membership Interest Certificates have been surrendered for re-issuance with any conforming changes required as a result of such amendment.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Board of Governors.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax
return, form, report, statement or other document separate from the Sole Member, the Board of Governors shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Board of Governors.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Board of Governors, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything it deems necessary or appropriate to carry on the business of the Company, (ii) the Board of Governors shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Board of Governors and (iv) the Board of Governors shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto. Notwithstanding the foregoing or anything in this Agreement to the contrary: (y) the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Board of Governors to take; and (z) none of the actions described in the foregoing clauses (i) through (iv) of this Section 4.1(a), other than Ministerial Acts, may be taken by any individual Governor on behalf of the Company without first obtaining the approval required pursuant to Section 4.1(e) or (f).
(b) The implementation of any decisions properly made by the Board of Governors, including the execution and delivery of all documents, may be through any Person selected by the Board of Governors (including any Governor). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Board of Governors is, to the extent of its rights and powers set forth in this Agreement, an agent of the Company for the purpose of the Companys business, and all actions of the Board of Governors taken in accordance with such rights and powers shall bind the Company.
(d) The Board of Governors shall consist of not less than one (1) nor more than eight (8) Governors. Without amendment to this Agreement, the number of Governors, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Governors shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Governor shall serve until the earlier of his or her death, resignation or removal. A Governor may be removed at any time, with or without cause, by the Sole Member. A Governor may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Governors then in office shall be present in person at any meeting of the Board of Governors in order to constitute a quorum for the transaction of business at such meeting; provided, however, that (i) at least three (3) of the Governors constituting such a quorum must be a CCFI Governor, and (ii) if the meeting is held by telephone or through other communications equipment at which all Governors participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority (which act of the majority must, for the avoidance of doubt, always include the vote of at least one (1) CCFI Governor) of the Governors present at any meeting of the Board of Governors at which a quorum is present shall be the act of the Board of Governors.
(f) Any action required or permitted to be taken by the Board of Governors under this Agreement or the LLC Law may be taken without a meeting if the Board of Governors consents thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, the Board of Governors shall consist of seven (7) Governors, which Governors shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
Trevin G. Workman
S. Todd Jensen
4.2 Agents. The Board of Governors may engage on behalf of, and at the expense of, the Company, such Persons as the Board of Governors shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Board of Governors shall determine.
4.3 Managers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such managers of the Company, who may also be titled officers, as may be appointed from time to time in accordance with this Section 4.3 (the Managers). The Board of Governors may appoint such Managers as it may determine from time to time. The Managers, subject to the direction and control of the Board of Governors, shall do all things and take all actions necessary to run the business of the Company. Notwithstanding anything to the contrary in the LLC Law, each Manager shall have the powers and duties as may be prescribed to him or her by the Board of Governors and, to the extent not so prescribed, as generally pertain to their respective offices. Each
Manager shall hold office at the pleasure of the Board of Governors. Each Manager shall serve until the earlier of his or her death, resignation or removal, and any Manager may be removed at any time, with or without cause, by the Board of Governors. Any vacancy in any office shall also be filled by the Board of Governors. Any Manager may resign at any time by delivering his or her written resignation to the Board of Governors. For purposes of Section 322B.67 of the LLC Law, as of the date of this Agreement, (i) William E. Saunders, Jr. shall exercise the functions of the office of chief manager of the Company, and (ii) Michel Durbin shall exercise the functions of the office of treasurer of the Company.
(b) The Company may employ such employees as the Managers or Governors of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Governor or any Manager shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 322B.303 of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, any Governor nor any Manager shall be liable therefor solely by reason of being a member of the Company or acting as a governor or a manager of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Governor or any Manager (or any member or other holder of an equity interest in the Sole Member or any director, manager, governor, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Governor, a Manager, or an officer, manager or member of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, governor, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such
Proceeding is alleged action in an official capacity as an equity holder, manager, governor, director or officer or in any other capacity while serving as an equity holder, manager, governor, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the LLC Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Board of Governors.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the LLC Law, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Governor, Manager, or other equity holder, governor, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the LLC Law. Neither the failure of the Company (including the Sole Member, the Board of Governors or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the LLC Law, nor an actual determination
by the Company (including the Sole Member, the Board of Governors or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Articles of Organization, this Agreement, any agreement, any action by the Board of Governors or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members managers, officers or members, a Governor, a Manager, or an employee or agent of the Company, or is or was serving at the request of the Company as a director, governor, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Board of Governors, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion
of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 322B.306, Subdivision 1 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Board of Governors shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Governor to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Articles of Organization, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Operating Agreement of Cash Central of Minnesota, LLC as of the date first written above.
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EXHIBIT A
Form of Membership Interest Certificate
THE INTEREST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. ACCORDINGLY, SUCH INTEREST MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
THIS CERTIFICATE EVIDENCES AN INTEREST IN CASH CENTRAL OF MINNESOTA, LLC AND SHALL BE A SECURITY GOVERNED BY ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, REVISED ARTICLE 8 OF THE MINNESOTA UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT.
No.
CASH CENTRAL OF MINNESOTA, LLC
A Minnesota Limited Liability Company
Membership Interest Certificate
This certifies that [ ] is the owner of the Membership Interest representing [ ]% membership equity interest in Cash Central of Minnesota, LLC (the Company), subject to the terms of the Amended and Restated Operating Agreement of Cash Central of Minnesota, LLC, made and entered into as of April 1, 2012, as the same may be amended from time to time in accordance with its terms (the Agreement).
This Membership Interest Certificate may be transferred by the lawful holders hereof only in accordance with the provisions of the Agreement and applicable law.
THIS SECURITY IS SUBJECT TO THE PROVISIONS OF THE AGREEMENT.
IN WITNESS WHEREOF, the Company has caused this Membership Interest Certificate to be issued this day of , .
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FOR VALUE RECEIVED, , the of the Company does hereby sell, assign and transfer unto:
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the Membership Interest evidenced by the within Membership Interest Certificate, and does hereby irrevocably constitute an appoint attorney-in-fact to transfer the said Membership Interest on the books of the within-named Company, with the full power of substitution in the premises.
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NOTICE: The signature to this assignment must correspond with the name as written upon the face of the Membership Interest Certificate in every particular, without alternation or enlargement or any change whatsoever.
Exhibit 3.77
File Number: 200517441002 LC0668101 Date Filed: 06/21/2005 Robin Carnahan Secretary of State State of Missouri Robin Carnahan, Secretary of State Corporations Division P.O. Box 778 / 600 W. Main Street, Rm 322 Jefferson City, MO 65102 Articles of Organization (Submit with filing fee of $105) 1.The name of the limited liability company is: Direct Financial Solutions of Missouri LLC (Must include Limited Liability Company, Limmited Company, LC, L.C., L.L.C., or LLC) 2.The purpose(s) for which the limited liability company is organized: Consumer lending, and any other lawful purpose 3.The name and address of the limited liability companys registered agent in Missouri is: Jeff City Filing, Inc. 222 E. Dunklin Jefferson City, MO 65101 Name Street Address: May not use P.O. Box unless street address also provided City/State/Zip 4.The management of the limited liability company is vested in: managers members (check one) 5.The events, if any, on which the limited liability company is to dissolve or the number of years the limited liability company is to continue, which may be any number or perpetual: 100 Years (The answer to this question could cause possible tax consequences, you may wish to consult with your attorney or accountant) 6.The name(s) and Street address(es) of each organizer (P.O. Box may only be used in addition to a physical street address): Trevin G. Workman, Esq., Smurthwaite & Workman, LLC, 503 West 2600 South, Suite 200, Bountiful, UT 84010 7.The effective date of this document is the date it is filed by the Secretary of State of Missouri, unless you indicate a future date, as follows: (Date may not be more than 90 days after the filing date in this office) In Affirmation thereof, the facts stated above are true and correct: (The undersigned understands that false statements made in this filing are subject to the penalties provide under Section 575.040, RSMo) Trevin G. Workman, Esq. 6/17/2005 Organizer Signature Printed Name Date Organizer Signature Printed Name Date Organizer Signature Printed Name Date Name and address to return filed document: Name: Trevin G. Workman Address: 503 W. 2600 S., #200 City, State, and Zip Code: Bountiful, UT 84010 State of Missouri Creation - LLC/LP 1 Page(s) T0517215639 Creation - LLC/LP 1 Page(s) State of Missouri. |
File Number: LC0668101 Date Filed: 05/24/2007 Rohin Carnahan, Secretary of State Corporations Division P.O. Box 778/600 W.Main Steet, Rm 322 Jefferson City, MO 65102 File Number: LC0668101 Date Filed: 05/24/2007 Robin Carnahan Secretary of State Amendment of Article of Organization (Submit with filing fee of $25) 1.The current name of the limited liability company is: Direct Financial Solutions of Missouri LLC. The effective date of this document is the date it is filed by the Secretary of State of Missouri, Unless a future date is indicated, as follows: (Date may not be more than 90 days after the filing date in this Office) 3.State date of occurrence that required this amendment: 05/01/2007 Month/Day/Year 4.The articles of organization are hereby amended as follows: The name of the Limited Liability Company is changed from Direct Financial Solutions of Missouri LLC to Cash Central of Missouri, LLC. 5.(Check if applicable) This amendment is required to be filed because: management of the limited liability company is vested in one or more managers where management had not been so previously vested. management of the limited liability company is no longer vested in one or more managers where management was previously so vested. a change in the name of the limited liability company. a change in the time set forth in the articles of organization for the limited liability company to dissolve. 6 This amendment is (check either or both): authorized under the operating agreement required to be filed under the provisions of RSMo Chapter 347 In affirmation thereof, the facts stated above are true: (The undersigned understands that false statements made in this filing are subject to the penalties provided under Section 575.040, RSMo) Trevin Workman 5/15/07 Authorized Signature Printed Name Date Authorized Signature Printed Name Date Authorized Signature Printed Name Date Name and address to return filed document: Name: Trevin Workman Address: 84 East 2400 North City, State, and Zip Code: Logan, UT 84341 State of Missouri Amend/Restate - LLP/LP/LLP/LLLP 1 Page(s) T0714406764 |
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Exhibit 3.78
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
CASH CENTRAL OF MISSOURI, LLC
a Missouri Limited Liability Company
Dated as of April 1, 2012
THE MEMBERSHIP INTERESTS OF CASH CENTRAL OF MISSOURI, LLC SHALL BE SECURITIES GOVERNED BY ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, ARTICLE 8 OF THE MISSOURI UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT. THE MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
CASH CENTRAL OF MISSOURI, LLC
This AMENDED AND RESTATED OPERATING AGREEMENT (this Agreement) of Cash Central of Missouri, LLC (the Company) is made, adopted and entered into effective as of April 1, 2012, by Direct Financial Solutions, LLC, a Delaware limited liability company, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Amended and Restated Operating Agreement for Direct Financial Solutions of Missouri, LLC (n/k/a Cash Central of Missouri, LLC), effective as of March 31, 2006 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 347 of the Missouri Limited Liability Company Act (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Articles of Organization of the Company (the Articles of Organization) were filed with the Secretary of State of Missouri on June 23, 2005. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in an operating agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Cash Central of Missouri, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 84 East 2400 North, North Logan, Utah 84341. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Articles of Organization in accordance with the LLC Law and shall continue in existence for the duration set forth in the Articles of Organization, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Articles of Organization have been filed in the office of the Secretary of State of Missouri in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Missouri.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Missouri in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Missouri shall be as set forth in the Articles of Organization. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Missouri shall be as set forth in the Articles of Organization. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Operating Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Articles of Organization has the meaning set forth in Section 1.1.
CCFI Manager means any of William E. Saunders, Jr., Kyle Hanson, Chad Streff, Michael Durbin or Bridgette Roman, or their respective alternates or successors, as appointed from time to time in accordance with Section 4.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.1.
Membership Interest Certificate has the meaning set forth in Section 2.2.
Ministerial Acts means (i) completing, executing and filing annual reports on behalf of the Company as required in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (ii) ordinary course acts required in connection with obtaining or maintaining the licensure of the Company in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (iii) executing any contract that by its terms is less than 12 months in length and represents a financial obligation of the Company of less than $5,000 in the aggregate, or (iv) any other act that is approved in writing by any CCFI Manager (other than the individual Manager requesting to take such other act).
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means Direct Financial Solutions, LLC, a Delaware limited liability company, or any Person that acquires all of the equity interests of the Company from Direct Financial Solutions, LLC.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST CERTIFICATE
2.1 Capital Contribution; Membership Interest. The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement, as evidenced by a Membership Interest Certificate (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
2.2 Membership Interest Certificate. The Membership Interest of the Sole Member will be evidenced by a certificate of limited liability company interest issued by the Company in substantially the form attached as Exhibit A to this Agreement (the Membership Interest Certificate). The Membership Interest shall be a security governed by Article 8 of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Article 8 of the Missouri Uniform Commercial Code, as currently in effect. Each Membership Interest Certificate shall bear the following legend:
This certificate evidences an interest in Cash Central of Missouri, LLC and shall be a security governed by Article 8 of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Article 8 of the Missouri Uniform Commercial Code, as currently in effect.
This Section 2.2 shall not be amended and no such purported amendment to this Section 2.2 shall be effective until, to the extent necessary, all outstanding Membership Interest Certificates have been surrendered for re-issuance with any conforming changes required as a result of such amendment.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers
shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto. Notwithstanding the foregoing or anything in this Agreement to the contrary: (y) the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take; and (z) none of the actions described in the foregoing clauses (i) through (iv) of this Section 4.1(a), other than Ministerial Acts, may be taken by any individual Manager on behalf of the Company without first obtaining the approval required pursuant to Section 4.1(e) or (f).
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that (i) at least three (3) of the Managers constituting such a quorum must be a CCFI Manager, and (ii) if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority (which act of the majority must, for the avoidance of doubt, always include the vote of at least one (1) CCFI Manager) of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be seven (7) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
Trevin G. Workman
S. Todd Jensen
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the
Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 347.057 of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, manager or member of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the LLC Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security
Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the LLC Law, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the LLC Law. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the LLC Law, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Articles of Organization, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members managers, officers or members, a Manager, an Officer, or an employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the
provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 347.123(4) or (5) of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Missouri without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Articles of Organization, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Operating Agreement of Cash Central of Missouri, LLC as of the date first written above.
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EXHIBIT A
Form of Membership Interest Certificate
THE INTEREST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. ACCORDINGLY, SUCH INTEREST MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
THIS CERTIFICATE EVIDENCES AN INTEREST IN CASH CENTRAL OF MISSOURI, LLC AND SHALL BE A SECURITY GOVERNED BY ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, ARTICLE 8 OF THE MISSOURI UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT.
No.
CASH CENTRAL OF MISSOURI, LLC
A Missouri Limited Liability Company
Membership Interest Certificate
This certifies that [ ] is the owner of the Membership Interest representing [ ]% membership equity interest in Cash Central of Missouri, LLC (the Company), subject to the terms of the Amended and Restated Operating Agreement of Cash Central of Missouri, LLC, made and entered into as of April 1, 2012, as the same may be amended from time to time in accordance with its terms (the Agreement).
This Membership Interest Certificate may be transferred by the lawful holders hereof only in accordance with the provisions of the Agreement and applicable law.
THIS SECURITY IS SUBJECT TO THE PROVISIONS OF THE AGREEMENT.
IN WITNESS WHEREOF, the Company has caused this Membership Interest Certificate to be issued this day of , .
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FOR VALUE RECEIVED, , the of the Company does hereby sell, assign and transfer unto:
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the Membership Interest evidenced by the within Membership Interest Certificate, and does hereby irrevocably constitute an appoint attorney-in-fact to transfer the said Membership Interest on the books of the within-named Company, with the full power of substitution in the premises.
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NOTICE: The signature to this assignment must correspond with the name as written upon the face of the Membership Interest Certificate in every particular, without alternation or enlargement or any change whatsoever. | ||||
Exhibit 3.79
Ross Miller Secretary of State State of Nevada Document Number 20070360942-73 Filling Date and Time 05/23/2007 7:41 AM Entity Number E0581482005-7 Amendment to Articles of Organization (PURSUANT TO NRS 86.221) USE BLACK INK ONLY. DO NOT HIGHLIGHT ABOVE SPACE IS FOR OFFICE USE ONLY Certificate of Amendment to Articles of Organization For a Nevada Limited-Liability Company (Pursuant to NRS 86.221) 1. Name of limited-liability company: Direct Financial Solutions of Nevada LLC 2. The company is managed by: / / Managers / / OR Members 3. The articles have been amended as follows (provide articles number, if available)*: The name of the Limited Liability Company is changed from Directed Financial Solutions of Nevada LLC to Cash Central of Nevada LLC. 4. Signature (must be signed by at least one manager or by a managing member): Signature * 1) If amending company name, it must contain the words Limited-Liability Company, Limited, or the abbreviations Ltd., L.L.C., or L.C., The word Company may abbreviated as Co. 2) if adding managers, provide names and addresses, FILLING FEE: $175.00 IMPORTANT: Failure to include any of the above information and submit the proper fees may cause this filling to be rejected. This form must be accompanied by appropriate fees Nevada Secretary of State AM 85.221 Amend 2007 Revised on: 01/01/07 |
[LOGO] DEAN HELLER Secretary of State 206 North Carson Street Carson City, Nevada 89701-4208 (775) 684 5708 Website: secretaryofstate.blz Articles Of Organization Limited-Liability Company (PURSUANT TO NRS 86) Filed in the office of Dean Heller Secretary of State State of Nevada Document Number 20050365278-88 Filing Date and Time 08/08/2005 2:26 PM Entity Number E0581482005-7 ABOVE SPACE FOR OFFICE USE ONLY Important : Read attached Instructions before completing form. 1. Name of Limited-Liability Company Direct Financial Solutions of Nevada, LLC 2. Resident Agents Name and Street Address: [ILLEGIBLE] Registered Agents Legal Services, Ltd. Name 202 North Curry Street, Suite 100 Carson City NEVADA 89703-4121 Physical Street Address City Zip Code 3. Dissolution Date: [ILLEGIBLE] Latest date upon which the company is to dissolve (if existance is not perpetual): Perpetual 4. Management (Check box) Company shall be managed by / / Manager(s) OR / / Members 5. Names, Addresses of Manager(s) or Members: [ILLEGIBLE] Todd jensen Name 89 East 1400 North Logan Utah 84341 Address City State Zip Code Mari-Catherine Vinton Name 89 East 1400 North Logan Utah 84341 Address City State Zip Code Name Address City State Zip Code 6. Names, Addresses and Signatures of Organizers: [ILLEGIBLE] Trevin G. Workman Name Signature 503 West 2600 South, Suite 200 Bountiful Utah 84010 Address City State Zip Code 7. Certificate of Acceptance of Appointment of Resident Agent: I hereby accept appointment as Resident Agent for the above named limited-liability company. Authorized Signature of R.A. for On behalf of R.A. Company Date This form must be accompanied by appropriate fees. See attached fee schedule. |
Exhibit 3.80
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
CASH CENTRAL OF NEVADA, LLC
a Nevada Limited Liability Company
Dated as of April 1, 2012
THE MEMBERSHIP INTERESTS OF CASH CENTRAL OF NEVADA, LLC SHALL BE SECURITIES GOVERNED BY ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, ARTICLE 8 OF THE NEVADA UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT. THE MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
CASH CENTRAL OF NEVADA, LLC
This AMENDED AND RESTATED OPERATING AGREEMENT (this Agreement) of Cash Central of Nevada, LLC (the Company) is made, adopted and entered into effective as of April 1, 2012, by Direct Financial Solutions, LLC, a Delaware limited liability company, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Amended and Restated Operating Agreement for Cash Central of Nevada, LLC, effective as of March 31, 2006 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 86 of the Nevada Revised Statutes (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Articles of Organization of the Company (the Articles of Organization) were filed with the Secretary of State of Nevada on August 8, 2005. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in an operating agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Cash Central of Nevada, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 84 East 2400 North, North Logan, Utah 84341. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Articles of Organization in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Articles of Organization have been filed in the office of the Secretary of State of Nevada in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Nevada.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Nevada in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Nevada shall be as set forth in the Articles of Organization. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Nevada shall be as set forth in the Articles of Organization. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Operating Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Articles of Organization has the meaning set forth in Section 1.1.
CCFI Manager means any of Michael Durbin or Bridgette Roman, or their respective alternates or successors, as appointed from time to time in accordance with Section 4.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.1.
Membership Interest Certificate has the meaning set forth in Section 2.2.
Ministerial Acts means (i) completing, executing and filing annual reports on behalf of the Company as required in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (ii) ordinary course acts required in connection with obtaining or maintaining the licensure of the Company in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (iii) executing any contract that by its terms is less than 12 months in length and represents a financial obligation of the Company of less than $5,000 in the aggregate, or (iv) any other act that is approved in writing by any CCFI Manager (other than the individual Manager requesting to take such other act).
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means Direct Financial Solutions, LLC, a Delaware limited liability company, or any Person that acquires all of the equity interests of the Company from Direct Financial Solutions, LLC.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST CERTIFICATE
2.1 Capital Contribution; Membership Interest. The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement, as evidenced by a Membership Interest Certificate (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
2.2 Membership Interest Certificate. The Membership Interest of the Sole Member will be evidenced by a certificate of limited liability company interest issued by the Company in substantially the form attached as Exhibit A to this Agreement (the Membership Interest Certificate). The Membership Interest shall be a security governed by Article 8 of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Article 8 of the Nevada Uniform Commercial Code, as currently in effect. Each Membership Interest Certificate shall bear the following legend:
This certificate evidences an interest in Cash Central of Nevada, LLC and shall be a security governed by Article 8 of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Article 8 of the Nevada Uniform Commercial Code, as currently in effect.
This Section 2.2 shall not be amended and no such purported amendment to this Section 2.2 shall be effective until, to the extent necessary, all outstanding Membership Interest Certificates have been surrendered for re-issuance with any conforming changes required as a result of such amendment.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers
shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto. Notwithstanding the foregoing or anything in this Agreement to the contrary: (y) the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take; and (z) none of the actions described in the foregoing clauses (i) through (iv) of this Section 4.1(a), other than Ministerial Acts, may be taken by any individual Manager on behalf of the Company without first obtaining the approval required pursuant to Section 4.1(e) or (f).
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that (i) at least two (2) of the Managers constituting such a quorum must be a CCFI Manager, and (ii) if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority (which act of the majority must, for the avoidance of doubt, always include the vote of at least one (1) CCFI Manager) of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be four (4) Managers, which Managers shall be as follows:
Michael Durbin
Bridgette Roman
Trevin G. Workman
S. Todd Jensen
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 86.371 of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, manager or member of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the LLC Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to
Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the LLC Law, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the LLC Law. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the LLC Law, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right
which any Person may have or hereafter acquire under any law, the Articles of Organization, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members managers, officers or members, a Manager, an Officer, or an employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member reaffirms Section 86.491-4 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Articles of Organization, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Operating Agreement of Cash Central of Nevada, LLC as of the date first written above.
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DIRECT FINANCIAL SOLUTIONS, LLC | |
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Bridgette C. Roman |
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EXHIBIT A
Form of Membership Interest Certificate
THE INTEREST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. ACCORDINGLY, SUCH INTEREST MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
THIS CERTIFICATE EVIDENCES AN INTEREST IN CASH CENTRAL OF NEVADA, LLC AND SHALL BE A SECURITY GOVERNED BY ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, ARTICLE 8 OF THE NEVADA UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT.
No.
CASH CENTRAL OF NEVADA, LLC
A Nevada Limited Liability Company
Membership Interest Certificate
This certifies that [ ] is the owner of the Membership Interest representing [ ]% membership equity interest in Cash Central of Nevada, LLC (the Company), subject to the terms of the Amended and Restated Operating Agreement of Cash Central of Nevada, LLC, made and entered into as of April 1, 2012, as the same may be amended from time to time in accordance with its terms (the Agreement).
This Membership Interest Certificate may be transferred by the lawful holders hereof only in accordance with the provisions of the Agreement and applicable law.
THIS SECURITY IS SUBJECT TO THE PROVISIONS OF THE AGREEMENT.
IN WITNESS WHEREOF, the Company has caused this Membership Interest Certificate to be issued this day of , .
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CASH CENTRAL OF NEVADA, LLC | |
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FOR VALUE RECEIVED, , the of the Company does hereby sell, assign and transfer unto:
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(print or type name of assignee) |
the Membership Interest evidenced by the within Membership Interest Certificate, and does hereby irrevocably constitute an appoint attorney-in-fact to transfer the said Membership Interest on the books of the within-named Company, with the full power of substitution in the premises.
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In presence of: |
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NOTICE: The signature to this assignment must correspond with the name as written upon the face of the Membership Interest Certificate in every particular, without alternation or enlargement or any change whatsoever. | ||||
Exhibit 3.81
ARTICLES OF ORGANIZATION
OF
DIRECT FINANCIAL SOLUTIONS OF NORTH DAKOTA LLC
BY AGREEMENT, the undersigned Organizer, on behalf of the Members who desire to form a limited liability company pursuant to the enabling laws of the state of North Dakota (hereinafter referred to as the Act), hereby sets forth the following Articles of Organization for such limited liability company (hereinafter referred to as the Company):
ARTICLE 1 NAME
The name of the Company is Direct Financial Solutions of North Dakota LLC.
ARTICLE 2 REGISTERED AGENT
The name of the original Registered Agent of the Company is Michael Kautzman, located at 1008 E. Capitol Ave., Bismarck, North Dakota 58501-1930.
ARTICLE 3 ORGANIZER
The name and address of the Organizer is:
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ADDRESS |
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Richard G. Smurthwaite, Esq. |
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Smurthwaite & Workman, LLC |
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503 W. 2600 S., Suite 200 |
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Bountiful, Utah 84010 |
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801-335-0404 |
ARTICLE 4 EFFECTIVE DATE
These Articles of Organization shall be effective when filed with the Secretary of State of North Dakota.
ARTICLE 5 PERIOD OF DURATION
The Company shall have perpetual existence.
NORTH DAKOTA |
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Filed |
8-3-2005 | |
[ILLEGIBLE] | ||
Secretary of State | ||
ARTICLE 6 MANAGEMENT
The management of the Company shall be vested in one or more Managers. The name and street address of the initial Managers, who will serve until a successor is elected, is as follows:
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Todd Jensen |
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89 East 1400 North |
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Logan, Utah 84341 |
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Mari-Catherine Vinton |
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89 East 1400 North |
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Logan, Utah 84341 |
ARTICLE 7 AUTHORITY
No Member shall have authority to act on behalf of or bind the Company without the written approval of the Manager. Only the Manager of the Company, as indicated above, or successor(s) as Manager, and those given authority by such written approval may sign contracts or other instruments on behalf of the Company.
I, the above named Organizer, have read the foregoing Articles of Organization, know the contents, and believe the statements therein to be true.
IN WITNESS WHEREOF, the Parties have hereunto executed this Agreement this 27th day of July, 2005.
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ORGANIZER: |
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/s/ Richard G. Smurthwaite |
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Richard G. Smurthwaite, Esq. |
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STATE OF NORTH DAKOTA OFFICE OF THE SECRETARY OF STATE 600 E Boulevard Ave Dept 108, 1st Floor Bismarck, ND 58505-0500 |
ARTICLES OF AMENDMENT TO CHANGE LIMITED LIABILITY COMPANY NAME
The undersigned, for the purpose of amending the Articles of Organization, do hereby certify as follows:
1. The present name of the limited liability company is:
Direct Financial Solutions of North Dakota LLC
2. The name of the limited liability company is changed to:
Cash Central of North Dakota, LLC
3. The future effective date of this amendment shall be:
When filed with the Secretary of State.
4. The amendment was adopted with the consent of all, or a lesser number of, the members of the limited liability company as authorized by the operating agreement.
We certify, under the penalties set forth in the North Dakota Limited Liability Company Act, that we have read the above statements and that the same are true and correct.
Signed this 11th day of July , 2007.
Trevin Workman, Manager |
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(Print Name and Title) |
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/s/ Trevin Workman |
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(Signature) |
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NORTH DAKOTA |
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Filed |
8-07-2007 | |
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Secretary of State | ||
Exhibit 3.82
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
CASH CENTRAL OF NORTH DAKOTA, LLC
a North Dakota Limited Liability Company
Dated as of April 1, 2012
THE MEMBERSHIP INTERESTS OF CASH CENTRAL OF NORTH DAKOTA, LLC SHALL BE SECURITIES GOVERNED BY ARTICLE 8 (INVESTMENT SECURITIES) OR THE EQUIVALENT ARTICLE OR CHAPTER OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, CHAPTER 41-08 OF THE NORTH DAKOTA UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT. THE MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
CASH CENTRAL OF NORTH DAKOTA, LLC
This AMENDED AND RESTATED OPERATING AGREEMENT (this Agreement) of Cash Central of North Dakota, LLC (the Company) is made, adopted and entered into effective as of April 1, 2012, by Direct Financial Solutions, LLC, a Delaware limited liability company, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Operating Agreement for Direct Financial Solutions of North Dakota, LLC (n/k/a Cash Central of North Dakota, LLC), effective as of March 31, 2006 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of the North Dakota Limited Liability Act (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Articles of Organization of the Company (the Articles of Organization) were filed with the Secretary of State of North Dakota on August 3, 2005. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in an operating agreement or bylaws or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Cash Central of North Dakota, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Board of Governors.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 84 East 2400 North, North Logan, Utah 84341. The principal office of the Company may be relocated from time to time by determination of the Board of Governors. The Company may maintain offices at such other place or places as the Board of Governors deems advisable.
1.5 Term. The term of the Company commenced upon the filing of the Articles of Organization in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Articles of Organization have been filed in the office of the Secretary of State of North Dakota in accordance with the provisions of the LLC Law. The Board of Governors shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of North Dakota.
(b) The Board of Governors shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than North Dakota in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in North Dakota shall be as set forth in the Articles of Organization. The Board of Governors may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in North Dakota shall be as set forth in the Articles of Organization. The Board of Governors may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Board of Governors shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Operating Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires. This Agreement shall also be known as Bylaws for purposes of the LLC Law.
Articles of Organization has the meaning set forth in Section 1.1.
Board of Governors means the group of individuals appointed by the Sole Member as the governors of the Company in accordance with Section 4.1. As used herein, each member of the Board of Governors shall be a Governor.
CCFI Governors means any of William E. Saunders, Jr., Kyle Hanson, Chad Streff, Michael Durbin or Bridgette Roman, or their respective alternates or successors, as appointed from time to time in accordance with Section 4.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means those individuals appointed by the Board of Governors as managers of the Company in accordance with Section 4.3.
Membership Interest has the meaning set forth in Section 2.1.
Membership Interest Certificate has the meaning set forth in Section 2.2.
Ministerial Acts means (i) completing, executing and filing annual reports on behalf of the Company as required in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (ii) ordinary course acts required in connection with obtaining or maintaining the licensure of the Company in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (iii) executing any contract that by its terms is less than 12 months in length and represents a financial obligation of the Company of less than $5,000 in the aggregate, or (iv) any other act that is approved in writing by any CCFI Governor (other than the individual Governor requesting to take such other act).
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means Direct Financial Solutions, LLC, a Delaware limited liability company, or any Person that acquires all of the equity interests of the Company from Direct Financial Solutions, LLC.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST CERTIFICATE
2.1 Capital Contribution; Membership Interest. The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement, as evidenced by a Membership Interest Certificate (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
2.2 Membership Interest Certificate. The Membership Interest of the Sole Member will be evidenced by a certificate of limited liability company interest issued by the Company in substantially the form attached as Exhibit A to this Agreement (the Membership Interest Certificate). The Membership Interest shall be a security governed by Article 8 (Investment Securities) or the equivalent Article or Chapter of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Chapter 41-08 of the North Dakota Uniform Commercial Code, as currently in effect. Each Membership Interest Certificate shall bear the following legend:
This certificate evidences an interest in Cash Central of North Dakota, LLC and shall be a security governed by Article 8 (Investment Securities) or the equivalent Article or Chapter of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Chapter 41-08 of the North Dakota Uniform Commercial Code, as currently in effect.
This Section 2.2 shall not be amended and no such purported amendment to this Section 2.2 shall be effective until, to the extent necessary, all outstanding Membership Interest Certificates have been surrendered for re-issuance with any conforming changes required as a result of such amendment.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Board of Governors.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and
accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Board of Governors shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Board of Governors.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Board of Governors, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything it deems necessary or appropriate to carry on the business of the Company, (ii) the Board of Governors shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Board of Governors and (iv) the Board of Governors shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto. Notwithstanding the foregoing or anything in this Agreement to the contrary: (y) the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Board of Governors to take; and (z) none of the actions described in the foregoing clauses (i) through (iv) of this Section 4.1(a), other than Ministerial Acts, may be taken by any individual Governor on behalf of the Company without first obtaining the approval required pursuant to Section 4.1(e) or (f).
(b) The implementation of any decisions properly made by the Board of Governors, including the execution and delivery of all documents, may be through any Person selected by the Board of Governors (including any Governor). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Board of Governors is, to the extent of its rights and powers set forth in this Agreement, an agent of the Company for the purpose of the Companys business, and all actions of the Board of Governors taken in accordance with such rights and powers shall bind the Company.
(d) The Board of Governors shall consist of not less than one (1) nor more than eight (8) Governors. Without amendment to this Agreement, the number of Governors, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Governors shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Governor shall serve until the earlier of his or her death, resignation or removal. A Governor may be removed at any time, with or
without cause, by the Sole Member. A Governor may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Governors then in office shall be present in person at any meeting of the Board of Governors in order to constitute a quorum for the transaction of business at such meeting; provided, however, that (i) at least three (3) of the Governors constituting such a quorum must be a CCFI Governor, and (ii) if the meeting is held by telephone or through other communications equipment at which all Governors participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority (which act of the majority must, for the avoidance of doubt, always include the vote of at least one (1) CCFI Governor) of the Governors present at any meeting of the Board of Governors at which a quorum is present shall be the act of the Board of Governors.
(f) Any action required or permitted to be taken by the Board of Governors under this Agreement or the LLC Law may be taken without a meeting if the Board of Governors consents thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, the Board of Governors shall consist of seven (7) Governors, which Governors shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
Trevin G. Workman
S. Todd Jensen
4.2 Agents. The Board of Governors may engage on behalf of, and at the expense of, the Company, such Persons as the Board of Governors shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Board of Governors shall determine.
4.3 Managers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such managers of the Company, who may also be titled officers, as may be appointed from time to time in accordance with this Section 4.3 (the Managers). The Board of Governors may appoint such Managers as it may determine from time to time. The Managers, subject to the direction and control of the Board of Governors, shall do all things and take all actions necessary to run the business of the Company.
Notwithstanding anything to the contrary in the LLC Law, each Manager shall have the powers and duties as may be prescribed to him or her by the Board of Governors and, to the extent not so prescribed, as generally pertain to their respective offices. Each Manager shall hold office at the pleasure of the Board of Governors. Each Manager shall serve until the earlier of his or her death, resignation or removal, and any Manager may be removed at any time, with or without cause, by the Board of Governors. Any vacancy in any office shall also be filled by the Board of Governors. Any Manager may resign at any time by delivering his or her written resignation to the Board of Governors. For purposes of Section 10-32-88 of the LLC Law, as of the date of this Agreement, (i) William E. Saunders, Jr. shall exercise the functions of the office of president or chief executive officer or chief manager of the Company, (ii) Michel Durbin shall exercise the functions of the office of treasurer of the Company, and (iii) Bridgette Roman shall exercise the functions of the office of secretary of the Company.
(b) The Company may employ such employees as the Managers or Governors of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Governor or any Manager shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 10-32-29 of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, any Governor nor any Manager shall be liable therefor solely by reason of being a member of the Company or acting as a governor or a manager of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Governor or any Manager (or any member or other holder of an equity interest in the Sole Member or any director, manager, governor, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Governor, a Manager, or an officer, manager or
member of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, governor, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, governor, director or officer or in any other capacity while serving as an equity holder, manager, governor, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the LLC Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Board of Governors.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the LLC Law, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Governor, Manager, or other equity holder, governor, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the LLC
Law. Neither the failure of the Company (including the Sole Member, the Board of Governors or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the LLC Law, nor an actual determination by the Company (including the Sole Member, the Board of Governors or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Articles of Organization, this Agreement, any agreement, any action by the Board of Governors or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members managers, officers or members, a Governor, a Manager, or an employee or agent of the Company, or is or was serving at the request of the Company as a director, governor, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Board of Governors, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this
Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in subsection 1 of Section 10-32-30 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Board of Governors shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Governor to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of North Dakota without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Articles of Organization, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Operating Agreement of Cash Central of North Dakota, LLC as of the date first written above.
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DIRECT FINANCIAL SOLUTIONS, LLC | |
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EXHIBIT A
Form of Membership Interest Certificate
THE INTEREST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. ACCORDINGLY, SUCH INTEREST MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
THIS CERTIFICATE EVIDENCES AN INTEREST IN CASH CENTRAL OF NORTH DAKOTA, LLC AND SHALL BE A SECURITY GOVERNED BY ARTICLE 8 (INVESTMENT SECURITIES) OR THE EQUIVALENT ARTICLE OR CHAPTER OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, CHAPTER 41-08 OF THE NORTH DAKOTA UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT.
No.
CASH CENTRAL OF NORTH DAKOTA, LLC
A North Dakota Limited Liability Company
Membership Interest Certificate
This certifies that [ ] is the owner of the Membership Interest representing [ ]% membership equity interest in Cash Central of North Dakota, LLC (the Company), subject to the terms of the Amended and Restated Operating Agreement of Cash Central of North Dakota, LLC, made and entered into as of April 1, 2012, as the same may be amended from time to time in accordance with its terms (the Agreement).
This Membership Interest Certificate may be transferred by the lawful holders hereof only in accordance with the provisions of the Agreement and applicable law.
THIS SECURITY IS SUBJECT TO THE PROVISIONS OF THE AGREEMENT.
IN WITNESS WHEREOF, the Company has caused this Membership Interest Certificate to be issued this day of , .
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CASH CENTRAL OF NORTH DAKOTA, LLC | |
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FOR VALUE RECEIVED, , the of the Company does hereby sell, assign and transfer unto:
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(print or type name of assignee) |
the Membership Interest evidenced by the within Membership Interest Certificate, and does hereby irrevocably constitute an appoint attorney-in-fact to transfer the said Membership Interest on the books of the within-named Company, with the full power of substitution in the premises.
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NOTICE: The signature to this assignment must correspond with the name as written upon the face of the Membership Interest Certificate in every particular, without alternation or enlargement or any change whatsoever.
Exhibit 3.83
SECRETARY OF STATE |
CARTICLES OF ORGANIZATION |
RECEVIED JUN 28 05 S.D. SEC. OF STATE |
1. The name of Limited Liability Company is: Direct Financial Solutions of South Dakota LLC
2. The duration of the company if other than perpetual is:
3. The address of the initial designated office is: 819 W. 3rd, Pierre, SD 57501
4. The name and street address of the initial agent for service of process is: Marilyn Person, 819 W. 3rd, Pierre, SD 57501
5. The name and address of each organizer:
Trevin G. Workman, Esq.
Smurthwaite & Workman, LLC
503 West 2600 South, Suite 200
Bountiful, UT 84010
6. If the company is to be a manager-managed company rather than a member-managed company, the name and address of each initial manager is:
Todd Jensen, 89 East 1400 North, Logan, UT .84341
Mari-Catherine Vinton, 89 East 1400 North, Logan, UT 84341
7. Whether one or more of the members of the company are to be liable for its debts and obligations under SDCL 47-34A-303 (c). No member of the company is to liable for the companys debts and obligations.
8. Any other provisions, not inconsistent with law, which the members elect to set out in the articles of organization.
The Articles of Organization must be signed by the organizers and must state adjacent to the signature the name and capacity of the signer.
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6-24-05 |
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FILING INSTRUCTIONS:
· One or more persons may organize a Limited Liability Company
· The articles must be accompanied by the first Annual Report
· One original and one exact or conformed copy must be submitted
SECRETARY OF STATE |
AMENDED ARTICLES OF ORGANIZATION |
RECEVIED |
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STATE CAPITOL |
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MAY 24 2007 |
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500 E. CAPITOL AVE. |
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S.D. SEC. OF STATE |
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PIERRE, S.D. 57501 (605)773-4845 |
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FAX (605)773-4550 |
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FILING FEE: $50
The Limited Liability Company named below, adopts the following Amended Articles of Organization pursuant to SDCL 47-34A-204.
1. The name of the limited liability company is: Direct Financial Solutions of South Dakota LLC
2. The date of filing the articles of organization is 6/28/05
3. The amendment to the articles is:
The name of the Limited Liability Company is changed from Direct Financial Solutions of South Dakota LLC to Cash Central of South Dakota, LLC.
The application must be signed by a member if the company is a member-managed company or by a manager if its a manager- managed company.
Date: |
5/15/07 |
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Manager |
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Name of title |
domesticllcamendmentarticles July 2005
Exhibit 3.84
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
CASH CENTRAL OF SOUTH DAKOTA, LLC
a South Dakota Limited Liability Company
Dated as of April 1, 2012
THE MEMBERSHIP INTERESTS OF CASH CENTRAL OF SOUTH DAKOTA, LLC SHALL BE SECURITIES GOVERNED BY ARTICLE 8 (INVESTMENT SECURITIES) OR THE EQUIVALENT ARTICLE OR CHAPTER OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, CHAPTER 57A-8 OF THE SOUTH DAKOTA UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT. THE MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
CASH CENTRAL OF SOUTH DAKOTA, LLC
This AMENDED AND RESTATED OPERATING AGREEMENT (this Agreement) of Cash Central of South Dakota, LLC (the Company) is made, adopted and entered into effective as of April 1, 2012, by Direct Financial Solutions, LLC, a Delaware limited liability company, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Amended and Restated Operating Agreement for Direct Financial Solutions of South Dakota, LLC (n/k/a Cash Central of South Dakota, LLC), effective as of March 31, 2006 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of the Uniform Limited Liability Company Act (Chapter 47-34A of South Dakota Codified Laws) (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Articles of Organization of the Company (the Articles of Organization) were filed with the Secretary of State of South Dakota on June 28, 2005. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in an operating agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Cash Central of South Dakota, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 84 East 2400 North, North Logan, Utah 84341. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Articles of Organization in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Articles of Organization have been filed in the office of the Secretary of State of South Dakota in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of South Dakota.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than South Dakota in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in South Dakota shall be as set forth in the Articles of Organization. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in South Dakota shall be as set forth in the Articles of Organization. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Operating Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires. This Agreement shall also be known as a Declaration pursuant to Section 47-34A-101(12) of the LLC Law.
Articles of Organization has the meaning set forth in Section 1.1.
CCFI Manager means any of William E. Saunders, Jr., Kyle Hanson, Chad Streff, Michael Durbin or Bridgette Roman, or their respective alternates or successors, as appointed from time to time in accordance with Section 4.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.1.
Membership Interest Certificate has the meaning set forth in Section 2.2.
Ministerial Acts means (i) completing, executing and filing annual reports on behalf of the Company as required in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (ii) ordinary course acts required in connection with obtaining or maintaining the licensure of the Company in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (iii) executing any contract that by its terms is less than 12 months in length and represents a financial obligation of the Company of less than $5,000 in the aggregate, or (iv) any other act that is approved in writing by any CCFI Manager (other than the individual Manager requesting to take such other act).
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means Direct Financial Solutions, LLC, a Delaware limited liability company, or any Person that acquires all of the equity interests of the Company from Direct Financial Solutions, LLC.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST CERTIFICATE
2.1 Capital Contribution; Membership Interest. The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement, as evidenced by a Membership Interest Certificate (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
2.2 Membership Interest Certificate. The Membership Interest of the Sole Member will be evidenced by a certificate of limited liability company interest issued by the Company in substantially the form attached as Exhibit A to this Agreement (the Membership Interest Certificate). The Membership Interest shall be a security governed by Article 8 (Investment Securities) or the equivalent Article or Chapter of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Chapter 57A-8 of the South Dakota Uniform Commercial Code, as currently in effect. Each Membership Interest Certificate shall bear the following legend:
This certificate evidences an interest in Cash Central of South Dakota, LLC and shall be a security governed by Article 8 (Investment Securities) or the equivalent Article or Chapter of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Chapter 57A-8 of the South Dakota Uniform Commercial Code, as currently in effect.
This Section 2.2 shall not be amended and no such purported amendment to this Section 2.2 shall be effective until, to the extent necessary, all outstanding Membership Interest Certificates have been surrendered for re-issuance with any conforming changes required as a result of such amendment.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and
accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto. Notwithstanding the foregoing or anything in this Agreement to the contrary: (y) the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take; and (z) none of the actions described in the foregoing clauses (i) through (iv) of this Section 4.1(a), other than Ministerial Acts, may be taken by any individual Manager on behalf of the Company without first obtaining the approval required pursuant to Section 4.1(e) or (f).
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation or removal. A Manager may be removed at any time, with or without cause, by the Sole
Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that (i) at least three (3) of the Managers constituting such a quorum must be a CCFI Manager, and (ii) if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority (which act of the majority must, for the avoidance of doubt, always include the vote of at least one (1) CCFI Manager) of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be seven (7) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
Trevin G. Workman
S. Todd Jensen
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as
generally pertain to their respective offices. Each Officer shall hold office at the pleasure of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of subsections (a) and (b) of Section 47-34A-303 of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, manager or member of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the LLC Law, as the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the LLC Law, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the LLC Law. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the LLC Law, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by
the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Articles of Organization, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members managers, officers or members, a Manager, an Officer, or an employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 47-34A-601(7) of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of South Dakota without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Articles of Organization, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Operating Agreement of Cash Central of South Dakota, LLC as of the date first written above.
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EXHIBIT A
Form of Membership Interest Certificate
THE INTEREST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. ACCORDINGLY, SUCH INTEREST MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
THIS CERTIFICATE EVIDENCES AN INTEREST IN CASH CENTRAL OF SOUTH DAKOTA, LLC AND SHALL BE A SECURITY GOVERNED BY ARTICLE 8 (INVESTMENT SECURITIES) OR THE EQUIVALENT ARTICLE OR CHAPTER OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, CHAPTER 57A-8 OF THE SOUTH DAKOTA UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT.
No.
CASH CENTRAL OF SOUTH DAKOTA, LLC
A South Dakota Limited Liability Company
Membership Interest Certificate
This certifies that [ ] is the owner of the Membership Interest representing [ ]% membership equity interest in Cash Central of South Dakota, LLC (the Company), subject to the terms of the Amended and Restated Operating Agreement of Cash Central of South Dakota, LLC, made and entered into as of April 1, 2012, as the same may be amended from time to time in accordance with its terms (the Agreement).
This Membership Interest Certificate may be transferred by the lawful holders hereof only in accordance with the provisions of the Agreement and applicable law.
THIS SECURITY IS SUBJECT TO THE PROVISIONS OF THE AGREEMENT.
IN WITNESS WHEREOF, the Company has caused this Membership Interest Certificate to be issued this day of , .
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FOR VALUE RECEIVED, , the of the Company does hereby sell, assign and transfer unto:
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the Membership Interest evidenced by the within Membership Interest Certificate, and does hereby irrevocably constitute an appoint attorney-in-fact to transfer the said Membership Interest on the books of the within-named Company, with the full power of substitution in the premises.
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NOTICE: The signature to this assignment must correspond with the name as written upon the face of the Membership Interest Certificate in every particular, without alternation or enlargement or any change whatsoever. | ||||
Exhibit 3.85
Form 205 (Revised 01/06) This space reserved for office use. Certificate of Formation Limited Liability Company Return in duplicate to: FILED Secretary of State In the Office of the P.O. Box 13697 Secretary of State of Texas Austin, TX 78711-3697 512 463-5555 APR 10 2006 FAX: 512 463-5709 Filing Fee: $300 Corporations Section Article 1 Entity Name and Type The filing entity being formed is a limited liability company. The name of the entity is: Direct Financial Solutions of Texas, LLC The name must contain the words limited liability company, limited company, or an abbreviation of one of these phrases. Article 2 Registered Agent and Registered Office (Select and complete either A or B and complete C) A. The initial registered agent is an organization (cannot be entity named above) by the name of: Blumbergexcelsior Corporate Services OR B. The initial registered agent is an individual resident of the state whose name is set forth below: First Name M.I. Last Name Suffix C. The business address of the registered agent and the registered office address is: 814 San Jacinto Boulevard, Suite 303 Austin TX 72701 Street Address City State Zip Code Article 3 Governing Authority (Select and complete either A or B and provide the name and address of each governing person) A. The limited liability company will have managers. The name and address of each initial manager are set forth below. B. The limited liability company will not have managers. The company will be governed by its members, and the name and address of each initial member are set forth below. NAME OF GOVERNING PERSON (Enter the name of either an individual or an organization, but not both.) IF INDIVIDUAL Trevin G Workman First Name M.I. Last Name Suffix OR IF ORGANIZATION Organization Name ADDRESS OF GOVERNING PERSON 84 East 2400 North Logan UT USA 84341 Street or Mailing Address City State Country Zip Code 4 Form 205 |
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NAME OF GOVERNING PERSON (Enter the name of either an individual or an organization, but not both.) IF INDIVIDUAL First Name M.I. Last Name Suffix OR IF ORGANIZATION Organization Name ADDRESS OF GOVERNING PERSON Street or Mailing Address City State Country Zip Code NAME OF GOVERNING PERSON (Enter the name of either an individual or an organization, but not both.) IF INDIVIDUAL First Name M.I. Last Name Suffix OR IF ORGANIZATION Organization Name ADDRESS OF GOVERNING PERSON Street or Mailing Address City State Country Zip Code Article 4 Purpose The purpose for which the company is formed is for the transaction of any and all lawful purposes for which a limited liability company may be organized under the Texas Business Organizations Code. Supplemental Provisions/Information Text Area: [The attached addendum, if any, is incorporated herein by reference.] 5 Form 205 |
Organizer The name and address of the organizer: Trevin Workman Name 84 East 2400 North Logan UT 84341 Street or Mailing Address City State Zip Code Effectiveness of Filing (Select either A, B, or C) A. This document becomes effective when the document is filed by the secretary of state. B. This document becomes effective at a later date, which is not more than ninety (90) days from the date of signing. The delayed effective date is: C. This document takes effect upon the occurrence of the future event or fact, other than the passage of time. The 90th day after the date of signing is: The following event or fact will cause the document to take effect in the manner described below: Execution The undersigned signs this document subject to the penalties imposed by law for the submission of a materially false or fraudulent instrument. Date: April 4, 2006 Signature of organizer Form 205 |
Form 424 Certificate of Amendment This space reserved for office use. (Revised 01/06) Return in duplicate to: Secretary of State P.O. Box 13697 Austin, TX 78711-3697 512 463-5555 FAX: 512/463-5709 Filing Fee: See instructions FILED In the Office of the Secretary of State of Texas MAY 23 2007 Corporations Section Entity Information The name of the filing entity is: Direct Financial Solutions of Texas, LLC State the name of the entity as currently shown in the records of the secretary of state. If the amendment changes the name of the entity, state the old name and not the new name. The filing entity is a: (Select the appropriate entity type below.) For-profit Corporation Professional Corporation Nonprofit Corporation Professional Limited Liability Company Cooperative Association Professional Association Limited Liability Company Limited Partnership The file number issued to the filing entity by the secretary of state is: 800639153 The date of formation of the entity is: 4/10/2006 Amendments 1. Amended Name (If the purpose of the certificate of amendment is to change the name of the entity, use the following statement) The amendment changes the certificate of formation to change the article or provision that names the filing entity. The article or provision is amended to read as follows: The name of the filing entity is: (state the new name of the entity below) Cash Central of Texas, LLC The name of the entity must contain an organizational designation or accepted abbreviation of such term, as applicable. 2. Amended Registered Agent/Registered Office The amendment changes the certificate of formation to change the article or provision stating the name of the registered agent and the registered office address of the filing entity. The article or provision is amended to read as follows: RECEIVED MAY 23 2007 Secretary of State 6 Form 424 |
Registered Agent (Complete either A or B, but not both. Also complete C.) A. The registered agent is an organization (cannot be entity named above) by the name of: OR B. The registered agent is an individual resident of the state whose name is: First Name M.I. Last Name Suffix C. The business address of the registered agent and the registered office address is: TX Street Address (No P.O. Box) City State Zip Code 3. Other Added, Altered, or Deleted Provisions Other changes or additions to the certificate of formation may be made in the space provided below. If the space provided is insufficient, incorporate the additional text by providing an attachment to this form. Please read the instructions to this form for further information on format. Text Area (The attached addendum, if any, is incorporated herein by reference.) Add each of the following provisions to the certificate of formation. The identification or reference of the added provision and the full text are as follows: Alter each of the following provisions of the certificate of formation. The identification or reference of the altered provision and the full text of the provision as amended are as follows: Delete each of the provisions identified below from the certificate of formation. Statement of Approval The amendments to the certificate of formation have been approved in the manner required by the Texas Business Organizations Code and by the governing documents of the entity. 7 |
Effectiveness of Filing (Select either A, B, or C.) A. This document becomes effective when the document is filed by the secretary of state. B. This document becomes effective at a later date, which is not more than ninety (90) days from the date of signing. The delayed effective date is: C. This document takes effect upon the occurrence of a future event or fact, other than the passage of time. The 90th day after the date of signing is: The following event or fact will cause the document to take effect in the manner described below: Execution The undersigned signs this document subject to the penalties imposed by law for the submission of a materially false or fraudulent instrument. Date: 5/21/07 Trevin Workman, Manager Signature and title of authorized person(s) (see instructions) 8 Form 424 |
Exhibit 3.86
AMENDED AND RESTATED
COMPANY AGREEMENT
OF
CASH CENTRAL OF TEXAS, LLC
a Texas Limited Liability Company
Dated as of April 1, 2012
THE MEMBERSHIP INTERESTS OF CASH CENTRAL OF TEXAS, LLC SHALL BE SECURITIES GOVERNED BY ARTICLE 8 (INVESTMENT SECURITIES) OR THE EQUIVALENT ARTICLE OR CHAPTER OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, CHAPTER 8 OF THE TEXAS UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT. THE MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
COMPANY AGREEMENT
OF
CASH CENTRAL OF TEXAS, LLC
This AMENDED AND RESTATED COMPANY AGREEMENT (this Agreement) of Cash Central of Texas, LLC (the Company) is made, adopted and entered into effective as of April 1, 2012, by Direct Financial Solutions, LLC, a Delaware limited liability company, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Amended and Restated Operating Agreement for Direct Financial Solutions of Texas, LLC (n/k/a Cash Central of Texas, LLC), effective as of March 31, 2006 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 101 of Title 3 of the Texas Business Organizations Code (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Texas on April 10, 2006. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in a company agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Cash Central of Texas, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 84 East 2400 North, North Logan, Utah 84341. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Texas in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Texas.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Texas in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Texas shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Texas shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Company Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
CCFI Manager means any of William E. Saunders, Jr., Kyle Hanson, Chad Streff, Michael Durbin or Bridgette Roman, or their respective alternates or successors, as appointed from time to time in accordance with Section 4.1.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.1.
Membership Interest Certificate has the meaning set forth in Section 2.2.
Ministerial Acts means (i) completing, executing and filing annual reports on behalf of the Company as required in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (ii) ordinary course acts required in connection with obtaining or maintaining the licensure of the Company in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (iii) executing any contract that by its terms is less than 12 months in length and represents a financial obligation of the Company of less than $5,000 in the aggregate, or (iv) any other act that is approved in writing by any CCFI Manager (other than the individual Manager requesting to take such other act).
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means Direct Financial Solutions, LLC, a Delaware limited liability company, or any Person that acquires all of the equity interests of the Company from Direct Financial Solutions, LLC.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST CERTIFICATE
2.1 Capital Contribution; Membership Interest. The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement, as evidenced by a Membership Interest Certificate (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
2.2 Membership Interest Certificate. The Membership Interest of the Sole Member will be evidenced by a certificate of limited liability company interest issued by the Company in substantially the form attached as Exhibit A to this Agreement (the Membership Interest Certificate). The Membership Interest shall be a security governed by Article 8 (Investment Securities) or the equivalent Article or Chapter of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Chapter 8 of the Texas Uniform Commercial Code, as currently in effect. Each Membership Interest Certificate shall bear the following legend:
This certificate evidences an interest in Cash Central of Texas, LLC and shall be a security governed by Article 8 (Investment Securities) or the equivalent Article or Chapter of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Chapter 8 of the Texas Uniform Commercial Code, as currently in effect.
This Section 2.2 shall not be amended and no such purported amendment to this Section 2.2 shall be effective until, to the extent necessary, all outstanding Membership Interest Certificates have been surrendered for re-issuance with any conforming changes required as a result of such amendment.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax
purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto. Notwithstanding the foregoing or anything in this Agreement to the contrary: (y) the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take; and (z) none of the actions described in the foregoing clauses (i) through (iv) of this Section 4.1(a), other than Ministerial Acts, may be taken by any individual Manager on behalf of the Company without first obtaining the approval required pursuant to Section 4.1(e) or (f).
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that (i) at least three (3) of the Managers constituting such a quorum must be a CCFI Manager, and (ii) if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority (which act of the majority must, for the avoidance of doubt, always include the vote of at least one (1) CCFI Manager) of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be seven (7) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
Trevin G. Workman
S. Todd Jensen
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as
generally pertain to their respective offices. Each Officer shall hold office at the pleasure of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 101.114 of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, manager or member of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the LLC Law, as the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the LLC Law, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the LLC Law. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the LLC Law, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by
the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Certificate of Formation, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members managers, officers or members, a Manager, an Officer, or an employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Company Agreement of Cash Central of Texas, LLC as of the date first written above.
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EXHIBIT A
Form of Membership Interest Certificate
THE INTEREST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. ACCORDINGLY, SUCH INTEREST MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
THIS CERTIFICATE EVIDENCES AN INTEREST IN CASH CENTRAL OF TEXAS, LLC AND SHALL BE A SECURITY GOVERNED BY ARTICLE 8 (INVESTMENT SECURITIES) OR THE EQUIVALENT ARTICLE OR CHAPTER OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, CHAPTER 8 OF THE TEXAS UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT.
No.
CASH CENTRAL OF TEXAS, LLC
A Texas Limited Liability Company
Membership Interest Certificate
This certifies that [ ] is the owner of the Membership Interest representing [ ]% membership equity interest in Cash Central of Texas, LLC (the Company), subject to the terms of the Amended and Restated Company Agreement of Cash Central of Texas, LLC, made and entered into as of April 1, 2012, as the same may be amended from time to time in accordance with its terms (the Agreement).
This Membership Interest Certificate may be transferred by the lawful holders hereof only in accordance with the provisions of the Agreement and applicable law.
THIS SECURITY IS SUBJECT TO THE PROVISIONS OF THE AGREEMENT.
IN WITNESS WHEREOF, the Company has caused this Membership Interest Certificate to be issued this day of , .
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FOR VALUE RECEIVED, , the of the Company does hereby sell, assign and transfer unto:
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the Membership Interest evidenced by the within Membership Interest Certificate, and does hereby irrevocably constitute an appoint attorney-in-fact to transfer the said Membership Interest on the books of the within-named Company, with the full power of substitution in the premises.
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NOTICE: The signature to this assignment must correspond with the name as written upon the face of the Membership Interest Certificate in every particular, without alternation or enlargement or any change whatsoever. |
Exhibit 3.87
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RECEIVED |
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JUN 20 2005 |
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UT.DIV.of CORP.&COMM.CODE |
ARTICLES OF ORGANIZATION
OF
DIRECT FINANCIAL SOLUTIONS OF UTAH, L.L.C.
BY AGREEMENT, the undersigned Manager, on behalf of the Members who desire to form a limited liability company pursuant to the Utah Revised Limited Liability Company Act (hereinafter referred to as the Act), hereby set forth the following Articles of Organization for such limited liability company (hereinafter referred to as the Company):
ARTICLE 1 NAME
The name of the Company is Direct Financial Solutions of Utah, L.L.C.
ARTICLE 2 PERIOD OF DURATION
The period of duration of the Company shall begin as of the effective date of the filing with the state of Utah, and shall continue thereafter until the 31st day of May, 2105, or until such time as it is dissolved by agreement of the Members or upon the occurrence of any of the events provided for under the Act.
ARTICLE 3 PURPOSE
The purposes for which the Company is organized are to engage in any lawful business activities for which limited liability companies may be organized pursuant to the Act.
ARTICLE 4 REGISTERED OFFICE AND AGENT
The name of the original Registered Agent of the Company is Trevin G. Workman, located at 503 West 2600 South, Suite 200, Bountiful Utah 84010.
State of Utah | ||||||
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[ILLEGIBLE] |
Date: |
6.24.05 |
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/S/ Kathy Berg |
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Kathy Berg | ||||||
Division Director | ||||||
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ILLEGIBLE |
ARTICLE 5 FAILURE TO MAINTAIN A REGISTERED AGENT
The Director of the Division of Corporations and Commercial Code of the Utah Department of Commerce (Division) is appointed agent of the Company for service of process in the event (i) the agent has resigned, (ii) the agents authority has been revoked, or (iii) the agent cannot be found or served with the exercise of reasonable diligence.
ARTICLE 6 DESIGNATED OFFICE
The designated office of the Company shall be 89 East 1400 North, Logan, Utah 84341.
ARTICLE 7 MANAGEMENT
The management of the Company shall be vested in Co-Managers. The names and street addresses of the Co-Managers, who will serve until a successor or successors are elected, are as follows:
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Todd Jensen |
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89 East 1400 North |
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Logan, Utah 84341 |
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Mari-Catherine Vinton |
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89 East 1400 North |
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Logan, Utah 84341 |
ARTICLE 8 AMENDMENT TO THE ARTICLES OF ORGANIZATION
The Articles of Organization of the Company shall be amended if there is a change in Manager of the Company, or for any of the other applicable reasons stated in the Act, and may otherwise only be amended by majority vote of the Members of the Company.
ARTICLE 9 OPERATING AGREEMENT
The Operating Agreement shall set forth all provisions pertaining to control, operations and records of the Company. The Operating Agreement of the Company shall only be altered, amended, or repealed as provided therein. Significant changes in the purposes of the Company or any matters of significant consequence to the existence of the Company, including but not limited to the distribution of substantially all or all of the assets of the Company, shall only be made with the majority written approval of the Members of the Company.
ARTICLE 10 AUTHORITY
No Member shall have authority to act on behalf of or bind the Company without the written approval of the Co-Managers. Only the Co-Managers of the Company, as indicated above, or successor(s) as Manager, and those given authority by such written approval may sign contracts or other instruments on behalf of the Company.
ARTICLE 11 INTEREST OF A MEMBER
An interest of a Member in the Company may only be adjusted, transferred or assigned in accordance with the provisions of the Operating Agreement of the Company. If all of the Members of the Company do not consent to a transfer or assignment, the transferee has no right to participate in the management of the business or affairs of the Company or become a Member and is only entitled to receive the transferors share of profits or other compensation.
ARTICLE 12 LIABILITY
Neither the Members, Managers, Employees, nor Agents of the Company shall be personally liable for any debt, obligation, or liability of the Company nor of any other Member, Manager, Employee, or Agent of the Company. Neither shall the Company be liable for any debts, obligations, or liabilities of any Member, Manager, Employee, or Agent.
IN WITNESS WHEREOF, the Parties have hereunto executed this Agreement this 15th day of June, 2005.
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MANAGERS: |
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/s/ Todd Jensen |
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Todd Jensen |
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/s/ Mari-Catherine Vinton |
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Mari-Catherine Vinton |
The undersigned hereby accepts appointment as Registered Agent for the above named Company.
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REGISTERED AGENT: |
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/s/ Trevin G. Workman |
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Trevin G. Workman |
State of Utah DEPARTMENT OF COMMERCE Division of Corporations & Commercial Code Articles of Amendment to Articles of Organization IThis form must be type vtntten or computer generated File Number 5941161-0160 Non-Refundable Processing Fee $37 00 AMENDMENT Pursuant to UCA § 48-2c-408, the individual named below causes this Amendment to the Articles of Organization to be delivered to the Utah Division of Corporations for filing, and states as follows The name of the limited liability company is Direct Financial Solutions of Utah, LLC The Articles of Organization shall be amended as set forth herein (mark all that apply) There is a change in the name of the limited liability company to Cash Central of Utah, LLC The articles of organization are amended as follows A change of ownership structure or exchange/reclassification of interests The amendment was adopted on May (1) ,2007 Each amendment was adopted by the members and any managers, as required by Section 48-2c-803 or 48-2c-204, or otherwise required by the articles or organization or operating agreement Delayed effective date (if not to be effective upon filing) (not to raved 90 chns) Under penalties of perjury, I declare that this Amendment of Articles of Organization has been examined by me and is, to the best of my knowledge and belief, true, correct and complete Typed Name Trevin Workman Capacity Member Manager Signed Dated 5/15/07 Under CRANIA (63-2-2011 all registration Information maintained by the Division is classified as public record For confidentiality purposes, the business entity physical address ma) be provided rather than the residential or private address of any indis dual affiliated with the entity Mailing/Faxing Information www.corporations utah gov/contactus html Divisions Website www.corporations utah gov Date 05/22/2007 Receipt Number 2133254 AMount paid $37 00 |
Exhibit 3.88
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
CASH CENTRAL OF UTAH, LLC
a Utah Limited Liability Company
Dated as of April 1, 2012
THE MEMBERSHIP INTERESTS OF CASH CENTRAL OF UTAH, LLC SHALL BE SECURITIES GOVERNED BY ARTICLE 8 (INVESTMENT SECURITIES) OR THE EQUIVALENT ARTICLE OR CHAPTER OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, CHAPTER 8 OF THE UTAH UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT. THE MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
CASH CENTRAL OF UTAH, LLC
This AMENDED AND RESTATED OPERATING AGREEMENT (this Agreement) of Cash Central of Utah, LLC (the Company) is made, adopted and entered into effective as of April 1, 2012, by Direct Financial Solutions, LLC, a Delaware limited liability company, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Amended and Restated Operating Agreement for Direct Financial Solutions of Utah, LLC (n/k/a Cash Central of Utah, LLC), effective as of March 31, 2006 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of the Utah Revised Limited Liability Company Act (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Articles of Organization of the Company (the Articles of Organization) were filed with the Utah Division of Corporations and Commercial Code on June 20, 2005. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in an operating agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Cash Central of Utah, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 84 East 2400 North, North Logan, Utah 84341. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Articles of Organization in accordance with the LLC Law and shall continue in existence for the duration set forth in the Articles of Organization, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Articles of Organization have been filed with Utah Division of Corporations and Commercial Code in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Utah.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Utah in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Utah shall be as set forth in the Articles of Organization. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Utah shall be as set forth in the Articles of Organization. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Operating Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Articles of Organization has the meaning set forth in Section 1.1.
CCFI Manager means any of William E. Saunders, Jr., Kyle Hanson, Chad Streff, Michael Durbin or Bridgette Roman, or their respective alternates or successors, as appointed from time to time in accordance with Section 4.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.1.
Membership Interest Certificate has the meaning set forth in Section 2.2.
Ministerial Acts means (i) completing, executing and filing annual reports on behalf of the Company as required in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (ii) ordinary course acts required in connection with obtaining or maintaining the licensure of the Company in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (iii) executing any contract that by its terms is less than 12 months in length and represents a financial obligation of the Company of less than $5,000 in the aggregate, or (iv) any other act that is approved in writing by any CCFI Manager (other than the individual Manager requesting to take such other act).
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means Direct Financial Solutions, LLC, a Delaware limited liability company, or any Person that acquires all of the equity interests of the Company from Direct Financial Solutions, LLC.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST CERTIFICATE
2.1 Capital Contribution; Membership Interest. The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement, as evidenced by a Membership Interest Certificate (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
2.2 Membership Interest Certificate. The Membership Interest of the Sole Member will be evidenced by a certificate of limited liability company interest issued by the Company in substantially the form attached as Exhibit A to this Agreement (the Membership Interest Certificate). The Membership Interest shall be a security governed by Article 8 (Investment Securities) or the equivalent Article or Chapter of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Chapter 8 of the Utah Uniform Commercial Code, as currently in effect. Each Membership Interest Certificate shall bear the following legend:
This certificate evidences an interest in Cash Central of Utah, LLC and shall be a security governed by Article 8 (Investment Securities) or the equivalent Article or Chapter of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Chapter 8 of the Utah Uniform Commercial Code, as currently in effect.
This Section 2.2 shall not be amended and no such purported amendment to this Section 2.2 shall be effective until, to the extent necessary, all outstanding Membership Interest Certificates have been surrendered for re-issuance with any conforming changes required as a result of such amendment.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax
purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto. Notwithstanding the foregoing or anything in this Agreement to the contrary: (y) the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take; and (z) none of the actions described in the foregoing clauses (i) through (iv) of this Section 4.1(a), other than Ministerial Acts, may be taken by any individual Manager on behalf of the Company without first obtaining the approval required pursuant to Section 4.1(e) or (f).
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that (i) at least three (3) of the Managers constituting such a quorum must be a CCFI Manager, and (ii) if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority (which act of the majority must, for the avoidance of doubt, always include the vote of at least one (1) CCFI Manager) of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be seven (7) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
Trevin G. Workman
S. Todd Jensen
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the
Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 48-2c-601 of the LLC Law (or any successor thereto). The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, manager or member of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the LLC Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security
Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the LLC Law, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the LLC Law. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the LLC Law, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Articles of Organization, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members managers, officers or members, a Manager, an Officer, or an employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the
provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in subsections 1(f)(i) and (ii) of Section 48-2c-708 of the LLC Law (or any successor thereto).
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Utah without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Articles of Organization, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Operating Agreement of Cash Central of Utah, LLC as of the date first written above.
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DIRECT FINANCIAL SOLUTIONS, LLC | |
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By: |
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Bridgette C. Roman |
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Manager |
EXHIBIT A
Form of Membership Interest Certificate
THE INTEREST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. ACCORDINGLY, SUCH INTEREST MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
THIS CERTIFICATE EVIDENCES AN INTEREST IN CASH CENTRAL OF UTAH, LLC AND SHALL BE A SECURITY GOVERNED BY ARTICLE 8 (INVESTMENT SECURITIES) OR THE EQUIVALENT ARTICLE OR CHAPTER OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, CHAPTER 8 OF THE UTAH UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT.
No.
CASH CENTRAL OF UTAH, LLC
A Utah Limited Liability Company
Membership Interest Certificate
This certifies that [ ] is the owner of the Membership Interest representing [ ]% membership equity interest in Cash Central of Utah, LLC (the Company), subject to the terms of the Amended and Restated Operating Agreement of Cash Central of Utah, LLC, made and entered into as of April 1, 2012, as the same may be amended from time to time in accordance with its terms (the Agreement).
This Membership Interest Certificate may be transferred by the lawful holders hereof only in accordance with the provisions of the Agreement and applicable law.
THIS SECURITY IS SUBJECT TO THE PROVISIONS OF THE AGREEMENT.
IN WITNESS WHEREOF, the Company has caused this Membership Interest Certificate to be issued this day of , .
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CASH CENTRAL OF UTAH, LLC | |
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Name: |
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Manager |
FOR VALUE RECEIVED, , the of the Company does hereby sell, assign and transfer unto:
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(print or type name of assignee) |
the Membership Interest evidenced by the within Membership Interest Certificate, and does hereby irrevocably constitute an appoint attorney-in-fact to transfer the said Membership Interest on the books of the within-named Company, with the full power of substitution in the premises.
Dated as of: |
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NOTICE: The signature to this assignment must correspond with the name as written upon the face of the Membership Interest Certificate in every particular, without alternation or enlargement or any change whatsoever. | |||||
Exhibit 3.89
State of Washington |
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Secretary of State | |
CORPORATIONS DIVISION | |
James M. Dolliver Building 801 Capitol Way South | |
PO Box 40234 |
602 513 978 |
Olympia WA 98504-0234 |
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360.753.7115 |
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Application for Limited Liability Company | |
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Office Information |
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Application ID |
309956 |
Tracking ID |
927844 |
Validation ID |
646369-001 |
Date Submitted for Filing: |
6/20/2005 |
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Contact Information |
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Contact Name |
Trevin Workman |
Contact Address |
503 West 2600 South, Suite 200 |
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Bountiful |
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UT |
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84010 |
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Contact Email |
trevin@wsfirm.com |
Contact Phone |
801-335-0404 |
Certificate of Formation | |
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Preferred Name |
DIRECT FINANCIAL SOLUTIONS OF WASHINGTON LLC |
Physical Address |
89 East 1400 North |
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Logan |
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UT |
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84341 |
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Purpose |
Any Lawful Purpose |
Duration |
Perpetual |
Formation Date |
Effective Upon Filing by the Secretary of State |
Expiration Date |
6/30/2006 |
Limited Liability Company Management |
Manager |
Members Signature |
Attached |
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Registered Agent Information | |
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Agent is Individual |
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Agent Name |
Charles Markwell |
Agent Street Address |
3306 Wetmore |
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Everett |
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WA |
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98201 |
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Agent Mailing Address |
Same as Street Address |
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Agent Email Address |
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Submitter/Agent Relationship |
Submitter has signed consent of specified agent |
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Members Information | |
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Members Signatures On File |
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Member #1 |
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Member Name |
Direct Financial Solutions LLC |
Member Address |
89 East 1400 North |
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Logan |
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UT |
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84341 |
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Signature Information | |
Signed By |
Trevin G. Workman |
STATE OF WASHINGTON ARTICLES OF AMENDMENT SECRETARY OF STATE FILED LIMITED LIABILITY COMPANY Fill, type or print In black ink. SECRETARY OF STATE (Per Chapter 25:15 RCW) Checks made payable to Secretary of State SAM REED FEE: $30.00 Sign, date and return original to: 05/24/2007 EXPEDITED (24-HOUR) SERVICE AVAILABLE $20 PER ENTITY INCLUDE FEE AND WRITE EXPEDITE IN BOLD LETTERS CORPORATIONS DIVISION STATE OF WASHINGTON ON OUTSIDE OF ENVELOPE 801 CAPITOL WAY SOUTH, PO BOX 40234 OLYMPIA, WA 98504-0234 IMPORTANTI Person to contact about this filling Daytime Phone Number (with area code) Trevin Workman (435) 774-8270 Email Address trevin@directfinancialsolutions.com ARTICLES OF AMENDMENT NAME OF LIMITED LIABILITY COMPANY UBI NUMBER Direct Financial Solutions of Washington LLC 602513978 AMENDMENT(S) The text of each adopted amendment is as follows: The name of the Limited Liability Company is changed from Direct Financial Solutions of Washington LLC to Cash Central of Washington, LLC. EFFECTIVE DATE OF AMENDMENT (Specified effective date may be up to 90 days AFTER receipt of the document by the Secretary of State.) specific Date: Upon Filing by the Secretary of State. SIGNATURE OF MEMBER OR MANAGER This document is hereby executed under penalities of perjury, and is, to the best of my knowledge, true and correct. Trevin Workman Manager 5/15/07 Signature of Member or Manager Printed Name Printed Title Date IMPORTANTI This form must be filled out in its entirety and returned with the appropriate payment for filing. If you have questions about the requested information on the form please contact our customer assistance at: CUSTOMER ASSISTANCE http://secstate.wa.gov/corps/ or 360/753-7115 (TOD 360/753-1485) |
Exhibit 3.90
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
CASH CENTRAL OF WASHINGTON, LLC
a Washington Limited Liability Company
Dated as of April 1, 2012
THE MEMBERSHIP INTERESTS OF CASH CENTRAL OF WASHINGTON, LLC SHALL BE SECURITIES GOVERNED BY ARTICLE 8 (INVESTMENT SECURITIES) OR THE EQUIVALENT ARTICLE OR CHAPTER OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, CHAPTER 62A.8 OF THE WASHINGTON UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT. THE MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
CASH CENTRAL OF WASHINGTON, LLC
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of Cash Central of Washington, LLC (the Company) is made, adopted and entered into effective as of April 1, 2012, by Direct Financial Solutions, LLC, a Washington limited liability company, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Amended and Restated Operating Agreement for Direct Financial Solutions of Washington, LLC (n/k/a Cash Central of Washington, LLC), effective as of March 31, 2006 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of the Washington Limited Liability Company Act (Revised Code of Washington Chapter 25.15) (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Washington on June 20, 2005. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in a limited liability company agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Cash Central of Washington, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 84 East 2400 North, North Logan, Utah 84341. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Washington in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Washington.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Washington in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Washington shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Washington shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Limited Liability Company Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
CCFI Manager means any of William E. Saunders, Jr., Kyle Hanson, Chad Streff, Michael Durbin or Bridgette Roman, or their respective alternates or successors, as appointed from time to time in accordance with Section 4.1.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.1.
Membership Interest Certificate has the meaning set forth in Section 2.2.
Ministerial Acts means (i) completing, executing and filing annual reports on behalf of the Company as required in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (ii) ordinary course acts required in connection with obtaining or maintaining the licensure of the Company in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (iii) executing any contract that by its terms is less than 12 months in length and represents a financial obligation of the Company of less than $5,000 in the aggregate, or (iv) any other act that is approved in writing by any CCFI Manager (other than the individual Manager requesting to take such other act).
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means Direct Financial Solutions, LLC, a Washington limited liability company, or any Person that acquires all of the equity interests of the Company from Direct Financial Solutions, LLC.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST CERTIFICATE
2.1 Capital Contribution; Membership Interest. The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement, as evidenced by a Membership Interest Certificate (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
2.2 Membership Interest Certificate. The Membership Interest of the Sole Member will be evidenced by a certificate of limited liability company interest issued by the Company in substantially the form attached as Exhibit A to this Agreement (the Membership Interest Certificate). The Membership Interest shall be a security governed by Article 8 (Investment Securities) or the equivalent Article or Chapter of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Chapter 62A.8 of the Washington Uniform Commercial Code, as currently in effect. Each Membership Interest Certificate shall bear the following legend:
This certificate evidences an interest in Cash Central of Washington, LLC and shall be a security governed by Article 8 (Investment Securities) or the equivalent Article or Chapter of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Chapter 62A.8 of the Washington Uniform Commercial Code, as currently in effect.
This Section 2.2 shall not be amended and no such purported amendment to this Section 2.2 shall be effective until, to the extent necessary, all outstanding Membership Interest Certificates have been surrendered for re-issuance with any conforming changes required as a result of such amendment.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and
accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto. Notwithstanding the foregoing or anything in this Agreement to the contrary: (y) the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take; and (z) none of the actions described in the foregoing clauses (i) through (iv) of this Section 4.1(a), other than Ministerial Acts, may be taken by any individual Manager on behalf of the Company without first obtaining the approval required pursuant to Section 4.1(e) or (f).
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation or removal. A Manager may be removed at any time, with or without cause, by the Sole
Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that (i) at least three (3) of the Managers constituting such a quorum must be a CCFI Manager, and (ii) if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority (which act of the majority must, for the avoidance of doubt, always include the vote of at least one (1) CCFI Manager) of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be seven (7) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
Trevin G. Workman
S. Todd Jensen
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction
and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of subsection 1 of Section 25.15.125 of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, manager or member of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any
other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the LLC Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the LLC Law, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the LLC Law. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the LLC Law, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that
the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Certificate of Formation, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members managers, officers or members, a Manager, an Officer, or an employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in subsections (1)(d) and (e) of Section 25.15.130 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Limited Liability Company Agreement of Cash Central of Washington, LLC as of the date first written above.
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DIRECT FINANCIAL SOLUTIONS, LLC | |
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Bridgette C. Roman |
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EXHIBIT A
Form of Membership Interest Certificate
THE INTEREST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. ACCORDINGLY, SUCH INTEREST MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
THIS CERTIFICATE EVIDENCES AN INTEREST IN CASH CENTRAL OF WASHINGTON, LLC AND SHALL BE A SECURITY GOVERNED BY ARTICLE 8 (INVESTMENT SECURITIES) OR THE EQUIVALENT ARTICLE OR CHAPTER OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, CHAPTER 62A.8 OF THE WASHINGTON UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT.
No.
CASH CENTRAL OF WASHINGTON, LLC
A Washington Limited Liability Company
Membership Interest Certificate
This certifies that [ ] is the owner of the Membership Interest representing [ ]% membership equity interest in Cash Central of Washington, LLC (the Company), subject to the terms of the Amended and Restated Limited Liability Company Agreement of Cash Central of Washington, LLC, made and entered into as of April 1, 2012, as the same may be amended from time to time in accordance with its terms (the Agreement).
This Membership Interest Certificate may be transferred by the lawful holders hereof only in accordance with the provisions of the Agreement and applicable law.
THIS SECURITY IS SUBJECT TO THE PROVISIONS OF THE AGREEMENT.
IN WITNESS WHEREOF, the Company has caused this Membership Interest Certificate to be issued this day of , .
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CASH CENTRAL OF WASHINGTON, LLC | |
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FOR VALUE RECEIVED, , the of the Company does hereby sell, assign and transfer unto:
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(print or type name of assignee) |
the Membership Interest evidenced by the within Membership Interest Certificate, and does hereby irrevocably constitute an appoint attorney-in-fact to transfer the said Membership Interest on the books of the within-named Company, with the full power of substitution in the premises.
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NOTICE: The signature to this assignment must correspond with the name as written upon the face of the Membership Interest Certificate in every particular, without alternation or enlargement or any change whatsoever. | ||||
Exhibit 3.91
Sec. 183.0202 Wis. Stats. |
State of Wisconsin
Department of Financial Institutions
ARTICLES OF ORGANIZATION - LIMITED LIABILITY COMPANY
Executed by the undersigned for the purpose of forming a Wisconsin Limited Liability Company under Chapter 183 of the Wisconsin Statutes:
Article 1. |
Name of the limited liability company: |
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Direct Financial Solutions of Wisconsin LLC |
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The limited liability company is organized under Ch. 183 of the Wisconsin Statutes. |
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Article 3. |
Name of the initial registered agent: |
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Paul C. Klumb |
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Article 4. |
Street address of the initial registered office: |
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6688 N. Shawmoors Drive |
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Chenequa, WI 53029 |
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United States of America |
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Article 5. |
Management of the limited liability company shall be vested in: |
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A manager or managers |
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Article 6. |
Name and complete address of each organizer: |
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Trevin G. Workman |
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503 West 2600 South, Suite 200 |
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Bountiful, UT 84010 |
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United States of America |
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Not executed in Wisconsin |
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Organizer Signature: |
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Trevin G. Workman |
Set. It*: State of Wisconsin Wis. Stats Department of Financial Institutions Division of Corporate and Consumer Services ARTICLES OF AMENDMENT - LIMITED LIABILITY COMPANY Note: Articles of Amendment cannot be filed to add or remove members, managers or owners of the limited liability company. Member and manager information should be listed in the companys operating agreement. The operating agreement is not filed with the Department of Financial Institutions. A. The present limited liability company name (prior to any change effected by this amendment) is: Direct Financial Solutions of Wisconsin LLC (Enter Limited Liability Company Name) Text of Amendment (Refer to the existing articles of organization and the instructions on the reverse of this form. Determine those items to be changed and enter the number identifying the paragraph in the articles of organization being changed and how the amended paragraph is to read.) RESOLVED, THAT the articles of organization be amended as follows: Article One: The name of the Limited Liability Company is changed from Direct Financial Solutions of Wisconsin LLC to Cash Central of Wisconsin, LLC. MAY 24 2007 01:34 PM [ILLEGIBLE] A 374870 DC0RP40 $40.00 B. Amendment(s) to the articles of organization was adopted by the vote required by sec. 183.0404(2), Wis. Stats. C.Executed on 5/1/07 [ILLEGIBLE] (Date) (Signature) Title: Member OR Manager (Select and mark (X) the appropriate title) Trevin Workman (Printed name) This document was drafted by Trevin Workman (Name the individual who drafted the document) FILING FEE - $40.00 DFI/CORP/504(R09-05)
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Exhibit 3.92
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
CASH CENTRAL OF WISCONSIN, LLC
a Wisconsin Limited Liability Company
Dated as of April 1, 2012
THE MEMBERSHIP INTERESTS OF CASH CENTRAL OF WISCONSIN, LLC SHALL BE SECURITIES GOVERNED BY ARTICLE 8 (INVESTMENT SECURITIES) OR THE EQUIVALENT ARTICLE OR CHAPTER OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, CHAPTER 408 OF THE WISCONSIN UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT. THE MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
CASH CENTRAL OF WISCONSIN, LLC
This AMENDED AND RESTATED OPERATING AGREEMENT (this Agreement) of Cash Central of Wisconsin, LLC (the Company) is made, adopted and entered into effective as of April 1, 2012, by Direct Financial Solutions, LLC, a Delaware limited liability company, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Amended and Restated Operating Agreement for Direct Financial Solutions of Wisconsin, LLC (n/k/a Cash Central of Wisconsin, LLC), effective as of March 31, 2006 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 183 of the Wisconsin Statutes (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Articles of Organization of the Company (the Articles of Organization) were filed with the State of Wisconsin Department of Financial Institutions on June 20, 2005. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in an operating agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Cash Central of Wisconsin, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 84 East 2400 North, North Logan, Utah 84341. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Articles of Organization in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Articles of Organization have been filed with the State of Wisconsin Department of Financial Institutions in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Wisconsin.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Wisconsin in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Wisconsin shall be as set forth in the Articles of Organization. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Wisconsin shall be as set forth in the Articles of Organization. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Operating Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Articles of Organization has the meaning set forth in Section 1.1.
CCFI Manager means any of William E. Saunders, Jr., Kyle Hanson, Chad Streff, Michael Durbin or Bridgette Roman, or their respective alternates or successors, as appointed from time to time in accordance with Section 4.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.1.
Membership Interest Certificate has the meaning set forth in Section 2.2.
Ministerial Acts means (i) completing, executing and filing annual reports on behalf of the Company as required in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (ii) ordinary course acts required in connection with obtaining or maintaining the licensure of the Company in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (iii) executing any contract that by its terms is less than 12 months in length and represents a financial obligation of the Company of less than $5,000 in the aggregate, or (iv) any other act that is approved in writing by any CCFI Manager (other than the individual Manager requesting to take such other act).
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means Direct Financial Solutions, LLC, a Delaware limited liability company, or any Person that acquires all of the equity interests of the Company from Direct Financial Solutions, LLC.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST CERTIFICATE
2.1 Capital Contribution; Membership Interest. The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement, as evidenced by a Membership Interest Certificate (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
2.2 Membership Interest Certificate. The Membership Interest of the Sole Member will be evidenced by a certificate of limited liability company interest issued by the Company in substantially the form attached as Exhibit A to this Agreement (the Membership Interest Certificate). The Membership Interest shall be a security governed by Article 8 (Investment Securities) or the equivalent Article or Chapter of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Chapter 408 of the Wisconsin Uniform Commercial Code, as currently in effect. Each Membership Interest Certificate shall bear the following legend:
This certificate evidences an interest in Cash Central of Wisconsin, LLC and shall be a security governed by Article 8 (Investment Securities) or the equivalent Article or Chapter of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Chapter 408 of the Wisconsin Uniform Commercial Code, as currently in effect.
This Section 2.2 shall not be amended and no such purported amendment to this Section 2.2 shall be effective until, to the extent necessary, all outstanding Membership Interest Certificates have been surrendered for re-issuance with any conforming changes required as a result of such amendment.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax
purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto. Notwithstanding the foregoing or anything in this Agreement to the contrary: (y) the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take; and (z) none of the actions described in the foregoing clauses (i) through (iv) of this Section 4.1(a), other than Ministerial Acts, may be taken by any individual Manager on behalf of the Company without first obtaining the approval required pursuant to Section 4.1(e) or (f).
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that (i) at least three (3) of the Managers constituting such a quorum must be a CCFI Manager, and (ii) if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority (which act of the majority must, for the avoidance of doubt, always include the vote of at least one (1) CCFI Manager) of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be seven (7) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
Trevin G. Workman
S. Todd Jensen
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the
Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of subsection (1) of Section 183.0304 of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, manager or member of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the LLC Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security
Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the LLC Law, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the LLC Law. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the LLC Law, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Articles of Organization, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members managers, officers or members, a Manager, an Officer, or an employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the
provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in subsections (1)(d) and (e) of Section 183.0802 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Wisconsin without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Articles of Organization, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Operating Agreement of Cash Central of Wisconsin, LLC as of the date first written above.
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DIRECT FINANCIAL SOLUTIONS, LLC | |
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Bridgette C. Roman |
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Manager |
EXHIBIT A
Form of Membership Interest Certificate
THE INTEREST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. ACCORDINGLY, SUCH INTEREST MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
THIS CERTIFICATE EVIDENCES AN INTEREST IN CASH CENTRAL OF WISCONSIN, LLC AND SHALL BE A SECURITY GOVERNED BY ARTICLE 8 (INVESTMENT SECURITIES) OR THE EQUIVALENT ARTICLE OR CHAPTER OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, CHAPTER 408 OF THE WISCONSIN UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT.
No.
CASH CENTRAL OF WISCONSIN, LLC
A Wisconsin Limited Liability Company
Membership Interest Certificate
This certifies that [ ] is the owner of the Membership Interest representing [ ]% membership equity interest in Cash Central of Wisconsin, LLC (the Company), subject to the terms of the Amended and Restated Operating Agreement of Cash Central of Wisconsin, LLC, made and entered into as of April 1, 2012, as the same may be amended from time to time in accordance with its terms (the Agreement).
This Membership Interest Certificate may be transferred by the lawful holders hereof only in accordance with the provisions of the Agreement and applicable law.
THIS SECURITY IS SUBJECT TO THE PROVISIONS OF THE AGREEMENT.
IN WITNESS WHEREOF, the Company has caused this Membership Interest Certificate to be issued this day of , .
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CASH CENTRAL OF WISCONSIN, LLC | |
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FOR VALUE RECEIVED, , the of the Company does hereby sell, assign and transfer unto:
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(print or type name of assignee) |
the Membership Interest evidenced by the within Membership Interest Certificate, and does hereby irrevocably constitute an appoint attorney-in-fact to transfer the said Membership Interest on the books of the within-named Company, with the full power of substitution in the premises.
Dated as of: |
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NOTICE: The signature to this assignment must correspond with the name as written upon the face of the Membership Interest Certificate in every particular, without alternation or enlargement or any change whatsoever. |
Exhibit 3.93
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WY Secretary of State |
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FILED: 05/23/2007 |
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Original ID: 2005-000497467 |
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Amendment ID: 2007-000611943 |
LIMITED LIABILITY COMPANY AMENDMENT TO ARTICLES OF ORGANIZATION |
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933003 |
Wyoming Secretary of State |
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Phone (307) 777-7311/7312 |
The Capitol Building, Room 110 |
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Fax (307) 777-5339 |
200 W. 24th Street |
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E-mail: corporations@state.wy.us |
Cheyenne, WY 82002-0020 |
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The name of the limited liability company is: Direct Financial Solutions of Wyoming LLC
Article One is amended as follows:
The name of the Limited Liability Company is changed from Direct Financial Solutions of Wyoming LLC to Cash Central of Wyoming, LLC.
The above amendments are adopted in accordance with the operating agreement or with the consent of all members.
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5/15/07 |
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By: |
/s/ [ILLEGIBLE] | |
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Title: |
Manager |
MAY 23 2007
SECRETARY OF STATE
WYOMING
Filing Fee: $50.00
Hamend - Revised 9/2003
FILED: 08/05/2005
CID: 2005-00497467
WY Secretary of State
ARTICLES OF ORGANIZATION
OF
DIRECT FINANCIAL SOLUTIONS OF WYOMING LLC
BY AGREEMENT, the undersigned Organizer, on behalf of the Members who desire to form a limited liability company pursuant to the Wyoming Limited Liability Company Act (hereinafter referred to as the Act), hereby sets forth the following Articles of Organization for such limited liability company (hereinafter referred to as the Company):
ARTICLE 1 NAME
The name of the Company is Direct Financial Solutions of Wyoming LLC.
ARTICLE 2 PERIOD OF DURATION
The period of duration of the Company shall be perpetual.
ARTICLE 3 PURPOSE
The purposes for which the Company is organized are to engage in any lawful business activities for which limited liability companies may be organized pursuant to the Act.
ARTICLE 4 REGISTERED AGENT
The name of the original Registered Agent of the Company is Pioneer Corporate Services, located at 1720 Carey Avenue, Cheyenne, Wyoming 82001.
ARTICLE 5 CONTRIBUTED CAPITAL
The total cash contributed to the Company by the Members is $1,000. Subsequent contributions shall be made as later determined by the Members.
ARTICLE 6 ADDITIONAL MEMBERS
Additional members may be admitted as members of the Company upon the unanimous consent of the Members as have been previously admitted. An interest of a Member in the Company may only be adjusted, transferred or assigned in accordance with the provisions of the Operating Agreement of the Company. If all of the Members of the Company do not consent to a transfer or assignment, the transferee has no right to participate in the management of the business or affairs of the Company or become a Member and is only entitled to receive the transferors share of profits or other compensation.
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RECEIVED |
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WYOMING |
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SECRETARY OF STATE |
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2005 AUG 5 AM 10 19 |
ARTICLE 7 MANAGEMENT
The management of the Company shall be vested in one or more Managers. The names and street addresses of the initial Managers, who will serve until a successor is elected, are as follows:
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Todd Jensen |
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89 East 1400 North |
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Logan, Utah 84341 |
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Mari-Catherine Vinton |
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89 East 1400 North |
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Logan, Utah 84341 |
ARTICLE 8 ELECTION AS A FLEXIBLE LIMITED LIABILITY COMPANY
The Company shall be organized as a flexible limited liability company, as provided in Wyoming Statutes § 17-15-144.
ARTICLE 9 AUTHORITY
No Member shall have authority to act on behalf of or bind the Company without the written approval of the Manager. Only a Manager of the Company, as indicated above, or successor(s) as Manager, and those given authority by such written approval may sign contracts or other instruments on behalf of the Company.
ARTICLE 10 LIABILITY
Neither the Members, Managers, Employees, nor Agents of the Company shall be personally liable for any debt, obligation, or liability of the Company nor of any other Member, Manager, Employee, or Agent of the Company. Neither shall the Company be liable for any debts, obligations, or liabilities of any Member, Manager, Employee, or Agent.
IN WITNESS WHEREOF, the Organizer has hereunto executed this Agreement this 20th day of June, 2005.
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ORGANIZER: |
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/s/ Richard G. Smurthwaite |
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Richard G. Smurthwaite |
Exhibit 3.94
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
CASH CENTRAL OF WYOMING, LLC
a Wyoming Limited Liability Company
Dated as of April 1, 2012
THE MEMBERSHIP INTERESTS OF CASH CENTRAL OF WYOMING, LLC SHALL BE SECURITIES GOVERNED BY ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, ARTICLE 8 OF THE WYOMING UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT. THE MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
CASH CENTRAL OF WYOMING, LLC
This AMENDED AND RESTATED OPERATING AGREEMENT (this Agreement) of Cash Central of Wyoming, LLC (the Company) is made, adopted and entered into effective as of April 1, 2012, by Direct Financial Solutions, LLC, a Delaware limited liability company, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Amended and Restated Operating Agreement for Direct Financial Solutions of Wyoming, LLC (n/k/a Cash Central of Wyoming, LLC), effective as of March 31, 2006 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of the Wyoming Limited Liability Company Act (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Articles of Organization of the Company (the Articles of Organization) were filed with the Secretary of State of Wyoming on August 5, 2005. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in an operating agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Cash Central of Wyoming, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 84 East 2400 North, North Logan, Utah 84341. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Articles of Organization in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Articles of Organization have been filed in the office of the Secretary of State of Wyoming in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Wyoming.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Wyoming in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Wyoming shall be as set forth in the Articles of Organization. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Wyoming shall be as set forth in the Articles of Organization. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Operating Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Articles of Organization has the meaning set forth in Section 1.1.
CCFI Manager means any of William E. Saunders, Jr., Kyle Hanson, Chad Streff, Michael Durbin or Bridgette Roman, or their respective alternates or successors, as appointed from time to time in accordance with Section 4.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.1.
Membership Interest Certificate has the meaning set forth in Section 2.2.
Ministerial Acts means (i) completing, executing and filing annual reports on behalf of the Company as required in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (ii) ordinary course acts required in connection with obtaining or maintaining the licensure of the Company in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (iii) executing any contract that by its terms is less than 12 months in length and represents a financial obligation of the Company of less than $5,000 in the aggregate, or (iv) any other act that is approved in writing by any CCFI Manager (other than the individual Manager requesting to take such other act).
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means Direct Financial Solutions, LLC, a Delaware limited liability company, or any Person that acquires all of the equity interests of the Company from Direct Financial Solutions, LLC.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST CERTIFICATE
2.1 Capital Contribution; Membership Interest. The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement, as evidenced by a Membership Interest Certificate (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
2.2 Membership Interest Certificate. The Membership Interest of the Sole Member will be evidenced by a certificate of limited liability company interest issued by the Company in substantially the form attached as Exhibit A to this Agreement (the Membership Interest Certificate). The Membership Interest shall be a security governed by Article 8 of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Article 8 of the Wyoming Uniform Commercial Code, as currently in effect. Each Membership Interest Certificate shall bear the following legend:
This certificate evidences an interest in Cash Central of Wyoming, LLC and shall be a security governed by Article 8 of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Article 8 of the Wyoming Uniform Commercial Code, as currently in effect.
This Section 2.2 shall not be amended and no such purported amendment to this Section 2.2 shall be effective until, to the extent necessary, all outstanding Membership Interest Certificates have been surrendered for re-issuance with any conforming changes required as a result of such amendment.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax
return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto. Notwithstanding the foregoing or anything in this Agreement to the contrary: (y) the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take; and (z) none of the actions described in the foregoing clauses (i) through (iv) of this Section 4.1(a), other than Ministerial Acts, may be taken by any individual Manager on behalf of the Company without first obtaining the approval required pursuant to Section 4.1(e) or (f).
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that (i) at least three (3) of the Managers constituting such a quorum must be a CCFI Manager, and (ii) if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority (which act of the majority must, for the avoidance of doubt, always include the vote of at least one (1) CCFI Manager) of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be seven (7) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
Trevin G. Workman
S. Todd Jensen
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the
Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 17-29-304 of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, manager or member of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the LLC Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security
Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the LLC Law, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the LLC Law. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the LLC Law, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Articles of Organization, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members managers, officers or members, a Manager, an Officer, or an employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the
provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Wyoming without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Articles of Organization, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Operating Agreement of Cash Central of Wyoming, LLC as of the date first written above.
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DIRECT FINANCIAL SOLUTIONS, LLC | |
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EXHIBIT A
Form of Membership Interest Certificate
THE INTEREST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. ACCORDINGLY, SUCH INTEREST MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
THIS CERTIFICATE EVIDENCES AN INTEREST IN CASH CENTRAL OF WYOMING, LLC AND SHALL BE A SECURITY GOVERNED BY ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, ARTICLE 8 OF THE WYOMING UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT.
No.
CASH CENTRAL OF WYOMING, LLC
A Wyoming Limited Liability Company
Membership Interest Certificate
This certifies that [ ] is the owner of the Membership Interest representing [ ]% membership equity interest in Cash Central of Wyoming, LLC (the Company), subject to the terms of the Amended and Restated Operating Agreement of Cash Central of Wyoming, LLC, made and entered into as of April 1, 2012, as the same may be amended from time to time in accordance with its terms (the Agreement).
This Membership Interest Certificate may be transferred by the lawful holders hereof only in accordance with the provisions of the Agreement and applicable law.
THIS SECURITY IS SUBJECT TO THE PROVISIONS OF THE AGREEMENT.
IN WITNESS WHEREOF, the Company has caused this Membership Interest Certificate to be issued this day of , .
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FOR VALUE RECEIVED, , the of the Company does hereby sell, assign and transfer unto:
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the Membership Interest evidenced by the within Membership Interest Certificate, and does hereby irrevocably constitute an appoint attorney-in-fact to transfer the said Membership Interest on the books of the within-named Company, with the full power of substitution in the premises.
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NOTICE: The signature to this assignment must correspond with the name as written upon the face of the Membership Interest Certificate in every particular, without alternation or enlargement or any change whatsoever. |
Exhibit 3.95
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ARTICLES OF INCORPORATION
OF
CCCIS, INC. |
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ENDORSED - FILED |
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In the office of the Secretary of State SEP 23 2005 |
1. Name:
The name of the corporation is CCCIS, INC.
2. Purpose:
The purpose of the corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of California other than the banking business, the trust company business, or the practice of a profession permitted to be incorporated by the California Corporation Code.
3. The name and address in the State of California of this corporations initial agent for service of process is:
Richard D. Lake
4179 Piedmont Avenue, Suite 200
Oakland, CA 94611
4. This corporation is authorized to issue only one class of shares of stock; and the total number of shares which this corporation is authorized to issue is: Twenty-five Thousand (25,000) shares.
5. This corporation is a Close Corporation. All of the corporations issued shares of stock, of all classes, shall be held of record by not more than Thirty Five (35) persons.
IN WITNESS WHEREOF the undersigned, RICHARD D. LAKE, who is the incorporator of this corporation, has executed the Articles of Incorporation on this 15th day of September, 2005.
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RICHARD D. LAKE |
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Incorporator |
The undersigned, RICHARD D. LAKE, the person named above as the incorporator, declares that he is the person who executed the foregoing Articles of Incorporation, which execution is his act and deed.
I declare under penalty of perjury that the foregoing is true and correct and that this declaration was executed on September 15, 2005 at Oakland, California.
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Exhibit 3.96
AMENDED AND RESTATED BYLAWS
OF
CCCIS, INC.
(Adopted as of September 29, 2006)
ARTICLE I.
OFFICES
1. PRINCIPAL OFFICES. The Board of Directors shall fix the location of the principal executive office of the corporation at any place within or outside the State of California. If the principal executive office is located outside this state, and the corporation has one or more business offices in this state, the Board of Directors shall likewise fix and designate a principal business office in the State of California.
2. OTHER OFFICES. The Board of Directors may at any time establish branch or subordinate offices at any place or places where the corporation is qualified to do business.
ARTICLE II.
MEETINGS OF SHAREHOLDERS
1. PLACE OF MEETINGS. Meetings of shareholders shall be held at any place within or outside the State of California designated by the Board of Directors. In the absence of any such designation, shareholders meetings shall be held at the principal executive office of the corporation.
2. ANNUAL MEETINGS OF SHAREHOLDERS. The annual meeting of shareholders shall be held each year on a date and at a time designated by the Board of Directors. At each annual meeting directors shall be elected and any other proper business may be transacted.
3. SPECIAL MEETINGS. A special meeting of the shareholders may be called at any time by the Board of Directors, or by the Chairman of the Board, or by the President, or by one or more shareholders holding shares in the aggregate entitled to cast not less than 10% of the votes at any such meeting.
If a special meeting is called by any person or persons other than the Board of Directors, the request shall be in writing, specifying the time of such meeting and the general nature of the business proposed to be transacted, and shall be delivered personally or sent by registered mail or by telegraphic or other facsimile transmission to the Chairman of the Board, the President, any Vice President or the Secretary of the corporation. The officer receiving such request forthwith shall cause notice to be given to the shareholders entitled to vote, in accordance with the provisions of Sections 4 and 5 of this Article II, that a meeting will be held at the time requested by the person or persons calling the meeting, not less than thirty-five (35) nor more than sixty (60) days after the receipt of the request. If the notice is not given within twenty (20) days after receipt of the request, the person or persons requesting the meeting may give the notice. Nothing contained in this paragraph of this Section 3 shall be construed as limiting, fixing or affecting the time when a meeting of shareholders called by action of the Board of Directors may be held.
4. NOTICE OF SHAREHOLDERS MEETINGS. All notices of meetings of shareholders shall be sent or otherwise given in accordance with Section 5 of this Article II not less than ten (10) nor more than sixty (60) days before the date of the meeting being noticed. The notice shall specify the place, date and hour of the meeting and (i) in the case of a special meeting, the general nature of the business to be transacted, or (ii) in the case of the annual meeting those matters which the Board of Directors, at the time of giving the notice, intends to present for action by the shareholders. The notice of any meeting at which directors are to be elected shall include the name of any nominee or nominees which, at the time of the notice, management intends to present for election.
If action is proposed to be taken at any meeting for approval of (i) a contract or transaction in which a director has a direct or indirect financial interest, pursuant to Section 310 of the Corporations Code of California, (ii) an amendment of the articles of incorporation, pursuant to Section 902 of such Code, (iii) a reorganization of the corporation, pursuant to Section 1201 of such Code, (iv) a voluntary dissolution of the corporation, pursuant to Section 1900 of such Code, or (v) a distribution in dissolution other than in accordance with the rights of outstanding preferred shares pursuant to Section 2007 of such Code, the notice shall also state the general nature of such proposal.
5. MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE. Notice of any meeting of shareholders shall be given either personally or by first-class mail or telegraphic or other written communication, charges prepaid, addressed to the shareholder at the address of such shareholder appearing on the books of the corporation or given by the shareholder to the corporation for the purpose of notice. If no such address appears on the corporations books or has been so given, notice shall be deemed to have been given if sent by first-class mail or telegraphic or other written communication to the corporations principal executive office, or if published at least once in a newspaper of general circulation in the county where such office is located. Notice shall be deemed to have been given at the time when delivered personally or deposited in the mail or sent by telegram or other means of written communication.
If any notice addressed to a shareholder at the address of such shareholder appearing on the books of the corporation is returned to the corporation by the United States Postal Service marked to indicate that the United States Postal Service is unable to deliver the notice to the shareholder at such address, all future notices or reports shall be deemed to have been duly given without further mailing if the same shall be available to the shareholder upon written demand of the shareholder at the principal executive office of the corporation for a period of one year from the date of the giving of such notice.
An affidavit of the mailing or other means of giving any notice of any shareholders meeting shall be executed by the Secretary, Assistant Secretary or any transfer agent of the corporation giving such notice, and shall be filed and maintained in the minute book of the corporation.
6. QUORUM. The presence in person or by proxy of the holders of a majority of the shares entitled to vote at any meeting of shareholders shall constitute a quorum for the transaction of business. The shareholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum.
7. ADJOURNED MEETING AND NOTICE THEREOF. Any shareholders meeting, annual or special, whether or not a quorum is present, may be adjourned from time to time by the vote of the majority of the shares represented at such meeting, either in person or by proxy, but in the absence of a quorum, no other business may be transacted at such meeting, except as provided in Section 6 of this Article II.
When any meeting of shareholders, either annual or special, is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken, unless a new record date for the adjourned meeting is fixed, or unless the adjournment is for more than forty-five (45) days from the date set for the original meeting, in which case the Board of Directors shall set a new record date. Notice of any such adjourned meeting, if required, shall be given to each shareholder of record entitled to vote at the adjourned meeting in accordance with the provisions of Sections 4 and 5 of this Article II. At any adjourned meeting the corporation may transact any business which might have been transacted at the original meeting.
8. VOTING. The shareholders entitled to vote at any meeting of shareholders shall be determined in accordance with the provisions of Section 11 of this Article II, subject to the provisions of Sections 702 to 704, inclusive, of the Corporations Code of California (relating to voting shares held by a fiduciary, in the name of a corporation or in joint ownership). Such vote may be by voice vote or by ballot; provided, however, that all elections for directors must be by ballot upon demand by a shareholder at any election and before the voting begins. Any shareholder entitled to vote on any matter (other than the election of directors) may vote part of the shares in favor of the proposal and refrain from voting the remaining shares or vote them against the proposal, but, if the shareholder fails to specify the number of shares such shareholder is voting affirmatively, it will be conclusively presumed that the shareholders approving vote is with respect to all shares such shareholder is entitled to vote. If a quorum is present, the affirmative vote of the majority of the shares represented at the meeting and voting on any matter (other than the election of directors), provided that the shares voting affirmatively must also constitute at least a majority of the required quorum, shall be the act of the shareholders, unless the vote of a greater number or voting by classes is required by the California General Corporation Law or the articles of incorporation.
At a shareholders meeting involving the election of directors, no shareholder shall be entitled to cumulate votes (i.e., cast for any candidate a number of votes greater than the number of the shareholders shares) unless such candidate or candidates names have been placed in nomination prior to commencement of the voting and a shareholder has given notice prior to commencement of the voting of the shareholders intention to cumulate votes. If any shareholder has given such notice, then every shareholder entitled to vote may cumulate such shareholders votes for candidates in nomination and give one candidate a number of votes equal to the number of directors to be elected multiplied by the number of votes to which such shareholders shares are entitled, or distribute the shareholders votes on the same principle among any or all of the candidates, as the shareholder thinks fit. The candidates receiving the highest number of votes, up to the number of directors to be elected, shall be elected.
9. WAIVER OF NOTICE OR CONSENT BY ABSENT SHAREHOLDERS. The transactions of any meeting of shareholders, either annual or special, however called and noticed, and wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present either in person or by proxy, and if, either before or after the meeting, each person entitled to vote, not present in person or by proxy, signs a written waiver of notice or a consent to the holding of the meeting, or an approval of the minutes thereof. The waiver of notice or consent need not specify either the business to be transacted or the purpose of any annual or special meeting of shareholders, except that if action is taken or proposed to be taken for approval of any of those matters specified in the second paragraph of Section 4 of this Article II, the waiver of notice or consent shall state the general nature of such proposal. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting.
Attendance of a person at a meeting shall also constitute a waiver of notice of such meeting, except when the person objects, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened, and except that attendance at a meeting
is not a waiver of any right to object to the consideration of matters not included in the notice of the meeting if such objection is expressly made at the meeting.
10. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING. Any action which may be taken at any annual or special meeting of shareholders may be taken without a meeting and without prior notice, if a consent in writing, setting forth the action so taken, is signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. In the case of election of directors, such consent shall be effective only if signed by the holders of all outstanding shares entitled to vote for the election of directors; provided, however, that a director may be elected at any time to fill a vacancy not created by removal and not filled by the directors by the written consent of the holders of a majority of the outstanding shares entitled to vote for the election of directors. All such consents shall be filed with the Secretary of the corporation and shall be maintained in the corporate records. Any shareholder giving a written consent, or the shareholders proxy holders, or a transferee of the shares or a personal representative of the shareholder or their respective proxy holder, may revoke the consent by a writing received by the Secretary of the corporation prior to the time that written consents of the number of shares required to authorize the proposed action have been filed with the Secretary.
Unless the consents of all shareholders entitled to vote have been solicited in writing, the Secretary shall give prompt notice of any corporate action approved by the shareholders without a meeting by less than unanimous consent, to those shareholders entitled to vote who have not consented in writing. Such notice shall be given in the manner specified in Section 5 of this Article II. In the case of approval of (i) contracts or transactions in which a director has a direct or indirect financial interest, pursuant to Section 310 of the Corporations Code of California, (ii) indemnification of agents of the corporation, pursuant to Section 317 of such Code, (iii) a reorganization of the corporation, pursuant to Section 1201 of such Code, or (iv) a distribution in dissolution other than in accordance with the rights of outstanding preferred shares pursuant to Section 2007 of such Code, such notice shall be given at least ten (10) days before the consummation of any such action authorized by any such approval.
11. RECORD DATE FOR SHAREHOLDER NOTICE, VOTING, AND GIVING CONSENTS. For purposes of determining the shareholders entitled to notice of any meeting or to vote or entitled to give consent to corporate action without a meeting, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty (60) days nor less than ten (10) days prior to the date of any such meeting nor more than sixty (60) days prior to such action without a meeting, and in such case only shareholders of record at the close of business on the date so fixed are entitled to notice and to vote or to give consents, as the case may be, notwithstanding any transfer of any shares on the books of the corporation after the record date fixed as aforesaid, except as otherwise provided in the California General Corporation Law.
If the Board of Directors does not so fix a record date:
(a) The record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the business day next preceding the day on which notice if given or, if notice is waived, at the close of business on the business day next preceding the day on which the meeting is held.
(b) The record date for determining shareholders entitled to give consent to corporate action in writing without a meeting, (i) when no prior action by the Board has been taken, shall be the day on which the first written consent is given, or (ii) when prior action of the Board has been taken, shall be at
the close of business on the day on which the Board adopts the resolution relating thereto, or the sixtieth (60th) day prior to the date of such other action, whichever is later.
12. PROXIES. Every person entitled to vote for directors or on any other matter shall have the right to do so either in person or by one or more agents authorized by a written proxy signed by the person and filed with the Secretary of the corporation. A proxy shall be deemed signed if the shareholders name is placed on the proxy (whether by manual signature, typewriting, telegraphic transmission or otherwise) by the shareholder or the shareholders attorney in fact. A validly executed proxy which does not state that it is irrevocable shall continue in full force and effect unless (i) revoked by the person executing it, prior to the vote pursuant thereto, by a writing delivered to the corporation stating that the proxy is revoked or by a subsequent proxy presented to the meeting and executed by, or attendance at the meeting and voting in person by, the person executing the proxy; or (ii) written notice of the death or incapacity of the maker of such proxy is received by the corporation before the vote pursuant thereto is counted; provided, however, that no such proxy shall be valid after the expiration of eleven (11) months from the date of such proxy, unless otherwise provided in the proxy. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of Section 705(e) and (f) of the Corporations Code of California.
13. INSPECTORS OF ELECTION. Before any meeting of shareholders, the Board of Directors may appoint any persons other than nominees for office to act as inspectors of election at the meeting or its adjournment. If no inspectors of election are so appointed, the chairman of the meeting may, and on the request of any shareholder or a shareholders proxy shall, appoint inspectors of election at the meeting. The number of inspectors shall be either one (l) or three (3). If inspectors are appointed at a meeting on the request of one or more shareholders or proxies, the holders of a majority of shares or their proxies present at the meeting shall determine whether one (l) or three (3) inspectors are to be appointed. If any person appointed as inspector fails to appear or fails or refuses to act, the chairman of the meeting may, and upon the request of any shareholder or a shareholders proxy shall, appoint a person to fill such vacancy.
The duties of these inspectors shall be as follows:
(a) Determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, and the authenticity, validity and effect of proxies;
(b) Receive votes, ballots or consents;
(c) Hear and determine all challenges and questions in any way arising in connection with the right to vote;
(d) Count and tabulate all votes or consents;
(e) Determine when the polls shall close;
(f) Determine the result; and
(g) Do any other acts that may be proper to conduct the election or vote with fairness to all shareholders.
ARTICLE III.
DIRECTORS
1. POWERS. Subject to the provisions of the California General Corporation Law and any limitations in the articles of incorporation and these bylaws relating to action required to be approved by the shareholders or by the outstanding shares, the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the Board of Directors.
Without prejudice to such general powers, but subject to the same limitations, it is hereby expressly declared that the directors shall have the power and authority to:
(a) Select and remove all officers, agents, and employees of the corporation, prescribe such powers and duties for them as may not be inconsistent with law, the articles of incorporation or these bylaws, fix their compensation, and require from them security for faithful service.
(b) Change the principal executive office or the principal business office in the State of California from one location to another; cause the corporation to be qualified to do business in any other state, territory, dependency, or foreign country and conduct business within or outside the State of California; designate any place within or without the State for the holding of any shareholders meeting or meetings, including annual meetings; adopt, make and use a corporate seal, and prescribe the forms of certificates of stock, and alter the form of such seal and of such certificates from time to time as in their judgment they may deem best, provided that such forms shall at all times comply with the provisions of law.
(c) Authorize the issuance of shares of stock of the corporation from time to time, upon such terms as may be lawful, in consideration of money paid, labor done or services actually rendered, debts or securities canceled or tangible or intangible property actually received.
(d) Borrow money and incur indebtedness for the purposes of the corporation, and cause to be executed and delivered therefor, in the corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecations, or other evidences of debt and securities therefor.
2. NUMBER AND QUALIFICATION OF DIRECTORS. The number of directors which shall constitute the board initially shall be one (1). The exact number of directors shall be established from time to time by resolution of the Board of Directors or by resolution of the shareholders. Directors need not be residents of the State of California.
3. ELECTION AND TERM OF OFFICE OF DIRECTORS. Directors shall be elected at each annual meeting of the shareholders to hold office until the next annual meeting. Each director, including a director elected to fill a vacancy, shall hold office until the expiration of the term for which elected and until a successor has been elected and qualified.
4. VACANCIES. Vacancies in the Board of Directors may be filled by a majority of the remaining directors, though less than a quorum, or by a sole remaining director, except that a vacancy created by the removal of a director by the vote or written consent of the shareholders or by court order may be filled only by the vote of a majority of the shares represented and voting at a duly held meeting at which a quorum is present, or by the written consent of holders of all outstanding shares entitled to vote. Each director so elected shall hold office until the next annual meeting of the shareholders and until a successor has been elected and qualified.
A vacancy or vacancies in the Board of Directors shall be deemed to exist in the case of the death, resignation or removal of any director, or if the Board of Directors by resolution declares vacant the office of a director who has been declared of unsound mind by an order of court or convicted of a felony, or if the authorized number of directors be increased, or if the shareholders fail, at any meeting of shareholders at which any director or directors are elected, to elect the full authorized number of directors to be voted for at that meeting.
The shareholders may elect a director or directors at any time to fill any vacancy or vacancies not filled by the directors, but any such election by written consent, other than to fill a vacancy created by removal, shall require the consent of a majority of the outstanding shares entitled to vote.
Any director may resign upon giving written notice to the Chairman of the Board, the President, the Secretary or the Board of Directors. A resignation shall be effective upon the giving of the notice, unless the notice specifies a later time for its effectiveness. If the resignation of a director is effective at a future time, the Board of Directors may elect a successor to take office when the resignation becomes effective.
No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of his term of office.
5. PLACE OF MEETINGS AND TELEPHONIC MEETINGS. Regular meetings of the Board of Directors may be held at any place within or without the State that has been designated from time to time by resolution of the board. In the absence of such designation, regular meetings shall be held at the principal executive office of the corporation. Special meetings of the board shall be held at any place within or without the State that has been designated in the notice of the meeting or, if not stated in the notice or there is no notice, at the principal executive office of the corporation. Any meeting, regular or special, may be held by conference telephone or similar communication equipment, so long as all directors participating in such meeting can hear one another, and all such directors shall be deemed to be present in person at such meeting.
6. ANNUAL MEETINGS. Immediately following each annual meeting of shareholders, the Board of Directors shall hold a regular meeting for the purpose of organization, any desired election of officers and the transaction of other business. Notice of this meeting shall not be required.
7. OTHER REGULAR MEETINGS. Other regular meetings of the Board of Directors shall be held without call at such time as shall from time to time be fixed by the Board of Directors. Such regular meetings may be held without notice.
8. SPECIAL MEETINGS. Special meetings of the Board of Directors for any purpose or purposes may be called at any time by the Chairman of the Board or the President or any Vice President or the Secretary or any two directors.
Notice of the time and place of special meetings shall be delivered personally or by telephone to each director or sent by first-class mail or telegram, charges prepaid, addressed to each director at his or her address as it is shown upon the records of the corporation. In case such notice is mailed, it shall be deposited in the United States mail at least four (4) days prior to the time of the holding of the meeting. In case such notice is delivered personally, or by telephone or telegram, it shall be delivered personally or by telephone or to the telegraph company at least forty-eight (48) hours prior to the time of the holding of the meeting. Any oral notice given personally or by telephone may be communicated to either the director or to a person at the office of the director who the person giving the notice has reason to believe will promptly communicate it to the director. The notice need not specify the
purpose of the meeting nor the place if the meeting is to be held at the principal executive office of the corporation.
9. DISPENSING WITH NOTICE. The transactions of any meeting of the Board of Directors, however called and noticed or wherever held, shall be as valid as though had at a meeting duly held after regular call and notice if a quorum be present and if, either before or after the meeting, each of the directors not present signs a written waiver of notice, a consent to holding the meeting or an approval of the minutes thereof. The waiver of notice or consent need not specify the purpose of the meeting. All such waivers, consents and approvals shall be filed with the corporate records or made a part of the minutes of the meeting. Notice of a meeting need not be given to any director who attends the meeting without protesting, prior thereto or at its commencement, the lack of notice to such director.
10. QUORUM. A majority of the authorized number of directors shall constitute a quorum for the transaction of business, except to adjourn as hereinafter provided. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors, subject to the provisions of Section 310 of the Corporations Code of California (approval of contracts or transactions in which a director has a direct or indirect material financial interest), Section 311 (appointment of committees), and Section 317 (e) (indemnification of directors). A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for such meeting.
11. ADJOURNMENT. A majority of the directors present, whether or not constituting a quorum, may adjourn any meeting to another time and place.
12. NOTICE OF ADJOURNMENT. Notice of the time and place of holding an adjourned meeting need not be given, unless the meeting is adjourned for more than twenty-four (24) hours, in which case notice of such time and place shall be given prior to the time of the adjourned meeting, in the manner specified in Section 8 of this Article III, to the directors who were not present at the time of the adjournment.
13. ACTION WITHOUT MEETING. Any action required or permitted to be taken by the Board of Directors may be taken without a meeting, if all members of the board shall individually or collectively consent in writing to such action. Such action by written consent shall have the same force and effect as a unanimous vote of the Board of Directors. Such written consent or consents shall be filed with the minutes of the proceedings of the board.
14. FEES AND COMPENSATION OF DIRECTORS. Directors and members of committees may receive such compensation, if any, for their services, and such reimbursement of expenses, as may be fixed or determined by resolution of the Board of Directors. Nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity as an officer, agent, employee, or otherwise, and receiving compensation for such services.
ARTICLE IV.
COMMITTEES
1. COMMITTEES OF DIRECTORS. The Board of Directors may, by resolution adopted by a majority of the authorized number of directors, designate one or more committees, each consisting of two or more directors, to serve at the pleasure of the board. The board may designate one or more directors as alternate members of any committee, who may replace any absent member at any meeting of
the committee. Any such committee, to the extent provided in the resolution of the board, shall have all the authority of the board, except with respect to:
(a) the approval of any action which, under the General Corporation Law of California, also requires shareholders approval or approval of the outstanding shares;
(b) the filling of vacancies on the Board of Directors or in any committee;
(c) the fixing of compensation of the directors for serving on the board or on any committee;
(d) the amendment or repeal of bylaws or the adoption of new bylaws;
(e) the amendment or repeal of any resolution of the Board of Directors which by its express terms is not so amendable or repealable;
(f) a distribution to the shareholders of the corporation, except at a rate or in a periodic amount or within a price range determined by the Board of Directors; or
(g) the appointment of any other committees of the Board of Directors or the members thereof.
2. MEETINGS AND ACTION OF COMMITTEES. Meetings and action of committees shall be governed by, and held and taken in accordance with, the provisions of Article III of these bylaws, Sections 5 (place of meetings), 7 (regular meetings), 8 (special meetings and notice), 9 (dispensing with notice), 10 (quorum), 11 (adjournment), 12 (notice of adjournment) and 13 (action without meeting), with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the Board of Directors and its members, except that the time of regular meetings of committees may be determined by resolution of the Board of Directors as well as the committee, special meetings of committees may also be called by resolution of the Board of Directors and notice of special meetings of committees shall also be given to all alternate members, who shall have the right to attend all meetings of the committee. The Board of Directors may adopt rules for the government of any committee not inconsistent with the provisions of these bylaws.
ARTICLE V.
OFFICERS
1. OFFICERS. The officers of the corporation shall be a President, a Secretary and a Treasurer. The corporation may also have, at the discretion of the Board of Directors, a Chairman of the Board, one or more Vice Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers, and such other officers as may be appointed in accordance with the provisions of Section 3 of this Article V. Any number of offices may be held by the same person.
2. ELECTION OF OFFICERS. The officers of the corporation, except such officers as may be appointed in accordance with the provisions of Section 3 of this Article V, shall be chosen by the Board of Directors, and each shall serve at the pleasure of the board, subject to the rights, if any, of an officer under any contract of employment.
3. SUBORDINATE OFFICERS, ETC. The Board of Directors may appoint, and may empower the President to appoint, such other officers as the business of the corporation may require, each
of whom shall hold office for such period, have such authority and perform such duties as are provided in the bylaws or as the Board of Directors may from time to time determine.
4. REMOVAL AND RESIGNATION OF OFFICERS. Subject to the rights, if any, of an officer under any contract of employment, any officer may be removed, either with or without cause, by the Board of Directors, at any regular or special meeting thereof, or, except in case of an officer chosen by the Board of Directors, by any officer upon whom such power of removal may be conferred by the Board of Directors.
Any officer may resign at any time by giving written notice to the corporation. Any such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Any such resignation is without prejudice to the rights, if any, of the corporation under any contract to which the officer is a party.
5. VACANCIES IN OFFICES. A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in these bylaws for regular appointments to such office.
6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if such an officer be elected, shall, if present, preside at all meetings of the Board of Directors and exercise and perform such other powers and duties as may be from time to time assigned to him by the Board of Directors or prescribed by the bylaws. If there is no President, the Chairman of the Board shall in addition be the Chief Executive Officer of the corporation and shall have the powers and duties prescribed in Section 7 of this Article V.
7. PRESIDENT. Subject to such supervisory powers, if any, as may be given by the Board of Directors to the Chairman of the Board, if there be such an officer, the President shall be the Chief Executive Officer of the corporation and shall, subject to the control of the Board of Directors, have general supervision, direction and control of the business and the officers of the corporation. He shall preside at all meetings of the shareholders and, in the absence of the Chairman of the Board, or if there be none, at all meetings of the Board of Directors. He shall have the general powers and duties of management usually vested in the office of President of a corporation, and shall have such other powers and duties as may be prescribed by the Board of Directors or the bylaws.
8. VICE PRESIDENTS. In the absence or disability of the President, the Vice Presidents, if any, in order of their rank as fixed by the Board of Directors or, if not ranked, a Vice President designated by the Board of Directors, shall perform all the duties of the President, and when so acting shall have all the powers of, and be subject to all the restrictions upon, the President. The Vice Presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the Board of Directors or the bylaws, the President or the Chairman of the Board if there is no President.
9. SECRETARY. The Secretary shall keep or cause to be kept, at the principal executive office or such other place as the Board of Directors may order, a book of minutes of all meetings and actions of directors, committees of directors and shareholders, with the time and place of holding, whether regular or special, and, if special, how authorized, the notice thereof given, the names of those present at directors and committee meetings, the number of shares present or represented at shareholders meetings, and the proceedings thereof.
The Secretary shall keep, or cause to be kept, at the principal executive office or at the office of the corporations transfer agent or registrar, as determined by resolution of the Board of Directors, a share register, or a duplicate share register, showing the names of all shareholders and their addresses, the number and classes of shares held by each, the number and date of certificates issued for the same, and the number and date of cancellation of every certificate surrendered for cancellation.
The Secretary shall give, or cause to be given, notice of all meetings of the shareholders and of the Board of Directors required by the bylaws or by law to be given, and he shall keep the seal of the corporation, if one be adopted, in safe custody, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or by the bylaws.
10. TREASURER. The Treasurer shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, retained earnings and shares. The books of account shall be open at all reasonable times to inspection by any director.
The Treasurer shall deposit all moneys and other valuables in the name and to the credit of the corporation with such depositories as may be designated by the Board of Directors. He shall disburse the funds of the corporation as may be ordered by the Board of Directors, shall render to the President and directors, whenever they request it, an account of all of his transactions as Treasurer and of the financial condition of the corporation, and shall have other powers and perform such other duties as may be prescribed by the Board of Directors or the bylaws.
ARTICLE VI.
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES
AND OTHER AGENTS
The corporation shall, to the maximum extent permitted by the General Corporation Law of California, indemnify each of its directors and officers against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any proceeding arising by reason of the fact any such person is or was a director or officer of the corporation and shall advance to such director or officer expenses incurred in defending any such proceeding to the maximum extent permitted by such law. For purposes of this Article VI, a director or officer of the corporation includes any person who is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, or other enterprise, or was a director or officer of a corporation which was a predecessor corporation of the corporation or of another enterprise at the request of such predecessor corporation. The Board of Directors may in its discretion provide by resolution for such indemnification of, or advance of expenses to, other agents of the corporation, and likewise may refuse to provide for such indemnification or advance of expenses except to the extent such indemnification is mandatory under the California General Corporation law.
ARTICLE VII.
RECORDS AND REPORTS
1. MAINTENANCE AND INSPECTION OF SHARE REGISTER. The corporation shall keep at its principal executive office, or at the office of its transfer agent or registrar, if either be appointed and as determined by resolution of the Board of Directors, a record of its shareholders, giving the names and addresses of all shareholders and the number and class of shares held by each shareholder.
A shareholder or shareholders of the corporation holding at least five percent (5%) in the aggregate of the outstanding voting shares of the corporation may (i) inspect and copy the records of shareholders names and addresses and shareholdings during usual business hours upon five (5) business days prior written demand upon the corporation, and/or (ii) obtain from the transfer agent of the corporation, upon written demand and upon the tender of such transfer agents usual charges for such list, a list of the shareholders names and addresses, who are entitled to vote for the election of directors, and their shareholdings, as of the most recent record date for which such list has been compiled or as of a date specified by the shareholder subsequent to the date of demand. Such list shall be made available to such shareholder or shareholders by the transfer agent on or before the later of five (5) business days after the demand is received or the date specified therein as the date as of which the list is to be compiled. The record of shareholders shall also be open to inspection upon the written demand of any shareholder or holder of a voting trust certificate, at any time during usual business hours, for a purpose reasonably related to such holders interests as a shareholder or as the holder of a voting trust certificate. Any inspection and copying under this Section l may be made in person or by an agent or attorney of the shareholder or holder of a voting trust certificate making such demand.
2. MAINTENANCE AND INSPECTION OF BYLAWS. The corporation shall keep at its principal executive office, or if its principal executive office is not in the State of California at its principal business office in this state, the original or a copy of the bylaws as amended to date, which shall be open to inspection by the shareholders at all reasonable times during office hours. If the principal executive office of the corporation is outside this state and the corporation has no principal business office in this state, the Secretary shall, upon the written request of any shareholder, furnish to such shareholder a copy of the bylaws as amended to date.
3. MAINTENANCE AND INSPECTION OF OTHER CORPORATE RECORDS. The accounting books and records and minutes of proceedings of the shareholders and the Board of Directors and any committee or committees of the Board of Directors shall be kept at such place or places designated by the Board of Directors, or, in the absence of such designation, at the principal executive office of the corporation. The minutes shall be kept in written form and the accounting books and records shall be kept either in written form or in any other form capable of being converted into written form. Such minutes and accounting books and records shall be open to inspection upon the written demand of any shareholder or holder of a voting trust certificate, at any reasonable time during usual business hours, for a purpose reasonably related to such holders interests as a shareholder or as the holder of a voting trust certificate. Such inspection may be made in person or by an agent or attorney, and shall include the right to copy and make extracts. The foregoing rights of inspection shall extend to the records of each subsidiary corporation of the corporation.
4. INSPECTION BY DIRECTORS. Every director shall have the absolute right at any reasonable time to inspect all books, records and documents of every kind and the physical properties of the corporation and each of its subsidiary corporations. Such inspection by a director may be made in person or by agent or attorney and the right of inspection includes the right to copy and make extracts.
5. ANNUAL REPORT TO SHAREHOLDERS. The annual report to shareholders referred to in Section 1501 of the General Corporation Law is expressly dispensed with, but nothing herein shall be interpreted as prohibiting the Board of Directors from issuing annual or other periodic reports to the shareholders of the corporations as they deem appropriate.
6. FINANCIAL STATEMENTS. A copy of any annual financial statement and any income statement of the corporation for each quarterly period of each fiscal year, and any accompanying balance sheet of the corporation as of the end of each such period, that has been prepared by the corporation shall be kept on file in the principal executive office of the corporation for twelve (12) months and each such
statement shall be exhibited at all reasonable times to any shareholder demanding an examination of any such statement or a copy shall be mailed to any such shareholder.
If the corporation has not sent to the shareholders an annual report for the last fiscal year, a balance sheet as of the end of such fiscal year and an income statement and statement of changes in financial position for such fiscal year shall, upon the written request of any shareholder made more than one hundred twenty (120) days after the close of such fiscal year, be delivered or mailed to such shareholder within thirty (30) days after such request.
If a shareholder or shareholders holding at least five percent (5%) of the outstanding shares of any class of stock of the corporation make a written request to the corporation for an income statement of the corporation for the three-month, six-month or nine-month period of the current fiscal year ended more than thirty (30) days prior to the date of the request, and a balance sheet of the corporation as of the end of such period, the Treasurer shall cause such statement to be prepared, if not already prepared, and shall deliver personally or mail such statement or statements to the person making the request within thirty (30) days after the receipt of such request.
The corporation also shall, upon the written request of any shareholder, mail to the shareholder a copy of the last annual, semi-annual or quarterly income statement which it has prepared and a balance sheet as of the end of such period.
The quarterly income statements and balance sheets referred to in this section shall be accompanied by the report thereon, if any, of any independent accountants engaged by the corporation or the certificate of an authorized officer of the corporation that such financial statements were prepared without audit from the books and records of the corporation.
7. ANNUAL STATEMENT OF GENERAL INFORMATION. The corporation shall each year during the calendar month in which its articles of incorporation were originally filed with the California Secretary of State, or at any time during the immediately preceding five (5) calendar months, file with the Secretary of State of the State of California, on the prescribed form, a statement setting forth the names and complete business or residence addresses of all incumbent directors, the number of vacancies on the Board of Directors, if any, the names and complete business or residence addresses of the Chief Executive Officer, Secretary and Treasurer, the street address of its principal executive office or principal business office in this state and the general type of business constituting the principal business activity of the corporation, together with a designation of the agent of the corporation for the purpose of service of process, all in compliance with Section 1502 of the Corporations Code of California.
ARTICLE VIII.
GENERAL CORPORATE MATTERS
1. RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING. For purposes of determining the shareholders entitled to receive payment of any dividend or other distribution or allotment of any rights or entitled to exercise any rights in respect of any other lawful action, (other than action by shareholders by written consent without a meeting) the Board of Directors may fix, in advance, a record date, which shall not be more than sixty (60) days prior to any such action, and in such case only shareholders of record on the date so fixed are entitled to receive the dividend, distribution or allotment of rights or to exercise the rights, as the case may be, notwithstanding any transfer of any shares on the books of the corporation after the record date fixed as aforesaid, except as otherwise provided in the California General Corporation Law.
If the Board of Directors does not so fix a record date, the record date for determining shareholders for any such purpose shall be at the close of business on the day on which the board adopts the resolution relating thereto, or the sixtieth (60th) day prior to the date of such action, whichever is later.
2. CHECKS, DRAFTS, EVIDENCES OF INDEBTEDNESS. All checks, drafts or other orders for payment of money, notes or other evidences of indebtedness, issued in the name of or payable to the corporation, shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by resolution of the Board of Directors.
3. CORPORATE CONTRACTS AND INSTRUMENTS; HOW EXECUTED. The Board of Directors, except as otherwise provided in these bylaws, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances; and, unless so authorized or ratified by the Board of Directors or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or to any amount.
4. CERTIFICATES FOR SHARES. A certificate or certificates for shares of the capital stock of the corporation shall be issued to each shareholder when any such shares are fully paid, and the Board of Directors may authorize the issuance of certificates or shares as partly paid provided that such certificates shall state the amount of the consideration to be paid therefor and the amount paid thereon. All certificates shall be signed in the name of the corporation by the Chairman of the Board or Vice Chairman of the Board or the President or Vice President and by the Treasurer or an Assistant Treasurer or the Secretary or any Assistant Secretary, certifying the number of shares and the class or series of shares owned by the shareholder. Any or all of the signatures on the certificate may be facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if such person were an officer, transfer agent or registrar at the date of issue.
5. LOST CERTIFICATES. Except as hereinafter in this Section 5 provided, no new certificates for shares shall be issued in lieu of an old certificate unless the latter is surrendered to the corporation and canceled at the same time. The Board of Directors may in case any share certificate or certificate for any other security is lost, stolen or destroyed, authorize the issuance of a new certificate in lieu thereof, upon such terms and conditions as the board may require, including provision for indemnification of the corporation secured by a bond or other adequate security sufficient to protect the corporation against any claim that may be made against it, including any expense or liability, on account of the alleged loss, theft or destruction of such certificate or the issuance of such new certificate.
6. REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The Chairman of the Board, the President, or any Vice President, or any other person authorized by resolution of the Board of Directors by any of the foregoing designated officers, is authorized to vote on behalf of the corporation any and all shares of any other corporation or corporations, foreign or domestic, standing in the name of the corporation. The authority herein granted to said officers to vote or represent on behalf of the corporation any and all shares held by the corporation in any other corporation or corporations may be exercised by any such officer in person or by any person authorized to do so by proxy duly executed by said officer.
ARTICLE IX.
AMENDMENTS
1. AMENDMENT BY SHAREHOLDERS. New bylaws may be adopted or these bylaws may be amended or repealed by the vote or written consent of holders of a majority of the outstanding shares entitled to vote; provided, however, that if the articles of incorporation of the corporation set forth the number of authorized directors of the corporation, the authorized number of directors may be changed only by an amendment of the articles of incorporation.
2. AMENDMENT BY DIRECTORS. Subject to the rights of the shareholders as provided in Section 1 of this Article IX, bylaws, other than a bylaw or an amendment thereof changing the authorized number of directors, may be adopted, amended or repealed by the Board of Directors.
ARTICLE X.
GENERAL
1. GOVERNING LAW. This corporation is organized under the provisions of the California General Corporation Law (Corporations Code Sections 100-2319) as in effect on the date of filing of its original articles of incorporation, namely September 23, 2005 under the name CCCIS, Inc. Upon such filing the California Secretary of State assigned the following corporation number to this corporation: C2803093. The corporate affairs of this corporation shall be governed by and conducted in accordance with the provisions of the California General Corporation Law, as the same presently exist and are from time to time hereafter amended or superseded, except in those instances where the articles of incorporation or bylaws of this corporation, now or through amendment hereafter, may adopt alternative rules which are permissible under the California General Corporation Law. Any provision (or portion thereof) in these bylaws which is not permissible under the California General Corporation Law or is inconsistent with the articles of incorporation of this corporation (as they may from time to time be amended and supplemented) is void, but the balance of these bylaws shall nevertheless be valid and effective.
2. CONSTRUCTION AND DEFINITIONS. Unless the context requires otherwise, the general provisions, rules of construction, and definitions in the California General Corporation Law shall govern the construction of these bylaws. Without limiting the generality of the foregoing, the singular number includes the plural, the plural number includes the singular, and the term person includes both a corporation and a natural person.
AMENDED AND RESTATED BYLAWS
OF
CCCIS, INC.
TABLE OF CONTENTS
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Page |
ARTICLE I. OFFICES |
1 | |
1. |
PRINCIPAL OFFICES |
1 |
2. |
OTHER OFFICES |
1 |
ARTICLE II. MEETINGS OF SHAREHOLDERS |
1 | |
1. |
PLACE OF MEETINGS |
1 |
2. |
ANNUAL MEETINGS OF SHAREHOLDERS |
1 |
3. |
SPECIAL MEETINGS |
1 |
4. |
NOTICE OF SHAREHOLDERS MEETINGS |
2 |
5. |
MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE |
2 |
6. |
QUORUM |
2 |
7. |
ADJOURNED MEETING AND NOTICE THEREOF |
2 |
8. |
VOTING |
3 |
9. |
WAIVER OF NOTICE OR CONSENT BY ABSENT SHAREHOLDERS |
3 |
10. |
SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING |
4 |
11. |
RECORD DATE FOR SHAREHOLDER NOTICE, VOTING, AND GIVING CONSENTS |
4 |
12. |
PROXIES |
5 |
13. |
INSPECTORS OF ELECTION |
5 |
ARTICLE III. DIRECTORS |
6 | |
1. |
POWERS |
6 |
2. |
NUMBER AND QUALIFICATION OF DIRECTORS |
6 |
3. |
ELECTION AND TERM OF OFFICE OF DIRECTORS |
6 |
4. |
VACANCIES |
6 |
5. |
PLACE OF MEETINGS AND TELEPHONIC MEETINGS |
7 |
6. |
ANNUAL MEETINGS |
7 |
7. |
OTHER REGULAR MEETINGS |
7 |
8. |
SPECIAL MEETINGS |
7 |
9. |
DISPENSING WITH NOTICE |
8 |
10. |
QUORUM |
8 |
11. |
ADJOURNMENT |
8 |
12. |
NOTICE OF ADJOURNMENT |
8 |
13. |
ACTION WITHOUT MEETING |
8 |
14. |
FEES AND COMPENSATION OF DIRECTORS |
8 |
ARTICLE IV. COMMITTEES |
8 | |
1. |
COMMITTEES OF DIRECTORS |
8 |
2. |
MEETINGS AND ACTION OF COMMITTEES |
9 |
ARTICLE V. OFFICERS |
9 | |
1. |
OFFICERS |
9 |
2. |
ELECTION OF OFFICERS |
9 |
3. |
SUBORDINATE OFFICERS, ETC |
9 |
4. |
REMOVAL AND RESIGNATION OF OFFICERS |
10 |
5. |
VACANCIES IN OFFICES |
10 |
6. |
CHAIRMAN OF THE BOARD |
10 |
7. |
PRESIDENT |
10 |
8. |
VICE PRESIDENTS |
10 |
9. |
SECRETARY |
10 |
10. |
TREASURER |
11 |
ARTICLE VI. INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND OTHER AGENTS |
11 | |
ARTICLE VII. RECORDS AND REPORTS |
11 | |
1. |
MAINTENANCE AND INSPECTION OF SHARE REGISTER |
11 |
2. |
MAINTENANCE AND INSPECTION OF BYLAWS |
12 |
3. |
MAINTENANCE AND INSPECTION OF OTHER CORPORATE RECORDS |
12 |
4. |
INSPECTION BY DIRECTORS |
12 |
5. |
ANNUAL REPORT TO SHAREHOLDERS |
12 |
6. |
FINANCIAL STATEMENTS |
12 |
7. |
ANNUAL STATEMENT OF GENERAL INFORMATION |
13 |
ARTICLE VIII. GENERAL CORPORATE MATTERS |
13 | |
1. |
RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING |
13 |
2. |
CHECKS, DRAFTS, EVIDENCES OF INDEBTEDNESS |
14 |
3. |
CORPORATE CONTRACTS AND INSTRUMENTS; HOW EXECUTED |
14 |
4. |
CERTIFICATES FOR SHARES |
14 |
5. |
LOST CERTIFICATES |
14 |
6. |
REPRESENTATION OF SHARES OF OTHER CORPORATIONS |
14 |
ARTICLE IX. AMENDMENTS |
15 | |
1. |
AMENDMENT BY SHAREHOLDERS |
15 |
2. |
AMENDMENT BY DIRECTORS |
15 |
ARTICLE X. GENERAL |
15 | |
1. |
GOVERNING LAW |
15 |
2. |
CONSTRUCTION AND DEFINITIONS |
15 |
Exhibit 3.97
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
CCCS CORPORATE HOLDINGS, INC.
A STOCK CORPORATION
(Pursuant to Sections 242 and 245 of the
General Corporation Law of the State of Delaware)
CCCS Corporate Holdings, Inc., a corporation organized and existing under the laws of the State of Delaware (the Corporation), hereby certifies as follows:
1. The original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on July 27, 2006 under the name CCS Corporate Holdings, Inc. The Corporations name was later changed to CCCS Corporate Holdings, Inc. on July 31, 2006.
2. The text of the Certificate of Incorporation is hereby amended and restated to read in its entirety as set forth in Annex A attached hereto.
3. This Amended and Restated Certificate of Incorporation has been duly adopted by the directors and stockholders of the Corporation in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware.
[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned authorized officer has executed this Amended and Restated Certificate of Incorporation of CCCS Corporate Holdings, Inc. as of this 29th day April, 2011.
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CCCS Corporate Holdings, Inc. | |
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By: |
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Name: |
Bridgette C. Roman |
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Title: |
Secretary |
Annex A
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
CCCS CORPORATE HOLDINGS, INC.
A STOCK CORPORATION
FIRST: The name of the corporation (the Corporation) is:
CCCS Corporate Holdings, Inc.
SECOND: The address of the Corporations registered office in the State of Delaware is 1209 Orange Street, City of Wilmington, County of New Castle, Delaware 19801. The name of the Corporations registered agent at such address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.
FOURTH: The total number of shares that the Corporation has authority to issue is 100 shares of Common Stock, par value of $0.01 per share.
FIFTH: Elections of directors need not be by written ballot except and to the extent provided in the bylaws of the Corporation.
SIXTH: To the full extent permitted by the General Corporation Law of the State of Delaware or any other applicable laws presently or hereafter in effect, no director of the Corporation will be personally liable to the Corporation or its stockholders for or with respect to any acts or omissions in the performance of his or her duties as a director of the Corporation. Any repeal or modification of this Article Sixth will not adversely affect any right or protection of a director of the Corporation existing immediately prior to such repeal or modification.
SEVENTH: Each person who is or was or had agreed to become a director, officer, employee or agent of the Corporation, or each such person who is or was serving or who had
agreed to serve at the request of the Board of Directors or an officer of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise (including the heirs, executors, administrators or estate of such person), will be indemnified by the Corporation to the full extent permitted by the General Corporation Law of the State of Delaware or any other applicable laws as presently or hereafter in effect. Without limiting the generality or the effect of the foregoing, the Corporation may enter into one or more agreements with any person that provide for indemnification greater or different than that provided in this Article Seventh. Any repeal or modification of this Article Seventh will not adversely affect any right or protection existing hereunder immediately prior to such repeal or modification.
EIGHTH: In furtherance and not in limitation of the rights, powers, privileges, and discretionary authority granted or conferred by the General Corporation Law of the State of Delaware or other statutes or laws of the State of Delaware, the Board of Directors is expressly authorized to make, alter, amend or repeal the bylaws of the Corporation, without any action on the part of the stockholders, but the stockholders may make additional bylaws and may alter, amend or repeal any bylaw whether adopted by them or otherwise. The Corporation may in its bylaws confer powers upon the Board of Directors in addition to the foregoing and in addition to the powers and authorities expressly conferred upon the Board of Directors by applicable law.
NINTH: The Corporation reserves the right at any time and from time to time to amend, alter, change or repeal any provision contained in this Amended and Restated Certificate of Incorporation, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted, in the manner now or hereafter prescribed herein or by applicable law; and all rights, preferences and privileges of whatsoever nature conferred upon stockholders, directors or any other persons whomsoever by and pursuant to this Amended and Restated Certificate of Incorporation in its present form or as hereafter amended are granted subject to this reservation.
Exhibit 3.98
CCCS CORPORATE HOLDINGS, INC.
AMENDED AND RESTATED BYLAWS
TABLE OF CONTENTS
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Page |
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ARTICLE I |
MEETINGS OF STOCKHOLDERS |
1 |
Section 1. |
Time and Place of Meetings |
1 |
Section 2. |
Annual Meeting |
1 |
Section 3. |
Special Meetings |
1 |
Section 4. |
Notice of Meetings |
1 |
Section 5. |
Quorum |
2 |
Section 6. |
Voting |
2 |
Section 7. |
Written Action |
3 |
ARTICLE II |
DIRECTORS |
3 |
Section 1. |
Powers |
3 |
Section 2. |
Number and Term of Office |
4 |
Section 3. |
Vacancies and New Directorships |
4 |
Section 4. |
Regular Meetings |
5 |
Section 5. |
Special Meetings |
5 |
Section 6. |
Quorum |
5 |
Section 7. |
Written Action |
5 |
Section 8. |
Participation in Meetings by Conference Telephone |
6 |
Section 9. |
Committees |
6 |
Section 10. |
Compensation |
7 |
Section 11. |
Rules |
7 |
ARTICLE III |
NOTICES |
7 |
Section 1. |
Generally |
7 |
Section 2. |
Waivers |
7 |
ARTICLE IV |
OFFICERS |
8 |
Section 1. |
Generally |
8 |
Section 2. |
Compensation |
8 |
Section 3. |
Succession |
8 |
Section 4. |
Authority and Duties |
9 |
TABLE OF CONTENTS
(continued)
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Page |
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Section 5. |
Execution of Documents and Action with Respect to Securities of Other Corporations |
9 |
ARTICLE V |
STOCK |
9 |
Section 1. |
Certificates |
9 |
Section 2. |
Transfer |
10 |
Section 3. |
Lost, Stolen or Destroyed Certificates |
10 |
Section 4. |
Record Date |
10 |
ARTICLE VI |
GENERAL PROVISIONS |
12 |
Section 1. |
Fiscal Year |
12 |
Section 2. |
Corporate Seal |
12 |
Section 3. |
Reliance upon Books, Reports and Records |
12 |
Section 4. |
Time Periods |
13 |
Section 5. |
Dividends |
13 |
ARTICLE VII |
AMENDMENTS |
13 |
Section 1. |
Amendments |
13 |
AMENDED AND RESTATED BYLAWS
ARTICLE I
MEETINGS OF STOCKHOLDERS
Section 1. Time and Place of Meetings. All meetings of the stockholders for the election of directors or for any other purpose shall be held at such time and place, within or without the State of Delaware, as may be designated by the Board of Directors, or by the Chairman of the Board of Directors, the President or the Secretary in the absence of a designation by the Board of Directors, and stated in the notice of the meeting or in a duly executed waiver of notice thereof. Stockholders may participate in an annual or special meeting of the stockholders by use of any means of communication by which all stockholders participating may simultaneously hear each other during the meeting. A stockholders participation in a meeting by any such means of communication constitutes presence in person at the meeting.
Section 2. Annual Meeting. An annual meeting of the stockholders shall be held at such date and time as shall be designated from time to time by the Board of Directors, at which meeting the stockholders shall elect by a plurality vote the directors to succeed those whose terms expire and shall transact such other business as may properly be brought before the meeting.
Section 3. Special Meetings. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by law or by the Certificate of Incorporation, may be called by the Board of Directors, the Chairman of the Board of Directors or the President.
Section 4. Notice of Meetings. Written notice of every meeting of the stockholders, stating the place, if any, date and hour of the meeting, the means of remote communication, if
any, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting, except as otherwise provided herein or by law. When a meeting is adjourned to another place, date or time, written notice need not be given of the adjourned meeting if the place, date and time thereof and the means of remote communication, if any, are announced at the meeting at which the adjournment is taken; provided, however, that if the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, written notice of the place, date and time of the adjourned meeting shall be given in conformity herewith. At any adjourned meeting, any business may be transacted which might have been transacted at the original meeting.
Section 5. Quorum. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by law or by the Certificate of Incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented.
Section 6. Voting. Except as otherwise provided by law or by the Certificate of Incorporation, each stockholder shall be entitled at every meeting of the stockholders to one vote for each share of stock having voting power standing in the name of such stockholder on the books of the Corporation on the record date for the meeting and such votes may be cast either in person or by written proxy. Every proxy must be duly executed and filed with the Secretary of
the Corporation. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or another duly executed proxy bearing a later date with the Secretary of the Corporation. The vote upon any question brought before a meeting of the stockholders may be by voice vote, unless the holders of a majority of the outstanding shares of all classes of stock entitled to vote thereon present in person or by proxy at such meeting shall so determine. When a quorum is present at any meeting, the vote of the holders of a majority of the stock that has voting power present in person or represented by proxy shall decide any question properly brought before such meeting, unless the question is one upon which by express provision of law, the Certificate of Incorporation or these bylaws, a different vote is required, in which case such express provision shall govern and control the decision of such question.
Section 7. Written Action. Any action required or permitted to be taken at any meeting of the stockholders of the Corporation may be taken without a meeting or notice thereof if a consent or consents in writing, describing the action or actions so taken, is or are signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereupon were present and voted, and such consent or consents are filed with the minutes or proceedings of the stockholders of the Corporation.
ARTICLE II
DIRECTORS
Section 1. Powers. The business and affairs of the Corporation shall be managed by or under the direction of its Board of Directors, which may exercise all such powers of the
Corporation and do all such lawful acts and things as are not by law or by the Certificate of Incorporation directed or required to be exercised or done by the stockholders.
Section 2. Number and Term of Office. Except as otherwise required by any stockholders agreement by and among the Corporation and its stockholders, (a) the Board of Directors shall consist of one or more members and (b) the number of directors shall be fixed by resolution from time to time of the Board of Directors or by the stockholders at the annual meeting or a special meeting. The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 3 of this Article, and each director elected shall hold office until such directors successor is elected and qualified, except as required by law. Except as otherwise required by any stockholders agreement by and among the Corporation and its stockholders, the Board of Directors may, at its discretion, elect a Chairman of the Board of Directors from the directors currently in office by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the Chairman so elected shall hold office until the next annual meeting of the stockholders and until his/her successor is elected and qualified, except as required by law. Any decrease in the authorized number of directors shall not be effective until the expiration of the term of the directors then in office, unless, at the time of such decrease, there shall be vacancies on the Board of Directors which are being eliminated by such decrease.
Section 3. Vacancies and New Directorships. Except as otherwise required by any stockholders agreement by and among the Corporation and its stockholders, vacancies and newly created directorships resulting from any increase in the authorized number of directors which occur between annual meetings of the stockholders may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so
elected shall hold office until the next annual meeting of the stockholders and until their successors are elected and qualified, except as required by law.
Section 4. Regular Meetings. Regular meetings of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders and at such other time and place as shall from time to time be determined by the Board of Directors.
Section 5. Special Meetings. Special meetings of the Board of Directors may be called by the Chairman of the Board of Directors or the President on one days written notice to each director by whom such notice is not waived, given either personally or by mail or telegram, and shall be called by the President or the Secretary in like manner and on like notice on the written request of any two directors.
Section 6. Quorum. At all meetings of the Board of Directors, a majority of the total number of directors then in office shall constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time to another place, time or date, without notice other than announcement at the meeting, until a quorum shall be present.
Section 7. Written Action. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if all members of the Board of Directors or committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board of Directors or Committee.
Section 8. Participation in Meetings by Conference Telephone. Members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or a meeting of any such committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.
Section 9. Committees. Except as otherwise required by any stockholders agreement by and among the Corporation and its stockholders, the Board of Directors may, by resolution passed by a majority of the whole Board of Directors, designate one or more committees, each committee to consist of one or more of the directors of the Corporation and each to have such lawfully delegable powers and duties as the Board of Directors may confer and each such committee shall serve at the pleasure of the Board of Directors. Except as otherwise required by any stockholders agreement by and among the Corporation and its stockholders, the Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Except as otherwise provided by law, any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it. Any committee or committees so designated by the Board of Directors shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. Unless otherwise prescribed by the Board of Directors, a majority of the members of the committee shall constitute a quorum for the transaction of business, and the act of a majority of the members present at a meeting at which
there is a quorum shall be the act of such committee. Each committee shall prescribe its own rules for calling and holding meetings and its method of procedure, subject to any rules prescribed by the Board of Directors, and shall keep a written record of all actions taken by it.
Section 10. Compensation. The Board of Directors may establish such compensation for, and reimbursement of the expenses of, directors for attendance at meetings of the Board of Directors or committees, or for other services by directors to the Corporation, as the Board of Directors may determine.
Section 11. Rules. The Board of Directors may adopt such special rules and regulations for the conduct of their meetings and the management of the affairs of the Corporation as they may deem proper, not inconsistent with law or these bylaws.
ARTICLE III
NOTICES
Section 1. Generally. Whenever by law or under the provisions of the Certificate of Incorporation or these bylaws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at such directors or stockholders address as it appears on the records of the Corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Notice to directors may also be given by facsimile, by telephone or by a form of electronic transmission consented to by the stockholder or director to whom the notice is given.
Section 2. Waivers. Whenever any notice is required to be given by law or under the provisions of the Certificate of Incorporation or these bylaws, a waiver thereof in writing, signed by the person or persons entitled to such notice, or a waiver by electronic transmission by the
person entitled to such notice, in each case, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to such notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.
ARTICLE IV
OFFICERS
Section 1. Generally. The officers of the Corporation shall be elected by the Board of Directors and shall consist of a President, a Secretary and a Treasurer. The Board of Directors may also elect such other officers, as the Board of Directors deems desirable, including the election of a Chief Executive Officer, a Chief Financial Officer and such number of Vice Presidents as the Board of Directors may from time to time determine. Any number of offices may be held by the same person.
Section 2. Compensation. The compensation of all officers and agents of the Corporation who are also directors of the Corporation shall be fixed by the Board of Directors. The Board of Directors may delegate the power to fix the compensation of other officers and agents of the Corporation to an officer of the Corporation.
Section 3. Succession. The officers of the Corporation shall hold office until their successors are elected and qualified or until such officers earlier resignation or removal. Any officer elected or appointed by the Board of Directors may be removed at any time by the affirmative vote of a majority of the directors. Any vacancy occurring in any office of the Corporation may be filled by the Board of Directors.
Section 4. Authority and Duties. Each of the officers of the Corporation shall have such authority and shall perform such duties as are customarily incident to their respective offices, or as may be specified from time to time by the Board of Directors in a resolution which is not inconsistent with these bylaws.
Section 5. Execution of Documents and Action with Respect to Securities of Other Corporations. The President shall have and is hereby given, full power and authority, except as otherwise required by law or directed by the Board of Directors, (a) to execute, on behalf of the Corporation, all duly authorized contracts, agreements, deeds, conveyances or other obligations of the Corporation, applications, consents, proxies and other powers of attorney, and other documents and instruments, and (b) to vote and otherwise act on behalf of the Corporation, in person or by proxy, at any meeting of stockholders, members, partners or other equity holders (or with respect to any action of such stockholders, members, partners or other equity holders) of any other corporation, limited liability company, partnership or other entity in which the Corporation may hold securities and otherwise to exercise any and all rights and powers which the Corporation may possess by reason of its ownership of securities. In addition, the President may delegate to other officers, employees and agents of the Corporation the power and authority to take any action which the President is authorized to take under this Section 5, with such limitations as the President may specify; such authority so delegated by the President shall not be re-delegated by the person to whom such execution authority has been delegated.
ARTICLE V
STOCK
Section 1. Certificates. Certificates representing shares of stock of the Corporation shall be in such form as shall be determined by the Board of Directors, subject to applicable legal
requirements. Such certificates shall be numbered and their issuance recorded in the books of the Corporation, and such certificate shall exhibit the holders name and the number of shares and shall be signed by, or in the name of the Corporation by the Chairman or Vice-Chairman of the Board of Directors or the President or Vice-President and the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer of the Corporation. Any or all of the signatures upon such certificates may be facsimiles, engraved or printed.
Section 2. Transfer. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Corporation to issue, or to cause its transfer agent to issue, a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.
Section 3. Lost, Stolen or Destroyed Certificates. The Secretary may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed upon the making of an affidavit of that fact, satisfactory to the Secretary, by the person claiming the certificate of stock to be lost, stolen or destroyed. As a condition precedent to the issuance of a new certificate or certificates the Secretary may require the owner of such lost, stolen or destroyed certificate or certificates, or such owners legal representative, to give the Corporation a bond in such sum and with such surety or sureties as the Secretary may direct as indemnity against any claims that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed or the issuance of the new certificate.
Section 4. Record Date. In order that the Corporation is able to determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment
thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty nor less than ten days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.
(a) In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date has been fixed by the Board of Directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to a Corporations registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of
Directors and prior action by the Board of Directors is required by law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.
(b) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
ARTICLE VI
GENERAL PROVISIONS
Section 1. Fiscal Year. The fiscal year of the Corporation shall be fixed from time to time by the Board of Directors.
Section 2. Corporate Seal. The Board of Directors may adopt a corporate seal and use the same by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
Section 3. Reliance upon Books, Reports and Records. Each director, each member of a committee designated by the Board of Directors and each officer of the Corporation will, in the performance of his or her duties, be fully protected in relying in good faith upon the records of the Corporation and upon such information, opinions, reports or statements presented to the
Corporation by any of the Corporations officers or employees, or committees of the Board of Directors, or by any other person as to matters the director, committee member or officer reasonably believes are within such other persons professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.
Section 4. Time Periods. In applying any provision of these bylaws which requires that an act be done or not be done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded and the day of the event shall be included.
Section 5. Dividends. The Board of Directors may from time to time declare and the Corporation may pay dividends upon its outstanding shares of capital stock, in the manner and upon the terms and conditions provided by law and the Certificate of Incorporation.
ARTICLE VII
AMENDMENTS
Section 1. Amendments. These bylaws may be altered, amended or repealed, or new bylaws may be adopted, by the stockholders or by the Board of Directors.
Exhibit 3.99
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CERTIFICATE OF FORMATION OF
CCCS HOLDINGS, LLC |
State of Delaware |
The undersigned, an authorized natural person, for the purpose of forming a limited liability company, under the provisions and subject to the requirements of the Delaware Limited Liability Company Act, hereby certifies that:
1. The name of the limited liability company is CCCS Holdings, LLC (the Company).
2. The name and address of the registered agent and the registered office of the Company required to be maintained by Section 104 of the Delaware Limited Liability Company Act are National Registered Agents. Inc. 160 Greentree Drive, Suite 101, Dover, Delaware 19904. County of Kent.
IN WITNESS WHEREOF, the undersigned has caused this Certificate of Formation to be duly executed as of this 13th day of July, 2006.
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/s/ Kate Cregor |
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Kate Cregor, Authorized Person |
Exhibit 3.100
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
CCCS HOLDINGS, LLC
a Delaware Limited Liability Company
Dated as of April 29, 2011
THE MEMBERSHIP INTERESTS OF CCCS HOLDINGS, LLC SHALL BE SECURITIES GOVERNED BY ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, ARTICLE 8 OF THE DELAWARE UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT. THE MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
CCCS HOLDINGS, LLC
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of CCCS Holdings, LLC (the Company) is made, adopted and entered into effective as of the 29th day of April, 2011, by CCCS Corporate Holdings, Inc., a Delaware corporation, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Amended and Restated Limited Liability Company Agreement of CCCS Holdings, LLC, dated as of September 29, 2006, as amended, to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) that certain Amended and Restated Limited Liability Company Agreement of CCCS Holdings, LLC, dated as of September 29, 2006, as amended, is hereby further amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 18 of the Delaware Corporation Laws Annotated, as amended from time to time (the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Delaware on July 13, 2006. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in a limited liability company agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is CCCS Holdings, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 7001 Post Road, Suite 200, Dublin, Ohio 43016. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Delaware in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Delaware in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Delaware shall be National Registered Agents, Inc. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Delaware shall be c/o National Registered Agents, Inc., 160 Greenwood Drive, Suite 101, Dover, Delaware 19904, Kent County. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Agreement means this Amended and Restated Limited Liability Company Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
GAAP means United States generally accepted accounting principles as in effect from time to time.
Indemnified Parties has the meaning set forth in Section 5.4(a).
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.1.
Membership Interest Certificate has the meaning set forth in Section 2.2.
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Sole Member means CCCS Corporate Holdings, Inc., a Delaware corporation, or any Person that acquires all of the equity interests of the Company from CCCS Corporate Holdings, Inc.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST CERTIFICATE
2.1 Capital Contribution; Membership Interest. The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement, as evidenced by a Membership Interest Certificate (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
2.2 Membership Interest Certificate. The Membership Interest of the Sole Member will be evidenced by a certificate of limited liability company interest issued by the Company (the Membership Interest Certificate). The Membership Interest shall be a security governed by Article 8 of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Article 8 of the Delaware Uniform Commercial Code, as currently in effect. Each Membership Interest Certificate shall bear the following legend:
This certificate evidences an interest in CCCS Holdings, LLC and shall be a security governed by Article 8 of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Article 8 of the Delaware Uniform Commercial Code, as currently in effect.
This Section 2.2 shall not be amended and no such purported amendment to this Section 2.2 shall be effective until, to the extent necessary, all outstanding Membership Interest Certificates have been surrendered for re-issuance with any conforming changes required as a result of such amendment.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto. Notwithstanding the foregoing or anything in this Agreement to the contrary, the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take.
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers of the Company shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation or removal, as applicable. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her, as applicable, written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company shall be exercised by such officers as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their
respective offices. Each Officer of the Company shall hold office at the pleasure of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3 of this Agreement.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Proof of Failure to Satisfy Standard of Conduct. The Sole Member, any Manager and any Officer shall not be deemed to have violated any standard of conduct under this Section 5 unless such violation is proved by clear and convincing evidence in an action brought against the Sole Member, any Manager or any Officer in a court of competent jurisdiction. The termination of any action, suit or proceeding by judgment, order, settlement or upon a plea of nolo contendere or its equivalent shall not of itself constitute proof or create a presumption that the appropriate standard of conduct has been violated.
5.2 Liability to the Company. The Sole Member, any Manager and any Officer shall not be liable to the Company in damages for any action that the Sole Member, any Manager or any Officer takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.3 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 18-303(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.4 Indemnification.
(a) The Company shall indemnify, defend and hold harmless the Sole Member, any Manager and any Officer (collectively, the Indemnified Parties) to
the fullest extent provided by, or permissible under, Section 18-108 of the LLC Law, or any successor statute. The Company is hereby authorized to take any and all further action to effectuate any indemnification of the Indemnified Parties that any Delaware limited liability company may have power to take with respect to the indemnification of its members, managers and officers by any agreement or otherwise. This Section 5.4(a) shall be interpreted in all respects to expand such power to indemnify to the maximum extent permissible to any Delaware limited liability company with regard to the particular facts of each case, and not in any way to limit any statutory or other power to indemnify, or any right of any individual to indemnification. Expenses, including, without limitation, attorneys fees, incurred by the Indemnified Parties in defending any proceeding shall be paid by the Company in advance of the final disposition of such proceeding, upon receipt of any undertaking by or on behalf of the Indemnified Parties to repay such amount if it shall be ultimately determined that it is not entitled to be indemnified by the Company as authorized in this Section 5. No repeal, amendment or modification of this Section 5.4(a) shall affect any rights or obligations then existing hereunder with respect to any state of facts then or theretofore existing or any action, suit or proceeding theretofore or thereafter brought or threatened based in whole or in part upon any such state of facts. This Section 5.4(a) is intended for the benefit of the Company and the Indemnified Parties.
(b) Authorized agents and employees of the Company shall be indemnified by the Company only if and to the extent, if any, approved by the Managers or specifically required by applicable law.
(c) The provisions of this Section 5 shall survive any termination of this Agreement.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member. All financials statements shall be prepared in accordance with GAAP.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 18-304 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Limited Liability Company Agreement of CCCS Holdings, LLC as of the date first written above.
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EXHIBIT A
Form of Membership Interest Certificate
THE INTEREST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. ACCORDINGLY, SUCH INTEREST MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
THIS CERTIFICATE EVIDENCES AN INTEREST IN CCCS HOLDINGS, LLC AND SHALL BE A SECURITY GOVERNED BY ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, ARTICLE 8 OF THE DELAWARE UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT.
No.
CCCS HOLDINGS, LLC
A Delaware Limited Liability Company
Membership Interest Certificate
This certifies that [ ] is the owner of the Membership Interest representing [ ]% membership equity interest in CCCS Holdings, LLC (the Company), subject to the terms of the Amended and Restated Limited Liability Company Agreement of CCCS Holdings, LLC, dated as of , 2011, as the same may be amended from time to time in accordance with its terms (the Agreement).
This Membership Interest Certificate may be transferred by the lawful holders hereof only in accordance with the provisions of the Agreement and applicable law.
THIS SECURITY IS SUBJECT TO THE PROVISIONS OF THE AGREEMENT.
IN WITNESS WHEREOF, the Company has caused this Membership Interest Certificate to be issued this day of , .
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FOR VALUE RECEIVED, , the of the Company does hereby sell, assign and transfer unto:
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the Membership Interest evidenced by the within Membership Interest Certificate, and does hereby irrevocably constitute an appoint attorney-in-fact to transfer the said Membership Interest on the books of the within-named Company, with the full power of substitution in the premises.
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NOTICE: The signature to this assignment must correspond with the name as written upon the face of the Membership Interest Certificate in every particular, without alternation or enlargement or any change whatsoever. | ||||
Exhibit 3.101
State of Delaware
Secretary of State
Division of Corporations
Delivered 04:16 PM 04/25/2006
FILED 04:01 PM 04/25/2006
SRV 060382619 - 4144174 FILE
CERTIFICATE OF INCORPORATION
OF
CHECKSMART FINANCIAL COMPANY
THE UNDERSIGNED, being a natural person for the purpose of organizing a corporation under the General Corporation Law of the State of Delaware, (the DGCL) hereby certifies that:
FIRST: Name. The name of the Corporation is: CheckSmart Financial Company (the Corporation).
SECOND: Address. The address of the registered office of the Corporation in the State of Delaware is Corporation Service Company, 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle, 19808. The name of its registered agent at such address is the Corporation Service Company.
THIRD: Purpose. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL, as from time to time amended.
FOURTH: Capitalization. The total number of shares of capital stock which the Corporation shall have authority to issue is one hundred (100) shares of common stock having a par value of $0.01 (the Common Stock).
FIFTH: Incorporator. The name and mailing address of the incorporator is Chad Streff, c/o Buckeye Check Cashing, Inc., 7001 Post Road, Suite 200, Dublin, Ohio 43016. Upon the filing of this Certificate of Incorporation, the incorporator will have no further authority, rights or obligations to the Corporation hereunder.
SIXTH: Director. Upon filing this Certificate of Incorporation, the name and mailing address of the person who is to serve as director is:
James H. Frauenberg, Sr.
c/o Buckeye Check Cashing, Inc.
7001 Post Road, Suite 200
Dublin, Ohio 43016
Telephone: 614-798-5900
Facsimile: 614-760-2601
SEVENTH: Amendments. In furtherance and not in limitation of the powers conferred by law, subject to any limitations contained elsewhere in this Certificate of Incorporation, the Corporation may adopt, amend or repeal Bylaws by the vote of a majority of the board of directors of the Corporation, but any Bylaws adopted
by the board of directors may be amended or repealed by the stockholders entitled to vote thereon. Election of directors need not be by written ballot.
EIGHTH: Director Exculpation. A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the directors duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit. Any repeal or amendment of this Article Eighth by the stockholders of the Corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director of the Corporation arising from an act or omission occurring prior to the time of such repeal or amendment. In addition to the circumstances in which a director of the Corporation is not personally liable as set forth in the foregoing provisions of this Article Eighth, a director shall not be liable to the Corporation or its stockholders to such further extent as permitted by any law hereafter enacted, including without limitation any subsequent amendment to the DGCL.
NINTH: Director and Officer Indemnification. The Corporation shall indemnify any person who was, is, or is threatened to be made a party to a proceeding (as hereinafter defined) by reason of the fact that he or she (i) is or was a director or executive officer of the Corporation or (ii) while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, partner, venturer, proprietor, trustee, employee, agent, or similar functionary of another foreign or domestic corporation, partnership, joint venture, sole proprietorship, trust, employee benefit plan, or other enterprise, to the fullest extent permitted under the DGCL, as the same exists or may hereafter be amended. Any repeal or modification of this Article Ninth, or change in law that purports to restrict the ability of the Corporation to indemnify or award expenses as permitted in this Article Ninth, shall not adversely affect any right or protection hereunder in respect to any act or omission occurring prior to the time of such repeal, modification or change of law, as the case may be. Such right shall include the right to be paid by the Corporation expenses incurred in defending any such proceeding in advance of its final disposition to the maximum extent permitted under the DGCL, as the same exists or may hereafter be amended. Neither the failure of the Corporation (including its Board of Directors or any committee thereof, independent legal counsel, or stockholders) to have made its determination prior to the commencement of such action that indemnification of, or advancement of costs of defense to, the claimant is permissible in the circumstances nor an actual determination by the Corporation (including its Board of Directors or any committee thereof, independent legal counsel, or stockholders) that such indemnification or advancement is not permissible shall be a defense to the action or create a presumption that such indemnification or advancement is not permissible. In the event of the death of any person having a right of indemnification under the foregoing provisions, such right shall inure to the benefit of his or her heirs, executors, administrators, and personal representatives. The rights conferred above shall not be exclusive of any other right which any person may have or hereafter acquire under any
statute, by-law, resolution of stockholders or disinterested directors, agreement, or otherwise.
The Corporation may additionally indemnify any other officer, employee or agent of the Corporation or other person to the fullest extent permitted by law.
As used herein, the term proceeding means any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, arbitrative, or investigative, any appeal in such an action, suit, or proceeding, and any inquiry or investigation that could lead to such an action, suit, or proceeding.
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate of Incorporation on this 25th day of April, 2006.
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/s/ Chad Streff |
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Chad Streff |
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Sole Incorporator |
Exhibit 3.102
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BYLAWS
OF
CHECKSMART FINANCIAL COMPANY
(a Delaware Corporation)
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TABLE OF CONTENTS
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ARTICLE I |
Offices |
1 | ||
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1.1 |
Registered Office and Agent |
1 | |
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1.2 |
Other Offices |
1 | |
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ARTICLE II |
Meetings of Stockholders |
1 | ||
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2.1 |
Annual Meeting |
1 | |
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2.2 |
Special Meeting |
1 | |
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2.3 |
Place of Meetings |
1 | |
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2.4 |
Notice |
2 | |
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2.5 |
Voting List |
2 | |
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2.6 |
Quorum |
2 | |
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2.7 |
Required Vote; Withdrawal of Quorum |
2 | |
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2.8 |
Method of Voting; Proxies |
2 | |
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2.9 |
Record Date |
3 | |
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2.10 |
Conduct of Meeting |
4 | |
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2.11 |
Inspectors |
4 | |
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ARTICLE III |
Directors |
4 | ||
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3.1 |
Management |
4 | |
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3.2 |
Number; Qualification; Election; Term |
4 | |
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3.3 |
Change in Number |
5 | |
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3.4 |
Removal |
5 | |
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3.5 |
Vacancies |
5 | |
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3.6 |
Meetings of Directors |
5 | |
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3.7 |
First Meeting |
5 | |
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3.8 |
Election of Officers |
5 | |
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3.9 |
Regular Meetings |
5 | |
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3.10 |
Special Meetings |
5 | |
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3.11 |
Notice |
6 | |
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3.12 |
Quorum; Majority Vote |
6 | |
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3.13 |
Procedure |
6 | |
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3.14 |
Presumption of Assent |
6 | |
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3.15 |
Compensation |
6 | |
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ARTICLE IV |
Committees |
6 | ||
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4.1 |
Designation |
6 | |
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4.2 |
Number; Qualification; Term |
6 | |
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4.3 |
Authority |
7 | |
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4.4 |
Committee Changes |
7 | |
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4.5 |
Alternate Members of Committees |
7 | |
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4.6 |
Regular Meetings |
7 | |
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4.7 |
Special Meetings |
7 | |
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4.8 |
Quorum; Majority Vote |
7 | |
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4.9 |
Minutes |
7 | |
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4.10 |
Compensation |
7 | |
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4.11 |
Responsibility |
7 | |
TABLE OF CONTENTS
(continued)
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ARTICLE V |
Notice |
8 | ||
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5.1 |
Method |
8 | |
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5.2 |
Waiver |
8 | |
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ARTICLE VI |
Officers |
8 | ||
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6.1 |
Number; Titles; Term of Office |
8 | |
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6.2 |
Removal |
8 | |
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6.3 |
Vacancies |
8 | |
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6.4 |
Authority |
8 | |
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6.5 |
Compensation |
8 | |
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6.6 |
Chairman of the Board |
9 | |
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6.7 |
President |
9 | |
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6.8 |
Vice Presidents |
9 | |
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6.9 |
Treasurer |
9 | |
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6.10 |
Assistant Treasurers |
9 | |
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6.11 |
Secretary |
9 | |
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6.12 |
Assistant Secretaries |
9 | |
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ARTICLE VII |
Certificates and Stockholders |
10 | ||
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7.1 |
Certificates for Shares |
10 | |
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7.2 |
Replacement of Lost or Destroyed Certificates |
10 | |
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7.3 |
Transfer of Shares |
10 | |
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7.4 |
Registered Stockholders |
10 | |
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7.5 |
Regulations |
10 | |
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7.6 |
Legends |
11 | |
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ARTICLE VIII |
Miscellaneous Provisions |
11 | ||
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8.1 |
Dividends |
11 | |
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8.2 |
Reserves |
11 | |
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8.3 |
Books and Records |
11 | |
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8.4 |
Fiscal Year |
11 | |
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8.5 |
Seal |
11 | |
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8.6 |
Resignations |
11 | |
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8.7 |
Securities of Other Corporations |
11 | |
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8.8 |
Telephone Meetings |
11 | |
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8.9 |
Action Without a Meeting |
12 | |
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8.10 |
Invalid Provisions |
12 | |
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8.11 |
Mortgages, etc. |
12 | |
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8.12 |
Headings |
12 | |
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8.13 |
References |
12 | |
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8.14 |
Amendments |
13 | |
BYLAWS
OF
CHECKSMART FINANCIAL COMPANY
(a Delaware Corporation)
PREAMBLE
These Bylaws (Bylaws) are subject to, and governed by, the General Corporation Law of the State of Delaware (the DGCL) and the certificate of incorporation of CheckSmart Financial Company, a Delaware corporation (the Corporation). In the event of a direct conflict between the provisions of these Bylaws and the mandatory provisions of the DGCL or the provisions of the certificate of incorporation of the Corporation (as amended from time to time, the Charter), such provisions of the DGCL or the Charter, as the case may be, shall control.
ARTICLE I
Offices
1.1 Registered Office and Agent. The registered office and registered agent of the Corporation shall be as designated from time to time by the appropriate filing by the Corporation in the office of the Secretary of State of the State of Delaware.
1.2 Other Offices. The Corporation may also have offices at such other places, both within and without the State of Delaware, as the board of directors may from time to time determine or as the business of the Corporation may require.
ARTICLE II
Meetings of Stockholders
2.1 Annual Meeting. An annual meeting of stockholders of the Corporation shall be held each calendar year on such date and at such time as shall be designated from time to time by the board of directors and stated in the notice of the meeting or in a duly executed waiver of notice of such meeting. At such meeting, the stockholders shall elect directors and transact such other business as may properly be brought before the meeting.
2.2 Special Meeting. A special meeting of the stockholders may be called at any time by the Chairman of the Board, the President, or the board of directors, and shall be called by the President or the Secretary at the request in writing of the stockholders of record of not less than 25% of all shares entitled to vote at such meeting or as otherwise provided by the Charter. A special meeting shall be held on such date and at such time as shall be designated by the person(s) calling the meeting and stated in the notice of the meeting or in a duly executed waiver of notice of such meeting. Only such business shall be transacted at a special meeting as may be stated or indicated in the notice of such meeting or in a duly executed waiver of notice of such meeting.
2.3 Place of Meetings. An annual meeting of stockholders may be held at any place within or without the State of Delaware designated by the board of directors. A special meeting of stockholders may be held at any place within or without the State of Delaware designated in the notice of the meeting or a duly executed waiver of notice of such meeting. Meetings of stockholders shall be held at the
principal office of the Corporation unless another place is designated for meetings in the manner provided herein.
2.4 Notice. Written or printed notice stating the place, day, and time of each meeting of the stockholders and, in case of a special meeting, the purpose or purposes for which the meeting is called shall be delivered not less than ten nor more than 60 days before the date of the meeting, either personally or by mail, by or at the direction of the President, the Secretary, or the officer or person(s) calling the meeting, to each stockholder of record entitled to vote at such meeting. If such notice is to be sent by mail, it shall be directed to such stockholder at his address as it appears on the records of the Corporation, unless he shall have filed with the Secretary of the Corporation a written request that notices to him be mailed to some other address, in which case it shall be directed to him at such other address. Notice of any meeting of stockholders shall not be required to be given to any stockholder who shall attend such meeting in person or by proxy and shall not, at the beginning of such meeting, object to the transaction of any business because the meeting is not lawfully called or convened, or who shall, either before or after the meeting, submit a signed waiver of notice, in person or by proxy.
2.5 Voting List. At least ten days before each meeting of stockholders, the Secretary or other officer of the Corporation who has charge of the Corporations stock ledger, either directly or through another officer appointed by him or through a transfer agent appointed by the board of directors, shall prepare a complete list of stockholders entitled to vote thereat, arranged in alphabetical order and showing the address of each stockholder and number of shares registered in the name of each stockholder. For a period of ten days prior to such meeting, such list shall be kept on file at a place within the city where the meeting is to be held, which place shall be specified in the notice of meeting or a duly executed waiver of notice of such meeting or, if not so specified, at the place where the meeting is to be held and shall be open to examination by any stockholder during ordinary business hours. Such list shall be produced at such meeting and kept at the meeting at all times during such meeting and may be inspected by any stockholder who is present.
2.6 Quorum. The holders of a majority of the outstanding shares entitled to vote on a matter, present in person or by proxy, shall constitute a quorum at any meeting of stockholders, except as otherwise provided by law, the Charter, or these Bylaws. If a quorum shall not be present, in person or by proxy, at any meeting of stockholders, the stockholders entitled to vote thereat who are present, in person or by proxy, or, if no stockholder entitled to vote is present, any officer of the Corporation may adjourn the meeting from time to time, without notice other than announcement at the meeting (unless the board of directors, after such adjournment, fixes a new record date for the adjourned meeting), until a quorum shall be present, in person or by proxy. At any adjourned meeting at which a quorum shall be present, in person or by proxy, any business may be transacted that may have been transacted at the original meeting had a quorum been present; provided, however, that if the adjournment is for more than 30 days or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the adjourned meeting.
2.7 Required Vote; Withdrawal of Quorum. When a quorum is present at any meeting, the vote of the holders of at least a majority of the outstanding shares entitled to vote who are present, in person or by proxy, shall decide any question brought before such meeting, unless the question is one on which, by express provision of statute, the Charter, or these Bylaws, a different vote is required, in which case such express provision shall govern and control the decision of such question. The stockholders present at a duly constituted meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.
2.8 Method of Voting; Proxies. Except as otherwise provided in the Charter or by law, each outstanding share, regardless of class, shall be entitled to one vote on each matter submitted to a vote at a
meeting of stockholders. Elections of directors need not be by written ballot. At any meeting of stockholders, every stockholder having the right to vote may vote either in person or by a proxy executed in writing by the stockholder or by his duly authorized attorney-in-fact. Each such proxy shall be filed with the Secretary of the Corporation before or at the time of the meeting. No proxy shall be valid after three years from the date of its execution, unless otherwise provided in the proxy. If no date is stated in a proxy, such proxy shall be presumed to have been executed on the date of the meeting at which it is to be voted. Each proxy shall be revocable unless expressly provided therein to be irrevocable and coupled with an interest sufficient in law to support an irrevocable power or unless otherwise made irrevocable by law.
2.9 Record Date.
(a) For the purpose of determining stockholders entitled to notice of or to vote at any meeting of stockholders, or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion, or exchange of stock or for the purpose of any other lawful action, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, for any such determination of stockholders, such date in any case to be not more than 60 days and not less than ten days prior to such meeting nor more than 60 days prior to any other action. If no record date is fixed:
(i) The record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held.
(ii) The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto.
(iii) A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjourned meeting.
(b) In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the board of directors. If no record date has been fixed by the board of directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the board of directors is required by law or these Bylaws, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporations registered office in the State of Delaware, principal place of business, or such officer or agent shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the board of directors and prior action by the board of directors is required by law or these Bylaws, the record date for determining stockholders entitled to consent to corporate action in writing without a
meeting shall be at the close of business on the day on which the board of directors adopts the resolution taking such prior action.
2.10 Conduct of Meeting. The Chairman of the Board, if such office has been filled, and, if not or if the Chairman of the Board is absent or otherwise unable to act, the President shall preside at all meetings of stockholders. The Secretary shall keep the records of each meeting of stockholders. In the absence or inability to act of any such officer, such officers duties shall be performed by the officer given the authority to act for such absent or non-acting officer under these Bylaws or by some person appointed by the meeting.
2.11 Inspectors. The board of directors may, in advance of any meeting of stockholders, appoint one or more inspectors to act at such meeting or any adjournment thereof. If any of the inspectors so appointed shall fail to appear or act, the chairman of the meeting shall, or if inspectors shall not have been appointed, the chairman of the meeting may, appoint one or more inspectors. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector at such meeting with strict impartiality and according to the best of his ability. The inspectors shall determine the number of shares of capital stock of the Corporation outstanding and the voting power of each, the number of shares represented at the meeting, the existence of a quorum, and the validity and effect of proxies and shall receive votes, ballots, or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes, ballots, or consents, determine the results, and do such acts as are proper to conduct the election or vote with fairness to all stockholders. On request of the chairman of the meeting, the inspectors shall make a report in writing of any challenge, request, or matter determined by them and shall execute a certificate of any fact found by them. No director or candidate for the office of director shall act as an inspector of an election of directors. Inspectors need not be stockholders.
ARTICLE III
Directors
3.1 Management. The business and property of the Corporation shall be managed by the board of directors. Subject to the restrictions imposed by law, the Charter, or these Bylaws, the board of directors may exercise all the powers of the Corporation.
3.2 Number; Qualification; Election; Term. The number of directors that shall constitute the entire board of directors shall be not less than one. The first board of directors shall consist of the number of directors named in the Charter or, if no directors are so named, shall consist of the number of directors elected by the incorporator(s) at an organizational meeting or by unanimous written consent in lieu thereof. Within the foregoing limit and subject to any stockholders agreement of the Corporation (as the same may be amended or supplemented from time to time in accordance with the terms thereof, the Stockholders Agreement), the number of directors which shall constitute the entire Board of Directors shall be determined by resolution of the Board of Directors or by resolution of the stockholders at the annual meeting thereof or at a special meeting thereof called for that purpose. Except as otherwise required by law, the Charter, or these Bylaws, the directors shall be elected at an annual meeting of stockholders at which a quorum is present. Directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy and entitled to vote on the election of directors. Each director so chosen shall hold office until the first annual meeting of stockholders held after his election and until his successor is elected and qualified or, if earlier, until his death, resignation, or removal from office. None of the directors need be a stockholder of the Corporation or a resident of the State of Delaware. Each director must have attained the age of majority.
3.3 Change in Number. No decrease in the number of directors constituting the entire board of directors shall have the effect of shortening the term of any incumbent director.
3.4 Removal. Except as otherwise provided in the Charter, these Bylaws, OR THE Stockholders Agreement, at any meeting of stockholders called expressly for that purpose, any director or the entire board of directors may be removed, with or without cause, by a vote of the holders of a majority of the shares then entitled to vote on the election of directors; provided, however, that if and so long as stockholders have the right to cumulate votes in the election of directors pursuant to the Charter, if less than the entire board of directors is to be removed, no one of the directors may be removed if the votes cast against his removal would be sufficient to elect him if then cumulatively voted at an election of the entire board of directors.
3.5 Vacancies. Except as otherwise provided in the Stockholders Agreement, vacancies and newly-created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by the sole remaining director, and each director so chosen shall hold office until the first annual meeting of stockholders held after his election and until his successor is elected and qualified or, if earlier, until his death, resignation, or removal from office. If there are no directors in office, an election of directors may be held in the manner provided by statute. If, at the time of filling any vacancy or any newly-created directorship, the directors then in office shall constitute less than a majority of the whole board of directors (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten percent of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly-created directorships or to replace the directors chosen by the directors then in office. Except as otherwise provided in these Bylaws, when one or more directors shall resign from the board of directors, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have the power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as provided in these Bylaws in respect of the filling of other vacancies.
3.6 Meetings of Directors. The directors may hold their meetings and may have an office and keep the books of the Corporation, except as otherwise provided by statute, in such place or places within or without the State of Delaware as the board of directors may from time to time determine or as shall be specified in the notice of such meeting or duly executed waiver of notice of such meeting.
3.7 First Meeting. Each newly-elected board of directors may hold its first meeting for the purpose of organization and the transaction of business, if a quorum is present, immediately after and at the same place as the annual meeting of stockholders, and no notice of such meeting shall be necessary.
3.8 Election of Officers. At the first meeting of the board of directors after each annual meeting of stockholders at which a quorum shall be present, the board of directors shall elect the officers of the Corporation.
3.9 Regular Meetings. Regular meetings of the board of directors shall be held at such times and places as shall be designated from time to time by resolution of the board of directors. Notice of such regular meetings shall not be required.
3.10 Special Meetings. Special meetings of the board of directors shall be held whenever called by the Chairman of the Board, the President, or any director.
3.11 Notice. The Secretary shall give notice of each special meeting to each director at least 24 hours before the meeting. Notice of any such meeting need not be given to any director who shall, either before or after the meeting, submit a signed waiver of notice or who shall attend such meeting without protesting, prior to or at its commencement, the lack of notice to him. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the board of directors need be specified in the notice or waiver of notice of such meeting.
3.12 Quorum; Majority Vote. At all meetings of the board of directors, a majority of the directors fixed in the manner provided in these Bylaws shall constitute a quorum for the transaction of business. If at any meeting of the board of directors there be less than a quorum present, a majority of those present or any director solely present may adjourn the meeting from time to time without further notice. Unless the act of a greater number is required by law, the Charter, or these Bylaws, the act of a majority of the directors present at a meeting at which a quorum is in attendance shall be the act of the board of directors. At any time that the Charter provides that directors elected by the holders of a class or series of stock shall have more or less than one vote per director on any matter, every reference in these Bylaws to a majority or other proportion of directors shall refer to a majority or other proportion of the votes of such directors.
3.13 Procedure. At meetings of the board of directors, business shall be transacted in such order as from time to time the board of directors may determine. The Chairman of the Board, if such office has been filled, and, if not or if the Chairman of the Board is absent or otherwise unable to act, the President shall preside at all meetings of the board of directors. In the absence or inability to act of either such officer, a chairman shall be chosen by the board of directors from among the directors present. The Secretary of the Corporation shall act as the secretary of each meeting of the board of directors unless the board of directors appoints another person to act as secretary of the meeting. The board of directors shall keep regular minutes of its proceedings which shall be placed in the minute book of the Corporation.
3.14 Presumption of Assent. A director of the Corporation who is present at the meeting of the board of directors at which action on any corporate matter is taken shall be presumed to have assented to the action unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent to such action with the person acting as secretary of the meeting before the adjournment thereof or shall forward any dissent by certified or registered mail to the Secretary of the Corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action.
3.15 Compensation. The board of directors shall have the authority to fix the compensation, including fees and reimbursement of expenses, paid to directors for attendance at regular or special meetings of the board of directors or any committee thereof; provided, however, that nothing contained in these Bylaws shall be construed to preclude any director from serving the Corporation in any other capacity or receiving compensation therefor.
ARTICLE IV
Committees
4.1 Designation. The board of directors may, by resolution adopted by a majority of the entire board of directors, designate one or more committees.
4.2 Number; Qualification; Term. Each committee shall consist of one or more directors appointed by resolution adopted by a majority of the entire board of directors. The number of committee members may be increased or decreased from time to time by resolution adopted by a majority of the entire board of directors. Each committee member shall serve as such until the earliest of (i) the
expiration of his term as director, (ii) his resignation as a committee member or as a director, or (iii) his removal as a committee member or as a director.
4.3 Authority. Each committee, to the extent expressly provided in the resolution establishing such committee, shall have and may exercise all of the authority of the board of directors in the management of the business and property of the Corporation except to the extent expressly restricted by law, the Charter, or these Bylaws.
4.4 Committee Changes. The board of directors shall have the power at any time to fill vacancies in, to change the membership of, and to discharge any committee.
4.5 Alternate Members of Committees. The board of directors may designate one or more directors as alternate members of any committee. Any such alternate member may replace any absent or disqualified member at any meeting of the committee. If no alternate committee members have been so appointed to a committee or each such alternate committee member is absent or disqualified, the member or members of such committee present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member.
4.6 Regular Meetings. Regular meetings of any committee may be held without notice at such time and place as may be designated from time to time by the committee and communicated to all members thereof.
4.7 Special Meetings. Special meetings of any committee may be held whenever called by any committee member. The committee member calling any special meeting shall cause notice of such special meeting, including therein the time and place of such special meeting, to be given to each committee member at least two days before such special meeting. Neither the business to be transacted at, nor the purpose of, any special meeting of any committee need be specified in the notice or waiver of notice of any special meeting.
4.8 Quorum; Majority Vote. At meetings of any committee, a majority of the number of members designated by the board of directors shall constitute a quorum for the transaction of business. If a quorum is not present at a meeting of any committee, a majority of the members present may adjourn the meeting from time to time, without notice other than an announcement at the meeting, until a quorum is present. The act of a majority of the members present at any meeting at which a quorum is in attendance shall be the act of a committee, unless the act of a greater number is required by law, the Charter, or these Bylaws.
4.9 Minutes. Each committee shall cause minutes of its proceedings to be prepared and shall report the same to the board of directors upon the request of the board of directors. The minutes of the proceedings of each committee shall be delivered to the Secretary of the Corporation for placement in the minute books of the Corporation.
4.10 Compensation. Committee members may, by resolution of the board of directors, be allowed a fixed sum and expenses of attendance, if any, for attending any committee meetings or a stated salary.
4.11 Responsibility. The designation of any committee and the delegation of authority to it shall not operate to relieve the board of directors or any director of any responsibility imposed upon it or such director by law.
ARTICLE V
Notice
5.1 Method. Whenever by statute, the Charter, or these Bylaws, notice is required to be given to any director, committee member, or stockholder and no provision is made as to how such notice shall be given, personal notice shall not be required and any such notice may be given (i) in writing, by mail, postage prepaid, addressed to such committee member, director, or stockholder at his address as it appears on the books or (in the case of a stockholder) the stock transfer records of the Corporation, or (ii) by any other method permitted by law (including, without limitation, to overnight courier service, telegram, telex, or telefax). Any notice required or permitted to be given by mail shall be deemed to be delivered and given at the time when the same is deposited in the United States mail as aforesaid. Any notice required or permitted to be given by overnight courier service shall be deemed to be delivered and given at the time delivered to such service with all charges prepaid and addressed as aforesaid. Any notice required or permitted to be given by telegram, telex, or telefax shall be deemed to be delivered and given at the time transmitted with all charges prepaid and addressed as aforesaid.
5.2 Waiver. Whenever any notice is required to be given to any director, committee member, or stockholder of the Corporation by statute, the certificate of incorporation of the Corporation, or these Bylaws, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be equivalent to the giving of such notice. Attendance of a stockholder, director, or committee member at a meeting shall constitute a waiver of notice of such meeting, except where such person attends for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.
ARTICLE VI
Officers
6.1 Number; Titles; Term of Office. The officers of the Corporation shall be a President, a Secretary, and such other officers as the board of directors may from time to time elect or appoint, including a Chairman of the Board, one or more Vice Presidents (with each Vice President to have such descriptive title, if any, as the board of directors shall determine), and a Treasurer. Each officer shall hold office until his successor shall have been duly elected and shall have qualified, until his death, or until he shall resign or shall have been removed in the manner hereinafter provided. Any two or more offices may be held by the same person. None of the officers need be a stockholder or a director of the Corporation or a resident of the State of Delaware.
6.2 Removal. Any officer or agent elected or appointed by the board of directors may be removed by the board of directors whenever in its judgment the best interest of the Corporation will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights.
6.3 Vacancies. Any vacancy occurring in any office of the Corporation (by death, resignation, removal, or otherwise) may be filled by the board of directors.
6.4 Authority. Officers shall have such authority and perform such duties in the management of the Corporation as are provided in these Bylaws or as may be determined by resolution of the board of directors not inconsistent with these Bylaws.
6.5 Compensation. The compensation, if any, of officers and agents shall be fixed from time to time by the board of directors; provided, however, that the board of directors may delegate the power to
determine the compensation of any officer and agent (other than the officer to whom such power is delegated) to the Chairman of the Board or the President.
6.6 Chairman of the Board. The Chairman of the Board, if elected by the board of directors, shall have such powers and duties as may be prescribed by the board of directors. Such officer shall preside at all meetings of the stockholders and of the board of directors. Such officer may sign all certificates for shares of stock of the Corporation.
6.7 President. The President shall be the chief executive officer of the Corporation and, subject to the board of directors, he shall have general executive charge, management, and control of the properties and operations of the Corporation in the ordinary course of its business, with all such powers in respect of such properties and operations as may be reasonably incident to such responsibilities. If the board of directors has not elected a Chairman of the Board or in the absence or inability to act of the Chairman of the Board, the President shall exercise all of the powers and discharge all of the duties of the Chairman of the Board. As between the Corporation and third parties, any action taken by the President in the performance of the duties of the Chairman of the Board shall be conclusive evidence that there is no Chairman of the Board or that the Chairman of the Board is absent or unable to act.
6.8 Vice Presidents. Each Vice President shall have such powers and duties as may be assigned to him by the board of directors, the Chairman of the Board, or the President, and (in order of their seniority as determined by the board of directors or, in the absence of such determination, as determined by the length of time they have held the office of Vice President) shall exercise the powers of the President during that officers absence or inability to act. As between the Corporation and third parties, any action taken by a Vice President in the performance of the duties of the President shall be conclusive evidence of the absence or inability to act of the President at the time such action was taken.
6.9 Treasurer. The Treasurer shall have custody of the Corporations funds and securities, shall keep full and accurate account of receipts and disbursements, shall deposit all monies and valuable effects in the name and to the credit of the Corporation in such depository or depositories as may be designated by the board of directors, and shall perform such other duties as may be prescribed by the board of directors, the Chairman of the Board, or the President.
6.10 Assistant Treasurers. Each Assistant Treasurer shall have such powers and duties as may be assigned to him by the board of directors, the Chairman of the Board, or the President. The Assistant Treasurers (in the order of their seniority as determined by the board of directors or, in the absence of such a determination, as determined by the length of time they have held the office of Assistant Treasurer) shall exercise the powers of the Treasurer during that officers absence or inability to act.
6.11 Secretary. Except as otherwise provided in these Bylaws, the Secretary shall keep the minutes of all meetings of the board of directors and of the stockholders in books provided for that purpose, and he shall attend to the giving and service of all notices. He may sign with the Chairman of the Board or the President, in the name of the Corporation, all contracts of the Corporation and affix the seal of the Corporation thereto. He may sign with the Chairman of the Board or the President all certificates for shares of stock of the Corporation, and he shall have charge of the certificate books, transfer books, and stock papers as the board of directors may direct, all of which shall at all reasonable times be open to inspection by any director upon application at the office of the Corporation during ordinary business hours. He shall in general perform all duties incident to the office of the Secretary, subject to the control of the board of directors, the Chairman of the Board, and the President.
6.12 Assistant Secretaries. Each Assistant Secretary shall have such powers and duties as may be assigned to him by the board of directors, the Chairman of the Board, or the President. The Assistant
Secretaries (in the order of their seniority as determined by the board of directors or, in the absence of such a determination, as determined by the length of time they have held the office of Assistant Secretary) shall exercise the powers of the Secretary during that officers absence or inability to act.
ARTICLE VII
Certificates and Stockholders
7.1 Certificates for Shares. The shares of the Corporation shall be represented by certificates, provided that the Board of Directors of the Corporation may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation. Notwithstanding the adoption of such a resolution by the Board of Directors, every holder of stock represented by certificates and upon request every holder of uncertificated shares shall be entitled to have a certificate, signed by or in the name of the Corporation by the Chairman or Vice-Chairman of the Board of Directors, or the President or Vice-President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation, representing the number of shares registered in certificate form. Any and all signatures on any such certificate may be facsimiles. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. The name of the holder of record of the shares represented thereby, with the number of such shares and the date of issue, shall be entered on the books of the Corporation.
7.2 Replacement of Lost or Destroyed Certificates. The board of directors may direct a new certificate or certificates to be issued in place of a certificate or certificates theretofore issued by the Corporation and alleged to have been lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate or certificates representing shares to be lost or destroyed. When authorizing such issue of a new certificate or certificates the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the Corporation a bond with a surety or sureties satisfactory to the Corporation in such sum as it may direct as indemnity against any claim, or expense resulting from a claim, that may be made against the Corporation in respect of the certificate or certificates alleged to have been lost or destroyed.
7.3 Transfer of Shares. Shares of stock of the Corporation shall be transferable only on the books of the Corporation by the holders thereof in person or by their duly authorized attorneys or legal representatives. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate representing shares duly endorsed or accompanied by proper evidence of succession, assignment, or authority to transfer, the Corporation or its transfer agent shall issue a new certificate to the person entitled thereto, cancel the old certificate, and record the transaction upon its books.
7.4 Registered Stockholders. The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by law.
7.5 Regulations. The board of directors shall have the power and authority to make all such rules and regulations as it may deem expedient concerning the issue, transfer, and registration or the replacement of certificates for shares of stock of the Corporation.
7.6 Legends. The board of directors shall have the power and authority to provide that certificates representing shares of stock bear such legends as the board of directors deems appropriate to assure that the Corporation does not become liable for violations of federal or state securities laws or other applicable law.
ARTICLE VIII
Miscellaneous Provisions
8.1 Dividends. Subject to provisions of law and the Charter, dividends may be declared by the board of directors at any regular or special meeting and may be paid in cash, in property, or in shares of stock of the Corporation. Such declaration and payment shall be at the discretion of the board of directors.
8.2 Reserves. There may be created by the board of directors out of funds of the Corporation legally available therefor such reserve or reserves as the board of directors from time to time, in its discretion, considers proper to provide for contingencies, to equalize dividends, or to repair or maintain any property of the Corporation, or for such other purpose as the board of directors shall consider beneficial to the Corporation, and the board of directors may modify or abolish any such reserve in the manner in which it was created.
8.3 Books and Records. The Corporation shall keep correct and complete books and records of account, shall keep minutes of the proceedings of its stockholders and board of directors and shall keep at its registered office or principal place of business, or at the office of its transfer agent or registrar, a record of its stockholders, giving the names and addresses of all stockholders and the number and class of the shares held by each.
8.4 Fiscal Year. The fiscal year of the Corporation shall be fixed by the board of directors; provided, however, that if such fiscal year is not fixed by the board of directors and the selection of the fiscal year is not expressly deferred by the board of directors, the fiscal year shall be the calendar year.
8.5 Seal. The seal of the Corporation shall be such as from time to time may be approved by the board of directors.
8.6 Resignations. Any director, committee member, or officer may resign by so stating at any meeting of the board of directors or by giving written notice to the board of directors, the Chairman of the Board, the President, or the Secretary. Such resignation shall take effect at the time specified therein or, if no time is specified therein, immediately upon its receipt. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
8.7 Securities of Other Corporations. The Chairman of the Board, the President, or any Vice President of the Corporation shall have the power and authority to transfer, endorse for transfer, vote, consent, or take any other action in respect of any securities of another issuer that may be held or owned by the Corporation and to make, execute, and deliver any waiver, proxy, or consent in respect of any such securities.
8.8 Telephone Meetings. Stockholders (acting for themselves or through a proxy), members of the board of directors, and members of a committee of the board of directors may participate in and hold a meeting of such stockholders, board of directors, or committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section 8.8 shall constitute presence in person
at such meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.
8.9 Action Without a Meeting.
(a) Unless otherwise provided in the Charter, any action required by the DGCL to be taken at any annual or special meeting of the stockholders, or any action which may be taken at any annual or special meeting of the stockholders, may be taken without a meeting, without prior notice, and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders (acting for themselves or through a proxy) of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which the holders of all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Every written consent of stockholders shall bear the date of signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the earliest dated consent delivered in the manner required by this Section 8.9(a) to the Corporation, written consents signed by a sufficient number of holders to take action are delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporations registered office, principal place of business, or such officer or agent shall be by hand or by certified or registered mail, return receipt requested.
(b) Unless otherwise restricted by the Charter or by these Bylaws, any action required or permitted to be taken at a meeting of the board of directors, or of any committee of the board of directors, may be taken without a meeting if a consent or consents in writing, setting forth the action so taken, shall be signed by all the directors or all the committee members, as the case may be, entitled to vote in respect of the subject matter thereof, and such consent shall have the same force and effect as a vote of such directors or committee members, as the case may be, and may be stated as such in any certificate or document filed with the Secretary of State of the State of Delaware or in any certificate delivered to any person. Such consent or consents shall be filed with the minutes of proceedings of the board or committee, as the case may be.
8.10 Invalid Provisions. If any part of these Bylaws shall be held invalid or inoperative for any reason, the remaining parts, so far as it is possible and reasonable, shall remain valid and operative.
8.11 Mortgages, etc. In respect of any deed, deed of trust, mortgage, or other instrument executed by the Corporation through its duly authorized officer or officers, the attestation to such execution by the Secretary of the Corporation shall not be necessary to constitute such deed, deed of trust, mortgage, or other instrument a valid and binding obligation against the Corporation unless the resolutions, if any, of the board of directors authorizing such execution expressly state that such attestation is necessary.
8.12 Headings. The headings used in these Bylaws have been inserted for administrative convenience only and do not constitute matter to be construed in interpretation.
8.13 References. Whenever herein the singular number is used, the same shall include the plural where appropriate, and words of any gender should include each other gender where appropriate.
8.14 Amendments. Except as may be otherwise provided in the Charter, these Bylaws may be altered, amended, or repealed or new Bylaws may be adopted by the stockholders or by the board of directors at any regular meeting of the stockholders or the board of directors or at any special meeting of the stockholders or the board of directors if notice of such alteration, amendment, repeal, or adoption of new Bylaws be contained in the notice of such special meeting.
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Exhibit 3.103
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
CHECKSMART FINANCIAL HOLDINGS CORP.
A STOCK CORPORATION
(Pursuant to Sections 242 and 245 of the
General Corporation Law of the State of Delaware)
Checksmart Financial Holdings Corp., a corporation organized and existing under the laws of the State of Delaware (the Corporation), hereby certifies as follows:
1. The original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on April 25, 2006.
2. The text of the Certificate of Incorporation is hereby amended and restated to read in its entirety as set forth in Annex A attached hereto.
3. This Amended and Restated Certificate of Incorporation has been duly adopted by the directors and stockholders of the Corporation in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware.
[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned authorized officer has executed this Amended and Restated Certificate of Incorporation of Checksmart Financial Holdings Corp. as of this 29th day April, 2011.
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Checksmart Financial Holdings Corp. | |
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By: |
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Name: |
Bridgette C. Roman |
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Title: |
Secretary |
Annex A
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
CHECKSMART FINANCIAL HOLDINGS CORP.
A STOCK CORPORATION
FIRST: The name of the corporation (the Corporation) is:
Checksmart Financial Holdings Corp.
SECOND: The address of the Corporations registered office in the State of Delaware is 1209 Orange Street, City of Wilmington, County of New Castle, Delaware 19801. The name of the Corporations registered agent at such address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.
FOURTH: The total number of shares that the Corporation has authority to issue is 100 shares of Common Stock, par value of $0.01 per share.
FIFTH: Elections of directors need not be by written ballot except and to the extent provided in the bylaws of the Corporation.
SIXTH: To the full extent permitted by the General Corporation Law of the State of Delaware or any other applicable laws presently or hereafter in effect, no director of the Corporation will be personally liable to the Corporation or its stockholders for or with respect to any acts or omissions in the performance of his or her duties as a director of the Corporation. Any repeal or modification of this Article Sixth will not adversely affect any right or protection of a director of the Corporation existing immediately prior to such repeal or modification.
SEVENTH: Each person who is or was or had agreed to become a director, officer, employee or agent of the Corporation, or each such person who is or was serving or who had
agreed to serve at the request of the Board of Directors or an officer of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise (including the heirs, executors, administrators or estate of such person), will be indemnified by the Corporation to the full extent permitted by the General Corporation Law of the State of Delaware or any other applicable laws as presently or hereafter in effect. Without limiting the generality or the effect of the foregoing, the Corporation may enter into one or more agreements with any person that provide for indemnification greater or different than that provided in this Article Seventh. Any repeal or modification of this Article Seventh will not adversely affect any right or protection existing hereunder immediately prior to such repeal or modification.
EIGHTH: In furtherance and not in limitation of the rights, powers, privileges, and discretionary authority granted or conferred by the General Corporation Law of the State of Delaware or other statutes or laws of the State of Delaware, the Board of Directors is expressly authorized to make, alter, amend or repeal the bylaws of the Corporation, without any action on the part of the stockholders, but the stockholders may make additional bylaws and may alter, amend or repeal any bylaw whether adopted by them or otherwise. The Corporation may in its bylaws confer powers upon the Board of Directors in addition to the foregoing and in addition to the powers and authorities expressly conferred upon the Board of Directors by applicable law.
NINTH: The Corporation reserves the right at any time and from time to time to amend, alter, change or repeal any provision contained in this Amended and Restated Certificate of Incorporation, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted, in the manner now or hereafter prescribed herein or by applicable law; and all rights, preferences and privileges of whatsoever nature conferred upon stockholders, directors or any other persons whomsoever by and pursuant to this Amended and Restated Certificate of Incorporation in its present form or as hereafter amended are granted subject to this reservation.
Exhibit 3.104
CHECKSMART FINANCIAL HOLDINGS CORP.
AMENDED AND RESTATED BYLAWS
TABLE OF CONTENTS
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Page |
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ARTICLE I |
MEETINGS OF STOCKHOLDERS |
1 |
Section 1. |
Time and Place of Meetings |
1 |
Section 2. |
Annual Meeting |
1 |
Section 3. |
Special Meetings |
1 |
Section 4. |
Notice of Meetings |
1 |
Section 5. |
Quorum |
2 |
Section 6. |
Voting |
2 |
Section 7. |
Written Action |
3 |
ARTICLE II |
DIRECTORS |
3 |
Section 1. |
Powers |
3 |
Section 2. |
Number and Term of Office |
4 |
Section 3. |
Vacancies and New Directorships |
4 |
Section 4. |
Regular Meetings |
5 |
Section 5. |
Special Meetings |
5 |
Section 6. |
Quorum |
5 |
Section 7. |
Written Action |
5 |
Section 8. |
Participation in Meetings by Conference Telephone |
6 |
Section 9. |
Committees |
6 |
Section 10. |
Compensation |
7 |
Section 11. |
Rules |
7 |
ARTICLE III |
NOTICES |
7 |
Section 1. |
Generally |
7 |
Section 2. |
Waivers |
7 |
ARTICLE IV |
OFFICERS |
8 |
Section 1. |
Generally |
8 |
Section 2. |
Compensation |
8 |
Section 3. |
Succession |
8 |
Section 4. |
Authority and Duties |
9 |
TABLE OF CONTENTS
(continued)
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Section 5. |
Execution of Documents and Action with Respect to Securities of Other Corporations |
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ARTICLE V |
STOCK |
9 |
Section 1. |
Certificates |
9 |
Section 2. |
Transfer |
10 |
Section 3. |
Lost, Stolen or Destroyed Certificates |
10 |
Section 4. |
Record Date |
10 |
ARTICLE VI |
GENERAL PROVISIONS |
12 |
Section 1. |
Fiscal Year |
12 |
Section 2. |
Corporate Seal |
12 |
Section 3. |
Reliance upon Books, Reports and Records |
12 |
Section 4. |
Time Periods |
13 |
Section 5. |
Dividends |
13 |
ARTICLE VII |
AMENDMENTS |
13 |
Section 1. |
Amendments |
13 |
AMENDED AND RESTATED BYLAWS
ARTICLE I
MEETINGS OF STOCKHOLDERS
Section 1. Time and Place of Meetings. All meetings of the stockholders for the election of directors or for any other purpose shall be held at such time and place, within or without the State of Delaware, as may be designated by the Board of Directors, or by the Chairman of the Board of Directors, the President or the Secretary in the absence of a designation by the Board of Directors, and stated in the notice of the meeting or in a duly executed waiver of notice thereof. Stockholders may participate in an annual or special meeting of the stockholders by use of any means of communication by which all stockholders participating may simultaneously hear each other during the meeting. A stockholders participation in a meeting by any such means of communication constitutes presence in person at the meeting.
Section 2. Annual Meeting. An annual meeting of the stockholders shall be held at such date and time as shall be designated from time to time by the Board of Directors, at which meeting the stockholders shall elect by a plurality vote the directors to succeed those whose terms expire and shall transact such other business as may properly be brought before the meeting.
Section 3. Special Meetings. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by law or by the Certificate of Incorporation, may be called by the Board of Directors, the Chairman of the Board of Directors or the President.
Section 4. Notice of Meetings. Written notice of every meeting of the stockholders, stating the place, if any, date and hour of the meeting, the means of remote communication, if
any, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting, except as otherwise provided herein or by law. When a meeting is adjourned to another place, date or time, written notice need not be given of the adjourned meeting if the place, date and time thereof and the means of remote communication, if any, are announced at the meeting at which the adjournment is taken; provided, however, that if the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, written notice of the place, date and time of the adjourned meeting shall be given in conformity herewith. At any adjourned meeting, any business may be transacted which might have been transacted at the original meeting.
Section 5. Quorum. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by law or by the Certificate of Incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented.
Section 6. Voting. Except as otherwise provided by law or by the Certificate of Incorporation, each stockholder shall be entitled at every meeting of the stockholders to one vote for each share of stock having voting power standing in the name of such stockholder on the books of the Corporation on the record date for the meeting and such votes may be cast either in person or by written proxy. Every proxy must be duly executed and filed with the Secretary of
the Corporation. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or another duly executed proxy bearing a later date with the Secretary of the Corporation. The vote upon any question brought before a meeting of the stockholders may be by voice vote, unless the holders of a majority of the outstanding shares of all classes of stock entitled to vote thereon present in person or by proxy at such meeting shall so determine. When a quorum is present at any meeting, the vote of the holders of a majority of the stock that has voting power present in person or represented by proxy shall decide any question properly brought before such meeting, unless the question is one upon which by express provision of law, the Certificate of Incorporation or these bylaws, a different vote is required, in which case such express provision shall govern and control the decision of such question.
Section 7. Written Action. Any action required or permitted to be taken at any meeting of the stockholders of the Corporation may be taken without a meeting or notice thereof if a consent or consents in writing, describing the action or actions so taken, is or are signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereupon were present and voted, and such consent or consents are filed with the minutes or proceedings of the stockholders of the Corporation.
ARTICLE II
DIRECTORS
Section 1. Powers. The business and affairs of the Corporation shall be managed by or under the direction of its Board of Directors, which may exercise all such powers of the
Corporation and do all such lawful acts and things as are not by law or by the Certificate of Incorporation directed or required to be exercised or done by the stockholders.
Section 2. Number and Term of Office. Except as otherwise required by any stockholders agreement by and among the Corporation and its stockholders, (a) the Board of Directors shall consist of one or more members and (b) the number of directors shall be fixed by resolution from time to time of the Board of Directors or by the stockholders at the annual meeting or a special meeting. The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 3 of this Article, and each director elected shall hold office until such directors successor is elected and qualified, except as required by law. Except as otherwise required by any stockholders agreement by and among the Corporation and its stockholders, the Board of Directors may, at its discretion, elect a Chairman of the Board of Directors from the directors currently in office by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the Chairman so elected shall hold office until the next annual meeting of the stockholders and until his/her successor is elected and qualified, except as required by law. Any decrease in the authorized number of directors shall not be effective until the expiration of the term of the directors then in office, unless, at the time of such decrease, there shall be vacancies on the Board of Directors which are being eliminated by such decrease.
Section 3. Vacancies and New Directorships. Except as otherwise required by any stockholders agreement by and among the Corporation and its stockholders, vacancies and newly created directorships resulting from any increase in the authorized number of directors which occur between annual meetings of the stockholders may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so
elected shall hold office until the next annual meeting of the stockholders and until their successors are elected and qualified, except as required by law.
Section 4. Regular Meetings. Regular meetings of the Board of Directors may be held without notice immediately after the annual meeting of the stockholders and at such other time and place as shall from time to time be determined by the Board of Directors.
Section 5. Special Meetings. Special meetings of the Board of Directors may be called by the Chairman of the Board of Directors or the President on one days written notice to each director by whom such notice is not waived, given either personally or by mail or telegram, and shall be called by the President or the Secretary in like manner and on like notice on the written request of any two directors.
Section 6. Quorum. At all meetings of the Board of Directors, a majority of the total number of directors then in office shall constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time to another place, time or date, without notice other than announcement at the meeting, until a quorum shall be present.
Section 7. Written Action. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if all members of the Board of Directors or committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board of Directors or Committee.
Section 8. Participation in Meetings by Conference Telephone. Members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or a meeting of any such committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.
Section 9. Committees. Except as otherwise required by any stockholders agreement by and among the Corporation and its stockholders, the Board of Directors may, by resolution passed by a majority of the whole Board of Directors, designate one or more committees, each committee to consist of one or more of the directors of the Corporation and each to have such lawfully delegable powers and duties as the Board of Directors may confer and each such committee shall serve at the pleasure of the Board of Directors. Except as otherwise required by any stockholders agreement by and among the Corporation and its stockholders, the Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Except as otherwise provided by law, any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it. Any committee or committees so designated by the Board of Directors shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. Unless otherwise prescribed by the Board of Directors, a majority of the members of the committee shall constitute a quorum for the transaction of business, and the act of a majority of the members present at a meeting at which
there is a quorum shall be the act of such committee. Each committee shall prescribe its own rules for calling and holding meetings and its method of procedure, subject to any rules prescribed by the Board of Directors, and shall keep a written record of all actions taken by it.
Section 10. Compensation. The Board of Directors may establish such compensation for, and reimbursement of the expenses of, directors for attendance at meetings of the Board of Directors or committees, or for other services by directors to the Corporation, as the Board of Directors may determine.
Section 11. Rules. The Board of Directors may adopt such special rules and regulations for the conduct of their meetings and the management of the affairs of the Corporation as they may deem proper, not inconsistent with law or these bylaws.
ARTICLE III
NOTICES
Section 1. Generally. Whenever by law or under the provisions of the Certificate of Incorporation or these bylaws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at such directors or stockholders address as it appears on the records of the Corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Notice to directors may also be given by facsimile, by telephone or by a form of electronic transmission consented to by the stockholder or director to whom the notice is given.
Section 2. Waivers. Whenever any notice is required to be given by law or under the provisions of the Certificate of Incorporation or these bylaws, a waiver thereof in writing, signed by the person or persons entitled to such notice, or a waiver by electronic transmission by the
person entitled to such notice, in each case, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to such notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.
ARTICLE IV
OFFICERS
Section 1. Generally. The officers of the Corporation shall be elected by the Board of Directors and shall consist of a President, a Secretary and a Treasurer. The Board of Directors may also elect such other officers, as the Board of Directors deems desirable, including the election of a Chief Executive Officer, a Chief Financial Officer and such number of Vice Presidents as the Board of Directors may from time to time determine. Any number of offices may be held by the same person.
Section 2. Compensation. The compensation of all officers and agents of the Corporation who are also directors of the Corporation shall be fixed by the Board of Directors. The Board of Directors may delegate the power to fix the compensation of other officers and agents of the Corporation to an officer of the Corporation.
Section 3. Succession. The officers of the Corporation shall hold office until their successors are elected and qualified or until such officers earlier resignation or removal. Any officer elected or appointed by the Board of Directors may be removed at any time by the affirmative vote of a majority of the directors. Any vacancy occurring in any office of the Corporation may be filled by the Board of Directors.
Section 4. Authority and Duties. Each of the officers of the Corporation shall have such authority and shall perform such duties as are customarily incident to their respective offices, or as may be specified from time to time by the Board of Directors in a resolution which is not inconsistent with these bylaws.
Section 5. Execution of Documents and Action with Respect to Securities of Other Corporations. The President shall have and is hereby given, full power and authority, except as otherwise required by law or directed by the Board of Directors, (a) to execute, on behalf of the Corporation, all duly authorized contracts, agreements, deeds, conveyances or other obligations of the Corporation, applications, consents, proxies and other powers of attorney, and other documents and instruments, and (b) to vote and otherwise act on behalf of the Corporation, in person or by proxy, at any meeting of stockholders, members, partners or other equity holders (or with respect to any action of such stockholders, members, partners or other equity holders) of any other corporation, limited liability company, partnership or other entity in which the Corporation may hold securities and otherwise to exercise any and all rights and powers which the Corporation may possess by reason of its ownership of securities. In addition, the President may delegate to other officers, employees and agents of the Corporation the power and authority to take any action which the President is authorized to take under this Section 5, with such limitations as the President may specify; such authority so delegated by the President shall not be re-delegated by the person to whom such execution authority has been delegated.
ARTICLE V
STOCK
Section 1. Certificates. Certificates representing shares of stock of the Corporation shall be in such form as shall be determined by the Board of Directors, subject to applicable legal
requirements. Such certificates shall be numbered and their issuance recorded in the books of the Corporation, and such certificate shall exhibit the holders name and the number of shares and shall be signed by, or in the name of the Corporation by the Chairman or Vice-Chairman of the Board of Directors or the President or Vice-President and the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer of the Corporation. Any or all of the signatures upon such certificates may be facsimiles, engraved or printed.
Section 2. Transfer. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Corporation to issue, or to cause its transfer agent to issue, a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.
Section 3. Lost, Stolen or Destroyed Certificates. The Secretary may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed upon the making of an affidavit of that fact, satisfactory to the Secretary, by the person claiming the certificate of stock to be lost, stolen or destroyed. As a condition precedent to the issuance of a new certificate or certificates the Secretary may require the owner of such lost, stolen or destroyed certificate or certificates, or such owners legal representative, to give the Corporation a bond in such sum and with such surety or sureties as the Secretary may direct as indemnity against any claims that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed or the issuance of the new certificate.
Section 4. Record Date. In order that the Corporation is able to determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment
thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty nor less than ten days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.
(a) In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date has been fixed by the Board of Directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to a Corporations registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of
Directors and prior action by the Board of Directors is required by law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.
(b) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
ARTICLE VI
GENERAL PROVISIONS
Section 1. Fiscal Year. The fiscal year of the Corporation shall be fixed from time to time by the Board of Directors.
Section 2. Corporate Seal. The Board of Directors may adopt a corporate seal and use the same by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
Section 3. Reliance upon Books, Reports and Records. Each director, each member of a committee designated by the Board of Directors and each officer of the Corporation will, in the performance of his or her duties, be fully protected in relying in good faith upon the records of the Corporation and upon such information, opinions, reports or statements presented to the
Corporation by any of the Corporations officers or employees, or committees of the Board of Directors, or by any other person as to matters the director, committee member or officer reasonably believes are within such other persons professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.
Section 4. Time Periods. In applying any provision of these bylaws which requires that an act be done or not be done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded and the day of the event shall be included.
Section 5. Dividends. The Board of Directors may from time to time declare and the Corporation may pay dividends upon its outstanding shares of capital stock, in the manner and upon the terms and conditions provided by law and the Certificate of Incorporation.
ARTICLE VII
AMENDMENTS
Section 1. Amendments. These bylaws may be altered, amended or repealed, or new bylaws may be adopted, by the stockholders or by the Board of Directors.
Exhibit 3.105
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State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 01:13 PM 02/26/2007 |
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FILED 01:13 PM 02/26/2007 |
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SRV 070226429 - 4307348 FILE |
STATE of DELAWARE
LIMITED LIABILITY COMPANY
CERTIFICATE of FORMATION
· First: The name of the limited liability company is CheckSmart Financial, LLC
· Second: The address of its registered office in the State of Delaware is 2711 Centerville Road Suite 400 in the City of Wilmington, DE 19808. The name of its Registered agent at such address is Corporation Service Company
· Third: (Use this paragraph only if the company is to have a specific effective date of dissolution: The latest date on which the limited liability company is to dissolve is .)
· Fourth: (Insert any other matters the members determine to include herein.)
In Witness Whereof, the undersigned have executed this Certificate of Formation this 26th day of February, 2007.
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By: |
[ILLEGIBLE] |
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Authorized Person(s) |
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Name: |
Heidi Bowman |
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Typed or Printed |
Exhibit 3.106
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
CHECKSMART FINANCIAL, LLC
a Delaware Limited Liability Company
Dated as of April 20, 2012
THE MEMBERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
CHECKSMART FINANCIAL, LLC
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of CheckSmart Financial, LLC (the Company) is made, adopted and entered into effective as of April 20, 2012, by CheckSmart Financial Company, a Delaware corporation, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Limited Liability Company Agreement of CheckSmart Financial, LLC, effective as of February 26, 2007 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 18 of the Delaware Corporation Laws Annotated (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Delaware on February 26, 2007. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in a limited liability company agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is CheckSmart Financial, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 7001 Post Road, Suite 200, Dublin, Ohio 43016. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Delaware in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Delaware in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Limited Liability Company Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means CheckSmart Financial Company, a Delaware corporation, or any Person that acquires all of the equity interests of the Company from CheckSmart Financial Company.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST
The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto, including, without limitation, all decisions required or permitted to be made by the Sole Member under this Agreement and all decisions required or permitted to be made by the Company as a member, partner or other beneficial owner of any other Person. Notwithstanding the foregoing or anything in this Agreement to the contrary, the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take.
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager or Officer). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation
or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be five (5) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure
of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 18-303(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, nor the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, director or stockholder of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the Delaware General Corporation Law as if the Company were a Delaware corporation, as the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the Delaware General Corporation Law as if the Company were a Delaware corporation, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, director, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such
suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Certificate of Formation, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members directors, officers or stockholders, or a Manager, an Officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 18-304 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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Exhibit 3.109
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State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 07:44 PM 02/18/2009 |
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FILED 07:44 PM 02/18/2009 |
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SRV 090157687 - 4657183 FILE |
STATE of DELAWARE
CERTIFICATE of INCORPORATION
A STOCK CORPORATION
· First: The name of this Corporation is Checksmart Money Order Services, Inc.
· Second: Its registered office in the State of Delaware is to be located at 2711 Centerville Road, Suite 400 Street, in the City of Wilmington County of New Castle Zip Code 19808. The registered agent in charge thereof is Corporation Service Company
· Third: The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.
· Fourth: The amount of the total stock of this corporation is authorized to issue is 1,500 shares (number of authorized shares) with a par value of 0.00 per share.
· Fifth: The name and mailing address of the incorporator are as follows:
Name Mercury Agent Company
Mailing Address 250 West Street, Suite 700
Columbus Zip Code 43215
· I, The Undersigned, for the purpose of forming a corporation under the laws of the State of Delaware, do make, file and record this Certificate, and do certify that the facts herein stated are true, and I have accordingly hereunto set my hand this 18th day of February, A.D. 2009.
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Mercury Agent Company | |
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BY: |
[ILLEGIBLE] |
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(Incorporator) |
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NAME: |
Heidi Bowman, Secretary |
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(type or print) |
Exhibit 3.110
BYLAWS
of
CHECKSMART MONEY ORDER SERVICES, INC.
a Delaware Corporation
ARTICLE I
OFFICES
Section 1.01 REGISTERED OFFICE. The registered office of Checksmart Money Order Services, Inc. (hereinafter called the Corporation) shall be at such place in the State of Delaware as shall be designated by the Board of Directors (hereinafter called the Board).
Section 1.02 PRINCIPAL OFFICE. The principal office for the transaction of the business of the Corporation shall be at such location, within or without the State of Delaware, as shall be designated by the Board.
Section 1.03 OTHER OFFICES. The Corporation may also have an office or offices at such other place or places, either within or without the State of Delaware, as the Board may from time to time determine or as the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 2.01 ANNUAL MEETINGS. Annual meetings of the stockholders of the Corporation for the purpose of electing directors and for the transaction of such other proper business as may come before such meetings may be held at such time, date and place as the Board shall determine by resolution.
Section 2.02 SPECIAL MEETINGS. Special meetings of the stockholders of the Corporation for any purpose or purposes may be called at any time by the Board, or by a committee of the Board which has been duly designated by the Board and whose powers and authority, as provided in a resolution of the Board or in the Bylaws, include the power to call such meetings, but such special meetings may not be called by any other person or persons; provided, however, that if and to the extent that any special meeting of stockholders may be called by any other person or persons specified in any provisions of the Certificate of Incorporation or any amendment thereto or any certificate filed under Section 151(g) of the General Corporation Law of the State of Delaware (or its successor statute as in effect from time to time hereafter), then such special meeting may also be called by the person or persons, in the manner, at the time and for the purposes so specified.
Section 2.03 PLACE OF MEETINGS. All meetings of the stockholders shall be held at such places, within or without the State of Delaware, as may from time to time be designated by the person or persons calling the respective meetings and specified in the respective notices or waivers of notice thereof.
Section 2.04 NOTICE OF MEETINGS. Except as otherwise required by law, notice of each meeting of the stockholders, whether annual or special, shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder of record entitled to vote at such meeting by delivering a typewritten or printed notice thereof to him personally, or by depositing such notice in the United States mail, in a postage prepaid envelope, directed to him at his address furnished by him to the Secretary of the Corporation for such purpose or, if he shall not have furnished to the Secretary his address for such purpose, then at his address last known to the Secretary, or by transmitting a notice thereof to him at such address by telegraph, cable or wireless. Except as otherwise expressly required by law, no publication of any notice of a meeting of the stockholders shall be required. Every notice of a meeting of the stockholders shall state the place, date and hour of the meeting and, in the case of a special meeting shall also state the purpose or purposes for which the meeting is called. Except as otherwise expressly required by law, notice of any adjourned meeting of the stockholders need not be given if the time and place thereof are announced at the meeting at which the adjournment is taken.
Whenever notice is required to be given to any stockholder to whom (i) notice of two consecutive annual meetings and all notices of meetings or of the taking of action by written consent without a meeting to such person during the period between such two consecutive annual meetings, or (ii) all, and at least two, payments (if sent by first class mail) of dividends or interest on securities during a twelve month period, have been mailed addressed to such person at his address as shown on the records of the Corporation and have been returned undeliverable, the giving of such notice to such person shall not be required. Any action or meeting which shall have been taken or held without notice to such person shall the same force and effect as if such notice had been duly given. If any such person shall deliver to the Corporation a written notice setting forth his then current address, the requirement that notice be given to such person shall be reinstated.
No notice need be given to any person with whom communication is unlawful, nor shall there be any duty to apply for any permanent or license to give notice to any such person.
Section 2.05 QUORUM. Except as provided by law, the holders of record of a majority in voting interest of the shares of stock of the Corporation entitled to be voted, present in person or by proxy, shall constitute a quorum for the transaction of business at any meeting of the stockholders of the Corporation or any adjournment thereof. The stockholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. In the absence of a quorum at any meeting or any adjournment thereof, a majority in voting interest of the stockholders present in person or by proxy and entitled to vote thereat or, in the absence therefrom of all the stockholders, any officer entitled to preside at or to act as secretary of such meeting may adjourn such meeting from time to time. At any such adjourned meeting at which a quorum is
present any business may be transacted which might have been transacted at the meeting as originally called.
Section 2.06 VOTING.
(a) At each meeting of the stockholders, each stockholder shall be entitled to vote in person or by proxy each share or fractional share of the stock of the Corporation which has voting rights on the matter in question and which shall have been held by him and registered in his name on the books of the Corporation:
(i) on the date fixed pursuant to Section 2.10 of these Bylaws as the record date for the determination of stockholders entitled to notice of and to vote at such meeting, or
(ii) if no such record date shall have been so fixed, then (A) at the close of business on the day next preceding the day on which notice of the meeting shall be given or (B) if notice of the meeting shall be waived, at the close of business on the day next preceding the day on which the meeting shall be held.
(b) Shares of its own stock belonging to the Corporation or to another corporation if a majority of the shares entitled to vote in the election of directors in such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes. Persons holding stock of the Corporation in a fiduciary capacity shall be entitled to vote such stock. Persons whose stock is pledged shall be entitled to vote, unless in the transfer by the pledgor on the books of the Corporation he shall have expressly empowered the pledgee to vote thereon, in which case only the pledgee, or his proxy, may represent such stock and vote thereon. Stock having voting power standing of record in the names of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety or otherwise, or with respect to which two or more persons have the same fiduciary relationship, shall be voted in accordance with the provisions of the General Corporation Law of Delaware.
(c) Any such voting rights may be exercised by the stockholder entitled thereto in person or by his proxy appointed by an instrument in writing, subscribed by such stockholder or by his attorney thereunto authorized and delivered to the secretary of the meeting; provided, however, that no proxy shall be voted or acted upon after three years from its date unless said proxy shall provide for a longer period. The attendance at any meeting of a stockholder who may theretofore have given a proxy shall not have the effect of revoking the same unless he shall in writing so notify the secretary of the meeting prior to the voting of the proxy. At any meeting of the stockholders all matters, except as otherwise provided in the Certificate of Incorporation, in these Bylaws or by law, shall be decided by the vote of a majority in voting interest of the stockholders present in person or by proxy and entitled to vote thereat and thereon. The stockholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. The vote at any meeting of the stockholders on any question need not be by ballot, unless so directed by the chairman of the meeting. On a vote by ballot, each ballot shall be signed
by the stockholder voting, or by his proxy if there be such proxy, and it shall state the number of shares voted.
Section 2.07 LIST OF STOCKHOLDERS. The Secretary of the Corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the entire duration thereof, and may be inspected by any stockholder who is present.
Section 2.08 INSPECTOR OF ELECTION. If at any meeting of the stockholder a vote by written ballot shall be taken on any question, the chairman of such meeting may appoint an inspector or inspectors of election to act with respect to such vote. Each inspector so appointed shall first subscribe an oath faithfully to execute the duties of an inspector at such meeting with strict impartiality and according to the best of his ability. Such inspectors shall decide upon the qualification of the voters and shall report the number of shares represented at the meeting and entitled to vote on such question, shall conduct and accept the votes, and, when the voting is completed, shall ascertain and report the number of shares voted respectively for and against the question. Reports of the inspectors shall be in writing and subscribed and delivered by them to the Secretary of the Corporation. Inspectors need not be stockholders of the Corporation, and any officer of the Corporation may be an inspector on any question other than a vote for or against a proposal in which he shall have a material interest.
Section 2.09 STOCKHOLDER ACTION WITHOUT MEETINGS. Any action required by the General Corporation Law of the State of Delaware to be taken at any annual or special meeting of the stockholders, or any action which may be taken at any annual or special meeting of the stockholder, may be taken without a meeting, without prior notice and without a vote, if a consent in writing setting forth the action so taken shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.
Section 2.10 RECORD DATE. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment or any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board and which record date: (i) in the case of determination of stockholders entitled to vote at any meeting of stockholders or adjournment thereof, shall, unless otherwise required by law, not be more than sixty (60) nor less
than ten (10) days before the date of such meeting; (ii) in the case of determination of stockholders entitled to express consent to corporate action in writing without a meeting, shall not be more than ten (10) days from the date upon which the resolution fixing the record date is adopted by the Board; and (iii) in the case of any other action, shall not be more than sixty (60) days prior to such other action. If no record date is fixed: (i) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; (ii) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting when no prior action of the Board is required by law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation in accordance with applicable law, or, if prior action by the Board is required by law, shall be at the close of business on the day on which the Board adopts the resolution taking such prior action; and (iii) the record date for determining stockholders for any other purpose shall be at the close of business on the clay on which the Board of Directors adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided however, that the Board may fix a new record date for the adjourned meeting.
ARTICLE III
BOARD OF DIRECTORS
Section 3.01 GENERAL POWERS. The property, business and affairs of the Corporation shall be managed by or under the direction of the Board, which may exercise all of the powers of the Corporation, except such as are by the Certificate of Incorporation, by these Bylaws or by law conferred upon or reserved to the stockholders.
Section 3.02 NUMBER AND TERM. The authorized number of directors shall be four (4) until changed by a duty adopted amendment to the Certificate of Incorporation or by an amendment to these Bylaws adopted by the vote or written consent of holders of a majority of the outstanding shares entitled to vote.
Section 3.03 ELECTION OF DIRECTORS. The directors shall be elected by the stockholders of the Corporation, and at each election the persons receiving the greatest number of votes, up to the number of directors then to be elected, shall be the persons then elected. The election of directors is subject to any provisions contained in the Certificate of Incorporation relating thereto, including any provisions for a classified board.
Section 3.04 RESIGNATION AND REMOVAL. Any director of the Corporation may resign at any time by giving written notice to the Board or to the Secretary of the Corporation. Any such resignation shall take effect at the time specified therein, or, if the time is not specified, it shall take effect immediately upon its receipt; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
Except as otherwise provided by the Certificate of Incorporation or by law, any director or the entire board of directors may be removed, with or without cause, by the holders of a majority of shares then entitled to vote at an election of directors.
Section 3.05 VACANCIES. Except as otherwise provided in the Certificate of Incorporation, any vacancy in the Board, whether because of death, resignation, disqualification, an increase in the number of directors, or any other cause, may be filled by vote of the majority of the remaining directors, although less than a quorum, or by a sole remaining director. Each director so chosen to fill a vacancy shall hold office until his successor shall have been elected and shall qualify or until he shall resign or shall have been removed. No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of his of office.
Upon the resignation of one or more directors from the Board, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have the power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as provided hereinabove in the filling of other vacancies.
Section 3.06 PLACE OF MEETING; TELEPHONE CONFERENCE MEETING. The Board may hold any of its meetings at such place or places, within or without the State of Delaware as the Board may from time to time by resolution designate or as shall be designated by the person or persons calling the meeting or in the notice or waiver of notice of any such meeting. Directors may participate in any regular or special meeting of the Board by means of conference telephone or similar communications equipment pursuant to which all persons participating in the meeting of the Board can hear each other, and such participation shall constitute presence in person at such meeting.
Section 3.07 FIRST MEETING. The Board shall meet as soon as practicable after each annual election of directors and notice of such first meeting shall not be required.
Section 3.08 REGULAR MEETINGS. Regular meetings of the Board may be held at such times as the Board shall from time to time by resolution determine. If any day fixed for a meeting shall be a legal holiday at the place where the meeting is to be held, then the meeting shall be held at the same hour and place on the next succeeding business day which is not a legal holiday. Except as provided by law, notice of regular meetings need not be given.
Section 3.09 SPECIAL MEETINGS. Special meetings of the Board may be called at any time by the President or by any director, to be held at the principal office of the Corporation, or at such other place or places, within or without the State of Delaware, as the person or persons calling the meeting may designate.
Notice of the time and place of special meetings shall be given to each director either (i) by mailing or otherwise sending to him a written notice of such meeting, charges prepaid, addressed to him at his address as it is shown upon the records of the Corporation, or if it is not so shown on such records or is not readily ascertainable, at the place in which the meetings of the directors are regularly held, at least seventy-two (72) hours prior to the time of the holding of such meeting; or
(ii) by orally communicating the time and place of the special meeting to him at least forty-eight (48) hours prior to the time of the holding of such meeting. Either of the notices as above provided shall be due, legal and personal notice to such director.
Section 3.10 QUORUM AND ACTION. Except as otherwise provided in these Bylaws or by law, the presence of a majority of the authorized number of directors shall be required to constitute a quorum for the transaction of business at any meeting of the Board, and all matters shall be decided at any such meeting, a quorum being present, by the affirmative votes of a majority of the directors present. In the absence of a quorum, a majority of directors present at any meeting may adjourn the same from time to time until a quorum shall be present. Notice of any adjourned meeting need not be given. The directors shall act only as a Board, and the individual directors shall have no power as such.
Section 3.11 ACTION BY CONSENT. Any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if a written consent thereto is signed by all members of the Board or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board or such committee. Such action by written consent shall have the same force and effect as the unanimous vote of such directors.
Section 3.12 COMPENSATION. No stated salary need be paid to directors, as such, for their services but, as fixed from time to time by resolution of the Board, the directors may receive directors fees, compensation and reimbursement for expenses for attendance at directors meetings, for serving on committees and for discharging their duties; provided that nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.
Section 3.13 COMMITTEES. The Board may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not be or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member. Any such committee, to the extent permitted by law and provided in the resolution of the Board, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it.
Unless the Board otherwise provides, each committee designated by the Board may make, alter and repeal rules for conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner as the Board conducts its business pursuant to these Bylaws. Any such committee shall keep written minutes of its meetings and report the same to the Board when required.
ARTICLE IV
OFFICERS
Section 4.01 OFFICERS. The officers of the Corporation shall be a President, a Treasurer and a Secretary. The Corporation may also have, at the discretion of the Board, a Chief Executive Officer, a Chief Financial Officer, a Chief Operating Officer, a Chairman of the Board, one or more Vice Presidents, one or more Assistant Vice Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers and such other officers as may be appointed in accordance with the provisions of Section 4.03 of these Bylaws. One person may hold two or more offices.
Section 4.02 ELECTION AND TERM. The officers of the Corporation, except such officers as may be appointed in accordance with the provisions of Section 4.03 or Section 4.05 of these Bylaws, shall be chosen annually by the Board, and each shall hold his office until he shall resign or shall be removed or otherwise disqualified to serve, or until his successor shall be elected and qualified.
Section 4.03 SUBORDINATE OFFICERS. The Board may appoint, or may authorize the President to appoint, such other officers as the business of the Corporation may require, each of whom shall have such authority and perform such duties as are provided in these Bylaws or as the Board or the President from time to time may specify, and shall hold office until he shall resign or shall be removed or otherwise disqualified to serve.
Section 4.04 REMOVAL AND RESIGNATION. Any officer may be removed, with or without cause, by a majority of the directors at the time in office, at any regular or special meeting of the Board, or, except in case of an officer chosen by the Board, by the President upon whom such power of removal may be conferred by the Board.
Any officer may resign at any time by giving written notice to the Board, the President or the Secretary of the Corporation. Any such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein; and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
Section 4.05 VACANCIES. A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in the Bylaws for the regular appointments to such office.
Section 4.06 PRESIDENT. The President of the Corporation shall, subject to the control of the Board, have general supervision, direction and control of the business and affairs of the Corporation. He shall preside at all meetings of stockholders and the Board. He shall have the general powers and duties of management usually vested in the President of a corporation, and shall have such other powers and duties with respect to the administration of the business and affairs of the Corporation as may from time to time be assigned to him by the Board or as prescribed by the Bylaws.
Section 4.07 VICE PRESIDENTS. The Vice President(s), if any, shall exercise and perform such powers and duties with respect to the administration of the business and affairs of the Corporation as from time to time may be assigned to each of them by the President, by the Board or as is prescribed by the Bylaws. In the absence or disability of the President, the Vice Presidents, in order of their rank as fixed by the Board, or if not ranked, the Vice President designated by the Board, shall perform all of the duties of the President and when so acting shall have all of the powers of and be subject to all the restrictions upon the President.
Section 4.08 SECRETARY. The Secretary shall keep, or cause to be kept, a book of minutes at the principal office for the transaction of the business of the Corporation, or such other place as the Board may order, of all meetings of directors and stockholders, with the time and place of holding, whether regular or special, and if special, how authorized and the notice thereof given, the names of those present at directors meetings, the number of shares present or represented at stockholders meetings and the proceedings thereof.
The Secretary shall keep, or cause to be kept, at the principal office for the transaction of the business of the Corporation or at the office of the Corporations transfer agent, a share register, or a duplicate share register, showing the names of the stockholders and their addresses, the number and classes of shares held by each, the number and date of certificates issued for the same, and the number and date of cancellation of every certificate surrendered for cancellation.
The Secretary shall give, or cause to be given, notice of all the meetings of the stockholders and of the Board required by these Bylaws or by law to be given, and he shall keep the seal of the Corporation in safe custody, and shall have such other powers and perform such other duties as may be prescribed by the Board or these Bylaws. If for any reason the Secretary shall fail to give notice of any special meeting of the Board called by one or more of the persons identified in Section 3.09 of these Bylaws, or if he shall fail to give notice of any special meeting of the stockholders called by one or more of the persons identified in Section 2.02 of these Bylaws, then any such person or persons may give notice of any such special meeting.
Section 4.09 TREASURER. The Treasurer shall keep and maintain or cause to be kept and maintained, adequate and correct accounts of the properties and business transactions of the Corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, surplus and shares. Any surplus, including earned surplus, paid-in surplus and surplus arising from a reduction of capital, shall be classified according to source and shown in a separate account. The books of account at all reasonable times shall be open to inspection by any director.
The Treasurer shall deposit all moneys and other valuables in the name and to the credit of the Corporation with such depositories as may be designated by the Board. He shall disburse the funds of the Corporation as may be ordered by the Board, shall render to the President and to the directors, whenever they request it, an account of all of his transactions as Treasurer and of the financial condition of the Corporation, and shall have such other powers and perform such other duties as may be prescribed by the Board or these Bylaws.
Section 4.10 COMPENSATION. The compensation of the officers of the Corporation, if any, shall be fixed from time to time by the Board.
ARTICLE V
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
Section 5.01 EXECUTION OF CONTRACTS. The Board, except as otherwise provided in these Bylaws, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument in the name and on behalf of the Corporation, and such authority may be general or confined to specific instances; and unless so authorized by the Board or by these Bylaws, no officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or in any amount.
Section 5.02 CHECKS, DRAFTS, ETC. All checks, drafts or other orders for payment of money, notes or other evidence of indebtedness, issued in the name of or payable to the Corporation, shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by resolution of the Board. Each such person shall give such bond, if any, as the Board may require.
Section 5.03 DEPOSIT. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board may select, or as may be selected by any officer or officers, assistant or assistants, agent or agents, attorney or attorneys, of the Corporation to whom such power shall have been delegated by the Board. For the purpose of deposit and for the purpose of collection for the account of the Corporation, the President, any Vice President or the Treasurer (or any other officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation who shall be determined by the Board from time to time) may endorse, assign, and deliver checks, drafts and other orders for the payment of money which are payable to the order of the Corporation.
Section 5.04 GENERAL AND SPECIAL BANK ACCOUNTS. The Board from time to time may authorize the opening and keeping of general and special bank accounts with such banks, trust companies or other depositories as the Board may select or as may be selected by an officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation to whom such power shall have been delegated by the Board. The Board may make such special rules and regulations with respect to such bank accounts, not inconsistent with the provisions of these Bylaws, as it may deem expedient.
ARTICLE VI
SHARES AND THEIR TRANSFER
Section 6.01 CERTIFICATES FOR STOCK. Every owner of stock of the Corporation shall be entitled to have a certificate or certificates, in such form as the Board shall prescribe, certifying the number and class of shares of the stock of the Corporation owned by him. The certificates representing shares of such stock shall be numbered in the order in which they shall be issued and shall be signed in the name of the Corporation by the President or a Vice President and by the Secretary or an Assistant Secretary or by the Treasurer or an Assistant Treasurer. Any or all
of the signatures on the certificates may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon any such certificate shall thereafter have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may nevertheless be issued by the Corporation with the same effect as though the person who signed such certificate, or whose facsimile signature shall have been placed thereupon, were such officer, transfer agent or registrar at the date of issue. A record shall be kept of the respective names of the persons, firms or corporations owning the stock represented by such certificates, the number and class of shares represented by such certificates, respectively, and the respective dates thereof, and in case of cancellation, the respective dates of cancellation. Every certificate surrendered to the Corporation for exchange or transfer shall be cancelled, and no new certificate or certificates shall be issued in exchange for any existing certificate until such existing certificate shall have been so cancelled, except in cases provided for in Section 6.04 of these Bylaws.
Section 6.02 TRANSFER OF STOCK. Transfer of shares of stock of the Corporation shall be made only on the books of the Corporation by the registered holder thereof, or by his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary, or with a transfer clerk or a transfer agent appointed as provided in Section 6.03 of these Bylaws, and upon surrender of the certificate or certificates for such shares properly endorsed and the payment of all taxes thereon. The person in whose name shares of stock stand on the books of the Corporation shall be deemed the owner thereof for all purposes as regards the Corporation. Whenever any transfer of shares shall be made for collateral security, and not absolutely, such fact shall be stated expressly in the entry of transfer if, when the certificate or certificates shall be presented to the Corporation for transfer, both the transferor and the transferee request the Corporation to do so.
Section 6.03 REGULATIONS. The Board may make such rules and regulations as it may deem expedient, not inconsistent with these Bylaws, concerning the issue, transfer and registration of certificates for shares of the stock of the Corporation. The Board may appoint, or authorize any officer or officers to appoint, one or more transfer clerks or one or more transfer agents and one or more registrars, and may require all certificates for stock to bear the signature or signatures of any of them.
Section 6.04 LOST, STOLEN, DESTROYED AND MUTILATED CERTIFICATES. In any case of loss, theft, destruction, or mutilation of any certificate of stock, another may be issued in its place upon proof of such loss, theft, destruction, or mutilation and upon the giving of a bond of indemnity to the Corporation in such form and in such sums as the Board may direct; provided, however, that a new certificate may be issued without requiring any bond when, in the judgment of the Board, it is proper to do so.
Section 6.05 REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The President or any Vice President and the Secretary or any Assistant Secretary of this Corporation are authorized to vote, represent and exercise on behalf of this Corporation all rights incident to all shares of any other corporation or corporations standing in the name of this Corporation. The authority herein granted to said officers to vote or represent on behalf of this Corporation any and all shares and all shares held by this Corporation in any other corporation or corporations may be
exercised either by such officers in person or by any person authorized so to do by proxy or power of attorney duly executed by said officers.
ARTICLE VII
INDEMNIFICATION
Section 7.01 ACTIONS OTHER THAN BY OR IN THE RIGHT OF THE CORPORATION. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise or as a member of any committee or similar body, against expenses (including attorneys fees) judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in, or not opposed to, the best interests of the Corporation, and, with respect to any criminal action or proceeding, that he had reasonable cause to believe that his conduct was unlawful.
Section 7.02 ACTIONS BY OR IN THE RIGHT OF THE CORPORATION. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, or as a member of any committee or similar body, against expenses (including attorneys fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
Section 7.03 DETERMINATION OF RIGHT OF INDEMNIFICATION. Any indemnification under Section 7.01 or 7.02 of these Bylaws (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in Sections 7.01 and 7.02 of these Bylaws.
Such determination shall be made (i) by the Board by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (iii) by the stockholders.
Section 7.04 INDEMNIFICATION AGAINST EXPENSES OF SUCCESSFUL PARTY. Notwithstanding the other provisions of this Article VII, to the extent that a director, officer, employee or agent of the Corporation bas been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 7.01 or 7.02 of these Bylaws, or in defense or any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys fees) actually and reasonably incurred by him in connection therewith.
Section 7.05 ADVANCE OF EXPENSES. Expenses incurred by an officer or director in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding as authorized by the Board upon receipt of an undertaking by or on behalf of the director or officer, to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized in this Article VII. Such expenses incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the Board deems appropriate.
Section 7.06 OTHER RIGHTS AND REMEDIES. The indemnification and advancement of expenses provided by, or granted pursuant to, the other Sections of this Article VII shall not be deemed exclusive and are declared expressly to be nonexclusive of any other rights to which those seeking indemnification or advancements of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office.
Section 7.07 INSURANCE. Upon resolution passed by the Board, the Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise or as a member of any committee or similar body against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this Article VII.
Section 7.08 CONSTITUENT CORPORATIONS. For the purpose of this Article VII, references to the Corporation include in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise or as a member of any committee or similar body shall stand in the same position under the provisions of this Article VII with respect to the resulting or
surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued.
Section 7.09 EMPLOYEE BENEFIT PLANS. For the purposes of this Article VII, references to other enterprises shall include employee benefit plans; references to fines shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to serving at the request of the Corporation shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner not opposed to the best interests of the Corporation as referred to in this Article VII.
Section 7.10 BROADEST LAWFUL INDEMNIFICATION. In addition to the foregoing, the Corporation shall, to the broadest and maximum extent permitted by Delaware law, as the same exists from time to time (but, in case of any amendment to or change in Delaware law, only to the extent that such amendment or change permits the Corporation to provide broader rights of indemnification than is permitted to the Corporation prior to such amendment or change), indemnify each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding whether civil, criminal, administrative or investigative by reason of the fact that he is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding. In addition, the Corporation shall, to the broadest and maximum extent permitted by Delaware law, as the same may exist from time to time (but, in case of any amendment to or change in Delaware law, only to the extent that such amendment or change permits the Corporation to provide broader rights of payment of expenses incurred in advance of the final disposition of an action, suit or proceeding than is permitted to the Corporation prior to such amendment or change), pay to such person any and all expenses (including attorneys fees) incurred in defending or settling any such action, suit or proceeding in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director or officer, to repay such amount if it shall ultimately be determined by a final judgment or other final adjudication that he is not entitled to be indemnified by the Corporation as authorized in this Section 7.10. The first sentence of this Section 7.10 to the contrary notwithstanding, the Corporation shall not indemnify any such person with respect to any of the following matters: (i) remuneration paid to such person if it shall be determined by a final judgment or other final adjudication that such remuneration was in violation of law; or (ii) any accounting of profits made from the purchase or sale by such person of the Corporations securities within the meaning of Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisions of any federal, state or local statutory law; or (iii) actions brought about or contributed to by the dishonesty of such person, if a final judgment or other final adjudication adverse; to such person establishes that acts of active and deliberate dishonesty were committed or attempted by such person with actual dishonest purpose and intent and were material to the adjudication; or (iv) actions based on or attributable to such person having gained any
personal profit or advantage to which he was not entitled, in the event that a final judgment or other final adjudication adverse to such person establishes that such person in fact gained such personal profit or other advantage to which he was not entitled, or (v) any matter in respect of which a final decision by a court with competent jurisdiction shall determine that indemnification is unlawful; provided, however, that the Corporation shall perform its obligations under the second sentence of this Section 7.10 on behalf of such person until such time as it shall be ultimately determined by a final judgment or other final adjudication that he is not entitled to be indemnified by the Corporation as authorized by the first sentence of this Section 7.10 by virtue of any of the preceding clauses (i), (ii), (iii), (iv) or (v).
Section 7.11 TERM. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VII shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
Section 7.12 SEVERABILITY. If any part of this Article VII shall be found, in any action, suit or proceeding or appeal therefrom or in any other circumstances or as to any particular officer, director, employee or agent to be unenforceable, ineffective or invalid for any reason, the enforceability, effect and validity of the remaining parts or of such parts in other circumstances shall not be affected, except as otherwise required by applicable law.
Section 7.13 AMENDMENTS. The foregoing provisions of this Article VII shall be deemed to constitute an agreement between the Corporation and each of the persons entitled to indemnification hereunder, for as long as such provisions remain in effect. Any amendment to the foregoing provisions of this Article VII which limits or otherwise adversely affects the scope of indemnification or rights of any such persons hereunder shall, as to such persons, apply only to claims arising, or causes of action based on actions or events occurring, after such amendment and delivery of notice of such amendment is given to the person or persons so affected. Until notice of such amendment is given to the person or persons whose rights hereunder are adversely affected, such amendment shall have no effect on such rights of such persons hereunder. Any person entitled to indemnification under the foregoing provisions of this Article VII shall, as to any act or omission occurring prior to the date of receipt of such notice, be entitled to indemnification to the same extent as had such provisions continued as Bylaws of the Corporation without such amendment.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 SEAL. The Board may provide a corporate seal, which shall be in the form of a circle and shall bear the name of the Corporation and words and figures showing that the Corporation was incorporated in the State of Delaware and showing the year of incorporation.
Section 8.02 WAIVER OF NOTICES. Whenever notice is required to be given under any provision of these bylaws, the Certificate of Incorporation or by law, a written waiver, signed by the person entitled to notice, whether before or after, the time stated therein, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when a person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors, or members of a committee of directors need be specified in any written waiver of notice unless required by the Certificate of Incorporation.
Section 8.03 LOANS AND GUARANTIES. The Corporation may lend money to, or guarantee any obligation of, and otherwise assist any officer or other employee of the Corporation or of its subsidiaries, including any officer who is a director, whenever, in the judgment of the Board, such loan, guaranty or assistance may reasonably be expected to benefit the Corporation. The loan, guaranty, or other assistance may be with or without interest, and may be unsecured or secured in such manner as the Board shall approve, including, without limitation, a pledge of shares of stock of the Corporation.
Section 8.04 GENDER. All personal pronouns used in these Bylaws shall include the other genders, whether used in the masculine, feminine or neuter gender, and the singular shall include the plural, and vice versa, whenever and as often as may be appropriate.
Section 8.05 AMENDMENTS. These Bylaws, or any of them, may be rescinded, altered, amended or repealed, and new Bylaws may be made by the stockholders, by the vote of a majority of the outstanding shares of voting stock of the Corporation, at an annual meeting of stockholders, without previous notice, or at any special meeting of stockholders provided that notice of such proposed amendment, modification, repeal or adoption is given in the notice of special meeting; provided; however, that Section 2.02 of these Bylaws can only be amended if that Section as amended would not conflict with the Corporations Certificate of Incorporation.
Exhibit 3.111
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State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 05:04 PM 08/29/2011 |
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FILED 04:46 PM 08/29/2011 |
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SRV 110961905 - 5030901 FILE |
STATE of DELAWARE
LIMITED LIABILITY COMPANY
CERTIFICATE of FORMATION
· First: The name of the limited liability company is Community Choice Family Insurance , LLC
· Second: The address of its registered office in the State of Delaware is 2711 Centerville Road Suite 400 in the City of Wilmington, DE 19808. The name of its Registered agent at such address is Corporation Service Company
· Third: (Use this paragraph only if the company is to have a specific effective date of dissolution: The latest date on which the limited liability company is to dissolve is .)
· Fourth: (Insert any other matters the members determine to include herein.)
In Witness Whereof, the undersigned have executed this Certificate of Formation this 29th day of August, 2011.
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By: |
[ILLEGIBLE] |
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Authorized Person(s) |
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Name: |
Heidi K. Bowman |
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Typed or Printed |
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State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 04:42 PM 09/06/2011 |
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FILED 04:29 PM 09/06/2011 |
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SRV 110981593 - 5030901 FILE |
STATE OF DELAWARE
CERTIFICATE OF AMENDMENT
1. Name of Limited Liability Company: Community Choice Family Insurance, LLC.
2. The Certificate of Formation of the limited liability company is hereby amended as follows: First: The name of the limited liability company is Community Choice Family Insurance Agency, LLC.
IN WITNESS WHEREOF, the undersigned have executed this Certificate on the 6th day of September, A.D. 2011.
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By: |
[ILLEGIBLE] |
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Authorized Person(s) |
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Name: |
Heidi K. Bowman |
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Print or Type |
Exhibit 3.112
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
COMMUNITY CHOICE FAMILY INSURANCE AGENCY, LLC
a Delaware Limited Liability Company
Dated as of March 31, 2012
THE MEMBERSHIP INTERESTS OF COMMUNITY CHOICE FAMILY INSURANCE AGENCY, LLC SHALL BE SECURITIES GOVERNED BY ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, ARTICLE 8 OF THE DELAWARE UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT. THE MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
COMMUNITY CHOICE FAMILY INSURANCE AGENCY, LLC
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of Community Choice Family Insurance Agency, LLC (the Company) is made, adopted and entered into effective as of March 31, 2012, by Community Choice Financial Inc., an Ohio corporation (the Member), as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Limited Liability Company Agreement of Community Choice Family Insurance Agency, LLC, effective as of August 29, 2011 (as amended from time to time, the Original Agreement) to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 18 of the Delaware Corporation Laws Annotated, as amended from time to time (the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Delaware on September 6, 2011. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in a limited liability company agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Community Choice Family Insurance Agency, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 7001 Post Road, Suite 200, Dublin, Ohio 43016. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Delaware in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Delaware in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Limited Liability Company Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.1.
Membership Interest Certificate has the meaning set forth in Section 2.2.
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means Community Choice Financial Inc., an Ohio corporation, or any Person that acquires all of the equity interests of the Company from Community Choice Financial Inc.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST CERTIFICATE
2.1 Capital Contribution; Membership Interest. The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement, as evidenced by a Membership Interest Certificate (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
2.2 Membership Interest Certificate. The Membership Interest of the Sole Member will be evidenced by a certificate of limited liability company interest issued by the Company in substantially the form set forth as Exhibit A to this Agreement (the Membership Interest Certificate). The Membership Interest shall be a security governed by Article 8 of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Article 8 of the Delaware Uniform Commercial Code, as currently in effect. Each Membership Interest Certificate shall bear the following legend:
This certificate evidences an interest in Community Choice Family Insurance Agency, LLC and shall be a security governed by Article 8 of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Article 8 of the Delaware Uniform Commercial Code, as currently in effect.
This Section 2.2 shall not be amended and no such purported amendment to this Section 2.2 shall be effective until, to the extent necessary, all outstanding Membership Interest Certificates have been surrendered for re-issuance with any conforming changes required as a result of such amendment.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company, including, without limitation, all decisions required or permitted to be made by the Sole Member under this Agreement and all decisions required or permitted to be made by the Company as a member, partner or other beneficial owner of any other Person, shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers, and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto. Notwithstanding the foregoing or anything in this Agreement to the contrary, the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take.
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager or Officer). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers
shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be three Managers, which Managers shall be as follows:
Michael Durbin
Bridgette Roman
Brandon Jones
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 18-303(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and none of the Sole Member, the Managers, or the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, manager, director or stockholder of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director, officer, employee or agent or in any other capacity while serving as an equity holder, manager, director, officer, employee or agent, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the Delaware General Corporation Law as if the Company were a Delaware corporation, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that, if so required by the Delaware General Corporation Law as if the Company were a Delaware corporation, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an
Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Sections 5.4 and 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, director, Officer, or other equity holder, manager, director, officer, employee or agent and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the applicable standard of conduct set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified, or to such Advancement of Expenses, under this Section 5 or otherwise shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Certificate of Formation or this Agreement, any agreement, any action by the Managers or the Sole Member or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members directors, officers or stockholders, or a Manager, an Officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of
the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee, or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 18-304 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Limited Liability Company Agreement of Community Choice Family Insurance Agency, LLC as of the date first written above.
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COMMUNITY CHOICE FINANCIAL INC. | |
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Bridgette C. Roman |
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EXHIBIT A
Form of Membership Interest Certificate
THE INTEREST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. ACCORDINGLY, SUCH INTEREST MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
THIS CERTIFICATE EVIDENCES AN INTEREST IN COMMUNITY CHOICE FAMILY INSURANCE AGENCY, LLC AND SHALL BE A SECURITY GOVERNED BY ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, ARTICLE 8 OF THE DELAWARE UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT.
No.
COMMUNITY CHOICE FAMILY INSURANCE AGENCY, LLC
A Delaware Limited Liability Company
Membership Interest Certificate
This certifies that [ ] is the owner of the Interest representing [ ]% membership equity interest in Community Choice Family Insurance Agency, LLC (the Company), subject to the terms of the Amended and Restated Limited Liability Company Agreement of Community Choice Family Insurance Agency, LLC, effective as of March 31, 2012, as amended and as may be further amended from time to time in accordance with its terms (the Agreement).
This Membership Interest Certificate may be transferred by the lawful holders hereof only in accordance with the provisions of the Agreement and applicable law.
THIS SECURITY IS SUBJECT TO THE PROVISIONS OF THE AGREEMENT.
IN WITNESS WHEREOF, the Company has caused this Membership Interest Certificate to be issued this day of , .
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COMMUNITY CHOICE FAMILY INSURANCE AGENCY, LLC | |
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FOR VALUE RECEIVED, , the of the Company does hereby sell, assign and transfer unto:
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(print or type name of assignee) |
the Membership Interest evidenced by the within Membership Interest Certificate, and does hereby irrevocably constitute an appoint attorney-in-fact to transfer the said Membership Interest on the books of the within-named Company, with the full power of substitution in the premises.
Dated as of: |
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In presence of: |
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NOTICE: The signature to this assignment must
correspond with the name as written upon the face of the
Membership Interest Certificate in every particular, without
alternation or enlargement or any change whatsoever.
Exhibit 3.113
STATE of DELAWARE
LIMITED LIABILITY COMPANY
CERTIFICATE of FORMATION
· First: The name of the limited liability company is CS-Arizona, LLC
· Second: The address of its registered office in the State of Delaware is 2711 Centerville Road Suite 400 in the City of Wilmington, DE 19808. The name of its Registered agent at such address is Corporation Service Company
· Third: (Use this paragraph only if the company is to have a specific effective date of
dissolution: The latest date on which the limited liability company is to dissolve is .)
· Fourth: (Insert any other matters the members determine to include herein.)
In Witness Whereof, the undersigned have executed this Certificate of Formation this 7th day of May, 2010.
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Heidi Bowman |
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State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 12:53 PM 05/07/2010 |
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FILED 12:08 PM 05/07/2010 |
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SRV 100476773 - 4820849 FILE |
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Exhibit 3.114
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
CS-ARIZONA, LLC
a Delaware Limited Liability Company
Dated as of April 20, 2012
THE MEMBERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
CS-ARIZONA, LLC
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of CS-Arizona, LLC (the Company) is made, adopted and entered into effective as of April 20, 2012, by CheckSmart Financial Company, a Delaware corporation, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Limited Liability Company Agreement of CS-Arizona, LLC, effective as of May 3, 2010 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 18 of the Delaware Corporation Laws Annotated (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Delaware on May 7, 2010. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in a limited liability company agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is CS-Arizona, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 7001 Post Road, Suite 200, Dublin, Ohio 43016. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Delaware in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Delaware in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Limited Liability Company Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means CheckSmart Financial Company, a Delaware corporation, or any Person that acquires all of the equity interests of the Company from CheckSmart Financial Company.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST
The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto, including, without limitation, all decisions required or permitted to be made by the Sole Member under this Agreement and all decisions required or permitted to be made by the Company as a member, partner or other beneficial owner of any other Person. Notwithstanding the foregoing or anything in this Agreement to the contrary, the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take.
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager or Officer). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation
or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be five (5) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure
of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 18-303(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, nor the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, director or stockholder of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the Delaware General Corporation Law as if the Company were a Delaware corporation, as the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the Delaware General Corporation Law as if the Company were a Delaware corporation, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, director, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such
suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Certificate of Formation, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members directors, officers or stockholders, or a Manager, an Officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 18-304 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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Exhibit 3.115
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State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 03:32 PM 08/12/2009 |
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FILED 03:32 PM 08/12/2009 |
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SRV 090774338 - 4722724 FILE |
STATE OF DELAWARE
CERTIFICATE OF CONVERSION
FROM A NON-DELWARE LIMITED LIABILITY COMPANY TO
A DELAWARE LIMITED LIABILITY COMPANY PURSUANT TO
SECTION 18-214 OF THE LIMITED LIABILITY ACT
1.) The jurisdiction where the Non-Delaware Limited Liability Company first formed is Utah.
2.) The jurisdiction immediately prior to filing this Certificate is Utah.
3.) The date the Non-Delaware Limited Liability Company first formed is June 20, 2005.
4.) The name of the Non-Delaware Limited Liability Company immediately prior to filing this Certificate is Direct Financial Solutions, L .L . C..
5.) The name of the Limited Liability Company as set fourth in the Certificate of Formation is Direct Financial Solutions, LLC.
IN WITNESS WHEREOF, the undersigned have executed this Certificate of the 10 day of August, A.D. 2009.
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By: |
[ILLEGIBLE] |
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Authorized Person |
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Name: |
Trevin G. Workman |
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Print or Type |
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State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 03:32 PM 08/12/2009 |
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FILED 03:32 PM 08/12/2009 |
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SRV 090774338 - 4722724 FILE |
CERTIFICATE OF FORMATION
OF
DIRECT FINANCIAL SOLUTIONS, LLC
Article 1 NAME
The name of the Company is Direct Financial Solutions, LLC
Article 2 REGISTERED OFFICE AND AGENT
The name of the original Registered Agent of the Company is Registered Agents Legal Services, LLC, located at 1220 N. Market Street, Suite 806, Wilmington, Delaware 19801.
Article 3 AUTHORITY
No Member shall have authority to act on behalf of or bind the Company without the written approval of the Manager. Only the Manager of the Company, as indicated above, or successor(s) as Manager, and those given authority by such written approval may sign contracts or other instruments on behalf of the Company.
IN WITNESS WHEREOF, the undersigned have executed this Certificate of Formation this 10 day of August, 2009.
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Authorized Person: |
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[ILLEGIBLE] |
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Trevin G. Workman |
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State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 03:21 PM 08/29/2011 |
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FILED 03:21 PM 08/29/2011 |
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SRV 110961390 - 4722724 FILE |
STATE OF DELAWARE
CERTIFICATE OF AMENDMENT
1. Name of Limited Liability Company: Direct Financial Solutions, LLC
2. The Certificate of Formation of the limited liability company is hereby amended as follows:
The name of the Company shall be Financial Denouement, LLC
IN WITNESS WHEREOF, the undersigned have executed this Certificate on the15th day of August , A.D. 2011.
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By: |
[ILLEGIBLE] |
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Authorized Person(s) |
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Name: |
Mason Niederhauser, Manager |
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Print or Type |
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State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 11:30 AM 10/20/2011 |
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FILED 11:30 AM 10/20/2011 |
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SRV 111123799 - 4722724 FILE |
STATE OF DELAWARE
CERTIFICATE OF AMENDMENT
1. Name of Limited Liability Company: Financial Denouement, LLC
2. The Certificate of Formation of the limited liability company is hereby amended as follows:
The name of the company shall be Direct Financial Solutions, LLC
IN WITNESS WHEREOF, the undersigned have executed this Certificate on the 16 day of October, A.D. 2011.
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By: |
/s/ Mason Niederhauser |
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Authorized Person(s) |
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Name: |
Mason Niederhauser Manager |
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Print or Type |
Exhibit 3.116
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
DIRECT FINANCIAL SOLUTIONS, LLC
a Delaware Limited Liability Company
Dated as of April 1, 2012
THE MEMBERSHIP INTERESTS OF DIRECT FINANCIAL SOLUTIONS, LLC SHALL BE SECURITIES GOVERNED BY ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, ARTICLE 8 OF THE DELAWARE UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT. THE MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
DIRECT FINANCIAL SOLUTIONS, LLC
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of Direct Financial Solutions, LLC (the Company) is made, adopted and entered into effective as of April 1, 2012, by Community Choice Financial Inc., an Ohio corporation, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Amended and Restated Operating Agreement for Direct Financial Solutions, LLC, effective as of July 1, 2009 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company, first formed as a Utah limited liability company on June 20, 2005. The Company was re-domesticated to Delaware on August 12, 2009 pursuant to the provisions of Chapter 18 of the Delaware Corporation Laws Annotated (as amended from time to time, the LLC Law). The Company is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Delaware on August 12, 2009 in connection with the conversion of the Company from a Utah limited liability company to a Delaware limited liability company. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in a limited liability company agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Direct Financial Solutions, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 84 East 2400 North, North Logan, Utah 84341. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced on June 20, 2005 and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Delaware in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Delaware in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Limited Liability Company Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
CCFI Manager means any of William E. Saunders, Jr., Kyle Hanson, Chad Streff, Michael Durbin or Bridgette Roman, or their respective alternates or successors, as appointed from time to time in accordance with Section 4.1.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.1.
Membership Interest Certificate has the meaning set forth in Section 2.2.
Ministerial Acts means (i) completing, executing and filing annual reports on behalf of the Company as required in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (ii) ordinary course acts required in connection with obtaining or maintaining the licensure of the Company in its jurisdiction of formation and any other states or jurisdictions in which the Company engages in business, (iii) executing any contract that by its terms is less than 12 months in length and represents a financial obligation of the Company of less than $5,000 in the aggregate, or (iv) any other act that is approved in writing by an officer of the Sole Member.
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means Community Choice Financial Inc., an Ohio corporation, or any Person that acquires all of the equity interests of the Company from Community Choice Financial Inc.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST CERTIFICATE
2.1 Capital Contribution; Membership Interest. The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the
Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement, as evidenced by a Membership Interest Certificate (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
2.2 Membership Interest Certificate. The Membership Interest of the Sole Member will be evidenced by a certificate of limited liability company interest issued by the Company in substantially the form attached as Exhibit A to this Agreement (the Membership Interest Certificate). The Membership Interest shall be a security governed by Article 8 of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Article 8 of the Delaware Uniform Commercial Code, as currently in effect. Each Membership Interest Certificate shall bear the following legend:
This certificate evidences an interest in Direct Financial Solutions, LLC and shall be a security governed by Article 8 of the Uniform Commercial Code as in effect in any jurisdiction in which it has been adopted, including, without limitation, Article 8 of the Delaware Uniform Commercial Code, as currently in effect.
This Section 2.2 shall not be amended and no such purported amendment to this Section 2.2 shall be effective until, to the extent necessary, all outstanding Membership Interest Certificates have been surrendered for re-issuance with any conforming changes required as a result of such amendment.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto. Notwithstanding the foregoing or anything in this Agreement to the contrary: (y) the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take; and (z) none of the actions described in the foregoing clauses (i) through (iv) of this Section 4.1(a), other than Ministerial Acts, may be taken by any individual Manager on behalf of the Company without first obtaining the approval required pursuant to Section 4.1(e) or (f).
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that (i) at least three (3) of the Managers constituting such a quorum must be a
CCFI Manager, and (ii) if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority (which act of the majority must, for the avoidance of doubt, always include the vote of at least one (1) CCFI Manager) of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be seven (7) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
Trevin G. Workman
S. Todd Jensen
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the
Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members directors, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 18-303(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, director or shareholder of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the Delaware General Corporation Law as if the Company were a Delaware corporation, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including
attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the Delaware General Corporation Law as if the Company were a Delaware corporation, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of
Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Certificate of Formation, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members directors, officers or shareholders, a Manager, an Officer, or an employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 18-304 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Limited Liability Company Agreement of Direct Financial Solutions, LLC as of the date first written above.
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EXHIBIT A
Form of Membership Interest Certificate
THE INTEREST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. ACCORDINGLY, SUCH INTEREST MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
THIS CERTIFICATE EVIDENCES AN INTEREST IN DIRECT FINANCIAL SOLUTIONS, LLC AND SHALL BE A SECURITY GOVERNED BY ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY JURISDICTION IN WHICH IT HAS BEEN ADOPTED, INCLUDING, WITHOUT LIMITATION, ARTICLE 8 OF THE DELAWARE UNIFORM COMMERCIAL CODE, AS CURRENTLY IN EFFECT.
No.
DIRECT FINANCIAL SOLUTIONS, LLC
A Delaware Limited Liability Company
Membership Interest Certificate
This certifies that [ ] is the owner of the Membership Interest representing [ ]% membership equity interest in Direct Financial Solutions, LLC (the Company), subject to the terms of the Amended and Restated Limited Liability Company Agreement of Direct Financial Solutions, LLC, made and entered into as of April 1, 2012, as the same may be amended from time to time in accordance with its terms (the Agreement).
This Membership Interest Certificate may be transferred by the lawful holders hereof only in accordance with the provisions of the Agreement and applicable law.
THIS SECURITY IS SUBJECT TO THE PROVISIONS OF THE AGREEMENT.
IN WITNESS WHEREOF, the Company has caused this Membership Interest Certificate to be issued this day of , .
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FOR VALUE RECEIVED, , the of the Company does hereby sell, assign and transfer unto:
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the Membership Interest evidenced by the within Membership Interest Certificate, and does hereby irrevocably constitute an appoint attorney-in-fact to transfer the said Membership Interest on the books of the within-named Company, with the full power of substitution in the premises.
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NOTICE: The signature to this assignment must correspond with the name as written upon the face of the Membership Interest Certificate in every particular, without alternation or enlargement or any change whatsoever. |
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Exhibit 3.117
Prescribed by J. Kenneth Blackwell Ohio Secretary of State Central Ohio: (614) 466-3910 Toll Free: 1-877-SOS-FILE (1-877-767-3453) www.state.oh.us/sos e-mail: busserv@sos.state.oh.us Expedite this Form: (select one) Mail Form to one of the Following: Yes PO Box 1390 Columbus, OH 43216 Requires an additional fee of $100 . PO Box 670 No Columbus, OH 43216 INITIAL ARTICLES OF INCORPORATION (For Domestic Profit or Non-Profit) Filing Fee $125.00 THE UNDERSIGNED HEREBY STATES THE FOLLOWING: (CHECK ONLY ONE (1) BOX) (1) Articles of Incorporation Profit (113-ARF) ORC 1701 (2) Articles of Incorporation Non-Profit (114-ARN) ORC 1702 (3) Articles of Incorporation Professional (170-ARP) Profession ORC 1785 Complete the general information in this section for the box checked above. First: Name of Corporation Express Payroll advance of ohio, inc. Second: Location Columbus (city) Franklin (Country) Effective Date (Optional) (mm/dd/yyyy) Date specified can be no more than 90 days after date of filling. If a date is specified, the date must be a date on or after the date of filing. Check here if additional provisions are attached Complete the information in this section if box (2) or (3) is checked. Completing this section is optional if box (1) is checked. THIRD: Purpose for which corporation is formed The purpose of said corporation is to engage in any lawful act or activity for which corporations may be formed under Sections 1701.01 through 1701.98, inclusive, of the Ohio Revised Code. Complete the information in this section if box (2) or (3) is checked. Completing this section is optional if box (1) is checked. FOURTH: The number of shares which the corporation is authorized to have outstanding (Please state if shares are common or preferred and their par value if any) 1,500 Common No par value (No. of Shares) (Type) (Par Value) (Refer to instructions if needed) |
Completing the information in this section is optional
FIFTH: The following are the names and addresses of the individuals who are to serve as initial Directors.
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Mercury Agent Company |
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Complete the information in this section if box (1) (2) or (3) is checked.
ORIGINAL APPOINTMENT OF STATUTORY AGENT
The undersigned, being at least a majority of the incorporators of Express Payroll Advance of Ohio, Inc. hereby appoint the following to be statutory agent upon whom any process, notice or demand required or permitted by statute to be served upon the corporation may be served. The complete address of the agent is
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SIXTH: The corporation, through its Board of Directors, shall have the right and power to repurchase any of its outstanding shares at such price and upon such terms as may be agreed upon between the corporation and the selling shareholder or shareholders.
SEVENTH: The Board of Directors is hereby authorized to fix and determine whether any surplus, and, if any, what part of the surplus, however created or arising, shall be used or disposed of or declared in dividends or paid to shareholders, and, without action by the shareholders, to use and apply surplus, or any part thereof, or such part of the stated capital of the corporation as is permitted under the provisions of Section 1701.35 of the Ohio Revised Code, or any statute of like tenor or effect which is hereafter enacted, at any time, or from time to time, in the purchase or acquisition of shares of any class, voting trust certificates for shares, bonds, debentures, notes, script, warrants, obligations, evidences of indebtedness of the corporation, or other securities of the corporation, to such extent or amount and in such manner and upon such terms as the Board of Directors shall deem expedient.
EIGHTH: No person shall be disqualified from being a director of the corporation because he or she is or may be a party to, and no director of the corporation shall be disqualified from entering into, any contract or other transaction to which the corporation is or may be a party. No contract or other transaction to which the corporation is or may be a party shall be void or voidable for the reason that any director or officer or other agent of the corporation is a party thereto, or otherwise has any direct or indirect interest in such contract or transaction or in any other party thereto, or for reason that any interested director or officer or other agent of the corporation authorizes or participates in authorization of such contract or transaction, (a) if the material facts as to such interest are disclosed or are otherwise known to the Board of Directors or applicable committee of directors at the time the contract or transaction is authorized, and at least a majority of the disinterested directors or disinterested members of the committee vote for or otherwise take action authorizing such contract or transaction, even though such disinterested directors or members are less than a quorum, or (b) if the contract or transaction (i) is not less favorable to the corporation than an arms length contract or transaction in which no director or officer or other agent of the corporation has any interest or (ii) is otherwise fair to the corporation as of the time it is authorized. Any interested director may be counted in determining the presence of a quorum at any meeting of the Board of Directors or any committee thereof which authorizes the contract or transaction.
NINTH: The provisions of Section 1701.13(E)(5)(a) of the Ohio Revised Code or any statute of like tenor or effect which is hereafter enacted shall not apply to the corporation. The corporation shall, to the fullest extent not
prohibited by any provision of applicable law other than Section 1701.13(E)(5)(a) of the Ohio Revised Code or any statute of like tenor or effect which is hereafter enacted, indemnify each director and officer against any and all costs and expenses (including attorney fees, judgments, fines, penalties, amounts paid in settlement, and other disbursements) actually and reasonably incurred by or imposed upon such person in connection with any action, suit, investigation or proceeding (or any claim or other matter therein), whether civil, criminal, administrative or otherwise in nature, including any settlements thereof or any appeals therein, with respect to which such person is named or otherwise becomes or is threatened to be made a party by reason of being or at any time having been a director or officer of the corporation, or by any reason of being or at any time having been, while such a director or officer, an employee or other agent of the corporation or, at the direction or request of the corporation, a director, trustee, officer, administrator, manager, employee, adviser or other agent of or fiduciary for any other corporation, partnership, trust, venture or other entity or enterprise including any employee benefit plan.
The corporation shall indemnify any other person to the extent such person shall be entitled to indemnification under Ohio law by reason of being successful on the merits or otherwise in defense of an action to which such person is named a party by reason of being an employee or other agent of the corporation, and the corporation may further indemnify any such person if it is determined on a case by case basis by the Board of Directors that indemnification is proper in the specific case.
Notwithstanding anything to the contrary in these Articles of Incorporation, no person shall be indemnified to the extent, if any, it is determined by the Board of Directors or by written opinion of legal counsel designated by the Board of Directors for such purpose that indemnification is contrary to applicable law.
TENTH: Notwithstanding any provisions of the Ohio Revised Code, now or hereafter in force, requiring for any purpose the vote or consent of the holders of shares entitling them to exercise two-thirds (2/3) or any other proportion of the voting power of the corporation or of any class or classes of shares thereof, such action, unless otherwise expressly required by statute, may be taken by the vote or consent of the holders of shares entitling them to exercise a majority of the voting power of the corporation or of such class of shares thereof.
Exhibit 3.118
CODE OF REGULATIONS
OF
EXPRESS PAYROLL ADVANCE OF OHIO, INC.
ARTICLE I - MEETING OF SHAREHOLDERS
(a) Annual Meetings. An annual meeting of shareholders, for the election of Directors, for the consideration of any reports and for the transaction of such other business as may be brought before the meeting, shall be held on the first Monday of the fourth month following the close of the Corporations fiscal year or on such other date as may be designated by the Board of Directors.
(b) Special Meetings. Special meetings of the shareholders of this corporation shall be called by the Secretary, pursuant to a resolution of the Board of Directors, or upon written request of two Directors, or by shareholders representing 25% of the shares issued and entitled to vote. Calls for special meetings shall specify the time, place and object or objects thereof, and no business other than that specified in the call therefor shall be considered at any such meetings.
(c) Notice of Meetings. A written or printed notice of the annual or any special meetings of the shareholders, stating the time and place, and in case of special meetings, the objects thereof, shall be given to each shareholder entitled to vote at such meeting appearing on the books of the corporation, by mailing same to the shareholders address as same appears on the records of the corporation or of its Transfer Agent or Agents, at least ten (10) days before any such meeting; provided, however, that no failure or irregularity of notice of any annual meeting shall invalidate the same or any proceeding thereat. It shall be the responsibility of the Secretary to mail such notice.
(d) Quorum. Those shareholders present in person or by proxy entitling them to exercise a majority of the voting power shall constitute a quorum for any meeting of shareholders. In the event of an absence of a quorum at any meeting or any adjournment thereof, a majority of those present in person or by proxy and entitled to vote may adjourn such meeting from time to time. At any adjourned meeting at which a quorum may be present, any business may be transacted which might have been transacted at the meeting as originally called.
(e) Place of Meetings. The annual or any special meetings of shareholders may be held at such place or places within or without the State of Ohio, as may be specified in the notice of any such meetings.
(f) Proxies. At any meeting of shareholders, any person who is entitled to attend, or to vote thereat, and to execute consents, waivers or releases, may be represented at such meeting or vote thereat, and execute consents, waivers and releases, and exercise any of such persons other rights, by proxy or proxies appointed by a writing signed by such person and submitted to the Secretary at or before such meeting. Voting by proxy or proxies shall be governed by all of
the provisions of Ohio law, including the provisions relating to the sufficiency of the writing, the duration of the validity of the proxy or proxies, and the power of substitution and revocation.
ARTICLE II - SHARES
(a) Certificates. Certificates evidencing the ownership of shares of the corporation shall be issued to those entitled to them by transfer or otherwise. Each certificate for shares shall bear a distinguishing number, the signature of the Chairman of the Board or the President or a Vice President and the signature of the Secretary, an Assistant Secretary, the Treasurer, or an Assistant Treasurer of the corporation, and such recitals as may be required by law. The certificates for shares shall be of such tenor and design as the Board of Directors from time to time may adopt.
(b) Transfers. The shares of the corporation shall be assignable and transferable only on the books and records of the corporation by the registered owner, or by the registered owners duly authorized attorney, upon surrender of the certificate duly and properly endorsed with proper evidence of authority to transfer. The corporation shall issue a new certificate for the shares surrendered to the person or persons entitled thereto.
(c) Lost, Stolen or Destroyed Certificates. The holder of any shares in the corporation shall immediately notify the Secretary of any lost, stolen or destroyed certificate, and the corporation may issue a new certificate in the place of any certificate alleged to have been lost, stolen or destroyed. The Board of Directors may, at its discretion, require the owner of a lost, stolen or destroyed certificate or the owners legal representative to give the corporation a bond on such terms and with such sureties as it may direct, to indemnify the corporation against any claim that may be made against it on account of the alleged lost, stolen or destroyed certificate. The Board of Directors may, however, at its discretion, refuse to issue any such new certificate except pursuant to legal proceedings in a court having jurisdiction over such matter pursuant to Ohio law.
ARTICLE III - DIRECTORS
(a) Number and Term. The number of members of the Board of Directors shall be determined pursuant to law, or by resolution of the shareholders entitled to vote, but where said resolution provides for less than three (3) Directors, the number of Directors shall not be less than the number of shareholders. The Directors shall hold office until the expiration of the term for which they were elected and shall continue in office until their respective successors shall have been duly elected and qualified.
(b) Vacancies. A resignation from the Board of Directors shall be deemed to take effect upon its receipt by the Secretary, unless some other time is specified therein. The acceptance of any resignation shall not be necessary to make it effective unless so specified in the resignation. In case of any vacancy in the Board of Directors, the remaining Directors, even though they may be less than a quorum of the entire number of Directors constituting a full
Board, may at any duly convened meeting, except as hereinafter provided, elect a successor to hold office for the unexpired portion of the term of the Director whose place shall be vacant, and until the election and qualification of a successor.
(c) Regular Meetings. Regular meetings of the Board of Directors shall be held monthly on such dates as the Board may designate.
(d) Special Meetings. Special meetings of the Board of Directors shall be called by the Secretary and held at the request of the President or two (2) of the Directors.
(e) Notice of Meetings. The Secretary shall give notice of each meeting of the Board of Directors, whether regular or special, to each member of the Board.
(f) Quorum. A majority of the Directors in office at the time shall constitute a quorum at all meetings thereof.
(g) Place of Meetings. The Board of Directors may hold its meetings at such place or places within or without the State of Ohio as the Board may, from time to time, determine.
(h) Compensation. Directors, as such, shall not receive any stated salary for their services, but, on resolution of the Board, a fixed sum for expenses of attendance, if any, may be allowed for attendance at each meeting, regular or special, provided that nothing herein contained shall be construed to preclude any Director from serving the corporation in any other capacity and receiving compensation therefor. Members of either executive or special committees may be allowed such compensation as the Board of Directors may determine for attending committee meetings.
(i) Liability. The provisions of Section 1701.59(D) of the Ohio Revised Code, or any statute of like tenor or effect which is hereafter enacted, shall not apply in any action brought by or in the right of the corporation against a Director.
ARTICLE IV - ELECTION OF OFFICERS
At the first meeting of the Board of Directors in each year (at which a quorum shall be present) held next after the annual meeting of the shareholders, and at any special meeting for such purpose, as provided in Article III(d), the Board of Directors shall elect the officers of the corporation. It may also appoint an executive committee or other committees and define their powers and duties.
ARTICLE V - OFFICERS
The officers of this corporation shall include a President, a Vice President, a Secretary, a Treasurer, and such other officers as the Board of Directors may, from time to time, elect, all of whom may or may not be Directors. Said officers shall be chosen by the Board of Directors, and shall hold office for one (1) year, or until their successors are elected and qualified.
Any officer or employee elected or appointed by the Board of Directors, other than a Director, may be removed at any time for any reason upon vote of the majority of the whole Board of Directors.
ARTICLE VI - DUTIES OF OFFICERS
(a) President. The President shall preside at all meetings of shareholders and Directors. The President shall exercise, subject to the control of the Board of Directors and the shareholders of the corporation, a general supervision over the affairs of the corporation, and shall perform generally all duties incident to the office and such other duties as may be assigned to the President from time to time by the Board of Directors.
(b) Vice President. The Vice President shall perform all duties of the President in the Presidents absence or during the Presidents inability to act, and shall have such further duties as may be assigned to the Vice President by the Board of Directors.
(c) Secretary. The Secretary shall keep the minutes of all proceedings of the Board of Directors and of the shareholders and make a proper record of same, which shall be attested to by the Secretary, and shall have such further duties as may be assigned to the Secretary by the Board of Directors.
(d) Treasurer. The Treasurer shall have the custody of the funds and securities of the corporation which may come into the Treasurers hands, and shall do with the same as may be ordered by the Board of Directors. When necessary or proper, the Treasurer may endorse on behalf of the corporation, for collection, checks, notes and other obligations. The Treasurer shall deposit the funds of the corporation to its credit in such hands and depositories as the Board of Directors may, from time to time, designate. The Treasurer shall also have such further duties as may be assigned to him by the Board of Directors.
ARTICLE VII - ORDER OF BUSINESS - SHAREHOLDER MEETINGS
1. Call meeting to order.
2. Selection of Chairman and Secretary.
3. Proof of notice of meeting.
4. Roll call, including filing of proxies with the Secretary.
5. Appointment of Tellers.
6. Reading and disposal of previously unapproved minutes.
7. Reports of officers and committees.
8. If annual meeting, or meeting called for that purpose, election of Directors.
9. Unfinished business.
10. New business.
11. Adjournment.
This order may be changed by the affirmative vote of a majority in interest of the shareholders present.
ARTICLE VIII - AMENDMENTS
These Regulations may be adopted, amended or repealed by the affirmative vote of a majority of the shares empowered to vote thereon at any meeting called and held for that purpose, notice of which meeting has been given pursuant to law, or without a meeting by the written assent of the owners of two-thirds of the shares of the corporation entitled to vote thereon.
The undersigned shareholders hereby adopts the foregoing Code of Regulations this 26th day of May 2005.
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SHAREHOLDERS: |
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James H. Frauenberg, as Trustee of |
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the James H. Frauenberg 1998 Trust, |
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dated 01/01/98, as amended |
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Susan D. Rector, as Trustee of |
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the Frauenberg 1998 Descendants Trust, |
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dated 01/01/98, as amended |
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Michael W. Lenhart, as Trustee of |
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the Michael W. Lenhart 1998 Trust, dated |
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01/01/98, as amended |
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Susan D. Rector, as Trustee of |
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the Lenhart 1998 Descendants Trust, dated |
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01/01/98, as amended |
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Chad M. Streff |
Exhibit 3.119
A0658114
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ENDORSED - FILED |
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AMENDED AND RESTATED |
in the office of the Secretary of State |
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ARTICLES OF INCORPORATION |
of the State of California |
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MAR 15 2007 |
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OF |
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FAST CASH, INC. |
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The undersigned certify that:
1. Richard Lake and Lance Solomon are the president and the secretary, respectively, of Fast Cash, Inc., a California corporation.
2. The Articles of Incorporation of this corporation are amended and restated to read as follows:
ARTICLE I
The name of the corporation (the Corporation) is Fast Cash, Inc.
ARTICLE II
The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of the State of California other than the banking business, the trust company business or the practice of a profession permitted to be incorporated by the California Corporations Code.
ARTICLE III
The Corporation is authorized to issue only one class of shares of stock, consisting of Common Stock, without par value, and the total number of shares which the Corporation is authorized to issue is one hundred thousand (100,000).
3. The foregoing amendment and restatement of Articles of Incorporation has been duly approved by the board of directors.
4. The foregoing amendment and restatement of Articles of Incorporation has been duly approved by the required vote of shareholders in accordance with Section 902, California Corporations Code. The total number of outstanding shares of the corporation is 82,400. The number of shares voting in favor of the amendment equaled or exceeded the vote required. The percentage vote required was more then 50%.
We further declare under penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct of our own knowledge.
Date: March 15, 2007 |
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/s/ Richard Lake |
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Richard Lake, President |
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/s/ Lance Solomon |
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Lance Solomon, Secretary |
(Fast Cash, Inc. - A&R Articles of Incorporation |
Exhibit 3.120
AMENDED AND RESTATED BYLAWS
OF
FAST CASH, INC.
(Adopted as of March 15, 2007)
ARTICLE I.
OFFICES
1. PRINCIPAL OFFICES. The Board of Directors shall fix the location of the principal executive office of the corporation at any place within or outside the State of California. If the principal executive office is located outside this state, and the corporation has one or more business offices in this state, the Board of Directors shall likewise fix and designate a principal business office in the State of California.
2. OTHER OFFICES. The Board of Directors may at any time establish branch or subordinate offices at any place or places where the corporation is qualified to do business.
ARTICLE II.
MEETINGS OF SHAREHOLDERS
1. PLACE OF MEETINGS. Meetings of shareholders shall be held at any place within or outside the State of California designated by the Board of Directors. In the absence of any such designation, shareholders meetings shall be held at the principal executive office of the corporation.
2. ANNUAL MEETINGS OF SHAREHOLDERS. The annual meeting of shareholders shall be held each year on a date and at a time designated by the Board of Directors. At each annual meeting directors shall be elected and any other proper business may be transacted.
3. SPECIAL MEETINGS. A special meeting of the shareholders may be called at any time by the Board of Directors, or by the Chairman of the Board, or by the President, or by one or more shareholders holding shares in the aggregate entitled to cast not less than 10% of the votes at any such meeting.
If a special meeting is called by any person or persons other than the Board of Directors, the request shall be in writing, specifying the time of such meeting and the general nature of the business proposed to be transacted, and shall be delivered personally or sent by registered mail or by telegraphic or other facsimile transmission to the Chairman of the Board, the President, any Vice President or the Secretary of the corporation. The officer receiving such request forthwith shall cause notice to be given to the shareholders entitled to vote, in accordance with the provisions of Sections 4 and 5 of this Article II, that a meeting will be held at the time requested by the person or persons calling the meeting, not less than thirty-five (35) nor more than sixty (60) days after the receipt of the request. If the notice is not given within twenty (20) days after receipt of the request, the person or persons requesting the meeting may give the notice. Nothing contained in this paragraph of this Section 3 shall be construed as limiting, fixing or affecting the time when a meeting of shareholders called by action of the Board of Directors may be held.
4. NOTICE OF SHAREHOLDERS MEETINGS. All notices of meetings of shareholders shall be sent or otherwise given in accordance with Section 5 of this Article II not less than ten (10) nor more than sixty (60) days before the date of the meeting being noticed. The notice shall specify the place, date and hour of the meeting and (i) in the case of a special meeting, the general nature of the business to be transacted, or (ii) in the case of the annual meeting those matters which the Board of Directors, at the time of giving the notice, intends to present for action by the shareholders. The notice of any meeting at which directors are to be elected shall include the name of any nominee or nominees which, at the time of the notice, management intends to present for election.
If action is proposed to be taken at any meeting for approval of (i) a contract or transaction in which a director has a direct or indirect financial interest, pursuant to Section 310 of the Corporations Code of California, (ii) an amendment of the articles of incorporation, pursuant to Section 902 of such Code, (iii) a reorganization of the corporation, pursuant to Section 1201 of such Code, (iv) a voluntary dissolution of the corporation, pursuant to Section 1900 of such Code, or (v) a distribution in dissolution other than in accordance with the rights of outstanding preferred shares pursuant to Section 2007 of such Code, the notice shall also state the general nature of such proposal.
5. MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE. Notice of any meeting of shareholders shall be given either personally or by first-class mail or telegraphic or other written communication, charges prepaid, addressed to the shareholder at the address of such shareholder appearing on the books of the corporation or given by the shareholder to the corporation for the purpose of notice. If no such address appears on the corporations books or has been so given, notice shall be deemed to have been given if sent by first-class mail or telegraphic or other written communication to the corporations principal executive office, or if published at least once in a newspaper of general circulation in the county where such office is located. Notice shall be deemed to have been given at the time when delivered personally or deposited in the mail or sent by telegram or other means of written communication.
If any notice addressed to a shareholder at the address of such shareholder appearing on the books of the corporation is returned to the corporation by the United States Postal Service marked to indicate that the United States Postal Service is unable to deliver the notice to the shareholder at such address, all future notices or reports shall be deemed to have been duly given without further mailing if the same shall be available to the shareholder upon written demand of the shareholder at the principal executive office of the corporation for a period of one year from the date of the giving of such notice.
An affidavit of the mailing or other means of giving any notice of any shareholders meeting shall be executed by the Secretary, Assistant Secretary or any transfer agent of the corporation giving such notice, and shall be filed and maintained in the minute book of the corporation.
6. QUORUM. The presence in person or by proxy of the holders of a majority of the shares entitled to vote at any meeting of shareholders shall constitute a quorum for the transaction of business. The shareholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum.
7. ADJOURNED MEETING AND NOTICE THEREOF. Any shareholders meeting, annual or special, whether or not a quorum is present, may be adjourned from time to time by the vote of the majority of the shares represented at such meeting, either in person or by proxy, but in the absence of a quorum, no other business may be transacted at such meeting, except as provided in Section 6 of this Article II.
When any meeting of shareholders, either annual or special, is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken, unless a new record date for the adjourned meeting is fixed, or unless the adjournment is for more than forty-five (45) days from the date set for the original meeting, in which case the Board of Directors shall set a new record date. Notice of any such adjourned meeting, if required, shall be given to each shareholder of record entitled to vote at the adjourned meeting in accordance with the provisions of Sections 4 and 5 of this Article II. At any adjourned meeting the corporation may transact any business which might have been transacted at the original meeting.
8. VOTING. The shareholders entitled to vote at any meeting of shareholders shall be determined in accordance with the provisions of Section 11 of this Article II, subject to the provisions of Sections 702 to 704, inclusive, of the Corporations Code of California (relating to voting shares held by a fiduciary, in the name of a corporation or in joint ownership). Such vote may be by voice vote or by ballot; provided, however, that all elections for directors must be by ballot upon demand by a shareholder at any election and before the voting begins. Any shareholder entitled to vote on any matter (other than the election of directors) may vote part of the shares in favor of the proposal and refrain from voting the remaining shares or vote them against the proposal, but, if the shareholder fails to specify the number of shares such shareholder is voting affirmatively, it will be conclusively presumed that the shareholders approving vote is with respect to all shares such shareholder is entitled to vote. If a quorum is present, the affirmative vote of the majority of the shares represented at the meeting and voting on any matter (other than the election of directors), provided that the shares voting affirmatively must also constitute at least a majority of the required quorum, shall be the act of the shareholders, unless the vote of a greater number or voting by classes is required by the California General Corporation Law or the articles of incorporation.
At a shareholders meeting involving the election of directors, no shareholder shall be entitled to cumulate votes (i.e., cast for any candidate a number of votes greater than the number of the shareholders shares) unless such candidate or candidates names have been placed in nomination prior to commencement of the voting and a shareholder has given notice prior to commencement of the voting of the shareholders intention to cumulate votes. If any shareholder has given such notice, then every shareholder entitled to vote may cumulate such shareholders votes for candidates in nomination and give one candidate a number of votes equal to the number of directors to be elected multiplied by the number of votes to which such shareholders shares are entitled, or distribute the shareholders votes on the same principle among any or all of the candidates, as the shareholder thinks fit. The candidates receiving the highest number of votes, up to the number of directors to be elected, shall be elected.
9. WAIVER OF NOTICE OR CONSENT BY ABSENT SHAREHOLDERS. The transactions of any meeting of shareholders, either annual or special, however called and noticed, and wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present either in person or by proxy, and if, either before or after the meeting, each person entitled to vote, not present in person or by proxy, signs a written waiver of notice or a consent to the holding of the meeting, or an approval of the minutes thereof. The waiver of notice or consent need not specify either the business to be transacted or the purpose of any annual or special meeting of shareholders, except that if action is taken or proposed to be taken for approval of any of those matters specified in the second paragraph of Section 4 of this Article II, the waiver of notice or consent shall state the general nature of such proposal. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting.
Attendance of a person at a meeting shall also constitute a waiver of notice of such meeting, except when the person objects, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened, and except that attendance at a meeting
is not a waiver of any right to object to the consideration of matters not included in the notice of the meeting if such objection is expressly made at the meeting.
10. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING. Any action which may be taken at any annual or special meeting of shareholders may be taken without a meeting and without prior notice, if a consent in writing, setting forth the action so taken, is signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. In the case of election of directors, such consent shall be effective only if signed by the holders of all outstanding shares entitled to vote for the election of directors; provided, however, that a director may be elected at any time to fill a vacancy not created by removal and not filled by the directors by the written consent of the holders of a majority of the outstanding shares entitled to vote for the election of directors. All such consents shall be filed with the Secretary of the corporation and shall be maintained in the corporate records. Any shareholder giving a written consent, or the shareholders proxy holders, or a transferee of the shares or a personal representative of the shareholder or their respective proxy holder, may revoke the consent by a writing received by the Secretary of the corporation prior to the time that written consents of the number of shares required to authorize the proposed action have been filed with the Secretary.
Unless the consents of all shareholders entitled to vote have been solicited in writing, the Secretary shall give prompt notice of any corporate action approved by the shareholders without a meeting by less than unanimous consent, to those shareholders entitled to vote who have not consented in writing. Such notice shall be given in the manner specified in Section 5 of this Article II. In the case of approval of (i) contracts or transactions in which a director has a direct or indirect financial interest, pursuant to Section 310 of the Corporations Code of California, (ii) indemnification of agents of the corporation, pursuant to Section 317 of such Code, (iii) a reorganization of the corporation, pursuant to Section 1201 of such Code, or (iv) a distribution in dissolution other than in accordance with the rights of outstanding preferred shares pursuant to Section 2007 of such Code, such notice shall be given at least ten (10) days before the consummation of any such action authorized by any such approval.
11. RECORD DATE FOR SHAREHOLDER NOTICE, VOTING, AND GIVING CONSENTS. For purposes of determining the shareholders entitled to notice of any meeting or to vote or entitled to give consent to corporate action without a meeting, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty (60) days nor less than ten (10) days prior to the date of any such meeting nor more than sixty (60) days prior to such action without a meeting, and in such case only shareholders of record at the close of business on the date so fixed are entitled to notice and to vote or to give consents, as the case may be, notwithstanding any transfer of any shares on the books of the corporation after the record date fixed as aforesaid, except as otherwise provided in the California General Corporation Law.
If the Board of Directors does not so fix a record date:
(a) The record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the business day next preceding the day on which notice if given or, if notice is waived, at the close of business on the business day next preceding the day on which the meeting is held.
(b) The record date for determining shareholders entitled to give consent to corporate action in writing without a meeting, (i) when no prior action by the Board has been taken, shall be the day on which the first written consent is given, or (ii) when prior action of the Board has been taken, shall be at
the close of business on the day on which the Board adopts the resolution relating thereto, or the sixtieth (60th) day prior to the date of such other action, whichever is later.
12. PROXIES. Every person entitled to vote for directors or on any other matter shall have the right to do so either in person or by one or more agents authorized by a written proxy signed by the person and filed with the Secretary of the corporation. A proxy shall be deemed signed if the shareholders name is placed on the proxy (whether by manual signature, typewriting, telegraphic transmission or otherwise) by the shareholder or the shareholders attorney in fact. A validly executed proxy which does not state that it is irrevocable shall continue in full force and effect unless (i) revoked by the person executing it, prior to the vote pursuant thereto, by a writing delivered to the corporation stating that the proxy is revoked or by a subsequent proxy presented to the meeting and executed by, or attendance at the meeting and voting in person by, the person executing the proxy; or (ii) written notice of the death or incapacity of the maker of such proxy is received by the corporation before the vote pursuant thereto is counted; provided, however, that no such proxy shall be valid after the expiration of eleven (11) months from the date of such proxy, unless otherwise provided in the proxy. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of Section 705(e) and (f) of the Corporations Code of California.
13. INSPECTORS OF ELECTION. Before any meeting of shareholders, the Board of Directors may appoint any persons other than nominees for office to act as inspectors of election at the meeting or its adjournment. If no inspectors of election are so appointed, the chairman of the meeting may, and on the request of any shareholder or a shareholders proxy shall, appoint inspectors of election at the meeting. The number of inspectors shall be either one (l) or three (3). If inspectors are appointed at a meeting on the request of one or more shareholders or proxies, the holders of a majority of shares or their proxies present at the meeting shall determine whether one (l) or three (3) inspectors are to be appointed. If any person appointed as inspector fails to appear or fails or refuses to act, the chairman of the meeting may, and upon the request of any shareholder or a shareholders proxy shall, appoint a person to fill such vacancy.
The duties of these inspectors shall be as follows:
(a) Determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, and the authenticity, validity and effect of proxies;
(b) Receive votes, ballots or consents;
(c) Hear and determine all challenges and questions in any way arising in connection with the right to vote;
(d) Count and tabulate all votes or consents;
(e) Determine when the polls shall close;
(f) Determine the result; and
(g) Do any other acts that may be proper to conduct the election or vote with fairness to all shareholders.
ARTICLE III.
DIRECTORS
1. POWERS. Subject to the provisions of the California General Corporation Law and any limitations in the articles of incorporation and these bylaws relating to action required to be approved by the shareholders or by the outstanding shares, the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the Board of Directors.
Without prejudice to such general powers, but subject to the same limitations, it is hereby expressly declared that the directors shall have the power and authority to:
(a) Select and remove all officers, agents, and employees of the corporation, prescribe such powers and duties for them as may not be inconsistent with law, the articles of incorporation or these bylaws, fix their compensation, and require from them security for faithful service.
(b) Change the principal executive office or the principal business office in the State of California from one location to another; cause the corporation to be qualified to do business in any other state, territory, dependency, or foreign country and conduct business within or outside the State of California; designate any place within or without the State for the holding of any shareholders meeting or meetings, including annual meetings; adopt, make and use a corporate seal, and prescribe the forms of certificates of stock, and alter the form of such seal and of such certificates from time to time as in their judgment they may deem best, provided that such forms shall at all times comply with the provisions of law.
(c) Authorize the issuance of shares of stock of the corporation from time to time, upon such terms as may be lawful, in consideration of money paid, labor done or services actually rendered, debts or securities canceled or tangible or intangible property actually received.
(d) Borrow money and incur indebtedness for the purposes of the corporation, and cause to be executed and delivered therefor, in the corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecations, or other evidences of debt and securities therefor.
2. NUMBER AND QUALIFICATION OF DIRECTORS. The number of directors which shall constitute the board shall be two (2). The exact number of directors shall be established from time to time by resolution of the Board of Directors or by resolution of the shareholders. Directors need not be residents of the State of California.
3. ELECTION AND TERM OF OFFICE OF DIRECTORS. Directors shall be elected at each annual meeting of the shareholders to hold office until the next annual meeting. Each director, including a director elected to fill a vacancy, shall hold office until the expiration of the term for which elected and until a successor has been elected and qualified.
4. VACANCIES. Vacancies in the Board of Directors may be filled by a majority of the remaining directors, though less than a quorum, or by a sole remaining director, except that a vacancy created by the removal of a director by the vote or written consent of the shareholders or by court order may be filled only by the vote of a majority of the shares represented and voting at a duly held meeting at which a quorum is present, or by the written consent of holders of all outstanding shares entitled to vote. Each director so elected shall hold office until the next annual meeting of the shareholders and until a successor has been elected and qualified.
A vacancy or vacancies in the Board of Directors shall be deemed to exist in the case of the death, resignation or removal of any director, or if the Board of Directors by resolution declares vacant the office of a director who has been declared of unsound mind by an order of court or convicted of a felony, or if the authorized number of directors be increased, or if the shareholders fail, at any meeting of shareholders at which any director or directors are elected, to elect the full authorized number of directors to be voted for at that meeting.
The shareholders may elect a director or directors at any time to fill any vacancy or vacancies not filled by the directors, but any such election by written consent, other than to fill a vacancy created by removal, shall require the consent of a majority of the outstanding shares entitled to vote.
Any director may resign upon giving written notice to the Chairman of the Board, the President, the Secretary or the Board of Directors. A resignation shall be effective upon the giving of the notice, unless the notice specifies a later time for its effectiveness. If the resignation of a director is effective at a future time, the Board of Directors may elect a successor to take office when the resignation becomes effective.
No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of his term of office.
5. PLACE OF MEETINGS AND TELEPHONIC MEETINGS. Regular meetings of the Board of Directors may be held at any place within or without the State that has been designated from time to time by resolution of the board. In the absence of such designation, regular meetings shall be held at the principal executive office of the corporation. Special meetings of the board shall be held at any place within or without the State that has been designated in the notice of the meeting or, if not stated in the notice or there is no notice, at the principal executive office of the corporation. Any meeting, regular or special, may be held by conference telephone or similar communication equipment, so long as all directors participating in such meeting can hear one another, and all such directors shall be deemed to be present in person at such meeting.
6. ANNUAL MEETINGS. Immediately following each annual meeting of shareholders, the Board of Directors shall hold a regular meeting for the purpose of organization, any desired election of officers and the transaction of other business. Notice of this meeting shall not be required.
7. OTHER REGULAR MEETINGS. Other regular meetings of the Board of Directors shall be held without call at such time as shall from time to time be fixed by the Board of Directors. Such regular meetings may be held without notice.
8. SPECIAL MEETINGS. Special meetings of the Board of Directors for any purpose or purposes may be called at any time by the Chairman of the Board or the President or any Vice President or the Secretary or any two directors.
Notice of the time and place of special meetings shall be delivered personally or by telephone to each director or sent by first-class mail or telegram, charges prepaid, addressed to each director at his or her address as it is shown upon the records of the corporation. In case such notice is mailed, it shall be deposited in the United States mail at least four (4) days prior to the time of the holding of the meeting. In case such notice is delivered personally, or by telephone or telegram, it shall be delivered personally or by telephone or to the telegraph company at least forty-eight (48) hours prior to the time of the holding of the meeting. Any oral notice given personally or by telephone may be communicated to either the director or to a person at the office of the director who the person giving the
notice has reason to believe will promptly communicate it to the director. The notice need not specify the purpose of the meeting nor the place if the meeting is to be held at the principal executive office of the corporation.
9. DISPENSING WITH NOTICE. The transactions of any meeting of the Board of Directors, however called and noticed or wherever held, shall be as valid as though had at a meeting duly held after regular call and notice if a quorum be present and if, either before or after the meeting, each of the directors not present signs a written waiver of notice, a consent to holding the meeting or an approval of the minutes thereof. The waiver of notice or consent need not specify the purpose of the meeting. All such waivers, consents and approvals shall be filed with the corporate records or made a part of the minutes of the meeting. Notice of a meeting need not be given to any director who attends the meeting without protesting, prior thereto or at its commencement, the lack of notice to such director.
10. QUORUM. A majority of the authorized number of directors shall constitute a quorum for the transaction of business, except to adjourn as hereinafter provided. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors, subject to the provisions of Section 310 of the Corporations Code of California (approval of contracts or transactions in which a director has a direct or indirect material financial interest), Section 311 (appointment of committees), and Section 317 (e) (indemnification of directors). A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for such meeting.
11. ADJOURNMENT. A majority of the directors present, whether or not constituting a quorum, may adjourn any meeting to another time and place.
12. NOTICE OF ADJOURNMENT. Notice of the time and place of holding an adjourned meeting need not be given, unless the meeting is adjourned for more than twenty-four (24) hours, in which case notice of such time and place shall be given prior to the time of the adjourned meeting, in the manner specified in Section 8 of this Article III, to the directors who were not present at the time of the adjournment.
13. ACTION WITHOUT MEETING. Any action required or permitted to be taken by the Board of Directors may be taken without a meeting, if all members of the board shall individually or collectively consent in writing to such action. Such action by written consent shall have the same force and effect as a unanimous vote of the Board of Directors. Such written consent or consents shall be filed with the minutes of the proceedings of the board.
14. FEES AND COMPENSATION OF DIRECTORS. Directors and members of committees may receive such compensation, if any, for their services, and such reimbursement of expenses, as may be fixed or determined by resolution of the Board of Directors. Nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity as an officer, agent, employee, or otherwise, and receiving compensation for such services.
ARTICLE IV.
COMMITTEES
1. COMMITTEES OF DIRECTORS. The Board of Directors may, by resolution adopted by a majority of the authorized number of directors, designate one or more committees, each consisting of two or more directors, to serve at the pleasure of the board. The board may designate one or more directors as alternate members of any committee, who may replace any absent member at any
meeting of the committee. Any such committee, to the extent provided in the resolution of the board, shall have all the authority of the board, except with respect to:
(a) the approval of any action which, under the General Corporation Law of California, also requires shareholders approval or approval of the outstanding shares;
(b) the filling of vacancies on the Board of Directors or in any committee;
(c) the fixing of compensation of the directors for serving on the board or on any committee;
(d) the amendment or repeal of bylaws or the adoption of new bylaws;
(e) the amendment or repeal of any resolution of the Board of Directors which by its express terms is not so amendable or repealable;
(f) a distribution to the shareholders of the corporation, except at a rate or in a periodic amount or within a price range determined by the Board of Directors; or
(g) the appointment of any other committees of the Board of Directors or the members thereof.
2. MEETINGS AND ACTION OF COMMITTEES. Meetings and action of committees shall be governed by, and held and taken in accordance with, the provisions of Article III of these bylaws, Sections 5 (place of meetings), 7 (regular meetings), 8 (special meetings and notice), 9 (dispensing with notice), 10 (quorum), 11 (adjournment), 12 (notice of adjournment) and 13 (action without meeting), with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the Board of Directors and its members, except that the time of regular meetings of committees may be determined by resolution of the Board of Directors as well as the committee, special meetings of committees may also be called by resolution of the Board of Directors and notice of special meetings of committees shall also be given to all alternate members, who shall have the right to attend all meetings of the committee. The Board of Directors may adopt rules for the government of any committee not inconsistent with the provisions of these bylaws.
ARTICLE V.
OFFICERS
1. OFFICERS. The officers of the corporation shall be a President, a Chief Financial Officer, and a Secretary. The corporation may also have, at the discretion of the Board of Directors, a Chairman of the Board, one or more Vice Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers, and such other officers as may be appointed in accordance with the provisions of Section 3 of this Article V. Any number of offices may be held by the same person.
2. ELECTION OF OFFICERS. The officers of the corporation, except such officers as may be appointed in accordance with the provisions of Section 3 of this Article V, shall be chosen by the Board of Directors, and each shall serve at the pleasure of the board, subject to the rights, if any, of an officer under any contract of employment.
3. SUBORDINATE OFFICERS, ETC. The Board of Directors may appoint, and may empower the President to appoint, such other officers as the business of the corporation may require,
each of whom shall hold office for such period, have such authority and perform such duties as are provided in the bylaws or as the Board of Directors may from time to time determine.
4. REMOVAL AND RESIGNATION OF OFFICERS. Subject to the rights, if any, of an officer under any contract of employment, any officer may be removed, either with or without cause, by the Board of Directors, at any regular or special meeting thereof, or, except in case of an officer chosen by the Board of Directors, by any officer upon whom such power of removal may be conferred by the Board of Directors.
Any officer may resign at any time by giving written notice to the corporation. Any such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Any such resignation is without prejudice to the rights, if any, of the corporation under any contract to which the officer is a party.
5. VACANCIES IN OFFICES. A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in these bylaws for regular appointments to such office.
6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if such an officer be elected, shall, if present, preside at all meetings of the Board of Directors and exercise and perform such other powers and duties as may be from time to time assigned to him by the Board of Directors or prescribed by the bylaws. If there is no President, the Chairman of the Board shall in addition be the Chief Executive Officer of the corporation and shall have the powers and duties prescribed in Section 7 of this Article V.
7. PRESIDENT. Subject to such supervisory powers, if any, as may be given by the Board of Directors to the Chairman of the Board, if there be such an officer, the President shall be the Chief Executive Officer of the corporation and shall, subject to the control of the Board of Directors, have general supervision, direction and control of the business and the officers of the corporation. He shall preside at all meetings of the shareholders and, in the absence of the Chairman of the Board, or if there be none, at all meetings of the Board of Directors. He shall have the general powers and duties of management usually vested in the office of President of a corporation, and shall have such other powers and duties as may be prescribed by the Board of Directors or the bylaws.
8. VICE PRESIDENTS. In the absence or disability of the President, the Vice Presidents, if any, in order of their rank as fixed by the Board of Directors or, if not ranked, a Vice President designated by the Board of Directors, shall perform all the duties of the President, and when so acting shall have all the powers of, and be subject to all the restrictions upon, the President. The Vice Presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the Board of Directors or the bylaws, the President or the Chairman of the Board if there is no President.
9. SECRETARY. The Secretary shall keep or cause to be kept, at the principal executive office or such other place as the Board of Directors may order, a book of minutes of all meetings and actions of directors, committees of directors and shareholders, with the time and place of holding, whether regular or special, and, if special, how authorized, the notice thereof given, the names of those present at directors and committee meetings, the number of shares present or represented at shareholders meetings, and the proceedings thereof.
The Secretary shall keep, or cause to be kept, at the principal executive office or at the office of the corporations transfer agent or registrar, as determined by resolution of the Board of Directors, a share register, or a duplicate share register, showing the names of all shareholders and their addresses, the number and classes of shares held by each, the number and date of certificates issued for the same, and the number and date of cancellation of every certificate surrendered for cancellation.
The Secretary shall give, or cause to be given, notice of all meetings of the shareholders and of the Board of Directors required by the bylaws or by law to be given, and he shall keep the seal of the corporation, if one be adopted, in safe custody, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or by the bylaws.
10. TREASURER. The Treasurer shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, retained earnings and shares. The books of account shall be open at all reasonable times to inspection by any director.
The Treasurer shall deposit all moneys and other valuables in the name and to the credit of the corporation with such depositories as may be designated by the Board of Directors. He shall disburse the funds of the corporation as may be ordered by the Board of Directors, shall render to the President and directors, whenever they request it, an account of all of his transactions as Treasurer and of the financial condition of the corporation, and shall have other powers and perform such other duties as may be prescribed by the Board of Directors or the bylaws.
ARTICLE VI.
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES
AND OTHER AGENTS
The corporation shall, to the maximum extent permitted by the General Corporation Law of California, indemnify each of its directors and officers against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any proceeding arising by reason of the fact any such person is or was a director or officer of the corporation and shall advance to such director or officer expenses incurred in defending any such proceeding to the maximum extent permitted by such law. For purposes of this Article VI, a director or officer of the corporation includes any person who is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, or other enterprise, or was a director or officer of a corporation which was a predecessor corporation of the corporation or of another enterprise at the request of such predecessor corporation. The Board of Directors may in its discretion provide by resolution for such indemnification of, or advance of expenses to, other agents of the corporation, and likewise may refuse to provide for such indemnification or advance of expenses except to the extent such indemnification is mandatory under the California General Corporation law.
ARTICLE VII.
RECORDS AND REPORTS
1. MAINTENANCE AND INSPECTION OF SHARE REGISTER. The corporation shall keep at its principal executive office, or at the office of its transfer agent or registrar, if either be appointed and as determined by resolution of the Board of Directors, a record of its shareholders, giving the names and addresses of all shareholders and the number and class of shares held by each shareholder.
A shareholder or shareholders of the corporation holding at least five percent (5%) in the aggregate of the outstanding voting shares of the corporation may (i) inspect and copy the records of shareholders names and addresses and shareholdings during usual business hours upon five (5) business days prior written demand upon the corporation, and/or (ii) obtain from the transfer agent of the corporation, upon written demand and upon the tender of such transfer agents usual charges for such list, a list of the shareholders names and addresses, who are entitled to vote for the election of directors, and their shareholdings, as of the most recent record date for which such list has been compiled or as of a date specified by the shareholder subsequent to the date of demand. Such list shall be made available to such shareholder or shareholders by the transfer agent on or before the later of five (5) business days after the demand is received or the date specified therein as the date as of which the list is to be compiled. The record of shareholders shall also be open to inspection upon the written demand of any shareholder or holder of a voting trust certificate, at any time during usual business hours, for a purpose reasonably related to such holders interests as a shareholder or as the holder of a voting trust certificate. Any inspection and copying under this Section l may be made in person or by an agent or attorney of the shareholder or holder of a voting trust certificate making such demand.
2. MAINTENANCE AND INSPECTION OF BYLAWS. The corporation shall keep at its principal executive office, or if its principal executive office is not in the State of California at its principal business office in this state, the original or a copy of the bylaws as amended to date, which shall be open to inspection by the shareholders at all reasonable times during office hours. If the principal executive office of the corporation is outside this state and the corporation has no principal business office in this state, the Secretary shall, upon the written request of any shareholder, furnish to such shareholder a copy of the bylaws as amended to date.
3. MAINTENANCE AND INSPECTION OF OTHER CORPORATE RECORDS. The accounting books and records and minutes of proceedings of the shareholders and the Board of Directors and any committee or committees of the Board of Directors shall be kept at such place or places designated by the Board of Directors, or, in the absence of such designation, at the principal executive office of the corporation. The minutes shall be kept in written form and the accounting books and records shall be kept either in written form or in any other form capable of being converted into written form. Such minutes and accounting books and records shall be open to inspection upon the written demand of any shareholder or holder of a voting trust certificate, at any reasonable time during usual business hours, for a purpose reasonably related to such holders interests as a shareholder or as the holder of a voting trust certificate. Such inspection may be made in person or by an agent or attorney, and shall include the right to copy and make extracts. The foregoing rights of inspection shall extend to the records of each subsidiary corporation of the corporation.
4. INSPECTION BY DIRECTORS. Every director shall have the absolute right at any reasonable time to inspect all books, records and documents of every kind and the physical properties of the corporation and each of its subsidiary corporations. Such inspection by a director may be made in person or by agent or attorney and the right of inspection includes the right to copy and make extracts.
5. ANNUAL REPORT TO SHAREHOLDERS. The annual report to shareholders referred to in Section 1501 of the General Corporation Law is expressly dispensed with, but nothing herein shall be interpreted as prohibiting the Board of Directors from issuing annual or other periodic reports to the shareholders of the corporations as they deem appropriate.
6. FINANCIAL STATEMENTS. A copy of any annual financial statement and any income statement of the corporation for each quarterly period of each fiscal year, and any accompanying balance sheet of the corporation as of the end of each such period, that has been prepared by the corporation shall be kept on file in the principal executive office of the corporation for twelve (12)
months and each such statement shall be exhibited at all reasonable times to any shareholder demanding an examination of any such statement or a copy shall be mailed to any such shareholder.
If the corporation has not sent to the shareholders an annual report for the last fiscal year, a balance sheet as of the end of such fiscal year and an income statement and statement of changes in financial position for such fiscal year shall, upon the written request of any shareholder made more than one hundred twenty (120) days after the close of such fiscal year, be delivered or mailed to such shareholder within thirty (30) days after such request.
If a shareholder or shareholders holding at least five percent (5%) of the outstanding shares of any class of stock of the corporation make a written request to the corporation for an income statement of the corporation for the three-month, six-month or nine-month period of the current fiscal year ended more than thirty (30) days prior to the date of the request, and a balance sheet of the corporation as of the end of such period, the Treasurer shall cause such statement to be prepared, if not already prepared, and shall deliver personally or mail such statement or statements to the person making the request within thirty (30) days after the receipt of such request.
The corporation also shall, upon the written request of any shareholder, mail to the shareholder a copy of the last annual, semi-annual or quarterly income statement which it has prepared and a balance sheet as of the end of such period.
The quarterly income statements and balance sheets referred to in this section shall be accompanied by the report thereon, if any, of any independent accountants engaged by the corporation or the certificate of an authorized officer of the corporation that such financial statements were prepared without audit from the books and records of the corporation.
7. ANNUAL STATEMENT OF GENERAL INFORMATION. The corporation shall each year during the calendar month in which its articles of incorporation were originally filed with the California Secretary of State, or at any time during the immediately preceding five (5) calendar months, file with the Secretary of State of the State of California, on the prescribed form, a statement setting forth the names and complete business or residence addresses of all incumbent directors, the number of vacancies on the Board of Directors, if any, the names and complete business or residence addresses of the Chief Executive Officer, Secretary and Treasurer, the street address of its principal executive office or principal business office in this state and the general type of business constituting the principal business activity of the corporation, together with a designation of the agent of the corporation for the purpose of service of process, all in compliance with Section 1502 of the Corporations Code of California.
ARTICLE VIII.
GENERAL CORPORATE MATTERS
1. RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING. For purposes of determining the shareholders entitled to receive payment of any dividend or other distribution or allotment of any rights or entitled to exercise any rights in respect of any other lawful action, (other than action by shareholders by written consent without a meeting) the Board of Directors may fix, in advance, a record date, which shall not be more than sixty (60) days prior to any such action, and in such case only shareholders of record on the date so fixed are entitled to receive the dividend, distribution or allotment of rights or to exercise the rights, as the case may be, notwithstanding any transfer of any shares on the books of the corporation after the record date fixed as aforesaid, except as otherwise provided in the California General Corporation Law.
If the Board of Directors does not so fix a record date, the record date for determining shareholders for any such purpose shall be at the close of business on the day on which the board adopts the resolution relating thereto, or the sixtieth (60th) day prior to the date of such action, whichever is later.
2. CHECKS, DRAFTS, EVIDENCES OF INDEBTEDNESS. All checks, drafts or other orders for payment of money, notes or other evidences of indebtedness, issued in the name of or payable to the corporation, shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by resolution of the Board of Directors.
3. CORPORATE CONTRACTS AND INSTRUMENTS; HOW EXECUTED. The Board of Directors, except as otherwise provided in these bylaws, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances; and, unless so authorized or ratified by the Board of Directors or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or to any amount.
4. CERTIFICATES FOR SHARES. A certificate or certificates for shares of the capital stock of the corporation shall be issued to each shareholder when any such shares are fully paid, and the Board of Directors may authorize the issuance of certificates or shares as partly paid provided that such certificates shall state the amount of the consideration to be paid therefor and the amount paid thereon. All certificates shall be signed in the name of the corporation by the Chairman of the Board or Vice Chairman of the Board or the President or Vice President and by the Treasurer or an Assistant Treasurer or the Secretary or any Assistant Secretary, certifying the number of shares and the class or series of shares owned by the shareholder. Any or all of the signatures on the certificate may be facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if such person were an officer, transfer agent or registrar at the date of issue.
5. LOST CERTIFICATES. Except as hereinafter in this Section 5 provided, no new certificates for shares shall be issued in lieu of an old certificate unless the latter is surrendered to the corporation and canceled at the same time. The Board of Directors may in case any share certificate or certificate for any other security is lost, stolen or destroyed, authorize the issuance of a new certificate in lieu thereof, upon such terms and conditions as the board may require, including provision for indemnification of the corporation secured by a bond or other adequate security sufficient to protect the corporation against any claim that may be made against it, including any expense or liability, on account of the alleged loss, theft or destruction of such certificate or the issuance of such new certificate.
6. REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The Chairman of the Board, the President, or any Vice President, or any other person authorized by resolution of the Board of Directors by any of the foregoing designated officers, is authorized to vote on behalf of the corporation any and all shares of any other corporation or corporations, foreign or domestic, standing in the name of the corporation. The authority herein granted to said officers to vote or represent on behalf of the corporation any and all shares held by the corporation in any other corporation or corporations may be exercised by any such officer in person or by any person authorized to do so by proxy duly executed by said officer.
ARTICLE IX.
AMENDMENTS
1. AMENDMENT BY SHAREHOLDERS. New bylaws may be adopted or these bylaws may be amended or repealed by the vote or written consent of holders of a majority of the outstanding shares entitled to vote; provided, however, that if the articles of incorporation of the corporation set forth the number of authorized directors of the corporation, the authorized number of directors may be changed only by an amendment of the articles of incorporation.
2. AMENDMENT BY DIRECTORS. Subject to the rights of the shareholders as provided in Section 1 of this Article IX, bylaws, other than a bylaw or an amendment thereof changing the authorized number of directors, may be adopted, amended or repealed by the Board of Directors.
ARTICLE X.
GENERAL
1. GOVERNING LAW. This corporation is organized under the provisions of the California General Corporation Law (Corporations Code Sections 100-2319) as in effect on the date of filing of its original articles of incorporation, namely August 2, 1984. Upon such filing the California Secretary of State assigned the following corporation number to this corporation: C1253077. The corporate affairs of this corporation shall be governed by and conducted in accordance with the provisions of the California General Corporation Law, as the same presently exist and are from time to time hereafter amended or superseded, except in those instances where the articles of incorporation or bylaws of this corporation, now or through amendment hereafter, may adopt alternative rules which are permissible under the California General Corporation Law. Any provision (or portion thereof) in these bylaws which is not permissible under the California General Corporation Law or is inconsistent with the articles of incorporation of this corporation (as they may from time to time be amended and supplemented) is void, but the balance of these bylaws shall nevertheless be valid and effective.
2. CONSTRUCTION AND DEFINITIONS. Unless the context requires otherwise, the general provisions, rules of construction, and definitions in the California General Corporation Law shall govern the construction of these bylaws. Without limiting the generality of the foregoing, the singular number includes the plural, the plural number includes the singular, and the term person includes both a corporation and a natural person.
TABLE OF CONTENTS
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Page | |
ARTICLE I. OFFICES |
1 | |
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Section 1. PRINCIPAL OFFICES |
1 |
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Section 2. OTHER OFFICES |
1 |
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ARTICLE II. MEETINGS OF SHAREHOLDERS |
1 | |
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Section 1. PLACE OF MEETINGS |
1 |
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Section 2. ANNUAL MEETINGS OF SHAREHOLDERS |
1 |
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Section 3. SPECIAL MEETINGS |
1 |
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Section 4. NOTICE OF SHAREHOLDERS MEETINGS |
2 |
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Section 5. MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE |
2 |
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Section 6. QUORUM |
2 |
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Section 7. ADJOURNED MEETING AND NOTICE THEREOF |
2 |
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Section 8. VOTING |
3 |
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Section 9. WAIVER OF NOTICE OR CONSENT BY ABSENT SHAREHOLDERS |
3 |
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Section 10. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING |
4 |
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Section 11. RECORD DATE FOR SHAREHOLDER NOTICE, VOTING, AND GIVING CONSENTS |
4 |
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Section 12. PROXIES |
5 |
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Section 13. INSPECTORS OF ELECTION |
5 |
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ARTICLE III. DIRECTORS |
6 | |
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Section 1. POWERS |
6 |
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Section 2. NUMBER AND QUALIFICATION OF DIRECTORS |
6 |
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Section 3. ELECTION AND TERM OF OFFICE OF DIRECTORS |
6 |
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Section 4. VACANCIES |
6 |
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Section 5. PLACE OF MEETINGS AND TELEPHONIC MEETINGS |
7 |
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Section 6. ANNUAL MEETINGS |
7 |
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Section 7. OTHER REGULAR MEETINGS |
7 |
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Section 8. SPECIAL MEETINGS |
7 |
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Section 9. DISPENSING WITH NOTICE |
8 |
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Section 10. QUORUM |
8 |
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Section 11. ADJOURNMENT |
8 |
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Section 12. NOTICE OF ADJOURNMENT |
8 |
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Section 13. ACTION WITHOUT MEETING |
8 |
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Section 14. FEES AND COMPENSATION OF DIRECTORS |
8 |
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ARTICLE IV. COMMITTEES |
10 | |
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Section 1. COMMITTEES OF DIRECTORS |
8 |
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Section 2. MEETINGS AND ACTION OF COMMITTEES |
9 |
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ARTICLE V. OFFICERS |
9 | |
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Section 1. OFFICERS |
9 |
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Section 2. ELECTION OF OFFICERS |
9 |
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Section 3. SUBORDINATE OFFICERS, ETC. |
9 |
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Section 4. REMOVAL AND RESIGNATION OF OFFICERS |
10 |
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Section 5. VACANCIES IN OFFICES |
10 |
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Section 6. CHAIRMAN OF THE BOARD |
10 |
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Section 7. PRESIDENT |
10 |
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Section 8. VICE PRESIDENTS |
10 |
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Section 9. SECRETARY |
10 |
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Section 10. TREASURER |
11 |
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ARTICLE VI. INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND OTHER AGENTS |
11 | |
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ARTICLE VII. RECORDS AND REPORTS |
11 | |
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Section 1. MAINTENANCE AND INSPECTION OF SHARE REGISTER |
11 |
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Section 2. MAINTENANCE AND INSPECTION OF BYLAWS |
12 |
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Section 3. MAINTENANCE AND INSPECTION OF OTHER CORPORATE RECORDS |
12 |
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Section 4. INSPECTION BY DIRECTORS |
12 |
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Section 5. ANNUAL REPORT TO SHAREHOLDERS |
12 |
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Section 6. FINANCIAL STATEMENTS |
12 |
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Section 7. ANNUAL STATEMENT OF GENERAL INFORMATION |
13 |
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ARTICLE VIII. GENERAL CORPORATE MATTERS |
13 | |
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Section 1. RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING |
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Section 2. CHECKS, DRAFTS, EVIDENCES OF INDEBTEDNESS |
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Section 3. CORPORATE CONTRACTS AND INSTRUMENTS; HOW EXECUTED |
14 |
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Section 4. CERTIFICATES FOR SHARES |
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Section 5. LOST CERTIFICATES |
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Section 6. REPRESENTATION OF SHARES OF OTHER CORPORATIONS |
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ARTICLE IX. AMENDMENTS |
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Section 1. AMENDMENT BY SHAREHOLDERS |
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Section 2. AMENDMENT BY DIRECTORS |
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ARTICLE X. GENERAL |
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Section 1. GOVERNING LAW |
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Section 2. CONSTRUCTION AND DEFINITIONS |
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Exhibit 3.121
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State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 11:37 AM 10/13/2009 |
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FILED 11:30 AM 10/13/2009 |
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SRV 090929907 - 4741200 FILE |
STATE of DELAWARE
LIMITED LIABILITY COMPANY
CERTIFICATE of FORMATION
First: The name of the limited liability company is First Virginia Credit Solutions, LLC
Second: The address of its registered office in the State of Delaware is 2711 Centerville Road, Suite 400 in the City of Wilmington. Zip code 19808. The name of its Registered agent at such address is Corporation Service Company
Third: (Use this paragraph only if the company is to have a specific effective date of dissolution: The latest date on which the limited liability company is to dissolve is .)
Fourth: (Insert any other matters the members determine to include herein.)
In Witness Whereof, the undersigned have executed this Certificate of Formation this 12th day of October, 2009.
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By: |
/s/ Heidi Bowman |
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Authorized Person (s) |
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Name: |
Heidi Bowman |
Exhibit 3.122
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
FIRST VIRGINIA CREDIT SOLUTIONS, LLC
a Delaware Limited Liability Company
Dated as of April 20, 2012
THE MEMBERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
FIRST VIRGINIA CREDIT SOLUTIONS, LLC
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of First Virginia Credit Solutions, LLC (the Company) is made, adopted and entered into effective as of April 20, 2012, by CheckSmart Financial Company, a Delaware corporation, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Limited Liability Company Agreement of First Virginia Credit Solutions, LLC, effective on or around October 13, 2009 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 18 of the Delaware Corporation Laws Annotated (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Delaware on October 13, 2009. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in a limited liability company agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is First Virginia Credit Solutions, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 7001 Post Road, Suite 200, Dublin, Ohio 43016. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Delaware in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Delaware in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Limited Liability Company Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means CheckSmart Financial Company, a Delaware corporation, or any Person that acquires all of the equity interests of the Company from CheckSmart Financial Company.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST
The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto, including, without limitation, all decisions required or permitted to be made by the Sole Member under this Agreement and all decisions required or permitted to be made by the Company as a member, partner or other beneficial owner of any other Person. Notwithstanding the foregoing or anything in this Agreement to the contrary, the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take.
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager or Officer). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation
or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be five (5) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure
of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 18-303(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, nor the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, director or stockholder of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the Delaware General Corporation Law as if the Company were a Delaware corporation, as the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the Delaware General Corporation Law as if the Company were a Delaware corporation, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, director, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such
suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Certificate of Formation, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members directors, officers or stockholders, or a Manager, an Officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 18-304 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
*** Remainder of page intentionally left blank ***
Exhibit 3.123
State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 02:36 PM 03/26/2009 |
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FILED 02:02 PM 03/26/2009 |
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illegible 090305392 - 4669767 FILE |
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STATE of DELAWARE
LIMITED LIABILITY COMPANY
CERTIFICATE of FORMATION
First: The name of the limited liability company is First Virginia Financial Services, LLC
Second: The address of its registered office in the State of Delaware is 2711 Centerville Road, Suite 400 in the City of Wilmington. Zip code 19808. The name of its Registered agent at such address is Corporation Service Company
Third: (Use this paragraph only if the company is to have a specific effective date of dissolution: The latest date on which the limited liability company is to dissolve is .)
Fourth: (Insert any other matters the members determine to include herein.)
In Witness Whereof, the undersigned have executed this Certificate of Formation this 26th day of March, 2009.
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By: |
/s/ Heidi Bowman |
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Authorized Person (s) |
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Name: |
Heidi Bowman |
Exhibit 3.124
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
FIRST VIRGINIA FINANCIAL SERVICES, LLC
a Delaware Limited Liability Company
Dated as of April 20, 2012
THE MEMBERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
FIRST VIRGINIA FINANCIAL SERVICES, LLC
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of First Virginia Financial Services, LLC (the Company) is made, adopted and entered into effective as of April 20, 2012, by CheckSmart Financial Company, a Delaware corporation, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Limited Liability Company Agreement of First Virginia Financial Services, LLC, effective as of March 19, 2009 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 18 of the Delaware Corporation Laws Annotated (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Delaware on March 26, 2009. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in a limited liability company agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is First Virginia Financial Services, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 7001 Post Road, Suite 200, Dublin, Ohio 43016. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Delaware in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Delaware in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Limited Liability Company Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means CheckSmart Financial Company, a Delaware corporation, or any Person that acquires all of the equity interests of the Company from CheckSmart Financial Company.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST
The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto, including, without limitation, all decisions required or permitted to be made by the Sole Member under this Agreement and all decisions required or permitted to be made by the Company as a member, partner or other beneficial owner of any other Person. Notwithstanding the foregoing or anything in this Agreement to the contrary, the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take.
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager or Officer). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation
or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be five (5) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure
of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 18-303(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, nor the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, director or stockholder of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the Delaware General Corporation Law as if the Company were a Delaware corporation, as the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the Delaware General Corporation Law as if the Company were a Delaware corporation, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, director, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such
suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Certificate of Formation, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members directors, officers or stockholders, or a Manager, an Officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 18-304 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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Exhibit 3.125
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05301-1471 |
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Approved SSG |
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Date:10-19-95 |
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Fee $85 |
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95102005701 |
ARTICLES OF ORGANIZATION
(Under Section 1705.04 of the Ohio Revised Code)
Limited Liability Company
The undersigned, desiring to form a limited liability company, under Chapter 1705 of the Ohio Revised Code, do hereby state the following:
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The name of said limited liability company shall be Hoosier Check Cashing of Ohio, Ltd | ||
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SECOND: |
This limited liability company shall exist for a period of perpetual duration | ||
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THIRD: |
The address to which interested persons may direct requests for copies of any operating agreement and any bylaws of this limited liability company is: | ||
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6321 Irelan Place | |
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Dublin, Ohio 43017 | |
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Please check this box if additional provisions are attached hereto | ||
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Provisions attached hereto are incorporated herein and made a part of these articles of organization. | ||
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IN WITNESS WHEREOF, we have hereunto subscribed our names, this 3rd day of October, 1995. | ||
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Signed: |
/s/ James H. Frauenberg |
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James H. Frauenberg |
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Signed: |
/s/ Michael W. Lenhart |
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Michael W. Lenhart |
Exhibit 3.126
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
HOOSIER CHECK CASHING OF OHIO, LTD.
an Ohio Limited Liability Company
Dated as of April 20, 2012
THE MEMBERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
HOOSIER CHECK CASHING OF OHIO, LTD.
This AMENDED AND RESTATED OPERATING AGREEMENT (this Agreement) of Hoosier Check Cashing of Ohio, Ltd. (the Company) is made, adopted and entered into effective as of April 20, 2012, by CheckSmart Financial Company, a Delaware corporation, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Declaration of Sole Member of Hoosier Check Cashing of Ohio, Ltd., effective on or around October 19, 1995 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 1705 of the Ohio Revised Code (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Articles of Organization of the Company (the Articles of Organization) were filed with the Secretary of State of Ohio on October 19, 1995. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in an operating agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Hoosier Check Cashing of Ohio, Ltd. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 7001 Post Road, Suite 200, Dublin, Ohio 43016. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Articles of Organization in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Articles of Organization have been filed in the office of the Secretary of State of Ohio in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Ohio.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Ohio in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Ohio shall be as set forth in the Articles of Organization. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Ohio shall be as set forth in the Articles of Organization. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Operating Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Articles of Organization has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means CheckSmart Financial Company, a Delaware corporation, or any Person that acquires all of the equity interests of the Company from CheckSmart Financial Company.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST
The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto, including, without limitation, all decisions required or permitted to be made by the Sole Member under this Agreement and all decisions required or permitted to be made by the Company as a member, partner or other beneficial owner of any other Person. Notwithstanding the foregoing or anything in this Agreement to the contrary, the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take.
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager or Officer). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation
or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be five (5) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the
Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Sections 1705.48(A) and (B) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, nor the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, director or stockholder of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the LLC Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income
Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the LLC Law, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, director, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the LLC Law. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the LLC Law, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Articles of Organization, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members directors, officers or stockholders, or a Manager, an Officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the
provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Sections 1705.15(C) and (D) of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Articles of Organization, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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Exhibit 3.127
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ARTICLES OF AMENDMENT |
|
ARTICLES OF ORGANIZATION |
Pursuant to the provisions of § 10-12-11 of the Alabama Limited Liability Company Act, the undersigned limited liability company executes these Articles of Amendment to its Articles of Organization:
FIRST The name of the limited liability company is INSIGHT CAPITAL, LLC (the Company).
SECOND The Articles of Organization of the Company were filed in the office of the Judge of Probate of Jefferson County, Alabama on October 2, 2003.
THIRD Article V of the Articles of Organization of the Company is hereby amended in its entirety to read as follows:
ARTICLE V
The name and mailing address of the initial members of the Company are as follows:
NAME |
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MAILING ADDRESS |
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Jeff Smith |
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316 Lapiaya Place |
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Homewood, Alabama 35209 |
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Bill I. Smith |
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551 Rutherford Circle |
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Birmingham, Alabama 35206 |
The name and address of the sole current member of the Company is Checksmart Financial Company, 7001 Post Road, Dublin, Ohio 43016.
FOURTH Article IX of the Articles of Organization of the Company is hereby amended in its entirety to read as follows:
ARTICLE IX
The Company shall be managed by one or more managers. The name and mailing address of the initial managers are as follows:
NAME |
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MAILING ADDRESS |
|
|
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Jeff Smith |
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316 Lapiaya Place |
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|
Homewood, Alabama 35209 |
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Bill I. Smith |
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551 Rutherford Circle |
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Birmingham, Alabama 35206 |
The name and mailing address of the current managers who are to serve as managers effective March 1, 2010, until their successors are elected and begin serving are as follows:
NAME |
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MAILING ADDRESS |
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|
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William E. Saunders |
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7001 Post Road, Suite 200 |
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|
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Kyle F. Hanson |
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7001 Post Road, Suite 200 |
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|
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Bridgette C. Roman |
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7001 Post Road, Suite 200 |
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Chad Streff |
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7001 Post Road, Suite 200 |
IN WITNESS WHEREOF, the undersigned member of the Company has executed these Articles of Amendment to the Articles of Organization of the Company as of the 1st day of March, 2010.
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CHECKSMART FINANCIAL CORPORATION | ||
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| ||
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By: |
[illegible] | |
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Print Name: |
[illegible] | |
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| |
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Title: |
Asst Secretary | |
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20100617000650660 |
2/2 |
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Bk: LR201005 Pg:7342 | |
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Jefferson County, Alabama | |
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06/17/2010 02:45:45 PM PAMEND | |
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Fee - $11.00 | |
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| |
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Total of Fees and Taxes-$11.00 | |
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JCOCKRELL |
STATE OF ALABAMA |
) |
2 0 0 J I 5 / 1 8 1 4 |
COUNTY OF JEFFERSON |
) |
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ARTICLES OF ORGANIZATION
OF
INSIGHT CAPITAL, LLC
The undersigned, for the purpose of forming a limited liability company under Chapter 12 of the Code of Alabama (1975), as amended (the Alabama limited liability company Act), here by file the following Articles of Organization with the probate judge of the county in which the initial registered agent of the limited liability company will be located and affirm that the facts stated in these Articles of Organization are true and correct.
ARTICLE I
The name of the limited liability company is INSIGHT CAPITAL., LLC therematter referred to as the Company).
ARTICLE II
The period of duration of the Company shall be from the date of filing of these Articles of Organization with the Office of the Probate Judge for Jefferson County, Alabama until the first occur of the following:
(a) Dissolution of the Company pursuant to the laws of the state of Alabama on the Operating Agreement of the Company, as in effect from time to time; or
(b) Upon the written unanimous consent of all the members of the Company.
ARTICLE III
The purpose for which the Company is organized is to engage in the transaction of all lawful business for which limited liability companies may be organized under the laws of the State of Alabama.
ARTICLE IV
The location and mailing address of the initial registered office of the Company shall be 2239 Bessemer Road, Birmingham. Alabama 35208 The initial registered agent for service of process at the foregoing address shall be Jeff Smith
ARTICLE V
The name and mailing address of the initial members of the Company are as follows:
NAME |
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MAILING ADDRESS |
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Jeff Smith |
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316 Laplaya Place |
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Homewood, Alabama 35209 |
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Bill I. Smith |
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551 Rutherford Circle |
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Birmingham, Alabama 35206 |
ARTICLE VI
The name and mailing address of the Organizer of the Company is George M. Vaugbn. S. Riverchase Ridge, Suite 100, Birmingham, Alabama 35244.
ARTICLE VII
The members of the Company shall have the right to admit additional members to the company pursuant to the terms and provisions of the Operating Agreement of the Company.
ARTICLE VIII
The members of the Company shall have the right to continue the business of the Company upon the death, retirement, resignation, expulsion, bankruptcy or dissolution of a member or the occurrence of any other event which terminates the continued membership of a member of the Company if there is at least one remaining member.
ARTICLE IX
The Company shall be managed by one or more managers The name and mailing address of the managers who are to serve as managers until their successors are elected and begin serving are as follows:
NAME |
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MAILING ADDRESS |
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|
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Jeff Smith |
|
316 Lapiaya Place |
|
|
Homewood, Alabama 35209 |
|
|
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Bill I. Smith |
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551 Rutherford Circle |
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Birmingham, Alabama 35206 |
ARTICLE X
The members of the Company shall have no liability for any debt, obligation, or liability of the Company, as provided in the Alabama Limited Liability Company Act.
IN WITNESS WHEREOF, the undersigned, constituting the Organizer of the Company, has executed these Articles of Organization this the 18th day of September, 2003.
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[illegible] |
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George M. Vaughn, Organizer |
This instrument prepared by:
George M. Vaughn, Esq.
Paden & Paden
5 Riverchase Ridge, Suite 100
Bimingham, Alabama 35244
(205)987-7210
|
Exhibit 3.128
SECOND AMENDED AND RESTATED
OPERATING AGREEMENT
OF
INSIGHT CAPITAL, LLC
an Alabama Limited Liability Company
Dated as of April 20, 2012
THE MEMBERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
SECOND AMENDED AND RESTATED
OPERATING AGREEMENT
OF
INSIGHT CAPITAL, LLC
This SECOND AMENDED AND RESTATED OPERATING AGREEMENT (this Agreement) of Insight Capital, LLC (the Company) is made, adopted and entered into effective as of April 20, 2012, by CheckSmart Financial Company, a Delaware corporation, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Amended and Restated Operating Agreement for Insight Capital, LLC, effective as of March 1, 2010 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 5 of Title 10A of the Alabama Limited Liability Company Law (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Alabama on October 2, 2003. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in an operating agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is Insight Capital, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 7001 Post Road, Suite 200, Dublin, Ohio 43016. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Alabama in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Alabama.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Alabama in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Alabama shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Alabama shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Second Amended and Restated Operating Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means CheckSmart Financial Company, a Delaware corporation, or any Person that acquires all of the equity interests of the Company from CheckSmart Financial Company.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST
The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto, including, without limitation, all decisions required or permitted to be made by the Sole Member under this Agreement and all decisions required or permitted to be made by the Company as a member, partner or other beneficial owner of any other Person. Notwithstanding the foregoing or anything in this Agreement to the contrary, the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take.
(b) Unless authorized by the Managers (in writing or otherwise), no individual Manager shall have the power or authority to bind the Company to any obligation or liability; provided, however, that any one Manager shall have the authority to bind the Company without any specific action of the Managers as a whole with respect to any agreement or instrument between the Company and the Republic Bank of Chicago.
(c) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager or Officer). All approvals and consents required or permitted herein may be prospective or retroactive.
(d) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(e) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(f) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(g) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers consent thereto in writing and such written consent is filed in the minute books of the Company.
(h) As of the date of this Agreement, there shall be five (5) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be
prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 10A-5-3.02 of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, nor the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, director or stockholder of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or
required by the LLC Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the LLC Law, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, director, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the LLC Law. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the LLC Law, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to
enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Certificate of Formation, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members directors, officers or stockholders, or a Manager, an Officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 10A-5-6.06 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Alabama without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
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Exhibit 3.129
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State of Delaware |
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Secretary of State |
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Division of Corporations |
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Delivered 12:58 PM 12/16/2010 |
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FILED 12:53 PM 12/16/2010 |
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SRV 101197773 - 4914092 FILE |
STATE of DELAWARE
LIMITED LIABILITY COMPANY
CERTIFICATE of FORMATION
First: The name of the limited liability company is National Tax Lending, LLC
Second: The address of its registered office in the State of Delaware is 2711 Centerville Road, Suite 400 in the City of Wilmington. Zip code 19808. The name of its Registered agent at such address is Corporation Service Company
Third: (Use this paragraph only if the company is to have a specific effective date of dissolution: The latest date on which the limited liability company is to dissolve is .)
Fourth: (Insert any other matters the members determine to include herein.)
In Witness Whereof, the undersigned have executed this Certificate of Formation this 16th day of December , 2010.
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By: |
/s/ Heidi Bowman |
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Authorized Person (s) |
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Name: |
Heidi Bowman |
Exhibit 3.130
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
NATIONAL TAX LENDING, LLC
a Delaware Limited Liability Company
Dated as of April 20, 2012
THE MEMBERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS. THE MEMBERSHIP INTERESTS MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED OF (WITHIN THE MEANING OF ANY SECURITIES LAW) WITHOUT COMPLIANCE WITH SUCH ACT AND SUCH OTHER SECURITIES LAWS IF REQUIRED.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
NATIONAL TAX LENDING, LLC
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this Agreement) of National Tax Lending, LLC (the Company) is made, adopted and entered into effective as of April 20, 2012, by CheckSmart Financial Company, a Delaware corporation, as the sole member of the Company (the Sole Member).
WHEREAS, the Sole Member desires to amend and restate in its entirety that certain Limited Liability Company Agreement of National Tax Lending, LLC, effective as of December 31, 2010 (as amended from time to time, the Original Agreement), to make changes that the Sole Member deems appropriate and in the best interest of the Company.
NOW THEREFORE, the Sole Member hereby declares that, as of the date hereof (i) the Original Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and (ii) the provisions of this Agreement shall govern the affairs of the Company and the conduct of its business.
SECTION 1
THE COMPANY; DEFINED TERMS
1.1 Formation. The Company is a limited liability company formed pursuant to the provisions of Chapter 18 of the Delaware Corporation Laws Annotated (as amended from time to time, the LLC Law), and is intended to operate as an entity separate from the Sole Member. The Certificate of Formation of the Company (the Certificate of Formation) was filed with the Secretary of State of Delaware on December 16, 2010. The rights and liabilities of the Sole Member shall be determined in accordance with the terms and conditions of this Agreement and, except where the LLC Law provides that such rights and obligations specified in the LLC Law shall apply unless otherwise provided in a limited liability company agreement or words of similar effect and such rights and obligations are set forth in this Agreement, the LLC Law.
1.2 Company Name. The name of the Company is National Tax Lending, LLC. The Companys business may be conducted under its name and/or any other name or names deemed advisable by the Managers.
1.3 Purpose. The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the LLC Law.
1.4 Principal Office. The principal office of the Company is located at 7001 Post Road, Suite 200, Dublin, Ohio 43016. The principal office of the Company may be relocated from time to time by determination of the Managers. The Company may maintain offices at such other place or places as the Managers deem advisable.
1.5 Term. The term of the Company commenced upon the filing of the Certificate of Formation in accordance with the LLC Law and shall continue in existence for perpetuity, unless dissolved or terminated pursuant to the LLC Law or the provisions of this Agreement.
1.6 Filings; Registered Agent for Service of Process; Registered Office.
(a) The Certificate of Formation has been filed in the office of the Secretary of State of Delaware in accordance with the provisions of the LLC Law. The Managers shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware.
(b) The Managers shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any states or jurisdictions other than Delaware in which the Company engages in business.
(c) The Companys registered agent for service of process on the Company in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered agent.
(d) The Companys registered office in Delaware shall be as set forth in the Certificate of Formation. The Managers may change, at any time and from time to time, such registered office.
(e) Upon the dissolution of the Company, the Managers shall authorize the prompt execution and filing of a certificate of cancellation (or equivalent document) in accordance with the LLC Law and the law of any other states or jurisdictions in which the Company has qualified to conduct business.
1.7 Defined Terms. Unless the context otherwise requires or unless otherwise provided in this Agreement, capitalized terms used in this Agreement shall have the following meanings:
Advancement of Expenses has the meaning set forth in Section 5.5.
Agreement means this Amended and Restated Limited Liability Company Agreement, as originally executed and as amended from time to time. Terms such as hereof, hereto, hereby, hereunder and herein refer to this Agreement as a whole, unless the context otherwise requires.
Certificate of Formation has the meaning set forth in Section 1.1.
Company has the meaning set forth in the preamble to this Agreement.
ERISA has the meaning set forth in Section 5.3.
Final Adjudication has the meaning set forth in Section 5.5.
Indemnitee has the meaning set forth in Section 5.3.
LLC Law has the meaning set forth in Section 1.1.
Managers means the group of individuals appointed by the Sole Member as the managers of the Company in accordance with Section 4.1. As used herein, each manager of the Company shall be a Manager.
Membership Interest has the meaning set forth in Section 2.
Officers means those individuals appointed by the Managers as officers of the Company in accordance with Section 4.3.
Original Agreement has the meaning set forth in the recitals to this Agreement.
Person means any individual, partnership, corporation, trust, limited liability company or other entity.
Proceeding has the meaning set forth in Section 5.3.
Sole Member means CheckSmart Financial Company, a Delaware corporation, or any Person that acquires all of the equity interests of the Company from CheckSmart Financial Company.
Undertaking has the meaning set forth in Section 5.5.
SECTION 2
CAPITAL CONTRIBUTION; MEMBERSHIP INTEREST
The Sole Member has made a capital contribution to the Company and shall have a 100% membership equity interest in the Company, including any and all benefits to which the Sole Member is entitled under this Agreement and the obligations of the Sole Member under this Agreement (the Membership Interest). Additional capital contributions to the Company may be made from time to time in such amounts as determined by the Sole Member in its discretion; provided, however, that the Sole Member is not and shall not be obligated to make any additional contributions to the Company. The Sole Member shall not receive any interest payment, salary or draw with respect to its capital contribution or capital account or otherwise solely in its capacity as the Sole Member.
SECTION 3
DISTRIBUTIONS; TAX MATTERS
3.1 Distributions. Subject to any conditions and restrictions contained in any contract or agreement to which the Company is a party, distributions shall be made to the Sole Member at the times and in the aggregate amounts determined by the Managers.
3.2 Tax Reporting. It is the intention of the Sole Member that the Company be disregarded for federal tax purposes (so long as the Company has only one member), and accordingly all items of income, gain, loss, expense, deduction and credit shall, for federal tax purposes, be reported directly by the Sole Member. If the Company is required to file any tax return, form, report, statement or other document separate from the Sole Member, the Managers shall prepare and file, or cause to be prepared and filed, such return, form, report, statement or other document.
SECTION 4
MANAGEMENT AND CONTROL
4.1 Management by Managers.
(a) Except as otherwise expressly provided in this Agreement or to the extent delegated by the written consent of the Sole Member, (i) the business and affairs of the Company solely shall be vested in and controlled by the Managers, which shall have the exclusive power and authority, on behalf of the Company, to take any action and to do anything and everything they deem necessary or appropriate to carry on the business of the Company, (ii) the Managers shall have full, exclusive and complete discretion in the management and control of the Company, (iii) all decisions relating to the business and affairs of the Company shall be made by, and all action proposed to be taken by or on behalf of the Company, shall be taken by, the Managers and (iv) the Managers shall have full power and authority to execute all documents and take all other actions on behalf of the Company and thereby bind the Company and the Sole Member with respect thereto, including, without limitation, all decisions required or permitted to be made by the Sole Member under this Agreement and all decisions required or permitted to be made by the Company as a member, partner or other beneficial owner of any other Person. Notwithstanding the foregoing or anything in this Agreement to the contrary, the Sole Member may take any action that the LLC Law or this Agreement requires or permits the Managers to take.
(b) The implementation of any decisions properly made by the Managers, including the execution and delivery of all documents, may be through any Person selected by the Managers (including any Manager or Officer). All approvals and consents required or permitted herein may be prospective or retroactive.
(c) The Managers are, to the extent of their rights and powers set forth in this Agreement, agents of the Company for the purpose of the Companys business, and all actions of the Managers taken in accordance with such rights and powers shall bind the Company.
(d) The Managers shall consist of not less than one (1) nor more than eight (8) Managers. Without amendment to this Agreement, the number of Managers, subject to the foregoing limitations, may be fixed or changed by resolution of the Sole Member. Managers shall be appointed by the Sole Member and shall hold office at the pleasure of the Sole Member. A Manager shall serve until the earlier of his or her death, resignation
or removal. A Manager may be removed at any time, with or without cause, by the Sole Member. A Manager may resign at any time by delivering his or her written resignation to the Sole Member.
(e) Except as otherwise provided in this Agreement, a majority of the number of Managers then in office shall be present in person at any meeting of the Managers in order to constitute a quorum for the transaction of business at such meeting; provided, however, that if the meeting is held by telephone or through other communications equipment at which all Managers participating can hear each other, such participation shall constitute attendance at such meeting. Except as otherwise provided in this Agreement, the act of the majority of the Managers present at any meeting of the Managers at which a quorum is present shall be the act of the Managers.
(f) Any action required or permitted to be taken by the Managers under this Agreement or the LLC Law may be taken without a meeting if the Managers, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Managers entitled to vote thereon were present and voted, consent thereto in writing and such written consent is filed in the minute books of the Company.
(g) As of the date of this Agreement, there shall be five (5) Managers, which Managers shall be as follows:
William E. Saunders, Jr.
Kyle Hanson
Chad Streff
Michael Durbin
Bridgette Roman
4.2 Agents. The Managers may engage on behalf of, and at the expense of, the Company, such Persons as the Managers shall deem advisable for the conduct and operation of the business and affairs of the Company, including, without limitation, leasing, rental and sales agents and brokers, mortgage bankers, securities brokers and dealers, credit enhancers, lawyers, accountants, architects, engineers, consultants, contractors and purveyors of other services or materials for the Company on such terms and for such compensation or costs as the Managers shall determine.
4.3 Officers and Employees.
(a) The day-to-day operational management of the Company may be exercised by such officers of the Company as may be appointed from time to time in accordance with this Section 4.3 (the Officers). The Managers may appoint such Officers as they may determine from time to time. The Officers, subject to the direction and control of the Managers, shall do all things and take all actions necessary to run the business of the Company. Each Officer shall have the powers and duties as may be prescribed to him or her by the Managers and, to the extent not so prescribed, as generally pertain to their respective offices. Each Officer shall hold office at the pleasure
of the Managers. Each Officer shall serve until the earlier of his or her death, resignation or removal, and any Officer may be removed at any time, with or without cause, by the Managers. Any vacancy in any office shall also be filled by the Managers. Any Officer may resign at any time by delivering his or her written resignation to the Managers.
(b) The Company may employ such employees as the Officers of the Company deem reasonably necessary to effectuate the purpose of the Company as set forth in Section 1.3.
SECTION 5
LIMITATION OF LIABILITY; INDEMNIFICATION
5.1 Liability to the Company. None of the Sole Member, any of the Sole Members managers, any Manager or any Officer shall be liable to the Company in damages for any action that such Person takes or fails to take in such capacity, unless it is proved by clear and convincing evidence in a court of competent jurisdiction that such action or failure to act was undertaken with deliberate intent to cause injury to the Company or with reckless disregard for the best interests of the Company.
5.2 Liability to Others. The Sole Member intends that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture. It is the intention of the Sole Member that it shall have the benefit of Section 18-303(a) of the LLC Law. The debts, obligations and liabilities of the Company (whether arising in contract, tort or otherwise) are solely the debts, obligations and liabilities of the Company, and neither the Sole Member, nor the Managers nor the Officers shall be liable therefor solely by reason of being a member of the Company or acting as a manager or an officer of the Company. No failure of the Company to observe any corporate or other formality or requirement relating to the exercise of its powers or the management of its business or affairs under this Agreement or the LLC Law shall be grounds for imposing liability on the Sole Member, any Manager or any Officer (or any member or other holder of an equity interest in the Sole Member or any director, manager, board observer, officer or employee of any of the foregoing or any of their affiliates) for any debt, obligation or liability of the Company.
5.3 Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he, she or it is or was the Sole Member, a Manager, an Officer, or an officer, director or stockholder of the Sole Member in its capacity as sole member of the Company, or is or was serving at the request of the Company as a director, manager or officer of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an Indemnitee), whether the basis of such Proceeding is alleged action in an official capacity as an equity holder, manager, director or officer or in any other capacity while serving as an equity holder, manager, director or officer, shall be indemnified and held harmless by the Company, to the fullest extent permitted or required by the Delaware General Corporation Law as if the Company were a Delaware corporation, as the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits broader indemnification rights than such law permitted prior to such amendment), against all expense, liability and loss (including attorneys fees, judgments, fines, excise taxes under the Employee Retirement Income Security Act of 1974, as amended and as may be further amended from time to time (ERISA), or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 5.6 with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Managers.
5.5 Right to Advancement of Expenses. The right to indemnification conferred in Section 5.4 shall include the right to be paid by the Company the expenses (including, without limitation, attorneys fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an Advancement of Expenses); provided, however, that if so required by the Delaware General Corporation Law as if the Company were a Delaware corporation, an Advancement of Expenses incurred by an Indemnitee shall be made only upon delivery to the Company of an undertaking (an Undertaking), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a Final Adjudication) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 5.5 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Section 5.4 and this Section 5.5 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be the Sole Member, Manager, director, Officer, or other equity holder, manager, director or officer, and shall inure to the benefit of the Indemnitees heirs, executors and administrators.
5.6 Right of Indemnitee to Bring Suit. If a claim under Section 5.4 or 5.5 is not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (b) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation. Neither the failure of the Company (including the Sole Member, the Managers or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met any applicable standard of conduct set forth in the Delaware General Corporation Law as if the Company were a Delaware corporation, nor an actual determination by the Company (including the Sole Member, the Managers or independent legal counsel) that the Indemnitee has not met any such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such
suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses, under this Section 5 or otherwise, shall be on the Company.
5.8 Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this Section 5 shall not be exclusive of any other right which any Person may have or hereafter acquire under any law, the Certificate of Formation, this Agreement, any agreement, any action by the Managers or the Sole Member, or otherwise.
5.9 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Person who is or was serving as the Sole Member, the Sole Members directors, officers or stockholders, or a Manager, an Officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under this Section 5.
5.10 Indemnification of Employees and Agents. The Company may, to the extent authorized from time to time by the Managers, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company (other than the Indemnitees) to the fullest extent of the provisions of this Section 5 with respect to the indemnification and Advancement of Expenses of the Indemnitees. For purposes of this Section 5.10, an employee or agent of the Company (other than an Indemnitee) includes any Person (a) who is or was an employee or agent of the Company, or (b) who is or was serving at the request of the Company as an employee or agent of another foreign or domestic limited liability company, corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan.
5.11 Repeal or Modification. Any repeal or modification of the foregoing provisions of this Section 5 shall not adversely affect any right of indemnification or limitation of liability of an Indemnitee, employee or agent of the Company relating to acts or omissions occurring prior to such repeal or modification.
5.12 Savings Clause. If this Section 5 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnitee or any other Person indemnified pursuant to this Section 5 as to all expense, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Person in connection with any Proceeding to the full extent permitted by any applicable portion of this Section 5 that shall not have been invalidated and to the fullest extent permitted by applicable law.
SECTION 6
BOOKS AND RECORDS; FISCAL YEAR
6.1 Books and Records. The Company shall keep adequate books and records at its principal office as described in Section 1.4, setting forth a true and accurate account of all transactions and other matters arising out of and in connection with the conduct of the Companys business, which books and records shall be otherwise kept in accordance with the provisions of the LLC Law. The Companys books and records shall be maintained according to the same methods of accounting used by the Sole Member.
6.2 Fiscal Year. The fiscal year of the Company shall end each year on the same day that the fiscal year of the Sole Member ends, unless a different fiscal year is required by applicable law.
SECTION 7
TRANSFER OR PLEDGE OF MEMBERSHIP INTEREST
The Sole Member shall be entitled, in its sole and absolute discretion at any time and from time to time, to sell, mortgage, hypothecate, transfer, pledge, assign, donate, create or grant a security interest in or lien upon, encumber, give, place in trust (voting or other) or otherwise dispose of, all or any portion of its Membership Interest.
SECTION 8
DISSOLUTION AND WINDING UP OF THE COMPANY
8.1 Dissolution. Notwithstanding anything to the contrary in the LLC Law, the Company shall dissolve only upon the written consent of the Sole Member. Moreover, the Sole Member shall not cease to be a member of the Company solely as a result of the happening of any of the events specified in Section 18-304 of the LLC Law.
8.2 Winding Up. Upon dissolution, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and the Sole Member. The Managers shall not take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Companys business and affairs. The Companys assets shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, shall be applied and distributed in the following order and priority:
(a) First, to the payment and discharge of all of the Companys debts and liabilities to creditors (including the repayment of any loans or advances made by the Sole Member or any Manager to the Company), and the expenses of liquidation and dissolution;
(b) Second, to the setting up of any reserves reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(c) Third, to the Sole Member.
SECTION 9
MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its conflict of laws rules.
9.2 No Third Party Beneficiaries. Except as provided in Section 5, nothing contained in this Agreement is intended or shall be deemed to benefit any third party or creditor of the Company or the Sole Member.
9.3 Successors and Assigns. Every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Company, the Sole Member and their respective legal representatives, successors, transferees and permitted assigns.
9.4 Entire Agreement; Amendment. This Agreement, together with the Certificate of Formation, contains the entire understanding of the Sole Member with respect to the subject matter of this Agreement. This Agreement may be amended only in a writing signed by the Sole Member.
9.5 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
9.6 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.
9.7 Variation of Pronouns. All pronouns and any variations shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may require.
*** Remainder of page intentionally left blank ***
Exhibit 3.131
RECEIVED |
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State of Utah |
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Department of Commerce |
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Division of Corporations and Commercial Code I hereby certified that the foregoing has been filed and approved on this 24 day of [ILLEGIBLE] In this office of this Division and hereby issued This Certificate thereof |
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Examiner [Illegible] Date [Illegible] |
Nov 24 2006
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ARTICLES OF INCORPORATION
OF
RELIANT SOFTWARE, INC. |
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ILLEGIBLE |
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BY AGREEMENT made effective the 1st day of November, 2006, the undersigned natural persons over the age of eighteen (18) years, in accordance with the laws of the state of Utah, approve the following Articles of Incorporation:
SECTION 1 NAME
The name of this Corporation is Reliant Software, Inc., and the address of the principal office is 84 East 2400 North, North Logan, Utah 84341.
SECTION 2 PURPOSES
This Corporation is organized to engage in any lawful activity under the laws of the State of Utah.
SECTION 3 AUTHORIZED SHARES
The aggregate number of shares of common stock which the Corporation shall have authority to issue is ten thousand (10,000), having no par value. Each share shall participate equally in the earned surplus and dividends of the Corporation as well as share equally in the distribution of the assets of the Corporation upon dissolution and termination. There shall be one (1) class of common stock.
Such common stock shall be divided into voting common stock and non-voting common stock; two thousand five hundred (2,500) shares shall be designated as voting common and seven thousand five hundred (7,500) shares designated as non-voting common. As between the voting and non-voting common, the voting rights shall be the sole difference.
SECTION 4 DURATION
The duration of the Corporation shall be perpetual, or until terminated under the terms of this Agreement or by law.
SECTION 5 REGISTERED OFFICE AND AGENT
The name of this Corporations original Registered Agent is Trevin G. Workman, and the address of the Registered Office is 503 West 2600 South, Suite 200, Bountiful, Utah 84010.
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Date |
11/24/2006 |
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Receipt Number: |
1955366 |
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Amount Paid: |
$52.00 |
SECTION 6 INCORPORATOR
The name and address of the Incorporator of the Corporation is as follows:
Amie M. Dunkley |
609 Meadow Lark Lane |
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Smithfield, Utah 84335 |
SECTION 7 DIRECTORS AND CUMULATIVE VOTING
The number of Directors constituting the initial Board of Directors of this Corporation is one (1), and the name and address of the person who is to serve as Director until the first annual meeting of Shareholders or until successors are elected and shall qualify, is:
Amie M. Dunkley |
609 Meadow Lark Lane |
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Smithfield, Utah 84335 |
Such Directors are to be elected by cumulative voting, in that each Shareholder shall be entitled to vote all of the Shareholders whole or fractional shares cumulatively. At each election of Directors, each Shareholder entitled to vote at such elections shall have the right to accumulate his votes and give one candidate a number of votes equal to the number of Directors to be elected, multiplied by the number of votes to which his shares are entitled, or to distribute his votes on the same principal among as many candidates as he desires. The candidates, up to the number of Directors to be elected, receiving the highest number of votes shall be elected.
The number of Directors can range from a minimum of the lowest amount allowed by law to a maximum of seven (7).
SECTION 8 SHAREHOLDER VOTE REQUIREMENT
The affirmative vote of holders of fifty-one percent (51%) of the outstanding shares entitled to vote shall be necessary for the following corporate action:
8.1 Amendment to the Articles of Incorporation or Bylaws of the Corporation;
8.2 Merger, reorganization or consolidation of the Corporation;
8.3 Reduction or increase of the stated capital of the Corporation;
8.4 Reduction or increase in the number of authorized shares of the Corporation;
8.5 Sale, lease or exchange of the major portion of the property or assets of the Corporation; or
8.6 Dissolution or liquidation of the Corporation.
SECTION 9 PRE-EMPTIVE RIGHTS
The authorized and treasury stock of this Corporation may be issued at such time, upon such terms and conditions, and for such consideration as the Board of Directors shall determine.
Shareholders shall have pre-emptive rights to acquire unissued shares of this Corporation in the manner and subject to the limitations prescribed by this Article, and not otherwise. Before the Board of Directors shall issue any unissued shares of this Corporation, authorized in these Articles or by later amendment, it shall notify each Shareholder of the proposed issuance of the terms and conditions under which the shares are proposed to be issued. For a period of thirty (30) days after the giving of such notice, any Shareholder shall have the rights, on the same terms and conditions as is stated in the notice, to acquire such portion of the shares proposed to be issued as the shares held by such Shareholder bears to the total shares issued and outstanding at the time such notice is given, such right to be exercised by giving notice of such election to the Corporation at its registered office. If any Shareholder does not give notice of his election to acquire such shares within such thirty (30) day period, the shares may be issued to others, but only on terms and conditions no more favorable than the terms and conditions stated in the notice to the Shareholders. Except as provided for above, no other pre-emptive rights shall vest in any Shareholder.
SECTION 10 NONASSESSIBILITY
Shares of the Corporation shall not be subject to assessment for payment of debts of the Corporation.
SECTION 11 RIGHT TO AMEND
The Corporation reserves the right to amend, alter, change or repeal any provision of these Articles, in the manner now or hereafter prescribed by law, and by these Articles; and all rights and powers conferred herein on Shareholders and Directors are subject to this reserved power.
IN WITNESS WHEREOF, the undersigned have hereunto executed this Agreement this lst day of November, 2006.
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INCORPORATOR |
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/s/ Amie M. Dunkley |
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Amie M. Dunkley |
Exhibit 3.132
CORPORATE BYLAWS
RELIANT SOFTWARE, INC.
TABLE OF CONTENTS
SECTION 1 |
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OFFICES - BOOKS AND RECORDS |
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1 |
A. |
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PRINCIPAL OFFICES |
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1 |
B. |
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REGISTERED AGENT AND REGISTERED OFFICE |
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1 |
C. |
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BOOKS AND RECORDS |
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1 |
D. |
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FINANCIAL STATEMENTS |
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2 |
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SECTION 2 |
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BYLAWS |
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2 |
A. |
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AMENDMENTS |
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2 |
B. |
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PROVISIONS SUPPLEMENTAL TO PROVISIONS OF LAW |
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2 |
C. |
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PROVISIONS CONTRARY TO OR INCONSISTENT WITH PROVISIONS OF LAW |
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3 |
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SECTION 3 |
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SHAREHOLDERS |
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3 |
A. |
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ANNUAL MEETING |
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3 |
B. |
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SPECIAL MEETINGS |
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3 |
C. |
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MEETINGS BY TELECOMMUNICATIONS |
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3 |
D. |
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PLACE OF MEETING |
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3 |
E. |
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NOTICE OF MEETING |
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3 |
F. |
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QUORUM |
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4 |
G. |
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PROXIES |
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4 |
H. |
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VOTING OF SHARES |
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4 |
I. |
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CUMULATIVE VOTING |
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4 |
J. |
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INFORMAL ACTION BY SHAREHOLDERS |
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4 |
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SECTION 4 |
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BOARD OF DIRECTORS |
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4 |
A. |
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GENERAL POWERS |
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4 |
B. |
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NUMBER, TENURE AND QUALIFICATIONS |
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4 |
C. |
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REGULAR MEETINGS |
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5 |
D. |
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SPECIAL MEETINGS |
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5 |
E. |
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NOTICE |
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5 |
F. |
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QUORUM |
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5 |
G. |
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MANNER OF ACTING |
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5 |
H. |
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CHAIRMAN OF THE BOARD - POWERS AND DUTIES |
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6 |
I. |
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EXECUTIVE COMMITTEE |
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6 |
J. |
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REMOVAL |
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6 |
K. |
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RESIGNATION |
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6 |
L. |
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VACANCIES |
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6 |
M. |
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COMPENSATION |
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7 |
N. |
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PRESUMPTION OF ASSENT |
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7 |
O. |
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INFORMAL ACTION BY DIRECTORS |
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7 |
P. |
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DIRECTORS CONDUCT |
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7 |
SECTION 5 |
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OFFICERS |
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8 |
A. |
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NUMBER |
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8 |
B. |
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ELECTION AND TERM OF OFFICE |
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8 |
C. |
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REMOVAL |
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8 |
D. |
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VACANCIES |
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8 |
E. |
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CHIEF EXECUTIVE OFFICER |
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8 |
F. |
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PRESIDENT |
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9 |
G. |
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THE VICE PRESIDENT |
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9 |
H. |
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THE SECRETARY |
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10 |
I. |
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THE TREASURER |
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10 |
J. |
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SALARIES |
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10 |
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SECTION 6 |
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GENERAL MANAGER |
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11 |
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SECTION 7 |
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CONTRACTS, LOANS, CHECKS AND DEPOSITS |
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11 |
A. |
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CONTRACTS |
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11 |
B. |
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LOANS |
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11 |
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SECTION 8 |
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CERTIFICATES FOR SHARES AND THEIR TRANSFER |
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12 |
A. |
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CERTIFICATES FOR SHARES |
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12 |
B. |
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LOST, STOLEN OR DESTROYED CERTIFICATES |
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12 |
C. |
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TRANSFER OF SHARES |
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13 |
D. |
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TRANSFER DEFINED |
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13 |
E. |
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RESTRICTIONS ON TRANSFER OF INTERESTS |
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13 |
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SECTION 9 |
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ACCOUNTING |
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14 |
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SECTION 10 |
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INDEMNIFICATION |
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14 |
A. |
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THIRD PARTY ACTIONS |
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14 |
B. |
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DERIVATIVE ACTIONS |
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15 |
C. |
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RIGHTS AFTER SUCCESSFUL DEFENSE |
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15 |
D. |
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OTHER DETERMINATION OF RIGHTS |
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15 |
E. |
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ADVANCES OF EXPENSES |
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16 |
F. |
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NONEXCLUSIVENESS; HEIRS |
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16 |
G. |
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PURCHASE OF INSURANCE |
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16 |
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SECTION 11 |
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DIVIDENDS |
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16 |
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SECTION 12 |
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GENERAL COUNSEL |
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17 |
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SECTION 13 |
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SEAL |
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17 |
SECTION 14 |
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WAIVER OF NOTICE |
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17 |
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SECTION 15 |
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GENERAL PROVISIONS |
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17 |
A. |
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HEADINGS |
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17 |
B. |
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GENDER |
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17 |
C. |
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SEVERABILITY |
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17 |
D. |
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EXHIBITS |
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17 |
E. |
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BENEFIT AND OBLIGATION |
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18 |
F. |
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COUNTERPARTS |
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18 |
G. |
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ENTIRE AGREEMENT |
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18 |
H. |
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GOVERNING LAW AND JURISDICTION |
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18 |
I. |
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ATTORNEYS FEES |
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18 |
J. |
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NO PRESUMPTION |
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18 |
THE BYLAWS
OF
RELIANT SOFTWARE, INC.
The following Bylaws are made effective the 1st day of November, 2006:
Section 1 OFFICES - BOOKS AND RECORDS
A. PRINCIPAL OFFICES
The principal place of business of the Corporation in the State of Utah shall be located at 84 East 2400 North, North Logan, Utah 84341. The Corporation may also have an office or offices at such other place or places within or without the State of Utah as the Board of Directors may from time to time designate or the business of the Corporation requires.
B. REGISTERED AGENT AND REGISTERED OFFICE
The Registered Agent of the Corporation is Trevin G. Workman, Esq., and the Registered Office of the Corporation in the State of Utah shall be located at 503 West 2600 South, Suite 200, Bountiful, Utah 84341.
C. BOOKS AND RECORDS
The Corporation shall keep at its principal office the following books and records and any Shareholder of record, upon written demand stating the purpose thereof, shall have the right to examine, in person or by agent or attorney, at any reasonable time or times, for any proper purpose, the same and to make extracts therefrom:
1. Its minutes of meetings of the Board of Directors and any committees thereof;
2. Its minutes of meetings of the Shareholders;
3. Its record of Shareholders which shall give their names and addresses and the number and class of the shares held by each; and
4. Its Articles of Incorporation and Bylaws as originally executed and adopted together with all subsequent amendments thereto.
All other books and records of account shall be kept at the Corporations principal place of business or as determined by the Board of Directors.
D. FINANCIAL STATEMENTS
Upon the written request of any Shareholder of the Corporation, the Corporation shall mail to such Shareholder its most recent annual or quarterly financial statements showing in reasonable detail its assets and liabilities and the results of its operation unless the Shareholder has already received the same. Neither the Corporation nor any Director, Officer, Employee or Agent of the Corporation shall be liable to the Shareholder or anyone to whom the Shareholder discloses the financial statement or any information contained therein for any error or omission therein whether caused without fault, by negligence or by gross negligence, unless:
1. The error or omission is material;
2. The Director, Officer, Employee or Agent in question knew of the error or omission and intended for the Shareholder or other person to rely thereon to his detriment; and
3. The Shareholder or other persons did reasonably rely thereon, and in addition, is otherwise liable under applicable law.
Section 2 BYLAWS
A. AMENDMENTS
These Bylaws may be, if consistent with and in compliance with the Articles of Incorporation, altered, amended or repealed and new Bylaws adopted by the Board of Directors. Any such action shall be subject to repeal or change by action of the Shareholders, but the alteration, amendment, repeal, change or new Bylaw (and the repeal of the old Bylaw) shall be valid and effective and no Director, Officer, Shareholder, Employee or Agent of the Corporation shall incur any liability by reason of any action taken or omitted in reliance on the same. The power of the Shareholders to repeal or change any alteration, amendment, repeal or new Bylaw shall not extend to any original Bylaw of the Corporation so long as it is not altered, amended or repealed, but only to action by the Board thereafter. There shall be no time limit on its exercise.
B. PROVISIONS SUPPLEMENTAL TO PROVISIONS OF LAW
All restrictions, limitations, requirements and other provisions of these Bylaws shall be construed, insofar as possible, as supplemental and additional to all provisions of law applicable to the subject matter thereof and shall be fully complied with in addition to the said provisions of law unless such compliance shall be illegal.
C. PROVISIONS CONTRARY TO OR INCONSISTENT WITH PROVISIONS OF LAW
Any article, section, subsection, subdivision, sentence, clause or phrase of these Bylaws which, upon being construed in the manner provided in Section 2B hereof, shall be contrary to or inconsistent with any applicable provisions of law, shall not apply so long as said provisions of law shall remain in effect, but such result shall not affect the validity or applicability of any other portions of these Bylaws, it being hereby declared that these Bylaws would have been adopted and each article, section, subsection, subdivision, sentence, clause or phrase thereof, irrespective of the fact that any one (1) or more articles, sections, subsections, subdivisions, sentences, clauses or phrases is or are illegal.
Section 3 SHAREHOLDERS
A. ANNUAL MEETING
Annual meetings of the Shareholders shall be held each year for the purpose of electing Directors and for the transaction of such other business as may come before the meeting.
B. SPECIAL MEETINGS
Special meetings of the Shareholders, for any purpose or purposes, may be called by the President or by any Director, and shall be called by the President at the request of the holders of not less than ten percent (10%) of all the outstanding shares of the Corporation entitled to vote at the meeting.
C. MEETINGS BY TELECOMMUNICATIONS
Shareholders may participate in any Shareholder meeting by any means of communication in which all persons participating can hear each other. A Shareholder participating in a meeting by this means is considered to be present in person at the meeting.
D. PLACE OF MEETING
The Board of Directors may designate the place of meeting for any annual meeting called by the Board of Directors. A waiver of notice signed by all of the Shareholders entitled to vote at a meeting may designate any other place, either within or without the State of Utah, as the place for the holding of such meeting.
E. NOTICE OF MEETING
Written notice stating the place, day and hour of the meeting, and in case of a special meeting, the purpose or purposes for which the meeting is called shall be delivered not less than ten (10) nor more than twenty (20) days before the date of the meeting, by or at the direction of the President or the Director calling the meeting, to each Shareholder of record entitled to vote at such meeting.
F. QUORUM
A majority of the outstanding shares of the Corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of Shareholders. If less than a majority of the outstanding shares are represented at any meeting, a majority of the shares so represented may adjourn the meeting from time to time without further notice. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally set forth in the notice. The Shareholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough Shareholders to leave less than a quorum.
G. PROXIES
At all meetings of the Shareholders, a Shareholder may vote by proxy, executed in writing by the Shareholder. Such proxy shall be filed with the Secretary of the Corporation before or at the time of the meeting. No proxy shall be valid after three (3) months from the date of its execution, unless otherwise provided in the proxy.
H. VOTING OF SHARES
Each outstanding share entitled to vote shall be entitled to one (1) vote upon each matter submitted to a vote at a meeting of Shareholders.
I. CUMULATIVE VOTING
At each election for Directors, every Shareholder entitled to vote at such election shall have the right to vote, in person or by proxy, the number of shares owned by him for as many persons as there are Directors to be elected and for whose election he has a right to vote.
J. INFORMAL ACTION BY SHAREHOLDERS
Any action required to be taken at a meeting of the Shareholders, or any other action which may be taken at a meeting of the Shareholders, may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the Shareholders entitled to vote with respect to the subject matter thereof.
Section 4 BOARD OF DIRECTORS
A. GENERAL POWERS
The business and affairs of the Corporation shall be managed under the direction of its Board of Directors. The Board of Directors shall determine matters of corporate policy and perform such duties as are required of it by law.
B. NUMBER, TENURE AND QUALIFICATIONS
The number of Directors of the Corporation shall be a minimum of the least amount allowed by law and a maximum of seven (7). Each Director shall hold office until a successor shall have been elected and qualify. Directors need not be residents of the State of Utah.
C. REGULAR MEETINGS
A regular meeting of the Board of Directors shall be held without notice, immediately after, and at the same place as the annual meeting of Shareholders. The Board of Directors may provide, by resolution the time and place, either within or without the State of Utah, for the holding of additional regular meetings without other notice than such resolution.
D. SPECIAL MEETINGS
Special meetings of the Board of Directors may be called by or at the request of the President or any one (1) Directors. The person or persons authorized to call special meetings of the Board of Directors shall fix the place for holding any special meeting of the Board of Directors called by them.
E. NOTICE
Notice of any special meeting shall be given at least ten (10) days prior thereto by written notice delivered personally or mailed to each Director at his business address. Any Director may waive notice of any meeting. The attendance of a Director at a meeting shall constitute a waiver of notice of such meeting, except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at nor the purpose of any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting.
F. QUORUM
A majority of the Directors then elected shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, but if less than such majority are present at a meeting, a majority of the Directors may adjourn the meeting from time to time without further notice. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally set forth in the notice. The Directors present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough Directors to leave less than a quorum.
G. MANNER OF ACTING
The act of the majority of the Directors present at a meeting of which a quorum is present shall be the act of the Board of Directors. Minutes of the proceedings of Board of Directors meetings shall be prepared and shall be made available to the Shareholders.
H. CHAIRMAN OF THE BOARD - POWERS AND DUTIES
The Chairman of the Board of Directors, if there be one, shall have the power to preside at all meetings of the Board of Directors and shall have such other powers and shall be subject to such other duties as the Board of Directors may from time to time prescribe.
I. EXECUTIVE COMMITTEE
By resolution of the Board of Directors and at their option, the Directors may designate an Executive Committee, which includes at least two (2) Directors, to manage and direct the daily affairs of the Corporation. Said Executive Committee shall have and may exercise all of the authority that is vested in the Board of Directors as if they were regularly convened, except that the Executive Committee shall not have authority to amend these Bylaws.
At all meetings of the Executive Committee, each member of said committee shall have one (1) vote and the act of a majority of the members present at a meeting at which a quorum is present shall be the act of the Executive Committee.
The number of Executive Committee members who shall be present at all meetings of the Executive Committee in order to constitute a quorum for the transaction of business or any specified item of business, shall be a majority.
The number of votes of Executive Committee members that shall be necessary for the transaction of any business or any specified item of business at any meeting of the Executive Committee, or the giving of any consent, shall be a majority.
J. REMOVAL
At any special meeting of the Shareholders duly called as provided in these Bylaws, any Director or Directors may, by the affirmative vote of the holders of a majority of all shares of stock outstanding and entitled to vote for the election of Directors, be removed from office, either with or without cause, and his successor or their successors may be elected at such meeting.
K. RESIGNATION
A Director may resign at any time by giving written notice to the Board of Directors and the President. Unless otherwise specified in the notice, the resignation shall take effect upon receipt thereof by the Board, and the acceptance of the resignation shall not be necessary to make it effective.
L. VACANCIES
Any vacancy occurring in the Board of Directors may be filled by the affirmative vote of a majority of the remaining Directors, though less than a quorum of the Board of Directors. A Director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in
office. Any directorship to be filled by reason of an increase in the number of Directors shall be filled by election at an annual meeting or at a special meeting of Shareholders called for that purpose, unless at such meeting the Shareholders delegate the filling of such vacancy to the Board of Directors.
M. COMPENSATION
No compensation shall be paid to Directors, as such for their services, but by resolution of the Board of Directors a fixed sum and expenses for actual attendance at each regular or special meeting of the Board of Directors may be authorized. Nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.
N. PRESUMPTION OF ASSENT
A Director of the Corporation who is present at a meeting of the Board of Directors, at which action on any corporate matter is taken, shall be presumed to have assented to the action taken unless his dissent shall be entered in the minutes of the meeting, or unless he shall file his written dissent to such action with the person acting as the Secretary of the meeting before the adjournment thereof, or shall forward such dissent by registered mail to the Secretary of the Corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favor of such action.
O. INFORMAL ACTION BY DIRECTORS
Any action required or permitted to be taken at any meeting of the Board of Directors or committee thereof may be taken without a meeting if a written consent thereto is signed by all Members of the Board or of the Committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board or Committee.
P. DIRECTORS CONDUCT
No contracts or other transactions between the Corporation and any other trust, organization or corporation shall in any way be affected or invalidated by the fact that any of the Directors of the Corporation are pecuniarily or otherwise interested in, or are trustees, directors or officers of such other trust, organization or corporation.
Any Director, individually, or any trust, organization or corporation with which any Director may be associated, and be a party to or may be pecuniarily or otherwise interested in any contracts or transactions of the corporation, provided that the fact that he or such trust, organization or corporation is so interested, shall be disclosed or shall have been known to the Board of Directors or a majority thereof.
Any Director of the Corporation who is also a trustee, director or officer of such other trust, organization or corporation or who is so interested may be counted in determining the
existence of a quorum at any meeting of the Board of Directors of the Corporation which shall authorize any such contracts or transactions with like force and effect as if he were not such trustee, director or officer of such other trust, organization or corporation, or not so interested.
In all other matters, the general standards of conduct for Directors shall be governed by the applicable laws of the state of Utah.
Section 5 OFFICERS
A. NUMBER
The Officers of the Corporation may consist of a Chief Executive Officer, a President, a Vice President, a Secretary and a Treasurer, each of whom shall be elected by the Board of Directors. Such other officers and assistant officers as may be deemed necessary may be elected or appointed by the Board of Directors. Any two (2) or more offices may be held by the same officer.
B. ELECTION AND TERM OF OFFICE
The Officers of the Corporation shall be elected annually by the Board of Directors beginning at the first meeting of the Board of Directors held after each annual meeting of the Shareholders. Each Officer shall hold office until his successor shall have been duly elected and shall have qualified, or until his death or until he shall resign or shall have been removed in the manner hereinafter provided.
C. REMOVAL
Any Officer or agent elected or appointed by the Board of Directors may be removed by the Board of Directors whenever, in its judgment, the best interests of the Corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed.
D. VACANCIES
A vacancy in any office because of death, resignation, removal, disqualification or otherwise, the duties of such Officer shall be performed by the Chief Executive Officer, if that position has been filled by the Board of Directors, or may be filled by the Board of Directors for the unexpired portion of the term.
E. CHIEF EXECUTIVE OFFICER
If the position is filled by a vote of the Board of Directors, the Chief Executive Officer (CEO) shall be the principal executive officer of the Corporation, and subject to the control of the Board of Directors shall in general supervise and control all of the business affairs of the Corporation. The CEO shall have power to assign work, hire and discharge employees, determine the compensation of employees, purchase supplies, allocate vacation periods, grant
leaves to employees, collect outstanding accounts, borrow money in the ordinary course of business and to do all acts necessary to the conduct of the business of the Corporation. He shall, when present, preside at all meetings of the Shareholders and of the Board of Directors. He may sign, with the Secretary or any other proper officer of the Corporation thereunto authorized by the Board of Directors, certificates for shares of the Corporation, any deeds, mortgages, bonds, contracts, or other instruments which the Board of Directors have authorized to be executed except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other Officer or agent of the Corporation or shall be required by law to be otherwise signed or executed, and in general shall perform all duties as may be prescribed by the Board of Directors from time to time. In the absence of a Secretary, whose duties are described below, the CEO shall perform such duties that are required of the Secretary.
F. PRESIDENT
If there is no Chief Executive Officer elected by the Board of Directors, the President shall be the principal executive officer of the Corporation, and subject to the control of the Board of Directors shall in general supervise and control all of the business affairs of the Corporation. The President shall have power to assign work, hire and discharge employees, determine the compensation of employees, purchase supplies, allocate vacation periods, grant leaves to employees, collect outstanding accounts, borrow money in the ordinary course of business and to do all acts necessary to the conduct of the business of the Corporation. He shall, when present, preside at all meetings of the Shareholders and of the Board of Directors. He may sign, with the Secretary or any other proper officer of the Corporation so authorized by the Board of Directors, certificates for shares of the Corporation, any deeds, mortgages, bonds, contracts, or other instruments which the Board of Directors have authorized to be executed except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other Officer or agent of the Corporation or shall be required by law to be otherwise signed or executed, and in general shall perform all duties as may be prescribed by the Chief Executive Officer and Board of Directors from time to time.
G. THE VICE PRESIDENT
In the absence of the President or in the event of his death, inability or refusal to act, the Vice President shall assume the day-to-day duties of the President and shall have power to assign work, hire and discharge employees, determine the compensation of employees, purchase supplies, allocate vacation periods, grant leaves to employees, collect outstanding accounts and do all acts necessary to the conduct of business in the ordinary course. Other powers of the President set forth in these Bylaws shall be performed by the Vice President in the absence of the President only with the approval of the Board of Directors. The Vice President at all times shall perform such duties as are from time to time assigned by the Chief Executive Officer and President.
H. THE SECRETARY
The Secretary shall:
1. Keep the minutes of the Shareholders and Board of Directors meetings in one (1) or more books provided for that purpose;
2. See that all notices are duly given in accordance with the provisions of these Bylaws or as required by law;
3. Be custodian of the corporate records and of the seal, if any, of the Corporation and see that such seal of the Corporation is affixed to all documents the execution of which, on behalf of the Corporation under its seal, if any, is duly authorized;
4. Keep a register of the post office address of each Shareholder, which shall be furnished to the Secretary by each Shareholder;
5. Sign with the President or Vice President certificates for shares of the Corporation, the issuance of which shall have been authorized by resolution of the Board of Directors;
6. Have general charge of the share transfer books of the Corporation; and
7. In general, perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned by the Chief Executive Officer, President or by the Board of Directors.
I. THE TREASURER
If required by the Board of Directors, the Treasurer shall give a bond for the faithful discharge of his duties in such sum and with such surety or sureties as the Board of Directors shall determine. He shall have charge custody of and be responsible for all funds and securities of the Corporation, receive and give receipts for monies due and payable to the Corporation from any source whatsoever and deposit all such monies in the name of the Corporation in such banks, trust companies or other depositories as shall be selected in accordance with the provisions of Article 5 of these Bylaws. The Treasurer shall perform such other duties as from time to time may be assigned by the Chief Executive Officer, President, Vice President and Board of Directors.
J. SALARIES
The salaries of the Officers shall be fixed from time to time by the Board of Directors and no Officer shall be prevented from receiving such salary by reason of the fact that he is also a Director of the Corporation.
Section 6 GENERAL MANAGER
The Board of Directors may employ and appoint a General Manager who may or may not be one of the Officers or Directors of the Corporation. The General Manager shall be the Chief Operating Officer of the Corporation and, subject to the directions of the Board of Directors, shall:
1. Have general charge of the business operations of the Corporation and general supervision over its employees and agents;
2. Employ all employees of the Corporation, or delegate such employment to subordinate officers, and shall have authority to discharge any person so employed;
3. Make a report to the President and Directors quarterly, or more often if required to do so, setting forth the result of the operations under his charge together with suggestions looking to the improvement and betterment of the condition of the Corporation; and
4. Perform such other duties as the Board of Directors shall require.
Section 7 CONTRACTS, LOANS, CHECKS AND DEPOSITS
A. CONTRACTS
The Board of Directors may authorize any officer or officers, agent or agents to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances.
B. LOANS
The Board of Directors shall have the following powers or duties with respect to the lending of funds:
1. To lend money in furtherance of any of the purposes of the Corporation, to invest and reinvest the funds of the Corporation from time to time and to take and hold any property as security for the payment of funds so loaned or invested.
2. To lend money and use its credit to assist any employees of the Corporation or of a subsidiary, including any such employee who is a Director of the Corporation, if the Board of Directors determine that such loan or assistance may benefit the Corporation, but to make no loans or use of its credit to assist its Directors without authorization in each particular case by the Shareholders.
3. To sign all checks, drafts or other order for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation by such officer(s) or agent(s) of the Corporation and in such manner as shall from time to time be determined by resolution of the Board of Directors.
4. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board of Directors may select.
Section 8 CERTIFICATES FOR SHARES AND THEIR TRANSFER
A. CERTIFICATES FOR SHARES
Certificates representing shares of the Corporation shall be in such form as shall be determined by the Board of Directors. Such certificates shall be signed by the Chief Executive Officer, the President or by the Secretary. All certificates for shares shall be consecutively numbered or otherwise identified. The name and address of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the share transfer records of the Corporation. All certificates surrendered to the Corporation for transfer shall be cancelled and no new certificate shall be issued until the former certificate for a like number of shares shall have been surrendered and cancelled, except that in case of a lost, destroyed or mutilated certificate, a new one may be issued therefore upon such terms and indemnity to the Corporation as herein provided.
B. LOST, STOLEN OR DESTROYED CERTIFICATES
The Corporation shall issue a new stock certificate in the place of any certificate theretofore issued where the holder of record of the certificate:
1. Claim. Makes proof in affidavit form that it has been lost, destroyed or wrongfully taken;
2. Timely Request. Requests the issuance of a new certificate before the Corporation has notice that the certificate has been acquired by a purchaser for value in good faith and without notice of any adverse claim;
3. Bond. Gives a bond in such form, and with such surety or sureties, with fixed or open penalty, as the Corporation may direct, to indemnify the Corporation against any claim that may be made on account of the alleged loss, destruction or theft of the certificates; and
4. Other Requirements. Satisfies any other reasonable requirements imposed by the Corporation not inconsistent with applicable law.
When a certificate has been lost, apparently destroyed or wrongfully taken, and the holder of record fails to notify the Corporation within a reasonable time after he, she or it had notice of it, and the Corporation registers a transfer of the shares represented by this certificate before receiving such notification, the holder of record is precluded from making any claim against the Corporation for the transfer or for a new certificate.
C. TRANSFER OF SHARES
Transfer of shares of the Corporation shall be made only on the share transfer records of the Corporation by the holder of record thereof or by his legal representative, who shall furnish proper evidence of authority to transfer, or by his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the Corporation, and on surrender for cancellation of the certificate for such shares. The person in whose name shares stand on the books of the Corporation shall be deemed by the Corporation to be the owner thereof for all purposes.
D. TRANSFER DEFINED
As used in this Agreement, to Transfer Shares of the Corporation shall mean to dispose of or assign, with or without consideration, voluntarily or involuntarily, any legal or equitable interest in such Shares. A Transfer shall include, without limitation, a sale, gift, exchange, pledge, hypothecation, encumbrance, transfer in trust or contract or option to sell or transfer.
E. RESTRICTIONS ON TRANSFER OF INTERESTS
Notwithstanding anything to the contrary contained herein, in the event that the Corporation and the Shareholders have not entered into a Redemption Agreement governing the Transfer of interest in the Corporation, the following provisions shall govern the Transfer of such interests:
1. All Transfers must be approved by a unanimous vote of the Shareholders;
2. In the event of the death of a Shareholder, the Corporation shall redeem all interests of the deceased Shareholder within the later of thirty (30) days after the death of the Shareholder or the receipt of any insurance proceeds;
3. In the event of a Transfer other than death of a Shareholder, the Corporation shall have the first option to purchase any or all of the interest offered. The remaining Shareholders shall then have the option to purchase any or all of the interest not purchased by the Corporation. The purchase of the interest offered shall occur within thirty (30) days of the unanimous vote of the Shareholders approving the Transfer. If the Corporation and the remaining Shareholders do not elect to purchase of all the interest offered, then no Transfer shall occur without the unanimous approval of the Shareholders.
4. The purchase price for the interests shall be the Shareholders proportionate interest of the book value of the Corporation. The purchase price shall be reduced by the amount of any insurance proceeds collected and paid by the Corporation and/or any Shareholder who has purchased insurance with the transferring Shareholder as the insured for the purpose of redeeming the transferring Shareholders interests; and
5. The payment of the purchase price shall be as follows:
a. The transferring Shareholder shall receive a down payment of ten percent (10%) of the purchase price within thirty (30) days of the unanimous vote of the Shareholders approving the Transfer; and
b. The balance of the purchase price shall be paid in twenty (20) equal annual payments commencing the eleventh month after the payment of the down payment.
Section 9 ACCOUNTING
Full and accurate books of account shall be kept in accordance with generally accepted accounting practices. Such books of account shall be available for inspection by any Shareholder at all reasonable times. All corporate purchases shall be made on account and all accounts shall be paid by check.
Section 10 INDEMNIFICATION
A. THIRD PARTY ACTIONS
The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, including all appeals (other than an action, suit or proceeding by or in the right of the Corporation) by reason of the fact that he is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, trustee, officer or employee of another Corporation, partnership, joint venture, trust or other enterprise, against expenses including attorneys fees, judgments, decrees, fines, penalties and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interest of the Corporation and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.
B. DERIVATIVE ACTIONS
The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit, including all appeals, by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer or employee of the Corporation as a director, trustee, officer or employee of another Corporation, partnership, joint venture, trust or other enterprise, against expenses including attorneys fees actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been finally adjudged to be liable for negligence or misconduct in the performance of his duty to the Corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that despite the adjudication of liability, but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as such court shall deem proper.
C. RIGHTS AFTER SUCCESSFUL DEFENSE
To the extent that a director, trustee, officer or employee has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 10A or Section 10B or in defense of any claim, issue or matter therein, he shall be indemnified against expenses including attorneys fees, actually and reasonably incurred by him in connection therewith.
D. OTHER DETERMINATION OF RIGHTS
Except in a situation governed by Section 10C, any indemnification under Section 10A or Section 10B, unless ordered by a court, shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, trustee, officer or employee is proper in the circumstances because he has met the applicable standard of conduct set forth in Section 10A or Section 10B. Such determination shall be made:
1. By a majority vote of directors acting at a meeting at which a quorum consisting of directors who were not parties to such action, suit or proceeding is present;
2. If such a quorum is not obtainable or even if obtainable and a majority of disinterested directors so direct, by independent legal counsel compensated by the Corporation in a written opinion; or
3. By the affirmative vote in person or by proxy of the holders of a majority of the shares entitled to vote in the election of directors, without regard to voting power which may thereafter exist upon a default, failure or other contingency.
E. ADVANCES OF EXPENSES
Expenses of each person indemnified hereunder incurred in defending a civil, criminal, administrative or investigative action, suit or proceedings including all appeals thereof, may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding as authorized by the Board of Directors, whether a disinterested quorum exists or not, upon receipt of an undertaking by or on behalf of the director, trustee, officer or employee to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the Corporation.
F. NONEXCLUSIVENESS; HEIRS
The indemnification provided by this Article shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled as a matter of law or under the Articles, these Bylaws, any agreement, vote of Shareholders, any insurance purchased by the Corporation or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office and shall continue as to a person who has ceased to be director, trustee, officer or employee and shall inure to the benefit of the heirs, executors and administrators of such a person.
G. PURCHASE OF INSURANCE
The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, trustee, officer or employee of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this Article or under Utah law.
Section 11 DIVIDENDS
The Board of Directors may from time to time declare, and the Corporation may pay dividends on its outstanding shares in the manner and upon the terms and conditions provided by law and its Articles of Incorporation.
Section 12 GENERAL COUNSEL
The Board of Directors may appoint a General Counsel who shall advise and represent the Corporation generally in all legal matters and proceedings and shall act as counsel to the Board of Directors and the Executive Committee. The General Counsel may sign and execute pleadings, powers of attorney pertaining to legal matters and any other contracts and documents in the regular course of his duties.
Section 13 SEAL
The Board of Directors may provide a corporate seal which shall be circular in form and shall have inscribed thereon the name of the Corporation and the state of incorporation and the words Corporate Seal.
Section 14 WAIVER OF NOTICE
Whenever any notice is required to be given to any Shareholder or Director of the Corporation under the provisions of these Bylaws or under the provisions of the Articles of Incorporation or under the provisions of Utah law, a waiver thereof, in writing and signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.
Section 15 GENERAL PROVISIONS
A. HEADINGS
All headings set forth in this Agreement are intended for convenience only and shall not control or affect the meaning, construction or intent of this Agreement or any provision thereof.
B. GENDER
As used herein, all pronouns shall include the masculine, feminine, neuter, singular and plural thereof, wherever the context and facts require such construction.
C. SEVERABILITY
In the event any provision of this Agreement shall be held invalid or unenforceable according to law, such holding or action shall not invalidate or render unenforceable any other provision hereof.
D. EXHIBITS
Each Exhibit attached hereto shall be incorporated into and be a part of this Agreement.
E. BENEFIT AND OBLIGATION
This Agreement shall be binding upon and shall inure to the benefit of the legal representatives, successors and assigns of the parties hereto.
F. COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument.
G. ENTIRE AGREEMENT
This Agreement contains the entire Agreement among the parties with regard to the subject matter herein.
H. GOVERNING LAW AND JURISDICTION
This Agreement, and the application or interpretation thereof, shall be governed exclusively by its terms and by the laws of the State of Utah. The parties agree that in any action relating to or arising from this Agreement, the State of Utah is hereby designated the proper jurisdiction and venue to hear such action. The parties hereby agree to bring any such action before the Courts in Utah and, in addition, to submit themselves to the jurisdiction of the Courts in Utah.
I. ATTORNEYS FEES
The parties agree that should any party default in or be in breach of any of the covenants, agreements, or warranties herein contained, the non-defaulting parties or the non-breaching parties (or in the event litigation was commenced the prevailing party) shall be entitled to all costs and expenses, including reasonable attorneys fees, (whether an action has been commenced or not) which may arise or accrue from enforcing any of the terms of this Agreement or terminating this Agreement, or in pursuing any remedy provided hereunder or by applicable law (whether before or after judgement).
J. NO PRESUMPTION
Should any provision of this Agreement require judicial interpretations, the Court interpreting or consulting the same shall not apply a presumption that the terms hereof shall be more strictly construed against one party, by reason of the rule of construction that a document is to be construed more strictly against the person who himself or through his agents prepared the same, it being acknowledged that all parties have participated in the preparation hereof.
IN WITNESS WHEREOF, the undersigned have hereunto executed this Agreement this 1st November, 2006.
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DIRECTOR: |
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Amie M. Dunkley |
Certificate of Secretary
I, the undersigned, do hereby certify:
1. That I am the duly elected and acting Secretary of Reliant Software, Inc., a Utah corporation; and
2. That these Bylaws constitute the Bylaws of said Corporation as duly adopted at a meeting of the Board of Directors thereof duly held on the 1st day of November, 2006.
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Amie M. Dunkley |
CONSENT AND AGREEMENT BY SHAREHOLDERS
By their signatures below, the Shareholders covenant and agree to be bound by the provisions of the foregoing Bylaws, as amended from time to time by the Board of Directors, as fully and with the same force and effect as though all of the provisions of said Bylaws were set forth in a separate shareholder agreement duly executed and delivered by the Shareholders.
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SHAREHOLDER: |
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Amie M. Dunkley |
Exhibit 4.1
COUNTERSIGNED: CONTINENTAL STOCK TRANSFER & TRUST COMPANY JERSEY CITY, NJ TRANSFER AGENT BY: AUTHORIZED OFFICER THIS CERTIFIES THAT: IS THE OWNER OF NUMBER SHARES DATED: SEE REVERSE FOR CERTAIN DEFINITIONS PROOF CC INCORPORATED UNDER THE LAWS OF THE STATE OF OHIO C O M M O N S H A R E S transferable on the books of the Corporation in person or by attorney upon surrender of this certificate duly endorsed or assigned. This certificate and the shares represented hereby are subject to the laws of the State of Ohio, and to the Articles of Incorporation and Regulations of the Corporation, as now or hereafter amended. This certificate is not valid until countersigned by the Transfer Agent. WITNESS the facsimile seal of the Corporation and the facsimile signatures of its duly authorized officers. CUSIP 20367Q 10 7 FULLY PAID AND NON-ASSESSABLE COMMON SHARES, $0.01 PAR VALUE PER SHARE, OF COMMUNITY CHOICE FINANCIAL INC. SENIOR VICE PRESIDENT AND SECRETARY SENIOR VICE PRESIDENT AND TREASURER |
THE SIGNATURE TO THE ASSIGNMENT MUST CORRESPOND TO THE NAME AS WRITTEN UPON THE FACE OF THIS CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A COMMERCIAL BANK OR TRUST COMPANY OR A MEMBER FIRM OF A NATIONAL OR REGIONAL OR OTHER RECOGNIZED STOCK EXCHANGE IN CONFORMANCE WITH A SIGNATURE GUARANTEE MEDALLION PROGRAM. COLUMBIA FINANCIAL PRINTING CORP. - www.stockinformation.com Community Choice Financial Inc. The express terms and provisions, including conditions of transfer, of the Common Shares may be found in the Corporations Articles of Incorporation, a copy of which will be sent to each shareholder without charge within five days after receipt of written request therefor. The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian TEN ENT - as tenants by the entireties (Cust) (Minor) JT TEN - as joint tenants with right of under Uniform Gifts to Minors survivorship and not as tenants Act in common (State) Additional abbreviations may also be used though not in the above list. For Value Received, hereby sell, assign and transfer unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE (PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE) Shares represented by the within Certificate, and do hereby irrevocably constitute and appoint Attorney to transfer the said Shares on the books of the within named Corporation with full power of substitution in the premises. Dated NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER. |
Exhibit 4.2
EXECUTION COPY
INDENTURE
Dated as of April 29, 2011
Among
COMMUNITY CHOICE FINANCIAL INC.,
THE SUBSIDIARY GUARANTORS NAMED ON THE SIGNATURE PAGES HERETO
and
U.S. BANK NATIONAL ASSOCIATION,
as Trustee and Collateral Agent
10.75% SENIOR SECURED NOTES DUE 2019
TABLE OF CONTENTS
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Page | |
ARTICLE 1 | |||
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DEFINITIONS | |||
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Section 1.01 |
Definitions |
1 | |
Section 1.02 |
Other Definitions |
37 | |
Section 1.03 |
Rules of Construction |
38 | |
Section 1.04 |
Acts of Holders |
39 | |
Section 1.05 |
Incorporation by Reference of the Trust Indenture Act |
40 | |
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ARTICLE 2 | |||
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THE NOTES | |||
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Section 2.01 |
Form and Dating; Terms |
40 | |
Section 2.02 |
Execution and Authentication |
42 | |
Section 2.03 |
Registrar and Paying Agent |
42 | |
Section 2.04 |
Paying Agent to Hold Money in Trust |
43 | |
Section 2.05 |
Holder Lists |
43 | |
Section 2.06 |
Transfer and Exchange |
43 | |
Section 2.07 |
Replacement Notes |
55 | |
Section 2.08 |
Outstanding Notes |
56 | |
Section 2.09 |
Treasury Notes |
56 | |
Section 2.10 |
Temporary Notes |
56 | |
Section 2.11 |
Cancellation |
56 | |
Section 2.12 |
Defaulted Interest |
57 | |
Section 2.13 |
CUSIP Numbers |
57 | |
Section 2.14 |
Global Notes |
57 | |
Section 2.15 |
Issuance of Additional Notes |
57 | |
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ARTICLE 3 | |||
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REDEMPTION | |||
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Section 3.01 |
Notices to Trustee |
58 | |
Section 3.02 |
Selection of Notes to Be Redeemed or Purchased |
58 | |
Section 3.03 |
Notice of Redemption |
59 | |
Section 3.04 |
Effect of Notice of Redemption |
60 | |
Section 3.05 |
Deposit of Redemption or Purchase Price |
60 | |
Section 3.06 |
Notes Redeemed or Purchased in Part |
60 | |
Section 3.07 |
Optional Redemption |
61 | |
Section 3.08 |
Mandatory Redemption |
62 | |
Section 3.09 |
Offers to Repurchase by Application of Excess Proceeds |
62 | |
ARTICLE 4 | ||
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COVENANTS | ||
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Section 4.01 |
Payment of Notes |
64 |
Section 4.02 |
Maintenance of Office or Agency |
64 |
Section 4.03 |
Reports and Other Information |
64 |
Section 4.04 |
Compliance Certificate |
66 |
Section 4.05 |
Taxes |
67 |
Section 4.06 |
Stay, Extension and Usury Laws |
67 |
Section 4.07 |
Limitation on Restricted Payments |
67 |
Section 4.08 |
Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries |
74 |
Section 4.09 |
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock |
76 |
Section 4.10 |
Asset Sales |
83 |
Section 4.11 |
Transactions with Affiliates |
86 |
Section 4.12 |
Liens |
88 |
Section 4.13 |
Corporate Existence |
89 |
Section 4.14 |
Offer to Repurchase Upon Change of Control |
89 |
Section 4.15 |
Additional Guarantees |
91 |
Section 4.16 |
Suspension of Covenants |
91 |
Section 4.17 |
Further Assurances; After Acquired Property |
92 |
Section 4.18 |
Information Regarding Collateral |
92 |
Section 4.19 |
Alabama Excess Cash Flow Distribution |
93 |
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ARTICLE 5 | ||
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SUCCESSORS | ||
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Section 5.01 |
Merger, Consolidation or Sale of All or Substantially All Assets |
93 |
Section 5.02 |
Successor Corporation Substituted |
95 |
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ARTICLE 6 | ||
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DEFAULTS AND REMEDIES | ||
| ||
Section 6.01 |
Events of Default |
96 |
Section 6.02 |
Acceleration |
99 |
Section 6.03 |
Other Remedies |
99 |
Section 6.04 |
Waiver of Past Defaults |
99 |
Section 6.05 |
Control by Majority |
99 |
Section 6.06 |
Limitation on Suits |
100 |
Section 6.07 |
Rights of Holders of Notes to Receive Payment |
100 |
Section 6.08 |
Collection Suit by Trustee |
100 |
Section 6.09 |
Restoration of Rights and Remedies |
101 |
Section 6.10 |
Rights and Remedies Cumulative |
101 |
Section 6.11 |
Delay or Omission Not Waiver |
101 |
Section 6.12 |
Trustee May File Proofs of Claim |
101 |
Section 6.13 |
Priorities |
102 |
Section 6.14 |
Undertaking for Costs |
102 |
ARTICLE 7 | ||
| ||
TRUSTEE | ||
| ||
Section 7.01 |
Duties of Trustee |
102 |
Section 7.02 |
Rights of Trustee |
103 |
Section 7.03 |
Individual Rights of Trustee |
105 |
Section 7.04 |
Trustees Disclaimer |
105 |
Section 7.05 |
Notice of Defaults |
105 |
Section 7.06 |
Compensation and Indemnity |
105 |
Section 7.07 |
Replacement of Trustee |
106 |
Section 7.08 |
Successor Trustee by Merger, Etc. |
107 |
Section 7.09 |
Eligibility; Disqualification |
107 |
Section 7.10 |
Security Documents; Alabama Intercreditor Agreement; Junior Lien Intercreditor Agreement |
107 |
Section 7.11 |
Preferential Collection of Claims Against Issuer |
108 |
Section 7.12 |
Calculations in Respect of the Notes |
108 |
Section 7.13 |
Brokerage Confirmations |
108 |
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ARTICLE 8 | ||
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LEGAL DEFEASANCE AND COVENANT DEFEASANCE | ||
| ||
Section 8.01 |
Option to Effect Legal Defeasance and Covenant Defeasance |
108 |
Section 8.02 |
Legal Defeasance and Discharge |
108 |
Section 8.03 |
Covenant Defeasance |
109 |
Section 8.04 |
Conditions to Legal or Covenant Defeasance |
109 |
Section 8.05 |
Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions |
111 |
Section 8.06 |
Repayment to Issuer |
111 |
Section 8.07 |
Reinstatement |
111 |
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ARTICLE 9 | ||
| ||
AMENDMENT, SUPPLEMENT AND WAIVER | ||
| ||
Section 9.01 |
Without Consent of Holders of Notes |
112 |
Section 9.02 |
With Consent of Holders of Notes |
114 |
Section 9.03 |
Revocation and Effect of Consents |
116 |
Section 9.04 |
Notation on or Exchange of Notes |
116 |
Section 9.05 |
Trustee and Collateral Agent to Sign Amendments, Etc. |
116 |
Section 9.06 |
Payment for Consents |
116 |
Section 9.07 |
Compliance with the Trust Indenture Act |
117 |
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ARTICLE 10 | ||
| ||
GUARANTEES | ||
| ||
Section 10.01 |
Guarantee |
117 |
Section 10.02 |
Limitation on Subsidiary Guarantor Liability |
118 |
Section 10.03 |
Execution and Delivery |
119 |
Section 10.04 |
Subrogation |
119 |
Section 10.05 |
Benefits Acknowledged |
119 |
Section 10.06 |
Release of Guarantees |
119 |
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ARTICLE 11 | ||
| ||
COLLATERAL | ||
| ||
Section 11.01 |
Collateral and Security Documents |
120 |
Section 11.02 |
Non-Impairment of Liens |
121 |
Section 11.03 |
Release of Collateral |
121 |
Section 11.04 |
Suits to Protect the Collateral |
123 |
Section 11.05 |
Authorization of Receipt of Funds by the Trustee Under the Security Documents |
123 |
Section 11.06 |
Purchaser Protected |
123 |
Section 11.07 |
Powers Exercisable by Receiver or Trustee |
123 |
Section 11.08 |
Release Upon Termination of the Issuers Obligations |
124 |
Section 11.09 |
Collateral Agent |
124 |
Section 11.10 |
Designations |
130 |
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ARTICLE 12 | ||
| ||
SATISFACTION AND DISCHARGE | ||
| ||
Section 12.01 |
Satisfaction and Discharge |
131 |
Section 12.02 |
Application of Trust Money |
132 |
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ARTICLE 13 | ||
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MISCELLANEOUS | ||
| ||
Section 13.01 |
Notices |
132 |
Section 13.02 |
Certificate and Opinion as to Conditions Precedent |
133 |
Section 13.03 |
Statements Required in Certificate or Opinion |
134 |
Section 13.04 |
Rules by Trustee and Agents |
134 |
Section 13.05 |
No Personal Liability of Directors, Officers, Employees, Incorporators, Members, Partners and Stockholders |
134 |
Section 13.06 |
Governing Law |
134 |
Section 13.07 |
Waiver of Jury Trial |
135 |
Section 13.08 |
Force Majeure |
135 |
Section 13.09 |
No Adverse Interpretation of Other Agreements |
135 |
Section 13.10 |
Successors |
135 |
Section 13.11 |
Severability |
135 |
Section 13.12 |
Counterpart Originals |
135 |
Section 13.13 |
Table of Contents, Headings |
135 |
Section 13.14 |
Collateral Agreement Governs |
136 |
Section 13.15 |
Alabama Intercreditor Agreement Governs |
136 |
Section 13.16 |
U.S.A. Patriot Act |
136 |
Section 13.17 |
Trust Indenture Act Controls |
136 |
Section 13.18 |
Communication by Holders of Notes with Other Holders of Notes |
136 |
SCHEDULES | |
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Schedule I |
List of Subsidiary Guarantors |
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EXHIBITS | |
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Exhibit A |
Form of Note |
Exhibit B |
Form of Certificate of Transfer |
Exhibit C |
Form of Certificate of Exchange |
Exhibit D |
Form of Supplemental Indenture to Be Delivered by Subsequent Guarantors |
Exhibit E |
Form of Junior Lien Intercreditor Agreement |
RECONCILIATION OF TIA PROVISIONS
Reconciliation and tie between the Trust Indenture Act of 1939 and this Indenture, dated as of April 29, 2011
TIA Section |
|
Indenture Section | |
303 |
|
|
1.05 |
310 |
(a)(1) |
|
7.09 |
|
(a)(2) |
|
7.09 |
|
(a)(3) |
|
N.A. |
|
(a)(4) |
|
N.A. |
|
(a)(5) |
|
7.09 |
|
(b) |
|
7.09 |
|
(c) |
|
N.A. |
311 |
(a) |
|
7.11 |
|
(b) |
|
7.11 |
|
(c) |
|
N.A. |
312 |
(a) |
|
2.05 |
|
(b) |
|
13.18 |
|
(c) |
|
13.18 |
313 |
(a) |
|
7.12 |
|
(b) |
|
7.12 |
|
(b)(1) |
|
7.12 |
|
(b)(2) |
|
7.12 |
|
(c) |
|
7.12; 13.01 |
|
(d) |
|
7.12 |
314 |
(a) |
|
4.04; 13.03 |
|
(a)(4) |
|
4.04 |
|
(b) |
|
N.A. |
|
(c)(1) |
|
13.02 |
|
(c)(2) |
|
13.02 |
|
(c)(3) |
|
N.A. |
|
(d |
|
N.A. |
|
(e) |
|
13.02; 13.03 |
|
(f) |
|
N.A. |
315 |
(a) |
|
7.01(b); 7.02 |
|
(b) |
|
7.05; 13.01 |
|
(c) |
|
7.01(a) |
|
(d) |
|
7.01(c) |
|
(e) |
|
6.14 |
316 |
(a) (last sentence) |
|
2.09 |
|
(a)(1)(A) |
|
6.05 |
|
(a)(1)(B) |
|
6.04 |
|
(a)(2) |
|
N.A. |
|
(b) |
|
6.07 |
|
(c) |
|
1.04(e) |
317 |
(a)(1) |
|
6.08 |
|
(a)(2) |
|
6.12 |
|
(b) |
|
2.04 |
318 |
(a) |
|
13.17 |
|
(c) |
|
13.17 |
N.A. means Not Applicable.
Note: This Reconciliation and tie shall not, for any purposes, be deemed to be part of this Indenture.
INDENTURE, dated as of April 29, 2011, among Community Choice Financial Inc., an Ohio corporation (the Issuer), the Subsidiary Guarantors (as defined herein) listed on the signature pages hereto and U.S. Bank National Association, a national banking association, as Trustee and Collateral Agent.
W I T N E S S E T H
WHEREAS, the Issuer has duly authorized the creation of an issue of $395,000,000 aggregate principal amount of 10.75% Senior Secured Notes due 2019 (the Initial Notes); and
WHEREAS, the Issuer and each of the Subsidiary Guarantors has duly authorized the execution and delivery of this Indenture;
NOW, THEREFORE, the Issuer, each of the Subsidiary Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the Notes:
ARTICLE 1
DEFINITIONS
Section 1.01 Definitions.
144A Global Note means a Global Note substantially in the form of Exhibit A bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 144A.
Acquired Indebtedness means, with respect to any specified Person,
(1) Indebtedness of any other Person existing at the time such other Person is merged or amalgamated with or into or became a Restricted Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging or amalgamating with or into or becoming a Restricted Subsidiary of such specified Person, and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.
Additional Interest means all additional interest then owing pursuant to the Registration Rights Agreement.
Additional Notes means additional Notes (other than the Initial Notes) issued under this Indenture in accordance with Sections 2.01, 4.09 and 4.12, as part of the same series as the Initial Notes.
Affiliate of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, control (including, with correlative meanings, the terms controlling, controlled by and under common control with), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.
Alabama Capital Expenditures means, for any period, the cash capital expenditures of the Alabama Subsidiary determined in accordance with GAAP, but excluding any such expenditure (a) made to restore, replace or rebuild property to the condition of such property immediately prior to any damage, loss, destruction or condemnation of such property, to the extent such expenditure is made with, or subsequently reimbursed out of, insurance proceeds, indemnity payments, condemnation awards (or payments in lieu thereof) or damage recovery proceeds relating to any such damage, loss, destruction or condemnation, (b) constituting reinvestment by the Alabama Subsidiary during such period of the Net Proceeds of any Asset Sale consummated by the Alabama Subsidiary, (c) made by the Alabama Subsidiary to effect leasehold improvements to any property leased by the Alabama Subsidiary as lessee, to the extent that such expenses have been reimbursed by the landlord and (d) expenditures that are accounted for as capital expenditures by the Alabama Subsidiary and that actually are paid for (including by means of the issuance of Equity Interests by the Alabama Subsidiary) by a Person other than the Alabama Subsidiary and for which the Alabama Subsidiary has not provided and is not required to provide or incur, directly or indirectly, any consideration or obligation to such Person or any other Person (whether before, during or after such period).
Alabama Excess Cash Flow means, for any period, (i) earnings before depreciation and amortization expenses of the Alabama Subsidiary for such period (excluding for this purpose all inter-company transactions), (ii) less Alabama Capital Expenditures for such period, (iii) less any increase in Alabama Net Working Capital for such period or plus any decrease in Alabama Net Working Capital for such period.
Alabama Intercreditor Agreement means the Intercreditor Agreement dated the Issue Date among Republic Bank, the Collateral Agent and the Alabama Subsidiary.
Alabama Net Working Capital means, at any date, (a) the consolidated current assets of the Alabama Subsidiary as of such date (excluding cash and Cash Equivalents) minus (b) the consolidated current liabilities of the Alabama Subsidiary as of such date (excluding current liabilities in respect of Indebtedness). Alabama Net Working Capital at any date may be a positive or negative number. Alabama Net Working Capital increases when it becomes more positive or less negative and decreases when it becomes less positive or more negative.
Alabama Revolving Credit Agreement means the Credit Agreement by and between Insight Capital, LLC and Republic Bank of Chicago, dated July 31, 2009, as the same has been amended as of December 31, 2009 and as of the Issue Date, and as the same may be further amended, restated, replaced (whether upon or after termination or otherwise), refinanced, supplemented, modified or otherwise changed (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time.
Alabama Subsidiary means Insight Capital, LLC, an Alabama limited liability company.
Agent means any Registrar or Paying Agent.
Applicable Authorized Representative has the meaning given to such term in the Collateral Agreement.
Applicable Premium means, with respect to any Note on any Redemption Date, the greater of:
(1) 1.0% of the principal amount of such Note; and
(2) the excess, if any, of (a) the present value at such Redemption Date of (i) the redemption price of such Note at May 1, 2015 (such redemption price being set forth in Section 3.07(b)), plus (ii) all required interest payments due on such Note through May 1, 2015 (excluding accrued but unpaid interest to the Redemption Date), computed using a discount rate equal to the Treasury Rate as of such Redemption Date plus 50 basis points; over (b) the principal amount of such Note.
Applicable Procedures means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream that apply to such transfer or exchange.
Application Period means the 365 days after the receipt of any Net Proceeds of any Asset Sale.
Asset Sale means:
(1) the sale, conveyance, transfer or other disposition, whether in a single transaction or a series of related transactions, of property or assets (including by way of a Sale and Lease-Back Transaction) of the Issuer or any of the Restricted Subsidiaries (each referred to in this definition as a disposition); or
(2) the issuance or sale of Equity Interests of any Restricted Subsidiary (other than non-voting Preferred Stock of Restricted Subsidiaries issued in compliance with Section 4.09), whether in a single transaction or a series of related transactions;
in each case, other than:
(a) any disposition of Cash Equivalents or obsolete or worn out property or equipment in the ordinary course of business or any disposition of inventory or goods (or other assets) held for sale or no longer used or useful in the ordinary course of business;
(b) the disposition of all or substantially all of the assets of the Issuer in a manner permitted pursuant to the provisions described under Section 5.01 or any disposition that constitutes a Change of Control pursuant to this Indenture;
(c) the making of any Restricted Payment or Permitted Investment that is permitted to be made, and is made, under Section 4.07;
(d) any disposition of assets by the Issuer or a Restricted Subsidiary or issuance or sale of Equity Interests of any Restricted Subsidiary in any transaction or series of transactions with an aggregate fair market value of less than $15,000,000;
(e) any disposition of property or assets or issuance of securities by a Restricted Subsidiary to the Issuer or by the Issuer or a Restricted Subsidiary to another Restricted Subsidiary;
(f) the lease, assignment, sub-lease, license or sub-license of any real or personal property in the ordinary course of business;
(g) any issuance, sale or pledge of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;
(h) foreclosures, condemnation or any similar action on assets or the granting of Liens, in each case, not prohibited by this Indenture;
(i) any financing transaction with respect to property constructed or acquired by the Issuer or any Restricted Subsidiary after the Issue Date, including Sale and Lease-Back Transactions and asset securitizations, within 12 months of such construction or acquisition and otherwise permitted by this Indenture;
(j) any surrender or waiver of contractual rights or the settlement, release or surrender of contractual rights or other litigation claims in the ordinary course of business;
(k) the sale or discount of inventory, accounts or loans receivable or notes receivable in the ordinary course of business or the conversion of accounts or loans receivable to notes receivable;
(l) the licensing or sub-licensing of intellectual property or other general intangibles in the ordinary course of business, other than the licensing of intellectual property on a long-term basis;
(m) the unwinding of any Hedging Obligations;
(n) sales, transfers and other dispositions of Investments in joint ventures to the extent required by, or made pursuant to, customary buy/sell arrangements between the joint venture parties set forth in joint venture arrangements and similar binding arrangements;
(o) the lapse or abandonment of intellectual property rights in the ordinary course of business, that, in the reasonable good faith determination of the Issuer, are not material to the conduct of the business of the Issuer and the Restricted Subsidiaries taken as a whole; and
(p) the issuance of directors qualifying shares and shares issued to foreign nationals, in each case, as required by applicable law.
Attributable Debt in respect of a Sale and Lease-Back Transaction means, as at the time of determination, the present value (discounted at the interest rate equal to the rate of interest implicit in such transaction, determined in accordance with GAAP; provided that if such interest rate cannot be determined in accordance with GAAP, the present value shall be discounted at the interest rate borne by the Notes, compounded annually) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale and Lease-Back Transaction (including any period for which such lease has been extended); provided, however, that if such Sale and Lease-Back Transaction results in a Capitalized Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of Capitalized Lease Obligation.
Authorized Representative has the meaning given to such term in the Collateral Agreement.
Bankruptcy Code means Title 11 of the United States Code, as amended.
Bankruptcy Law means the Bankruptcy Code and any similar federal, state or foreign law for the relief of debtors.
Board, with respect to a Person, means the board of directors (or similar body) of such Person or any committee thereof duly authorized to act on behalf of such board of directors (or similar body).
Broker-Dealer means any broker or dealer, in either case, that is registered under the Exchange Act.
Business Day means each day that is not a Legal Holiday.
Capital Stock means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;
(3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person;
but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such securities include any right of participation with Capital Stock.
Capitalized Lease Obligation means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP.
Cash Equivalents means:
(1) United States dollars or Canadian dollars;
(2) (a) euro, pounds sterling or any national currency of any participating member state of the EMU; or
(b) in the case of any Foreign Subsidiary that is a Restricted Subsidiary, such local currencies held by such Restricted Subsidiary from time to time in the ordinary course of business;
(3) securities issued or directly and fully and unconditionally guaranteed or insured by the U.S. government or any agency or instrumentality thereof the securities of which are unconditionally guaranteed as a full faith and credit obligation of such government with maturities of 12 months or less from the date of acquisition;
(4) certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers acceptances with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank (any such instrument, a Qualifying Bank Instrument); provided that, with respect to any Qualifying Bank Instrument held by (x) the Issuer or any Domestic Subsidiary, the applicable commercial
bank is a U.S. commercial bank having capital and surplus of not less than $500,000,000 and (y) any Foreign Subsidiary, the applicable commercial bank is a U.S. commercial bank having capital and surplus of not less than $500,000,000 or a non-U.S. commercial bank having capital and surplus of not less than $100,000,000 (or the U.S. dollar equivalent thereof as of the date of determination);
(5) repurchase obligations for underlying securities of the types described in clause (3) or (4) above entered into with any financial institution meeting the qualifications specified in clause (4) above;
(6) commercial paper rated at least P-1 by Moodys or at least A-1 by S&P and in each case maturing within 12 months after the date of creation thereof;
(7) marketable short-term money market and similar securities having a rating of at least P-2 or A-2 from either Moodys or S&P, respectively (or, if at any time neither Moodys nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency) and in each case maturing within 12 months after the date of acquisition thereof;
(8) investment funds investing 95% of their assets in securities of the types described in clauses (1) through (7) above and (9) through (11) below; provided that Qualifying Bank Instruments with any non-U.S. commercial bank and any securities described under clause (11) below, in each case, shall only be counted towards such 95% requirement to the extent that the holder of such investment fund is a Foreign Subsidiary;
(9) Indebtedness or Preferred Stock issued by Persons (other than the Issuer or any Affiliate of the Issuer) with a rating of A or higher from S&P or A2 or higher from Moodys with maturities of 12 months or less from the date of acquisition;
(10) Investments with average maturities of 12 months or less from the date of acquisition in money market funds rated AAA- (or the equivalent thereof) or better by S&P or Aaa3 (or the equivalent thereof) or better by Moodys; and
(11) in the case of any Foreign Subsidiary, readily marketable direct obligations issued by any foreign government or any political subdivision or public instrumentality thereof, in each case having an Investment Grade Rating from Moodys and S&P (or, if at any time either Moodys or S&P shall not be rating such obligations, an equivalent rating from another Rating Agency) maturing within 12 months of the date of acquisition thereof.
Notwithstanding the foregoing, Cash Equivalents shall include amounts denominated in currencies other than those set forth in clause (1) or (2) above, provided that such amounts are converted into any currency described in either clause (1) or (2) above as promptly as practicable and in any event within ten Business Days following the receipt of such amounts.
Change of Control means the occurrence of any of the following:
(1) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all of the assets of the Issuer and its Subsidiaries, taken as a whole, to any Person other than the Permitted Holders; or
(2) the Issuer becomes aware of (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) the acquisition by
any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than the Permitted Holders, in a single transaction or in a related series of transactions, by way of merger, amalgamation, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), directly or indirectly, of 50% or more of the total voting power of the Voting Stock of the Issuer or any Parent Entity.
Clearstream means Clearstream Banking, Société Anonyme.
Code means the Internal Revenue Code of 1986, as amended, or any successor thereto.
Collateral means all the assets and properties subject to the Liens created by the Security Documents.
Collateral Agent means U.S. Bank National Association, in its capacity as the Collateral Agent appointed and authorized under this Indenture, until a successor replaces it in accordance with the applicable provisions of this Indenture and the Collateral Agreement, and thereafter means the successor serving hereunder and thereunder.
Collateral Agreement means the Collateral Agreement dated the Issue Date by and among the Issuer, the other Grantors, the Trustee, the Revolving Administrative Agent and the Collateral Agent, which creates the security interests in the Collateral in favor of the Collateral Agent for the benefit of the Noteholder Secured Parties, the Revolving Lenders, the other agents under the Revolving Credit Agreement and the holders of the Lender Hedging Obligations associated therewith.
Consolidated Depreciation and Amortization Expense means, with respect to any Person for any period, the total amount of depreciation and amortization expense, including the amortization of deferred financing fees or costs, of such Person and the Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.
Consolidated Interest Expense means, with respect to any Person for any period, without duplication, the sum of:
(1) consolidated interest expense of such Person and the Restricted Subsidiaries for such period, to the extent such expense was deducted in computing Net Income (including (a) accrual of original issue discount that resulted from the issuance of Indebtedness at less than par, (b) all commissions, discounts and other fees and charges owed with respect to letters of credit or bankers acceptances, (c) non-cash interest expense (but excluding any non-cash interest expense attributable to the movement in the mark-to-market valuation of Hedging Obligations or other derivative instruments pursuant to GAAP), (d) the interest component of Capitalized Lease Obligations, and (e) net payments, if any, pursuant to interest rate Hedging Obligations with respect to Indebtedness, and excluding (v) accretion or accrual of discounts with respect to liabilities not constituting Indebtedness, (w) any expense resulting from the discounting of Indebtedness in connection with the application of recapitalization or purchase accounting, (x) amortization of deferred financing fees, debt issuance costs, commissions, fees and expenses and (y) any expensing of bridge, commitment and other financing fees; plus
(2) consolidated capitalized interest of such Person and the Restricted Subsidiaries for such period, whether paid or accrued; less
(3) interest income for such period.
For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by such Person to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.
Consolidated Net Income means, with respect to any Person for any period, the aggregate of the Net Income attributable to such Person and its Restricted Subsidiaries for such period, on a consolidated basis, and otherwise determined in accordance with GAAP; provided, however, that, without duplication,
(1) any after-tax effect of extraordinary, non-recurring or unusual gains, losses or charges (including all fees and expenses relating to any such gains, losses or charges) or expenses (including any fees or expenses paid in connection with the Transactions), severance, relocation costs and curtailments or modifications to pension and post-retirement employee benefit plans shall be excluded,
(2) the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period,
(3) any after-tax effect of income (loss) from discontinued operations and any net after-tax gains or losses on disposal of abandoned or discontinued operations shall be excluded,
(4) any after-tax effect of gains or losses (less all fees and expenses relating thereto) attributable to asset dispositions other than in the ordinary course of business shall be excluded,
(5) the Net Income for such period of any Person that is not a Subsidiary, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting, shall be excluded; provided that Net Income shall be increased by the amount of dividends or distributions or other payments that are actually paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period,
(6) solely for the purpose of determining the amount available for Restricted Payments under clause (3)(a) of Section 4.07(a), the Net Income for such period of any Restricted Subsidiary (other than any Subsidiary Guarantor) shall be excluded to the extent the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, is otherwise restricted by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless all such restrictions with respect to the payment of dividends or similar distributions have been legally waived; provided that Net Income will be increased by the amount of dividends or other distributions or other payments actually paid in cash (or to the extent converted into cash) or Cash Equivalents to the referent Person or a Restricted Subsidiary thereof in respect of such period,
(7) effects of adjustments (including the effects of such adjustments pushed down to such Person and its Restricted Subsidiaries) in the inventory, property and equipment, software and other intangible assets, deferred revenue and debt line items in such Persons consolidated financial statements pursuant to GAAP resulting from the application of purchase accounting in relation to the Transactions or any consummated acquisition or the amortization or write-off of any amounts thereof, net of taxes, shall be excluded,
(8) any after-tax effect of income (loss) from the early extinguishment of Indebtedness or Hedging Obligations or other derivative instruments (including deferred financing costs written off and premiums paid) shall be excluded,
(9) any impairment charge, asset write-off or write-down, including impairment charges or asset write-offs or write-downs related to intangible assets, long-lived assets, investments in debt and equity securities, the amortization of intangibles, and the effects of adjustments to accruals and reserves during a prior period relating to any change in the methodology of calculating reserves for returns, rebates and other chargebacks (including government program rebates), in each case, pursuant to GAAP (excluding any non-cash item to the extent it represents an accrual or reserve for cash expenditures in any future period except to the extent such item is subsequently reversed) shall be excluded,
(10) any (i) non-cash compensation expense recorded from grants of stock appreciation or similar rights, stock options, restricted stock or other rights, (ii) income (loss) attributable to deferred compensation plans or trusts and (iii) compensation expense recorded in connection with the payment of the Special Options Distribution, in each case, shall be excluded,
(11) any expense relating to management, monitoring, consulting and advisory fees and related expenses paid in such period to the Investors to the extent such fees and expenses are permitted to be paid under subsection (3) of Section 4.11(b) and to the extent deducted in computing Net Income shall be excluded,
(12) any net gain or loss resulting in such period from currency transaction or translation gains or losses related to currency remeasurements (including any net loss or gain resulting from hedge agreements for currency exchange risk) shall be excluded, and
(13) any amortization of deferred financing fees or financial advisory costs incurred on or prior to the Issue Date, or in connection with the Transactions, shall be excluded.
Notwithstanding the foregoing, for the purpose of Section 4.07 only (other than clause (3)(d) of Section 4.07(a)), there shall be excluded from Consolidated Net Income any income arising from any sale or other disposition of Restricted Investments made by the Issuer and the Restricted Subsidiaries, any repurchases and redemptions of Restricted Investments from the Issuer and the Restricted Subsidiaries, any repayments of loans and advances that constitute Restricted Investments by the Issuer or any of the Restricted Subsidiaries or any sale of the stock of an Unrestricted Subsidiary, in each case only to the extent such amounts increase the amount of Restricted Payments permitted under clause (3)(d) of Section 4.07(a).
Consolidated Secured Debt Ratio as of any date of determination means the ratio of (1) Consolidated Total Indebtedness of the Issuer and the Restricted Subsidiaries that is secured by Liens as of the end of the most recent fiscal quarter for which internal financial statements are available immediately preceding the date on which such event for which such calculation is being made shall occur to (2) the Issuers EBITDA for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such event for which such calculation is being made shall occur, in each case with such pro forma adjustments to Consolidated Total Indebtedness and EBITDA as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of Fixed Charge Coverage Ratio.
Consolidated Total Indebtedness means, as at any date of determination, an amount equal to (a) the sum of (1) the aggregate amount of all outstanding Indebtedness of the Issuer and the
Restricted Subsidiaries on a consolidated basis consisting of Indebtedness for borrowed money, Obligations in respect of Capitalized Lease Obligations and debt obligations evidenced by promissory notes and similar instruments (for the avoidance of doubt, excluding any (A) Hedging Obligations and (B) performance bonds or any similar instruments) and (2) the aggregate amount of all outstanding Disqualified Stock of the Issuer and all Preferred Stock of the Restricted Subsidiaries on a consolidated basis, with the amount of such Disqualified Stock and Preferred Stock equal to the greater of their respective voluntary or involuntary liquidation preferences and maximum fixed repurchase prices, in each case determined on a consolidated basis in accordance with GAAP, less (b) any Excess Cash. For purposes hereof, the maximum fixed repurchase price of any Disqualified Stock or Preferred Stock that does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Stock or Preferred Stock as if such Disqualified Stock or Preferred Stock were purchased on any date on which Consolidated Total Indebtedness shall be required to be determined pursuant to this Indenture, and if such price is based upon, or measured by, the fair market value of such Disqualified Stock or Preferred Stock, such fair market value shall be determined reasonably and in good faith by the Board of the Issuer.
Contingent Obligations means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (primary obligations) of any other Person (the primary obligor) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent,
(1) to purchase any such primary obligation or any property constituting direct or indirect security therefor,
(2) to advance or supply funds
(a) for the purchase or payment of any such primary obligation, or
(b) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, or
(3) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.
Corporate Trust Office of the Trustee shall be at the address of the Trustee specified in Section 13.01, or such other address as to which the Trustee may give notice to the Holders and the Issuer, except that for purposes of Sections 2.03 and 4.02 such term shall mean the office of the Trustee located at U.S. Bank National Association, 1350 Euclid Avenue, CN OH RN11, Cleveland, Ohio 44115, or such other address as to which the Trustee may give notice to the Holders and the Issuer.
Credit Facilities means one or more debt facilities (including the Revolving Credit Agreement), commercial paper facilities, securities purchase agreements, indentures or similar agreements, in each case, with banks or other institutional lenders or investors providing for revolving loans, term loans, letters of credit or the issuance of securities, including any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith, and, in each case, as amended, restated, replaced (whether upon or after termination or otherwise), refinanced, supplemented, modified or otherwise changed (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time.
Custodian means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto.
Default means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.
Definitive Note means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06(c), substantially in the form of Exhibit A except that such Note shall not bear the Global Note Legend and shall not have the Schedule of Exchanges of Interests in the Global Note attached thereto.
Depositary means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03 as the Depositary with respect to the Notes, which Depositary shall be a clearing agency registered under the Exchange Act; and any and all successors thereto appointed as Depositary hereunder and having become such pursuant to the applicable provision of this Indenture.
Designated Non-cash Consideration means the fair market value of non-cash consideration received by the Issuer or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officers Certificate, setting forth the basis of such valuation, executed by the principal financial officer of the Issuer, less the amount of cash or Cash Equivalents received in connection with a subsequent sale of or collection on such Designated Non-cash Consideration.
Designated Preferred Stock means Preferred Stock of the Issuer or any Parent Entity (in each case other than Disqualified Stock) that is issued for cash (other than to a Restricted Subsidiary or an employee stock ownership plan or trust established by the Issuer or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officers Certificate executed by the principal financial officer of the Issuer or the applicable Parent Entity, as the case may be, on the issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in clause (3) of Section 4.07(a).
Designated Priority Obligations means all Revolving Credit Facility Obligations that have been designated by the Issuer as Designated Priority Obligations under the Collateral Agreement, and any Lender Hedging Obligations associated with such Revolving Credit Facility Obligations. As of the Issue Date, the Obligations under the Revolving Credit Agreement and any associated Lender Hedging Obligations constitute Designated Priority Obligations.
Designated Priority Representative has the meaning given to such term in the Collateral Agreement.
Disqualified Stock means, with respect to any Person, any Capital Stock of such Person that, by its terms, or by the terms of any security into which it is convertible or for which it is putable or exchangeable, or upon the happening of any event, matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise (other than solely as a result of a change of control or asset sale), is convertible or exchangeable for Indebtedness or Disqualified Stock or is redeemable at the option of the holder thereof (other than solely as a result of a change of control or asset sale), in whole or in part, in each case prior to the date that is 91 days after the earlier of the maturity date of the Notes and the date the Notes are no longer outstanding; provided, however, that if such Capital Stock is issued to any plan for the benefit of employees of the Issuer or its Subsidiaries or by any such plan to such employees, such
Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Issuer or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations.
Domestic Subsidiary means any Restricted Subsidiary that is organized or existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof.
EBITDA means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period,
(1) increased (without duplication) by:
(a) provision for taxes based on income or profits or capital, including, without limitation, state, franchise and similar taxes and foreign withholding taxes of such Person paid or accrued during such period deducted in computing Net Income and not added back in computing Consolidated Net Income; plus
(b) Fixed Charges of such Person for such period, together with items excluded from the definition of Consolidated Interest Expense pursuant to clauses 1(w) through 1(y) thereof, to the extent the same were deducted in computing Net Income and not added back in calculating Consolidated Net Income; plus
(c) Consolidated Depreciation and Amortization Expense of such Person for such period to the extent the same was deducted in computing Net Income and not added back in computing Consolidated Net Income; plus
(d) the aggregate amount of fees, expenses or charges related to any acquisition, Investment, disposition, issuance, repayment or refinancing of Indebtedness (including, for the avoidance of doubt, the Transactions) or amendment or modification of any debt instrument or issuance of Equity Interests (in each case, to the extent such transaction is permitted by this Indenture and including any such transaction consummated prior to the Issue Date and any such transaction undertaken but not completed) and any bonus payments made as a result of the successful consummation of the Transactions (to the extent the aggregate amount of such bonus payments does not exceed the amount of such bonus payments described in the Offering Circular), in each case, deducted in computing Net Income and not added back in computing Consolidated Net Income; plus
(e) the amount of (x) any restructuring charge or reserve or non-recurring integration costs deducted in computing Net Income and not added back in computing Consolidated Net Income, including any one-time costs incurred in connection with acquisitions after the Issue Date and (y) any costs or expenses relating to the closure and/or consolidation of facilities, including store closings; plus
(f) any other non-cash charges, including any write offs or write downs, deducted in computing Net Income and not added back in computing Consolidated Net Income (excluding any non-cash item to the extent it represents an accrual or reserve for cash expenditures in any future period except to the extent such item is subsequently reversed, and excluding amortization of any prepaid cash item that was paid in a prior period); plus
(g) the amount of any non-controlling interest expense consisting of Subsidiary income attributable to minority equity interests of third parties in any non-Wholly-Owned Subsidiary of the Issuer deducted in computing net income and not added back in computing Consolidated Net Income, excluding cash distributions made or declared in respect of any such minority equity interests of third parties; plus
(h) the amount of net cost savings resulting from specified actions that have been taken, which net cost savings are projected by the Issuer in good faith to be realized within 12 months following the date of determination (calculated on a pro forma basis as though such net cost savings had been realized on the first day of such period), with such amount of net cost savings being reduced by the amount of net cost savings actually realized during such period from any such specified actions that have already been taken; provided that (w) such projected net cost savings shall be set forth in an Officers Certificate delivered to the Trustee that certifies that such projected net cost savings meet the criteria of this clause (h), (x) such net cost savings are reasonably identifiable and factually supportable, (y) no net cost savings shall be added pursuant to this clause (h) to the extent they are duplicative of any expenses or charges relating to such net cost savings that are added pursuant to clause (e) above and (z) the aggregate amount of net cost savings added pursuant to this clause (h) shall not exceed 10.0% of EBITDA (calculated absent any such net cost savings) for any four consecutive fiscal quarter period; provided further that any additions made pursuant to this clause (h) may be incremental to (but not duplicative of) pro forma adjustments made pursuant to the second paragraph of the definition of Fixed Charge Coverage Ratio; plus
(i) any costs or expense incurred by such Person or a Restricted Subsidiary of such Person pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of such Person or net cash proceeds of an issuance of Equity Interests of such Person (other than Disqualified Stock and Designated Preferred Stock) solely to the extent that such net cash proceeds are excluded from the calculation set forth in clause (3) of Section 4.07(a); plus
(j) the amount of expenses relating to payments made to option holders of the Issuer or any Parent Entity in connection with, or as a result of, any distribution being made to shareholders of such Person or its Parent Entity, which payments are being made to compensate such option holders as though they were shareholders at the time of, and entitled to share in, such distribution, but only to the extent such distributions to shareholders are permitted under this Indenture; plus
(k) proceeds from business interruption insurance (to the extent such proceeds are not reflected as revenue or income in computing Consolidated Net Income and only to the extent the losses or other reduction of net income to which such proceeds are attributable are not otherwise added back in computing Consolidated Net Income or EBITDA); plus
(l) any net loss resulting in such period from Hedging Obligations and the application of Statement of Financial Accounting Standards No. 133; and
(2) decreased by (without duplication) (A) non-cash gains increasing Consolidated Net Income of such Person for such period, excluding any non-cash gains to the extent they
represent the reversal of an accrual or reserve for a potential cash item that reduced EBITDA in any prior period; provided that, to the extent non-cash gains are deducted pursuant to this clause (A) for any previous period and not otherwise added back to EBITDA, EBITDA shall be increased by the amount of any cash receipts (or any netting arrangements resulting in reduced cash expenses) in respect of such non-cash gains received in subsequent periods to the extent not already included therein and (B) any net gains resulting in such period from Hedging Obligations and the application of Statement of Financial Accounting Standards No. 133.
EMU means the economic and monetary union as contemplated by the Treaty on European Union.
Equity Interests means Capital Stock and all warrants, options or other rights to acquire Capital Stock, but excluding any debt security that is convertible into, or exchangeable for, Capital Stock.
Equity Offering means any public or private sale of common equity or Preferred Stock of the Issuer or any Parent Entity (excluding Disqualified Stock), other than:
(1) public offerings with respect to the Issuers or any Parent Entitys common stock registered on Form S-8;
(2) issuances to any Subsidiary of the Issuer; and
(3) any such public or private sale that constitutes an Excluded Contribution.
euro means the single currency of participating member states of the EMU.
Euroclear means Euroclear S.A./N.V., as operator of the Euroclear system.
Excess Cash means, as at any date of determination, an amount equal to (a) the cash and Cash Equivalents of the Issuer and the Restricted Subsidiaries as of such date (but excluding any cash or Cash Equivalents that are (or would be) the proceeds of Secured Indebtedness for which the amount of Excess Cash is being calculated), less (b) the sum of the aggregate amount of Store Cash and Excluded Cash of the Issuer and the Restricted Subsidiaries as of such date; provided that, the calculation of each such amount as of any relevant date of determination shall be set forth in an Officers Certificate delivered to the Trustee in which the relevant Officer shall also certify that the Issuer and the Subsidiary Guarantors are in compliance with the requirements set forth in the Collateral Agreement regarding cash, including that the Issuer and the Subsidiary Guarantors have taken and are taking commercially reasonable efforts to cause the Collateral Agent (or, in the case of cash and Cash Equivalents of the Alabama Subsidiary, the Collateral Agents bailee pursuant to the Alabama Intercreditor Agreement) to have control (as defined in the UCC) over at least 90% of the cash and Cash Equivalents of the Issuer and the Subsidiaries (other than Excluded Cash and Store Cash of the Issuer and the Subsidiaries).
Exchange Act means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.
Exchange Notes means the notes issued in the Exchange Offer pursuant to Section 2.06(f).
Exchange Offer has the meaning set forth in the Registration Rights Agreement.
Exchange Offer Registration Statement has the meaning set forth in the Registration Rights Agreement.
Exchange Securities means the debt securities of the Issuer issued pursuant to the Indenture in exchange for, and in an aggregate principal amount equal to, the Notes exchanged therefor, in compliance with the terms of the Registration Rights Agreement.
Excluded Assets has the meaning set forth in the Collateral Agreement.
Excluded Cash has the meaning set forth in the Collateral Agreement.
Excluded Contribution means the net cash proceeds, marketable securities or Qualified Proceeds received by the Issuer from:
(1) contributions to its common equity capital, and
(2) the sale (other than to a Subsidiary of the Issuer or to any management equity plan or stock option plan or any other management or employee benefit plan or agreement of the Issuer or any of its Subsidiaries) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of the Issuer,
in each case designated as Excluded Contributions pursuant to an Officers Certificate executed by the principal financial officer of the Issuer on the date such capital contributions are made or the date such Equity Interests are sold, as the case may be, which are excluded from the calculation set forth in clause (3) of Section 4.07(a).
Existing Credit Agreements means each of: (1) the Credit Agreement among CheckSmart Financial Company, CheckSmart Financial Holdings Corp., RBS Securities Corporation, Bear Stearns Corporate Lending Inc., and the other parties thereto dated as of May 1, 2006, (2) the First Lien Credit Agreement among California Check Cashing Stores, LLC, CCCS Holdings, LLC, UBS Securities LLC, UBS AG, Stamford Branch, Union Bank of California, N.A., and the other parties thereto dated September 29, 2006, and (3) the Second Lien Credit Agreement among California Check Cashing Stores, LLC, CCCS Holdings, LLC, UBS Securities LLC, UBS AG, Stamford Branch, Union Bank of California, N.A., and the other parties thereto dated September 29, 2006, in the case of each of the foregoing, as the same has been amended, restated, amended and restated, supplemented and otherwise modified prior to the Issue Date.
fair market value means, with respect to any asset or liability, the fair market value of such asset or liability as determined by the Issuer in good faith.
First Lien Holder means each holder of any First Lien Obligations.
First Lien Obligations means all Revolving Credit Facility Obligations, Lender Hedging Obligations, Notes Obligations and Other First Lien Obligations.
First Lien Priority means, as to any Indebtedness or other Obligations secured by a Lien, relative to the Notes, having equal, first-lien priority on the Collateral and the representative for the holders of which has become a party to the Collateral Agreement.
Fixed Charge Coverage Ratio means, with respect to any Person for any period, the ratio of EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In
the event that the Issuer or any Restricted Subsidiary incurs, assumes, guarantees, redeems, retires or extinguishes any Indebtedness (other than any Indebtedness incurred under any revolving credit facility unless such Indebtedness has been permanently repaid during the applicable period (with a corresponding reduction in commitments) and not replaced prior to the end of such period) or issues, redeems or repurchases Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to or simultaneously with the event for which the calculation of the Fixed Charge Coverage Ratio is made (the Fixed Charge Coverage Ratio Calculation Date), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee, redemption, retirement or extinguishment of Indebtedness, or such issuance, redemption or repurchase of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period.
For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP) that have been made by the Issuer or any of the Restricted Subsidiaries during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Fixed Charge Coverage Ratio Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, consolidations and discontinued operations (and the change in any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged or amalgamated with or into the Issuer or any of the Restricted Subsidiaries since the beginning of such period shall have made any Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation had occurred at the beginning of the applicable four-quarter period.
For purposes of this definition, whenever pro forma effect is to be given to a transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Issuer and shall be made in accordance with Article 11 of Regulation S-X. In addition to pro forma adjustments made in accordance with Article 11 of Regulation S-X, pro forma calculations may also include net operating expense reductions for such period resulting from any Asset Sale or other disposition or acquisition, Investment, merger, amalgamation, consolidation or discontinued operation (as determined in accordance with GAAP) for which pro forma effect is being given that (A) have been realized or (B) are reasonably expected to be realizable within twelve months of the date of such transaction; provided that (w) any pro forma adjustments made pursuant to this sentence shall be set forth in an Officers Certificate delivered to the Trustee that certifies that such net operating expense reductions meet the criteria set forth in this paragraph, (x) such net operating expense reductions are reasonably identifiable and factually supportable, (y) no net operating expense reductions shall be given pro forma effect to the extent duplicative of any expenses or charges that are added back pursuant to the definition of EBITDA and (z) net operating expense reductions given pro forma effect shall not include any operating expense reductions related to the combination of any Unrestricted Subsidiary that is converted into a Restricted Subsidiary or combined with the operations of the Issuer or any Restricted Subsidiary. Such pro forma adjustments may be incremental to (but not duplicative of) additions made to EBITDA pursuant to clause (h) of the definition thereof. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Fixed Charge Coverage Ratio Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Issuer to be the rate of interest implicit in such Capitalized Lease
Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility being given pro forma effect to shall be computed based upon the average daily balance of such Indebtedness during the applicable period (but excluding any such Indebtedness that has been permanently repaid during the applicable period (with a corresponding reduction in commitments) and not replaced prior to the end of such period). Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Issuer may designate.
Fixed Charges means, with respect to any Person for any period, without duplication, the sum of:
(1) Consolidated Interest Expense of such Person for such period;
(2) all cash dividends or other distributions (excluding items eliminated in consolidation) (i) on any series of Preferred Stock and (ii) to finance dividends or distributions paid on any series of Designated Preferred Stock of any Parent Entity, in each case, paid during such period; and
(3) all cash dividends or other distributions paid (excluding items eliminated in consolidation) on any series of Disqualified Stock during such period.
Foreign Subsidiary means, with respect to any Person, any Restricted Subsidiary of such Person that is not organized or existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof and any Restricted Subsidiary of such Foreign Subsidiary.
GAAP means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, that are in effect on the Issue Date, it being understood that, for purposes of this Indenture, all references to codified accounting standards specifically named in this Indenture shall be deemed to include any successor, replacement, amended or updated accounting standard under GAAP. At any time after the Issue Date, the Issuer may elect, for all purposes of this Indenture, to apply IFRS accounting principles in lieu of U.S. GAAP and, upon any such election, references herein to GAAP shall thereafter be construed to mean IFRS as in effect on the date of such election; provided that (1) any such election, once made, shall be irrevocable (and shall only be made once), (2) all financial statements and reports required to be provided after such election pursuant to this Indenture shall be prepared on the basis of IFRS, (3) from and after such election, all ratios, computations and other determinations based on GAAP contained in this Indenture shall be computed in conformity with IFRS with retroactive effect being given thereto assuming that such election had been made on the Issue Date, (4) such election shall not have the effect of rendering invalid any payment or Investment made prior to the date of such election pursuant to Section 4.07 or any incurrence of Indebtedness incurred prior to the date of such election pursuant to Section 4.09 (or any other action conditioned on the Issuer and the Restricted Subsidiaries having been able to incur $1.00 of additional Indebtedness) if such payment, Investment, incurrence or other action was valid under this Indenture on the date made, incurred or taken, as the case may be, (5) all accounting terms and references in this Indenture to accounting standards shall be deemed to be references to the most comparable terms or standards under IFRS and (6) in no event, regardless of the principles of IFRS in effect on the date of such election, shall any liabilities attributable to an operating lease be treated as Indebtedness nor shall any expenses attributable to payments made under an operating lease be treated, in
whole or in part, as interest expense; provided that such payments under an operating lease shall be treated as an operating expense in computing Consolidated Net Income. The Issuer shall give notice of any such election made in accordance with this definition to the Trustee and the Holders of Notes promptly after having made such election (and in any event, within 15 days thereof). For the avoidance of doubt, solely making an election (without any other action) referred to in this definition will not be treated as an incurrence of Indebtedness.
Global Note Legend means the legend set forth in Section 2.06(g)(ii), which is required to be placed on all Global Notes issued under this Indenture.
Global Notes means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes, substantially in the form of Exhibit A, issued in accordance with Section 2.01, 2.06(b) or 2.06(d).
Government Securities means securities that are:
(1) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged; or
(2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America,
which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian with respect to any such Government Securities or a specific payment of principal of or interest on any such Government Securities held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government Securities or the specific payment of principal of or interest on the Government Securities evidenced by such depository receipt.
Grantors means the Issuer and the Subsidiary Guarantors.
guarantee means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations.
Guarantee means the guarantee by any Subsidiary Guarantor of the Issuers Obligations under this Indenture and the Notes.
Hedging Obligations means, with respect to any Person, the obligations of such Person under any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, commodity swap agreement, commodity cap agreement, commodity collar agreement, foreign exchange contract, currency swap agreement or similar agreement providing for the transfer or mitigation of interest rate, currency or commodity risks either generally or under specific contingencies.
holder means, with reference to any Indebtedness or other Obligations, any holder or lender of, or trustee or collateral agent or other authorized representative with respect to, such
Indebtedness or Obligations, and, in the case of Hedging Obligations, any counter-party to such Hedging Obligations.
Holder means the Person in whose name a Note is registered in the Note Register.
Indebtedness means, with respect to any Person, without duplication:
(1) any indebtedness (including principal and premium) of such Person, whether or not contingent:
(a) in respect of borrowed money;
(b) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers acceptances (or, without duplication, reimbursement agreements in respect thereof);
(c) representing the balance deferred and unpaid of the purchase price of any property (including Capitalized Lease Obligations), except (i) any such balance that constitutes a trade payable or similar obligation to a trade creditor, in each case accrued in the ordinary course of business and (ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP; or
(d) representing any Hedging Obligations;
if and to the extent that any of the foregoing Indebtedness in any of clauses (a) through (d) above (other than letters of credit and Hedging Obligations) would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP; provided that Indebtedness of any Parent Entity that is non-recourse to the Issuer and all of its Restricted Subsidiaries but that appears on the consolidated balance sheet of the Issuer solely by reason of push-down accounting under GAAP shall be excluded;
(2) all Attributable Debt in respect of Sale and Lease-Back Transactions entered into by such Person;
(3) to the extent not otherwise included, any obligation by such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the obligations of the type referred to in clause (1) above of a third Person (whether or not such items would appear upon the balance sheet of such obligor or guarantor), other than by endorsement of negotiable instruments for collection in the ordinary course of business; and
(4) to the extent not otherwise included, the obligations of the type referred to in clause (1) or (2) above of a third Person secured by a Lien on any asset owned by such first Person, whether or not such Indebtedness is assumed by such first Person;
provided, however, that notwithstanding the foregoing, Indebtedness shall be deemed not to include Contingent Obligations incurred in the ordinary course of business. For the avoidance of doubt, in no event shall any liabilities attributable to an operating lease be treated as Indebtedness, so long as the associated payments under such operating lease are accounted for as an operating expense in computing Consolidated Net Income.
Indenture means this Indenture, as amended, supplemented or otherwise modified from time to time.
Independent Financial Advisor means an accounting, appraisal, investment banking firm or consultant to Persons engaged in Similar Businesses of nationally recognized standing that is, in the good faith judgment of the Issuer, qualified to perform the task for which it has been engaged and that is not an Affiliate of the Issuer.
Indirect Participant means a Person who holds a beneficial interest in a Global Note through a Participant.
Initial Notes has the meaning set forth in the recitals hereto.
Initial Purchasers means Credit Suisse Securities (USA) LLC, Jefferies & Company, Inc. and Stephens Inc.
Initial Unrestricted Subsidiary means Latin Card Strategy, LLC, a Delaware limited liability company.
interest with respect to the Notes means interest with respect thereto.
Interest Payment Date means May 1 and November 1 of each year to stated maturity.
Investment Grade Rating means (1) a rating equal to or higher than Baa3 (or the equivalent) by Moodys and BBB- (or the equivalent) by S&P or (2) a rating equal to or higher than Baa3 (or the equivalent) by Moodys or BBB- (or the equivalent) by S&P and an equivalent rating by any other Rating Agency.
Investments means, with respect to any Person, all investments, direct or indirect, by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts or loans receivable, trade credit, advances to customers, and commission, travel and similar advances to officers and employees, in each case made or arising in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet (excluding the footnotes) of the Issuer in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. For purposes of the definition of Unrestricted Subsidiary and Section 4.07:
(1) Investments shall include the portion (proportionate to the Issuers equity interest in such Subsidiary) of the fair market value of the net assets of a Subsidiary of the Issuer at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Issuer shall be deemed to continue to have a permanent Investment in an Unrestricted Subsidiary in an amount (if positive) equal to:
(a) the Issuers Investment in such Subsidiary at the time of such redesignation; less
(b) the portion (proportionate to the Issuers equity interest in such Subsidiary) of the fair market value of the net assets of such Subsidiary at the time of such redesignation; and
(2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at the time of such transfer, in each case as determined in good faith by the Board of the Issuer.
If the Issuer or any Restricted Subsidiary of the Issuer sells or otherwise disposes of any Equity Interests of any direct or indirect Subsidiary of the Issuer such that, after giving effect to any such sale or disposition, such Person is no longer a Subsidiary of the Issuer, the Issuer (or the applicable Restricted Subsidiary) will be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Issuers (and its Restricted Subsidiaries) Investments in such Subsidiary that were not sold or disposed of.
The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any dividend, distribution, return of capital or repayment received in cash by the Issuer or a Restricted Subsidiary in respect of such Investment.
Investor Management Agreement means the management services agreement, dated the Issue Date, among the Issuer, CheckSmart Financial Company, California Check Cashing Stores, LLC, Diamond Castle Holdings, LLC and GGC Administration, LLC.
Investors means the Sponsor and Golden Gate Private Equity, Inc. and any funds, partnerships or other investment vehicles managed or directly or indirectly controlled by Golden Gate Private Equity, Inc., but not including, however, any portfolio companies of any of the foregoing.
Issue Date means April 29, 2011.
Issuer has the meaning set forth in the recitals hereto.
Issuer Order means a written request or order signed on behalf of the Issuer by an Officer of the Issuer, who must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Issuer, and delivered to the Trustee.
Junior Lien Indebtedness means any Indebtedness incurred by the Issuer or any other Grantor that is secured by Liens on the Collateral having Junior Lien Priority relative to the Liens securing the Notes Obligations and the other First Lien Obligations.
Junior Lien Priority means, relative to specified Indebtedness or other Obligations secured by a Lien, having a junior Lien priority on specified Collateral and subject to a Junior Lien Intercreditor Agreement and, if the Alabama Revolving Credit Agreement remains outstanding, the Alabama Intercreditor Agreement.
Legal Holiday means a Saturday, a Sunday or a day on which commercial banking institutions are not required to be open in the State of New York.
Lender Hedging Obligations means any Hedging Obligations of the Grantors to any Person that is an agent, arranger or lender, or an Affiliate of an agent, arranger or lender, under a Credit Facility, the Obligations in respect of which are Revolving Credit Facility Obligations, at the time such Person enters into the applicable agreement giving rise to such Hedging Obligations. Lender Hedging Obligations shall be associated with a particular class of Revolving Credit Facility Obligations to the extent that such Lender Hedging Obligations are owing to an agent, arranger or lender, or an Affiliate of an agent, arranger or lender, under the applicable Credit Facility governing such Revolving Credit Facility Obligations, at the time such Person enters into such Lender Hedging Obligations.
Lien means, with respect to any asset, any mortgage, lien (statutory or otherwise), pledge, hypothecation, charge, security interest, preference, priority or encumbrance of any kind in respect of such asset, whether or not filed, recorded, registered, published or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction; provided that in no event shall an operating lease be deemed to constitute a Lien.
Moodys means Moodys Investors Service, Inc. and any successor to its rating agency business.
Net Income means, with respect to any Person, the net income (loss) attributable to such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.
Net Proceeds means the aggregate cash proceeds received by the Issuer or any of the Restricted Subsidiaries in respect of any Asset Sale, including any cash received upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Sale, net of:
(1) the direct costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash Consideration, including legal, accounting and investment banking fees, and brokerage and sales commissions, any relocation expenses incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements);
(2) amounts required to be applied to the repayment of principal, premium, if any, and interest on Indebtedness that is (i) secured by a Lien on the property or assets that are the subject of such Asset Sale, that is, and is permitted to be, senior to the Lien securing the Notes or (ii) secured by a Lien on such property or assets and such property or assets do not constitute Collateral, which Indebtedness, in either case, is required (other than required by Section 4.10) to be paid as a result of such transaction; and
(3) any deduction of appropriate amounts to be provided by the Issuer or any of the Restricted Subsidiaries as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by the Issuer or any of the Restricted Subsidiaries after such sale or other disposition thereof, including pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.
New York UCC means the UCC as from time to time in effect in the State of New York.
Non-U.S. Person means a Person who is not a U.S. Person.
Noteholder Secured Parties means each Holder of Notes, the Trustee, the Collateral Agent and each other holder of, or obligee in respect of, any Notes Obligations.
Notes means the Initial Notes and more particularly means any Note authenticated and delivered under this Indenture. For all purposes of this Indenture, the term Notes shall also include any Additional Notes that may be issued.
Notes Documents means the Notes, the Guarantees, this Indenture, the Security Documents, the Alabama Intercreditor Agreement and the Junior Lien Intercreditor Agreement.
Notes Obligations means all Obligations of the Grantors under the Notes, the Guarantees and this Indenture.
Obligations means any principal, interest (including any interest accruing subsequent to the filing of a petition in bankruptcy, reorganization or similar proceeding at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable state, federal or foreign law), premium, penalties, fees, indemnifications, reimbursements (including reimbursement obligations with respect to letters of credit and bankers acceptances), damages and other liabilities, and guarantees of payment of such principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities, payable under the documentation governing any Indebtedness.
Offering Circular means the final offering circular, dated April 20, 2011, relating to the offering of the Notes.
Officer means the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer, the Controller or the Secretary of the Issuer or of any other Person, as the case may be.
Officers Certificate means a certificate signed on behalf of the Issuer by two Officers of the Issuer or on behalf of any other Person, as the case may be, one of whom must be the Officer from which such certificate is required to be delivered, or, in the event that no such Officer is specified, the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Issuer or of such other Person that meets the requirements set forth in this Indenture.
Opinion of Counsel means a written opinion delivered to the Trustee from legal counsel that is acceptable to the Trustee in its reasonable discretion. The counsel may be an employee of or counsel to the Issuer.
Other First Lien Obligations means any Indebtedness or other Obligations (other than the Notes and Designated Priority Obligations) having First Lien Priority with respect to the Collateral and that are not secured by any other assets and, in the case of Indebtedness for borrowed money, has a stated maturity that is equal to or later than the stated maturity of the Notes; provided that an authorized representative of the holders of such Indebtedness shall have executed a joinder to the Collateral Agreement and, if the Alabama Revolving Credit Agreement remains outstanding, the Alabama Intercreditor Agreement.
Parent Entity means any Person that is a direct or indirect parent of the Issuer.
Pari Passu Payment Obligations means the Notes Obligations and each class of Other First Lien Obligations.
Participant means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account with the Depositary, Euroclear or Clearstream, respectively (and, with respect to DTC, shall include Euroclear and Clearstream).
Permitted Asset Swap means the concurrent purchase and sale or exchange of Related Business Assets or a combination of Related Business Assets and cash or Cash Equivalents between the
Issuer or any of the Restricted Subsidiaries, on the one hand, and another Person, on the other hand; provided that any cash or Cash Equivalents received must be applied in accordance with Section 4.10.
Permitted Holders means (i) the Sponsor, (ii) members of management of the Issuer or any Parent Entity who are holders of Equity Interests of the Issuer (or any Parent Entity) on the Issue Date, (iii) any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or any successor provision) of which any of the Persons described in the foregoing clause (i) or (ii) are members; provided that, in the case of such group and without giving effect to the existence of such group or any other group, the Sponsor and members of management, collectively, have beneficial ownership of more than 50% of the total voting power of the Voting Stock of the Issuer or any Parent Entity or (iv) any Permitted Parent. Any Person or group whose acquisition of beneficial ownership constitutes a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of this Indenture will thereafter, together with its controlled Affiliates, constitute an additional Permitted Holder.
Permitted Investments means:
(1) any Investment in the Issuer or any of the Restricted Subsidiaries;
(2) any Investment in cash or Cash Equivalents;
(3) any Investment by the Issuer or any of the Restricted Subsidiaries in a Person that is engaged in a Similar Business if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary; or
(b) such Person, in one transaction or a series of related transactions, is merged, amalgamated or consolidated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Issuer or a Restricted Subsidiary,
and, in each case, any Investment held by such Person; provided that such Investment was not acquired by such Person in contemplation of such acquisition, merger, amalgamation, consolidation or transfer;
(4) any Investment in securities or other assets not constituting cash or Cash Equivalents and received in connection with an Asset Sale made pursuant to the provisions of Section 4.10 or any other disposition of assets not constituting an Asset Sale;
(5) any Investment existing on the Issue Date or made pursuant to binding commitments in effect on the Issue Date to the extent described in the Offering Circular, or an Investment consisting of any extension, modification or renewal of any such Investment existing on the Issue Date or binding commitment in effect on the Issue Date to the extent described in the Offering Circular; provided that the amount of any such Investment may be increased in such extension, modification or renewal only (a) as required by the terms of such Investment or binding commitment as in existence on the Issue Date (including as a result of the accrual or accretion of interest or original issue discount or the issuance of pay-in-kind securities) or (b) as otherwise permitted under this Indenture;
(6) any Investment acquired by the Issuer or any of the Restricted Subsidiaries:
(a) in exchange for any other Investment or accounts or loans receivable held by the Issuer or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts or loans receivable;
(b) in satisfaction of judgments against other Persons; or
(c) as a result of a foreclosure by the Issuer or any of the Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;
(7) Hedging Obligations permitted under clause (11) of Section 4.09(b);
(8) any Investment in a Similar Business having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (8) that are at that time outstanding, not to exceed the greater of $25,000,000 and 5.5% of Total Assets;
(9) Investments the payment for which consists of Equity Interests (exclusive of Disqualified Stock) of the Issuer or any Parent Entity; provided, however, that such Equity Interests will not increase the amount available for Restricted Payments under clause (3) of Section 4.07(a);
(10) guarantees of Indebtedness permitted under Section 4.09;
(11) any transaction to the extent it constitutes an Investment that is permitted and made in accordance with the provisions of Section 4.11(b) (except transactions described in clauses (2), (6), (8), (10) or (15) of Section 4.11(b));
(12) Investments consisting of purchases and acquisitions of inventory, supplies, material or equipment or the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;
(13) additional Investments having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (13) that are at that time outstanding, not to exceed the greater of $20,000,000 and 4.0% of Total Assets;
(14) advances to, or guarantees of Indebtedness of, employees not in excess of $5,000,000 outstanding at any one time, in the aggregate;
(15) loans and advances to officers, directors and employees for business-related travel expenses, moving expenses and other similar expenses or payroll advances, in each case incurred in the ordinary course of business or consistent with past practices;
(16) advances, loans or extensions of trade credit in the ordinary course of business by the Issuer or any of the Restricted Subsidiaries;
(17) Investments consisting of purchases and acquisitions of assets or services in the ordinary course of business;
(18) Investments in the ordinary course of business consisting of Article 3 endorsements for collection or deposit and Article 4 customary trade arrangements with customers consistent with past practices; and
(19) Investments in Unrestricted Subsidiaries having an aggregate fair market value taken together with all other Investments made pursuant to this clause (19) that are at the time outstanding, not to exceed $10,000,000.
Permitted Liens means, with respect to any Person:
(1) pledges, deposits or security by such Person under workmens compensation laws, unemployment insurance, employers health tax, and other social security laws or similar legislation or other insurance related obligations (including, but not limited to, in respect of deductibles, self insured retention amounts and premiums and adjustments thereto) or indemnification obligations of (including obligations in respect of letters of credit or bank guarantees for the benefit of) insurance carriers providing property, casualty or liability insurance, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety, stay, customs or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, performance and return-of-money bonds and other similar obligations (including letters of credit issued in lieu of any such bonds or to support the issuance thereof and including those to secure health, safety and environmental obligations), in each case incurred in the ordinary course of business;
(2) Liens imposed by law or regulation, such as landlords, carriers, warehousemens and mechanics, materialmens and repairmens Liens, contractors, supplier of materials, architects, and other like Liens, in each case for sums not yet overdue for a period of more than 90 days or that are being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review, in each case, so long as adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;
(3) Liens for taxes, assessments or other governmental charges that are not yet overdue for a period of more than 30 days or not yet payable or that are being contested in good faith by appropriate proceedings diligently conducted, so long as adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;
(4) Liens in favor of the issuers of performance, surety, bid, indemnity, warranty, release, appeal or similar bonds or with respect to other regulatory requirements or letters of credit or bankers acceptances and completion guarantees, in each case issued pursuant to the request of and for the account of such Person in the ordinary course of its business;
(5) minor survey exceptions, minor encumbrances, ground leases, easements or reservations of, or rights of others for, licenses, rights-of-way, servitudes, drains, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning, building code or other restrictions (including minor defects and irregularities in title and similar encumbrances) as to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties that were not incurred in connection with Indebtedness and that do not in the aggregate materially impair their use in the operation of the business of such Person;
(6) Liens securing Indebtedness permitted at the time of incurrence to be incurred pursuant to clause (5), (13)(b), (15) or (19) of Section 4.09(b); provided that (a) Liens securing Indebtedness permitted to be incurred pursuant to such clause (5) extend only to the assets purchased with the proceeds of such Indebtedness and the proceeds and products thereof, (b) Liens securing Indebtedness permitted to be incurred pursuant to such clause (15) only secure Indebtedness of, and extend only to the assets of, Foreign Subsidiaries and (c) Liens securing Indebtedness permitted to be incurred pursuant to such clause (19) extend only to the assets of Foreign Subsidiaries; provided, further, that to the extent any Liens cover the Collateral, this clause (6) shall be available to permit such Liens only to the extent that such Liens secure Other First Lien Obligations;
(7) Liens existing on the Issue Date or pursuant to agreements in existence on the Issue Date (other than the Liens created by the Security Documents and the Republic Liens);
(8) Liens on property or shares of stock or other assets of a Person at the time such Person becomes a Subsidiary that, in each case, secure an Obligation existing at the time such Person becomes a Subsidiary; provided that (x) such Liens and Obligations are not created or incurred in connection with, or in contemplation of, such other Person becoming a Subsidiary and (y) such Liens may not extend to any other property owned by the Issuer or any of the Restricted Subsidiaries (other than (a) after-acquired property that is affixed to or incorporated into the property covered by such Lien securing such Obligation, (b) any other after-acquired property subject to such Lien securing such Obligation; provided that, in the case of clauses (a) and (b) above, the terms of such Obligation require or include a pledge of such after-acquired property (it being understood that such requirement shall not apply or be permitted to apply to any property to which such requirement would not have applied but for such acquisition) and (c) the proceeds and products thereof);
(9) Liens on property or other assets at the time the Issuer or a Restricted Subsidiary acquired the property or such other assets, including any acquisition by means of a merger, amalgamation or consolidation with or into the Issuer or any of the Restricted Subsidiaries; provided, however, that such Liens are not created or incurred in connection with, or in contemplation of, such acquisition, merger, amalgamation or consolidation; provided, further, however, that the Liens may not extend to any other property owned by the Issuer or any of the Restricted Subsidiaries;
(10) Liens securing Obligations relating to any Indebtedness or other obligations of a Restricted Subsidiary owing to the Issuer or a Subsidiary Guarantor permitted to be incurred in accordance with Section 4.09;
(11) Liens securing Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes); provided that with respect to Hedging Obligations relating to Indebtedness, such Indebtedness is permitted under this Indenture;
(12) Liens on specific items of inventory or other goods and proceeds of any Person securing such Persons obligations in respect of bankers acceptances or trade letters of credit issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;
(13) leases, subleases, licenses or sublicenses (including of intellectual property) granted to others in the ordinary course of business that do not materially interfere with the
ordinary conduct of the business of the Issuer or any of the Restricted Subsidiaries and do not secure any Indebtedness;
(14) Liens arising from Uniform Commercial Code (or equivalent statute) financing statement filings regarding operating leases or consignments entered into by the Issuer and the Restricted Subsidiaries in the ordinary course of business;
(15) Liens in favor of the Issuer or any Subsidiary Guarantor;
(16) Liens on vehicles or equipment of the Issuer or any of the Restricted Subsidiaries granted in the ordinary course of business;
(17) Liens to secure any modification, refinancing, refunding, extension, renewal or replacement (or successive modification, refinancing, refunding, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (6), (7), (8) or (9) or clauses (26) or (38) below; provided that (a) in the case of any Lien referred to in the foregoing clause (6), this clause (17) shall only apply to modifications, refinancings, refundings, extensions, renewals or replacements of Indebtedness of Foreign Subsidiaries initially incurred under clause (15) of Section 4.09(b) that are secured by assets of such Foreign Subsidiaries, (b) any such new Lien shall be limited to all or part of the same property that secured the original Lien (plus accessions, additions and improvements on such property, including (i) after-acquired property that is affixed to or incorporated into the property covered by such Lien, (ii) any other after-acquired property subject to such Lien; provided that, in the case of clauses (i) and (ii) above, the terms of such Indebtedness require or include a pledge of such after-acquired property (it being understood that such requirement shall not apply or be permitted to apply to any property to which such requirement would not have applied but for such modification, refinancing, refunding, extension, renewal or replacement) and (iii) the proceeds and products thereof) and (c) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (x) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clause (6), (7), (8), (9), (26) or (38) of this definition, in each case, at the time the original Lien became a Permitted Lien under this Indenture, and (y) an amount necessary to pay any fees and expenses, including premiums and accrued and unpaid interest, related to such modification, refinancing, refunding, extension, renewal or replacement;
(18) deposits made or other security provided in the ordinary course of business to secure liability to insurance carriers;
(19) Liens securing any other Obligations (which Obligations may be Other First Lien Obligations) that do not exceed $25,000,000 at any one time outstanding;
(20) Liens securing judgments for the payment of money not constituting an Event of Default under clause (5) of Section 6.01(a) so long as such Liens are adequately bonded and any appropriate legal proceedings that may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has not expired;
(21) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods in the ordinary course of business;
(22) Liens (a) of a collection bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection, (b) attaching to commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course of business and not for speculative purposes, and (c) in favor of banking institutions arising as a matter of law encumbering deposits (including the right of set-off) and that are within the general parameters customary in the banking industry;
(23) Liens deemed to exist in connection with Investments in repurchase agreements permitted under Section 4.09; provided that such Liens do not extend to any assets other than those that are the subject of such repurchase agreement;
(24) Liens that are contractual rights of set-off or rights of pledge (a) relating to the establishment of depository relations with banks not given in connection with the issuance of Indebtedness, (b) relating to pooled deposit or sweep accounts of the Issuer or any of the Restricted Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Issuer and the Restricted Subsidiaries or (c) relating to purchase orders and other agreements entered into with customers of the Issuer or any of the Restricted Subsidiaries in the ordinary course of business;
(25) Liens securing Indebtedness incurred under clause (1) of Section 4.09(b); provided that an authorized representative of the holders of such Indebtedness shall have executed a joinder to the Collateral Agreement and, if the Alabama Revolving Credit Agreement remains outstanding, the Alabama Intercreditor Agreement;
(26) Liens securing the Notes and the Guarantees outstanding on the Issue Date;
(27) Liens securing Lender Hedging Obligations;
(28) any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;
(29) Liens solely on any cash earnest money deposits made by the Issuer or any of the Restricted Subsidiaries in connection with any letter of intent or purchase agreement with respect to a transaction permitted under this Indenture;
(30) Liens on Capital Stock of an Unrestricted Subsidiary that secure Indebtedness or other obligations of such Unrestricted Subsidiary;
(31) Liens arising out of conditional sale, title retention, consignment or similar arrangements with vendors for the sale or purchase of goods entered into by the Issuer or any Restricted Subsidiary in the ordinary course of business;
(32) ground leases, subleases, licenses or sublicenses in respect of real property on which facilities owned or leased by the Issuer or any of the Restricted Subsidiaries are located that do not in the aggregate materially impair their use in the operation of the business of the Issuer and the Restricted Subsidiaries;
(33) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;
(34) the reservations, limitations, provisos and conditions expressed in any original grants of real or immoveable property that do not materially impair the use of the affected land for the purpose used or intended to be used;
(35) any Lien resulting from the deposit of cash or securities in connection with the performance of a bid, tender, sale or contract (excluding the borrowing of money) entered into in the ordinary course of business or deposits of cash or securities in order to secure appeal bonds or bonds required in respect of judicial proceedings;
(36) any Lien in favor of a lessor or licensor for rent to become due or for other obligations or acts, the payment or performance of which is required under any lease as a condition to the continuance of such lease;
(37) Liens on the Collateral in favor of any collateral agent relating to such collateral agents administrative expenses with respect to the Collateral;
(38) Liens securing any Other First Lien Obligations incurred pursuant to Section 4.09(a); provided, however, that, at the time of incurrence of such Liens securing such Other First Lien Obligations under this clause (38) and after giving pro forma effect thereto, the Consolidated Secured Debt Ratio would be no greater than 3.25 to 1.0;
(39) the Republic Liens;
(40) Liens on the assets of Subsidiaries that are not Subsidiary Guarantors securing Indebtedness of such Subsidiaries that was permitted by this Indenture to be incurred;
(41) all rights of expropriation, access or use or other similar rights conferred by or reserved by any federal, state or municipal authority or agency;
(42) any agreements with any governmental authority or utility that do not, in the aggregate, adversely affect in any material respect the use or value of real property and improvements thereon in the good faith judgment of the Issuer;
(43) Liens (i) on cash advances in favor of the seller of any property to be acquired in an Investment permitted under this Indenture to be applied against the purchase price for such Investment, and (ii) incurred in connection with an agreement to sell, transfer, lease or otherwise dispose of any property in a transaction permitted under Section 4.10, in each case, solely to the extent such Investment or sale, disposition, transfer or lease, as the case may be, would have been permitted on the date of the creation of such Lien; and
(44) agreements to subordinate any interest of the Issuer or any Restricted Subsidiary in any accounts or loans receivable or other proceeds arising from inventory consigned by the Issuer or any Restricted Subsidiary pursuant to an agreement entered into in the ordinary course of business.
For purposes of determining compliance with this definition, (A) Liens need not be incurred solely by reference to one category of Permitted Liens described in this definition but are permitted to be incurred in part under any combination thereof and of any other available exemption and (B) in the event that a Lien (or any portion thereof) meets the criteria of one or more of the categories of Permitted Liens, the Issuer may, in its sole discretion, classify or reclassify such Lien (or any portion thereof) in any manner that complies with this definition.
For purposes of this definition, the term Indebtedness shall be deemed to include interest on such Indebtedness.
Permitted Parent means any Parent Entity formed by the Sponsor that is not formed in connection with, or in contemplation of, a transaction that, assuming such Parent Entity was not a Parent Entity, would constitute a Change of Control.
Person means any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.
Post-Petition Interest means any interest or entitlement to fees or expenses or other charges that accrues after the commencement of any bankruptcy proceeding, whether or not allowed or allowable in any such bankruptcy proceeding.
Preferred Stock means any Equity Interest with preferential rights of payment of dividends or upon liquidation, dissolution, or winding up.
Private Placement Legend means the legend set forth in Section 2.06(g)(i) to be placed on all Notes issued under this Indenture, except where otherwise permitted by the provisions of this Indenture.
QIB means a qualified institutional buyer as defined in Rule 144A.
Qualified Proceeds means assets that are used or useful in, or Capital Stock of any Person engaged in, a Similar Business; provided that the fair market value of any such assets or Capital Stock shall be determined by the Issuers Board in good faith.
Qualifying Bank Instrument has the meaning given to such term in clause (4) of the definition of Cash Equivalents.
Rating Agencies means Moodys and S&P or if Moodys or S&P or both shall not make a rating on the Notes publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Issuer which shall be substituted for Moodys or S&P or both, as the case may be.
Registration Rights Agreement means the registration rights agreement dated the Issue Date among the Issuer, the Subsidiary Guarantors and the Initial Purchasers.
Record Date for the interest, if any, payable on any applicable Interest Payment Date means April 15 or October 15 (whether or not a Business Day) next preceding such Interest Payment Date.
Regulation S means Regulation S promulgated under the Securities Act.
Regulation S Global Note means a Regulation S Temporary Global Note or Regulation S Permanent Global Note, as applicable.
Regulation S Permanent Global Note means a permanent Global Note in the form of Exhibit A bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to
the outstanding principal amount of the Regulation S Temporary Global Note upon expiration of the Restricted Period.
Regulation S Temporary Global Note means a temporary Global Note in the form of Exhibit A bearing the Global Note Legend, the Private Placement Legend and the Regulation S Temporary Global Note Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Notes initially sold in reliance on Rule 903.
Regulation S Temporary Global Note Legend means the legend set forth in Section 2.06(g)(iii).
Related Business Assets means assets (other than cash or Cash Equivalents) used or useful in a Similar Business; provided that any assets received by the Issuer or a Restricted Subsidiary in exchange for assets transferred by the Issuer or a Restricted Subsidiary shall not be deemed to be Related Business Assets if they consist of securities of a Person, unless upon receipt of the securities of such Person, such Person would become a Restricted Subsidiary.
Republic Bank means Republic Bank of Chicago, in its capacity as the lender to the Alabama Subsidiary under the Alabama Revolving Credit Agreement.
Republic Liens means Liens on the Shared Alabama Collateral securing the Republic Obligations.
Republic Obligations means any and all Obligations of the Alabama Subsidiary pursuant to the Alabama Revolving Credit Facility the Indebtedness in respect of which is incurred under subsection (2) of Section 4.09(b).
Republic Obligations Payment Date has the meaning given to First Priority Obligations Payment Date in the Alabama Intercreditor Agreement.
Responsible Officer means, when used with respect to the Trustee or Collateral Agent, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such Persons knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.
Restricted Definitive Note means a Definitive Note bearing the Private Placement Legend.
Restricted Global Note means a Global Note bearing the Private Placement Legend.
Restricted Investment means an Investment other than a Permitted Investment.
Restricted Period means the 40-day distribution compliance period as defined in Regulation S.
Restricted Subsidiary means, at any time, any direct or indirect Subsidiary of the Issuer (including any Foreign Subsidiary) that is not then an Unrestricted Subsidiary; provided, however, that
upon the occurrence of an Unrestricted Subsidiary ceasing to be an Unrestricted Subsidiary, such Subsidiary shall be included in the definition of Restricted Subsidiary.
Revolving Administrative Agent means the administrative agent under the Revolving Credit Agreement, which, on the Issue Date, is Credit Suisse AG.
Revolving Credit Agreement means the Revolving Credit Agreement, dated the Issue Date, by and among the Issuer, the other persons party thereto designated as loan parties, Credit Suisse AG, as administrative agent and issuing bank thereunder, and the other parties thereto, including any related notes, letters of credit, guarantees, collateral documents, instruments and agreements executed in connection therewith, and any appendices, exhibits, annexes or schedules to any of the foregoing.
Revolving Credit Facility Obligations means Obligations of the Grantors in respect of revolving credit loans incurred, or letters of credit made, pursuant to a Credit Facility, the Indebtedness in respect of which is incurred pursuant to clause (1) of Section 4.09(b), which will include, for the avoidance of doubt, Obligations under the Revolving Credit Agreement and any related guarantee or security documents.
Revolving Lender means any lender or holder or agent or arranger of Indebtedness under the Revolving Credit Agreement.
Rule 144 means Rule 144 promulgated under the Securities Act.
Rule 144A means Rule 144A promulgated under the Securities Act.
Rule 903 means Rule 903 promulgated under the Securities Act.
Rule 904 means Rule 904 promulgated under the Securities Act.
S&P means Standard & Poors, a division of The McGraw-Hill Companies, Inc., and any successor to its rating agency business.
Sale and Lease-Back Transaction means any arrangement providing for the leasing by the Issuer or any of the Restricted Subsidiaries of any real or tangible personal property, which property has been or is to be sold or transferred by the Issuer or such Restricted Subsidiary to a third Person in contemplation of such leasing.
SEC means the U.S. Securities and Exchange Commission.
Secured Indebtedness means any Indebtedness of the Issuer or any of the Restricted Subsidiaries secured by a Lien.
Securities Act means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.
Security Documents means the security agreements (including the Collateral Agreement), pledge agreements, mortgages, hypothecs, collateral assignments, deeds of trust, deeds to secure debt and related agreements, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified from time to time, creating the security interests in any assets or property in favor of the Collateral Agent for the benefit of the First Lien Holders as contemplated by this Indenture.
Shared Alabama Collateral means that portion of the Collateral that is owned by the Alabama Subsidiary and pledged to secure the Republic Obligations.
Shelf Registration Statement means the Shelf Registration Statement as defined in the Registration Rights Agreement.
Significant Subsidiary means any Restricted Subsidiary that would be a significant subsidiary as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such regulation is in effect on the Issue Date.
Similar Business means any business conducted or proposed to be conducted by the Issuer and the Restricted Subsidiaries on the Issue Date or any business that is similar, reasonably related, incidental or ancillary thereto, or is a reasonable extension, development or expansion thereof.
Special Dividend means a special dividend paid in respect of the Capital Stock of the Issuer in an aggregate amount that, when taken together with the Special Options Distribution, does not exceed $125,000,000, which dividend shall be declared substantially concurrently with the consummation of the initial offering of the Notes and which dividend and shall be paid within fifteen Business Days thereof.
Special Options Distribution means a special distribution paid in respect of options to purchase Capital Stock of the Issuer in an aggregate amount that does not exceed the amount of such distributions described in the Offering Circular, and which distribution shall be paid within fifteen Business Days of the declaration of the Special Dividend.
Sponsor means Diamond Castle Holdings, LLC and any funds, partnerships or other investment vehicles managed or directly or indirectly controlled by the Sponsor, but not including, however, any portfolio companies of any of the foregoing.
Store Cash means, as of any date, the product of $50,000 multiplied by the number of stores owned and operated by the Issuer and its Subsidiaries as of such date.
Subordinated Indebtedness means, with respect to the Notes and the Guarantees,
(1) any Indebtedness of the Issuer that is by its terms subordinated in right of payment to the Notes, and
(2) any Indebtedness of any Subsidiary Guarantor that is by its terms subordinated in right of payment to the Guarantee of such entity of the Notes.
Subsidiary means, with respect to any Person:
(1) any corporation, association or other business entity (other than a partnership, joint venture, limited liability company or similar entity) of which more than 50% of the total voting power of shares of Capital Stock entitled to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, and
(2) any partnership, joint venture, limited liability company or similar entity of which
(a) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof whether in the form of membership, general, special or limited partnership or otherwise, and
(b) such Person or any Restricted Subsidiary of such Person is a controlling general partner or otherwise controls such entity.
Subsidiary Guarantor means each Subsidiary of the Issuer that executes the Indenture as a guarantor on the Issue Date and each other Subsidiary of the Issuer that thereafter guarantees the Notes in accordance with the terms of the Indenture.
TIA means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the Issue Date; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, TIA means, to the extent required by any such amendment, the Trust Indenture Act as so amended.
Total Assets means, as of any date, the total consolidated assets of the Issuer and the Restricted Subsidiaries on a consolidated basis, as shown on the consolidated balance sheet of the Issuer and the Restricted Subsidiaries as of the end of the most recently ended fiscal quarter prior to the applicable date of determination for which financial statements are available; provided that, for purposes of calculating Total Assets for purposes of testing the covenants under this Indenture in connection with any transaction, the total consolidated assets of the Issuer and the Restricted Subsidiaries shall be adjusted to reflect any acquisitions and dispositions of assets that have occurred during the period from the date of the applicable balance sheet through the applicable date of determination but without giving effect to the transaction being tested under this Indenture.
Transactions means the: (1) the execution and delivery of the Revolving Credit Agreement on or prior to the Issue Date on substantially the same terms as those described in the Offering Circular; (2) the issuance of the Notes (and the execution and delivery of the Guarantees and Security Documents in connection therewith); (3) the repayment in full of any amounts outstanding under the Existing Credit Agreements; (4) the acquisition by the Issuer on the Issue Date of all of the outstanding Equity Interests of California Check Cashing Stores, LLC and CheckSmart Financial Holdings Corp. pursuant to the Acquisition Agreement on substantially the same terms as those described in the Offering Circular; (5) the payment by the Issuer of the Special Dividend; (6) the payment by the Issuer of the Special Options Distribution; (7) the execution and delivery of an amendment to the Alabama Revolving Credit Agreement on substantially the same terms as those described in the Offering Circular; and (8) the payment of fees and expenses in relation to the foregoing (including accounting, attorney and other professional fees).
Treasury Rate means, as of any Redemption Date, the yield to maturity as of such Redemption Date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the Redemption Date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such Redemption Date to May 1, 2015; provided, however, that if the period from such Redemption Date to May 1, 2015 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.
Trustee means U.S. Bank National Association, a national banking association, as trustee, until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.
Uniform Commercial Code or UCC means the Uniform Commercial Code as in effect in the relevant jurisdiction from time to time. Unless otherwise specified, references to the Uniform Commercial Code herein refer to the New York UCC.
Unrestricted Definitive Note means one or more Definitive Notes that do not bear and are not required to bear the Private Placement Legend.
Unrestricted Global Note means a permanent Global Note, substantially in the form of Exhibit A that bears the Global Note Legend and that has the Schedule of Exchanges of Interests in the Global Note attached thereto, and that is deposited with or on behalf of and registered in the name of the Depositary, representing Notes that do not bear the Private Placement Legend.
Unrestricted Subsidiary means:
(1) as of the Issue Date and for so long as the same has not been designated as a Restricted Subsidiary, the Initial Unrestricted Subsidiary;
(2) any Subsidiary of the Issuer that at the time of determination is an Unrestricted Subsidiary (as designated by the Issuer, as provided below); and
(3) any Subsidiary of an Unrestricted Subsidiary.
The Issuer may designate any Subsidiary of the Issuer (including any existing Subsidiary and any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on, any property of, the Issuer or any Restricted Subsidiary (other than solely any Subsidiary of the Subsidiary to be so designated); provided that
(1) such designation complies with Section 4.07; and
(2) each of:
(a) the Subsidiary to be so designated; and
(b) its Subsidiaries
has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness pursuant to which the lender has recourse to any of the assets of the Issuer or any Restricted Subsidiary (other than Equity Interests in the Unrestricted Subsidiary).
The Issuer may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that, immediately after giving effect to such designation, no Default shall have occurred and be continuing and either:
(1) the Issuer could incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test described in Section 4.09(a); or
(2) the Fixed Charge Coverage Ratio for the Issuer and the Restricted Subsidiaries would be greater than such ratio for the Issuer and the Restricted Subsidiaries immediately prior to such designation, in each case on a pro forma basis taking into account such designation.
Any such designation by the Issuer shall be notified by the Issuer to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of the Issuer giving effect to such designation and an Officers Certificate certifying that such designation complied with the foregoing provisions.
U.S. Person means a U.S. person as defined in Rule 902(k) under the Securities Act.
U.S.A. Patriot Act means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56, as amended and signed into law October 26, 2001.
Voting Stock of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of such Person.
Weighted Average Life to Maturity means, when applied to any Indebtedness, Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing:
(1) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment; by
(2) the sum of all such payments.
Wholly-Owned Subsidiary of any Person means a Subsidiary of such Person, 100% of the outstanding Equity Interests of which (other than directors qualifying shares) are at the time owned by such Person or by one or more Wholly-Owned Subsidiaries of such Person.
Section 1.02 Other Definitions.
Term |
|
Defined |
Acceptable Commitment |
|
4.10 |
Action |
|
11.09 |
Additional Assets |
|
4.10 |
Affiliate Transaction |
|
4.11 |
Asset Sale Offer |
|
4.10 |
Authentication Order |
|
2.02 |
Change of Control Offer |
|
4.14 |
Change of Control Payment |
|
4.14 |
Change of Control Payment Date |
|
4.14 |
Covenant Defeasance |
|
8.03 |
DTC |
|
2.03 |
Event of Default |
|
6.01 |
Excess Proceeds |
|
4.10 |
incur or incurrence |
|
4.09 |
Legal Defeasance |
|
8.02 |
Term |
|
Defined |
Note Register |
|
2.03 |
Offer Amount |
|
3.09 |
Offer Period |
|
3.09 |
Paying Agent |
|
2.03 |
Purchase Date |
|
3.09 |
Redemption Date |
|
3.07 |
Refinancing Indebtedness |
|
4.09 |
Registrar |
|
2.03 |
Restricted Payments |
|
4.07 |
Reversion Date |
|
4.16 |
Security Document Order |
|
11.09 |
Subject Lien |
|
4.12 |
Successor Company |
|
5.01 |
Successor Subsidiary Guarantor |
|
5.01 |
Suspended Covenants |
|
4.16 |
Suspension Period |
|
4.16 |
Section 1.03 Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;
(c) or is not exclusive;
(d) words in the singular include the plural, and in the plural include the singular;
(e) will shall be interpreted to express a command;
(f) provisions apply to successive events and transactions;
(g) references to sections of, or rules under, the Securities Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time;
(h) unless the context otherwise requires, any reference to an Article, Section, clause or Exhibit refers to an Article, Section, clause or Exhibit, as the case may be, of this Indenture;
(i) the words herein, hereof and hereunder and other words of similar import refer to this Indenture as a whole and not any particular Article, Section, clause or other subdivision;
(j) including means including, without limitation;
(k) any reference to the Junior Lien Intercreditor Agreement made herein shall, unless the context requires otherwise, refer to the Junior Lien Intercreditor Agreement entered into pursuant to Section 11.09(m) to the extent the same is then in effect;
(l) any reference to the Alabama Intercreditor Agreement made herein shall, unless the context requires otherwise, apply only to the extent the Alabama Revolving Credit Agreement remains outstanding;
(m) all references herein, in any context, to any interest payable on or with respect to the Notes shall be deemed to include Additional Interest (if any) payable pursuant to the Registration Rights Agreement.
Section 1.04 Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments or record or both are delivered to the Trustee and, where it is hereby expressly required, to the Issuer. Proof of execution of any such instrument or of a writing appointing any such agent, or the holding by any Person of a Note, shall be sufficient for any purpose of this Indenture and (subject to Section 7.01) conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Section 1.04.
(b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by or on behalf of any legal entity other than an individual, such certificate or affidavit shall also constitute proof of the authority of the Person executing the same. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner that the Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Note shall bind every future Holder of the same Note and the Holder of every Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of any action taken, suffered or omitted by the Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note.
(e) The Issuer may set a record date for purposes of determining the identity of Holders entitled to give any request, demand, authorization, direction, notice, consent, waiver or take any other act, or to vote or consent to any action by vote or consent authorized or permitted to be given or taken by Holders. Unless otherwise specified, if not set by the Issuer prior to the first solicitation of a Holder made by any Person in respect of any such action, or in the case of any such vote, prior to such vote, any such record date shall be the later of 30 days prior to the first solicitation of such consent or the date of the most recent list of Holders furnished to the Trustee prior to such solicitation.
(f) Without limiting the foregoing, a Holder entitled to take any action hereunder with regard to any particular Note may do so with regard to all or any part of the principal amount of such Note or by one or more duly appointed agents, each of which may do so pursuant to such appointment with regard to all or any part of such principal amount. Any notice given or action taken by a Holder or its agents with regard to different parts of such principal amount pursuant to this paragraph shall have the same effect as if given or taken by separate Holders of each such different part.
(g) Without limiting the generality of the foregoing, a Holder, including DTC that is the Holder of a Global Note, may make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders, and DTC may provide its proxy or proxies to the beneficial owners of interests in any such Global Note through its standing instructions and customary practices.
(h) The Issuer may fix a record date for the purpose of determining the Persons that are beneficial owners of interests in any Global Note held by DTC entitled under the procedures of such depositary to make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders. If such a record date is fixed, the Holders on such record date or their duly appointed proxy or proxies, and only such Persons, shall be entitled to make, give or take such request, demand, authorization, direction, notice, consent, waiver or other action, whether or not such Holders remain Holders after such record date. No such request, demand, authorization, direction, notice, consent, waiver or other action shall be valid or effective if made, given or taken more than 90 days after such record date.
Section 1.05 Incorporation by Reference of the Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA and not otherwise defined herein are used herein as so defined.
ARTICLE 2
THE NOTES
Section 2.01 Form and Dating; Terms.
(a) General. The Notes and the Trustees certificate of authentication shall be substantially in the form of Exhibit A. The Notes may have notations, legends or endorsements required by law, stock exchange rules or usage. Each Note shall be dated the date of its authentication. The Notes shall be in denominations of $2,000 and integral multiples of $1,000 in excess thereof.
(b) Global Notes. Notes issued in global form shall be substantially in the form of Exhibit A (including the Global Note Legend thereon and the Schedule of Exchanges of Interests in the Global Note attached thereto). Notes issued in definitive form shall be substantially in the form of Exhibit A (but without the Global Note Legend thereon and without the Schedule of Exchanges of Interests in the Global Note attached thereto). Each Global Note shall represent such of the outstanding Notes as shall be specified in the Schedule of Exchanges of Interests in the Global Note attached thereto and each shall provide that it shall represent up to the aggregate principal amount of Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as applicable, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby shall be made by the Trustee or the Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06.
(c) Temporary Global Notes. Notes offered and sold in reliance on Regulation S shall be issued initially in the form of the Regulation S Temporary Global Note, which shall be deposited on behalf of the purchasers of the Notes represented thereby with the Trustee, as custodian for the Depositary, and registered in the name of the Depositary or the nominee of the Depositary for the accounts of designated agents holding on behalf of Euroclear or Clearstream, duly executed by the Issuer and authenticated by the Trustee as hereinafter provided. The Restricted Period shall be terminated upon the receipt by the Trustee of:
(i) a written certificate from the Depositary, together with copies of certificates from Euroclear and Clearstream certifying that they have received certification of non-United States beneficial ownership of 100% of the aggregate principal amount of the Regulation S Temporary Global Note (except to the extent of any beneficial owners thereof who acquired an interest therein during the Restricted Period pursuant to another exemption from registration under the Securities Act and who shall take delivery of a beneficial ownership interest in a 144A Global Note bearing a Private Placement Legend, all as contemplated by Section 2.06(b)); and
(ii) an Officers Certificate from the Issuer.
Following the termination of the Restricted Period, beneficial interests in the Regulation S Temporary Global Note shall be exchanged for beneficial interests in the Regulation S Permanent Global Note pursuant to the Applicable Procedures. Simultaneously with the authentication of the Regulation S Permanent Global Note, the Trustee shall cancel the Regulation S Temporary Global Note. The aggregate principal amount of the Regulation S Temporary Global Note and the Regulation S Permanent Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee, as the case may be, in connection with transfers of interest as hereinafter provided.
(d) Terms. The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is unlimited.
The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture and the Issuer, the Subsidiary Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.
The Notes shall be subject to repurchase by the Issuer pursuant to an Asset Sale Offer as provided in Section 4.10 or a Change of Control Offer as provided in Section 4.14. The Notes shall not be redeemable, other than as provided in Article 3.
(e) Euroclear and Clearstream Procedures Applicable. The provisions of the Operating Procedures of the Euroclear System and Terms and Conditions Governing Use of Euroclear and the General Terms and Conditions of Clearstream Banking and Customer Handbook of Clearstream shall be applicable to transfers of beneficial interests in the Regulation S Temporary
Global Note and the Regulation S Permanent Global Notes that are held by Participants through Euroclear or Clearstream.
Section 2.02 Execution and Authentication.
At least one Officer shall execute the Notes on behalf of the Issuer by manual or facsimile signature.
If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be entitled to any benefit under this Indenture or be valid or obligatory for any purpose until authenticated substantially in the form of Exhibit A by the manual signature of the Trustee. The signature shall be conclusive evidence that the Note has been duly authenticated and delivered under this Indenture.
On the Issue Date, the Trustee shall, upon receipt of an Issuer Order (an Authentication Order), authenticate and deliver the Initial Notes. In addition, at any time, from time to time, the Trustee shall, upon receipt of an Authentication Order, authenticate and deliver any Additional Notes for an aggregate principal amount specified in such Authentication Order for such Additional Notes issued hereunder.
The Trustee may appoint an authenticating agent reasonably acceptable to the Issuer to authenticate Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of the Issuer.
The Trustee shall have the right to decline to authenticate and deliver any Notes if (a) the Trustee, being advised by counsel, determines, in its reasonable discretion, that such action may not be taken lawfully, or (b) the Trustee in good faith by its Board or trustees, executive committee or a trust committee of directors and/or Responsible Officers shall determine, in its reasonable discretion, that such action would expose the Trustee to personal liability to Holders of any then outstanding Notes.
Section 2.03 Registrar and Paying Agent.
The Issuer shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange (Registrar) and an office or agency where Notes may be presented for payment (Paying Agent). The Registrar shall keep a register of the Notes (Note Register) and of their transfer and exchange. The Issuer may appoint one or more co-registrars and one or more additional paying agents. The term Registrar includes any co-registrar and the term Paying Agent includes any additional paying agent. The Issuer may change any Paying Agent or Registrar without prior notice to any Holder. The Issuer shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Issuer fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such and all presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. The Issuer or any of the Issuers Subsidiaries may act as Paying Agent or Registrar.
The Issuer initially appoints The Depository Trust Company (DTC) to act as Depositary with respect to the Global Notes.
The Issuer initially appoints the Trustee to act as the Paying Agent and Registrar for the Notes and to act as Custodian with respect to the Global Notes.
Section 2.04 Paying Agent to Hold Money in Trust.
The Issuer shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium, if any, or interest on the Notes, and will notify the Trustee of any default by the Issuer in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Issuer or a Subsidiary of the Issuer) shall have no further liability for the money. If the Issuer or a Subsidiary of the Issuer acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Issuer, the Trustee shall serve as Paying Agent for the Notes.
Section 2.05 Holder Lists.
The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with TIA, Section 312(a). If the Trustee is not the Registrar or to the extent otherwise required by the TIA, the Issuer shall furnish to the Trustee at least ten days before each Interest Payment Date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes.
Section 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. Except as otherwise set forth in this Section 2.06, a Global Note may be transferred, in whole and not in part, only to another nominee of the Depositary or to a successor Depositary or a nominee of such successor Depositary. A beneficial interest in a Global Note may not be exchanged for a Definitive Note unless (i) the Depositary (x) notifies the Issuer that it is unwilling or unable to continue as Depositary for such Global Note or (y) has ceased to be a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Issuer within 90 days, or (ii) there shall have occurred and be continuing an Event of Default with respect to the Notes. Upon the occurrence of any of the preceding events in subclause (i) or (ii), Definitive Notes delivered in exchange for any Global Note or beneficial interests therein will be registered in the names, and issued in any approved denominations, requested by or on behalf of the Depositary (in accordance with its customary procedures). Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10, shall be authenticated and delivered in the form of, and shall be, a Global Note, except for Definitive Notes issued subsequent to any of the preceding events in subclause (i) or (ii) above and pursuant to Section 2.06(c). A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a); provided, however, beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b) or (c).
(b) Transfer and Exchange of Beneficial Interests in the Global Notes. The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein
to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; provided, however, that prior to the expiration of the Restricted Period, transfers of beneficial interests in the Regulation S Temporary Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.06(b)(i), the transferor of such beneficial interest must deliver to the Registrar either (A) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase or (B) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (B) (1) above; provided that in no event shall Definitive Notes be issued upon the transfer or exchange of beneficial interests in the Regulation S Temporary Global Note prior to (A) the expiration of the Restricted Period and (B) the receipt by the Registrar of any certificates required pursuant to Rule 903. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(h).
(iii) Transfer of Beneficial Interests to Another Restricted Global Note. A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.06(b)(ii) and the Registrar receives the following:
(A) if the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B, including the certifications in item (1) thereof; or
(B) if the transferee will take delivery in the form of a beneficial interest in the Regulation S Global Note, then the transferor must deliver a certificate in the form of Exhibit B, including the certifications in item (2) thereof.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note. A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.06(b)(ii), and:
(A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Issuer;
(B) such transfer is effected pursuant to a Shelf Registration Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to an Exchange Offer Registration Statement and such Broker-Dealer complies with the terms of the Registration Rights Agreement; or
(D) the Registrar receives the following:
(y) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such Holder substantially in the form of Exhibit C, including the certifications in item (1)(a) thereof; or
(z) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit B, including the certifications in item (4) thereof;
and, in each such case set forth in this Section 2.06(b)(iv)(D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to this Section 2.06(b)(iv) at a time when an Unrestricted Global Note has not yet been issued, the Issuer shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred pursuant to this Section 2.06(b)(iv).
Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(i) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes. If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then, upon the occurrence of any of the events in subsection (i) or (ii) of Section 2.06(a) and receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder substantially in the form of Exhibit C, including the certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A, a certificate substantially in the form of Exhibit B, including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate substantially in the form of Exhibit B, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate substantially in the form of Exhibit B, including the certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to the Issuer or any of the Restricted Subsidiaries, a certificate substantially in the form of Exhibit B, including the certifications in item (3)(b) thereof; or
(F) if such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate substantially in the form of Exhibit B, including the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h), and the Issuer shall execute and the Trustee shall, upon receipt of an Authentication Order, authenticate and mail to the Person designated in the instructions a Definitive Note in the applicable principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall mail such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(i) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein.
(ii) Beneficial Interests in Regulation S Temporary Global Note to Definitive Notes. Notwithstanding Sections 2.06(c)(i)(A) and (C), a beneficial interest in the Regulation S Temporary Global Note may not be exchanged for a Definitive Note or transferred to a Person who takes delivery thereof in the form of a Definitive Note prior to
(A) the expiration of the Restricted Period and (B) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act, except in the case of a transfer pursuant to an exemption from the registration requirements of the Securities Act other than Rule 903 or Rule 904.
(iii) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes. A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only upon the occurrence of any of the events in subsection (i) or (ii) of Section 2.06(a), and:
(A) such exchange or transfer is effected pursuant to an Exchange Offer in accordance with the Registration Rights Agreement and the holder of such beneficial interest, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Issuer;
(B) such transfer is effected pursuant to a Shelf Registration Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement and such Broker-Dealer complies with the terms of the Registration Rights Agreement; or
(D) the Registrar receives the following:
(y) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for an Unrestricted Definitive Note, a certificate from such holder substantially in the form of Exhibit C, including the certifications in item (1)(b) thereof; or
(z) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder substantially in the form of Exhibit B, including the certifications in item (4) thereof;
and, in each such case set forth in this Section 2.06(c)(iii)(D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
(iv) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes. If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon the occurrence of any of the events in subsection (i) or (ii) of Section 2.06(a) and satisfaction of the conditions set forth in Section 2.06(b)(ii), the Trustee shall cause the aggregate principal
amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h), and the Issuer shall execute and the Trustee shall, upon receipt of an Authentication Order, authenticate and mail to the Person designated in the instructions a Definitive Note in the applicable principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iv) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from or through the Depositary and the Participant or Indirect Participant. The Trustee shall mail such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iv) shall not bear the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(i) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes. If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder substantially in the form of Exhibit C, including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A, a certificate substantially in the form of Exhibit B, including the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate substantially in the form of Exhibit B, including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate substantially in the form of Exhibit B, including the certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred to the Issuer or any of the Restricted Subsidiaries, a certificate substantially in the form of Exhibit B, including the certifications in item (3)(b) thereof; or
(F) if such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate substantially in the form of Exhibit B, including the certifications in item (3)(c) thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the applicable Restricted Global Note, in the case of clause (B) above, the applicable 144A Global Note, and in the case of clause (C) above, the applicable Regulation S Global Note.
(ii) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if:
(A) such exchange or transfer is effected pursuant to an Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Issuer;
(B) any such transfer is effected pursuant to a Shelf Registration Statement in accordance with the Registration Rights Agreement;
(C) any such transfer is effected by a Broker-Dealer pursuant to an Exchange Offer Registration Statement and such Broker-Dealer complies with the terms of the Registration Rights Agreement; or
(D) the Registrar receives the following:
(y) if the Holder of such Restrictive Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder substantially in the form of Exhibit C, including the certifications in item (1)(c) thereof; or
(z) if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder substantially in the form of Exhibit B, including the certifications in item (4) thereof;
and, in each such case set forth in this Section 2.06(d)(ii)(D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and increase or cause to be increased the aggregate principal amount of the applicable Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Unrestricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of the applicable Unrestricted Global Note.
If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraph (ii) or (iii) above at a time when an Unrestricted Global Note has not yet been issued, the Issuer shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a Holder of Definitive Notes and such Holders compliance with the provisions of this Section 2.06(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder shall provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.06(e):
(i) Restricted Definitive Notes to Restricted Definitive Notes. Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following:
(A) if the transfer will be made to a QIB in accordance with Rule 144A, then the transferor must deliver a certificate substantially in the form of Exhibit B, including the certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule 904 then the transferor must deliver a certificate in the form of Exhibit B, including the certifications in item (2) thereof; or
(C) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B, including the certifications required by item (3) thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive Notes. Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to an Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Issuer;
(B) any such transfer is effected pursuant to a Shelf Registration Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to an Exchange Offer Registration Statement and such Broker-Dealer complies with the terms of the Registration Rights Agreement; or
(D) the Registrar receives the following:
(y) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder substantially in the form of Exhibit C, including the certifications in item (1)(d) thereof; or
(z) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder substantially in the form of Exhibit B, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Registrar so requests, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of an Exchange Offer in accordance with the Registration Rights Agreement, the Issuer shall issue and, upon receipt of an authentication order in accordance with Section 2.02 hereof, the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of the beneficial interests in the Restricted Global Notes tendered for acceptance in an Exchange Offer by Persons that make the certifications required by the eleventh paragraph of Section 1 of the Registration Rights Agreement, and accepted for exchange in an Exchange Offer and (ii) subject to Section 2.06(a) Unrestricted Definitive Notes in an aggregate principal amount equal to the principal amount of the Restricted Definitive Notes accepted for exchange in an Exchange Offer by Persons that make the certifications in the applicable Letters of Transmittal required by the Registration Rights Agreement, and accepted for exchange in an Exchange Offer. Concurrently with the issuance of such Notes, the Trustee shall cause the aggregate principal amount of the applicable Restricted Global Notes to be reduced accordingly, and the Issuer shall execute and the Trustee shall authenticate and deliver to the Persons designated by the Holders of Restricted Definitive Notes so accepted Unrestricted Definitive Notes in the appropriate principal amounts.
(g) Legends. The following legends shall appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture:
(i) Private Placement Legend.
(A) (1) Except as permitted by subparagraph (B) below, in the case of any Notes offered in reliance on Rule 144A, each 144A Global Note and each Definitive Note issued in exchange for a beneficial interest in a Rule 144A Global Note (and all Notes issued in exchange therefor or substitution thereof) shall bear a legend in substantially the following form:
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE SECURITIES ACT), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
(2) Except as permitted by subparagraph (B) below, in the case of any Notes offered in reliance on Regulation S, each Regulation S Global Note and each Definitive Note issued in exchange for a beneficial interest in a Regulation S Global Note (and all Notes issued in exchange therefor or substitution thereof) shall bear a legend in substantially the following form:
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES
ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
(B) Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraph (b)(iv), (c)(iii), (c)(iv), (d)(ii), (d)(iii), (e)(ii) or (e)(iii) of this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) shall not bear the Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend in substantially the following form:
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06(h) OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUER. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (DTC) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
(iii) Regulation S Temporary Global Note Legend. The Regulation S Temporary Global Note shall bear a legend in substantially the following form:
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).
(h) Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or cancelled in whole and not in part, each such Global Note shall be returned to or retained and cancelled by the Trustee in accordance with Section 2.11. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Issuer shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.02 or at the Registrars request.
(ii) No service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.07, 2.10, 3.06, 3.09, 4.10, 4.14 and 9.04).
(iii) Neither the Registrar nor the Issuer shall be required to register the transfer of or exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.
(v) The Issuer shall not be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 3.02 and ending at the close of business on the day of selection, (B) to register the transfer of or to exchange any Note so selected for redemption or tendered (and not withdrawn) for repurchase in connection with a Change of Control Offer, an Asset Sale Offer or other tender offer, in whole or in part, except the unredeemed portion of any Note being redeemed in part or (C) to register the transfer of or to exchange any Note between a Record Date and the next succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Issuer may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of (and premium, if any) and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Issuer shall be affected by notice to the contrary.
(vii) Upon surrender for registration of transfer of any Note at the office or agency of the Issuer designated pursuant to Section 4.02, the Issuer shall execute, and the Trustee shall authenticate and mail, in the name of the designated transferee or transferees, one or more replacement Notes of like tenor, in any authorized denomination or denominations of a like aggregate principal amount.
(viii) At the option of the Holder, Notes may be exchanged for other Notes of like tenor, in any authorized denomination or denominations of a like aggregate principal amount upon surrender of the Notes to be exchanged at the office or agency of the Issuer designated pursuant to Section 4.02. Whenever any Global Notes or Definitive Notes are so surrendered for exchange, the Issuer shall execute, and the Trustee shall authenticate and mail, the replacement Global Notes and Definitive Notes to which the Holder making the exchange is entitled in accordance with the provisions of Section 2.02.
(ix) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile.
(x) Each Holder of a Note agrees to indemnify the Issuer and the Trustee against any liability that may result from the transfer, exchange or assignment of such Holders Note in violation of any provision of this Indenture and/or applicable U.S. Federal or state securities law.
(xi) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Participants or beneficial owners of interests in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
Section 2.07 Replacement Notes.
If any mutilated Note is surrendered to the Trustee, the Registrar or the Issuer and the Trustee receives evidence to its satisfaction of the ownership and destruction, loss or theft of any Note, the Issuer shall issue and the Trustee, upon receipt of an Authentication Order, shall authenticate a replacement Note of like tenor if the Trustees requirements are met. If required by the Trustee or the Issuer, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Issuer to protect the Issuer, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Issuer may charge for its expenses in replacing a Note.
Every replacement Note is a contractual obligation of the Issuer and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.
Section 2.08 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those cancelled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 2.08 as not outstanding. Except as set forth in Section 2.09, a Note does not cease to be outstanding because the Issuer or an Affiliate of the Issuer holds the Note.
If a Note is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section 4.01, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Issuer, a Subsidiary of the Issuer or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes shall be deemed to be no longer outstanding and shall cease to accrue interest.
Section 2.09 Treasury Notes.
In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Issuer, or by any Affiliate of the Issuer, shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded. Notes so owned which have been pledged in good faith shall not be disregarded if the pledgee establishes to the satisfaction of the Trustee the pledgees right to deliver any such direction, waiver or consent with respect to the Notes and that the pledgee is not the Issuer or any other obligor upon the Notes or any Affiliate of the Issuer or of such other obligor.
Section 2.10 Temporary Notes.
Until certificates representing Notes are ready for delivery, the Issuer may prepare and the Trustee, upon receipt of an Authentication Order, shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of certificated Notes but may have variations that the Issuer considers appropriate for temporary Notes and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Issuer shall prepare and the Trustee shall, upon receipt of an Authentication Order, authenticate definitive Notes in exchange for temporary Notes.
Holders and beneficial holders, as the case may be, of temporary Notes shall be entitled to all of the benefits accorded to Holders, or beneficial holders, respectively, of Notes under this Indenture.
Section 2.11 Cancellation.
The Issuer at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee or, at the direction of the Trustee, the Registrar or the Paying Agent and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall destroy cancelled Notes (subject to the record retention requirement
of the Exchange Act). Certification of the destruction of all cancelled Notes shall be delivered to the Issuer. The Issuer may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation.
Section 2.12 Defaulted Interest.
If the Issuer defaults in a payment of interest on the Notes, the Issuer shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.01. The Issuer shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment, and at the same time the Issuer shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such defaulted interest or shall make arrangements as are satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such defaulted interest as provided in this Section 2.12. The Trustee shall fix or cause to be fixed each such special record date and payment date; provided that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest. The Trustee shall promptly notify the Issuer of such special record date. At least 15 days before the special record date, the Issuer (or, upon the written request of the Issuer, the Trustee in the name and at the expense of the Issuer) shall mail or cause to be mailed, first-class postage prepaid, to each Holder a notice at his or her address as it appears in the Note Register that states the special record date, the related payment date and the amount of such interest to be paid.
Subject to the foregoing provisions of this Section 2.12 and for greater certainty, each Note delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Note shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Note.
Section 2.13 CUSIP Numbers.
The Issuer in issuing the Notes may use CUSIP numbers (if then generally in use) and, if so, the Trustee shall use CUSIP numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer will as promptly as practicable notify the Trustee of any change in the CUSIP numbers.
Section 2.14 Global Notes.
Neither the Trustee nor any Agent shall have any responsibility for any actions taken or not taken by the Depositary.
Section 2.15 Issuance of Additional Notes.
After the Issue Date, the Issuer shall be entitled, subject to its compliance with Sections 4.09 and 4.12, to issue Additional Notes under this Indenture, which Notes shall have identical terms as the Notes issued on the Issue Date, other than with respect to the date of issuance and issue price. All Notes shall be equally and ratably entitled to the benefits of this Indenture. With respect to any Additional Notes, the Issuer shall set forth in a resolution of the Board of the Issuer and an Officers Certificate, a copy of each which shall be delivered to the Trustee, the following information:
(a) the aggregate principal amount of such Additional Notes to be authenticated and delivered pursuant to this Indenture; and
(b) the issue price, the issue date and the CUSIP number of such Additional Notes; provided that only those Additional Notes that are part of the same issue as all other Notes issued under this Indenture, as defined under Treasury Regulation Section 1.1275-1(f), or issued in a qualified reopening under Treasury Regulation Section 1.1275-2(k) will be issued with the same CUSIP number as the other Notes issued under this Indenture.
In authenticating such Additional Notes, and accepting the additional responsibilities under this Indenture in relation to such Additional Notes, the Trustee shall receive, and, subject to Section 7.01, shall be fully protected in relying upon:
(i) an executed supplemental indenture, if any;
(ii) an Officers Certificate;
(iii) Opinion of Counsel delivered in accordance with Section 13.02; and
(iv) such other documents as it may reasonably require.
ARTICLE 3
REDEMPTION
Section 3.01 Notices to Trustee.
If the Issuer elects to redeem Notes pursuant to Section 3.07, it shall furnish to the Trustee, at least five Business Days (or such shorter time period as the Trustee may agree) before notice of redemption is required to be mailed or caused to be mailed to Holders pursuant to Section 3.03 but not more than 60 days before a redemption date, an Officers Certificate setting forth (i) the paragraph or subparagraph of such Note and/or Section of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of the Notes to be redeemed and (iv) the redemption price.
Section 3.02 Selection of Notes to Be Redeemed or Purchased.
If less than all of the Notes are to be redeemed or purchased in an offer to purchase at any time, the Trustee shall select the Notes to be redeemed or purchased (i) if the Notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the Notes are listed, (ii) on a pro rata basis to the extent practicable or (iii) by lot or such other similar method in accordance with the procedures of the Depositary. In the event of partial redemption or purchase by lot, the particular Notes to be redeemed or purchased shall be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption or purchase.
The Trustee shall promptly notify the Issuer in writing of the Notes selected for redemption or purchase and, in the case of any Note selected for partial redemption or purchase, the principal amount thereof to be redeemed or purchased. Notes and portions of Notes selected shall be in amounts of $2,000 or whole multiples of $1,000 in excess thereof; except that if all of the Notes of a Holder are to be redeemed or purchased, the entire outstanding amount of Notes held by such Holder shall
be redeemed or purchased. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption or purchase also apply to portions of Notes called for redemption or purchase.
Section 3.03 Notice of Redemption.
Subject to Section 3.09, the Issuer shall deliver electronically or mail or cause to be mailed by first-class mail, postage prepaid, notices of redemption at least 30 days but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at such Holders registered address or otherwise in accordance with the procedures of the Depositary, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with Article 8 or Article 12. Except as set forth in Section 3.07, notices of redemption may not be conditional.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price if then ascertainable, and otherwise the appropriate method for calculation of the redemption price, in which case the actual redemption price shall be set forth in an Officers Certificate delivered to the Trustee no later than two (2) Business Days prior to the Redemption Date unless clause (2) of the definition of Applicable Premium is applicable, in which case such Officers Certificate should be delivered on the Redemption Date;
(c) if any Note is to be redeemed in part only, the portion of the principal amount of that Note that is to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in a principal amount equal to the unredeemed portion of the original Note representing the same indebtedness to the extent not redeemed will be issued in the name of the Holder of the Notes upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;
(f) whether such redemption is conditioned on the happening of a future event;
(g) that, unless the Issuer defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date;
(h) the paragraph or subparagraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed; and
(i) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes;
Notes called for redemption become due on the date fixed for redemption unless such redemption is conditioned on the happening of a future event. At the Issuers request, the Trustee shall give the notice of redemption in the Issuers name and at the Issuers expense; provided that the Issuer
shall have delivered to the Trustee, at least five Business Days (or such shorter period as the Trustee may agree) before notice of redemption is required to be mailed or caused to be mailed to Holders pursuant to this Section 3.03 (unless a shorter notice shall be agreed to by the Trustee), an Officers Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.
Section 3.04 Effect of Notice of Redemption.
Once notice of redemption is delivered or mailed in accordance with Section 3.03, Notes called for redemption become irrevocably due and payable on the redemption date, unless such redemption is conditioned on the happening of a future event, at the applicable redemption price. The notice, if delivered or mailed in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. In any case, failure to give such notice by mail or any defect in the notice to the Holder of any Note designated for redemption in whole or in part shall not affect the validity of the proceedings for the redemption of any other Note. Subject to Section 3.05, on and after the redemption date interest ceases to accrue on Notes or portions of Notes called for redemption.
Section 3.05 Deposit of Redemption or Purchase Price.
Prior to noon (New York City time) on the redemption or purchase date, the Issuer shall deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption or purchase price of and accrued and unpaid interest on all Notes to be redeemed or purchased on that date. The Trustee or the Paying Agent shall promptly return to the Issuer any money deposited with the Trustee or the Paying Agent by the Issuer in excess of the amounts necessary to pay the redemption price of, and accrued and unpaid interest on, all Notes to be redeemed or purchased.
If the Issuer complies with the provisions of the preceding paragraph, on and after the redemption or purchase date, interest shall cease to accrue on the Notes or the portions of Notes called for redemption or purchase. If a Note is redeemed or purchased on or after a Record Date but on or prior to the related Interest Payment Date, then any accrued and unpaid interest to the redemption or purchase date shall be paid to the Person in whose name such Note was registered at the close of business on such Record Date. If any Note called for redemption or purchase shall not be so paid upon surrender for redemption or purchase because of the failure of the Issuer to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption or purchase date until such principal is paid, and to the extent lawful on any interest accrued to the redemption or purchase date and not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01.
Section 3.06 Notes Redeemed or Purchased in Part.
Upon surrender of a Note that is redeemed or purchased in part, the Issuer shall issue and the Trustee shall authenticate for the Holder at the expense of the Issuer a new Note equal in principal amount to the unredeemed or unpurchased portion of the Note surrendered representing the same indebtedness to the extent not redeemed or purchased; provided that each new Note will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. It is understood that, notwithstanding anything in this Indenture to the contrary, only an Authentication Order and not an Opinion of Counsel or Officers Certificate is required for the Trustee to authenticate such new Note.
Section 3.07 Optional Redemption.
(a) At any time prior to May 1, 2015, the Issuer may redeem all or a part of the Notes, upon notice as described under Section 3.03, at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest, if any, to, but excluding the date of redemption (any applicable date of redemption hereunder, the Redemption Date), subject to the rights of Holders on the relevant Record Date to receive interest due on the relevant Interest Payment Date.
(b) On and after May 1, 2015, the Issuer may redeem the Notes, in whole or in part, upon notice as described under Section 3.03, at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest thereon, if any, to, but excluding the applicable Redemption Date, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date, if redeemed during the 12-month period beginning on May 1 of each of the years indicated below:
Year |
|
Percentage |
|
2015 |
|
105.375 |
% |
2016 |
|
102.688 |
% |
2017 and thereafter |
|
100.000 |
% |
(c) Until May 1, 2014, the Issuer may, at its option, upon notice as described under Section 3.03, on one or more occasions, redeem up to 35% of the aggregate principal amount of Notes issued under this Indenture at a redemption price equal to 110.750% of the aggregate principal amount thereof, plus accrued and unpaid interest thereon, if any, to, but excluding the applicable Redemption Date, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date, with the net cash proceeds of one or more Equity Offerings to the extent such net cash proceeds are received by or contributed to the Issuer; provided that (a) at least $165 million in aggregate principal amount of Notes issued under this Indenture (including any Exchange Notes issued in exchange therefor) remains outstanding immediately after the occurrence of each such redemption and (b) each such redemption occurs within 90 days of the date of closing of each such Equity Offering.
(d) During each 12-month period, commencing with the 12-month period from the Issue Date to May 1, 2012, to and including the 12-month period from May 1, 2014 to May 1, 2015, the Issuer will be entitled to redeem up to 10% of the aggregate principal amount of the Notes issued under this Indenture at a redemption price equal to 103.000% of the aggregate principal amount thereof, plus accrued interest thereon, if any, to, but excluding, the Redemption Date, subject to the right of Holders of Notes of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date; provided that at least $165 million in aggregate principal amount of Notes issued under this Indenture (including any Exchange Notes issued in exchange therefor) remains outstanding immediately after the occurrence of each such redemption.
(e) Notice of any redemption upon any Equity Offering or other securities offering or financing, or in connection with a transaction (or series of related transactions) that constitutes a Change of Control may, at the Issuers discretion, be given prior to the completion thereof and be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering, securities offering, financing or Change of Control.
(f) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Sections 3.01 through 3.06.
Section 3.08 Mandatory Redemption.
The Issuer shall not be required to make any mandatory redemption or sinking fund payments with respect to the Notes.
Section 3.09 Offers to Repurchase by Application of Excess Proceeds.
(a) In the event that, pursuant to Section 4.10, the Issuer shall be required to commence an Asset Sale Offer, it shall follow the procedures specified below.
(b) The Asset Sale Offer shall remain open for a period of 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the Offer Period). No later than five Business Days after the termination of the Offer Period (the Purchase Date), the Issuer shall apply all Excess Proceeds (the Offer Amount) to the purchase of Notes and, if required, Other First Lien Obligations (on a pro rata basis, if applicable), or, if less than the Offer Amount has been tendered, all Notes and Other First Lien Obligations tendered in response to the Asset Sale Offer. Payment for any Notes so purchased shall be made in the same manner as interest payments are made.
(c) If the Purchase Date is on or after a Record Date and on or before the related Interest Payment Date, accrued and unpaid interest, if any, up to but excluding the Purchase Date, shall be paid to the Person in whose name a Note is registered at the close of business on such Record Date, and no additional interest shall be payable to Holders who tender Notes pursuant to the Asset Sale Offer.
(d) Upon the commencement of an Asset Sale Offer, the Issuer shall send, by first-class mail, a notice to each of the Holders, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer shall be made to all Holders and holders of Other First Lien Obligations. The notice, which shall govern the terms of the Asset Sale Offer, shall state:
(i) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.10 and the length of time the Asset Sale Offer shall remain open;
(ii) the Offer Amount, the purchase price and the Purchase Date;
(iii) that any Note not tendered and accepted for payment shall continue to accrue interest;
(iv) that, unless the Issuer defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest after the Purchase Date;
(v) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may elect to have Notes purchased in amounts of $2,000 or whole multiples of $1,000 in excess thereof only;
(vi) that Holders electing to have a Note purchased pursuant to any Asset Sale Offer shall be required to surrender the Note, with the form entitled Option of Holder to Elect Purchase attached to the Note completed, or transfer by book-entry transfer, to the Issuer, the Depositary, if appointed by the Issuer, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date;
(vii) that Holders shall be entitled to withdraw their election if the Issuer, the Depositary or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a telegram, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased;
(viii) that, if the aggregate principal amount of Notes and Other First Lien Obligations surrendered by the holders thereof exceeds the Offer Amount, the Issuer shall select the Notes and such Other First Lien Obligations to be purchased on a pro rata basis based on the accreted value or principal amount of the Notes or such Other First Lien Obligations tendered (with such adjustments as may be deemed appropriate by the Trustee so that only Notes in denominations of $2,000, or integral multiples of $1,000 in excess thereof, shall be purchased; except that if all of the Notes of a Holder are to be redeemed or purchased, the entire outstanding amount of Notes held by such Holder shall be redeemed or purchased); and
(ix) that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer) representing the same indebtedness to the extent not repurchased.
(e) On or before the Purchase Date, the Issuer shall, to the extent lawful, (1) accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof validly tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes tendered and (2) deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officers Certificate stating the aggregate principal amount of Notes or portions thereof so tendered.
(f) The Issuer, the Depositary or the Paying Agent, as the case may be, shall promptly mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes properly tendered by such Holder and accepted by the Issuer for purchase, and the Issuer shall promptly issue a new Note, and the Trustee, upon receipt of an Authentication Order, shall authenticate and mail or deliver (or cause to be transferred by book-entry) such new Note to such Holder (it being understood that, notwithstanding anything in this Indenture to the contrary, no Opinion of Counsel or Officers Certificate is required for the Trustee to authenticate and mail or deliver such new Note) in a principal amount equal to any unpurchased portion of the Note surrendered representing the same indebtedness to the extent not repurchased; provided that each such new Note shall be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. Any Note not so accepted shall be promptly mailed or delivered by the Issuer to the Holder thereof. The Issuer shall publicly announce the results of any Asset Sale Offer on or as soon as practicable after the Purchase Date.
Other than as specifically provided in this Section 3.09 or Section 4.10, any purchase pursuant to this Section 3.09 shall be made pursuant to the applicable provisions of Sections 3.01 through 3.06.
ARTICLE 4
COVENANTS
Section 4.01 Payment of Notes.
The Issuer shall pay or cause to be paid the principal of, premium, if any, and interest on the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, and interest shall be considered paid on the date due if the Paying Agent, if other than the Issuer or a Subsidiary of the Issuer, holds as of noon (New York City time) on the due date money deposited by the Issuer in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due.
The Issuer shall pay interest (including Post-Petition Interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to the then applicable interest rate on the Notes to the extent lawful; it shall pay interest (including Post-Petition Interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace period) at the same rate to the extent lawful.
Section 4.02 Maintenance of Office or Agency.
The Issuer shall maintain an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be presented or surrendered for registration of transfer or for payment or exchange and where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served. The Issuer shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuer shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.
The Issuer may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Issuer of its obligation to maintain an office or agency for such purposes. The Issuer shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.
The Issuer hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Issuer in accordance with Section 2.03.
Section 4.03 Reports and Other Information.
(a) (i) Whether or not the Issuer is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Issuer shall file with the SEC and provide the Trustee and Holders with such annual and other reports as are specified in Sections 13 and 15(d) of the Exchange Act and applicable to a U.S. corporation subject to such Sections, such reports to be so filed and provided within the time periods specified for the filings of such reports under such Sections and containing all the information, audit reports and exhibits required for such reports.
(ii) If at any time the Issuer is not subject to the periodic reporting requirements of the Exchange Act, the Issuer shall nevertheless file the reports specified in subclause (i) above with the SEC within the time periods required unless the SEC will not accept such a filing. The availability of the reports required by this Section 4.03(a) on the SECs EDGAR service (or successor thereto) shall be deemed to satisfy the Issuers delivery obligations to the Trustee and the Holders. The Issuer shall not take any action for the purpose of causing the SEC not to accept such filings. If, notwithstanding the foregoing, the SEC will not accept such filings for any reason, the Issuer shall post the specified reports on its public website within the time periods that would apply if the Issuer were required to file those reports with the SEC.
(b) Notwithstanding the requirements of clause (a) of this Section 4.03, the Issuer shall not be obligated to file the annual and quarterly reports required by clause (a) of this Section 4.03 with the SEC prior to the filing of any registration statement pursuant to the Registration Rights Agreement, and pending which the Issuer shall post the following information on its public website:
(i) (A) within 90 days of the end of each fiscal year, annual audited financial statements of the Issuer and its Subsidiaries for such fiscal year and (B) commencing with the fiscal quarter ended March 31, 2011, within 60 days of the end of such fiscal quarter and, thereafter, within 45 days of the end of each of the first three fiscal quarters of every fiscal year, unaudited financial statements of the Issuer and its Subsidiaries for the interim period as of, and for the period ending on, the end of such fiscal quarter prepared in accordance with GAAP and reviewed pursuant to Statement on Auditing Standards No. 116 (or any successor statement), in each case, including, with respect to the periods presented, applicable comparable prior periods and pro forma information, a Managements Discussion and Analysis of Financial Condition and Results of Operations and a presentation of EBITDA and Adjusted EBITDA of the Issuer and the Restricted Subsidiaries and, with respect to the annual information only, a report on the annual financial statements by the Issuers certified independent accountants (all of the foregoing information to be prepared on a basis substantially consistent with, and with the same level of detail as, the corresponding information included in the Offering Circular or, at the option of the Issuer, the then applicable SEC requirements); provided that, for the fiscal quarter ended March 31, 2011, the Issuer shall only be required to provide separate interim financial statements (with applicable comparable prior periods) for CheckSmart Financial Holdings Corp. (and its consolidated subsidiaries), together with a Managements Discussion and Analysis of Financial Condition and Results of Operations with respect to the interim financial information contained in such financial statements, prepared on a basis substantially consistent with, and with the same level of detail as, the corresponding information included in the Offering Circular or, at the option of the Issuer, the then applicable SEC requirements; and
(ii) prior to the filing of the any registration statement pursuant to the Registration Rights Agreement, in no event shall the reports required by clause (b) of this Section 4.03 be required to contain separate financial statements for Subsidiary Guarantors or Subsidiaries the shares of which are pledged to secure the Notes or any Guarantee that would be required under Section 3-10 or Section 3-16 of Regulation S-X, respectively, promulgated by the SEC.
(c) At any time that any of the Issuers Subsidiaries are Unrestricted Subsidiaries, then the quarterly and annual financial information required by clauses (a) and (b) of this Section 4.03 will include a reasonably detailed presentation, either on the face of the financial statements or in the
footnotes thereto, and in Managements Discussion and Analysis of Financial Condition and Results of Operations, such discussion to be on a basis substantially consistent with, and with the same level of detail as, the corresponding information included in the Offering Circular, of the financial condition and results of operations of the Issuer and the Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries of the Issuer.
(d) The requirement to provide the information required by clause (a) of this Section 4.03 shall be deemed satisfied prior to the commencement of the Exchange Offer or the effectiveness of the Shelf Registration Statement by filing with the SEC, prior to the time the information required by clause (a) of this Section 4.03 would otherwise be required to be filed, of a registration statement, and any amendments thereto, with such financial information that satisfies Regulation S-X under the Securities Act.
(e) So long as any Notes are outstanding, the Issuer shall also:
(i) as promptly as reasonably practicable after filing with the SEC or posting the annual and quarterly reports required by clause (a) or (b) of this Section 4.03, hold a conference call to discuss such reports and the results of operations for the relevant reporting period; and
(ii) issue a press release to the appropriate nationally recognized wire services prior to the date of the conference call required to be held in accordance with subparagraph (e)(i) of this Section 4.03, announcing the time and date of such conference call and either including all information necessary to access the call or informing Holders, beneficial owners, prospective investors, market makers affiliated with the Initial Purchaser and securities analysts how they can obtain such information.
(f) In addition, at any time when the Issuer is not subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Issuer shall furnish to the Holders and to prospective investors, upon the requests of such Holders or prospective investors, any information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act for so long as the Notes are not freely transferable under the Securities Act.
Section 4.04 Compliance Certificate.
(a) The Issuer and each Subsidiary Guarantor shall deliver to the Trustee, within 90 days after the end of each fiscal year ending after the Issue Date, a certificate from the principal executive officer, principal financial officer or principal accounting officer stating that a review of the activities of the Issuer and the Restricted Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officer with a view to determining whether the Issuer has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to such Officer signing such certificate, that to the best of his or her knowledge the Issuer has kept, observed, performed and fulfilled each and every condition and covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions, covenants and conditions of this Indenture (or, if a Default shall have occurred, describing all such Defaults of which he or she may have knowledge). To the extent required by the TIA, each Subsidiary Guarantor shall comply with TIA § 314(a)(4). The individual signing any certificate given by any Person pursuant to this Section 4.04 shall be the principal executive, financial or accounting officer of such Person, in compliance with TIA § 314(a)(4)
(b) When any Default has occurred and is continuing under this Indenture, or if the Trustee or the holder of any other evidence of Indebtedness of the Issuer or any Subsidiary of the Issuer
gives any notice or takes any other action with respect to a claimed Default, the Issuer shall promptly (which shall be no more than five Business Days upon any Officer first becoming aware of such Default) deliver to the Trustee by registered or certified mail or by facsimile transmission an Officers Certificate specifying such event.
Section 4.05 Taxes.
The Issuer shall pay, and shall cause each of the Restricted Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and governmental levies except such as are contested in good faith and by appropriate negotiations or proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders of the Notes.
Section 4.06 Stay, Extension and Usury Laws.
The Issuer and each of the Subsidiary Guarantors covenant (to the extent that they may lawfully do so) that they shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer and each of the Subsidiary Guarantors (to the extent that they may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and covenant that they shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law has been enacted.
Section 4.07 Limitation on Restricted Payments.
(a) The Issuer shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly:
(I) declare or pay any dividend or make any payment or distribution on account of the Issuers, or any of the Restricted Subsidiaries Equity Interests, including any dividend or distribution payable in connection with any merger, consolidation or amalgamation, other than:
(A) dividends, payments or distributions by the Issuer payable solely in Equity Interests (other than Disqualified Stock) of the Issuer; or
(B) dividends, payments or distributions by a Restricted Subsidiary so long as, in the case of any dividend, payment or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary other than a Wholly-Owned Subsidiary of the Issuer, the Issuer or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities;
(II) purchase, redeem, defease or otherwise acquire or retire for value any Equity Interests of the Issuer or any Parent Entity, including in connection with any merger, consolidation or amalgamation;
(III) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value or give any irrevocable notice of redemption with respect to, in each case, prior to any scheduled repayment, sinking fund payment or maturity, any Subordinated Indebtedness of the Issuer or any Subsidiary Guarantor, other than:
(A) Indebtedness permitted to be incurred under clause (8) or (9) of Section 4.09(b);
(B) the purchase, repurchase or other acquisition of Subordinated Indebtedness purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of purchase, repurchase or acquisition; or
(C) the giving of an irrevocable notice of redemption with respect to transactions described in clause (2) or (3) of Section 4.07(b); or
(IV) make any Restricted Investment
(all such payments and other actions set forth in clauses (I) through (IV) (other than any exception thereto) above being collectively referred to as Restricted Payments), unless, at the time of such Restricted Payment:
(1) no Default shall have occurred and be continuing or would occur as a consequence thereof;
(2) immediately after giving effect to such transaction on a pro forma basis, the Issuer could incur $1.00 of additional Indebtedness under Section 4.09(a); and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Issuer and the Restricted Subsidiaries after the Issue Date (including Restricted Payments made pursuant to clause (1), (4), (8) or (11) of Section 4.07(b), but excluding all other Restricted Payments made pursuant to Section 4.07(b)), is less than the sum of (without duplication):
(a) 50% of the Consolidated Net Income of the Issuer for the period (taken as one accounting period) beginning on the first day of the fiscal quarter commencing prior to the Issue Date to the end of the Issuers most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment, or, in the case such Consolidated Net Income for such period is a deficit, minus 100% of such deficit; plus
(b) 100% of the aggregate cash proceeds and the fair market value of marketable securities or other property received by the Issuer since immediately after the Issue Date (other than cash proceeds to the extent such cash proceeds (i) have been used to incur Indebtedness, Disqualified Stock or Preferred Stock pursuant to clause (13)(a) of Section 4.09(b) or (ii) have been used to make Restricted Payments pursuant to clause (2) of Section 4.07(b)) from the issue or sale of:
(i) (A) Equity Interests of the Issuer, excluding cash proceeds and the marketable securities or other property received from the sale of:
(x) Equity Interests to any future, current or former employee, director or consultant of the Issuer, any Parent Entity or any of the Issuers Subsidiaries after the Issue Date to the extent such amounts have been applied to Restricted Payments made in accordance with clause (4) of Section 4.07(b); and
(y) Designated Preferred Stock, and
(B) Equity Interests of Parent Entities, to the extent such cash proceeds are actually contributed to the Issuer (excluding contributions of the proceeds from the sale of Designated Preferred Stock of Parent Entities or contributions to the extent such amounts have been applied to Restricted Payments made in accordance with clause (4) of Section 4.07(b)); or
(ii) debt securities of the Issuer that have been subsequently converted into or exchanged for such Equity Interests of the Issuer;
provided, however, that this clause (b) shall not include the proceeds from (X) Equity Interests or convertible debt securities of the Issuer sold to a Restricted Subsidiary, (Y) Disqualified Stock or debt securities that have been converted into Disqualified Stock or (Z) Excluded Contributions; plus
(c) 100% of the aggregate amount of cash and the fair market value of marketable securities or other property contributed to the capital of the Issuer following the Issue Date (other than cash proceeds, marketable securities or other property to the extent such cash proceeds, marketable securities or other property (i) have been used to incur Indebtedness, Disqualified Stock or Preferred Stock pursuant to clause (13)(a) of Section 4.09(b), (ii) have been used to make Restricted Payments pursuant to clause (2) of Section 4.07(b), (iii) are contributed by a Restricted Subsidiary or (iv) constitute Excluded Contributions); plus
(d) 100% of the aggregate amount received in cash and the fair market value of marketable securities or other property received by means of:
(i) the sale or other disposition (other than to the Issuer or a Restricted Subsidiary) of Restricted Investments made by the Issuer or the Restricted Subsidiaries and repurchases and redemptions of such Restricted Investments from the Issuer or the Restricted Subsidiaries and repayments of loans or advances, and releases of guarantees, that constitute Restricted Investments made by the Issuer or the Restricted Subsidiaries, in each case, after the Issue Date;
(ii) the sale (other than to the Issuer or a Restricted Subsidiary) of the stock of an Unrestricted Subsidiary after the Issue Date (other than to the extent any Investments made in such Unrestricted Subsidiary constituted Permitted Investments); or
(iii) a distribution or a dividend from an Unrestricted Subsidiary after the Issue Date (only to the extent such distribution or dividend is not already included in the calculation of Consolidated Net Income); plus
(e) in the case of the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary after the Issue Date (other than to the extent any Investments made in such Unrestricted Subsidiary constituted Permitted Investments), the fair market value, as determined by the Board of the Issuer in good faith, of the Investment in such Unrestricted Subsidiary (if such fair market value exceeds $35,000,000, the fair market value thereof shall be as determined (and confirmed in
writing) by an Independent Financial Advisor), at the time of the redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary.
(b) The foregoing provisions of Section 4.07(a) shall not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption within 60 days after the date of declaration thereof or the giving of such irrevocable notice, as applicable, if at the date of declaration or the giving of such notice such payment would have complied with the provisions of this Indenture;
(2) the redemption, repurchase, retirement or other acquisition of any Equity Interests or Subordinated Indebtedness of the Issuer in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Issuer or a Restricted Subsidiary) of, Equity Interests of the Issuer or contributions to the equity capital of the Issuer (other than Excluded Contributions) (in each case, other than any Disqualified Stock or, except in the case of a redemption, repurchase, retirement or other acquisition of Subordinated Indebtedness, Preferred Stock); provided that the amount of any such proceeds that are utilized for any such Restricted Payment are excluded from clause (3)(b) of Section 4.07(a);
(3) the redemption, defeasance, repurchase or other acquisition or retirement of (i) Subordinated Indebtedness of the Issuer or a Subsidiary Guarantor made in exchange for, or out of the proceeds of a sale made within 45 days of, new Indebtedness of the Issuer or a Subsidiary Guarantor, as the case may be, or (ii) Disqualified Stock of the Issuer or a Subsidiary Guarantor made in exchange for, or out of the proceeds of a sale made within 45 days of, Disqualified Stock of the Issuer or a Subsidiary Guarantor, that, in each case, is incurred in compliance with Section 4.09, so long as:
(a) the principal amount (or accreted value, if applicable) of such new Indebtedness or the liquidation preference of such new Disqualified Stock does not exceed the principal amount of (or accreted value, if applicable), plus any accrued and unpaid interest on, the Subordinated Indebtedness or the liquidation preference of, plus any accrued and unpaid dividends on, the Disqualified Stock being so defeased, redeemed, repurchased, exchanged, acquired or retired for value, plus the amount of any reasonable premium (including reasonable tender premiums), defeasance costs and any reasonable fees and expenses incurred in connection with the issuance of such new Indebtedness or Disqualified Stock;
(b) such new Indebtedness is subordinated to the Notes or the applicable Guarantee at least to the same extent as such Subordinated Indebtedness so purchased, defeased, exchanged, redeemed, repurchased, acquired or retired for value;
(c) such new Indebtedness or Disqualified Stock has a final scheduled maturity date equal to or later than the final scheduled maturity date of the Subordinated Indebtedness or Disqualified Stock being so purchased, defeased, redeemed, repurchased, exchanged, acquired or retired; and
(d) such new Indebtedness or Disqualified Stock has a Weighted Average Life to Maturity equal to or greater than the remaining Weighted
Average Life to Maturity of the Subordinated Indebtedness or Disqualified Stock being so purchased, defeased, redeemed, repurchased, exchanged, acquired or retired;
(4) a Restricted Payment to pay for the repurchase, retirement or other acquisition or retirement for value of Equity Interests (other than Disqualified Stock) of the Issuer or any Parent Entity held by any future, present or former employee, director or consultant of the Issuer or any of its Subsidiaries or any Parent Entity pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement, or any stock subscription or shareholder agreement; provided, however, that the aggregate Restricted Payments made under this clause (4) do not exceed in any calendar year $7,500,000 (with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum (without giving effect to the following proviso) of $15,000,000 in any calendar year); provided further that such amount in any calendar year may be increased by an amount not to exceed:
(a) the cash proceeds from the sale of Equity Interests (other than Disqualified Stock and Preferred Stock) of the Issuer and, to the extent contributed to the Issuer, the cash proceeds from the sale of Equity Interests of any Parent Entity, in each case to any future, present or former employees, directors or consultants of the Issuer, any of its Subsidiaries or any Parent Entity that occurs after the Issue Date; provided that the amount of such cash proceeds utilized for any such repurchase, retirement or other acquisition or retirement for value will not increase the amount available for Restricted Payments under clause (3) of Section 4.07(a); plus
(b) the cash proceeds of key man life insurance policies received by the Issuer or the Restricted Subsidiaries after the Issue Date; less
(c) the amount of any Restricted Payments previously made with the cash proceeds described in clause (a) or (b) of this clause (4);
(5) the declaration and payment of dividends to holders of any class or series of Disqualified Stock of the Issuer or any of the Restricted Subsidiaries or any class or series of Preferred Stock of any Restricted Subsidiary, in each case issued in accordance with Section 4.09, provided that all such dividends are included in the calculation of Fixed Charges;
(6) the declaration and payment of dividends to holders of any class or series of Designated Preferred Stock issued by the Issuer or any of the Restricted Subsidiaries after the Issue Date and the declaration and payment of dividends to a Parent Entity, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock of such Parent Entity issued after the Issue Date; provided that (x) for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock, after giving effect to such issuance (and the payment of related dividends) on a pro forma basis, the Fixed Charge Coverage Ratio on a consolidated basis for the Issuer and the Restricted Subsidiaries would have been at least 2.00 to 1.00 and (y) the amount of dividends paid pursuant to this clause (6) shall not exceed the aggregate amount of cash actually received by the Issuer or the Restricted
Subsidiaries from the sale of such Designated Preferred Stock; and provided further that all such dividends are included in the calculation of Fixed Charges;
(7) payments made by the Issuer or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director or consultant and repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;
(8) the declaration and payment of dividends on the Issuers common equity (or the payment of dividends to any Parent Entity to fund a payment of dividends on such Parent Entitys common equity), following consummation of the first public offering of the Issuers common equity or the common equity of such Parent Entity after the Issue Date, of up to 6% per annum on the net cash proceeds received by or contributed to the Issuer in or from any such public offering, other than public offerings with respect to the Issuers common equity registered on Form S-8 and other than any public sale, the proceeds of which constitute an Excluded Contribution;
(9) Restricted Payments in an amount equal to the unused amount of Excluded Contributions previously received;
(10) [intentionally omitted].
(11) the repurchase, redemption, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in accordance with provisions similar to those described under Section 4.10 and Section 4.14; provided that (x) prior to such repurchase, redemption, defeasance or other acquisition or retirement for value, the Issuer (or a third Person permitted by this Indenture) has made a Change of Control Offer or Asset Sale Offer, as the case may be, with respect to the Notes as a result of such Change of Control or Asset Sale, as the case may be, and (y) all Notes tendered by Holders in connection with the relevant Change of Control Offer or Asset Sale Offer, as applicable, have been repurchased, redeemed, acquired or retired for value;
(12) the declaration and payment of dividends by the Issuer to, or the making of loans to, any Parent Entity in amounts required for any Parent Entity to pay, in each case without duplication,
(a) franchise and excise taxes and other fees, taxes and expenses required to maintain their corporate existence;
(b) foreign, federal, state and local income and similar taxes, to the extent such income taxes are attributable to the income, revenue, receipts, capital or margin of the Issuer and the Restricted Subsidiaries and, to the extent of the amount actually received from the Issuers Unrestricted Subsidiaries, in amounts required to pay such taxes to the extent attributable to the income of such Unrestricted Subsidiaries; provided that in each case the amount of such payments in any calendar year does not exceed the amount that the Issuer and its Subsidiaries would be required to pay in respect of foreign, federal, state and local taxes for such calendar year were the Issuer, the Restricted Subsidiaries and the Issuers Unrestricted Subsidiaries (to the extent described above) to pay such taxes separately from any such Parent Entity;
(c) (i) customary salary, bonus and other benefits payable to officers, employees and directors of any Parent Entity and (ii) general corporate operating (including, without limitation, expenses related to auditing or other accounting matters) and overhead costs and expenses of any Parent Entity, in each case, to the extent such salary, bonus, other benefits, costs and expenses are attributable to the ownership or operation of the Issuer and the Restricted Subsidiaries, including the Issuers proportionate share of such amounts relating to such Parent Entity being a public company;
(d) fees and expenses (other than to Affiliates of the Issuer) related to any unsuccessful equity or debt offering of such Parent Entity;
(e) cash payments in lieu of issuing fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Equity Interests of any Parent Entity; and
(f) amounts that would be permitted to be paid by the Issuer under clause (3), (4), (5), (8) or (11) of Section 4.11(b); provided that the amount of any dividend or distribution under this clause (12)(f) to permit any such payment shall reduce Consolidated Net Income of the Issuer to the extent, if any, that such payment would have reduced Consolidated Net Income of the Issuer if such payment had been made directly by the Issuer and increase (or, without duplication of any reduction of Consolidated Net Income, decrease) EBITDA to the extent, if any, that Consolidated Net Income is reduced under this clause (12)(f) and such payment would have been added back to (or would have been deducted from) EBITDA if such payment had been made directly by the Issuer, in each case, in the period such payment is made;
(13) the repurchase, redemption, or other acquisition for value of Equity Interests of the Issuer deemed to occur in connection with paying cash in lieu of fractional shares of such Equity Interests in connection with a share dividend, distribution, share split, reverse share split, merger, consolidation, amalgamation or other business combination of the Issuer, in each case, permitted under this Indenture;
(14) the distribution, by dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to the Issuer or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries the primary assets of which are cash and/or Cash Equivalents);
(15) Restricted Payments by the Issuer to any Parent Entity to finance Investments that would otherwise be permitted to be made pursuant to this Section 4.07 if made by the Issuer; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment, (B) such Parent Entity shall, immediately following the closing thereof, cause (i) all property acquired (whether Equity Interests or other assets) to be contributed to the capital of the Issuer or one of the Restricted Subsidiaries (and which contribution is not an Excluded Contribution) or (ii) the merger or amalgamation of the Person formed or acquired into the Issuer or one of the Restricted Subsidiaries (to the extent not prohibited by Section 5.01) in order to consummate such Investment, (C) such Parent Entity and its Affiliates (other than the Issuer or a Restricted Subsidiary) receive no consideration or other payment in connection with such transaction except to the extent the Issuer or a Restricted Subsidiary could have given such consideration or made such payment in compliance with this
Indenture, (D) any property received by the Issuer shall not increase amounts available for Restricted Payments pursuant to clause (3) of Section 4.07(a) or any other provision of this Section 4.07(b) and (E) such Investment shall have been permitted by and shall be deemed to be made by the Issuer or such Restricted Subsidiary pursuant to another provision of this Section 4.07 (other than pursuant to clause (10) of this Section 4.07(b)) or pursuant to the definition of Permitted Investments pursuant to which the Issuer would have been entitled to have made such Investment if made by the Issuer; and
(16) the Special Dividend and the Special Options Distribution;
provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under clause (15) of this Section 4.07(b), no Default shall have occurred and be continuing or would occur as a consequence thereof.
For purposes of determining compliance with this covenant, in the event that a payment or other action meets the criteria of more than one of the exceptions described in clauses (1) through (16) above, or is permitted to be made pursuant to the first paragraph of this covenant (including by virtue of qualifying as a Permitted Investment), the Issuer will be permitted to classify such payment or other action on the date of its occurrence in any manner that complies with this covenant. Payments or other actions permitted by this covenant need not be permitted solely by reference to one provision permitting such payment or other action but may be permitted in part by one such provision and in part by one or more other provisions of this covenant permitting such payment or other action (including pursuant to any section of the definition of Permitted Investment).
(c) The Issuer shall not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the last sentence of the definition of Unrestricted Subsidiary. For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Issuer and the Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated shall be deemed to be Restricted Payments in an amount determined as set forth in the last sentence of the definition of Investment. Such designation shall be permitted only if a Restricted Payment in such amount would be permitted at such time, whether pursuant to Section 4.07(a) or under clause (9) of Section 4.07(b), or pursuant to the definition of Permitted Investments, and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.
Section 4.08 Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.
(a) The Issuer shall not, and shall not permit any of the Restricted Subsidiaries that are not Subsidiary Guarantors to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:
(1) (A) pay dividends or make any other distributions to the Issuer or any of the Restricted Subsidiaries on its Capital Stock or with respect to any other interest or participation in, or measured by, its profits, or
(B) pay any Indebtedness owed to the Issuer or any of the Restricted Subsidiaries;
(2) make loans or advances to the Issuer or any of the Restricted Subsidiaries; or
(3) sell, lease or transfer any of its properties or assets to the Issuer or any of the Restricted Subsidiaries.
(b) The restrictions in Section 4.08(a) shall not apply to encumbrances or restrictions existing under or by reason of:
(1) contractual encumbrances or restrictions in effect on the Issue Date, including pursuant to the Alabama Revolving Credit Agreement, the Revolving Credit Agreement and the related documentation and related Hedging Obligations;
(2) this Indenture, the Notes, the Exchange Notes and Guarantees thereof;
(3) purchase money obligations for property acquired in the ordinary course of business and Capitalized Lease Obligations that impose restrictions of the nature described in clause (3) of Section 4.08(a), in each case, only with respect to the property so acquired;
(4) applicable law or any applicable rule, regulation or order;
(5) any agreement or other instrument of a Person acquired by or merged, amalgamated or consolidated with or into the Issuer or any Restricted Subsidiary in existence at the time of such acquisition or at the time it merges, amalgamates or consolidates with or into the Issuer or any Restricted Subsidiary or assumed in connection with the acquisition of assets from such Person (but, in each case, not created in contemplation thereof); provided that such encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person and its Subsidiaries, or the property or assets of the Person and its Subsidiaries, so acquired;
(6) contracts for the sale of assets, including customary restrictions with respect to a Subsidiary of the Issuer pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of such Subsidiary, pending the sale of such assets;
(7) Secured Indebtedness otherwise permitted to be incurred pursuant to Section 4.09 and Section 4.12 that limit the right of the debtor to dispose of the assets securing such Indebtedness;
(8) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;
(9) customary provisions in joint venture agreements or arrangements and other similar agreements relating solely to such joint venture;
(10) customary provisions contained in leases, sub-leases, licenses, sub-licenses or similar agreements, including with respect to intellectual property and other agreements, in each case entered into in the ordinary course of business to the extent such obligations impose restrictions of the nature described in clause (3) of this Section 4.08(b) on the property subject to such lease, sub-lease, license, sub-license or other similar agreement;
(11) restrictions or conditions contained in any trading, netting, operating, construction, service, supply, purchase, sale or other agreement to which the Issuer or any of the Restricted Subsidiaries is a party entered into in the ordinary course of business; provided that such agreement prohibits the encumbrance of solely the property or assets of the Issuer or such Restricted Subsidiary that are the subject of such agreement, the payment rights arising thereunder or the proceeds thereof and does not extend to any other asset or property of the Issuer or such Restricted Subsidiary or the assets or property of another Restricted Subsidiary;
(12) any encumbrance or restriction with respect to a Restricted Subsidiary that was previously an Unrestricted Subsidiary pursuant to or by reason of an agreement that such Subsidiary is a party to or entered into before the date on which such Subsidiary became a Restricted Subsidiary; provided that such agreement was not entered into in anticipation of an Unrestricted Subsidiary becoming a Restricted Subsidiary and any such encumbrance or restriction does not extend to any assets or property of the Issuer or any other Restricted Subsidiary other than the assets and property of such Subsidiary;
(13) other Indebtedness, Disqualified Stock or Preferred Stock of Foreign Subsidiaries that are not Subsidiary Guarantors that is permitted to be incurred subsequent to the Issue Date pursuant to the provisions of Section 4.09;
(14) other Indebtedness, Disqualified Stock or Preferred Stock permitted to be incurred subsequent to the Issue Date pursuant to the provisions of Section 4.09; provided that, in the good faith judgment of the Issuer, the encumbrances and restrictions contained therein will not materially impair the Issuers ability to make payments under the Notes when due; and
(15) any encumbrances or restrictions of the type referred to in clause (1), (2) or (3) of Section 4.08(a) imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in any of clauses (1) through (14) of this Section 4.08(b); provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings (i) are, in the good faith judgment of the Issuer, not materially more restrictive with respect to such encumbrance and other restrictions taken as a whole than those prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing, and (ii) in the case of the Alabama Revolving Credit Agreement, do not affect the ability of the Alabama Subsidiary to comply with Section 4.19.
Section 4.09 Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock.
(a) The Issuer shall not, and shall not permit any of the Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, incur and collectively, an incurrence) any Indebtedness (including Acquired Indebtedness) and the Issuer shall not issue any shares of Disqualified Stock and shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Issuer may incur Indebtedness (including Acquired Indebtedness) and issue shares of Disqualified Stock, and any of the Subsidiary Guarantors may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Issuer and the
Restricted Subsidiaries most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) shall not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the Issuer or any of the Restricted Subsidiaries and the issuance or creation of letters of credit and bankers acceptances thereunder (with letters of credit and bankers acceptances being deemed to have a principal amount equal to the face amount thereof), up to an aggregate principal amount outstanding at any one time not to exceed $40,000,000; provided that, to the extent that less than $7,000,000 in aggregate principal amount of Indebtedness is outstanding pursuant to clause (2) below, such $40,000,000 amount may be increased by an amount equal to the positive difference, if any, of $7,000,000 less the aggregate principal amount of Indebtedness outstanding pursuant to clause (2) below;
(2) the incurrence of Indebtedness under the Alabama Revolving Credit Agreement by the Alabama Subsidiary, up to an aggregate principal amount outstanding at any one time not to exceed $7,000,000; provided that, to the extent any Indebtedness in aggregate principal amount in excess of $40,000,000 has been incurred pursuant to the proviso in clause (1) above and is outstanding, such $7,000,000 amount in this clause (2) shall be reduced by such excess amount;
(3) the incurrence by the Issuer and any Subsidiary Guarantor of Indebtedness represented by the Notes (including any Guarantee) (other than any Additional Notes, but including any Exchange Notes and Guarantees thereof);
(4) Indebtedness of the Issuer and the Restricted Subsidiaries in existence on the Issue Date (other than Indebtedness described in clause (1), (2) or (3) of this Section 4.09(b));
(5) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred by the Issuer or any of the Restricted Subsidiaries to finance the purchase, lease, construction, installation or improvement of property (real or personal), equipment or other asset that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, and Indebtedness, Disqualified Stock and Preferred Stock incurred or issued to refund, refinance, replace, renew, extend or defease any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued as permitted under this clause (5); provided that the aggregate amount of Indebtedness, Disqualified Stock and Preferred Stock incurred or issued pursuant to this clause (5), when aggregated with the outstanding amount of Indebtedness, Disqualified Stock and Preferred Stock incurred or issued to refund, refinance, replace, renew, extend or defease Indebtedness, Disqualified Stock or Preferred Stock initially incurred or issued in reliance on this clause (5), does not exceed the greater of $10,000,000 and 2.0% of Total Assets;
(6) Indebtedness incurred by the Issuer or any of the Restricted Subsidiaries constituting reimbursement obligations with respect to bankers acceptances, bank guarantees, letters of credit, warehouse receipts or similar facilities entered into in the ordinary course of business, including letters of credit in respect of workers compensation claims, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers compensation claims, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, in each case (other than in the case of performance or surety bonds incurred to satisfy a regulatory requirement) incurred in the ordinary course of business; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(7) Indebtedness arising from agreements of the Issuer or the Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and the Restricted Subsidiaries in connection with such disposition;
(8) Indebtedness of the Issuer to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Subsidiary Guarantor is expressly subordinated in right of payment to the Notes; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this clause (8);
(9) Indebtedness of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary; provided that if a Subsidiary Guarantor incurs such Indebtedness owing to a Restricted Subsidiary that is not a Subsidiary Guarantor, such Indebtedness shall be expressly subordinated in right of payment to the Guarantee of the Notes of such Subsidiary Guarantor, as the case may be; provided, further, that any subsequent transfer of any Capital Stock or any other event that results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this clause (9);
(10) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of
Preferred Stock (except to the Issuer or another of the Restricted Subsidiaries or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed in each case to be an issuance of such shares of Preferred Stock not permitted by this clause (10);
(11) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(12) obligations in respect of self-insurance and obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Issuer or any of the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, incurred in the ordinary course of business;
(13) (a) Indebtedness or Disqualified Stock of the Issuer and Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary in an aggregate principal amount or liquidation preference up to 100.0% of the net cash proceeds received by the Issuer since immediately after the Issue Date from the issue or sale of Equity Interests of the Issuer or cash contributed to the capital of the Issuer (in each case, other than Excluded Contributions, proceeds of Disqualified Stock or Designated Preferred Stock and sales of Equity Interests to any Subsidiary of the Issuer) as determined in accordance with clause (3)(b) or (3)(c) of Section 4.07(a) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) or to make Permitted Investments (other than Permitted Investments specified in clause (1), (2) or (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Issuer and Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, that, when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred or issued pursuant to this clause (13)(b), does not exceed $35,000,000 (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued pursuant to this clause (13)(b) shall cease to be deemed incurred or issued for purposes of this clause (13)(b) but shall be deemed incurred pursuant to Section 4.09(a) from and after the first date on which the Issuer or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09(a) without reliance on this clause (13)(b); provided that, in the case of any such Indebtedness that is secured by a Lien, the foregoing reclassification shall only be effective if and to the extent that the Issuer and the Restricted Subsidiaries would be able to incur (and as a result of such reclassification are deemed to have incurred) such Lien pursuant to clause (19) or (38) of the definition of Permitted Lien);
(14) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness or the issuance by the Issuer or any Restricted Subsidiary of Disqualified Stock or Preferred Stock that serves to refund, refinance, replace, renew, extend or defease any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) or clause (3), (4), (13)(a) or (15) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund, refinance, replace, renew, extend or defease such Indebtedness, Disqualified Stock or Preferred Stock, including
additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees and accrued and unpaid interest in connection therewith (the Refinancing Indebtedness) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A) has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred that is not less than the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded, refinanced, replaced, renewed, extended or defeased,
(B) to the extent such Refinancing Indebtedness, refunds, refinances, replaces, renews, extends or defeases (i) Indebtedness subordinated or pari passu (without giving effect to security interests) to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu (without giving effect to security interests) to the same extent as the Indebtedness being refunded, refinanced, replaced, renewed, extended or defeased or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively, and
(C) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary that is not a Subsidiary Guarantor or the Issuer that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary that is not a Subsidiary Guarantor or the Issuer that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(15) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Issuer or a Restricted Subsidiary incurred or issued to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into, amalgamated with or consolidated with the Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving pro forma effect to such acquisition, amalgamation, merger or consolidation, either
(A) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a), or
(B) the Fixed Charge Coverage Ratio of the Issuer and the Restricted Subsidiaries is greater than such Fixed Charge Coverage Ratio immediately prior to such acquisition, amalgamation, merger or consolidation;
(16) cash management obligations and other Indebtedness in respect of netting services, automatic clearing house arrangements, employees credit or purchase
cards, endorsements of instruments for deposit, overdraft protections and similar arrangements, in each case incurred in the ordinary course of business;
(17) Indebtedness of the Issuer or any of the Restricted Subsidiaries supported by a letter of credit issued pursuant to a Credit Facility incurred pursuant to clause (1) of this Section 4.09(b), in a principal amount not in excess of the stated amount of such letter of credit and only so long as such letter of credit remains outstanding;
(18) any guarantee by the Issuer or a Restricted Subsidiary of Indebtedness or other obligations of the Issuer or any Restricted Subsidiary so long as the incurrence of such guaranteed Indebtedness is permitted under the terms of this Indenture and, in the case of any such guarantee by a Restricted Subsidiary, such Restricted Subsidiary is in compliance with Section 4.15;
(19) Indebtedness of Foreign Subsidiaries of the Issuer not to exceed at any one time outstanding, and together with any other Indebtedness incurred under this clause (19), the greater of $35,000,000 and 7.0% of Total Assets;
(20) Indebtedness of the Issuer or any of the Restricted Subsidiaries consisting of (i) the financing of insurance premiums or (ii) take-or-pay obligations contained in supply arrangements, in each case, incurred in the ordinary course of business;
(21) Indebtedness of the Issuer or any of the Restricted Subsidiaries undertaken in connection with cash management and related activities with respect to any Subsidiary or joint venture in the ordinary course of business;
(22) Indebtedness consisting of Indebtedness issued by the Issuer or any of the Restricted Subsidiaries to future, current or former officers, directors and employees thereof, their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Issuer or any Parent Entity to the extent described in clause (4) of Section 4.07(b); and
(23) any obligation, or guaranty of any obligation, of the Issuer or any Restricted Subsidiary to reimburse or indemnify a Person extending credit to customers of the Issuer or a Restricted Subsidiary incurred in the ordinary course of business as part of a Similar Business for all or any portion of the amounts payable by such customers to the Person extending such credit.
Notwithstanding the foregoing, Restricted Subsidiaries that are not Subsidiary Guarantors shall not be permitted to incur Indebtedness or issue Disqualified Stock or Preferred Stock pursuant to clause (5), (13)(b) or (19) of this Section 4.09(b) if, after giving effect to such incurrence or issuance, the aggregate principal amount of Indebtedness of Restricted Subsidiaries that are not Subsidiary Guarantors outstanding pursuant to such clauses, together with the aggregate liquidation preference of Disqualified Stock and Preferred Stock issued by Restricted Subsidiaries that are not Subsidiary Guarantors outstanding pursuant to such clauses, would exceed the greater of $55,000,000 and 11.0% of Total Assets.
(c) For purposes of determining compliance with this Section 4.09:
(1) in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of more than one of the categories of permitted Indebtedness, Disqualified Stock or Preferred Stock described in clauses (1) through (22) of Section 4.09(b) or is entitled to be incurred pursuant to Section 4.09(a), the Issuer, in its sole discretion, shall classify, and may later reclassify, such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) in any manner that complies with this Section 4.09; provided that (x) all Indebtedness outstanding under the Revolving Credit Agreement shall be treated as incurred under clause (1) of Section 4.09(b), (y) all Indebtedness outstanding under the Alabama Revolving Credit Agreement shall be treated as incurred under clause (2) of Section 4.09(b) and (z) the Issuer shall not be permitted to reclassify all or any portion of any Indebtedness incurred under clause (1) or (2) of Section 4.09(b); and
(2) at the time of incurrence, the Issuer shall be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in Sections 4.09(a) and 4.09(b).
Accrual of interest or dividends, the accretion of accreted value, the accretion or amortization of original issue discount and the payment of interest or dividends in the form of additional Indebtedness, Disqualified Stock or Preferred Stock shall not be deemed to be an incurrence of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this Section 4.09.
For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed (i) the principal amount of such Indebtedness being refinanced plus (ii) the aggregate amount of accrued interest, fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing.
The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.
Notwithstanding anything to the contrary, the Issuer shall not, and shall not permit any Subsidiary Guarantor to, directly or indirectly, incur any Indebtedness (including Acquired Indebtedness) that is subordinated or junior in right of payment to any Indebtedness of the Issuer or such Subsidiary Guarantor, as the case may be, unless such Indebtedness is expressly subordinated in right of payment to the Notes or such Subsidiary Guarantors Guarantee to the extent and in the same manner as such Indebtedness is subordinated to other Indebtedness of the Issuer or such Subsidiary Guarantor, as the case may be.
For the purposes of this Indenture, (1) Indebtedness that is unsecured is not deemed to be subordinated or junior to Secured Indebtedness merely because it is unsecured and (2) Indebtedness is not deemed to be subordinated or junior to any other Indebtedness merely because it has a junior priority with respect to the same collateral.
Section 4.10 Asset Sales.
(I) (a) The Issuer shall not, and shall not permit any Restricted Subsidiary to, consummate, directly or indirectly, an Asset Sale, unless:
(1) the Issuer or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the fair market value (measured at the time of contractually agreeing to such Asset Sale) of the assets sold or otherwise disposed of;
(2) except in the case of a Permitted Asset Swap, at least 75% of the consideration therefor received by the Issuer or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; and
(3) without limitation of the provisions described in Section 4.17, to the extent that any consideration received by the Issuer or any Restricted Subsidiary in such Asset Sale (including, for avoidance of doubt, any Designated Non-cash Consideration and any assets received in a Permitted Asset Swap) consists of assets of the type that would constitute Collateral, such assets, including the assets of any Person that becomes a Subsidiary Guarantor as a result of such transaction, are as soon as reasonably practicable (and in any event within 90 days) after their acquisition added to the Collateral.
(b) Within 365 days after the receipt of any Net Proceeds of any Asset Sale, the Issuer or such Restricted Subsidiary, at its option, may apply the Net Proceeds from such Asset Sale,
(1) to permanently reduce any Revolving Credit Facility Obligations, and to correspondingly reduce any outstanding commitments with respect thereto;
(2) to make one or more offers to the Holders of the Notes (and, at the option of the Issuer, the holders of Other First Lien Obligations) to purchase Notes (and reduce such Other First Lien Obligations) pursuant to Section 3.09 (each, an Asset Sale Offer); provided, however, that in connection with any prepayment, repayment or purchase of Indebtedness pursuant to this clause (2), the Issuer or such Restricted Subsidiary shall permanently retire such Indebtedness and shall cause the related loan commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid or purchased; provided further that if the Issuer or such Restricted Subsidiary shall so reduce any Other First Lien Obligations, the Issuer will equally and ratably reduce Indebtedness under the Notes by making an offer to all Holders of Notes to purchase at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, the pro rata principal amount of the Notes, such offer to be conducted in accordance with the procedures set forth below for an Asset Sale Offer but without any further limitation in amount;
(3) to make (a) one or more Investments in any business or businesses, provided that any such Investment is in the form of the acquisition of Capital Stock that results in the Issuer or a Restricted Subsidiary, as the case may be, owning an amount of the Capital Stock of such business such that it constitutes or continues to constitute a Restricted Subsidiary, (b) capital expenditures or (c) acquisitions of other assets that are, in the case of each of (a), (b) and (c), used or useful in a Similar Business or replace the businesses, properties and/or assets that are the subject of such Asset Sale (any
businesses, properties or assets acquired pursuant to clause (a), (b) or (c) together, the Additional Assets); provided that, without limitation of the provisions described in Section 4.17, any such Additional Assets acquired with Net Proceeds from an Asset Sale of Collateral are as soon as reasonably practicable (and in any event, within 90 days) after their acquisition added to the Collateral; or
(4) to the extent such Net Proceeds are not from Asset Sales of Collateral, to permanently reduce Indebtedness of a Restricted Subsidiary that is not the Issuer or a Subsidiary Guarantor, other than Indebtedness owed to the Issuer, a Subsidiary Guarantor or a Restricted Subsidiary;
provided that, in the case of clause (3) above, a binding commitment to acquire Additional Assets shall be treated as a permitted application of the Net Proceeds from the date of such commitment so long as the Issuer or such Restricted Subsidiary enters into such commitment with the good faith expectation that such Net Proceeds shall be applied to satisfy such commitment within 180 days of such commitment (an Acceptable Commitment) and, in the event any Acceptable Commitment is later cancelled or terminated for any reason before the Net Proceeds are applied in connection therewith, then such Net Proceeds shall constitute Excess Proceeds unless the Net Proceeds are otherwise applied pursuant to any or all of clauses (i) through (iv) above, including, subject to the proviso below, the entry into a new Acceptable Commitment, prior to the later of (x) the date that is six months following the date of such cancellation or termination and (y) the expiration of the Application Period; provided, further that the Issuer or such Restricted Subsidiary may only enter into a new Acceptable Commitment under the foregoing provision one time with respect to each Asset Sale.
(c) Any Net Proceeds from the Asset Sales covered by this clause (I) that are not invested or applied as provided and within the time period set forth in Section 4.10(I)(b), less the amount of cash applied by the Issuer during the six months preceding the date of receipt of such Net Proceeds to redeem Notes pursuant to Section 3.07(d) (other than any such cash applied in respect of accrued and unpaid interest), shall be deemed to constitute Excess Proceeds; provided that, in the event there have been multiple Asset Sales, cash applied with respect to any particular redemption pursuant to such paragraph shall only be deducted from the calculation of Excess Proceeds one time. When the aggregate amount of Excess Proceeds exceeds $20,000,000, the Issuer shall make an Asset Sale Offer to all Holders of the Notes and, if required by the terms of any Other First Lien Obligations, to the holders of such Other First Lien Obligations, to purchase the maximum aggregate principal amount of the Notes and such Other First Lien Obligations that is equal to $1,000 or an integral multiple thereof that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date fixed for the closing of such offer, in accordance with the procedures set forth in this Indenture. The Issuer shall commence an Asset Sale Offer with respect to Excess Proceeds within ten Business Days after the date that Excess Proceeds exceed $20,000,000 by mailing the notice required pursuant to the terms of this Indenture, with a copy to the Trustee. The Issuer may satisfy the foregoing obligation with respect to such Net Proceeds from an Asset Sale by making an Asset Sale Offer with respect to such Net Proceeds prior to the expiration of the Application Period.
(d) To the extent that the aggregate amount of Notes and such Other First Lien Obligations tendered or otherwise surrendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuer may, subject to the other covenants contained in this Indenture, use any remaining Excess Proceeds for general corporate purposes. If the aggregate principal amount of Notes and Other First Lien Obligations surrendered by such Holders and holders thereof exceeds the amount of Excess Proceeds, the Issuer shall select the Notes and such Other First Lien Obligations to be purchased on a pro rata basis based on the accreted value or principal amount of the Notes or such Other First Lien Obligations tendered. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds
shall be reset at zero. After the Issuer or any Restricted Subsidiary has applied the Net Proceeds from any Asset Sale covered by this clause (I) as provided in, and within the time periods required by, this paragraph (I), the balance of such Net Proceeds, if any, from such Asset Sale shall be released by the Collateral Agent to the Issuer or such Restricted Subsidiary for use by the Issuer or such Restricted Subsidiary for any purpose not prohibited by the terms of this Indenture.
(II) Pending the final application of any Net Proceeds pursuant to clause (I), the holder of such Net Proceeds may apply such Net Proceeds to temporarily reduce revolving credit Indebtedness or otherwise invest such Net Proceeds in any manner not prohibited by the terms of this Indenture.
(III) For purposes of this Section 4.10, the following are deemed to be cash or Cash Equivalents:
(1) any liabilities (as shown on the Issuers or such Restricted Subsidiarys most recent balance sheet or in the notes thereto, or if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been shown on the Issuers or such Restricted Subsidiarys balance sheet or in the footnotes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet, as determined in good faith by the Issuer) of the Issuer or any Restricted Subsidiary, that are assumed by the transferee of any such assets (or are otherwise extinguished in connection with the transactions relating to such Asset Sale) and for which the Issuer and all Restricted Subsidiaries have been validly released by all creditors in writing;
(2) any securities, notes or other obligations received by the Issuer or such Restricted Subsidiary from such transferee that are converted by the Issuer or such Restricted Subsidiary into cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received) within 180 days following the closing of such Asset Sale; and
(3) any Designated Non-cash Consideration received by the Issuer or such Restricted Subsidiary in such Asset Sale having an aggregate fair market value, taken together with all other Designated Non-cash Consideration received pursuant to this clause (3) that is at that time outstanding, not to exceed the greater of (x) $15,000,000 and (y) 3.0% of Total Assets at the time of the receipt of such Designated Non-cash Consideration, with the fair market value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value.
(VI) The notice, if mailed in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. If (a) the notice is mailed in a manner herein provided and (b) any Holder fails to receive such notice or a Holder receives such notice but it is defective, such Holders failure to receive such notice or such defect shall not affect the validity of the proceedings for the purchase of the Notes as to all other Holders that properly received such notice without defect. The Issuer shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with each repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the Asset Sale provisions of this Indenture, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.10 by virtue of such compliance.
Section 4.11 Transactions with Affiliates.
(a) The Issuer shall not, and shall not permit any of the Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Issuer (each of the foregoing, an Affiliate Transaction) involving aggregate payments or consideration in excess of $5,000,000, unless:
(1) such Affiliate Transaction is on terms that are not materially less favorable to the Issuer or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Issuer or such Restricted Subsidiary with an unrelated Person on an arms-length basis; and
(2) the Issuer delivers to the Trustee with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate payments or consideration in excess of $15,000,000, a resolution adopted by a majority of the Board of the Issuer approving such Affiliate Transaction and set forth in an Officers Certificate certifying that such Affiliate Transaction complies with clause (1) of this Section 4.11(a).
(b) The provisions of Section 4.11(a) shall not apply to the following:
(1) transactions between or among the Issuer or any of the Restricted Subsidiaries or any entity that becomes a Restricted Subsidiary as a result of such transaction, so long as such transaction is otherwise consummated in compliance with this Indenture;
(2) Restricted Payments permitted by Section 4.07 and Permitted Investments permitted by clause (8) or (13) of the definition of Permitted Investments;
(3) the payment of management, consulting, monitoring and advisory fees and related expenses (including indemnification and other similar agreements) to the Investors pursuant to the Investor Management Agreement (plus any unpaid management, consulting, monitoring, advisory and other fees and related expenses (including indemnification and other similar amounts) accrued in any prior year) and the termination fees pursuant to the Investor Management Agreement, in each case, in amounts not in excess of those contemplated by the Investor Management Agreement as in effect on the Issue Date, or as the same may be amended after the Issue Date, so long as any amendments thereto, when taken as a whole, are not disadvantageous in any material respect to the Holders;
(4) the payment of indemnification and other similar amounts to the Investors and reimbursement of expenses of the Investors approved by, or pursuant to arrangements approved by, the Board of the Issuer in good faith;
(5) the payment of reasonable and customary fees and compensation paid to, and indemnities and reimbursements and employment and severance arrangements provided on behalf of, or for the benefit of, future, current or former officers, directors, employees or consultants of the Issuer, any of the Restricted Subsidiaries or any Parent Entity;
(6) transactions in which the Issuer or any of the Restricted Subsidiaries, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to the Issuer or such Restricted Subsidiary from a financial point of view or stating that the terms are not materially less favorable to the Issuer or its relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Issuer or such Restricted Subsidiary with an unrelated Person on an arms-length basis;
(7) any agreement or arrangement as in effect as of the Issue Date, as the same may be amended after the Issue Date, so long as any such amendments, when taken as a whole, are not disadvantageous in any material respect to the Holders;
(8) the existence of, or the performance by the Issuer or any of the Restricted Subsidiaries of its obligations under the terms of, any stockholders agreement or the equivalent thereof (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Issue Date, and any amendment thereto or any similar agreement that it may enter into thereafter; provided, however, that any such amendment and any similar agreement shall not contain terms that, when taken as a whole, are disadvantageous in any material respect to the Holders;
(9) transactions with customers, clients, suppliers or purchasers or sellers of goods or services that are Affiliates, in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture and that are fair to the Issuer and the Restricted Subsidiaries, in the reasonable determination of the Board of the Issuer or the senior management thereof, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party;
(10) the issuance or transfer of Equity Interests (other than Disqualified Stock) of the Issuer to any Parent Entity or to any Permitted Holder or to any director, officer, employee or consultant (or their respective estates, investment funds, investment vehicles, spouses or former spouses) of the Issuer, any of the Issuers Subsidiaries or any Parent Entity and the granting and performing of reasonable and customary registration rights with respect to such Equity Interests;
(11) payments by the Issuer or any of the Restricted Subsidiaries to the Investors made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures; provided that such payments are approved by a majority of the Board of the Issuer in good faith;
(12) payments or loans (or cancellation of loans) to employees, directors or consultants of the Issuer, any of the Restricted Subsidiaries or any Parent Entity and employment agreements, stock option plans and other similar arrangements with such employees, directors or consultants that, in each case, that are approved by the Board of the Issuer in good faith;
(13) investments by the Investors in securities of the Issuers or any of the Restricted Subsidiaries (and payment of reasonable out-of-pocket expenses incurred by such Investors in connection therewith) so long as (i) the investment is being offered generally to other investors on the same or more favorable terms and (ii) the investment
by the Investors, in the aggregate, constitutes less than 5% of the proposed issue amount of such class of securities;
(14) payments to any future, current or former employee, director, officer or consultant of the Issuer, any of its Subsidiaries or any Parent Entity pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement; and any employment agreements, stock option plans and other compensatory arrangements (and any successor plans thereto) and any health, disability and similar insurance or benefit plans or supplemental executive retirement benefit plans or arrangements with any such employees, directors, officers or consultants that are, in each case, approved by the Board of the Issuer in good faith;
(15) transactions with a Person (other than an Unrestricted Subsidiary) that is an Affiliate of the Issuer solely because the Issuer owns any Equity Interest in, or controls, such Person; provided that, no Affiliate of the Issuer, other than the Issuer or a Restricted Subsidiary, shall have a beneficial interest or otherwise participate in such Person other than through such Affiliates ownership of the Issuer;
(16) payments by the Issuer and its Subsidiaries pursuant to tax sharing agreements among the Issuer (and any Parent Entity) and its Subsidiaries; provided that in each case the amount of such payments in any calendar year does not exceed the amount that the Issuer, the Restricted Subsidiaries and the Issuers Unrestricted Subsidiaries (to the extent of the amount received from Unrestricted Subsidiaries) would be required to pay in respect of foreign, federal, state and local taxes for such calendar year were the Issuer, the Restricted Subsidiaries and the Issuers Unrestricted Subsidiaries (to the extent described above) to pay such taxes separately from any such Parent Entity; and
(17) intellectual property licenses entered into in the ordinary course of business.
Section 4.12 Liens.
The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, create, incur or suffer to exist any Lien (except Permitted Liens) (each, a Subject Lien) that secures Obligations under any Indebtedness on any asset or property of the Issuer or any Restricted Subsidiary, except for:
(1) in the case of Subject Liens on any Collateral, any Subject Lien, if such Subject Lien expressly has Junior Lien Priority on the Collateral relative to the Notes and the Guarantees; or
(2) in the case of Subject Liens on any other asset or property, any Subject Lien if the Notes and the Guarantees are equally and ratably secured with (or on a senior basis to, in the case such Subject Lien secures any Subordinated Indebtedness) the Obligations secured by such Subject Lien.
Any Lien created for the benefit of the Holders of the Notes pursuant to clause (2) of this Section 4.12 may provide by its terms that such Lien shall be automatically and unconditionally released and discharged upon the release and discharge of the Subject Lien that gave rise to the obligation to so
secure the Notes and the Guarantees (which release and discharge in the case of any sale of any such asset or property shall not affect any Lien that the Collateral Agent may otherwise have on the proceeds from such sale).
Any reference to a Permitted Lien is not intended to subordinate or postpone, and shall not be interpreted as subordinating or postponing, or as any agreement to subordinate or postpone, any Lien in favor of the Collateral Agent in respect of the Collateral.
Section 4.13 Corporate Existence.
Subject to Article 5, the Issuer shall do or cause to be done all things necessary to preserve and keep in full force and effect (i) its company existence, and the corporate, partnership, limited liability company or other existence of each of the Restricted Subsidiaries, in accordance with the respective organizational documents (as the same may be amended, supplemented or otherwise modified from time to time) of the Issuer or any such Restricted Subsidiary and (ii) the rights (charter and statutory), licenses and franchises of the Issuer and the Restricted Subsidiaries; provided that the Issuer shall not be required to preserve any such right, license or franchise, or the corporate, partnership, limited liability company or other existence of any of the Restricted Subsidiaries, if the Issuer in good faith shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Issuer and the Restricted Subsidiaries, taken as a whole.
Section 4.14 Offer to Repurchase Upon Change of Control.
(a) If a Change of Control occurs, unless, prior to the time the Issuer is required to make a Change of Control Offer, the Issuer has previously mailed or concurrently mails a redemption notice with respect to all the outstanding Notes as described under Section 3.07, the Issuer shall make an offer to purchase all of the Notes pursuant to the offer described below (the Change of Control Offer) at a price in cash (the Change of Control Payment) equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to, but excluding, the date of purchase, subject to the right of Holders of the Notes of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date. Within 30 days following any Change of Control, the Issuer shall send notice of such Change of Control Offer by first-class mail, with a copy to the Trustee, to each Holder of Notes to the address of such Holder appearing in the security register or otherwise in accordance with the procedures of DTC, with the following information:
(1) that a Change of Control Offer is being made pursuant to this Section 4.14 and that all Notes properly tendered pursuant to such Change of Control Offer shall be accepted for payment by the Issuer;
(2) a description of the transaction or transactions constituting a Change of Control;
(3) the purchase price and the purchase date, which will be no earlier than 20 Business Days nor later than 60 days from the date such notice is mailed (the Change of Control Payment Date);
(4) that any Note not properly tendered will remain outstanding and continue to accrue interest;
(5) that unless the Issuer defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest on the Change of Control Payment Date;
(6) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer shall be required to surrender such Notes, with the form entitled Option of Holder to Elect Purchase on the reverse of such Notes completed, to the paying agent specified in the notice at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;
(7) that Holders shall be entitled to withdraw their tendered Notes and their election to require the Issuer to purchase such Notes; provided that the paying agent receives, not later than the expiration time of the Change of Control Offer, a telegram, facsimile transmission or letter setting forth the name of the Holder of the Notes, the principal amount of the Notes tendered for purchase, and a statement that such Holder is withdrawing its tendered Notes and its election to have such Notes purchased;
(8) that if less than all of such Holders Notes are tendered for purchase, such Holder shall be issued new Notes and such new Notes will be equal in principal amount to the unpurchased portion of the Notes surrendered; provided that the unpurchased portion of the Notes must be equal to $2,000 or an integral multiple of $1,000 in excess of $2,000;
(9) if such notice is delivered prior to the occurrence of a Change of Control, stating that the Change of Control Offer is conditional on the occurrence of such Change of Control; and
(10) such other instructions, as determined by the Issuer, consistent with this Section 4.14, that a Holder must follow.
The Issuer shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.14, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.14 by virtue thereof.
(b) On the Change of Control Payment Date, the Issuer shall, to the extent permitted by law,
(1) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer,
(2) deposit with the Paying Agent an amount equal to the aggregate Change of Control Payment in respect of all Notes or portions thereof so tendered, and
(3) deliver, or cause to be delivered, to the Trustee for cancellation the Notes so accepted together with an Officers Certificate to the Trustee stating that such Notes or portions thereof have been tendered to and purchased by the Issuer.
(c) The Issuer shall not be required to make a Change of Control Offer if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.14 applicable to a Change of Control Offer made by the Issuer and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer. Notwithstanding anything to the contrary herein, a Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.
(d) If Holders of not less than 95% in aggregate principal amount of the outstanding Notes validly tender and do not withdraw their Notes in connection with a Change of Control Offer and the Issuer, or any third-party making a Change of Control Offer in lieu of the Issuer as described in clause (c) above, purchases all of the Notes validly tendered and not withdrawn by such Holders, the Issuer or such third-party will have the right, upon not less than 30 nor more than 60 days prior notice, given not more than 30 days following such purchase pursuant to the applicable Change of Control Offer, to redeem all Notes that remain outstanding following such purchase at a price in cash equal to the applicable Change of Control Payment plus, to the extent not included in the Change of Control Payment, accrued and unpaid interest, if any, thereon, to the Redemption Date.
(e) Other than as specifically provided in this Section 4.14, any purchase pursuant to this Section 4.14 shall be made pursuant to the provisions of Sections 3.02, 3.05 and 3.06.
Section 4.15 Additional Guarantees.
The Issuer shall cause each Restricted Subsidiary that is not a Subsidiary Guarantor that guarantees Indebtedness of the Issuer or any Subsidiary Guarantor after the Issue Date to, as promptly as reasonably practicable, execute and deliver to the Trustee a supplemental indenture to this Indenture, the form of which is attached as Exhibit D, Security Documents (or supplements or counterparts thereto) and an acknowledgment to the Junior Lien Intercreditor Agreement pursuant to which such Restricted Subsidiary will (A) guarantee payment of the Notes and all other Notes Obligations on the same terms and conditions as those set forth in this Indenture, (B) grant a Lien on such of its assets of the type that would constitute Collateral in favor of the Collateral Agent for the benefit of the Noteholder Secured Parties as security for the Notes and all other Notes Obligations on terms and conditions similar to those set forth in the other Security Documents then existing and (C) agree to acknowledge, and agree to comply with, the terms of the Collateral Agreement and the Junior Lien Intercreditor Agreement.
Section 4.16 Suspension of Covenants.
(a) If on any date after the Issue Date (i) the Notes have Investment Grade Ratings from both Rating Agencies and (ii) no Default has occurred and is continuing under this Indenture, then, beginning on that day, Section 4.07, Section 4.08, Section 4.09, Section 4.10 (but only to the extent relating to properties or assets of the Issuer or any Restricted Subsidiary that do not constitute Collateral), Section 4.11 and clause (4) of Section 5.01(a) (collectively, the Suspended Covenants) shall no longer be applicable to the Notes.
(b) In the event that the Issuer and the Restricted Subsidiaries are not subject to the Suspended Covenants under this Indenture for any period of time (such period, the Suspension Period) as a result of the foregoing, and on any subsequent date (the Reversion Date) one or both of the Rating Agencies withdraw their Investment Grade Rating or downgrade the rating assigned to the Notes below an Investment Grade Rating, then the Issuer and the Restricted Subsidiaries shall thereafter again be subject to the Suspended Covenants with respect to future events.
(c) In the event of any such reinstatement, no action taken or omitted to be taken by the Issuer or any of the Restricted Subsidiaries prior to such reinstatement that would otherwise be a breach of any Suspended Covenant will give rise to a Default or Event of Default under this Indenture with respect to the Notes; provided that (i) with respect to Restricted Payments made after any such reinstatement, the amount of Restricted Payments made shall be calculated as though Section 4.07 had been in effect prior to, but not during, the Suspension Period, and all events set forth in clause (3) of Section 4.07(a) (including any Consolidated Net Income earned) occurring during a Suspension Period shall be disregarded for purposes of determining the amount of Restricted Payments the Issuer or any Restricted Subsidiary is permitted to make pursuant to such clause (3) after the applicable Reversion Date, and (ii) all Indebtedness incurred, or Disqualified Stock or Preferred Stock issued, during the Suspension Period shall be classified to have been incurred or issued pursuant to clause (3) of Section 4.09(b). No Subsidiaries shall be designated as Unrestricted Subsidiaries during any Suspension Period.
(d) The Issuer shall deliver promptly to the Trustee an Officers Certificate notifying it of any such occurrence under this Section 4.16.
Section 4.17 Further Assurances; After Acquired Property.
Subject to the applicable limitations set forth in the Security Documents and this Indenture (including with respect to Excluded Assets), the Issuer and the Subsidiary Guarantors shall execute any and all further documents, financing statements, applications for registration, agreements and instruments, and take all further action that may be required under applicable law, or that the Collateral Agent may reasonably request, in order to grant, preserve, protect and perfect the validity and priority of the security interests created or intended to be created by the Security Documents in the Collateral. Subject to the applicable limitations set forth in the Security Documents and this Indenture (including those with respect to Excluded Assets), if the Issuer or any Subsidiary Guarantor acquires any property which is of the type that would constitute Collateral under the Collateral Agreement or any other Security Document (excluding, for the avoidance of doubt, any Excluded Assets), it shall as soon as practicable (and in any event, within 90 days) after the acquisition thereof execute and deliver such security instruments, financing statements and such certificates and opinions of counsel as are required under the Indenture and the Collateral Agreement to vest in the Collateral Agent a first-priority Lien (subject only to Permitted Liens) in such after-acquired property and to have such after-acquired property added to the Collateral, and thereupon all provisions of the Indenture and the Security Documents relating to the Collateral shall be deemed to relate to such after-acquired property to the same extent and with the same force and effect. If granting a Lien in such property requires the consent of a third party, the Issuer or the applicable Subsidiary Guarantor will use commercially reasonable efforts to obtain such consent within 45 days after the acquisition of such property. If such third party does not consent to the granting of such Lien after the use of such commercially reasonable efforts, the applicable entity will not be required to provide such Lien.
Section 4.18 Information Regarding Collateral.
The Issuer shall furnish to the Collateral Agent, with respect to the Issuer or any Subsidiary Guarantor, prompt written notice of any change in such Persons (i) organizational name, (ii) jurisdiction of organization or formation, (iii) identity or organizational structure or (iv) organizational identification number. The Issuer and the Subsidiary Guarantors shall make all filings under the Uniform Commercial Code or equivalent statutes, or otherwise that are required by applicable law in order for the Collateral Agent to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral.
Section 4.19 Alabama Excess Cash Flow Distribution.
So long as the Alabama Subsidiary remains a Subsidiary of the Issuer and the Alabama Revolving Credit Agreement remains outstanding, within 45 days of the end of each fiscal quarter, the Issuer shall (a) cause the Alabama Subsidiary to declare and pay a dividend, other payment or distribution on account of its Equity Interests to the holders of such Equity Interests on a pro rata basis in an amount equal to the Alabama Excess Cash Flow for such fiscal quarter and (b) deliver to the Trustee an Officers Certificate setting forth a reasonably detailed calculation of Alabama Excess Cash Flow for such fiscal quarter and confirming that such dividend or other payment or distribution has been made.
ARTICLE 5
SUCCESSORS
Section 5.01 Merger, Consolidation or Sale of All or Substantially All Assets.
(a) The Issuer shall not consolidate, merge or amalgamate with or into or wind up into (whether or not the Issuer is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to any Person unless:
(1) The Issuer is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a Person organized or existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof (such Person, as the case may be, being herein called the Successor Company); provided that in the case where the Successor Company is not a corporation, a co-obligor of the Notes shall be a corporation;
(2) the Successor Company expressly assumes all the obligations of the Issuer under this Indenture, the Security Documents and the Notes pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;
(3) immediately after such transaction, no Default exists;
(4) immediately after giving pro forma effect to such transaction and any related financing transactions, as if such transactions had occurred at the beginning of the applicable four-quarter period,
(A) the Successor Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a), or
(B) the Fixed Charge Coverage Ratio for the Issuer (or the Successor Company, as applicable) and the Restricted Subsidiaries on a consolidated basis would be greater than the Fixed Charge Coverage Ratio for the Issuer and the Restricted Subsidiaries on a consolidated basis immediately prior to such transaction;
(5) each Subsidiary Guarantor, unless it is the other party to the transactions described above, in which case Section 5.01(c) shall apply, shall have by supplemental
indenture confirmed that its Guarantee shall apply to such Persons obligations under this Indenture and the Notes;
(6) the Issuer shall have delivered to the Trustee an Officers Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indentures, if any, comply with this Indenture;
(7) to the extent any assets of the Person that is merged, amalgamated or consolidated with or into the Successor Company are assets of the type that would constitute Collateral under the Security Documents, the Successor Company shall take such action as may be reasonably necessary to cause such property and assets to be made subject to the Lien of the Security Documents in the manner and to the extent required by this Indenture or any of the Security Documents and shall take all reasonably necessary action so that such Lien is perfected to the extent required by this Indenture and the Security Documents; and
(8) the Collateral owned by or transferred to the Successor Company shall: (a) continue to constitute Collateral under this Indenture and the Security Documents, (b) be subject to the Lien in favor of the Collateral Agent for the benefit of the Trustee and the Holders of the Notes and (c) not be subject to any Lien other than Permitted Liens and other Liens permitted under Section 4.12.
(b) Notwithstanding clauses (3) and (4) of Section 5.01(a),
(1) any Restricted Subsidiary may consolidate or amalgamate with or merge into or transfer all or part of its properties and assets to the Issuer or any Restricted Subsidiary; and
(2) the Issuer may consolidate, amalgamate or merge with an Affiliate of the Issuer solely for the purpose of reincorporating the Issuer in another state in the United States, the District of Columbia or any territory thereof so long as the amount of Indebtedness of the Issuer and the Restricted Subsidiaries is not increased thereby.
(c) Subject to Section 10.06, no Subsidiary Guarantor shall, and the Issuer shall not permit any such Subsidiary Guarantor to, consolidate, amalgamate or merge with or into or wind up into (whether or not such Subsidiary Guarantor is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to any Person unless:
(1) (A) such Subsidiary Guarantor is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than such Subsidiary Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a Person organized or existing under (i) the laws of the jurisdiction of organization of such Subsidiary Guarantor or (ii) the laws of the United States, any state thereof, the District of Columbia or any territory thereof (such Subsidiary Guarantor or such Person, as the case may be, being herein called the Successor Subsidiary Guarantor);
(B) the Successor Subsidiary Guarantor, if other than such Subsidiary Guarantor, expressly assumes all the obligations of such Subsidiary Guarantor under this Indenture and such Subsidiary Guarantors related Guarantee and the Security
Documents pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;
(C) immediately after such transaction, no Default exists;
(D) the Issuer shall have delivered to the Trustee an Officers Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indentures, if any, comply with this Indenture;
(E) to the extent any assets of the Person that is merged, amalgamated or consolidated with or into the Successor Subsidiary Guarantor are assets of the type that would constitute Collateral under the Security Documents, the Successor Subsidiary Guarantor shall take such action as may be reasonably necessary to cause such property and assets to be made subject to the Lien of the Security Documents in the manner and to the extent required by this Indenture or any of the Security Documents and shall take all reasonably necessary action so that such Lien is perfected to the extent required by this Indenture and the Security Documents; and
(F) the Collateral owned by or transferred to the Successor Subsidiary Guarantor shall: (i) continue to constitute Collateral under this Indenture and the Security Documents, (ii) be subject to the Lien in favor of the Collateral Agent for the benefit of the Trustee and the Holders of the Notes and (iii) not be subject to any Lien other than Permitted Liens and other Liens permitted under Section 4.12; or
(2) the transaction is made in compliance with Section 4.10.
(d) Subject to Section 10.06, the Successor Subsidiary Guarantor shall succeed to, and be substituted for, such Subsidiary Guarantor under this Indenture, the Security Documents and such Subsidiary Guarantors Guarantee. Notwithstanding the foregoing, any such Subsidiary Guarantor may (i) merge into or transfer all or part of its properties and assets to another Subsidiary Guarantor or the Issuer or (ii) merge with an Affiliate of the Issuer solely for the purpose of reincorporating or reorganizing such Subsidiary Guarantor in the United States, any state thereof, the District of Columbia or any territory thereof so long as the amount of Indebtedness of the Issuer and the Restricted Subsidiaries is not increased thereby.
Section 5.02 Successor Corporation Substituted.
Upon any consolidation, amalgamation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the assets of the Issuer in accordance with Section 5.01, the successor corporation formed by such consolidation or into or with which the Issuer is merged or amalgamated or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, amalgamation, merger, sale, lease, conveyance or other disposition, the provisions of this Indenture referring to the Issuer shall refer instead to the successor corporation and not to the Issuer), and may exercise every right and power of the Issuer under this Indenture, the Security Documents and the Notes with the same effect as if such successor Person had been named as the Issuer herein; provided that the predecessor Issuer shall not be relieved from the obligation to pay the principal of and interest, if any, on the Notes except in the case of a sale, assignment, transfer, conveyance or other disposition of all of the Issuers assets that meets the requirements of Section 5.01.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
(a) An Event of Default wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):
(1) default in payment when due and payable, upon redemption, acceleration or otherwise, of principal of, or premium, if any, on the Notes;
(2) default for 30 days or more in the payment when due of interest on or with respect to the Notes;
(3) failure by the Issuer or any Subsidiary Guarantor for 60 days after receipt of written notice given by the Trustee or the Holders of not less than 25% in principal amount of the outstanding Notes to comply with any of its obligations, covenants or agreements (other than a default referred to in clause (1) or (2) above) contained in this Indenture, the Security Documents, the Notes, the Alabama Intercreditor Agreement or the Junior Lien Intercreditor Agreement; provided that, in the case of Section 4.03, such period of continuance for such default or breach shall be 180 days after written notice described in this clause (3) has been given;
(4) default under any mortgage, indenture or instrument under which there is issued or by which there is secured or evidenced any Indebtedness for money borrowed by the Issuer or any of the Restricted Subsidiaries or the payment of which is guaranteed by the Issuer or any of the Restricted Subsidiaries, other than Indebtedness owed to the Issuer or a Restricted Subsidiary, whether such Indebtedness or guarantee now exists or is created after the issuance of the Notes, if both:
(i) such default either results from the failure to pay any principal of such Indebtedness at its stated final maturity (after giving effect to any applicable grace periods) or relates to an obligation other than the obligation to pay principal of any such Indebtedness at its stated final maturity and results in the holder or holders of such Indebtedness causing such Indebtedness to become due prior to its stated final maturity; and
(ii) the principal amount of such Indebtedness, together with the principal amount of any other such Indebtedness in default for failure to pay principal at its stated final maturity (after giving effect to any applicable grace periods), or the maturity of which has been so accelerated, is, in the aggregate, $25,000,000;
(5) failure by the Issuer or any Significant Subsidiary (or group of Restricted Subsidiaries that together (determined as of the most recent consolidated financial statements of the Issuer for a fiscal quarter end provided as required pursuant to Section 4.03) would constitute a Significant Subsidiary) to pay final judgments aggregating in excess of $25,000,000 or more (net of amounts covered by insurance policies issued by reputable insurance companies), which final judgments remain unpaid, undischarged and
unstayed for a period of more than 60 days after such judgment becomes final, and in the event such judgment is covered by insurance, an enforcement proceeding has been commenced by any creditor upon such judgment or decree that is not promptly stayed;
(6) the Issuer or any Significant Subsidiary (or group of Restricted Subsidiaries that together (determined as of the most recent consolidated financial statements of the Issuer for a fiscal quarter end provided as required pursuant to Section 4.03) would constitute a Significant Subsidiary), pursuant to or within the meaning of any Bankruptcy Law:
(i) commences proceedings to be adjudicated bankrupt or insolvent;
(ii) consents to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under applicable Bankruptcy Law;
(iii) consents to the appointment of a receiver, liquidator, assignee, trustee, sequestrator or other similar official of it or for all or substantially all of its property;
(iv) makes a general assignment for the benefit of its creditors; or
(v) generally is not paying its debts as they become due;
(7) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(i) is for relief against the Issuer or any Significant Subsidiary (or group of Restricted Subsidiaries that together (determined as of the most recent consolidated financial statements of the Issuer for a fiscal quarter end provided as required pursuant to Section 4.03) would constitute a Significant Subsidiary) in a proceeding in which the Issuer or any such Restricted Subsidiary that is a Significant Subsidiary or any such group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary, is to be adjudicated bankrupt or insolvent;
(ii) appoints a receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Issuer or any Significant Subsidiary (or group of Restricted Subsidiaries that together (determined as of the most recent consolidated financial statements of the Issuer for a fiscal quarter end provided as required pursuant to Section 4.03) would constitute a Significant Subsidiary), or for all or substantially all of the property of the Issuer or any Significant Subsidiary (or group of Restricted Subsidiaries that together (determined as of the most recent consolidated financial statements of the Issuer for a fiscal quarter end provided as required pursuant to Section 4.03) would constitute a Significant Subsidiary); or
(iii) orders the liquidation of the Issuer or any Significant Subsidiary (or group of Restricted Subsidiaries that together (determined as of the most recent consolidated financial statements of the Issuer for a fiscal quarter end
provided as required pursuant to Section 4.03) would constitute a Significant Subsidiary);
and the order or decree remains unstayed and in effect for 60 consecutive days; or
(8) the Guarantee of any Significant Subsidiary (or group of Restricted Subsidiaries that together (determined as of the most recent consolidated financial statements of the Issuer for a fiscal quarter end provided as required pursuant to Section 4.03) would constitute a Significant Subsidiary) shall for any reason cease to be in full force and effect or be declared null and void or any responsible officer of the Issuer or any Subsidiary Guarantor that is a Significant Subsidiary (or the responsible officers of any such group of Restricted Subsidiaries), as the case may be, denies that it has any further liability under its Guarantee or gives notice to such effect, other than by reason of the termination of this Indenture or the release of any such Guarantee in accordance with this Indenture; or
(9) with respect to any Collateral, individually or in the aggregate, having a fair market value in excess of $15,000,000, any of the Security Documents ceases to be in full force and effect, or any of the Security Documents ceases to give the Holders of the Notes the Liens purported to be created thereby with the priority contemplated thereby, or any of the Security Documents is declared null and void or the Issuer or any Subsidiary Guarantor denies in writing that it has any further liability under any Security Document or gives written notice to such effect (in each case other than in accordance with the terms of this Indenture, the Security Documents, the Alabama Intercreditor Agreement and the Junior Lien Intercreditor Agreement), and, except to the extent that any loss of perfection or priority results from the failure of the Collateral Agent to maintain possession of certificates actually delivered to it representing securities pledged under the Security Documents, or otherwise results from the gross negligence or willful misconduct of the Trustee or the Collateral Agent; provided that if a failure of the sort described in this clause (9) is susceptible of cure (including with respect to any loss of Lien priority on material portions of the Collateral), no Event of Default shall arise under this clause (9) with respect thereto until 30 days after notice of such failure shall have been given to the Issuer by the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes.
(b) In the event of any Event of Default specified in clause (4) of Section 6.01(a), such Event of Default and all consequences thereof (excluding any resulting payment default, other than as a result of acceleration of the Notes) shall be annulled, waived and rescinded, automatically and without any action by the Trustee or the Holders, if within 20 days after such Event of Default arose:
(1) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged; or
(2) the requisite holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default; or
(3) the default that is the basis for such Event of Default has been cured.
Section 6.02 Acceleration.
If any Event of Default (other than an Event of Default specified in clause (6) or (7) of Section 6.01(a)) occurs and is continuing under this Indenture, the Trustee or the Holders of at least 25% in principal amount of the then total outstanding Notes may declare the principal, premium, if any, interest and any other monetary obligations on all the then outstanding Notes to be due and payable immediately. Upon the effectiveness of such declaration, such principal and interest shall be due and payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default arising under clause (6) or (7) of Section 6.01(a), all outstanding Notes shall be due and payable immediately without further action or notice.
The Holders of a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may on behalf of all of the Holders rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal, interest, if any, or premium that has become due solely because of the acceleration) have been cured or waived.
Section 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue, or may direct the Collateral Agent to pursue, subject to the Collateral Agreement, any available remedy to collect the payment of principal, premium, if any, and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default and its consequences hereunder, except a continuing Default in the payment of the principal of, premium, if any, or interest on, any Note held by a non-consenting Holder (including in connection with an Asset Sale Offer or a Change of Control Offer); provided, subject to Section 6.02, that the Holders of a majority in aggregate principal amount of the then outstanding Notes may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.
Section 6.05 Control by Majority.
Subject to the terms of the Security Documents, the Alabama Intercreditor Agreement and the Junior Lien Intercreditor Agreement, Holders of a majority in principal amount of the then total outstanding Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee,
however, may refuse to follow any direction that conflicts with law or this Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder of a Note (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not such direction is unduly prejudicial to such Holders) or that would involve the Trustee in personal liability.
Section 6.06 Limitation on Suits.
Subject to Section 6.07, no Holder of a Note may pursue any remedy with respect to this Indenture or the Notes unless:
(1) such Holder has previously given the Trustee notice that an Event of Default is continuing;
(2) Holders of at least 25% in principal amount of the total outstanding Notes have requested the Trustee to pursue the remedy;
(3) Holders of the Notes have offered and, if requested, provided to the Trustee indemnity or security satisfactory to the Trustee against any loss, liability or expense in relation to such Holders pursuit of such remedy;
(4) the Trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity; and
(5) Holders of a majority in principal amount of the total outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period.
A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note (it being understood that the Trustee has no affirmative duty to ascertain whether or not any such use by any Holder is prejudicial to another Holder).
Section 6.07 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal, premium, if any, and interest on the Note, on or after the respective due dates expressed in the Note (including in connection with an Asset Sale Offer or a Change of Control Offer), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.
Section 6.08 Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a)(1) or (2) occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Issuer for the whole amount of principal of, premium, if any, and interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.
Section 6.09 Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceedings, the Issuer, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding has been instituted.
Section 6.10 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes in Section 2.07, no right or remedy herein conferred upon or reserved to the Trustee, the Collateral Agent or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
Section 6.11 Delay or Omission Not Waiver.
No delay or omission of the Trustee, the Collateral Agent or of any Holder of any Note to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee, the Collateral Agent or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee, the Collateral Agent or by the Holders, as the case may be.
Section 6.12 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Collateral Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, the Collateral Agent and their respective agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Issuer (or any other obligor upon the Notes including the Subsidiary Guarantors), its creditors or its property and shall be entitled and empowered to participate as a member in any official committee of creditors appointed in such matter and to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee and the Collateral Agent shall consent to the making of such payments directly to the Holders, to pay to the Trustee and the Collateral Agent any amount due to them for the reasonable compensation, expenses, disbursements and advances of the Trustee, the Collateral Agent and their respective agents and counsel, and any other amounts due the Trustee and the Collateral Agent under Section 7.06. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, the Collateral Agent, their agents and counsel, and any other amounts due the Trustee and the Collateral Agent under Section 7.06 out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee and the Collateral Agent to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee and the Collateral Agent to vote in respect of the claim of any Holder in any such proceeding.
Section 6.13 Priorities.
Subject to the terms of the Security Documents, the Alabama Intercreditor Agreement and the Junior Lien Intercreditor Agreement with respect to any proceeds of Collateral, any money or property collected by the Trustee or the Collateral Agent pursuant to this Article 6 and any money or other property distributable in respect of any Grantors Obligations under this Indenture after an Event of Default shall be applied in the following order:
FIRST: to pay Obligations in respect of any reasonable expenses reimbursements or indemnities then due to the Trustee or the Collateral Agent;
SECOND: to pay interest then due and payable in respect of the Notes;
THIRD: to pay or prepay principal payments in respect of the Notes; and
FOURTH: to pay all other Obligations with respect to the Notes, the Guarantees and this Indenture;
provided, however, that if sufficient funds are not available to fund all payments required to be made in any of clauses FIRST through FOURTH above, the available funds being applied to the Obligations specified in any such clause (unless otherwise specified in such clause) shall be allocated to the payment of such Obligations ratably, based on the proportion of the relevant partys interest in the aggregate outstanding Obligations described in such clause.
The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.13.
Section 6.14 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.14 does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07, or a suit by Holders of more than 10% in principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
Section 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise as a prudent person would exercise or use under the circumstances in the conduct of such persons own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved in a court of competent jurisdiction that the Trustee was negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05; and
(iv) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise to incur any liability, financial or otherwise, in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk or liability is not assured to it.
(d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.
(e) The Trustee shall be under no obligation to exercise any of its rights or powers under this Indenture at the request or direction of any of the Holders of the Notes unless the Holders have offered to the Trustee indemnity or security satisfactory to the Trustee in its sole discretion against any loss, liability, cost or expense in relation to such exercise.
(f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.
Section 7.02 Rights of Trustee.
(a) The Trustee may conclusively rely, as to the truth of statements and the correctness of the opinions expressed therein, upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated
in the document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuer, personally or by agent or attorney at the sole cost of the Issuer and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.
(b) Before the Trustee acts or refrains from acting, it may require an Officers Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers Certificate or Opinion of Counsel. The Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent or attorney appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Issuer shall be sufficient if signed by an Officer of each Issuer.
(f) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture. Delivery of reports to the Trustee pursuant to Section 4.03 shall not constitute actual knowledge of, or notice to, the Trustee of the information contained therein.
(g) In no event shall the Trustee be responsible or liable for any special, indirect, punitive, incidental or consequential loss or damage of any kind whatsoever (including, but not limited to, lost profits) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.
(h) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.
(i) The Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder.
(j) The Trustee may request that the Issuer and any Subsidiary Guarantor deliver an Officers Certificate setting forth the names of the individuals and/or titles of Officers (with specimen signatures) authorized at such times to take specific actions pursuant to this Indenture, which Officers Certificate may be signed by any persons specified as so authorized in any certificate previously delivered and not superseded.
(k) The Trustee shall receive and retain the financial reports and statements of the Issuer as provided herein, but shall have no duties whatsoever with respect to the contents thereof,
including no duty to review or analyze such reports or statements to determine compliance with covenants or other obligations of the Issuer.
Section 7.03 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or any Affiliate of the Issuer with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Section 7.09.
Section 7.04 Trustees Disclaimer.
The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Notes, the Security Documents, the Alabama Intercreditor Agreement, the Junior Lien Intercreditor Agreement or the Offering Circular, and it shall not be accountable for the Issuers use of the proceeds from the Notes or any money paid to the Issuer or upon the Issuers direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes, in the Offering Circular or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.
Section 7.05 Notice of Defaults.
If a Default occurs and is continuing and if it is known to the Trustee, the Trustee shall mail or otherwise deliver in accordance with the procedures of DTC to Holders of Notes a notice of the Default within 90 days after it occurs, unless such default shall have been cured or waived. Except in the case of a Default relating to the payment of principal, premium, if any, or interest on any Note, the Trustee may withhold from the Holders notice of any continuing Default if and so long as the board of directors, the executive committee or a trust committee of directors or Responsible Officers of the Trustee in good faith determines that withholding the notice is in the interests of the Holders of the Notes.
Section 7.06 Compensation and Indemnity.
The Issuer shall pay to the Trustee from time to time such compensation for its acceptance of this Indenture and services provided hereunder as Trustee and Paying Agent, and as Collateral Agent hereunder and under the Security Documents, the Alabama Intercreditor Agreement and the Junior Lien Intercreditor Agreement as the parties shall agree in writing from time to time. The Trustees and the Collateral Agents compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer shall reimburse the Trustee and the Collateral Agent promptly upon request for all reasonable disbursements, advances and expenses incurred or made by them in addition to the compensation for their services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustees and the Collateral Agents agents and counsel.
The Issuer and the Subsidiary Guarantors, jointly and severally, shall indemnify the Trustee and the Collateral Agent for, and hold the Trustee and the Collateral Agent harmless against, any and all loss, damage, claim, liability or expense (including attorneys fees) incurred by it in connection with the acceptance or administration of this trust and the performance of its duties hereunder, under the Security Documents, the Alabama Intercreditor Agreement and the Junior Lien Intercreditor Agreement (including the costs and expenses of enforcing this Indenture against the Issuer or any of the Subsidiary Guarantors (including this Section 7.06) or defending itself against any claim whether asserted by any
Holder, any holder of Other First Lien Obligations (if any), the Issuer or any Subsidiary Guarantor, or liability in connection with the acceptance, exercise or performance of any of its powers or duties hereunder). The Trustee or the Collateral Agent shall notify the Issuer promptly of any claim for which it may seek indemnity. Failure by the Trustee or the Collateral Agent to so notify the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer and the Subsidiary Guarantors shall defend the claim and the Trustee and the Collateral Agent may have separate counsel and the Issuer shall pay the fees and expenses of such counsel. The Issuer need not reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee or the Collateral Agent through the Trustees or the Collateral Agents own willful misconduct or gross negligence.
The obligations of the Issuer and the Subsidiary Guarantors under this Section 7.06 shall survive the satisfaction and discharge of this Indenture or the earlier resignation or removal of the Trustee or the Collateral Agent, as applicable.
To secure the payment obligations of the Issuer and the Subsidiary Guarantors in this Section 7.06, the Trustee and the Collateral Agent shall have a Lien prior to the Notes and rights of the Holders (and holders of Other First Lien Obligations (if any)) on all money or property held or collected by the Trustee or the Collateral Agent, except that held in trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture.
When the Trustee or the Collateral Agent incurs expenses or renders services after an Event of Default specified in Section 6.01(a)(6) or (7) occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.
Section 7.07 Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustees acceptance of appointment as provided in this Section 7.07. The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Issuer. The Holders of a majority in principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Issuer in writing. The Issuer may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.09;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Issuer shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Issuer.
If a successor Trustee does not take office within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee (at the Issuers expense), the Issuer or the Holders of at least
10% in principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.09, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee; provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.06. Notwithstanding replacement of the Trustee pursuant to this Section 7.07, the Issuers obligations under Section 7.06 shall continue for the benefit of the retiring Trustee.
Section 7.08 Successor Trustee by Merger, Etc.
If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee.
Section 7.09 Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that satisfies the requirements of TIA § 310(a)(1), (2) and (5), that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition. The Trustee shall comply with TIA § 310(b).
Section 7.10 Security Documents; Alabama Intercreditor Agreement; Junior Lien Intercreditor Agreement.
By their acceptance of the Notes, the Holders hereby authorize and direct the Trustee and Collateral Agent, as the case may be, to execute and deliver the Alabama Intercreditor Agreement, Junior Lien Intercreditor Agreement and the Security Documents in which the Trustee or the Collateral Agent, as applicable, is named as a party, including the Junior Lien Intercreditor Agreement or any Security Documents, in each case, executed after the Issue Date. It is hereby expressly acknowledged and agreed that, in doing so, the Trustee and the Collateral Agent are not responsible for the terms or contents of such agreements, or for the validity or enforceability thereof, or the sufficiency thereof for any purpose. Whether or not so expressly stated therein, in entering into, or taking (or forbearing from) any action under or pursuant to, the Alabama Intercreditor Agreement, the Junior Lien Intercreditor Agreement or any other Security Documents, the Trustee and the Collateral Agent each shall have all of the rights, immunities, indemnities and other protections granted to it under this Indenture (in addition to those that may be granted to it under the terms of such other agreement or agreements).
Section 7.11 Preferential Collection of Claims Against Issuer.
The Trustee shall be subject to TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee that has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated.
Section 7.12 Calculations in Respect of the Notes.
The Issuer shall be responsible for making calculations called for under the Notes, including, but not limited to, determination of premiums, Additional Notes, original issue discount, conversion rates and adjustments, if any. The Issuer shall make the calculations in good faith and, absent manifest error, its calculations shall be final and binding on the Holders of the Notes. The Issuer shall provide a schedule of its calculations to the Trustee when applicable, and the Trustee shall be entitled to rely conclusively on the accuracy of the Issuers calculations without independent verification.
Section 7.13 Brokerage Confirmations.
The Issuer acknowledges that regulations of the Comptroller of the Currency grant the Issuer the right to receive brokerage confirmations of the Note transactions as they occur. To the extent contemplated by law, the Issuer specifically waives any such notification relating to the Notes transactions contemplated herein; provided, however, that the Trustee shall send to the Issuer periodic cash transaction statements that describe all investment transactions.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance and Covenant Defeasance.
The Issuer may, at its option and at any time, elect to have either Section 8.02 or 8.03 applied to all outstanding Notes upon compliance with the conditions set forth below in this Article 8.
Section 8.02 Legal Defeasance and Discharge.
Upon the Issuers exercise under Section 8.01 of the option applicable to this Section 8.02, the Issuer and the Subsidiary Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04, be deemed to have been discharged from their obligations with respect to all outstanding Notes and Guarantees on the date the conditions set forth below are satisfied (Legal Defeasance). For this purpose, Legal Defeasance means that the Issuer shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes, which shall thereafter be deemed to be outstanding only for the purposes of Section 8.05 and the other Sections of this Indenture referred to in clauses (a) and (b) below, and to have satisfied all its other obligations under such Notes and this Indenture and the Security Documents, including the obligations of the Subsidiary Guarantors (and the Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder:
(a) the rights of Holders of Notes to receive payments in respect of the principal of, premium, if any, and interest on the Notes when such payments are due solely out of the trust created pursuant to this Indenture referred to in Section 8.04;
(b) the Issuers obligations with respect to Notes concerning issuing temporary Notes, registration of such Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;
(c) the rights, powers, trusts, duties and immunities of the Trustee, and the Issuers obligations in connection therewith; and
(d) this Section 8.02.
Subject to compliance with this Article 8, the Issuer may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03.
Section 8.03 Covenant Defeasance.
Upon the Issuers exercise under Section 8.01 of the option applicable to this Section 8.03, the Issuer and the Subsidiary Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04, be released from their obligations under the covenants contained in Sections 3.09, 4.03, 4.04, 4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.17, 4.18 and 4.19 and clauses (4), (5), (7) and (8) of Section 5.01(a) and Section 5.01(c) with respect to the outstanding Notes on and after the date the conditions set forth in Section 8.04 are satisfied (Covenant Defeasance), and the Notes shall thereafter be deemed not outstanding for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed outstanding for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Issuer may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Issuers, exercise under Section 8.01 of the option applicable to this Section 8.03, subject to the satisfaction of the conditions set forth in Section 8.04, Sections 6.01(a)(3), 6.01(a)(4), 6.01(a)(5), 6.01(a)(6) (solely with respect to Significant Subsidiaries (or group of Restricted Subsidiaries that together (determined as of the most recent consolidated financial statements of the Issuer for a fiscal quarter end provided as required pursuant to Section 4.03) would constitute a Significant Subsidiary)), 6.01(a)(7) (solely with respect to Significant Subsidiaries (or group of Restricted Subsidiaries that together (determined as of the most recent consolidated financial statements of the Issuer for a fiscal quarter end provided as required pursuant to Section 4.03) would constitute a Significant Subsidiary)), 6.01(a)(8) and 6.01(a)(9) shall not constitute Events of Default.
Section 8.04 Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either Section 8.02 or 8.03 to the outstanding Notes:
(1) the Issuer must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Notes, cash in U.S. dollars, Government Securities or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest due on the Notes on the stated maturity date or on the Redemption Date, as the case may be, of such principal, premium, if any, or interest on such Notes and the
Issuer must specify whether such Notes are being defeased to maturity or to a particular Redemption Date;
(2) in the case of Legal Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions,
(a) the Issuer has received from, or there has been published by, the United States Internal Revenue Service a ruling, or
(b) since the issuance of the Notes, there has been a change in the applicable U.S. federal income tax law,
in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, subject to customary assumptions and exclusions, the Holders of the Notes shall not recognize income, gain or loss for U.S. federal income tax purposes, as applicable, as a result of such Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;
(3) in the case of Covenant Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions, the Holders of the Notes shall not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to such tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;
(4) no Default (other than that resulting from borrowing funds to be applied to make such deposit and any similar and simultaneous deposit relating to other Indebtedness, and, in each case, the granting of Liens in connection therewith) shall have occurred and be continuing on the date of such deposit;
(5) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any Credit Facility or any other material agreement or instrument (other than this Indenture) to which the Issuer or any Subsidiary Guarantor is a party or by which the Issuer or any Subsidiary Guarantor is bound (other than that resulting from borrowing funds to be applied to make such deposit and any similar and simultaneous deposit relating to the discharge of such agreement or instrument and, in each case, the granting of Liens in connection therewith);
(6) the Issuer shall have delivered to the Trustee an Officers Certificate stating that the deposit was not made by the Issuer with the intent of defeating, hindering, delaying or defrauding any creditors of the Issuer or any Subsidiary Guarantor or others; and
(7) the Issuer shall have delivered to the Trustee an Officers Certificate and an Opinion of Counsel (which Opinion of Counsel may be subject to customary assumptions and exclusions) each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance, as the case may be, have been complied with.
Section 8.05 Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions.
Subject to Section 8.06, all money and Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the Trustee) pursuant to Section 8.04 in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer or any of the Issuers Subsidiaries acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium and interest, but such money need not be segregated from other funds except to the extent required by law.
The Issuer shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or Government Securities deposited pursuant to Section 8.04 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay to the Issuer from time to time upon the request of the Issuer any money or Government Securities held by it as provided in Section 8.04 which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(a)), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06 Repayment to Issuer.
Any money deposited with the Trustee or any Paying Agent, or then held by the Issuer, in trust for the payment of the principal of, premium or interest on any Note and remaining unclaimed for two years after such principal, and premium or interest has become due and payable shall be paid to the Issuer on its request or (if then held by the Issuer) shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured creditor, look only to the Issuer for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Issuer as trustee thereof, shall thereupon cease.
Section 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S. dollars or Government Securities in accordance with Section 8.02 or 8.03, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Issuers obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03, as the case may be; provided that, if the Issuer makes any payment of principal of, premium or interest on any Note following the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.
Notwithstanding the first paragraph of Section 9.02, the Issuer, any Subsidiary Guarantor (with respect to a Guarantee or this Indenture) and the Trustee and, if applicable, the Collateral Agent, may amend or supplement this Indenture, the Security Documents, the Junior Lien Intercreditor Agreement, the Alabama Intercreditor Agreement and any Guarantee or Notes without the consent of any Holder:
(1) to cure any ambiguity, omission, mistake, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in place of certificated Notes (provided that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code);
(3) to comply with Section 5.01;
(4) to make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect the legal rights under this Indenture of any such Holder;
(5) to add covenants for the benefit of the Holders or to surrender any right or power conferred upon the Issuer or any Subsidiary Guarantor;
(6) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA;
(7) to evidence and provide for the acceptance and appointment under this Indenture of a successor Trustee or a successor Collateral Agent thereunder pursuant to the requirements thereof;
(8) to provide for the issuance of Exchange Notes or private exchange notes that are identical to Exchange Notes except that they are not freely transferable;
(9) to add a Subsidiary Guarantor under this Indenture;
(10) to conform the text of this Indenture, the Security Documents, the Junior Lien Intercreditor Agreement, the Alabama Intercreditor Agreement, the Guarantees or the Notes to any provision of the Description of the Notes section of the Offering Circular to the extent that such provision in such Description of the Notes section was intended to be a verbatim recitation of a provision of this Indenture, the Security Documents, the Junior Lien Intercreditor Agreement, the Alabama Intercreditor Agreement, the Guarantees or the Notes;
(11) to make any amendment to the provisions of this Indenture relating to the transfer and legending of Notes as permitted by this Indenture, including, without limitation, to facilitate the issuance and administration of the Notes; provided, however,
that (i) compliance with this Indenture as so amended would not result in Notes being transferred in violation of the Securities Act or any applicable securities law and (ii) such amendment does not materially and adversely affect the rights of Holders to transfer Notes;
(12) to add additional assets as Collateral;
(13) to release Collateral from the Lien securing the Notes or any Subsidiary Guarantor from its Guarantee, in each case pursuant to this Indenture, the Security Documents and the Junior Lien Intercreditor Agreement when permitted or required by this Indenture, the Security Documents and the Junior Lien Intercreditor Agreement;
(14) in the case of any deposit account control agreement, securities account control agreement, bailee agreement or other similar agreement pertaining to control over the Collateral, in each case (a) providing for control and perfection of Collateral and (b) to which both the Collateral Agent and the representative of any Junior Lien Indebtedness are a party, at the request and sole expense of the Issuer, and without the consent of the Collateral Agent, to amend any such agreement to substitute a successor representative for such representative;
(15) in connection with the incurrence of any First Lien Obligations or Junior Lien Indebtedness, at the request and sole expense of the Issuer, and without consent of the Trustee or the Collateral Agent, to amend the Junior Lien Intercreditor Agreement or the Alabama Intercreditor Agreement to add parties (or any authorized agent or trustee therefor) providing any such First Lien Obligations or Junior Lien Indebtedness, as applicable;
(16) in connection with any replacement or refinancing of the Alabama Revolving Credit Agreement with a lender other than Republic Bank, to amend the Alabama Intercreditor Agreement to add such lender as a party thereto; or
(17) to comply with any requirement of the SEC in connection with the qualification of this Indenture under the TIA.
Upon the request of the Issuer accompanied by a resolution of its board of directors authorizing the execution of any such amended or supplemental indenture, and upon receipt by the Trustee of the documents described in Section 7.02, the Trustee and/or the Collateral Agent shall join with the Issuer and the Subsidiary Guarantors in the execution of any amended or supplemental indenture or security documents, intercreditor agreement or amendments thereto, in each case, authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee and/or the Collateral Agent shall not be obligated to enter into such amended or supplemental indenture or security documents, intercreditor agreement or any amendment thereto that affects their own rights, duties or immunities under this Indenture or otherwise. The delivery of an Opinion of Counsel and an Officers Certificate may be required, upon request by the Trustee, in connection with the addition of a Guarantor under this Indenture upon execution and delivery by such Guarantor and the Trustee of a supplemental indenture to this Indenture, the form of which is attached as Exhibit D.
To the extent that the Issuer and the Restricted Subsidiaries are permitted to incur Indebtedness and Liens in relation to any additional First Lien Obligations, the Issuer may designate such additional First Lien Obligations as Additional Obligations (and may, in the case of any Revolving
Credit Facility Obligations, designate such Revolving Credit Facility Obligations as Designated Priority Obligations) under the Collateral Agreement (or any other Security Document) by providing notice to such effect and an Officers Certificate certifying that such additional First Lien Obligations (and the Liens associated therewith), as applicable, have been incurred in compliance with this Indenture, in each case, to the Collateral Agent. Upon receipt of such notice and Officers Certificate, the representative of the holders of any such additional First Lien Obligations shall deliver to the Collateral Agent a joinder to the Collateral Agreement thereby acknowledging that such holders are bound by the terms thereof.
Section 9.02 With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Issuer and the Trustee and the Collateral Agent may amend or supplement this Indenture, the Notes and any Guarantee, and the Trustee (on behalf of the Holders) may consent to an amendment to any Security Document, the Junior Lien Intercreditor Agreement or the Alabama Intercreditor Agreement, in each case, with the consent of the Holders of at least a majority in principal amount of the Notes (including Additional Notes, if any) then outstanding voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes), and, subject to Sections 6.04 and 6.07, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium or interest on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of the Notes Documents may be waived with the consent of the Holders of at least a majority in principal amount of the then outstanding Notes (including Additional Notes, if any) voting as a single class (including consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes). Section 2.08 and Section 2.09 shall determine which Notes are considered to be outstanding for the purposes of this Section 9.02.
Upon the request of the Issuer accompanied by a resolution of its Board authorizing the execution of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02, the Trustee and/or the Collateral Agent shall join with the Issuer in the execution of such amended or supplemental indenture or security documents or intercreditor agreement unless such amended or supplemental indenture directly affects their own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee and/or the Collateral Agent may in its discretion, but shall not be obligated to, enter into such amended or supplemental indenture or security documents or intercreditor agreement.
It shall not be necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Issuer shall mail to Holders of Notes a notice briefly describing the amendment, supplement or waiver. Any failure of the Issuer to mail such notice to all Holders (or any defect in such notice), however, shall not in any way impair or affect the validity of any such amended or supplemental indenture or waiver.
Without the consent of each affected Holder of Notes, an amendment or waiver may not (with respect to any Notes held by a non-consenting Holder):
(1) reduce the principal amount of such Notes whose Holders must consent to an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed final maturity of any such Note or alter or waive the provisions with respect to the redemption of such Notes (other than provisions relating to Section 3.09, Section 4.10 and Section 4.14 to the extent that any such amendment or waiver does not have the effect of reducing the principal of or changing the fixed final maturity of any such Note or altering or waiving the provisions with respect to the redemption of such Notes);
(3) reduce the rate of or change the time for payment of interest on any Note;
(4) waive a Default in the payment of principal of or premium, if any, or interest on the Notes, except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the Notes and a waiver of the payment default that resulted from such acceleration, or waive a Default in respect of a covenant or provision contained in this Indenture or any Guarantee that cannot be amended or modified without the consent of all Holders;
(5) make any Note payable in money other than that stated therein;
(6) make any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of Holders to receive payments of principal of or premium, if any, or interest on the Notes;
(7) make any change in the amendment and waiver provisions set forth in this paragraph;
(8) impair the right of any Holder to receive payment of principal of, or interest on, such Holders Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holders Notes;
(9) make any change to or modify the ranking of the Notes that would adversely affect the Holders; or
(10) except as expressly permitted by this Indenture, modify the Guarantees of any Significant Subsidiary (or any group of Restricted Subsidiaries that together (determined as of the most recent consolidated financial statements for a fiscal quarter end provided as required pursuant to Section 4.03) would constitute a Significant Subsidiary) in any manner adverse in any material respect to the Holders of the Notes.
In addition, without the consent of the Holders of at least 662/3% in principal amount of the Notes outstanding (determined as to exclude any Notes beneficially owned by the Issuer or its Affiliates), the Trustee may not consent to any amendment, supplement or waiver the effect of which would (1) modify any Security Document that would have the impact of releasing all or substantially all of the Collateral from the Liens of the Security Documents (except as permitted by the terms of this Indenture) or modify the Collateral Agreement, Junior Lien Intercreditor Agreement or the Alabama Intercreditor Agreement to adversely change or alter the priority of the security interests in the Collateral, (2) make any change in any Security Document, the Junior Lien Intercreditor Agreement or the provisions in this Indenture dealing with the application of proceeds of the Collateral that would adversely affect the Holders in any material respect or (3) modify the Security Documents, the Junior Lien Intercreditor Agreement or the Alabama Intercreditor Agreement in any manner adverse to the Holders in any material respect other than in accordance with the terms of this Indenture.
Section 9.03 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holders Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.
The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement or waiver. If a record date is fixed, then, notwithstanding the preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only such Persons, shall be entitled to consent to such amendment, supplement, or waiver or to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date unless the consent of the requisite number of Holders has been obtained.
Section 9.04 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Issuer in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.
Section 9.05 Trustee and Collateral Agent to Sign Amendments, Etc.
The Trustee and Collateral Agent shall sign any amendment, supplement or waiver authorized pursuant to this Article 9, except that the Trustee or the Collateral Agent, as applicable, need not sign any amendment, supplement or waiver that the Trustee or Collateral Agent, as applicable, determines in its reasonable discretion that such amendment, supplement or waiver adversely affects the rights, duties, liabilities or immunities of the Trustee or Collateral Agent, as applicable. The Issuer may not sign an amendment, supplement or waiver until the Board of the Issuer approves it. In executing any amendment, supplement or waiver to any Notes Document, the Trustee and Collateral Agent shall be entitled to receive and (subject to Section 7.01) shall be fully protected in relying upon, in addition to the documents required by Section 13.02, an Officers Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Issuer and any Subsidiary Guarantors party thereto, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof.
Section 9.06 Payment for Consents.
Neither the Issuer nor any Affiliate of the Issuer may, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture, the Notes, any Guarantee, any Security Document, the Junior Lien Intercreditor Agreement or the Alabama Intercreditor Agreement, unless such consideration is offered to all Holders and is paid to all Holders that
so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or amendment; provided that, in connection with any consideration to be paid to Holders in an exchange offer in respect of Notes not registered under the Securities Act, such consideration need not be paid to Holders who, upon request, do not confirm they are qualified institutional buyers within the meaning of Rule 144A of the Securities Act or, in the case of non-U.S. Holders who, upon request, do not confirm that they are non-U.S. Persons within the meaning of Regulation S of the Securities Act.
Section 9.07 Compliance with the Trust Indenture Act.
Every amendment to this Indenture or the Notes shall be set forth in a supplemental indenture hereto that complies with the TIA.
ARTICLE 10
GUARANTEES
Section 10.01 Guarantee.
Subject to this Article 10, each of the Subsidiary Guarantors hereby, jointly and severally, unconditionally guarantees to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Issuer hereunder or thereunder, that: (a) the principal of, interest and premium on the Notes shall be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other obligations of the Issuer to the Holders, the Trustee or the Collateral Agent hereunder or thereunder shall be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Subsidiary Guarantors shall be jointly and severally obligated to pay or perform the same immediately. Each Subsidiary Guarantor agrees that this is a guarantee of payment and not a guarantee of collection.
The Subsidiary Guarantors hereby agree that their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes, this Indenture or the obligations of the Issuer hereunder or thereunder, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Subsidiary Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever and covenants that this Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and this Indenture.
Each Subsidiary Guarantor also agrees to pay any and all costs and expenses (including reasonable attorneys fees) incurred by the Trustee or any Holder in enforcing any rights under this Section 10.01.
If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, the Subsidiary Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to
either the Issuer or the Subsidiary Guarantors, any amount paid either to the Trustee or such Holder, this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.
Each Subsidiary Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Subsidiary Guarantor further agrees that, as between the Subsidiary Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6, such obligations (whether or not due and payable) shall forthwith become due and payable by the Subsidiary Guarantors for the purpose of this Guarantee. The Subsidiary Guarantors shall have the right to seek contribution from any non-paying Subsidiary Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Guarantees.
Each Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Issuer for liquidation or reorganization, should the Issuer become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Issuers assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes or Guarantees, whether as a voidable preference, fraudulent transfer or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.
In case any provision of any Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
The Guarantee issued by any Subsidiary Guarantor shall be a general senior obligation of such Subsidiary Guarantor and shall be pari passu in right of payment with all existing and future senior Indebtedness of such Subsidiary Guarantor, if any.
Each payment to be made by a Subsidiary Guarantor in respect of its Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.
Section 10.02 Limitation on Subsidiary Guarantor Liability.
Each Subsidiary Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Guarantee of such Subsidiary Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law or similar foreign law for the relief of debtors to the extent applicable to any Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Subsidiary Guarantors hereby irrevocably agree that the obligations of each Subsidiary Guarantor shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Subsidiary Guarantor that are relevant under such laws and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Subsidiary Guarantor in respect of the obligations of
such other Subsidiary Guarantor under this Article 10, result in the obligations of such Subsidiary Guarantor under its Guarantee not constituting a fraudulent conveyance or fraudulent transfer under applicable law. Each Subsidiary Guarantor that makes a payment under its Guarantee shall be entitled upon payment in full of all guaranteed Obligations under this Indenture to a contribution from each other Subsidiary Guarantor in an amount equal to such other Subsidiary Guarantors pro rata portion of such payment based on the respective net assets of all the Subsidiary Guarantors at the time of such payment determined in accordance with GAAP.
Section 10.03 Execution and Delivery.
To evidence its Guarantee set forth in Section 10.01, each Subsidiary Guarantor hereby agrees that this Indenture shall be executed on behalf of such Subsidiary Guarantor by one of its Officers.
Each Subsidiary Guarantor hereby agrees that its Guarantee set forth in Section 10.01 shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Guarantee on the Notes.
If an Officer whose signature is on this Indenture no longer holds that office at the time the Trustee authenticates the Note, the Guarantee shall be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Guarantee set forth in this Indenture on behalf of the Subsidiary Guarantors.
If required by Section 4.15, the Issuer shall cause any newly created or acquired Restricted Subsidiary to comply with the provisions of Section 4.15 and this Article 10, to the extent applicable.
The Guarantee of each Subsidiary Guarantor shall remain in full force and effect and continue to be effective notwithstanding the execution and delivery of any future Guarantee by any Restricted Subsidiary.
Section 10.04 Subrogation.
Each Subsidiary Guarantor shall be subrogated to all rights of Holders of Notes against the Issuer in respect of any amounts paid by any Subsidiary Guarantor pursuant to the provisions of Section 10.01; provided that, if an Event of Default has occurred and is continuing, no Subsidiary Guarantor shall be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Issuer under this Indenture or the Notes shall have been paid in full.
Section 10.05 Benefits Acknowledged.
Each Subsidiary Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the guarantee and waivers made by it pursuant to its Guarantee are knowingly made in contemplation of such benefits.
Section 10.06 Release of Guarantees.
A Guarantee by a Subsidiary Guarantor shall be automatically and unconditionally released and discharged, and no further action by such Subsidiary Guarantor, the Issuer or the Trustee is required for the release of such Subsidiary Guarantors Guarantee, upon:
(1) (A) (a) any sale, exchange or transfer (by merger, amalgamation or otherwise) of (i) the Capital Stock of such Subsidiary Guarantor after which the applicable Subsidiary Guarantor is no longer a Restricted Subsidiary or (ii) all or substantially all of the assets of such Subsidiary Guarantor, in each case, if such sale, exchange or transfer is made in compliance with this Indenture (including Article 5), so long as such Subsidiary Guarantor is also released from its guarantees and all pledges and security, if any, granted in connection with the Revolving Credit Agreement and any other Indebtedness of the Issuer or another Subsidiary Guarantor;
(B) the designation of any Restricted Subsidiary that is a Subsidiary Guarantor as an Unrestricted Subsidiary in compliance with the applicable provisions of this Indenture;
(C) the Issuer exercising its Legal Defeasance option or Covenant Defeasance option in accordance with Article 8 or the Issuers obligations under this Indenture being discharged in accordance with the terms of this Indenture; or
(D) in the case of any Subsidiary Guarantor that provides a Guarantee after the Issue Date pursuant to Section 4.15, the release or discharge of all guarantees made by such Subsidiary Guarantor that resulted in the obligation of such Subsidiary to Guarantee the Notes (it being understood that a release subject to a contingent reinstatement is still a release); and
(2) such Subsidiary Guarantor delivering to the Trustee an Officers Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for in this Indenture relating to the transaction permitting the release of such Guarantee have been complied with.
ARTICLE 11
COLLATERAL
Section 11.01 Collateral and Security Documents.
The due and punctual payment of the principal of and interest on the Notes and Guarantees when and as the same shall be due and payable, whether on an interest payment date, at maturity, by acceleration, repurchase, redemption or otherwise, and interest on the overdue principal of and interest on the Notes and Guarantees and performance of all other Obligations of the Issuer and the Subsidiary Guarantors to the Noteholder Secured Parties under the Notes Documents, according to the terms hereunder or thereunder, shall be secured as provided in the Security Documents, which define the terms of the Liens that secure the Obligations, subject to the terms of the Alabama Intercreditor Agreement and the Junior Lien Intercreditor Agreement. The Trustee, the Issuer and the Subsidiary Guarantors hereby acknowledge and agree that the Collateral Agent holds the Collateral in trust for the benefit of the Noteholder Secured Parties (and the other First Lien Holders) pursuant to the terms of the Security Documents, the Alabama Intercreditor Agreement and the Junior Lien Intercreditor Agreement. Each Holder, by accepting a Note, consents and agrees to the terms of the Security Documents (including the provisions providing for the possession, use, release and foreclosure of Collateral), the Alabama Intercreditor Agreement and the Junior Lien Intercreditor Agreement as each may be amended from time to time in accordance with their terms and this Indenture, the Alabama Intercreditor Agreement and the Junior Lien Intercreditor Agreement, and authorizes and directs the Collateral Agent to enter into the Security Documents, the Alabama Intercreditor Agreement and the Junior Lien Intercreditor Agreement (when applicable) and to perform its obligations and exercise its rights thereunder in accordance
therewith. The Issuer shall deliver to the Collateral Agent copies of all documents required to be filed pursuant to the Security Documents, and will do or cause to be done all such acts and things as may be reasonably required by the next sentence of this Section 11.01, to assure and confirm to the Collateral Agent the first-priority security interest in the Collateral (other than, as long as the Alabama Revolving Credit Agreement remains in effect, the Shared Alabama Collateral) and, as long as the Alabama Revolving Credit Agreement remains in effect, the second-priority security interest in the Shared Alabama Collateral contemplated hereby, by the Security Documents or any part thereof, as from time to time constituted, so as to render the same available for the security and benefit of this Indenture and of the Notes secured hereby, according to the intent and purposes herein expressed. The Issuer shall, and shall cause its Subsidiaries to, take any and all actions and make all filings, registrations and recordations (including the filing of UCC financing statements, continuation statements and amendments thereto) in all such jurisdictions reasonably required to cause the Security Documents to create, perfect and maintain, as security for the Obligations of the Issuer and the Subsidiary Guarantors to the Noteholder Secured Parties under this Indenture, the Notes, the Guarantees and the Security Documents, a valid and enforceable perfected Lien and security interest in and on all of the Collateral (subject to the terms of the Alabama Intercreditor Agreement, the Junior Lien Intercreditor Agreement and the Security Documents), in favor of the Collateral Agent for the benefit of the Noteholder Secured Parties subject to no Liens other than Liens permitted under this Indenture and with the priority set forth in the Collateral Agreement, the Alabama Intercreditor Agreement and the Junior Lien Intercreditor Agreement.
Section 11.02 Non-Impairment of Liens.
Any release of Collateral permitted by Section 11.03 will be deemed not to impair the Liens under this Indenture and the Security Documents in contravention thereof.
Section 11.03 Release of Collateral.
(a) Subject to Section 11.03(b) and (c), Collateral may be released from the Lien and security interest created by the Security Documents at any time or from time to time in accordance with the provisions of the Security Documents, the Alabama Intercreditor Agreement and this Indenture. Notwithstanding anything to the contrary in any Notes Document, the Liens on Collateral, to the extent that such Liens secure the Notes Obligations, shall automatically (without further action) be released with respect to the relevant Collateral under any of the following circumstances:
(A) in the case the Issuer or any Subsidiary Guarantor sells, exchanges or otherwise disposes of any of the Collateral, including Capital Stock (other than to the Issuer or a Guarantor, as applicable), to the extent not prohibited by this Indenture;
(B) in the case of a Subsidiary Guarantor that is released from its Guarantee with respect to the Notes in accordance with Section 10.06, the release of the property and assets of such Subsidiary Guarantor;
(C) to the extent such Collateral is comprised of property leased to the Issuer or a Subsidiary Guarantor, upon termination or expiration of such lease;
(D) with respect to Collateral that is Capital Stock, upon the dissolution or liquidation of the issuer of that Capital Stock that is not prohibited by this Indenture;
(E) pursuant to an amendment, supplement or waiver in accordance with Article 9; or
(F) if the Notes have been discharged or defeased pursuant to Article 8 or Article 12.
(b) In addition to the foregoing, the second-priority Lien on the Shared Alabama Collateral securing the Notes and the Guarantees shall terminate and be released automatically in connection with enforcement actions taken against the Shared Alabama Collateral by Republic Bank, subject to the terms of the Alabama Intercreditor Agreement.
(c) (1) To the extent that this Indenture is qualified under the TIA, the Issuer will cause TIA § 313(b), relating to reports, and TIA § 314(d), relating to the release of property or securities or relating to the substitution therefor of any property or securities to be subjected to the Lien of the Security Documents, to be complied with. Any certificate or opinion required by TIA § 314(d) may be made by an Officer except in cases where TIA § 314(d) requires that such certificate or opinion be made by an independent Person, which Person will be an independent engineer, appraiser or other expert selected or reasonably satisfactory to the Trustee.
(2) Notwithstanding anything to the contrary in Section 11.02(c)(1), the Issuer will not be required to comply with all or any portion of TIA § 314(d) if it determines, in good faith based on advice of counsel, that under the terms of TIA § 314(d) and/or any interpretation or guidance as to the meaning thereof of the SEC and its staff, including no action letters or exemptive orders, all or any portion of TIA § 314(d) is inapplicable to the released Collateral. The Issuer will also not be required to comply with TIA § 314(d) with respect to any of the following:
(A) cash payments (including for the scheduled repayment of Indebtedness) in the ordinary course of business;
(B) sales or other dispositions of inventory in the ordinary course of business;
(C) collections, sales or other dispositions of accounts receivable in the ordinary course of business; and
(D) sales or other dispositions in the ordinary course of business of any property the use of which is no longer necessary or desirable in, and is not material to, the conduct of the business of the Issuer and its Subsidiaries;
provided, however, the Issuers right to rely on the above will be conditioned upon the Issuers delivering to the Trustee, within 30 calendar days following the end of each six-month period beginning on May 1 and November 1 of any year, an Officers Certificate to the effect that all releases during such six-month period in respect of which the Issuer did not comply with TIA § 314(d) in reliance on the above were made in the ordinary course of business. The Issuer will otherwise comply with the provisions of TIA § 314.
(d) With respect to any release of Collateral permitted by this Section 11.03, upon receipt of a written request from the Issuer and supported by an Officers Certificate and an Opinion of Counsel each stating that all conditions precedent under this Indenture, the Security Documents, the Alabama Intercreditor Agreement and the Junior Lien Intercreditor Agreement, if any, to such release have been met and that it is proper for the Trustee or Collateral Agent to execute and deliver the documents requested by the Issuer in connection with such release, and any necessary or proper instruments of termination, satisfaction or release prepared by the Issuer, the Trustee shall, or shall cause the Collateral Agent to, execute, deliver or acknowledge (at the Issuers expense) such instruments or
releases to evidence the release of any Collateral permitted to be released pursuant to this Indenture, the Security Documents or the Alabama Intercreditor Agreement and the Junior Lien Intercreditor Agreement. Neither the Trustee nor the Collateral Agent shall be liable for any such release undertaken in reliance upon any such Officers Certificate or Opinion of Counsel, and notwithstanding any term hereof or in any Security Document, the Alabama Intercreditor Agreement or the Junior Lien Intercreditor Agreement to the contrary, the Trustee and the Collateral Agent shall not be under any obligation to release any such Lien and security interest, or execute and deliver any such instrument of release, satisfaction or termination, unless and until it receives such Officers Certificate and Opinion of Counsel.
Section 11.04 Suits to Protect the Collateral.
Subject to the provisions of Article 7, the Security Documents, the Alabama Intercreditor Agreement and the Junior Lien Intercreditor Agreement, the Trustee, without the consent of the Holders, on behalf of the Holders, may or may direct the Collateral Agent to take all actions it determines in order to:
(a) enforce any of the terms of the Security Documents; and
(b) collect and receive any and all amounts payable in respect of the Obligations hereunder.
Subject to the provisions of the Security Documents, the Alabama Intercreditor Agreement and the Junior Lien Intercreditor Agreement, the Trustee and the Collateral Agent shall have power to institute and to maintain such suits and proceedings as the Trustee may determine to prevent any impairment of the Collateral by any acts which may be unlawful or in violation of any of the Security Documents or this Indenture, and such suits and proceedings as the Trustee may determine to preserve or protect its interests and the interests of the Holders in the Collateral. Nothing in this Section 11.04 shall be considered to impose any such duty or obligation to act on the part of the Trustee or the Collateral Agent.
Section 11.05 Authorization of Receipt of Funds by the Trustee Under the Security Documents.
Subject to the provisions of the Collateral Agreement and the Alabama Intercreditor Agreement, the Trustee is authorized to receive any funds for the benefit of the Holders distributed under the Security Documents, and to make further distributions of such funds to the Holders according to the provisions of this Indenture.
Section 11.06 Purchaser Protected.
In no event shall any purchaser in good faith of any property purported to be released hereunder be bound to ascertain the authority of the Collateral Agent or the Trustee to execute the release or to inquire as to the satisfaction of any conditions required by the provisions hereof for the exercise of such authority or to see to the application of any consideration given by such purchaser or other transferee; nor shall any purchaser or other transferee of any property or rights permitted by this Article 11 to be sold be under any obligation to ascertain or inquire into the authority of the Issuer or the applicable Subsidiary Guarantor to make any such sale or other transfer.
Section 11.07 Powers Exercisable by Receiver or Trustee.
In case the Collateral shall be in the possession of a receiver or trustee, lawfully appointed, the powers conferred in this Article 11 upon the Issuer or a Subsidiary Guarantor with respect
to the release, sale or other disposition of such property may be exercised by such receiver or trustee, and an instrument signed by such receiver or trustee shall be deemed the equivalent of any similar instrument of the Issuer or a Subsidiary Guarantor or of any Officer or Officers thereof required by the provisions of this Article 11; and if the Trustee shall be in the possession of the Collateral under any provision of this Indenture, then such powers may be exercised by the Trustee.
Section 11.08 Release Upon Termination of the Issuers Obligations.
In the event that the Issuer delivers to the Trustee an Officers Certificate certifying that (i) payment in full of the principal of, together with accrued and unpaid interest on, the Notes and all Notes Obligations and Obligations to the Noteholder Secured Parties under the Security Documents that are due and payable at or prior to the time such principal, together with accrued and unpaid interest, are paid or (ii) the Issuer shall have exercised its Legal Defeasance option or its Covenant Defeasance option, in each case in compliance with the provisions of Article 8, and an Opinion of Counsel stating that all conditions precedent to the execution and delivery of such notice by the Trustee have been satisfied, the Trustee shall deliver to the Issuer and the Collateral Agent a notice stating that the Trustee, on behalf of the Holders, disclaims and gives up any and all rights it has in or to the Collateral (other than with respect to funds held by the Trustee pursuant to Article 8), and any rights it has under the Security Documents, and upon receipt by the Collateral Agent of such notice, the Collateral Agent shall be deemed not to hold a Lien in the Collateral on behalf of the Trustee.
Section 11.09 Collateral Agent.
(a) By their acceptance of the Notes, the Holders hereby designate and appoint the Trustee to serve as Collateral Agent and as their agent under this Indenture, the Security Documents, the Alabama Intercreditor Agreement and the Junior Lien Intercreditor Agreement and the Trustee and each of the Holders by acceptance of the Notes hereby irrevocably authorizes the Collateral Agent to take such action on its behalf under the provisions of this Indenture, the Security Documents, the Alabama Intercreditor Agreement and the Junior Lien Intercreditor Agreement and to exercise such powers and perform such duties as are expressly delegated to the Collateral Agent by the terms of this Indenture, the Security Documents, the Alabama Intercreditor Agreement and the Junior Lien Intercreditor Agreement, and consents and agrees to the terms of the Alabama Intercreditor Agreement, the Junior Lien Intercreditor Agreement and each Security Document, as the same may be in effect or may be amended, restated, supplemented or otherwise modified from time to time in accordance with their respective terms. The Trustee acknowledges that the Collateral Agent agrees to act as such on the express conditions contained in this Section 11.09. The provisions of this Section 11.09 are solely for the benefit of the Collateral Agent and none of the Trustee, any of the Holders nor any of the Grantors shall have any rights as a third party beneficiary of any of the provisions contained herein other than as expressly provided in Section 11.03. Each Holder agrees that any action taken by the Collateral Agent in accordance with the provisions of this Indenture, the Alabama Intercreditor Agreement, the Junior Lien Intercreditor Agreement and the Security Documents, and the exercise by the Collateral Agent of any rights or remedies set forth herein or therein, shall be authorized and binding upon all Holders. Notwithstanding any provision to the contrary contained elsewhere in this Indenture, the Security Documents, the Alabama Intercreditor Agreement and the Junior Lien Intercreditor Agreement, the duties of the Collateral Agent shall be ministerial and administrative in nature, and the Collateral Agent shall not have any duties or responsibilities, except those expressly set forth herein and in the other Notes Documents to which the Collateral Agent is a party, nor shall the Collateral Agent have or be deemed to have any trust or other fiduciary relationship with the Trustee, any Holder or any Grantor, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Indenture, the Security Documents, the Alabama Intercreditor Agreement or the Junior Lien Intercreditor Agreement or otherwise exist against the Collateral Agent. Without limiting the generality of the foregoing sentence, the use of the
term agent in this Indenture with reference to the Collateral Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.
(b) The Collateral Agent may perform any of its duties under this Indenture, the Security Documents, the Alabama Intercreditor Agreement or the Junior Lien Intercreditor Agreement by or through receivers, agents, employees, attorneys-in-fact or through its Related Persons and shall be entitled to advice of counsel concerning all matters pertaining to such duties, and shall be entitled to act upon, and shall be fully protected in taking action in reliance upon any advice or opinion given by legal counsel. The Collateral Agent shall not be responsible for the negligence or willful misconduct of any receiver, agent, employee, attorney-in-fact or Related Person that it selects as long as such selection was made in good faith.
(c) None of the Collateral Agent or any of its Related Persons shall (i) be liable for any action taken or omitted to be taken by any of them under or in connection with this Indenture or the transactions contemplated hereby (except to the extent that the foregoing are found by a final, non-appealable judgment of a court of competent jurisdiction to have resulted from its own gross negligence or willful misconduct) or under or in connection with any Security Document, the Alabama Intercreditor Agreement or the Junior Lien Intercreditor Agreement or the transactions contemplated thereby (except to the extent that the foregoing are found by a final, non-appealable judgment of a court of competent jurisdiction to have resulted from its own gross negligence or willful misconduct), or (ii) be responsible in any manner to any of the Trustee or any Holder for any recital, statement, representation, warranty, covenant or agreement made by the Issuer or any Grantor or Affiliate of any Grantor, or any Officer or Related Persons thereof, contained in this Indenture, or any other Notes Documents, or in any certificate, report, statement or other document referred to or provided for in, or received by the Collateral Agent under or in connection with, this Indenture, the Security Documents, the Alabama Intercreditor Agreement or the Junior Lien Intercreditor Agreement, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Indenture, the Security Documents, the Alabama Intercreditor Agreement or the Junior Lien Intercreditor Agreement, or for any failure of any Grantor or any other party to this Indenture, the Security Documents, the Alabama Intercreditor Agreement or the Junior Lien Intercreditor Agreement to perform its obligations hereunder or thereunder. None of the Collateral Agent or any of its respective Related Persons shall be under any obligation to the Trustee or any Holder to monitor, ascertain or inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Indenture, the Security Documents, the Alabama Intercreditor Agreement or the Junior Lien Intercreditor Agreement or to inspect the properties, books, or records of any Grantor or any Grantors Affiliates.
(d) The Collateral Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, facsimile, certification, telephone message, statement, or other communication, document or conversation (including those by telephone or e-mail) believed by it to be genuine and correct and to have been signed, sent, or made by the proper Person or Persons, and upon advice and statements of legal counsel (including, without limitation, counsel to the Issuer or any other Grantor), independent accountants and other experts and advisors selected by the Collateral Agent. The Collateral Agent shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, or other paper or document. The Collateral Agent shall be fully justified in failing or refusing to take action under the Notes Documents unless it shall first receive such advice or concurrence from the party or parties entitled to give instructions to the Collateral Agent under the terms of the Collateral Agreement.
(e) The Collateral Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, unless a Responsible Officer of the Collateral Agent shall have received written notice from the Trustee or the Issuer referring to this Indenture, describing such Default or Event of Default and stating that such notice is a notice of default. The Collateral Agent shall take such action with respect to such Default or Event of Default as may be requested by the Trustee in accordance with Article 6 or the Holders of a majority in aggregate principal amount of the Notes (subject to this Section 11.09 and the terms of the Collateral Agreement and the Alabama Intercreditor Agreement).
(f) U.S. Bank National Association and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in and generally engage in any kind of banking, trust, financial advisory, underwriting, or other business with any Grantor and its Affiliates as though it was not the Collateral Agent hereunder and without notice to or consent of the Trustee. The Trustee and the Holders acknowledge that, pursuant to such activities, U.S. Bank National Association or its Affiliates may receive information regarding any Grantor or its Affiliates (including information that may be subject to confidentiality obligations in favor of any such Grantor or such Affiliate) and acknowledge that the Collateral Agent shall not be under any obligation to provide such information to the Trustee or the Holders. Nothing herein shall impose or imply any obligation on the part of the U.S. Bank National Association to advance funds.
(g) The Collateral Agent may resign at any time subject to the terms of the Collateral Agreement and the procedures set forth therein.
(h) The Collateral Agent shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither the Collateral Agent nor any of its officers, directors, employees, attorneys, representatives or agents shall be responsible for any act or failure to act hereunder, except to the extent such act is found by a final, non-appealable judgment of a court of competent jurisdiction to have resulted from its own gross negligence or willful misconduct.
(i) By their acceptance of the Notes hereunder, the Collateral Agent is authorized and directed by the Holders to (i) enter into the Security Documents to which it is party, whether executed on or after the Issue Date, (ii) enter into the Alabama Intercreditor Agreement, (iii) enter into the Junior Lien Intercreditor Agreement, (iv) bind the Holders on the terms as set forth in the Security Documents, the Alabama Intercreditor Agreement and the Junior Lien Intercreditor Agreement and (v) perform and observe its obligations under the Security Documents, the Alabama Intercreditor Agreement and the Junior Lien Intercreditor Agreement.
(j) The Trustee agrees that it shall not (and shall not be obliged to), and shall not instruct the Collateral Agent to, unless specifically requested to do so by the Holders of a majority in aggregate principal amount of the Notes, take or cause to be taken any action to enforce its rights under this Indenture or the other Notes Documents or against any Grantor, including the commencement of any legal or equitable proceedings, to foreclose any Lien on, or otherwise enforce any security interest in, any of the Collateral.
If at any time or times the Trustee shall receive (i) by payment, foreclosure, set-off or otherwise, any proceeds of Collateral or any payments with respect to the Obligations arising under, or relating to, this Indenture, except for any such proceeds or payments received by the Trustee from the Collateral Agent pursuant to the terms of this Indenture, or (ii) payments from the Collateral Agent in excess of the amount required to be paid to the Trustee pursuant to Article 6, the Trustee shall promptly turn the same over to the Collateral Agent, in kind, and with such endorsements as may be required to negotiate the same to the Collateral Agent, such proceeds to be applied by the Collateral Agent pursuant
to the terms of this Indenture, the Security Documents, the Alabama Intercreditor Agreement and the Junior Lien Intercreditor Agreement.
(k) The Collateral Agent is each Holders agent for the purpose of perfecting the Holders security interest in assets which, in accordance with Article 9 of the Uniform Commercial Code can be perfected only by possession. Should the Trustee obtain possession of any such Collateral, upon request from the Issuer, the Trustee shall notify the Collateral Agent thereof and promptly shall deliver such Collateral to the Collateral Agent or otherwise deal with such Collateral in accordance with the Collateral Agents instructions.
(l) The Collateral Agent shall have no obligation whatsoever to the Trustee, any of the Holders, or any of the Noteholder Secured Parties to assure that the Collateral exists or is owned by any Grantor or is cared for, protected, or insured or has been encumbered, or that the Collateral Agents Liens have been properly or sufficiently or lawfully created, perfected, protected, maintained or enforced or are entitled to any particular priority, or to determine whether all of the Grantors property constituting collateral intended to be subject to the Lien and security interest of the Security Documents has been properly and completely listed or delivered, as the case may be, or the genuineness, validity, marketability or sufficiency thereof or title thereto, or to exercise at all or in any particular manner or under any duty of care, disclosure, or fidelity, or to continue exercising, any of the rights, authorities, and powers granted or available to the Collateral Agent pursuant to this Indenture, any Security Document, the Alabama Intercreditor Agreement or the Junior Lien Intercreditor Agreement other than pursuant to the instructions of the Trustee or the Holders of a majority in aggregate principal amount of the Notes or if there are Other First Lien Obligations then outstanding, the Applicable Authorized Representative or, if there are Designated Priority Obligations then outstanding, the Designated Priority Representative or as otherwise provided in the Security Documents, the Alabama Intercreditor Agreement or the Junior Lien Intercreditor Agreement, it being understood and agreed that in respect of the Collateral, or any act, omission, or event related thereto, the Collateral Agent shall have no other duty or liability whatsoever to the Trustee, any Holder, or any Noteholder Secured Party as to any of the foregoing.
(m) If the Issuer incurs any obligations in respect of Junior Lien Indebtedness, the Collateral Agent shall (and is hereby authorized and directed to) enter into an intercreditor agreement in the form attached as Exhibit E with a designated agent or representative for the holders of the Obligations so incurred (at the sole expense and cost of the Issuer, including legal fees and expenses of the Collateral Agent), bind the Holders on the terms set forth therein and perform and observe its obligations thereunder. To the extent that the Junior Lien Intercreditor Agreement is then in effect with respect to existing Junior Lien Indebtedness, the Collateral Agent shall (and is hereby authorized and directed to) enter into a joinder agreement to such Junior Lien Intercreditor Agreement with a designated agent or representative for the holders of the Obligations so incurred (at the sole expense and cost of the Issuer, including legal fees and expenses of the Collateral Agent).
(n) [intentionally omitted].
(o) Notwithstanding anything to the contrary contained in this Indenture, the Alabama Intercreditor Agreement, the Junior Lien Intercreditor Agreement or the Security Documents, in the event the Collateral Agent is instructed by the Trustee on behalf of the Holders to commence an action to foreclose or otherwise exercise its remedies to acquire control or possession of the Collateral, the Collateral Agent shall not be required to commence any such action or exercise any remedy or to inspect or conduct any studies of any property under any mortgages or take any such other action if the Collateral Agent has determined that it may incur personal liability as a result of the presence at, or release on or from, the Collateral or such property, of any hazardous substances unless the Collateral Agent has received security or indemnity from the Holders (and the holders of other First Lien Obligations (if any)
whose representative has similarly instructed the Collateral Agent) in an amount and in a form all satisfactory to the Collateral Agent in its sole discretion, protecting the Collateral Agent from all such liability. The Collateral Agent shall at any time be entitled to cease taking any action described above if it no longer reasonably deems any indemnity, security or undertaking from the Issuer or the Holders (or holders of other First Lien Obligations (if any), as applicable) to be sufficient.
(p) The Collateral Agent (i) shall not be liable to the Holders for any action taken or omitted to be taken by it in connection with this Indenture, the Alabama Intercreditor Agreement, the Junior Lien Intercreditor Agreement and the Security Documents or any instrument referred to herein or therein, except to the extent that any of the foregoing are found by a final, non-appealable judgment of a court of competent jurisdiction to have resulted from its own gross negligence or willful misconduct, (ii) shall not be liable to the Holders for interest on any money received by it except as the Collateral Agent may agree in writing with the Issuer (and money held in trust by the Collateral Agent need not be segregated from other funds except to the extent required by law) and (iii) may consult with counsel of its selection and the advice or opinion of such counsel as to matters of law shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it in good faith and in accordance with the advice or opinion of such counsel. The grant of permissive rights or powers to the Collateral Agent shall not be construed to impose duties to act.
(q) In no event shall the Collateral Agent be responsible or liable to the Holders or the Issuer or its Subsidiaries for any special, indirect, punitive, incidental or consequential loss or damage or any kind whatsoever irrespective of whether the Collateral Agent has been advised of the likelihood of such loss or damage and regardless of the form of action.
(r) The Collateral Agent does not assume any responsibility for any failure or delay in performance or any breach by the Issuer or any other Grantor under this Indenture, the Alabama Intercreditor Agreement, the Junior Lien Intercreditor Agreement and the Security Documents. The Collateral Agent shall not be responsible to the Holders or any other Person for any recitals, statements, information, representations or warranties contained in any Notes Documents or in any certificate, report, statement, or other document referred to or provided for in, or received by the Collateral Agent under or in connection with, this Indenture, the Alabama Intercreditor Agreement, the Junior Lien Intercreditor Agreement or any Security Document; the execution, validity, genuineness, effectiveness or enforceability of the Alabama Intercreditor Agreement, the Junior Lien Intercreditor Agreement and any Security Documents as to any other party thereto; the genuineness, enforceability, collectability, value, sufficiency, location or existence of any Collateral, or the validity, effectiveness, enforceability, sufficiency, extent, perfection or priority of any Lien therein; the validity, enforceability or collectability of any Obligations; the assets, liabilities, financial condition, results of operations, business, creditworthiness or legal status of any obligor; or for any failure of any obligor to perform its Obligations under this Indenture, the Alabama Intercreditor Agreement, the Junior Lien Intercreditor Agreement and the Security Documents. The Collateral Agent shall have no obligation to any Holder or any other Person to ascertain or inquire into the existence of any Default or Event of Default, the observance or performance by any obligor of any terms of this Indenture, the Alabama Intercreditor Agreement, the Junior Lien Intercreditor Agreement and the Security Documents, or the satisfaction of any conditions precedent contained in this Indenture, the Alabama Intercreditor Agreement, the Junior Lien Intercreditor Agreement and any Security Document. The Collateral Agent shall not be required to initiate or conduct any litigation or collection or other proceeding under this Indenture, the Alabama Intercreditor Agreement, the Junior Lien Intercreditor Agreement and the Security Documents except as expressly set forth hereunder or thereunder. The Collateral Agent shall have the right at any time to seek instructions from the party or parties entitled to give instructions to it under the terms of the Collateral Agreement.
(s) The parties hereto and the Holders hereby agree and acknowledge that the Collateral Agent shall not assume, be responsible for or otherwise be obligated for any liabilities, claims, causes of action, suits, losses, allegations, requests, demands, penalties, fines, settlements, damages (including foreseeable and unforeseeable), judgments, expenses and costs (including but not limited to, any remediation, corrective action, response, removal or remedial action, or investigation, operations and maintenance or monitoring costs, for personal injury or property damages, real or personal) of any kind whatsoever, pursuant to any environmental law as a result of this Indenture, the Alabama Intercreditor Agreement, the Junior Lien Intercreditor Agreement and the Security Documents or any actions taken pursuant hereto or thereto. Further, the parties hereto and the Holders hereby agree and acknowledge that in the exercise of its rights under this Indenture, the Alabama Intercreditor Agreement, the Junior Lien Intercreditor Agreement and the Security Documents, the Collateral Agent may hold or obtain indicia of ownership primarily to protect the security interest of the Collateral Agent in the Collateral, including without limitation the properties constituting real property that constitute Collateral, and that any such actions taken by the Collateral Agent shall not be construed as or otherwise constitute any participation in the management of such Collateral, including without limitation the real properties that constitute Collateral, as those terms are defined in Section 101(20)(E) of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §§ 9601 et seq., as amended.
(t) Upon the receipt by the Collateral Agent of a written request of the Issuer signed by two Officers (a Security Document Order), the Collateral Agent is hereby authorized to execute and enter into, and shall execute and enter into, without the further consent of any Holder or the Trustee, any Security Document to be executed after the Issue Date. Such Security Document Order shall (i) state that it is being delivered to the Collateral Agent pursuant to, and is a Security Document Order referred to in, this Section 11.09(t), and (ii) instruct the Collateral Agent to execute and enter into such Security Document. Any such execution of a Security Document shall be at the direction and expense of the Issuer, upon delivery to the Collateral Agent of an Officers Certificate and Opinion of Counsel stating that all conditions precedent to the execution and delivery of the Security Document have been satisfied. The Holders, by their acceptance of the Notes, hereby authorize and direct the Collateral Agent to execute such Security Documents.
(u) Subject to the provisions of the applicable Security Documents and the Alabama Intercreditor Agreement, each Holder, by acceptance of the Notes, agrees that the Collateral Agent shall execute and deliver the Alabama Intercreditor Agreement and the Security Documents to which it is a party and all agreements, documents and instruments incidental thereto, and act in accordance with the terms thereof.
(v) After the occurrence and during the continuance of an Event of Default and subject to the terms of the Collateral Agreement, the Trustee may direct the Collateral Agent in connection with any action required or permitted by this Indenture, the Security Documents, the Alabama Intercreditor Agreement or the Junior Lien Intercreditor Agreement.
(w) The Collateral Agent is authorized to receive any funds for the benefit of itself, the Trustee and the Holders distributed under the Security Documents, the Alabama Intercreditor Agreement or the Junior Lien Intercreditor Agreement and to the extent not prohibited under the Collateral Agreement or the Alabama Intercreditor Agreement, for turnover to the Trustee to make further distributions of such funds to itself and the Holders in accordance with the provisions of Section 6.13 and the other provisions of this Indenture and the Collateral Agreement.
(x) [intentionally omitted].
(y) Notwithstanding anything to the contrary in this Indenture or any other Notes Document, in no event shall the Collateral Agent be responsible for, or have any duty or obligation with respect to, the recording, filing, registering, perfection, protection or maintenance of the security interests or Liens intended to be created by this Indenture or the other Notes Documents (including without limitation the filing or continuation of any UCC financing or continuation statements or similar documents or instruments), nor shall the Collateral Agent be responsible for, and the Collateral Agent makes no representation regarding, the validity, effectiveness or priority of any of the Security Documents or the security interests or Liens intended to be created thereby. The Collateral Agent makes no representation regarding the validity, effectiveness or enforceability of the Alabama Intercreditor Agreement, the Junior Lien Intercreditor Agreement or any subsequent intercreditor agreement.
(z) Before the Collateral Agent acts or refrains from acting in each case at the request or direction of the Issuer or the Subsidiary Guarantors, it may require an Officers Certificate and an Opinion of Counsel, which shall conform to the provisions of Section 13.03. The Collateral Agent shall not be liable for any action it takes or omits to take in good faith in reliance on such certificate or opinion.
(aa) The Issuer and the Subsidiary Guarantors, jointly and severally, shall indemnify the Collateral Agent for, and hold the Collateral Agent harmless against, any and all loss, damage, claim, liability or expense (including attorneys fees) incurred by it in connection with the acceptance or the performance of its duties hereunder (including the costs and expenses of enforcing any Security Document against the Issuer or any of the Subsidiary Guarantors (including this Article 11) or defending itself against any claim whether asserted by any Holder, the Issuer or any Subsidiary Guarantor, any other holder of First Lien Obligations or liability in connection with the acceptance, exercise or performance of any of its powers or duties hereunder). The Collateral Agent shall notify the Issuer promptly of any claim for which it may seek indemnity. Failure by the Collateral Agent to so notify the Issuer shall not relieve the Issuer or any Subsidiary Guarantor of their obligations hereunder. The Issuer and the Subsidiary Guarantors shall defend the claim and the Collateral Agent may have separate counsel and the Issuer and the Subsidiary Guarantors shall pay the fees and expenses of such counsel. The Issuer and the Subsidiary Guarantors need not reimburse any expense or indemnify against any loss, liability or expense incurred by the Collateral Agent through the result of the Collateral Agents own willful misconduct or gross negligence. The obligations of the Issuer and the Subsidiary Guarantors under this Section 11.09(aa) shall survive the satisfaction and discharge of this Indenture or the earlier resignation or removal of the Collateral Agent. To secure the payment obligations of the Issuer and the Subsidiary Guarantors in this Section 11.09(aa) but subject to the terms of the Alabama Intercreditor Agreement, the Collateral Agent shall have a Lien prior to the Notes and rights of the Holders on all money or property held or collected by the Trustee or Collateral Agent, except that held in trust to pay principal, premium, if any, and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture.
Section 11.10 Designations.
Except as provided in the next sentence, for purposes of the provisions hereof and of the Alabama Intercreditor Agreement, the Junior Lien Intercreditor Agreement and the Security Documents requiring or permitting the Issuer to designate Indebtedness for the purposes of the terms Designated Priority Obligations and Additional Obligations or any other such designations hereunder or under the Alabama Intercreditor Agreement, the Junior Lien Intercreditor Agreement or the Security Documents, any such designation shall be sufficient if the relevant designation is set forth in writing, signed on behalf of the Issuer by an Officer and delivered to the Trustee, the Revolving Administrative Agent, the Collateral Agent and, if any Other First Lien Obligations are then outstanding, each other Authorized Representative. For all purposes hereof and of the Collateral Agreement, the Issuer hereby designates the
Obligations pursuant to the Revolving Credit Agreement and any associated Lender Hedging Obligations as Designated Priority Obligations.
ARTICLE 12
SATISFACTION AND DISCHARGE
Section 12.01 Satisfaction and Discharge.
This Indenture shall be discharged and shall cease to be of further effect as to all Notes, when either:
(1) all Notes theretofore authenticated and delivered, except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust, have been delivered to the Trustee for cancellation; or
(2) (A) all Notes not theretofore delivered to the Trustee for cancellation have become due and payable by reason of the making of a notice of redemption or otherwise, shall become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer and the Issuer or any Subsidiary Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders of the Notes, cash in U.S. dollars, Government Securities or a combination thereof, in such amounts as shall be sufficient without consideration of any reinvestment of interest to pay and discharge the entire indebtedness on the Notes not theretofore delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to the date of maturity or redemption;
(B) no Default (other than that resulting from borrowing funds to be applied to make such deposit or the grant of any Lien securing such borrowing or any similar and simultaneous deposit relating to other Indebtedness and, in each case, the granting of Liens in connection therewith) with respect to this Indenture or the Notes shall have occurred and be continuing on the date of such deposit or shall occur as a result of such deposit and such deposit shall not result in a breach or violation of, or constitute a default under, any Credit Facility or any other material agreement or instrument (other than this Indenture) to which the Issuer or any Subsidiary Guarantor is a party or by which the Issuer or any Subsidiary Guarantor is bound (other than that resulting from borrowing funds to be applied to make such deposit and any similar and simultaneous deposit relating to the discharge of such agreement or instrument and, in each case, the granting of Liens in connection therewith);
(C) the Issuer has paid or caused to be paid all sums payable by it under this Indenture; and
(D) the Issuer has delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Notes at maturity or the redemption date, as the case may be.
In addition, the Issuer shall deliver an Officers Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if money shall have been deposited with the Trustee pursuant to subclause (A) of clause (2) of this Section 12.01, the provisions of Section 12.02 and Section 8.06 shall survive.
Section 12.02 Application of Trust Money.
Subject to the provisions of Section 8.06, all money deposited with the Trustee pursuant to Section 12.01 shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or Government Securities in accordance with Section 12.01 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuers and any Subsidiary Guarantors obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 12.01; provided that if the Issuer has made any payment of principal of, premium or interest on any Notes because of the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Securities held by the Trustee or Paying Agent.
ARTICLE 13
MISCELLANEOUS
Section 13.01 Notices.
Any notice or communication by the Issuer, any Subsidiary Guarantor, the Trustee or the Collateral Agent to the others is duly given if in writing and published, delivered in person or mailed by first-class mail (registered or certified, return receipt requested), fax or overnight air courier guaranteeing next day delivery, to the others address:
If to the Issuer and/or any Guarantor:
Community Choice Financial Inc.
7001 Post Road
Suite 200
Dublin, Ohio 43016
Attention: General Counsel
Fax No.: (614) 798-5921
with a copy to:
Jones Day
222 East 41st Street
New York, NY 10017
Attention: Christopher Kelly
Fax No.: (212) 755-7306
If to the Trustee or the Collateral Agent:
U.S. Bank National Association
1350 Euclid Avenue
CN OH RN11
Cleveland, Ohio 44115
Attention: Corporate Trust Services
Fax No.: (216) 623-9202
The Issuer, any Subsidiary Guarantor, the Trustee or the Collateral Agent, by notice to the others, may designate additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Holder shall be mailed to the Holder at the Holders address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed. Any notice or communication shall also be so mailed or delivered to any Person described in TIA § 313(c), to the extent required by the TIA.
All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: on the first date on which publication is made, if published; at the time delivered by hand, if personally delivered; five calendar days after being deposited in the mail, postage prepaid, if mailed by first-class mail; when receipt acknowledged, if faxed; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery; provided that any notice or communication delivered to the Trustee or the Collateral Agent shall be deemed effective upon actual receipt thereof.
Any notice or communication to a Holder shall be mailed by first-class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.
If the Issuer mails a notice or communication to Holders, the Issuer shall mail a copy to the Trustee, the Collateral Agent and each Agent at the same time.
Section 13.02 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Issuer or any of the Subsidiary Guarantors to the Trustee to take any action under this Indenture, the Issuer or such Guarantor, as the case may be, shall furnish to the Trustee or, if such action relates to a Security Document, the Alabama Intercreditor Agreement or the Junior Lien Intercreditor Agreement, the Collateral Agent:
(a) An Officers Certificate in form and substance reasonably satisfactory to the Trustee or the Collateral Agent, as applicable (which shall include the statements set forth in Section 13.03) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; provided that an Officers Certificate shall not be required in connection with the issuance of Notes or the entering into any of the Notes Documents on the Issue Date;
(b) An Opinion of Counsel in form and substance reasonably satisfactory to the Trustee or the Collateral Agent, as applicable (which shall include the statements set forth in Section 13.03), stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied; and
(c) if required by the TIA, a certificate or opinion from a firm of certified public accountants meeting the applicable requirements therein.
Section 13.03 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA § 314(a)(4)) shall comply with the provisions of TIA § 314(e) and also shall include:
(a) a statement that the Person making such certificate or opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with (and, in the case of an Opinion of Counsel, may be limited to reliance on an Officers Certificate as to matters of fact); and
(d) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with.
Section 13.04 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.
Section 13.05 No Personal Liability of Directors, Officers, Employees, Incorporators, Members, Partners and Stockholders.
No director, officer, employee, incorporator, member, partner or stockholder of the Issuer or any Subsidiary Guarantor or any of their parent companies or entities shall have any liability for any obligations of the Issuer or the Subsidiary Guarantors under the Notes, the Guarantees, the Security Documents or this Indenture or for any claim based on, in respect of, or by reason of such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.
Section 13.06 Governing Law.
THIS INDENTURE, THE NOTES, AND ANY GUARANTEE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 13.07 Waiver of Jury Trial.
THE ISSUER, EACH OF THE SUBSIDIARY GUARANTORS, THE TRUSTEE AND THE COLLATERAL AGENT HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 13.08 Force Majeure.
In no event shall the Trustee or the Collateral Agent be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including without limitation strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services.
Section 13.09 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Issuer or the Restricted Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.
Section 13.10 Successors.
All agreements of the Issuer in this Indenture and the Notes shall bind its respective successors. All agreements of the Trustee in this Indenture shall bind its successors. All agreements of each Subsidiary Guarantor in this Indenture shall bind its successors, except as otherwise provided in Section 10.05.
Section 13.11 Severability.
In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
Section 13.12 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.
Section 13.13 Table of Contents, Headings.
The Table of Contents and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.
Section 13.14 Collateral Agreement Governs.
Reference is made to the Collateral Agreement. Each Holder, by its acceptance of a Note, (a) consents to the payment priority provided for in the Collateral Agreement, (b) agrees that it will be bound by and will take no actions contrary to the provisions of the Collateral Agreement and (c) authorizes and instructs the Collateral Agent to enter into the Collateral Agreement as Collateral Agent and on behalf of such Holder. The foregoing provisions are intended as an inducement to the lenders under the Revolving Credit Agreement to extend credit and such lenders are intended third party beneficiaries of such provisions and the provisions of the Collateral Agreement.
Section 13.15 Alabama Intercreditor Agreement Governs.
Reference is made to the Alabama Intercreditor Agreement. Each Holder, by its acceptance of a Note, (a) consents to the subordination of Liens provided for in the Alabama Intercreditor Agreement, (b) agrees that it will be bound by and will take no actions contrary to the provisions of the Alabama Intercreditor Agreement and (c) authorizes and instructs the Collateral Agent to enter into the Alabama Intercreditor Agreement as Collateral Agent and on behalf of such Holder.
Section 13.16 U.S.A. Patriot Act.
The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee, like all financial institutions, and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee. The parties to this Indenture agree that they will provide the Trustee with such information as it may reasonably request as required in order for the Trustee to satisfy the requirements of the U.S.A. Patriot Act.
Section 13.17 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with another provision that is required or deemed to be included in this Indenture by the TIA, such required or deemed provision shall control.
Section 13.18 Communication by Holders of Notes with Other Holders of Notes.
Holders of the Notes may communicate pursuant to TIA § 312(b) with other Holders of Notes with respect to their rights under this Indenture or the Notes. The Issuer, the Trustee, the Registrar and anyone else shall have the protection of TIA § 312(c).
[Remainder of page left intentionally blank. Signature page follows.]
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COMMUNITY CHOICE FINANCIAL INC. | ||
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By: |
/s/ Michael Durbin | |
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Name: |
Michael Durbin |
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Title: |
Senior Vice President, Chief Financial Officer and Treasurer |
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EACH OF THE SUBSIDIARY GUARANTORS LISTED ON SCHEDULE I HERETO | ||
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By: |
/s/ Michael Durbin | |
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Name: |
Michael Durbin |
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Title: |
Senior Vice President, Chief Financial Officer, Treasurer and Manager |
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U.S. BANK NATIONAL ASSOCIATION, | ||
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as Trustee | ||
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By: |
/s/ Elizabeth A. Thuning | |
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Name: |
Elizabeth A. Thuning |
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Title: |
Vice President |
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U.S. BANK NATIONAL ASSOCIATION, | ||
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as Collateral Agent | ||
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By: |
/s/ David A. Schlabach | |
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Name: |
David A. Schlabach |
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Title: |
Vice President |
SCHEDULE I
List of Subsidiary Guarantors
Subsidiary |
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Jurisdiction of Incorporation |
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ARH-Arizona, LLC |
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Delaware |
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BCCI CA, LLC |
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Delaware |
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BCCI Management Company |
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Ohio |
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Buckeye Check Cashing II, Inc. |
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Ohio |
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Buckeye Check Cashing of Arizona, Inc. |
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Ohio |
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Buckeye Check Cashing of California, LLC |
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Delaware |
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Buckeye Check Cashing of Florida, Inc. |
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Ohio |
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Buckeye Check Cashing of Illinois, LLC |
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Delaware |
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Buckeye Check Cashing of Kansas, LLC |
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Delaware |
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Buckeye Check Cashing of Kentucky, Inc. |
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Ohio |
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Buckeye Check Cashing of Michigan, Inc. |
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Delaware |
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Buckeye Check Cashing of Missouri, LLC |
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Delaware |
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Buckeye Check Cashing of Texas, LLC |
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Delaware |
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Buckeye Check Cashing of Utah, Inc. |
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Ohio |
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Buckeye Check Cashing of Virginia, Inc. |
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Ohio |
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Buckeye Check Cashing, Inc. |
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Ohio |
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Buckeye Commercial Check Cashing of Florida, LLC |
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Delaware |
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Buckeye Credit Solutions, LLC |
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Delaware |
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Buckeye Lending Solutions of Arizona, LLC |
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Delaware |
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Buckeye Lending Solutions, LLC |
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Delaware |
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Buckeye Small Loans, LLC |
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Delaware |
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Buckeye Title Loans of California, LLC |
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Delaware |
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Buckeye Title Loans of Kansas, LLC |
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Delaware |
Subsidiary |
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Jurisdiction of Incorporation |
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Buckeye Title Loans of Missouri, LLC |
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Delaware |
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Buckeye Title Loans of Utah, LLC |
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Delaware |
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Buckeye Title Loans of Virginia, LLC |
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Delaware |
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Buckeye Title Loans, Inc. |
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Ohio |
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Checksmart Financial Company |
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Delaware |
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Checksmart Financial Holdings Corp. |
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Delaware |
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Checksmart Financial, LLC |
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Delaware |
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Checksmart Money Order Services of Arizona, Inc. |
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Delaware |
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Checksmart Money Order Services, Inc. |
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Delaware |
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CS-Arizona, LLC |
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Delaware |
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Express Payroll Advance of Ohio, Inc. |
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Ohio |
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First Virginia Credit Solutions, LLC |
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Delaware |
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First Virginia Financial Services, LLC |
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Delaware |
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Hoosier Check Cashing of Ohio, LTD |
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Ohio |
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Insight Capital, LLC |
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Alabama |
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National Tax Lending, LLC |
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Delaware |
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California Check Cashing Stores, LLC |
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Delaware |
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CCCIS, Inc. |
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California |
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CCCS Corporate Holdings, Inc. |
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Delaware |
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CCCS Holdings, LLC |
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Delaware |
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Fast Cash, Inc. |
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California |
EXHIBIT A
[Face of Note]
[Insert the Global Note Legend, if applicable pursuant to the provisions of the Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the provisions of the Indenture]
[Insert the Regulation S Temporary Global Note Legend, if applicable pursuant to the provisions of the Indenture]
CUSIP [ ]
ISIN [ ](1)
[RULE 144A][REGULATION S] GLOBAL NOTE
representing up to
$[ ]
10.75% Senior Secured Notes due 2019
No. |
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[$ ] |
Community Choice Financial Inc.
promises to pay to CEDE & CO. or registered assigns, the principal sum [set forth on the Schedule of Exchanges of Interests in the Global Note attached hereto] [of United States Dollars] on May 1, 2019.
Interest Payment Dates: May 1 and November 1
Record Dates: April 15 and October 15
(1) |
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Rule 144A Note CUSIP: 20367Q AA5 |
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Rule 144A Note ISIN: US20367QAA58 |
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Regulation S Note CUSIP: U2037A AA5 |
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Regulation S Note ISIN: USU2037AAA52 |
IN WITNESS HEREOF, the Issuer has caused this instrument to be duly executed.
Dated: April 29, 2011
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COMMUNITY CHOICE FINANCIAL INC. | |
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By: |
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Name: |
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Title: |
This is one of the Notes referred to in the within-mentioned Indenture:
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U.S. BANK NATIONAL ASSOCIATION, as Trustee | |
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Dated: April 29, 2011 |
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By: |
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Authorized Signatory |
[Back of Note]
10.75% Senior Secured Notes due 2019
Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Community Choice Financial Inc., an Ohio corporation, promises to pay interest on the principal amount of this Note at 10.75% per annum from April 29, 2011 (or the most recent Interest Payment Date) until maturity. The Issuer will pay interest semi-annually in arrears on May 1 and November 1 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each, an Interest Payment Date). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that the first Interest Payment Date shall be November 1, 2011. The Issuer will pay interest (including Post-Petition Interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at the interest rate on the Notes; it shall pay interest (including Post-Petition Interest in any proceeding under any Bankruptcy Law) on overdue installments of interest, if any (without regard to any applicable grace periods), from time to time on demand at the interest rate on the Notes. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.
2. METHOD OF PAYMENT. The Issuer will pay interest on the Notes, if any, to the Persons who are registered Holders of Notes at the close of business on the April 15 or October 15 (whether or not a Business Day), as the case may be, next preceding the Interest Payment Date, even if such Notes are cancelled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. Payment of interest, if any, may be made by check mailed to the Holders at their addresses set forth in the register of Holders, provided that payment by wire transfer of immediately available funds will be required with respect to principal of and interest, premium, if any, on all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Issuer or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, U.S. Bank National Association, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Issuer may change any Paying Agent or Registrar without prior written notice to the Holders. The Issuer or any of the Issuers Subsidiaries may act in as paying agent or registrar.
4. INDENTURE. The Issuer issued the Notes under an Indenture, dated as of April 29, 2011 (the Indenture), among Community Choice Financial Inc., the Subsidiary Guarantors named therein and the Trustee. This Note is one of a duly authorized issue of notes of the Issuer designated as its 10.75% Senior Secured Notes due 2019. The Issuer may issue Additional Notes pursuant to Sections 2.01 and 2.15 of the Indenture, so long as the incurrence thereof is permitted by Sections 4.09 and 4.12 of the Indenture. The terms of the Notes include those stated in the Indenture. The Notes are subject to all such terms, and Holders are referred to the Indenture for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.
5. OPTIONAL REDEMPTION.
(a) Except as set forth below under clauses 5(b), 5(d) and 5(e) hereof, the Notes will not be redeemable at the Issuers option before May 1, 2015.
(b) At any time prior to May 1, 2015, the Issuer may redeem all or a part of the Notes, upon notice as described under Section 3.03 of the Indenture, at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest, if any, to, but excluding the date of redemption (any applicable date of redemption hereunder, the Redemption Date), subject to the rights of Holders on the relevant Record Date to receive interest due on the relevant Interest Payment Date.
(c) On and after May 1, 2015, the Issuer may redeem the Notes, in whole or in part, upon notice as described under Section 3.03 of the Indenture, at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest thereon, if any, to, but excluding the applicable Redemption Date, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date, if redeemed during the 12-month period beginning on May 1 of each of the years indicated below:
Year |
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Percentage |
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2015 |
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105.375 |
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2016 |
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102.688 |
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2017 and thereafter |
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100.000 |
% |
(d) Until May 1, 2014, the Issuer may, at its option, upon notice as described under Section 3.03 of the Indenture, on one or more occasions, redeem up to 35% of the aggregate principal amount of the Notes issued under the Indenture at a redemption price equal to 110.750% of the aggregate principal amount thereof, plus accrued and unpaid interest thereon, if any, to, but excluding, the applicable Redemption Date, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date, with the net cash proceeds of one or more Equity Offerings to the extent such net cash proceeds are received by or contributed to the Issuer; provided that (a) at least $165.0 million in aggregate principal amount of Notes issued under the Indenture (including any Exchange Notes issued in exchange therefor) remains outstanding immediately after the occurrence of each such redemption and (b) each such redemption occurs within 90 days of the date of closing of each such Equity Offering.
(e) During each 12-month period, commencing with the 12-month period from the Issue Date to May 1, 2012, to and including the 12-month period from May 1, 2014 to May 1, 2015, the Issuer will be entitled to redeem up to 10% of the aggregate principal amount of the Notes issued under the Indenture at a redemption price equal to 103.000% of the aggregate principal amount thereof, plus accrued and unpaid interest thereon, if any, to, but excluding, the Redemption Date, subject to the right of Holders of Notes of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date; provided that at least $165.0 million in aggregate principal amount of Notes (including any Exchange Notes issued in exchange therefor) issued under the Indenture (including any Additional Notes) remains outstanding immediately after the occurrence of each such redemption.
(f) Any redemption pursuant to this paragraph 5 shall be made pursuant to the provisions of Sections 3.01 through 3.07 of the Indenture.
6. MANDATORY REDEMPTION. The Issuer shall not be required to make any mandatory redemption or sinking fund payments with respect to the Notes.
7. NOTICE OF REDEMPTION. Subject to Section 3.03 of the Indenture, notice of redemption will be electronically delivered or mailed by first-class mail, postage prepaid, at least 30 days but not more than 60 days before the Redemption Date (except that redemption notices may be mailed more than 60 days prior to the Redemption Date if the notice is issued in connection with Article 8 or
Article 12 of the Indenture) to each Holder whose Notes are to be redeemed at its registered address. Notes in denominations larger than $2,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date interest ceases to accrue on Notes or portions thereof called for redemption.
8. OFFERS TO REPURCHASE.
(a) Upon the occurrence of a Change of Control, the Issuer shall make an offer (a Change of Control Offer) to each Holder to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of each Holders Notes at a purchase price equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to, but excluding, the date of purchase (the Change of Control Payment). The Change of Control Offer shall be made in accordance with Section 4.14 of the Indenture.
(b) If the Issuer or any of its Restricted Subsidiaries consummates an Asset Sale, within ten Business Days of each date that Excess Proceeds exceed $20,000,000, the Issuer shall make an Asset Sale Offer to all holders of the Notes, and, if required by the terms of any Other First Lien Obligations, to the holders of such Other First Lien Obligations, to purchase the maximum aggregate principal amount of the Notes and such Other First Lien Obligations that is equal to $1,000 or an integral multiple thereof that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date fixed for the closing of such offer, in accordance with the procedures set forth in the Indenture. To the extent that the aggregate amount of Notes and such Other First Lien Obligations tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for general corporate purposes, subject to other covenants contained in the Indenture. If the aggregate principal amount of Notes or the Other First Lien Obligations surrendered by such Holders and holders thereof exceeds the amount of Excess Proceeds, the Issuer shall select the Notes and such Other First Lien Obligations to be purchased on a pro rata basis based on the accreted value or principal amount of the Notes or such Other First Lien Obligations tendered. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. After the Issuer or any Restricted Subsidiary have applied the Net Proceeds from any Asset Sale of any assets that do not constitute Collateral, the balance of such Net Proceeds, if any, from such Asset Sale shall be released by the Collateral Agent to the Issuer or such Restricted Subsidiary for use by the Issuer or such Restricted Subsidiary for any purpose not prohibited by the terms of the Indenture. Holders of Notes that are the subject of an offer to purchase will receive an Asset Sale Offer from the Issuer prior to any related purchase date and may elect to have such Notes purchased by completing the form entitled Option of Holder to Elect Purchase attached to the Notes.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Issuer may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Issuer need not exchange or register the transfer of any Note or portion of a Note selected for redemption or tendered (and not withdrawn) for repurchase in connection with a Change of Control Offer, an Asset Sale Offer or other tender offer, in whole or in part, except for the unredeemed portion of any Note being redeemed in part. Also, the Issuer need not exchange or register the transfer of any Notes for a period of 15 Business Days before a selection of Notes to be redeemed.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. The Indenture, the Guarantees or the Notes may be amended or supplemented as provided in the Indenture.
12. DEFAULTS AND REMEDIES. The Events of Default relating to the Notes are defined in Section 6.01 of the Indenture. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then total outstanding Notes may declare the principal, premium, if any, interest and any other monetary obligations on all the then outstanding Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Notes will become due and payable immediately without further action or notice. Holders may not enforce the Indenture, the Notes or the Guarantees except as provided in the Indenture. Subject to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default (except a Default relating to the payment of principal, premium, if any, or interest) if and so long as it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default and its consequences under the Indenture (except a continuing Default in the payment of interest on, premium, if any, or the principal of any Note held by a non-consenting Holder) and rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal, interest, if any, or premium that has become due solely because of the acceleration) have been cured or waived. The Issuer and each Subsidiary Guarantor is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Issuer is required within five Business Days after becoming aware of any Default, to deliver to the Trustee a statement specifying such event.
13. AUTHENTICATION. This Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose until authenticated by the manual signature of the Trustee.
14. GOVERNING LAW. THE INDENTURE, THE NOTES AND ANY GUARANTEE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
15. SECURITY. The Notes and the Guarantees will be secured by the Collateral on the terms and subject to the conditions set forth in the Indenture and the Security Documents. The Trustee and the Collateral Agent, as the case may be, hold the Collateral in trust for the benefit of the Trustee and the Holders, in each case pursuant to the Security Documents, the Alabama Intercreditor Agreement and the Junior Lien Intercreditor Agreement. Each Holder, by accepting this Note, consents and agrees to the terms of the Security Documents, the Alabama Intercreditor Agreement and the Junior Lien Intercreditor Agreement as the same may be in effect or may be amended from time to time in accordance with their terms and the Indenture and authorizes and directs the Collateral Agent to enter into the Security Documents, the Alabama Intercreditor Agreement and the Junior Lien Intercreditor Agreement, and to perform its obligations and exercise its rights thereunder in accordance therewith.
16. COUNTERPARTS. This Note may be executed in counterparts, each of which shall be an original and all of which, when taken together, shall constitute one binding Note.
17. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuer has caused CUSIP numbers to be
printed on the Notes, and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption, and reliance may be placed only on the other identification numbers placed thereon.
The Issuer will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to the Issuer at the following address:
c/o Community Choice Financial Inc.
7001 Post Road
Suite 200
Dublin, Ohio 43016
Attention: General Counsel
Fax No.: (614) 798-5921
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to: |
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(Insert assignees legal name) |
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(Insert assignees soc. sec. or tax I.D. no.) |
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(Print or type assignees name, address and zip code) |
and irrevocably appoint |
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to transfer this Note on the books of the Issuer. The agent may substitute another to act for him. |
Date: |
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Your Signature: |
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(Sign exactly as your name appears on the face of this Note) | ||||
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Signature Guarantee:* |
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* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuer pursuant to Section 4.10 or 4.14 of the Indenture, check the appropriate box below:
o Section 4.10 |
o Section 4.14 |
If you want to elect to have only part of this Note purchased by the Issuer pursuant to Section 4.10 or Section 4.14 of the Indenture, state the amount you elect to have purchased:
$
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(Sign exactly as your name appears on the face of this Note) | |||
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Signature Guarantee:* |
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* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*
The initial outstanding principal amount of this Global Note is $ . The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global or Definitive Note for an interest in this Global Note, have been made:
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* This schedule should be included only if the Note is issued in global form.
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
c/o Community Choice Financial Inc.
7001 Post Road
Suite 200
Dublin, Ohio 43016
Attention: General Counsel
Fax No.: (614) 798-5921
c/o U.S. National Bank Association
1350 Euclid Avenue
CN OH RN11
Cleveland, Ohio 44115
Attention: Corporate Trust Services
Fax No.: (216) 623-9202
Re: 10.75% Senior Secured Notes due 2019
Reference is hereby made to the Indenture, dated as of April 29, 2011 (the Indenture), among Community Choice Financial Inc., the Subsidiary Guarantors named therein and the Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
(the Transferor) owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of $ in such Note[s] or interests (the Transfer), to (the Transferee), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. o CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the Securities Act), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a qualified institutional buyer within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States.
2. o CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed transfer is being made prior to the expiration of the Restricted Period, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on Transfer enumerated in the Indenture and the Securities Act.
3. o CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one):
(a) o such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act;
or
(b) o such Transfer is being effected to the Issuer or a subsidiary thereof;
or
(c) o such Transfer is being effected pursuant to an effective registration statement under the Securities Act and, if applicable, in compliance with the prospectus delivery requirements of the Securities Act.
4. o CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) o CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.
(b) o CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.
(c) o CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer.
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ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) o a beneficial interest in the:
(i) o 144A Global Note (CUSIP 20367Q AA5), or
(ii) o Regulation S Global Note (CUSIP U2037A AA5), or
(b) o a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) o a beneficial interest in the:
(i) o 144A Global Note (CUSIP 20367Q AA5), or
(ii) o Regulation S Global Note (CUSIP U2037A AA5), or
(iii) o Unrestricted Global Note (CUSIP [ ]); or
(b) o a Restricted Definitive Note; or
(c) o an Unrestricted Definitive Note, in accordance with the terms of the Indenture.
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
c/o Community Choice Financial Inc.
7001 Post Road
Suite 200
Dublin, Ohio 43016
Attention: General Counsel
Fax No.: (614) 798-5921
c/o U.S. National Bank Association
1350 Euclid Avenue
CN OH RN11
Cleveland, Ohio 44115
Attention: Corporate Trust Services
Fax No.: (216) 623-9202
Re: 10.75% Senior Secured Notes due 2019
Reference is hereby made to the Indenture, dated as of April 29, 2011 (the Indenture), among Community Choice Financial Inc., the Subsidiary Guarantors named therein and the Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
(the Owner) owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount of $ in such Note[s] or interests (the Exchange). In connection with the Exchange, the Owner hereby certifies that:
1) EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE
a) o CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Exchange of the Owners beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owners own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the United States Securities Act of 1933, as amended (the Securities Act), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
b) o CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of the Owners beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note is being acquired for the Owners own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
c) o CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Owners Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owners own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
d) o CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Owners Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owners own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
2) EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES
a) o CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of the Owners beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owners own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note and in the Indenture and the Securities Act.
b) o CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange of the Owners Restricted Definitive Note for a beneficial interest in the [CHECK ONE] [ ] 144A Global Note [ ] Regulation S Global Note, with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owners own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of
the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act.
This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer.
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EXHIBIT D
[FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS]
Supplemental Indenture (this Supplemental Indenture), dated as of , among (the Guaranteeing Subsidiary), a subsidiary of Community Choice Financial Inc., an Ohio corporation, as Issuer (under the Indenture referred to below), each of the other Subsidiary Guarantors (under the Indenture referred to below) party hereto and U.S. Bank National Association, as trustee (under the Indenture referred to below) (the Trustee).
W I T N E S S E T H
WHEREAS, each of the Issuer and the Subsidiary Guarantors has heretofore executed and delivered to the Trustee an indenture (the Indenture), dated as of April 29, 2011, providing for the issuance of an unlimited aggregate principal amount of 10.75% senior secured notes due 2019 (the Notes);
WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Issuers Obligations under the Notes and the Indenture on the terms and conditions set forth herein and under the Indenture (the Guarantee); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture;
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:
(1) Capitalized Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.
(2) Agreement to Guarantee. The Guaranteeing Subsidiary hereby agrees to be a Guarantor under the Indenture and to be bound by the terms of the Indenture applicable to Subsidiary Guarantors, including Article 10 thereof.
(3) Execution and Delivery. The Guaranteeing Subsidiary agrees that the Guarantee shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Guarantee on the Notes.
(4) Governing Law. THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
(5) Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
(6) Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.
(7) The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first above written.
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[GUARANTEEING SUBSIDIARY], as Guaranteeing Subsidiary | |
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COMMUNITY CHOICE FINANCIAL INC., as Issuer | |
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U.S. BANK NATIONAL ASSOCIATION, as Trustee | |
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Exhibit 4.3
$40,000,000
REVOLVING CREDIT AGREEMENT
dated as of
April 29, 2011,
among
COMMUNITY CHOICE FINANCIAL INC.,
THE LENDERS PARTY HERETO
and
CREDIT SUISSE AG,
as Administrative Agent
CREDIT SUISSE SECURITIES (USA) LLC
as Sole Bookrunner and Sole Lead Arranger
ARTICLE I
Definitions
SECTION 1.01. Defined Terms |
1 |
SECTION 1.02. Terms Generally |
49 |
SECTION 1.03. Classification of Loans and Borrowings |
49 |
SECTION 1.04. Effectuation of Transfers |
49 |
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ARTICLE II | |
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The Credits | |
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SECTION 2.01. Commitments |
49 |
SECTION 2.02. Loans |
50 |
SECTION 2.03. Borrowing Procedure |
52 |
SECTION 2.04. Evidence of Debt; Repayment of Loans |
52 |
SECTION 2.05. Fees |
53 |
SECTION 2.06. Interest on Loans |
54 |
SECTION 2.07. Default Interest |
54 |
SECTION 2.08. Alternate Rate of Interest |
54 |
SECTION 2.09. Termination and Reduction of Commitments |
55 |
SECTION 2.10. Conversion and Continuation of Borrowings |
55 |
SECTION 2.11. Optional Prepayment |
57 |
SECTION 2.12. Mandatory Prepayments |
57 |
SECTION 2.13. Increased Costs |
58 |
SECTION 2.14. Change in Legality |
59 |
SECTION 2.15. Indemnity |
60 |
SECTION 2.16. Pro Rata Treatment |
60 |
SECTION 2.17. Sharing of Payments by Lenders |
61 |
SECTION 2.18. Payments; Administrative Agents Clawback |
61 |
SECTION 2.19. Taxes |
63 |
SECTION 2.20. Mitigation Obligations; Replacement of Lenders |
66 |
SECTION 2.21. Letters of Credit |
67 |
SECTION 2.22. Defaulting Lender |
71 |
SECTION 2.23. Swingline Loans |
74 |
SECTION 2.24. Cash Collateral |
76 |
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ARTICLE III | |
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Representations and Warranties | |
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SECTION 3.01. Organization; Powers |
77 |
SECTION 3.02. Authorization |
77 |
SECTION 3.03. Enforceability |
77 |
SECTION 3.04. Governmental Approvals |
77 |
SECTION 3.05. Financial Statements |
78 |
SECTION 3.06. No Material Adverse Change |
78 |
SECTION 3.07. Title to Properties; Possession Under Leases |
78 |
SECTION 3.08. Subsidiaries |
79 |
SECTION 3.09. Litigation; Compliance with Laws |
79 |
SECTION 3.10. Agreements |
79 |
SECTION 3.11. Federal Reserve Regulations |
80 |
SECTION 3.12. Investment Company Act |
80 |
SECTION 3.13. Use of Proceeds |
80 |
SECTION 3.14. Tax Returns |
80 |
SECTION 3.15. No Material Misstatements |
80 |
SECTION 3.16. Employee Benefit Plans |
80 |
SECTION 3.17. Environmental Matters |
81 |
SECTION 3.18. Insurance |
81 |
SECTION 3.19. Security Documents |
81 |
SECTION 3.20. Location of Real Property and Leased Premises |
82 |
SECTION 3.21. Labor Matters |
82 |
SECTION 3.22. Solvency |
82 |
SECTION 3.23. Transaction Documents |
83 |
SECTION 3.24. Sanctioned Persons |
83 |
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ARTICLE IV | |
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Conditions of Lending | |
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SECTION 4.01. All Credit Events |
83 |
SECTION 4.02. First Credit Event |
84 |
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ARTICLE V | |
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Affirmative Covenants | |
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SECTION 5.01. Existence; Compliance with Laws; Businesses and Properties |
87 |
SECTION 5.02. Insurance |
87 |
SECTION 5.03. Obligations and Taxes |
88 |
SECTION 5.04. Financial Statements, Reports, etc |
88 |
SECTION 5.05. Litigation and Other Notices |
90 |
SECTION 5.06. Information Regarding Collateral |
91 |
SECTION 5.07. Maintaining Records; Access to Properties and Inspections; Maintenance of Ratings |
91 |
SECTION 5.08. Use of Proceeds |
92 |
SECTION 5.09. Employee Benefits |
92 |
SECTION 5.10. Compliance with Environmental Laws |
92 |
SECTION 5.11. Preparation of Environmental Reports |
92 |
SECTION 5.12. Further Assurances |
92 |
SECTION 5.13. Alabama Excess Cash Flow Distribution |
93 |
ARTICLE VI | |
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Negative Covenants | |
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SECTION 6.01. Indebtedness and Issuance of Disqualified Stock and Preferred Stock |
94 |
SECTION 6.02. Liens. |
101 |
SECTION 6.03. Asset Sales |
101 |
SECTION 6.04. Merger, Consolidation or Sale of All or Substantially All Assets |
103 |
SECTION 6.05. Restricted Payments |
106 |
SECTION 6.06. Transactions with Affiliates |
113 |
SECTION 6.07. Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries |
116 |
SECTION 6.08. Business of the Borrower and the Restricted Subsidiaries |
119 |
SECTION 6.09. Maximum Leverage Ratio |
119 |
SECTION 6.10. Fiscal Year |
119 |
SECTION 6.11. Designated Priority Obligations |
119 |
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ARTICLE VII | |
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Events of Default | |
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ARTICLE VIII | |
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Agency | |
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SECTION 8.01. Appointment and Authority |
122 |
SECTION 8.02. Rights as a Lender |
122 |
SECTION 8.03. Exculpatory Provisions |
123 |
SECTION 8.04. Reliance by Administrative Agent |
124 |
SECTION 8.05. Delegation of Duties |
124 |
SECTION 8.06. Resignation of Administrative Agent |
124 |
SECTION 8.07. Non-Reliance on Administrative Agent and Other Lenders |
125 |
SECTION 8.08. No Other Duties, Etc |
126 |
SECTION 8.09. Administrative Agent May File Proofs of Claim |
126 |
SECTION 8.10. Collateral and Guarantee Matters |
126 |
SECTION 8.11. Collateral Agreement |
127 |
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ARTICLE IX | |
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Miscellaneous | |
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SECTION 9.01. Notices; Effectiveness; Electronic Communication |
127 |
SECTION 9.02. Survival of Agreement |
131 |
SECTION 9.03. Successors and Assigns |
131 |
SECTION 9.04. Expenses; Indemnity; Damage Waiver |
137 |
SECTION 9.05. Right of Setoff |
139 |
SECTION 9.06. Governing Law; Jurisdiction; Etc |
140 |
SECTION 9.07. Waivers; Amendment |
141 |
SECTION 9.08. Interest Rate Limitation |
142 |
SECTION 9.09. WAIVER OF JURY TRIAL |
142 |
SECTION 9.10. Severability |
142 |
SECTION 9.11. Counterparts; Integration; Effectiveness; Electronic Execution |
143 |
SECTION 9.12. Headings |
143 |
SECTION 9.13. Treatment of Certain Information; Confidentiality |
143 |
SECTION 9.14. USA PATRIOT Act Notice |
144 |
SECTION 9.15. Lender Action |
144 |
SECTION 9.16. Application of Proceeds |
145 |
SECTION 9.17. Third Party Beneficiary |
145 |
SCHEDULES
Schedule 1.01(a) |
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Existing Letters of Credit |
Schedule 1.01(b) |
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Subsidiary Guarantors |
Schedule 2.01 |
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Lenders and Commitments |
Schedule 3.08(a) |
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Subsidiaries |
Schedule 3.08(b) |
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Unrestricted Subsidiaries |
Schedule 3.09 |
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Litigation |
Schedule 3.17 |
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Environmental Matters |
Schedule 3.18 |
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Insurance |
Schedule 3.19(a) |
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UCC Filing Offices |
Schedule 3.20(a) |
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Owned Real Property |
Schedule 3.20(b) |
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Leased Real Property |
Schedule 4.02(a) |
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Local Counsel |
Schedule 5.12 |
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Post-Closing Obligations |
Schedule 6.01 |
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Existing Indebtedness |
Schedule 6.02 |
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Existing Liens |
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EXHIBITS |
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Exhibit A |
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Form of Assignment and Assumption |
Exhibit B |
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Form of Borrowing Request |
Exhibit C |
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Form of Guarantee Agreement |
Exhibit D |
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Form of Collateral Agreement |
Exhibit E-1 |
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Form of Opinion of Jones Day |
Exhibit E-2 |
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Form of Local Counsel Opinion |
Exhibit F |
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Form of Junior Lien Intercreditor Agreement |
REVOLVING CREDIT AGREEMENT dated as of April 29, 2011 (this Agreement), among COMMUNITY CHOICE FINANCIAL INC., an Ohio corporation (the Borrower), the Lenders (as defined in Article I), and CREDIT SUISSE AG, as administrative agent (in such capacity, the Administrative Agent) for the Lenders.
The Borrower has requested the Lenders to extend credit in the form of Loans at any time and from time to time prior to the Maturity Date, in an aggregate principal amount at any time outstanding not in excess of $40,000,000. The Borrower has requested the Swingline Lender to extend credit, at any time and from time to time prior to the Maturity Date, in the form of Swingline Loans, in an aggregate principal amount at any time outstanding not in excess of $10,000,000, and the Issuing Bank to issue Letters of Credit, in an aggregate face amount at any time outstanding not in excess of $5,000,000, to support payment obligations incurred in the ordinary course of business by the Borrower and the Restricted Subsidiaries. The proceeds of the Loans are to be used solely (i) in an amount not to exceed $10,000,000, to consummate the Refinancing and (ii) otherwise, for general corporate purposes of the Borrower and the Subsidiaries.
The Lenders are willing to extend such credit to the Borrower, and the Issuing Bank is willing to issue Letters of Credit for the account of the Borrower, in each case on the terms and subject to the conditions set forth herein. Accordingly, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the following terms shall have the meanings specified below:
ABR, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.
Acquired Indebtedness shall mean, with respect to any specified Person, (i) Indebtedness of any other Person existing at the time such other Person is merged or amalgamated with or into or became a Restricted Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging or amalgamating with or into or becoming a Restricted Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.
Adjusted LIBO Rate shall mean, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum equal to the product of (a) the LIBO Rate in effect for such Interest Period and (b) Statutory Reserves.
Administrative Agent shall have the meaning assigned to such term in the introductory statement to this Agreement.
Administrative Agent Fees shall have the meaning assigned to such term in Section 2.05(b).
Administrative Questionnaire shall mean an Administrative Questionnaire in a form supplied by the Administrative Agent.
Affiliate of any specified Person shall mean any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, control (including, with correlative meanings, the terms controlling, controlled by and under common control with), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.
Aggregate Revolving Credit Exposure shall mean the aggregate amount of all of the Lenders Revolving Credit Exposures.
Agreement shall have the meaning assigned to such term in the introductory statement hereto.
Alabama Capital Expenditures shall mean, for any period, the cash capital expenditures of the Alabama Subsidiary determined in accordance with GAAP, but excluding any such expenditure (a) made to restore, replace or rebuild property to the condition of such property immediately prior to any damage, loss, destruction or condemnation of such property, to the extent such expenditure is made with, or subsequently reimbursed out of, insurance proceeds, indemnity payments, condemnation awards (or payments in lieu thereof) or damage recovery proceeds relating to any such damage, loss, destruction or condemnation, (b) constituting reinvestment by the Alabama Subsidiary during such period of the Net Proceeds of any Asset Sale consummated by the Alabama Subsidiary, (c) made by the Alabama Subsidiary to effect leasehold improvements to any property leased by the Alabama Subsidiary as lessee, to the extent that such expenses have been reimbursed by the landlord and (d) expenditures that are accounted for as capital expenditures by the Alabama Subsidiary and that actually are paid for (including by means of the issuance of Equity Interests by the Alabama Subsidiary) by a Person other than the Alabama Subsidiary and for which the Alabama Subsidiary has not provided and is not required to provide or incur, directly or indirectly, any consideration or obligation to such Person or any other Person (whether before, during or after such period).
Alabama Excess Cash Flow shall mean, for any period, (a) earnings before depreciation and amortization expenses of the Alabama Subsidiary for such period (excluding for this purpose all inter-company transactions), (b) less Alabama Capital
Expenditures for such period, (c) less any increase in Alabama Net Working Capital for such period or plus any decrease in Alabama Net Working Capital for such period.
Alabama Intercreditor Agreement shall mean the Intercreditor Agreement to be entered into as of the Closing Date among Republic Bank, the Collateral Agent and the Alabama Subsidiary.
Alabama Net Working Capital shall mean, at any date, (a) the consolidated current assets of the Alabama Subsidiary as of such date (excluding cash and Cash Equivalents) minus (b) the consolidated current liabilities of the Alabama Subsidiary as of such date (excluding current liabilities in respect of Indebtedness). Alabama Net Working Capital at any date may be a positive or negative number. Alabama Net Working Capital increases when it becomes more positive or less negative and decreases when it becomes less positive or more negative.
Alabama Revolving Credit Agreement shall mean the Amended and Restated Credit Agreement dated as of July 31, 2009, by and between the Alabama Subsidiary and Republic Bank, as the same has been amended as of December 31, 2009 and as amended and restated of the Closing Date, and as the same may be further amended, restated, replaced (whether upon or after termination or otherwise), refinanced, supplemented, modified or otherwise changed (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time.
Alabama Subsidiary shall mean Insight Capital, LLC.
Alternate Base Rate shall mean, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1% and (c) the Adjusted LIBO Rate applicable for an Interest Period of one month commencing on such day (or, if such day is not a Business Day, the immediately preceding Business Day) plus 1%; provided that, solely for purposes of the foregoing, the Adjusted LIBO Rate for any day shall be based on the rate set forth on such day at approximately 11:00 a.m. (London time) by reference to the British Bankers Association Interest Settlement Rates for deposits in dollars (as set forth by any service selected by the Administrative Agent that has been nominated by the British Bankers Association as an authorized vendor for the purpose of displaying such rates) . If the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Effective Rate or the Adjusted LIBO Rate, as the case may be, for any reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations or offers in accordance with the terms of the respective definitions thereof, the Alternate Base Rate shall be determined without regard to clause (b) or (c), as applicable, of the preceding sentence until the circumstances giving rise to such inability no longer exist. Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be effective as of the opening of business on the effective day of such change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, as the case may be.
Applicable Commitment Percentage shall mean with respect to any Lender, the percentage of the Total Commitment represented by such Lenders Commitment. If the Commitments have terminated or expired, the Applicable Commitment Percentages shall be determined based upon the Commitments most recently in effect, giving effect to any assignments.
Applicable Percentage shall mean, for any day (a) with respect to any Eurodollar Loan, 5.00% per annum, and (b) with respect to any ABR Loan, 4.00% per annum.
Approved Fund shall mean any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
Arranger shall mean Credit Suisse Securities (USA) LLC.
Asset Sale shall mean (a) the sale, conveyance, transfer or other disposition, whether in a single transaction or a series of related transactions, of property or assets (including by way of a Sale and Lease-Back Transaction) of the Borrower or any of the Restricted Subsidiaries (each referred to in this definition as a disposition) or (b) the issuance or sale of Equity Interests of any Restricted Subsidiary (other than non-voting Preferred Stock of Restricted Subsidiaries issued in compliance with Section 6.01), whether in a single transaction or a series of related transactions; in each case, other than: (i) any disposition of Cash Equivalents or obsolete or worn out property or equipment in the ordinary course of business or any disposition of inventory or goods (or other assets) held for sale or no longer used or useful in the ordinary course of business; (ii) the disposition of all or substantially all of the assets of the Borrower in a manner permitted pursuant to Section 6.04; (iii) the making of any Restricted Payment or Permitted Investment that is permitted to be made, and is made, under Section 6.05; (iv) any disposition of assets by the Borrower or a Restricted Subsidiary or issuance or sale of Equity Interests of any Restricted Subsidiary in any transaction or series of transactions with an aggregate fair market value of less than $15,000,000; (v) any disposition of property or assets or issuance of securities by a Restricted Subsidiary to the Borrower or by the Borrower or a Restricted Subsidiary to another Restricted Subsidiary; (vi) the lease, assignment, sub-lease, license or sub-license of any real or personal property in the ordinary course of business; (vii) any issuance, sale or pledge of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary; (viii) foreclosures, condemnation or any similar action on assets or the granting of Liens, in each case, not prohibited by this Agreement (ix) any financing transaction with respect to property constructed or acquired by the Borrower or any Restricted Subsidiary after the Closing Date, including Sale and Lease-Back Transactions and asset securitizations, within 12 months of such construction or acquisition and otherwise permitted by this Agreement; (x) any surrender or waiver of contractual rights or the settlement, release or surrender of contractual rights or other litigation claims in the ordinary course of business; (xi) the sale or discount of inventory, accounts or loans receivable or notes receivable in the ordinary course of business or the conversion of accounts or loans receivable to notes receivable; (xii) the licensing or sub-licensing of intellectual property or other general
intangibles in the ordinary course of business, other than the licensing of intellectual property on a long-term basis; (xiii) the unwinding of any Hedging Obligations; (xiv) sales, transfers and other dispositions of Investments in joint ventures to the extent required by, or made pursuant to, customary buy/sell arrangements between the joint venture parties set forth in joint venture arrangements and similar binding arrangements; (xv) the lapse or abandonment of intellectual property rights in the ordinary course of business, that, in the reasonable good faith determination of the Borrower, are not material to the conduct of the business of the Borrower and the Restricted Subsidiaries taken as a whole; and (xvi) the issuance of directors qualifying shares and shares issued to foreign nationals, in each case, as required by applicable law.
Asset Sale Offer shall have the meaning assigned to such term in the Senior Secured Notes Indenture.
Assignment and Assumption shall mean an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 9.03), and accepted by the Administrative Agent, in substantially the form of Exhibit A or any other form approved by the Administrative Agent.
Attributable Debt in respect of a Sale and Lease-Back Transaction shall mean, as at the time of determination, the present value (discounted at the interest rate equal to the rate of interest implicit in such transaction, determined in accordance with GAAP; provided that if such interest rate cannot be determined in accordance with GAAP, the present value shall be discounted at the interest rate borne by the Senior Secured Notes, compounded annually) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale and Lease-Back Transaction (including any period for which such lease has been extended); provided, however, that if such Sale and Lease-Back Transaction results in a Capitalized Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of Capitalized Lease Obligation.
Bank Obligations shall mean (a) the Loan Document Obligations and (b) the due and punctual payment and performance of all obligations of each Loan Party or an Affiliate of a Loan Party under each Hedging Agreement.
Bank Secured Parties shall mean (a) the Lenders, (b) the Administrative Agent, (c) the Issuing Bank, (d) each counterparty to any Hedging Agreement with a Loan Party or an Affiliate of a Loan Party, (e) the beneficiaries of each indemnification obligation undertaken by any Loan Party under any Loan Document and (f) the successors and permitted assigns of each of the foregoing.
Board shall mean the Board of Governors of the Federal Reserve System of the United States of America.
Borrower shall have the meaning assigned to such term in the introductory statement to this Agreement.
Borrowing shall mean (a) Loans of the same Type made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect, or (b) a Swingline Loan.
Borrowing Request shall mean a request by the Borrower in accordance with the terms of Section 2.03 and substantially in the form of Exhibit B, or such other form as shall be approved by the Administrative Agent.
Business Day shall mean any day other than a Saturday, Sunday or day on which banks in New York City are authorized or required by law to close; provided, however, that when used in connection with a Eurodollar Loan or an ABR Loan based on the LIBO Rate, the term Business Day shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.
Capital Stock shall mean (a) in the case of a corporation, corporate stock; (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; (c)in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and (d) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person; but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such securities include any right of participation with Capital Stock.
Capitalized Lease Obligation shall mean, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP.
Cash Collateralize shall mean, to deposit in a Controlled Account or to pledge and deposit with or deliver to the Administrative Agent, for the benefit of one or more of the Issuing Bank or Lenders, as collateral for L/C Obligations or obligations of Lenders to fund participations in respect of L/C Obligations, cash or deposit account balances or, if the Administrative Agent and the Issuing Bank shall agree in their sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to the Administrative Agent and the Issuing Bank. Cash Collateral and Cash Collateralizing shall have meanings correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.
Cash Equivalents shall mean
(i) United States dollars or Canadian dollars;
(ii) (A) euro, pounds sterling or any national currency of any participating member state of the EMU; or (B) in the case of any Foreign Subsidiary that is a Restricted Subsidiary, such local currencies held by such Restricted Subsidiary from time to time in the ordinary course of business;
(iii) securities issued or directly and fully and unconditionally guaranteed or insured by the U.S. government or any agency or instrumentality thereof the securities of which are unconditionally guaranteed as a full faith and credit obligation of such government with maturities of 12 months or less from the date of acquisition;
(iv) certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers acceptances with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank (any such instrument, a Qualifying Bank Instrument); provided that, with respect to any Qualifying Bank Instrument held by (x) the Borrower or any Domestic Subsidiary, the applicable commercial bank is a U.S. commercial bank having capital and surplus of not less than $500,000,000 and (y) any Foreign Subsidiary, the applicable commercial bank is a U.S. commercial bank having capital and surplus of not less than $500,000,000 or a non-U.S. commercial bank having capital and surplus of not less than $100,000,000 (or the U.S. dollar equivalent thereof as of the date of determination);
(v) repurchase obligations for underlying securities of the types described in clause (iii) or (iv) above entered into with any financial institution meeting the qualifications specified in clause (iv) above;
(vi) commercial paper rated at least P-1 by Moodys or at least A-1 by S&P and in each case maturing within 12 months after the date of creation thereof;
(vii) marketable short-term money market and similar securities having a rating of at least P-2 or A-2 from either Moodys or S&P, respectively (or, if at any time neither Moodys nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency) and in each case maturing within 12 months after the date of acquisition thereof;
(viii) investment funds investing 95% of their assets in securities of the types described in clauses (i) through (vii) above and (ix) through (xi) below; provided that Qualifying Bank Instruments with any non-U.S. commercial bank and any securities described under clause (xi) below, in each case, shall only be counted towards such 95% requirement to the extent that the holder of such investment fund is a Foreign Subsidiary;
(ix) Indebtedness or Preferred Stock issued by Persons (other than the Borrower or any Affiliate of the Borrower) with a rating of A or higher from S&P or A2 or higher from Moodys with maturities of 12 months or less from the date of acquisition;
(x) Investments with average maturities of 12 months or less from the date of acquisition in money market funds rated AAA- (or the equivalent thereof) or better by S&P or Aaa3 (or the equivalent thereof) or better by Moodys; and
(xi) in the case of any Foreign Subsidiary, readily marketable direct obligations issued by any foreign government or any political subdivision or public instrumentality thereof, in each case having an Investment Grade Rating from Moodys and S&P (or, if at any time either Moodys or S&P shall not be rating such obligations, an equivalent rating from another Rating Agency) maturing within 12 months of the date of acquisition thereof.
Notwithstanding the foregoing, Cash Equivalents shall include amounts denominated in currencies other than those set forth in clause (i) or (ii) above, provided that such amounts are converted into any currency described in either clause (i) or (ii) above as promptly as practicable and in any event within ten Business Days following the receipt of such amounts.
Change in Law shall mean the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, regulations or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines, regulations or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a Change in Law, regardless of the date enacted, adopted or issued.
A Change of Control shall mean the occurrence of any of the following: (i) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all of the assets of the Borrower and its Subsidiaries, taken as a whole, to any Person other than the Permitted Holders; or (ii) the Borrower becomes aware of (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than the Permitted Holders, in a single transaction or in a related series of transactions, by way of merger, amalgamation, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), directly or indirectly, of 50% or more of the total voting power of the Voting Stock of the Borrower or any Parent Entity.
Closing Date shall mean April 29, 2011.
Code shall mean the Internal Revenue Code of 1986, as amended from time to time.
Collateral shall mean all the assets and properties subject to the Liens created by the Security Documents.
Collateral Agent shall mean U.S. Bank National Association, in its capacity as collateral agent under the Security Documents, and any successor thereto.
Collateral Agreement shall mean the Collateral Agreement, substantially in the form of Exhibit D, among the Borrower, the Subsidiary Guarantors, the Administrative Agent, the Senior Secured Notes Trustee and the Collateral Agent, creating security interests in the Collateral in favor of the Collateral Agent for the benefit of the Secured Parties.
Commitment shall mean, with respect to each Lender, the commitment of such Lender to make Loans hereunder (and to acquire participations in Letters of Credit and Swingline Loans as provided for herein) as set forth on Schedule 2.01, or in the Assignment and Assumption pursuant to which such Lender assumed its Commitment, as applicable, as the same may be (a) reduced from time to time pursuant to Section 2.09 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.03. Unless the context clearly indicates otherwise, the term Commitments shall include the Swingline Commitment.
Commitment Fee shall have the meaning assigned to such term in Section 2.05(a).
Consolidated Depreciation and Amortization Expense shall mean with respect to any Person for any period, the total amount of depreciation and amortization expense, including the amortization of deferred financing fees or costs, of such Person and the Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.
Consolidated Interest Expense shall mean, , with respect to any Person for any period, without duplication, the sum of:
(i) consolidated interest expense of such Person and the Restricted Subsidiaries for such period, to the extent such expense was deducted in computing Net Income (including (a) accrual of original issue discount that resulted from the issuance of Indebtedness at less than par, (b) all commissions, discounts and other fees and charges owed with respect to letters of credit or bankers acceptances, (c) non-cash interest expense (but excluding any non-cash interest expense attributable to the movement in the mark-to-market valuation of Hedging Obligations or other derivative instruments pursuant to GAAP), (d) the interest component of Capitalized Lease Obligations, and (e) net payments, if any, pursuant to interest rate Hedging Obligations with respect to Indebtedness, and excluding (v) accretion or accrual of discounts with respect to liabilities not constituting Indebtedness, (w) any expense resulting from the discounting of
Indebtedness in connection with the application of recapitalization or purchase accounting, (x) amortization of deferred financing fees, debt issuance costs, commissions, fees and expenses and (y) any expensing of bridge, commitment and other financing fees); plus
(ii) consolidated capitalized interest of such Person and the Restricted Subsidiaries for such period, whether paid or accrued; less
(iii) interest income for such period.
For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by such Person to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.
Consolidated Net Income shall mean, with respect to any Person for any period, the aggregate of the Net Income attributable to such Person and its Restricted Subsidiaries for such period, on a consolidated basis, and otherwise determined in accordance with GAAP; provided, however, that, without duplication,
(i) any after-tax effect of extraordinary, non-recurring or unusual gains, losses or charges (including all fees and expenses relating to any such gains, losses or charges) or expenses (including any fees or expenses paid in connection with the Transactions), severance, relocation costs and curtailments or modifications to pension and post-retirement employee benefit plans shall be excluded,
(ii) the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period,
(iii) any after-tax effect of income (loss) from discontinued operations and any net after-tax gains or losses on disposal of abandoned or discontinued operations shall be excluded,
(iv) any after-tax effect of gains or losses (less all fees and expenses relating thereto) attributable to asset dispositions other than in the ordinary course of business shall be excluded,
(v) the Net Income for such period of any Person that is not a Subsidiary, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting, shall be excluded; provided that Net Income shall be increased by the amount of dividends or distributions or other payments that are actually paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period,
(vi) solely for the purpose of determining the amount available for Restricted Payments under clause (3)(a) of the first paragraph of Section 6.05, the Net Income for such period of any Restricted Subsidiary (other than any Subsidiary Guarantor) shall be excluded to the extent the declaration or payment
of dividends or similar distributions by that Restricted Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, is otherwise restricted by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless all such restrictions with respect to the payment of dividends or similar distributions have been legally waived; provided that Net Income will be increased by the amount of dividends or other distributions or other payments actually paid in cash (or to the extent converted into cash) or Cash Equivalents to the referent Person or a Restricted Subsidiary thereof in respect of such period,
(vii) effects of adjustments (including the effects of such adjustments pushed down to such Person and its Restricted Subsidiaries) in the inventory, property and equipment, software and other intangible assets, deferred revenue and debt line items in such Persons consolidated financial statements pursuant to GAAP resulting from the application of purchase accounting in relation to the Transactions or any consummated acquisition or the amortization or write-off of any amounts thereof, net of taxes, shall be excluded,
(viii) any after-tax effect of income (loss) from the early extinguishment of Indebtedness or Hedging Obligations or other derivative instruments (including deferred financing costs written off and premiums paid) shall be excluded,
(ix) any impairment charge, asset write-off or write-down, including impairment charges or asset write-offs or write-downs related to intangible assets, long-lived assets, investments in debt and equity securities, the amortization of intangibles, and the effects of adjustments to accruals and reserves during a prior period relating to any change in the methodology of calculating reserves for returns, rebates and other chargebacks (including government program rebates), in each case, pursuant to GAAP (excluding any non-cash item to the extent it represents an accrual or reserve for cash expenditures in any future period except to the extent such item is subsequently reversed) shall be excluded,
(x) any (A) non-cash compensation expense recorded from grants of stock appreciation or similar rights, stock options, restricted stock or other rights, (B) income (loss) attributable to deferred compensation plans or trusts and (C) compensation expense recorded in connection with the payment of the Special Options Distribution, in each case, shall be excluded,
(xi) any expense relating to management, monitoring, consulting and advisory fees and related expenses paid in such period to the Investors to the extent such fees and expenses are permitted to be paid under Section 6.06 and to the extent deducted in computing Net Income shall be excluded,
(xii) any net gain or loss resulting in such period from currency transaction or translation gains or losses related to currency remeasurements
(including any net loss or gain resulting from hedge agreements for currency exchange risk) shall be excluded, and
(xiii) any amortization of deferred financing fees or financial advisory costs incurred on or prior to the Closing Date, or in connection with the Transactions, shall be excluded.
Notwithstanding the foregoing, for the purposes Section 6.05 only (other than clause (3)(d) of the first paragraph thereof), there shall be excluded from Consolidated Net Income any income arising from any sale or other disposition of Restricted Investments made by the Borrower and the Restricted Subsidiaries, any repurchases and redemptions of Restricted Investments from the Borrower and the Restricted Subsidiaries, any repayments of loans and advances that constitute Restricted Investments by the Borrower or any of the Restricted Subsidiaries or any sale of the stock of an Unrestricted Subsidiary, in each case only to the extent such amounts increase the amount of Restricted Payments permitted under Section 6.05 pursuant to clause (3)(d) of the first paragraph thereof.
Consolidated Secured Debt Ratio as of any date of determination shall mean the ratio of (1) Consolidated Total Indebtedness of the Borrower and the Restricted Subsidiaries that is secured by Liens as of the end of the most recent fiscal quarter for which internal financial statements are available immediately preceding the date on which such event for which such calculation is being made shall occur to (2) the Borrowers EBITDA for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such event for which such calculation is being made shall occur, in each case with such pro forma adjustments to Consolidated Total Indebtedness and EBITDA as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of Fixed Charge Coverage Ratio.
Consolidated Total Indebtedness shall mean, as at any date of determination, an amount equal to (a) the sum of (i) the aggregate amount of all outstanding Indebtedness of the Borrower and the Restricted Subsidiaries on a consolidated basis consisting of Indebtedness for borrowed money, Obligations in respect of Capitalized Lease Obligations and debt obligations evidenced by promissory notes and similar instruments (for the avoidance of doubt, excluding any (A) Hedging Obligations and (B) performance bonds or any similar instruments) and (ii) the aggregate amount of all outstanding Disqualified Stock of the Borrower and all Preferred Stock of the Restricted Subsidiaries on a consolidated basis, with the amount of such Disqualified Stock and Preferred Stock equal to the greater of their respective voluntary or involuntary liquidation preferences and maximum fixed repurchase prices, in each case determined on a consolidated basis in accordance with GAAP, less (b) any Excess Cash. For purposes hereof, the maximum fixed repurchase price of any Disqualified Stock or Preferred Stock that does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Stock or Preferred Stock as if such Disqualified Stock or Preferred Stock were purchased on any date on which Consolidated Total Indebtedness shall be required to be determined pursuant to this Agreement, and if
such price is based upon, or measured by, the fair market value of such Disqualified Stock or Preferred Stock, such fair market value shall be determined reasonably and in good faith by the board of directors of the Borrower.
Contingent Obligations shall mean, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (primary obligations) of any other Person (the primary obligor) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (A) for the purchase or payment of any such primary obligation, or (B) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, or (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.
Controlled Account shall mean each deposit account and securities account that is subject to an account control agreement in form and substance satisfactory to the Administrative Agent and the Issuing Bank.
Credit Event shall have the meaning assigned to such term in Section 4.01.
Credit Facilities shall mean the revolving credit, swingline and letter of credit facilities provided for by this Agreement.
Debtor Relief Laws shall mean the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect.
Default shall mean any event or condition which upon notice, lapse of time or both would constitute an Event of Default.
Defaulting Lender shall mean, subject to Section 2.22(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of one or more conditions precedent to funding set forth in Article IV (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) not having been satisfied, or (ii) pay to the Administrative Agent, the Issuing Bank, the Swingline Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or Swingline Loans) within two Business Days of the date when due, (b) has notified the Borrower, the Administrative Agent or the Issuing Bank or Swingline Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement
to that effect (unless such writing or public statement relates to such Lenders obligation to fund a Loan hereunder and states that such position is based on a condition precedent to funding set forth in Article IV (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) which cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent that has, (i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or Federal regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.22(b)) upon delivery of written notice of such determination to the Borrower, the Issuing Bank, the Swingline Lender and each Lender.
Designated Non-cash Consideration shall mean the fair market value of non-cash consideration received by the Borrower or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officers Certificate, setting forth the basis of such valuation, executed by the principal financial officer of the Borrower, less the amount of cash or Cash Equivalents received in connection with a subsequent sale of or collection on such Designated Non-cash Consideration.
Designated Preferred Stock shall mean Preferred Stock of the Borrower or any Parent Entity (in each case other than Disqualified Stock) that is issued for cash (other than to a Restricted Subsidiary or an employee stock ownership plan or trust established by the Borrower or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an certificate executed by a Financial Officer of the Borrower or the applicable Parent Entity, as the case may be, on the issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in clause (3) of the first paragraph of Section 6.05.
Designated Priority Obligations shall have the meaning assigned to such term in the Collateral Agreement.
Disqualified Stock shall mean, with respect to any Person, any Capital Stock of such Person that, by its terms, or by the terms of any security into which it is convertible or for which it is putable or exchangeable, or upon the happening of any event, matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise (other than solely as a result of a change of control or asset sale), is convertible or exchangeable for Indebtedness or Disqualified Stock or is redeemable at the option of the holder thereof (other than solely as a result of a change of control or asset sale), in whole or in part, in each case prior to the date that is 91 days after the earlier of the Maturity Date and the date the Commitments are no longer outstanding; provided, however, that if such Capital Stock is issued to any plan for the benefit of employees of the Borrower or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Borrower or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations.
dollars or $ shall mean lawful money of the United States of America.
Domestic Subsidiaries shall mean all Subsidiaries incorporated or organized under the laws of the United States of America, any State thereof or the District of Columbia.
EBITDA shall mean, with respect to any Person for any period, the Consolidated Net Income of such Person for such period,
(i) increased (without duplication) by:
(A) provision for taxes based on income or profits or capital, including, without limitation, state, franchise and similar taxes and foreign withholding taxes of such Person paid or accrued during such period deducted in computing Net Income and not added back in computing Consolidated Net Income; plus
(B) Fixed Charges of such Person for such period, together with items excluded from the definition of Consolidated Interest Expense pursuant to clauses (i)(w) through (i)(y) thereof, to the extent the same were deducted in computing Net Income and not added back in calculating Consolidated Net Income; plus
(C) Consolidated Depreciation and Amortization Expense of such Person for such period to the extent the same was deducted in computing Net Income and not added back in computing Consolidated Net Income; plus
(D) the aggregate amount of fees, expenses or charges related to any acquisition, Investment, disposition, issuance, repayment or refinancing of Indebtedness (including, for the avoidance of doubt, the Transactions) or amendment or modification of any debt instrument or issuance of Equity Interests (in each case, to the extent such transaction is
permitted by this Agreement and including any such transaction consummated prior to the Closing Date and any such transaction undertaken but not completed) and any bonus payments made as a result of the successful consummation of the Transactions (to the extent the aggregate amount of such bonus payments does not exceed the amount of such bonus payments described in the Senior Secured Notes Offering Circular), in each case, deducted in computing Net Income and not added back in computing Consolidated Net Income; plus
(E) the amount of (x) any restructuring charge or reserve or non-recurring integration costs deducted in computing Net Income and not added back in computing Consolidated Net Income, including any one-time costs incurred in connection with acquisitions after the Closing Date and (y) any costs or expenses relating to the closure and/or consolidation of facilities, including store closings; plus
(F) any other non-cash charges, including any write offs or write downs, deducted in computing Net Income and not added back in computing Consolidated Net Income (excluding any non-cash item to the extent it represents an accrual or reserve for cash expenditures in any future period except to the extent such item is subsequently reversed, and excluding amortization of any prepaid cash item that was paid in a prior period); plus
(G) the amount of any non-controlling interest expense consisting of Subsidiary income attributable to minority equity interests of third parties in any non-Wholly-Owned Subsidiary of the Borrower deducted in computing net income and not added back in computing Consolidated Net Income, excluding cash distributions made or declared in respect of any such minority equity interests of third parties; plus
(H) the amount of net cost savings resulting from specified actions that have been taken, which net cost savings are projected by the Borrower in good faith to be realized within 12 months following the date of determination (calculated on a pro forma basis as though such net cost savings had been realized on the first day of such period), with such amount of net cost savings being reduced by the amount of net cost savings actually realized during such period from any such specified actions that have already been taken; provided that (w) such projected net cost savings shall be set forth in an Officers Certificate delivered to the Administrative Agent that certifies that such projected net cost savings meet the criteria of this clause (h), (x) such net cost savings are reasonably identifiable and factually supportable, (y) no net cost savings shall be added pursuant to this clause (h) to the extent they are duplicative of any expenses or charges relating to such net cost savings that are added pursuant to clause (e) above and (z) the aggregate amount of net cost savings added pursuant to this clause (h) shall not exceed 10.0% of
EBITDA (calculated absent any such net cost savings) for any four consecutive fiscal quarter period; provided further that the additions made pursuant to this clause (h) may be incremental to (but not duplicative of) pro forma adjustments made pursuant to the second paragraph of the definition of Fixed Charge Coverage Ratio; plus
(I) any costs or expense incurred by such Person or a Restricted Subsidiary of such Person pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of such Person or net cash proceeds of an issuance of Equity Interests of such Person (other than Disqualified Stock and Designated Preferred Stock) solely to the extent that such net cash proceeds are excluded from the calculation set forth in clause (3) of the first paragraph of Section 6.05; plus
(J) the amount of expenses relating to payments made to option holders of the Borrower or any Parent Entity in connection with, or as a result of, any distribution being made to shareholders of such Person or its Parent Entity, which payments are being made to compensate such option holders as though they were shareholders at the time of, and entitled to share in, such distribution, but only to the extent such distributions to shareholders are permitted under this Agreement; plus
(K) proceeds from business interruption insurance (to the extent such proceeds are not reflected as revenue or income in computing Consolidated Net Income and only to the extent the losses or other reduction of net income to which such proceeds are attributable are not otherwise added back in computing Consolidated Net Income or EBITDA); plus
(L) any net loss resulting in such period from Hedging Obligations and the application of Statement of Financial Accounting Standards No. 133; and
(ii) decreased by (without duplication) (A) non-cash gains increasing Consolidated Net Income of such Person for such period, excluding any non-cash gains to the extent they represent the reversal of an accrual or reserve for a potential cash item that reduced EBITDA in any prior period; provided that, to the extent non-cash gains are deducted pursuant to this clause (A) for any previous period and not otherwise added back to EBITDA, EBITDA shall be increased by the amount of any cash receipts (or any netting arrangements resulting in reduced cash expenses) in respect of such non-cash gains received in subsequent periods to the extent not already included therein and (B) any net gains resulting in such period from Hedging Obligations and the application of Statement of Financial Accounting Standards No. 133.
Eligible Assignee shall mean any Person that meets the requirements to be an assignee under Section 9.03(b)(iii), (v) and (vi) (subject to such consents, if any, as may be required under Section 9.03(b)(iii)).
EMU shall mean the economic and monetary union as contemplated by the Treaty on European Union.
Engagement Letter shall mean the Engagement Letter dated as of April 6, 2011, among Checksmart Financial Company, Checksmart Financial Holdings Corp. and the Arranger.
Environmental Laws shall mean all former, current and future Federal, state, local and foreign laws (including common law), treaties, regulations, rules, ordinances, codes, decrees, judgments, directives, orders (including consent orders) and agreements, in each case relating to protection of the environment, natural resources, human health and safety or the presence, Release of, or exposure to, Hazardous Materials, or the generation, manufacture, processing, distribution, use, treatment, storage, transport, recycling or handling of, or the arrangement for such activities with respect to, Hazardous Materials.
Environmental Liability shall mean all liabilities, obligations, damages, losses, claims, actions, suits, judgments, orders, fines, penalties, fees, expenses and costs (including administrative oversight costs, natural resource damages, trust fund reimbursements and remediation costs), whether contingent or otherwise, arising out of or relating to (a) compliance or non-compliance with any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials or (d) the Release of any Hazardous Materials.
Equity Interests shall mean Capital Stock and all warrants, options or other rights to acquire Capital Stock, but excluding any debt security that is convertible into, or exchangeable for, Capital Stock.
ERISA shall mean the Employee Retirement Income Security Act of 1974 and the regulations promulgated thereunder, as amended from time to time.
ERISA Affiliate shall mean any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code, or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.
ERISA Event shall mean (a) any reportable event, as defined in Section 4043 of ERISA, with respect to a Plan (other than an event for which the 30-day notice period is waived), (b) any failure by any Plan to satisfy the minimum funding standard (within the meaning of Section 412 of the Code or Section 302 of ERISA) applicable to such Plan, whether or not waived, (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan, (d) a determination that any Plan is, or is expected to be, in at-
risk status (as defined in Section 303(i)(4) of ERISA or Section 430(i)(4) of the Code), (e) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan or the withdrawal or partial withdrawal of the Borrower or any of its ERISA Affiliates from any Plan or Multiemployer Plan, (f) the receipt by the Borrower or any of its ERISA Affiliates from the PBGC or a plan administrator of any notice relating to the intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan, (g) the receipt by the Borrower or any of its ERISA Affiliates of any notice, or the receipt by any Multiemployer Plan from the Borrower or any of its ERISA Affiliates of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA or, on and after the effectiveness of the applicable provisions of the Pension Act, in endangered or critical status, within the meaning of Section 305 of ERISA, (h) the occurrence of a prohibited transaction with respect to which the Borrower or any of the Subsidiaries is a disqualified person (within the meaning of Section 4975 of the Code) or with respect to which the Borrower or any such Subsidiary could otherwise be liable or (i) any other event or condition with respect to a Plan or Multiemployer Plan that could result in liability of the Borrower or any Subsidiary.
euro shall mean the single currency of participating member states of the EMU.
Eurodollar, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.
Event of Default shall have the meaning assigned to such term in Article VII.
Excess Cash shall mean, as at any date of determination, an amount equal to (a) the cash and Cash Equivalents of the Borrower and the Restricted Subsidiaries as of such date (but excluding any cash or Cash Equivalents that are (or would be) the proceeds of Secured Indebtedness for which the amount of Excess Cash is being calculated), less (b) the sum of the aggregate amount of Store Cash and Excluded Cash of the Borrower and the Restricted Subsidiaries as of such date; provided that, the calculation of each such amount as of any relevant date of determination shall be set forth in an Officers Certificate delivered to the Administrative Agent in which the relevant Officer shall also certify that the Borrower and the Subsidiary Guarantors are in compliance with the requirements set forth in the Collateral Agreement regarding cash, including that the Borrower and the Subsidiary Guarantors have taken and are taking commercially reasonable efforts to cause the Collateral Agent (or, in the case of cash and Cash Equivalents of the Alabama Subsidiary, the Collateral Agents bailee pursuant to the Alabama Intercreditor Agreement) to have control (as defined in the Uniform Commercial Code) over at least 90% of the cash and Cash Equivalents of the Borrower and the Subsidiaries (other than Excluded Cash and Store Cash of the Borrower and the Subsidiaries).
Exchange Act shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.
Excluded Cash shall have the meaning set forth in the Collateral Agreement.
Excluded Contribution shall mean net cash proceeds, marketable securities or Qualified Proceeds received by the Borrower from (i) contributions to its common equity capital and (ii) the sale (other than to a Subsidiary of the Borrower or to any management equity plan or stock option plan or any other management or employee benefit plan or agreement of the Borrower or any of its Subsidiaries) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of the Borrower, in each case designated as Excluded Contributions pursuant to a certificate executed by a principal Financial Officer of the Borrower on the date such capital contributions are made or the date such Equity Interests are sold, as the case may be, which are excluded from the calculation set forth in clause (3) of the first paragraph of Section 6.05.
Excluded Taxes shall mean, with respect to any payment made hereunder by or on account of any obligation of the Borrower or any other Loan Party to the Administrative Agent, any Lender, the Issuing Bank or any other recipient, (a) income or franchise Taxes imposed on (or measured by) its net income (however denominated) by the United States of America, or by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits Taxes imposed by the United States of America or any similar Tax imposed by any other jurisdiction described in clause (a) above, (c) any withholding Taxes attributable to such recipients failure to comply with documentation requirements of Section 2.19(e), and (d) except in the case of an assignee pursuant to a request by the Borrower under Section 2.20(a)), any withholding Tax (including withholding Tax imposed under FATCA) that is imposed on amounts payable to such recipient at the time such recipient becomes a party to this Agreement (or designates a new lending office), except to the extent that such recipient (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding Tax pursuant to Section 2.19(a).
Existing Credit Agreements shall mean each of (a) the Credit Agreement among CheckSmart Financial Company, Checksmart Financial Holdings Corp., RBS Securities Corporation and Bear Stearns Corporate Lending Inc., dated as of May 1, 2006, (b) the First Lien Credit Agreement among California Check Cashing Stores, LLC, CCCS Holdings, LLC, UBS Securities LLC, UBS AG, Stamford Branch and Union Bank of California, N.A., dated September 29, 2006, and (c) the Second Lien Credit Agreement among California Check Cashing Stores, LLC, CCCS Holdings, LLC, UBS Securities LLC, UBS AG, Stamford Branch and Union Bank of California, N.A., dated September 29, 2006, in the case of each of the foregoing, as the same has been amended, restated, amended and restated, supplemented and otherwise modified prior to the Closing Date.
Existing Letter of Credit shall mean each Letter of Credit previously issued for the account of the Borrower or a Subsidiary that (a) is outstanding on the Closing Date and (b) is listed on Schedule 1.01(a).
fair market value shall mean, with respect to any asset or liability, the fair market value of such asset or liability as determined by the Borrower in good faith.
FATCA shall mean Sections 1471 through 1474 of the Code, as of the date of this Agreement, and any regulations or official interpretations thereof.
Federal Funds Effective Rate shall mean, for any day, the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for the day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.
Fees shall mean the Commitment Fees, the Administrative Agent Fees, the L/C Participation Fees and the Issuing Bank Fees.
Financial Officer of any Person shall mean the chief financial officer, principal accounting officer, treasurer or controller of such Person.
First Lien Priority shall mean, as to any Indebtedness or other Obligations secured by a Lien, relative to the Secured Obligations, having equal, first-lien priority on the Collateral and the representative for the holders of which has become a party to the Collateral Agreement.
Fixed Charge Coverage Ratio shall mean with respect to any Person for any period, the ratio of EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that the Borrower or any Restricted Subsidiary incurs, assumes, guarantees, redeems, retires or extinguishes any Indebtedness (other than any Indebtedness incurred under any revolving credit facility unless such Indebtedness has been permanently repaid during the applicable period (with a corresponding reduction in commitments) and not replaced prior to the end of such period) or issues, redeems or repurchases Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to or simultaneously with the event for which the calculation of the Fixed Charge Coverage Ratio is made (the Fixed Charge Coverage Ratio Calculation Date), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee, redemption, retirement or extinguishment of Indebtedness, or such issuance, redemption or repurchase of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period.
For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations, consolidations and discontinued operations (as
determined in accordance with GAAP) that have been made by the Borrower or any of the Restricted Subsidiaries during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Fixed Charge Coverage Ratio Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, consolidations and discontinued operations (and the change in any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged or amalgamated with or into the Borrower or any of the Restricted Subsidiaries since the beginning of such period shall have made any Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, amalgamation, consolidation or discontinued operation had occurred at the beginning of the applicable four-quarter period.
For purposes of this definition, whenever pro forma effect is to be given to a transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Borrower and shall be made in accordance with Article 11 of Regulation S-X. In addition to pro forma adjustments made in accordance with Article 11 of Regulation S-X, pro forma calculations may also include net operating expense reductions for such period resulting from any Asset Sale or other disposition or acquisition, Investment, merger, amalgamation, consolidation or discontinued operation (as determined in accordance with GAAP) for which pro forma effect is being given that (A) have been realized or (B) are reasonably expected to be realizable within twelve months of the date of such transaction; provided that (w) any pro forma adjustments made pursuant to this sentence shall be set forth in an Officers Certificate delivered to the Administrative Agent that certifies that such net operating expense reductions meet the criteria set forth in this paragraph, (x) such net operating expense reductions are reasonably identifiable and factually supportable, (y) no net operating expense reductions shall be given pro forma effect to the extent duplicative of any expenses or charges that are added back pursuant to the definition of EBITDA and (z) net operating expense reductions given pro forma effect shall not include any operating expense reductions related to the combination of any Unrestricted Subsidiary that is converted into a Restricted Subsidiary or combined with the operations of the Borrower or any Restricted Subsidiary. Such pro forma adjustments may be incremental to (but not duplicative of) additions made to EBITDA pursuant to clause (H) of the definition thereof. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Fixed Charge Coverage Ratio Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Borrower to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility being given pro forma effect to shall be
computed based upon the average daily balance of such Indebtedness during the applicable period (but excluding any such Indebtedness that has been permanently repaid during the applicable period (with a corresponding reduction in commitments) and not replaced prior to the end of such period). Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designate.
Fixed Charges shall mean, with respect to any Person for any period, without duplication, the sum of:
(i) Consolidated Interest Expense of such Person for such period;
(ii) all cash dividends or other distributions (excluding items eliminated in consolidation) (i) on any series of Preferred Stock and (ii) to finance dividends or distributions paid on any series of Designated Preferred Stock of any Parent Entity, in each case, paid during such period; and
(iii) all cash dividends or other distributions paid (excluding items eliminated in consolidation) on any series of Disqualified Stock during such period.
Foreign Lender shall mean any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes. For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.
Foreign Subsidiary shall mean, with respect to any Person, any Restricted Subsidiary of such Person that is not organized or existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof and any Restricted Subsidiary of such Foreign Subsidiary.
Fronting Exposure shall mean, at any time there is a Defaulting Lender, (a) with respect to the Issuing Bank, such Defaulting Lenders Applicable Commitment Percentage of the outstanding L/C Obligations with respect to Letters of Credit issued by the Issuing Bank other than L/C Obligations as to which such Defaulting Lenders participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof, and (b) with respect to the Swingline Lender, such Defaulting Lenders Applicable Commitment Percentage of outstanding Swingline Loans made by the Swingline Lender other than Swingline Loans as to which such Defaulting Lenders participation obligation has been reallocated to other Lenders.
Fund shall mean any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.
GAAP shall mean generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, that are in effect on the Closing Date, it being understood that, for purposes of this Agreement, all references to codified accounting standards specifically named herein shall be deemed to include any successor, replacement, amended or updated accounting standard under GAAP. At any time after the Closing Date, the Borrower may elect, for all purposes hereof, to apply IFRS accounting principles in lieu of GAAP and, upon any such election, references herein to GAAP shall thereafter be construed to mean IFRS as in effect on the date of such election; provided that (i) any such election, once made, shall be irrevocable (and shall only be made once), (ii) all financial statements and reports required to be provided after such election shall be prepared on the basis of IFRS, (iii) from and after such election, all ratios, computations and other determinations based on GAAP shall be computed in conformity with IFRS with retroactive effect being given thereto assuming that such election had been made on the Closing Date, (iv) such election shall not have the effect of rendering invalid any payment or Investment made prior to the date of such election pursuant to Section 6.05 or any incurrence of Indebtedness incurred prior to the date of such election pursuant to Section 6.01 (or any other action conditioned on the Borrower and the Restricted Subsidiaries having been able to incur $1.00 of additional Indebtedness) if such payment, Investment, incurrence or other action was valid hereunder on the date made, incurred or taken, as the case may be, (v) all accounting terms and references herein to accounting standards shall be deemed to be references to the most comparable terms or standards under IFRS and (vi) in no event, regardless of the principles of IFRS in effect on the date of such election, shall any liabilities attributable to an operating lease be treated as Indebtedness nor shall any expenses attributable to payments made under an operating lease be treated, in whole or in part, as interest expense; provided that such payments under an operating lease shall be treated as an operating expense in computing Consolidated Net Income. The Borrower shall give notice of any such election made in accordance with this definition to the Administrative Agent and the Lenders promptly after having made such election (and in any event, within 15 days thereof). For the avoidance of doubt, solely making an election (without any other action) referred to in this definition will not be treated as an incurrence of Indebtedness.
Governmental Authority shall mean any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization (including the National Association of Insurance Commissioners).
Granting Lender shall have the meaning assigned to such term in Section 9.03(h).
guarantee of or by any Person shall mean a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations.
Guarantee shall mean the guarantee by any Subsidiary Guarantor of the Borrowers Bank Obligations.
Guarantee Agreement shall mean the Guarantee Agreement, substantially in the form of Exhibit C, among the Borrower, the Subsidiaries party thereto and the Administrative Agent.
Hazardous Materials shall mean (a) any petroleum products, byproducts additives or fractions and all other hydrocarbons, coal ash, radon gas, asbestos or asbestos-containing material, urea formaldehyde foam insulation, polychlorinated biphenyls, chlorofluorocarbons and all other ozone-depleting substances and (b) any chemical, material, substance or waste that is prohibited, limited or regulated by or pursuant to any Environmental Law.
Hedging Agreement shall mean any agreement governing Hedging Obligation of a Loan Party or an Affiliate of a Loan Party that (i) is in effect on the Closing Date with a counterparty that is a Lender, an Affiliate of a Lender, the Administrative Agent or an Affiliate of the Administrative Agent as of the Closing Date or (ii) is entered into after the Closing Date with any counterparty that is a Lender, an Affiliate of a Lender, the Administrative Agent or an Affiliate of the Administrative Agent at the time such Hedging Agreement is entered into.
Hedging Obligations shall mean, with respect to any Person, the obligations of such Person under any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, commodity swap agreement, commodity cap agreement, commodity collar agreement, foreign exchange contract, currency swap agreement or similar agreement providing for the transfer or mitigation of interest rate, currency or commodity risks either generally or under specific contingencies.
Indebtedness shall mean, with respect to any Person, without duplication:
(i) any indebtedness (including principal and premium) of such Person, whether or not contingent:
(A) in respect of borrowed money;
(B) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers acceptances (or, without duplication, reimbursement agreements in respect thereof);
(C) representing the balance deferred and unpaid of the purchase price of any property (including Capitalized Lease Obligations), except (i) any such balance that constitutes a trade payable or similar obligation
to a trade creditor, in each case accrued in the ordinary course of business and (ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP; or
(D) representing any Hedging Obligations;
if and to the extent that any of the foregoing Indebtedness in any of clauses (A) through (D) (other than letters of credit and Hedging Obligations) would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP; provided that, Indebtedness of any Parent Entity that is non-recourse to the Borrower and all of its Restricted Subsidiaries but that appears on the consolidated balance sheet of the Borrower solely by reason of push-down accounting under GAAP shall be excluded;
(ii) all Attributable Debt in respect of Sale and Lease-Back Transactions entered into by such Person;
(iii) to the extent not otherwise included, any obligation by such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the obligations of the type referred to in clause (i) of a third Person (whether or not such items would appear upon the balance sheet of such obligor or guarantor), other than by endorsement of negotiable instruments for collection in the ordinary course of business; and
(iv) to the extent not otherwise included, the obligations of the type referred to in clause (i) or (ii) of a third Person secured by a Lien on any asset owned by such first Person, whether or not such Indebtedness is assumed by such first Person;
provided, however, that notwithstanding the foregoing, Indebtedness shall be deemed not to include Contingent Obligations incurred in the ordinary course of business. For the avoidance of doubt, in no event shall any liabilities attributable to an operating lease be treated as Indebtedness, so long as the associated payments under such operating lease are accounted for as an operating expense in computing Consolidated Net Income.
Indemnified Taxes shall mean Taxes other than Excluded Taxes.
Independent Financial Advisor shall mean an accounting, appraisal, investment banking firm or consultant to Persons engaged in Similar Businesses of nationally recognized standing that is, in the good faith judgment of the Borrower, qualified to perform the task for which it has been engaged and that is not an Affiliate of the Borrower.
Initial Unrestricted Subsidiary shall mean Latin Card Strategy, LLC, a Delaware limited liability company.
Interest Payment Date shall mean (a) with respect to any ABR Loan (including any Swingline Loan), the last Business Day of each March, June, September and
December, and (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months duration, each day that would have been an Interest Payment Date had successive Interest Periods of three months duration been applicable to such Borrowing.
Interest Period shall mean, with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day (or, if there is no numerically corresponding day, on the last day) in the calendar month that is 1, 2, 3 or 6 months thereafter, as the Borrower may elect; provided, however, that if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day. Interest shall accrue from and including the first day of an Interest Period to but excluding the last day of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.
Investments shall mean, with respect to any Person, all investments, direct or indirect, by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts or loans receivable, trade credit, advances to customers, and commission, travel and similar advances to officers and employees, in each case made or arising in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet (excluding the footnotes) of the Borrower in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. For purposes of the definition of Unrestricted Subsidiary and Section 6.05, (i) Investments shall include the portion (proportionate to the Borrowers equity interest in such Subsidiary) of the fair market value of the net assets of a Subsidiary at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Borrower shall be deemed to continue to have a permanent Investment in an Unrestricted Subsidiary in an amount (if positive) equal to (1) the Borrowers Investment in such Subsidiary at the time of such redesignation, less (2) the portion (proportionate to the Borrowers equity interest in such Subsidiary) of the fair market value of the net assets of such Subsidiary at the time of such redesignation and (ii) any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at the time of such transfer, in each case, as determined in good faith by the board of directors of the Borrower. If the Borrower or any Restricted Subsidiary sells or otherwise disposes of any Equity Interests of any direct or indirect Subsidiary such that, after giving effect to any such sale or disposition, such Person is no longer a Subsidiary, the Borrower (or the applicable Restricted Subsidiary) will be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Borrowers (and the Restricted Subsidiaries) Investments in such Subsidiary that were not sold or disposed of. The amount of any Investment outstanding at any time
shall be the original cost of such Investment, reduced by any dividend, distribution, return of capital or repayment received in cash by the Borrower or a Restricted Subsidiary in respect of such Investment.
Investor Management Agreement shall mean the Advisory Services and Monitoring Agreement, dated April 29, 2011, among the Borrower, CheckSmart Financial Company, California Check Cashing Stores, LLC, the Sponsor and GGC Administration, LLC.
Investors shall mean the Sponsor and Golden Gate Private Equity, Inc. and any funds, partnerships or other investment vehicles managed or directly or indirectly controlled by Golden Gate Private Equity, Inc., but not including, however, any portfolio companies of any of the foregoing.
Issuing Bank shall mean (a) Credit Suisse AG, in its capacity as issuer of Letters of Credit hereunder, (b) with respect to each Existing Letter of Credit, the Lender that issued such Existing Letter of Credit or (c) such other Lender as the Borrower may from time to time select as an Issuing Bank hereunder pursuant to Section 2.21; provided that such Lender has agreed to be an Issuing Bank. The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates or branches of the Issuing Bank, in which case the term Issuing Bank shall include any such Affiliate or branch with respect to Letters of Credit issued by such Affiliate or branch.
Issuing Bank Fees shall have the meaning assigned to such term in Section 2.05(c).
Junior Lien Indebtedness shall mean any Indebtedness incurred by the Borrower or any Subsidiary Guarantor that is secured by Liens on the Collateral having Junior Lien Priority relative to the Liens securing the Secured Obligations.
Junior Lien Intercreditor Agreement shall mean a junior lien intercreditor agreement among the Collateral Agent and the representative of the holders of the Junior Lien Indebtedness, in substantially the form attached hereto as Exhibit F.
Junior Lien Priority shall mean, relative to specified Indebtedness or other Obligations secured by a Lien, having a junior Lien priority on specified Collateral and subject to a Junior Lien Intercreditor Agreement and, if the Alabama Revolving Credit Agreement remains outstanding, the Alabama Intercreditor Agreement.
L/C Commitment shall mean the commitment of the Issuing Bank to issue Letters of Credit pursuant to Section 2.21.
L/C Disbursement shall mean a payment or disbursement made by the Issuing Bank pursuant to a Letter of Credit.
L/C Exposure shall mean at any time the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time and (b) the aggregate amount of all L/C Disbursements that have not yet been reimbursed by or on behalf of the Borrower
at such time. The L/C Exposure of any Lender at any time shall equal its Applicable Commitment Percentage of the aggregate L/C Exposure at such time.
L/C Participation Fee shall have the meaning assigned to such term in Section 2.05(c).
Lenders shall mean the Persons listed on Schedule 2.01 and any other Person that shall have become party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption. Unless the context requires otherwise, the term Lenders includes the Swingline Lender.
Letter of Credit shall mean any letter of credit issued pursuant to Section 2.21 and any Existing Letter of Credit.
Leverage Ratio shall mean, on any date, the ratio of Consolidated Total Indebtedness on such date to EBITDA for the period of four consecutive fiscal quarters most recently ended on or prior to such date. In any period of four consecutive fiscal quarters in which an acquisition or asset sale permitted under Section 6.04 occurs, the Leverage Ratio shall be determined with respect to such period on a pro forma basis after giving effect to all of the adjustments contemplated by the final paragraph of the definition of Fixed Charge Coverage Ratio.
LIBO Rate shall mean, with respect to any Eurodollar Borrowing for any Interest Period, the rate per annum determined by the Administrative Agent at approximately 11:00 a.m. (London time) on the date that is two Business Days prior to the commencement of such Interest Period by reference to the British Bankers Association Interest Settlement Rates for deposits in dollars (as set forth by any service selected by the Administrative Agent that has been nominated by the British Bankers Association as an authorized information vendor for the purpose of displaying such rates) for a period equal to such Interest Period; provided that, to the extent that an interest rate is not ascertainable pursuant to the foregoing provisions of this definition, the LIBO Rate shall be the interest rate per annum determined by the Administrative Agent to be the average of the rates per annum at which deposits in dollars are offered for such relevant Interest Period to major banks in the London interbank market in London, England by the Administrative Agent at approximately 11:00 a.m. (London time) on the date that is two Business Days prior to the beginning of such Interest Period.
Lien shall mean with respect to any asset, any mortgage, lien (statutory or otherwise), pledge, hypothecation, charge, security interest, preference, priority or encumbrance of any kind in respect of such asset, whether or not filed, recorded, registered, published or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction; provided that in no event shall an operating lease be deemed to constitute a Lien.
Loan Document Obligations shall mean (a) the due and punctual payment of (i) the principal of and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, (ii) each payment required to be made by the Borrower under this Agreement in respect of any Letter of Credit, when and as due, including payments in respect of reimbursement of disbursements, interest thereon and obligations to provide cash collateral and (iii) all other monetary obligations of the Borrower to any of the Bank Secured Parties under this Agreement and each of the other Loan Documents, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), (b) the due and punctual performance of all other obligations of the Borrower under or pursuant to this Agreement and each of the other Loan Documents and (c) the due and punctual payment and performance of all the obligations of each other Loan Party under or pursuant to each of the other Loan Documents.
Loan Documents shall mean this Agreement, the Letters of Credit, the Security Documents and the promissory notes, if any, executed and delivered pursuant to Section 2.04(e).
Loan Party shall mean each of the Borrower and each Subsidiary Guarantor.
Loans shall mean (a) the revolving loans made by the Lenders to the Borrower pursuant to Section 2.01 and (b) the Swingline Loans.
Margin Stock shall have the meaning assigned to such term in Regulation U.
Material Adverse Effect shall mean (a) a materially adverse effect on the business, assets, liabilities, operations, condition (financial or otherwise), operating results or prospects of the Borrower and the Subsidiaries, taken as a whole, (b) a material impairment of the ability of the Borrower or any other Loan Party to perform any of its obligations under any Loan Document to which it is or will be a party or (c) a material impairment of the rights and remedies of or benefits available to the Lenders under any Loan Document.
Material Indebtedness shall mean Indebtedness (other than the Loans and Letters of Credit), or obligations in respect of one or more Hedging Obligations, of any one or more of the Borrower or any Restricted Subsidiary in an aggregate principal amount exceeding $25,000,000. For purposes of determining Material Indebtedness, the principal amount of the obligations of the Borrower or any Restricted Subsidiary in respect of any Hedging Obligation at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such Restricted Subsidiary would be required to pay if such Hedging Obligation were terminated at such time.
Maturity Date shall mean April 29, 2015.
Merger Agreement shall mean the Agreement and Plan of Merger dated as of April 13, 2011, by and among CheckSmart Financial Holdings Corp., the Borrower, CCFI Merger Sub I Inc., CCFI Merger Sub II Inc., CCCS Topco, LLC, California Check Cashing Stores, Inc., California Check Cashing Stores II, Inc., California Check Cashing Stores IV, Inc., CCCS Corporate Holdings, Inc. and CCCS Holdings, LLC, as amended by the First Amendment to Agreement and Plan of Merger, dated as of April 28, 2011, by and among such parties.
Minimum Collateral Amount shall mean, at any time, Cash Collateral consisting of cash or deposit account balances in an amount equal to 103% of the Fronting Exposure of the Issuing Bank with respect to Letters of Credit issued and outstanding at such time.
Moodys shall mean Moodys Investors Service, Inc., or any successor thereto.
Multiemployer Plan shall mean a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
Net Income shall mean with respect to any Person, the net income (loss) attributable to such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.
Net Proceeds shall mean the aggregate cash proceeds received by the Borrower or any of the Restricted Subsidiaries in respect of any Asset Sale, including any cash received upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Sale, net of:
(i) the direct costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash Consideration, including legal, accounting and investment banking fees, and brokerage and sales commissions, any relocation expenses incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements);
(ii) amounts required to be applied to the repayment of principal, premium, if any, and interest on Indebtedness that is (i) secured by a Lien on the property or assets that are the subject of such Asset Sale, that is, and is permitted to be, senior to the Lien securing the Bank Obligations or (ii) secured by a Lien on such property or assets and such property or assets do not constitute Collateral, which Indebtedness, in either case, is required (other than required by Section 6.03) to be paid as a result of such transaction; and
(iii) any deduction of appropriate amounts to be provided by the Borrower or any of the Restricted Subsidiaries as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by the Borrower or any of the Restricted Subsidiaries after such sale or other disposition thereof, including pension and other post-employment benefit
liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.
New York UCC shall mean the UCC as from time to time in effect in the State of New York.
Non-Consenting Lender shall mean any Lender that does not approve any consent, waiver or amendment that (i) requires the approval of all affected Lenders in accordance with the terms of Section 9.07 and (ii) has been approved by the Required Lenders.
Non-Defaulting Lender shall mean, at any time, each Lender that is not a Defaulting Lender at such time.
Obligations shall mean any principal, interest (including any interest accruing subsequent to the filing of a petition in bankruptcy, reorganization or similar proceeding at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable state, federal or foreign law), premium, penalties, fees, indemnifications, reimbursements (including reimbursement obligations with respect to letters of credit and bankers acceptances), damages and other liabilities, and guarantees of payment of such principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities, payable under the documentation governing any Indebtedness.
Officer shall mean the Chairman of the board of directors, the Chief Executive Officer, the Chief Financial Officer, the President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer, the Controller or the Secretary of the Borrower or of any other Person, as the case may be.
Officers Certificate shall mean a certificate signed on behalf of the Borrower by an Officer of the Borrower or on behalf of any other Person, as the case may be, who must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Borrower or of such other Person that meets the requirements set forth in this Agreement.
Other First Lien Obligations shall mean any Indebtedness or other Obligations (other than the Designated Priority Obligations (as defined in the Collateral Agreement) and the Notes Obligations (as defined in the Collateral Agreement)) having First Lien Priority with respect to the Collateral and that are not secured by any other assets and, in the case of Indebtedness for borrowed money, has a stated maturity that is equal to or later than the stated maturity of the Senior Secured Notes; provided that an authorized representative of the holders of such Indebtedness shall have executed a joinder to the Collateral Agreement and, if the Alabama Revolving Credit Agreement remains outstanding, the Alabama Intercreditor Agreement.
Other Taxes shall mean all present or future stamp or documentary Taxes or any other excise or property Taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.
Parent Entity shall mean any Person that is a direct or indirect parent of the Borrower.
Participant shall have the meaning assigned to such term in clause (d) of Section 9.03.
Participant Register shall have the meaning assigned to such term in clause (d) of Section 9.03.
PBGC shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA.
Perfection Certificate shall mean the Perfection Certificate substantially in the form of Exhibit B to the Collateral Agreement.
Permitted Asset Swap shall mean the concurrent purchase and sale or exchange of Related Business Assets or a combination of Related Business Assets and cash or Cash Equivalents between the Borrower or any of the Restricted Subsidiaries, on the one hand, and another Person, on the other hand; provided that any cash or Cash Equivalents received must be applied in accordance Section 6.03.
Permitted Holders shall mean (i) the Sponsor, (ii) members of management of the Borrower or any Parent Entity who are holders of Equity Interests of the Borrower (or any Parent Entity) on the Closing Date, (iii) any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or any successor provision) of which any of the Persons described in foregoing clause (i) or (ii) are members; provided, that, in the case of such group and without giving effect to the existence of such group or any other group, the Sponsor and members of management, collectively, have beneficial ownership of more than 50% of the total voting power of the Voting Stock of the Borrower or any Parent Entity or (iv) any Permitted Parent.
Permitted Investments shall mean:
(i) any Investment in the Borrower or any of the Restricted Subsidiaries;
(ii) any Investment in cash or Cash Equivalents;
(iii) any Investment by the Borrower or any of the Restricted Subsidiaries in a Person that is engaged in a Similar Business if as a result of such Investment:
(A) such Person becomes a Restricted Subsidiary; or
(B) such Person, in one transaction or a series of related transactions, is merged, amalgamated or consolidated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Borrower or a Restricted
Subsidiary, and, in each case, any Investment held by such Person; provided that such Investment was not acquired by such Person in contemplation of such acquisition, merger, amalgamation, consolidation or transfer;
(iv) any Investment in securities or other assets not constituting cash or Cash Equivalents and received in connection with an Asset Sale made pursuant to the provisions of Section 6.03 or any other disposition of assets not constituting an Asset Sale;
(v) any Investment existing on the Closing Date or made pursuant to binding commitments in effect on the Closing Date to the extent described in the Senior Secured Notes Offering Circular, or an Investment consisting of any extension, modification or renewal of any such Investment existing on the Closing Date or binding commitment in effect on the Closing Date to the extent described in the Senior Secured Notes Offering Circular; provided that the amount of any such Investment may be increased in such extension, modification or renewal only (a) as required by the terms of such Investment or binding commitment as in existence on the Closing Date (including as a result of the accrual or accretion of interest or original issue discount or the issuance of pay-in-kind securities) or (b) as otherwise permitted under this Agreement;
(vi) any Investment acquired by the Borrower or any of the Restricted Subsidiaries:
(A) in exchange for any other Investment or accounts or loans receivable held by the Borrower or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts or loans receivable;
(B) in satisfaction of judgments against other Persons; or
(C) as a result of a foreclosure by the Borrower or any of the Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;
(vii) Hedging Obligations permitted under Section 6.01(b)(xi);
(viii) any Investment in a Similar Business having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (viii) that are at that time outstanding, not to exceed the greater of $25,000,000 and 5.5% of Total Assets;
(ix) Investments the payment for which consists of Equity Interests (exclusive of Disqualified Stock) of the Borrower or any Parent Entity; provided, however, that such Equity Interests will not increase the amount available for Restricted Payments under clause (3) of the first paragraph of Section 6.05;
(x) guarantees of Indebtedness permitted under Section 6.01;
(xi) any transaction to the extent it constitutes an Investment that is permitted and made in accordance with the provisions of Section 6.06(b) (except transactions described in clause (ii), (vi), (viii), (x) or (xv) of Section 6.06(b));
(xii) Investments consisting of purchases and acquisitions of inventory, supplies, material or equipment or the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;
(xiii) additional Investments having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (xiii) that are at that time outstanding, not to exceed the greater of $20,000,000 and 4.0% of Total Assets;
(xiv) advances to, or guarantees of Indebtedness of, employees not in excess of $5,000,000 outstanding at any one time, in the aggregate;
(xv) loans and advances to officers, directors and employees for business-related travel expenses, moving expenses and other similar expenses or payroll advances, in each case incurred in the ordinary course of business or consistent with past practices;
(xvi) advances, loans or extensions of trade credit in the ordinary course of business by the Borrower or any of the Restricted Subsidiaries;
(xvii) Investments consisting of purchases and acquisitions of assets or services in the ordinary course of business;
(xviii) Investments in the ordinary course of business consisting of UCC Article 3 endorsements for collection or deposit and UCC Article 4 customary trade arrangements with customers consistent with past practices; and
(xix) Investments in Unrestricted Subsidiaries having an aggregate fair market value taken together with all other Investments made pursuant to this clause (xix) that are at the time outstanding, not to exceed $10,000,000.
Permitted Liens shall mean, with respect to any Person:
(i) pledges, deposits or security by such Person under workmens compensation laws, unemployment insurance, employers health tax, and other social security laws or similar legislation or other insurance related obligations (including, but not limited to, in respect of deductibles, self insured retention amounts and premiums and adjustments thereto) or indemnification obligations of (including obligations in respect of letters of credit or bank guarantees for the benefit of) insurance carriers providing property, casualty or liability insurance, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to
secure public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety, stay, customs or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, performance and return-of-money bonds and other similar obligations (including letters of credit issued in lieu of any such bonds or to support the issuance thereof and including those to secure health, safety and environmental obligations), in each case incurred in the ordinary course of business;
(ii) Liens imposed by law or regulation, such as landlords, carriers, warehousemens and mechanics, materialmens and repairmens Liens, contractors, supplier of materials, architects, and other like Liens, in each case for sums not yet overdue for a period of more than 90 days or that are being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review, in each case, so long as adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;
(iii) Liens for taxes, assessments or other governmental charges that are not yet overdue for a period of more than 30 days or not yet payable or that are being contested in good faith by appropriate proceedings diligently conducted, so long as adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;
(iv) Liens in favor of the issuers of performance, surety, bid, indemnity, warranty, release, appeal or similar bonds or with respect to other regulatory requirements or letters of credit or bankers acceptances and completion guarantees, in each case issued pursuant to the request of and for the account of such Person in the ordinary course of its business;
(v) minor survey exceptions, minor encumbrances, ground leases, easements or reservations of, or rights of others for, licenses, rights-of-way, servitudes, drains, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning, building code or other restrictions (including minor defects and irregularities in title and similar encumbrances) as to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties that were not incurred in connection with Indebtedness and that do not in the aggregate materially impair their use in the operation of the business of such Person;
(vi) Liens securing Indebtedness permitted at the time of incurrence to be incurred pursuant to Section 6.01(b)(v), (xiii)(B), (xv) or (xix); provided that (A) Liens securing Indebtedness permitted to be incurred pursuant to such clause (v) extend only to the assets purchased with the proceeds of such Indebtedness and the proceeds and products thereof, (B) Liens securing Indebtedness permitted to be incurred pursuant to such clause (xv) only secure
Indebtedness of, and extend only to the assets of, Foreign Subsidiaries and (C) Liens securing Indebtedness permitted to be incurred pursuant to such clause (xix) extend only to the assets of Foreign Subsidiaries; provided further that to the extent any Liens cover the Collateral, this clause (vi) shall be available to permit such Liens only to the extent that such Liens secure Other First Lien Obligations;
(vii) Liens existing on the Closing Date and set forth on Schedule 6.02 or pursuant to agreements in existence on the Closing Date (other than the Liens created by the Security Documents and the Republic Liens);
(viii) Liens on property or shares of stock or other assets of a Person at the time such Person becomes a Subsidiary that, in each case, secure an Obligation existing at the time such Person becomes a Subsidiary; provided that (x) such Liens and Obligations are not created or incurred in connection with, or in contemplation of, such other Person becoming a Subsidiary and (y) such Liens may not extend to any other property owned by the Borrower or any of the Restricted Subsidiaries (other than (a) after-acquired property that is affixed to or incorporated into the property covered by such Lien securing such Obligation, (b) any other after-acquired property subject to such Lien securing such Obligation; provided that, in the case of clauses (a) and (b), the terms of such Obligation require or include a pledge of such after-acquired property (it being understood that such requirement shall not apply or be permitted to apply to any property to which such requirement would not have applied but for such acquisition) and (c) the proceeds and products thereof);
(ix) Liens on property or other assets at the time the Borrower or a Restricted Subsidiary acquired the property or such other assets, including any acquisition by means of a merger, amalgamation or consolidation with or into the Borrower or any of the Restricted Subsidiaries; provided, however, that such Liens are not created or incurred in connection with, or in contemplation of, such acquisition, merger, amalgamation or consolidation; provided, further, however, that the Liens may not extend to any other property owned by the Borrower or any of the Restricted Subsidiaries;
(x) Liens securing Obligations relating to any Indebtedness or other obligations of a Restricted Subsidiary owing to the Borrower or a Subsidiary Guarantor permitted to be incurred in accordance Section 6.01;
(xi) Liens securing Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes); provided that with respect to Hedging Obligations relating to Indebtedness, such Indebtedness is permitted under this Agreement;
(xii) Liens on specific items of inventory or other goods and proceeds of any Person securing such Persons obligations in respect of bankers acceptances
or trade letters of credit issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;
(xiii) leases, subleases, licenses or sublicenses (including of intellectual property) granted to others in the ordinary course of business that do not materially interfere with the ordinary conduct of the business of the Borrower or any of the Restricted Subsidiaries and do not secure any Indebtedness;
(xiv) Liens arising from Uniform Commercial Code (or equivalent statute) financing statement filings regarding operating leases or consignments entered into by the Borrower and the Restricted Subsidiaries in the ordinary course of business;
(xv) Liens in favor of the Borrower or any Subsidiary Guarantor;
(xvi) Liens on vehicles or equipment of the Borrower or any of the Restricted Subsidiaries granted in the ordinary course of business;
(xvii) Liens to secure any modification, refinancing, refunding, extension, renewal or replacement (or successive modification, refinancing, refunding, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (vi), (vii), (viii) or (ix) or clauses (xxvi) or (xxxviii) below; provided that (A) in the case of any Lien referred to in the foregoing clause (vi), this clause (xvii) shall only apply to modifications, refinancings, refundings, extensions, renewals or replacements of Indebtedness of Foreign Subsidiaries initially incurred under Section 6.01(b)(xv) that are secured by assets of such Foreign Subsidiaries, (B) any such new Lien shall be limited to all or part of the same property that secured the original Lien (plus accessions, additions and improvements on such property, including (I) after-acquired property that is affixed to or incorporated into the property covered by such Lien, (II) any other after-acquired property subject to such Lien; provided that, in the case of clauses (I) and (II), the terms of such Indebtedness require or include a pledge of such after acquired property (it being understood that such requirement shall not apply or be permitted to apply to any property to which such requirement would not have applied but for such modification, refinancing, refunding, extension, renewal or replacement) and (III) the proceeds and products thereof) and (C) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (x) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clause (vi), (vii), (viii), (ix), (xxvi) or (xxxviii) of this definition, in each case, at the time the original Lien became a Permitted Lien under this Agreement and (y) an amount necessary to pay any fees and expenses, including premiums and accrued and unpaid interest, related to such modification, refinancing, refunding, extension, renewal or replacement;
(xviii) deposits made or other security provided in the ordinary course of business to secure liability to insurance carriers;
(xix) Liens securing any other Obligations (which Obligations may be Other First Lien Obligations) that do not exceed $25,000,000 at any one time outstanding;
(xx) Liens securing judgments for the payment of money not constituting an Event of Default under clause (b) or (c) of Article VII so long as such Liens are adequately bonded and any appropriate legal proceedings that may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has not expired;
(xxi) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods in the ordinary course of business;
(xxii) Liens (A) of a collection bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection, (B) attaching to commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course of business and not for speculative purposes, and (C) in favor of banking institutions arising as a matter of law encumbering deposits (including the right of setoff) and that are within the general parameters customary in the banking industry;
(xxiii) Liens deemed to exist in connection with Investments in repurchase agreements permitted under Section 6.01; provided that such Liens do not extend to any assets other than those that are the subject of such repurchase agreement;
(xxiv) Liens that are contractual rights of set-off or rights of pledge (A) relating to the establishment of depository relations with banks not given in connection with the issuance of Indebtedness, (B) relating to pooled deposit or sweep accounts of the Borrower or any of the Restricted Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Borrower and the Restricted Subsidiaries or (C) relating to purchase orders and other agreements entered into with customers of the Borrower or any of the Restricted Subsidiaries in the ordinary course of business;
(xxv) Liens securing Indebtedness incurred under Section 6.01(b)(iii); provided that an authorized representative of the holders of such Indebtedness shall have executed a joinder to the Collateral Agreement and, if the Alabama Revolving Credit Agreement remains outstanding, the Alabama Intercreditor Agreement;
(xxvi) Liens securing the Bank Obligations;
(xxvii) Liens securing Hedging Agreements;
(xxviii) any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;
(xxix) Liens solely on any cash earnest money deposits made by the Borrower or any of the Restricted Subsidiaries in connection with any letter of intent or purchase agreement with respect to a transaction permitted under this Agreement;
(xxx) Liens on Capital Stock of an Unrestricted Subsidiary that secure Indebtedness or other obligations of such Unrestricted Subsidiary;
(xxxi) Liens arising out of conditional sale, title retention, consignment or similar arrangements with vendors for the sale or purchase of goods entered into by the Borrower or any Restricted Subsidiary in the ordinary course of business;
(xxxii) ground leases, subleases, licenses or sublicenses in respect of real property on which facilities owned or leased by the Borrower or any of the Restricted Subsidiaries are located that do not in the aggregate materially impair their use in the operation of the business of the Borrower and the Restricted Subsidiaries;
(xxxiii) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;
(xxxiv) the reservations, limitations, provisos and conditions expressed in any original grants of real or immoveable property that do not materially impair the use of the affected land for the purpose used or intended to be used;
(xxxv) any Lien resulting from the deposit of cash or securities in connection with the performance of a bid, tender, sale or contract (excluding the borrowing of money) entered into in the ordinary course of business or deposits of cash or securities in order to secure appeal bonds or bonds required in respect of judicial proceedings;
(xxxvi) any Lien in favor of a lessor or licensor for rent to become due or for other obligations or acts, the payment or performance of which is required under any lease as a condition to the continuance of such lease;
(xxxvii) Liens on the Collateral in favor of any collateral agent relating to such collateral agents administrative expenses with respect to the Collateral;
(xxxviii) Liens securing any Other First Lien Obligations incurred pursuant to the first paragraph of Section 6.01, provided, however, that, at the time of incurrence of such Other First Lien Obligations under this clause (xxxviii) and after giving pro forma effect thereto, the Consolidated Secured Debt Ratio would be no greater than 3.25 to 1.00;
(xxxix) the Republic Liens;
(xl) Liens on the assets of Subsidiaries that are not Subsidiary Guarantors securing Indebtedness of such Subsidiaries that was permitted by this Agreement to be incurred;
(xli) all rights of expropriation, access or use or other similar rights conferred by or reserved by any Federal, state or municipal authority or agency;
(xlii) any agreements with any Governmental Authority or utility that do not, in the aggregate, adversely affect in any material respect the use or value of real property and improvements thereon in the good faith judgment of the Borrower;
(xliii) Liens (i) on cash advances in favor of the seller of any property to be acquired in an Investment permitted under this Agreement to be applied against the purchase price for such Investment, and (ii) incurred in connection with an agreement to sell, transfer, lease or otherwise dispose of any property in a transaction permitted under Section 6.03, in each case, solely to the extent such Investment or sale, disposition, transfer or lease, as the case may be, would have been permitted on the date of the creation of such Lien; and
(xliv) agreements to subordinate any interest of the Borrower or any Restricted Subsidiary in any accounts or loans receivable or other proceeds arising from inventory consigned by the Borrower or any Restricted Subsidiary pursuant to an agreement entered into in the ordinary course of business.
For purposes of determining compliance with this definition, (A) Liens need not be incurred solely by reference to one category of Permitted Liens described in this definition but are permitted to be incurred in part under any combination thereof and of any other available exemption and (B) in the event that a Lien (or any portion thereof) meets the criteria of one or more of the categories of Permitted Liens, the Borrower may, in its sole discretion, classify or reclassify such Lien (or any portion thereof) in any manner that complies with this definition.
For purposes of this definition, the term Indebtedness shall be deemed to include interest on such Indebtedness.
Permitted Parent shall mean any Parent Entity formed by the Sponsor that is not formed in connection with, or in contemplation of, a transaction that, assuming such Parent Entity was not a Parent Entity, would constitute a Change of Control.
Person shall mean any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.
Plan shall mean any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an employer as defined in Section 3(5) of ERISA.
Preferred Stock shall mean any Equity Interest with preferential rights of payment of dividends or upon liquidation, dissolution, or winding up.
Prime Rate shall mean the rate of interest per annum determined from time to time by Credit Suisse AG as its prime rate in effect at its principal office in New York City (it being understood that the Prime Rate may not be the lowest rate of interest charged by Credit Suisse AG in connection with extensions of credit to debtors).
Qualified Proceeds shall mean assets that are used or useful in, or Capital Stock of any Person engaged in, a Similar Business; provided that the fair market value of any such assets or Capital Stock shall be determined by the Borrowers board of directors in good faith.
Refinancing shall have the meaning assigned to such term in the definition of Transactions.
Register shall have the meaning assigned to such term in Section 9.03(c).
Regulation T shall mean Regulation T of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.
Regulation U shall mean Regulation U of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.
Regulation X shall mean Regulation X of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.
Related Business Assets shall mean assets (other than cash or Cash Equivalents) used or useful in a Similar Business; provided that any assets received by the Borrower or a Restricted Subsidiary in exchange for assets transferred by the Borrower or a Restricted Subsidiary shall not be deemed to be Related Business Assets if they consist of securities of a Person, unless upon receipt of the securities of such Person, such Person would become a Restricted Subsidiary.
Related Parties shall mean, with respect to any Person, such Persons Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Persons Affiliates.
Release shall mean any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into or through the environment or within, upon or underneath any building, structure, facility or fixture.
Republic Bank shall mean Republic Bank of Chicago, in its capacity as the lender to the Alabama Subsidiary under the Alabama Revolving Credit Agreement.
Republic Liens shall mean Liens on the Shared Alabama Collateral securing the Republic Obligations.
Republic Obligations shall mean any and all Obligations of the Alabama Subsidiary pursuant to the Alabama Revolving Credit Agreement the Indebtedness in respect of which is incurred under Section 6.01(b)(ii).
Required Lenders shall mean, at any time, Lenders having Total Credit Exposures representing more than 50% of the Total Credit Exposures of all Lenders. The Total Credit Exposure of any Defaulting Lender shall be disregarded in determining Required Lenders at any time.
Responsible Officer of any Person shall mean any executive officer or Financial Officer of such Person and any other officer or similar official thereof responsible for the administration of the obligations of such Person in respect of this Agreement.
Restricted DRE shall mean any Subsidiary that (a) is disregarded as an entity separate from its sole owner under Treasury Regulation Section 301.7701-2(c)(2) or -3(b) and (b) with respect to which substantially all of its assets consist of Equity Interests in (i) Foreign Subsidiaries or (ii) other Restricted DREs.
Restricted Investment shall mean an Investment other than a Permitted Investment.
Restricted Payment shall have the meaning assigned to such term in Section 6.05.
Restricted Subsidiary shall mean, at any time, any direct or indirect Subsidiary (including any Foreign Subsidiary) that is not then an Unrestricted Subsidiary; provided, however, that upon the occurrence of an Unrestricted Subsidiary ceasing to be an Unrestricted Subsidiary, such Subsidiary shall be included in the definition of Restricted Subsidiary.
Revolving Credit Exposure shall mean, as to any Lender at any time, the aggregate principal amount at such time of its outstanding Loans and such Lenders L/C Exposure and Swingline Exposure at such time.
Revolving Credit Facility Obligations shall have the meaning assigned to such term in the Collateral Agreement.
Sale and Lease-Back Transaction shall mean any arrangement providing for the leasing by the Borrower or any of the Restricted Subsidiaries of any real or tangible personal property, which property has been or is to be sold or transferred by the Borrower or such Restricted Subsidiary to a third Person in contemplation of such leasing.
SEC shall mean the U.S. Securities and Exchange Commission.
Secured Indebtedness shall mean any Indebtedness of the Borrower or any of the Restricted Subsidiaries secured by a Lien.
Secured Obligations shall have the meaning assigned to such term in the Collateral Agreement.
Secured Parties shall have the meaning assigned to such term in the Collateral Agreement.
Security Documents shall mean the Guarantee Agreement, the Collateral Agreement, the Alabama Intercreditor Agreement, the Junior Lien Intercreditor Agreement and each of the security agreements, mortgages and other instruments and documents executed and delivered pursuant to any of the foregoing or pursuant to Section 5.12.
Senior Secured Notes shall mean the Borrowers 10.75% senior secured notes due 2019 issued pursuant to the Senior Secured Notes Indenture on the Closing Date in an aggregate principal amount of $395,000,000, and the Indebtedness represented thereby.
Senior Secured Notes Documents shall mean the Senior Secured Notes, the Senior Secured Notes Indenture, the Security Documents and all other documents executed and delivered with respect to the Senior Secured Notes or the Senior Secured Notes Indenture.
Senior Secured Notes Indenture shall mean the Indenture for the Senior Secured Notes dated as of April 29, 2011, as the same may be amended, restated, supplemented, substituted, replaced, refinanced or otherwise modified from time to time.
Senior Secured Notes Offering Circular shall mean the final offering circular dated April 20, 2011, in connection with the offering of the Senior Secured Notes.
Senior Secured Notes Trustee shall mean U.S. Bank National Association, N.A. and its successors and assigns acting as trustee under the Senior Secured Notes Indenture.
Shared Alabama Collateral shall mean that portion of the Collateral that is owned by the Alabama Subsidiary and pledged to secure the Republic Obligations.
Similar Business shall mean any business conducted or proposed to be conducted by the Borrower and the Restricted Subsidiaries on the Closing Date or any business that is similar, reasonably related, incidental or ancillary thereto, or is a reasonable extension, development or expansion thereof.
SPC shall have the meaning assigned to such term in Section 9.03(h).
Special Dividend shall mean a special dividend paid in respect of the Capital Stock of the Borrower in an aggregate amount that, when taken together with the Special
Options Distribution, not to exceed $125,000,000, which dividend shall be declared substantially concurrently with the consummation of the Transactions and which dividend and shall be paid within fifteen Business Days thereof.
Special Options Distribution shall mean a special distribution paid in respect of options to purchase Capital Stock of the Borrower in an aggregate amount of which shall not exceed the amount of such distributions described in the Senior Secured Notes Offering Circular, and which distribution shall be paid within fifteen Business Days of the declaration of the Special Dividend.
Sponsor shall mean Diamond Castle Holdings, LLC and any funds, partnerships or other investment vehicles managed or directly or indirectly controlled by the Sponsor, but not including, however, any portfolio companies of any of the foregoing.
S&P shall mean Standard & Poors Ratings Service, or any successor thereto.
Statutory Reserves shall mean a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board and any other banking authority, domestic or foreign, to which the Administrative Agent or any Lender (including any branch, Affiliate or other fronting office making or holding a Loan) is subject for Eurocurrency Liabilities (as defined in Regulation D of the Board). Eurodollar Loans shall be deemed to constitute Eurocurrency Liabilities (as defined in Regulation D of the Board) and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to the Administrative Agent or any Lender under such Regulation D. Statutory Reserves shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.
Store Cash shall mean, as of any date, the product of $50,000 multiplied by the number of stores owned and operated by the Borrower and its Subsidiaries as of such date.
Subordinated Indebtedness shall mean, with respect to the Secured Obligations, (i) any Indebtedness of the Borrower that is by its terms subordinated in right of payment to the Secured Obligations, and (ii) any Indebtedness of any Subsidiary Guarantor that is by its terms subordinated in right of payment to the Guarantee of such entity.
subsidiary shall mean, with respect to any Person, (a) any corporation, association or other business entity (other than a partnership, joint venture, limited liability company or similar entity) of which more than 50% of the total voting power of shares of Capital Stock entitled to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other subsidiaries of that Person or a combination thereof and (b) any partnership, joint venture, limited liability company or similar entity of which
(i) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other subsidiaries of that Person or a combination thereof whether in the form of membership, general, special or limited partnership or otherwise and (ii) such Person or any subsidiary of such Person is a controlling general partner or otherwise controls such entity.
Subsidiary shall mean any subsidiary of the Borrower.
Subsidiary Guarantor shall mean each Subsidiary listed on Schedule 1.01(b), and each other Subsidiary that is or becomes a party to the Guarantee Agreement.
Swingline Commitment shall mean the commitment of the Swingline Lender to make loans pursuant to Section 2.23 as the same may be reduced from time to time pursuant to Section 2.09.
Swingline Exposure shall mean at any time the aggregate principal amount at such time of all outstanding Swingline Loans. The Swingline Exposure of any Lender at any time shall equal its Applicable Commitment Percentage of the aggregate Swingline Exposure at such time.
Swingline Lender shall mean Fifth Third Bank, in its capacity as lender of Swingline Loans hereunder, or such other Lender as the Borrower may from time to time select as the Swingline Lender hereunder pursuant to Section 2.23; provided that such Lender has agreed to be a Swingline Lender.
Swingline Loan shall mean any loan made by the Swingline Lender pursuant to Section 2.23.
Tax and Taxes shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
Total Assets shall mean, as of any date, the total consolidated assets of the Borrower and the Restricted Subsidiaries on a consolidated basis, as shown on the consolidated balance sheet of the Borrower and the Restricted Subsidiaries as of the end of the most recently ended fiscal quarter prior to the applicable date of determination for which financial statements are available; provided that, for purposes of calculating Total Assets for purposes of testing the covenants under this Agreement in connection with any transaction, the total consolidated assets of the Borrower and the Restricted Subsidiaries shall be adjusted to reflect any acquisitions and dispositions of assets that have occurred during the period from the date of the applicable balance sheet through the applicable date of determination but without giving effect to the transaction being tested under this Agreement.
Total Commitment shall mean, at any time, the aggregate amount of the Commitments, as in effect at such time. The initial Total Commitment is $40,000,000.
Total Credit Exposure shall mean, as to any Lender at any time, the unused Commitments and Revolving Credit Exposure of such Lender at such time.
Transactions shall mean, collectively, (a) the execution, delivery and performance by the parties thereto of the Merger Agreement and the consummation of the transactions contemplated thereby, (b) the execution, delivery and performance by the Borrower and the Subsidiaries party thereto of the Senior Secured Note Documents and the issuance of the Senior Secured Notes, (c) the execution, delivery and performance by the Loan Parties of the Loan Documents to which they are a party, (d) the repayment of all amounts due or outstanding under or in respect of, and the termination of, the Existing Credit Agreements (such repayment and termination, the Refinancing), (e) the payment by the Borrower of the Special Dividend and the Special Options Distribution and (f) the payment of related fees and expenses (including accounting, attorney and other professional fees).
Type, when used in respect of any Loan or Borrowing, shall refer to the Rate by reference to which interest on such Loan or on the Loans comprising such Borrowing is determined. For purposes hereof, the term Rate shall mean the Adjusted LIBO Rate and the Alternate Base Rate.
Unfunded Advances/Participations shall mean (a) with respect to the Administrative Agent, without duplication of amounts paid to the Administrative Agent under the Collateral Agreement, the aggregate amount, if any, (i) made available to the Borrower on the assumption that each Lender has made its portion of the applicable Borrowing available to the Administrative Agent as contemplated by Section 2.02(d) and (ii) with respect to which a corresponding amount shall not in fact have been returned to the Administrative Agent by the Borrower or made available to the Administrative Agent by any such Lender, (b) with respect to the Swingline Lender, the aggregate amount, if any, of participations in respect of any outstanding Swingline Loans that shall not have been funded by the Lenders in accordance with Section 2.23(e) and (c) with respect to the Issuing Bank, the aggregate amount, if any, of participations in respect of any outstanding L/C Disbursement with respect to any Letters of Credit issued by the Issuing Bank that shall not have been funded by the Lenders in accordance with Section 2.21(d).
Uniform Commercial Code or UCC shall mean the Uniform Commercial Code as in effect in the relevant jurisdiction from time to time. Unless otherwise specified, references to the Uniform Commercial Code herein refer to the New York UCC.
Unrestricted Subsidiary shall mean (i) as of the Closing Date and for so long as the same has not been designated as a Restricted Subsidiary, the Initial Unrestricted Subsidiary; (ii) any Subsidiary that at the time of determination is an Unrestricted Subsidiary (as designated by the Borrower, as provided below) and (iii) any subsidiary of an Unrestricted Subsidiary. The Borrower may designate any Subsidiary (including any existing Subsidiary and any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of its subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on, any property of, the Borrower
or any Restricted Subsidiary (other than solely any subsidiary of the Subsidiary to be so designated); provided that (i) such designation complies with Section 6.05 and (ii) each of (A) the Subsidiary to be so designated and (B) its subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness pursuant to which the lender has recourse to any of the assets of the Borrower or any Restricted Subsidiary (other than Equity Interests in the Unrestricted Subsidiary). The Borrower may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that, immediately after giving effect to such designation, (i) no Event of Default or Default shall have occurred and be continuing and (ii) either (A) the Borrower could incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 6.01 or (B) the Fixed Charge Coverage Ratio for the Borrower and the Restricted Subsidiaries would be greater than such ratio for the Borrower and the Restricted Subsidiaries immediately prior to such designation, in each case on a pro forma basis taking into account such designation. Any such designation by the Borrower shall be notified by the Borrower to the Administrative Agent by promptly delivering to the Administrative Agent a copy of the resolution of the board of directors of the Borrower giving effect to such designation and an Officers Certificate certifying that such designation complied with the foregoing provisions.
USA PATRIOT Act shall mean The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. No. 107-56 (signed into law October 26, 2001)).
Voting Stock of any Person as of any date shall mean the Capital Stock of such Person that is at the time entitled to vote in the election of the board of directors of such Person.
Weighted Average Life to Maturity shall mean, when applied to any Indebtedness, Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing (i) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment by (ii) the sum of all such payments.
Wholly-Owned Subsidiary of any Person shall mean a subsidiary of such Person, 100% of the outstanding Equity Interests of which (other than directors qualifying shares) are at the time owned by such Person or by one or more Wholly-Owned Subsidiaries of such Person.
Withdrawal Liability shall mean liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
Withholding Agent shall mean the Administrative Agent, any Loan Party or their respective successors or assigns.
SECTION 1.02. Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words include, includes and including shall be deemed to be followed by the phrase without limitation. The word will shall be construed to have the same meaning and effect as the word shall. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Persons successors and assigns, (c) the words herein, hereof and hereunder, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (e) any reference to any law or regulation herein shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (f) the words asset and property shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights. Except as otherwise expressly provided herein, (i) any reference in this Agreement to any Loan Document shall mean such document as amended, restated, supplemented or otherwise modified from time to time, (ii) any reference in this Agreement to the Junior Lien Intercreditor Agreement shall, unless the context requires otherwise, mean the Junior Lien Intercreditor Agreement entered into pursuant to Section 8.11 to the extent the same is then in effect and (iii) all terms of an accounting or financial nature shall be, to the extent applicable, construed in accordance with GAAP.
SECTION 1.03. Classification of Loans and Borrowings. For purposes of this Agreement, Loans may be classified and referred to by Type (e.g., a Eurodollar Loan). Borrowings also may be classified and referred to by Type (e.g., a Eurodollar Borrowing).
SECTION 1.04. Effectuation of Transfers. Each of the representations and warranties of the Borrower contained in this Agreement (and all corresponding definitions) are made after giving effect to the Transactions, unless the context otherwise requires.
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions and relying upon the representations and warranties herein set forth, each Lender agrees, severally and not jointly, to make Loans to the Borrower, at any time and from time to time on or after the date hereof, and until the earlier of the Maturity Date and the termination of the Commitment of such Lender in accordance with the terms hereof, in an aggregate
principal amount at any time outstanding that will not result in such Lenders Revolving Credit Exposure exceeding such Lenders Commitment; provided that (i) the aggregate principal amount of Loans made on the Closing Date shall not exceed $10,000,000 and (ii) the proceeds of such Loans made on the Closing Date shall be used solely to consummate the Refinancing. Within the limits set forth in the preceding sentence and subject to the terms, conditions and limitations set forth herein, the Borrower may borrow, pay or prepay and reborrow Loans.
SECTION 2.02. Loans. (a) Each Loan (other than Swingline Loans) shall be made as part of a Borrowing consisting of Loans made by the Lenders ratably in accordance with their applicable Commitments; provided, however, that the failure of any Lender to make any Loan shall not in itself relieve any other Lender of its obligation to lend hereunder (it being understood, however, that no Lender shall be responsible for the failure of any other Lender to make any Loan required to be made by such other Lender). Except for Loans deemed made pursuant to Section 2.02(f), the Loans comprising any Borrowing shall be in an aggregate principal amount that is (i) an integral multiple of $500,000 and not less than $1,000,000 or (ii) equal to the remaining available balance of the applicable Commitments.
(b) Subject to Sections 2.02(f), 2.08 and 2.15, each Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request pursuant to Section 2.03. Each Lender may at its option make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement. Borrowings of more than one Type may be outstanding at the same time; provided, however, that the Borrower shall not be entitled to request any Borrowing that, if made, would result in more than seven Eurodollar Borrowings outstanding hereunder at any time. For purposes of the foregoing, Borrowings having different Interest Periods, regardless of whether they commence on the same date, shall be considered separate Borrowings.
(c) Except with respect to Loans made pursuant to Section 2.02(f), each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds to such account in New York City as the Administrative Agent may designate not later than 1:00 p.m., New York City time, and the Administrative Agent shall promptly credit the amounts so received to an account designated by the Borrower in the applicable Borrowing Request or, if a Borrowing shall not occur on such date because any condition precedent herein specified shall not have been met, return the amounts so received to the respective Lenders.
(d) Unless the Administrative Agent shall have received notice from a Lender prior to the date of any Borrowing that such Lender will not make available to the Administrative Agent such Lenders portion of such Borrowing, the Administrative Agent may assume that such Lender has made such portion available to the Administrative Agent on the date of such Borrowing in accordance with paragraph (c) above and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If the Administrative
Agent shall have so made funds available then, to the extent that such Lender shall not have made such portion available to the Administrative Agent, such Lender and the Borrower severally agree to repay to the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower to but excluding the date such amount is repaid to the Administrative Agent at (i) in the case of the Borrower, a rate per annum equal to the interest rate applicable at the time to the Loans comprising such Borrowing and (ii) in the case of such Lender, a rate determined by the Administrative Agent to represent its cost of overnight or short-term funds (which determination shall be conclusive absent manifest error). If such Lender shall repay to the Administrative Agent such corresponding amount, such amount shall constitute such Lenders Loan as part of such Borrowing for purposes of this Agreement.
(e) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date.
(f) If the Issuing Bank shall not have received from the Borrower the payment required to be made by Section 2.21(e) within the time specified in such Section, the Issuing Bank will promptly notify the Administrative Agent of the L/C Disbursement and the Administrative Agent will promptly notify each Lender of such L/C Disbursement and its Applicable Commitment Percentage thereof. Each Lender shall pay by wire transfer of immediately available funds to the Administrative Agent not later than 2:00 p.m., New York City time, on such date (or, if such Lender shall have received such notice later than 12:00 (noon), New York City time, on any day, not later than 10:00 a.m., New York City time, on the immediately following Business Day), an amount equal to such Lenders Applicable Commitment Percentage of such L/C Disbursement (it being understood that (i) if the conditions precedent to borrowing set forth in Sections 4.01(b) and (c) have been satisfied, such amount shall be deemed to constitute an ABR Loan of such Lender and, to the extent of such payment, the obligations of the Borrower in respect of such L/C Disbursement shall be discharged and replaced with the resulting ABR Borrowing, and (ii) if such conditions precedent to borrowing have not been satisfied, then any such amount paid by any Lender shall not constitute a Loan and shall not relieve the Borrower from its obligation to reimburse such L/C Disbursement), and the Administrative Agent will promptly pay to the Issuing Bank amounts so received by it from the Lenders. The Administrative Agent will promptly pay to the Issuing Bank any amounts received by it from the Borrower pursuant to Section 2.21(e) prior to the time that any Lender makes any payment pursuant to this paragraph (f); any such amounts received by the Administrative Agent thereafter will be promptly remitted by the Administrative Agent to the Lenders that shall have made such payments and to the Issuing Bank, as their interests may appear. If any Lender shall not have made its Applicable Commitment Percentage of such L/C Disbursement available to the Administrative Agent as provided above, such Lender and the Borrower severally agree to pay interest on such amount, for each day from and including the date such amount is required to be paid in accordance with this paragraph to but excluding the date such amount is paid, to the Administrative Agent for the account of the Issuing Bank at (i) in the case of the Borrower, a rate per annum equal to the interest rate applicable to Loans
pursuant to Section 2.06(a), and (ii) in the case of such Lender, for the first such day, the Federal Funds Effective Rate, and for each day thereafter, the Alternate Base Rate.
SECTION 2.03. Borrowing Procedure. In order to request a Borrowing (other than a Swingline Loan or a deemed Borrowing pursuant to Section 2.02(f), as to which this Section 2.03 shall not apply), the Borrower shall notify the Administrative Agent of such request by telephone (a) in the case of a Eurodollar Borrowing, not later than 12:00 noon, New York City time, three Business Days before a proposed Borrowing, and (b) in the case of an ABR Borrowing, not later than 12:00 noon, New York City time, one Business Day before the proposed Borrowing is to occur. Each such telephonic Borrowing Request shall be irrevocable, and shall be confirmed promptly by hand delivery or fax to the Administrative Agent of a written Borrowing Request and shall specify the following information: (i) whether such Borrowing is to be a Eurodollar Borrowing or an ABR Borrowing; (ii) the date of such Borrowing (which shall be a Business Day); (iii) the number and location of the account to which funds are to be disbursed; (iv) the amount of such Borrowing; and (v) if such Borrowing is to be a Eurodollar Borrowing, the Interest Period with respect thereto; provided, however, that, notwithstanding any contrary specification in any Borrowing Request, each requested Borrowing shall comply with the requirements set forth in Section 2.02. If no election as to the Type of Borrowing is specified in any such notice, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period with respect to any Eurodollar Borrowing is specified in any such notice, then the Borrower shall be deemed to have selected an Interest Period of one months duration. The Administrative Agent shall promptly advise the applicable Lenders of any notice given pursuant to this Section 2.03 (and the contents thereof), and of each Lenders portion of the requested Borrowing.
SECTION 2.04. Evidence of Debt; Repayment of Loans. (a) The Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Loan of such Lender on the Maturity Date, together with accrued and unpaid interest of such amount to but excluding the date of payment thereof. The Borrower hereby promises to pay to the Swingline Lender the then unpaid principal amount of each Swingline Loan on the earlier of the fifth Business Day after such Swingline Loan is made and the Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement.
(c) The Administrative Agent shall maintain accounts in which it will record (i) the amount of each Loan made hereunder, the Type thereof and, if applicable, the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder from the Borrower or any Subsidiary Guarantor and each Lenders share thereof.
(d) The entries made in the accounts maintained pursuant to paragraphs (b) and (c) of this Section 2.04 shall be prima facie evidence of the existence and amounts of the obligations therein recorded; provided, however, that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligations of the Borrower to repay the Loans in accordance with their terms.
(e) Any Lender may request that Loans made by it hereunder be evidenced by a promissory note. In such event, the Borrower shall execute and deliver to such Lender a promissory note payable to such Lender and its registered assigns and in a form and substance reasonably acceptable to the Administrative Agent and the Borrower. Notwithstanding any other provision of this Agreement, in the event any Lender shall request and receive such a promissory note, the interests represented by such note shall at all times (including after any assignment of all or part of such interests pursuant to Section 9.03) be represented by one or more promissory notes payable to the payee named therein or its registered assigns.
SECTION 2.05. Fees. (a) The Borrower agrees to pay to each Lender, through the Administrative Agent, on the last Business Day of March, June, September and December in each year and on each date on which any Commitment of such Lender shall expire or be terminated as provided herein, a commitment fee (a Commitment Fee) equal to 0.75% per annum on the daily unused amount of the Commitment of such Lender during the preceding quarter (or other period commencing with the date hereof or ending with the Maturity Date or the date on which the Commitments of such Lender shall otherwise expire or be terminated, as applicable). All Commitment Fees shall be computed on the basis of the actual number of days elapsed in a year of 360 days. For purposes of calculating Commitment Fees only, no portion of the Commitments shall be deemed utilized as a result of outstanding Swingline Loans.
(b) The Borrower agrees to pay to the Administrative Agent, for its own account, the administrative fees set forth in the Engagement Letter at the times and in the amounts specified therein (the Administrative Agent Fees). The Administrative Agent Fees shall be paid on the dates due, in immediately available funds, to the Administrative Agent for its own account. Once paid, the Administrative Agent Fees shall not be refundable under any circumstances.
(c) The Borrower agrees to pay (i) to each Lender, through the Administrative Agent, on the last Business Day of March, June, September and December of each year and on the date on which the Commitment of such Lender shall be terminated as provided herein, a fee (an L/C Participation Fee) calculated on such Lenders Applicable Commitment Percentage of the daily aggregate L/C Exposure (excluding the portion thereof attributable to unreimbursed L/C Disbursements) during the preceding quarter (or shorter period commencing with the date hereof or ending with the Maturity Date or the date on which all Letters of Credit have been canceled or have expired and the Commitments of all Lenders shall have been terminated) at a rate per annum equal to the Applicable Percentage from time to time used to determine the interest rate on Borrowings comprised of Eurodollar Loans pursuant to Section 2.06, and (ii) to the
Issuing Bank, with respect to each Letter of Credit, a fronting fee not in excess of 0.25% per annum on the outstanding face amount of the Letter of Credit issued, together with the standard issuance and administrative fees specified from time to time by the Issuing Bank (collectively, the Issuing Bank Fees). All L/C Participation Fees and Issuing Bank Fees shall be computed on the basis of the actual number of days elapsed in a year of 360 days.
(d) All Fees shall be paid on the dates due, in immediately available funds, to the Administrative Agent for distribution, if and as appropriate, among the Lenders, except that the Issuing Bank Fees shall be paid directly to the Issuing Bank. Once paid, none of the Fees shall be refundable under any circumstances.
SECTION 2.06. Interest on Loans. (a) Subject to the provisions of Section 2.07, the Loans comprising each ABR Borrowing, including each Swingline Loan, shall bear interest (computed on the basis of the actual number of days elapsed over a year of 360 days and calculated from and including the date of such Borrowing to but excluding the date of repayment thereof) at a rate per annum equal to the Alternate Base Rate plus the Applicable Percentage.
(b) Subject to the provisions of Section 2.07, the Loans comprising each Eurodollar Borrowing shall bear interest (computed on the basis of the actual number of days elapsed over a year of 360 days) at a rate per annum equal to the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Percentage.
(c) Interest on each Loan shall be payable on the Interest Payment Dates applicable to such Loan except as otherwise provided in this Agreement. The applicable Alternate Base Rate or Adjusted LIBO Rate for each Interest Period or day within an Interest Period, as the case may be, shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.
SECTION 2.07. Default Interest. If (a) the Borrower shall default in the payment of any principal of or interest on any Loan or any other amount due hereunder or under any other Loan Document, by acceleration or otherwise or (b) if any Event of Default under Article VII has occurred and is continuing then, in the case of clause (a) of this Section 2.07, until such defaulted amount shall have been paid in full or, in the case of clause (b) of this Section 2.07, from the date of occurrence of such Event of Default and for so long as such Event of Default is continuing, to the extent permitted by law, all amounts outstanding under this Agreement and the other Loan Documents shall bear interest (after as well as before judgment), payable on demand, (i) in the case of principal, at the rate otherwise applicable to such Loan pursuant to Section 2.06 plus 2.00% per annum and (ii) in all other cases, at a rate per annum (computed on the basis of the actual number of days elapsed over a year of 360 days) equal to the rate that would be applicable to an ABR Loan plus 2.00% per annum.
SECTION 2.08. Alternate Rate of Interest. In the event, and on each occasion, that on the day two Business Days prior to the commencement of any Interest Period for a Eurodollar Borrowing the Administrative Agent shall have determined that dollar
deposits in the principal amounts of the Loans comprising such Borrowing are not generally available in the London interbank market, or that the rates at which such dollar deposits are being offered will not adequately and fairly reflect the cost to any Lender of making or maintaining its Eurodollar Loan during such Interest Period, or that reasonable means do not exist for ascertaining the Adjusted LIBO Rate, the Administrative Agent shall, as soon as practicable thereafter, give written or fax notice of such determination to the Borrower and the Lenders. In the event of any such determination, until the Administrative Agent shall have advised the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, any request by the Borrower for a Eurodollar Borrowing pursuant to Section 2.03 or 2.10 shall be deemed to be a request for an ABR Borrowing. Each determination by the Administrative Agent under this Section 2.08 shall be conclusive absent manifest error.
SECTION 2.09. Termination and Reduction of Commitments. (a) The Commitments (including the Swingline Commitment) shall automatically terminate on the Maturity Date. The L/C Commitment shall automatically terminate on the earlier to occur of (i) the termination of the Commitments and (ii) the date 30 days prior to the Maturity Date.
(b) Upon at least three Business Days prior irrevocable written or fax notice to the Administrative Agent, the Borrower may at any time in whole permanently terminate, or from time to time in part permanently reduce, the Commitments; provided, however, that (i) each partial reduction of the Commitments shall be in an integral multiple of $500,000 and in a minimum amount of $1,000,000 and (ii) the Total Commitment shall not be reduced to an amount that is less than the Aggregate Revolving Credit Exposure at the time.
(c) Each reduction in the Commitments hereunder shall be made ratably among the Lenders in accordance with their respective Commitments. The Borrower shall pay to the Administrative Agent for the account of the applicable Lenders, on the date of each termination or reduction, the Commitment Fees on the amount of the Commitments so terminated or reduced accrued to but excluding the date of such termination or reduction.
SECTION 2.10. Conversion and Continuation of Borrowings. The Borrower shall have the right at any time upon prior irrevocable notice to the Administrative Agent (a) not later than 12:00 (noon), New York City time, one Business Day prior to conversion, to convert any Eurodollar Borrowing into an ABR Borrowing, (b) not later than 10:00 a.m., New York City time, three Business Days prior to conversion or continuation, to convert any ABR Borrowing into a Eurodollar Borrowing or to continue any Eurodollar Borrowing as a Eurodollar Borrowing for an additional Interest Period, and (c) not later than 12:00 noon, New York City time, three Business Days prior to conversion, to convert the Interest Period with respect to any Eurodollar Borrowing to another permissible Interest Period, subject in each case to the following:
(i) each conversion or continuation shall be made pro rata among the Lenders in accordance with the respective principal amounts of the Loans comprising the converted or continued Borrowing;
(ii) if less than all the outstanding principal amount of any Borrowing shall be converted or continued, then each resulting Borrowing shall satisfy the limitations specified in Sections 2.02(a) and 2.02(b) regarding the principal amount and maximum number of Borrowings of the relevant Type;
(iii) each conversion shall be effected by each Lender and the Administrative Agent by recording for the account of such Lender the new Loan of such Lender resulting from such conversion and reducing the Loan (or portion thereof) of such Lender being converted by an equivalent principal amount; accrued interest on any Eurodollar Loan (or portion thereof) being converted shall be paid by the Borrower at the time of conversion;
(iv) if any Eurodollar Borrowing is converted at a time other than the end of the Interest Period applicable thereto, the Borrower shall pay, upon demand, any amounts due to the Lenders pursuant to Section 2.15;
(v) any portion of a Borrowing maturing or required to be repaid in less than one month may not be converted into or continued as a Eurodollar Borrowing;
(vi) any portion of a Eurodollar Borrowing that cannot be converted into or continued as a Eurodollar Borrowing by reason of the immediately preceding clause shall be automatically converted at the end of the Interest Period in effect for such Borrowing into an ABR Borrowing;
(vii) no Interest Period may be selected for any Eurodollar Borrowing that would end later than the Maturity Date; and
(viii) upon notice to the Borrower from the Administrative Agent given at the request of the Required Lenders, after the occurrence and during the continuance of a Default or Event of Default, no outstanding Loan may be converted into, or continued as, a Eurodollar Loan.
Each notice pursuant to this Section 2.10 shall be irrevocable and shall refer to this Agreement and specify (i) the identity and amount of the Borrowing that the Borrower requests be converted or continued, (ii) whether such Borrowing is to be converted to or continued as a Eurodollar Borrowing or an ABR Borrowing, (iii) if such notice requests a conversion, the date of such conversion (which shall be a Business Day) and (iv) if such Borrowing is to be converted to or continued as a Eurodollar Borrowing, the Interest Period with respect thereto. If no Interest Period is specified in any such notice with respect to any conversion to or continuation as a Eurodollar Borrowing, the Borrower shall be deemed to have selected an Interest Period of one months duration. The Administrative Agent shall advise the Lenders of any notice given pursuant to this Section 2.10 and of each Lenders portion of any converted or continued Borrowing. If the Borrower shall not have given notice in accordance with this Section 2.10 to continue any Borrowing into a subsequent Interest Period (and shall not otherwise have given notice in accordance with this Section 2.10 to convert such Borrowing), such Borrowing
shall, at the end of the Interest Period applicable thereto (unless repaid pursuant to the terms hereof), automatically be continued into an ABR Borrowing.
SECTION 2.11. Optional Prepayment. (a) The Borrower shall have the right at any time and from time to time to prepay any Borrowing, in whole or in part, upon at least three Business Days prior written or fax notice (or telephone notice promptly confirmed by written or fax notice) in the case of Eurodollar Loans, or written or fax notice (or telephone notice promptly confirmed by written or fax notice) at least one Business Day prior to the date of prepayment in the case of ABR Loans, to the Administrative Agent before 11:00 a.m., New York City time; provided, however, that each partial prepayment shall be in an amount that is an integral multiple of $250,000 and not less than $1,000,000.
(b) Each notice of prepayment shall specify the prepayment date and the principal amount of each Borrowing (or portion thereof) to be prepaid, shall be irrevocable unless conditioned upon a refinancing, in which case it shall still be subject to Section 2.15, and shall commit the Borrower to prepay such Borrowing by the amount stated therein on the date stated therein. All prepayments under this Section 2.11 shall be subject to Section 2.15 but otherwise without premium or penalty. All prepayments under this Section 2.11 shall be accompanied by accrued and unpaid interest on the principal amount to be prepaid to but excluding the date of payment.
SECTION 2.12. Mandatory Prepayments. (a) In the event of any termination of all the Commitments, the Borrower shall, on the date of such termination, repay or prepay all its outstanding Borrowings and all outstanding Swingline Loans and replace or cause to be canceled (or make other arrangements satisfactory to the Administrative Agent and the Issuing Bank with respect to) all outstanding Letters of Credit. If, after giving effect to any partial reduction of the Commitments or at any other time, the Aggregate Revolving Credit Exposure would exceed the Total Commitment, then the Borrower shall, on the date of such reduction or at such other time, repay or prepay Borrowings or Swingline Loans (or a combination thereof) and, after the Borrowings and Swingline Loans shall have been repaid or prepaid in full, replace or cause to be canceled (or make other arrangements satisfactory to the Administrative Agent and the Issuing Bank with respect to) Letters of Credit in an amount sufficient to eliminate such excess.
(b) The Borrower shall deliver to the Administrative Agent, at the time of each prepayment required under this Section 2.12, (i) a certificate signed by a Financial Officer of the Borrower setting forth in reasonable detail the calculation of the amount of such prepayment and (ii) to the extent practicable, at least three days prior written notice of such prepayment. Each notice of prepayment shall specify the prepayment date, the Type of each Loan being prepaid and the principal amount of each Loan (or portion thereof) to be prepaid. All prepayments of Borrowings under this Section 2.12 shall be subject to Section 2.15, but shall otherwise be without premium or penalty, and shall be accompanied by accrued and unpaid interest on the principal amount to be prepaid to but excluding the date of payment.
SECTION 2.13. Increased Costs. (a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets or liabilities of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank;
(ii) subject any Lender or the Issuing Bank to any Tax of any kind whatsoever with respect to this Agreement, any Letter of Credit, any participation in a Letter of Credit or any Eurodollar Loan made by it, or change the basis of taxation of payments to such Lender or the Issuing Bank in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 2.19 and the imposition of, or any change in the rate of, any Excluded Tax payable by such Lender or the Issuing Bank); or
(iii) impose on any Lender or the Issuing Bank or the London interbank market any other condition, cost or expense affecting this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such Lender of making, converting to, continuing or maintaining any Eurodollar Loan or of maintaining its obligation to make any such Loan, or to increase the cost to such Lender or the Issuing Bank of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or the Issuing Bank hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or the Issuing Bank, the Borrower will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered (except for Indemnified Taxes or Other Taxes covered by Section 2.19 and the imposition of, or any change in the rate of, any Excluded Tax payable by such Lender or the Issuing Bank).
(b) Capital Requirements. If any Lender or the Issuing Bank reasonably determines that any Change in Law affecting such Lender or the Issuing Bank or any lending office of such Lender or such Lenders or the Issuing Banks holding company, if any, regarding capital requirements, has or would have the effect of reducing the rate of return on such Lenders or the Issuing Banks capital or on the capital of such Lenders or the Issuing Banks holding company, if any, as a consequence of this Agreement, the Commitment of such Lender or the Loans made by, or participations in Letters of Credit or Swingline Loans held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lenders or the Issuing Banks holding company could have achieved but for such Change in Law (taking into consideration such Lenders or the Issuing Banks policies and the policies of
such Lenders or the Issuing Banks holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank or such Lenders or the Issuing Banks holding company for any such reduction suffered (except for Indemnified Taxes or Other Taxes covered by Section 2.19 and the imposition of, or any change in the rate of, any Excluded Tax payable by such Lender or the Issuing Bank).
(c) Certificates for Reimbursement. A certificate of a Lender or the Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or the Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section 2.13 and delivered to the Borrower, shall be conclusive absent manifest error. The Borrower shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.
(d) Delay in Requests. Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section 2.13 shall not constitute a waiver of such Lenders or the Issuing Banks right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender or the Issuing Bank pursuant to this Section 2.13 for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender or the Issuing Bank, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions, and of such Lenders or the Issuing Banks intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).
SECTION 2.14. Change in Legality. (a) Notwithstanding any other provision of this Agreement, if any Change in Law shall make it unlawful for any Lender to make or maintain any Eurodollar Loan or to give effect to its obligations as contemplated hereby with respect to any Eurodollar Loan, then, by written notice to the Borrower and to the Administrative Agent:
(i) such Lender may declare that Eurodollar Loans will not thereafter (for the duration of such unlawfulness) be made by such Lender hereunder (or be continued for additional Interest Periods) and ABR Loans will not thereafter (for such duration) be converted into Eurodollar Loans, whereupon any request for a Eurodollar Borrowing (or to convert an ABR Borrowing to a Eurodollar Borrowing or to continue a Eurodollar Borrowing for an additional Interest Period) shall, as to such Lender only, be deemed a request for an ABR Loan (or a request to continue an ABR Loan as such for an additional Interest Period or to convert a Eurodollar Loan into an ABR Loan, as the case may be), unless such declaration shall be subsequently withdrawn; and
(ii) such Lender may require that all outstanding Eurodollar Loans made by it be converted to ABR Loans, in which event all such Eurodollar Loans shall
be automatically converted to ABR Loans as of the effective date of such notice as provided in paragraph (b) of this Section 2.14.
In the event any Lender shall exercise its rights under (i) or (ii) above, all payments and prepayments of principal that would otherwise have been applied to repay the Eurodollar Loans that would have been made by such Lender or the converted Eurodollar Loans of such Lender shall instead be applied to repay the ABR Loans made by such Lender in lieu of, or resulting from the conversion of, such Eurodollar Loans.
(b) For purposes of this Section 2.14, a notice to the Borrower by any Lender shall be effective as to each Eurodollar Loan made by such Lender, if lawful, on the last day of the Interest Period then applicable to such Eurodollar Loan; in all other cases such notice shall be effective on the date of receipt by the Borrower.
SECTION 2.15. Indemnity. The Borrower shall indemnify each Lender against any loss or expense that such Lender may sustain or incur as a consequence of (a) any event, other than a default by such Lender in the performance of its obligations hereunder, which results in (i) such Lender receiving or being deemed to receive any amount on account of the principal of any Eurodollar Loan prior to the end of the Interest Period in effect therefor, (ii) the conversion of any Eurodollar Loan to an ABR Loan, or the conversion of the Interest Period with respect to any Eurodollar Loan, in each case other than on the last day of the Interest Period in effect therefor, or (iii) any Eurodollar Loan to be made by such Lender (including any Eurodollar Loan to be made pursuant to a conversion or continuation under Section 2.10) not being made after notice of such Loan shall have been given by the Borrower hereunder (any of the events referred to in this clause (a) being called a Breakage Event) or (b) any default by the Borrower in the making of any payment or prepayment required to be made hereunder. In the case of any Breakage Event, such loss shall include to the extent applicable an amount equal to the excess, as reasonably determined by such Lender, of (i) its cost of obtaining funds for the Eurodollar Loan that is the subject of such Breakage Event for the period from the date of such Breakage Event to the last day of the Interest Period in effect (or that would have been in effect) for such Loan over (ii) the amount of interest likely to be realized by such Lender in redeploying the funds released or not utilized by reason of such Breakage Event for such period. A certificate of any Lender setting forth any amount or amounts which such Lender is entitled to receive pursuant to this Section 2.15 shall be delivered to the Borrower and shall be conclusive absent manifest error.
SECTION 2.16. Pro Rata Treatment. Except as provided below in this Section 2.16 with respect to Swingline Loans and as required under Section 2.14, each Borrowing, each payment or prepayment of principal of any Borrowing, each payment of interest on the Loans, each payment of the Commitment Fees, each reduction of the Commitments and each conversion of any Borrowing to or continuation of any Borrowing as a Borrowing of any Type shall be allocated pro rata among the Lenders in accordance with their respective Commitments (or, if such Commitments shall have expired or been terminated, in accordance with the respective principal amounts of their outstanding Loans). For purposes of determining the available Commitments of the Lenders at any time, each outstanding Swingline Loan shall be deemed to have utilized
the Commitments of the Lenders (including those Lenders which shall not have made Swingline Loans) pro rata in accordance with such respective Commitments. Each Lender agrees that in computing such Lenders portion of any Borrowing to be made hereunder, the Administrative Agent may, in its reasonable discretion, round each Lenders percentage of such Borrowing to the next higher or lower whole dollar amount.
SECTION 2.17. Sharing of Payments by Lenders. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or other obligations hereunder resulting in such Lender receiving payment of a proportion of the aggregate amount of its Loans and accrued interest thereon or other such obligations greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact and (b) purchase (for cash at face value) participations in the Loans and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them; provided that:
(i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and
(ii) the provisions of this paragraph shall not be construed to apply to (x) any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in L/C Disbursements to any assignee or participant, other than to the Borrower or any Subsidiary thereof (as to which the provisions of this paragraph shall apply).
The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation, but only to the extent that such consent does not increase the aggregate liability of the Borrower.
SECTION 2.18. Payments; Administrative Agents Clawback. (a) The Borrower shall make each payment (including principal of or interest on any Borrowing or any L/C Disbursement or any Fees or other amounts) hereunder and under any other Loan Document not later than 12:00 noon, New York City time, on the date when due in immediately available dollars, without setoff, defense or counterclaim. Each such payment (other than (i) Issuing Bank Fees, which shall be paid directly to the Issuing Bank, and (ii) principal of and interest on Swingline Loans, which shall be paid directly to the Swingline Lender except as otherwise provided in Section 2.23(e)) shall be made
to the Administrative Agent at its offices at Eleven Madison Avenue, New York, NY 10010. The Administrative Agent shall distribute to each Lender any payments received by the Administrative Agent on behalf of such Lender. Except as otherwise expressly provided herein, whenever any payment (including principal of or interest on any Borrowing or any Fees or other amounts) hereunder or under any other Loan Document shall become due, or otherwise would occur, on a day that is not a Business Day, such payment may be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of interest or Fees, if applicable.
(b) Funding by Lenders; Presumption by Administrative Agent. Unless the Administrative Agent shall have received notice from a Lender (x) in the case of ABR Loans, 12:00 noon, New York City time, on the date of such Borrowing and (y) otherwise, prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lenders share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.02 and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of a payment to be made by such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, and (ii) in the case of a payment to be made by the Borrower, the interest rate applicable to ABR Loans. If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period. If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lenders Loan included in such Borrowing. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.
(c) Payments by Borrower; Presumptions by Administrative Agent. Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Bank hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or the Issuing Bank, with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal
Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.
SECTION 2.19. Taxes. (a) Payments Free of Taxes. Any and all payments by or on account of any obligation of the Borrower or any other Loan Party hereunder or under any other Loan Document shall be made free and clear of and without reduction or withholding for any Indemnified Taxes or Other Taxes, provided that if the Borrower or any other Loan Party shall be required by applicable law to deduct any Indemnified Taxes (including any Other Taxes) from such payments, then (i) the sum payable shall be increased as necessary so that after making all such required deductions (including such deductions applicable to additional sums payable under this Section) the Administrative Agent, Lender or the Issuing Bank, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower or such Loan Party shall make such deductions and (iii) the Borrower or such Loan Party shall timely pay the full amount so deducted to the relevant Governmental Authority in accordance with applicable law. The Administrative Agent, Lender or Issuing Bank (as the case may be) will use reasonable efforts to notify the Borrower upon becoming aware of any circumstances as a result of which the Borrower or any other Loan Party is or would be required to make any deduction or withholding from any sum payable hereunder.
(b) Payments of Other Taxes by the Borrower. Without limiting the provisions of paragraph (a) of this Section 2.19, the Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.
(c) Indemnification by the Borrower. The Borrower shall indemnify the Administrative Agent, each Lender and the Issuing Bank, within 10 days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section 2.19) paid by the Administrative Agent, such Lender or the Issuing Bank, as the case may be, and any reasonable expenses (including the fees, charges and disbursements of counsel, which fees, charges and disbursements of counsel shall be on the same terms and subject to the same limitations as provided in Section 9.04(b), provided that successful recovery of such fees, charges and disbursements of counsel pursuant to this Section 2.19(c) by the Administrative Agent, any Lender or the Issuing Bank shall preclude such Administrative Agent, Lender or the Issuing Bank, as the case may be, from receiving duplicative indemnification for these same fees, charges or disbursements of counsel under Section 9.04(b) of this Agreement) arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority, other than penalties, interest and expenses to the extent solely and directly attributable to the gross negligence or willful misconduct, as determined by a final and nonappealable judgment of a court of competent jurisdiction, of such Administrative Agent, Lender, or Issuing Bank. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or the Issuing Bank (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive absent manifest error.
(d) Evidence of Payments. As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower or any other Loan Party to a Governmental Authority, the Borrower or such other Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(e) Status of Lenders. Any Lender or Issuing Bank that is entitled to an exemption from or reduction of withholding tax (including withholding tax imposed by FATCA) under the law of the jurisdiction in which the Borrower is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments under any Loan Document shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender or the Issuing Bank, if requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender or the Issuing Bank is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in this Section 2.19, the completion, execution and submission of such documentation shall not be required if in the Lenders or Issuing Banks judgment such completion, execution or submission would subject such Lender or the Issuing Bank to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender or the Issuing Bank; provided, however, that if any Lender or the Issuing Bank fails to comply with the documentation requirements of this Section 2.19(e), any Taxes or increase in Taxes resulting solely and directly from such failure shall be considered Excluded Taxes, but only to the extent that such resulting Taxes would not constitute Indemnified Taxes but for the operation of this sentence.
Without limiting the generality of the foregoing, in the event that the Borrower is resident for tax purposes in the United States of America, any Lender or Issuing Bank shall deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Lender or Issuing Bank becomes a Lender under this Agreement (and from time to time thereafter upon the request of the Borrower or the Administrative Agent, but only if such Lender or Issuing Bank is legally entitled to do so), whichever of the following is applicable:
(i) duly completed copies of Internal Revenue Service Form W-9,
(ii) duly completed copies of Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States of America is a party,
(iii) duly completed copies of Internal Revenue Service Form W-8ECI,
(iv) duly completed copies of Internal Revenue Service Form W-8IMY and all required supporting documentation,
(v) in the case of a payment made to a Lender or Issuing Bank under this Agreement or any Loan Document that would be subject to U.S. Federal withholding Tax imposed by FATCA if such Lender or Issuing Bank were to fail to comply with the applicable requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable, or any successor provisions thereof), such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Withholding Agent as may be necessary for the Withholding Agent to comply with its obligations under FATCA, to determine that such Lender has or has not complied with such Lenders or Issuing Banks obligations under FATCA or to determine the amount to deduct and withhold from such payment,
(vi) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under section 881(c) of the Code, (x) a certificate to the effect that such Foreign Lender is not (A) a bank within the meaning of section 881(c)(3)(A) of the Code, (B) a 10 percent shareholder of the Borrower within the meaning of section 881(c)(3)(B) of the Code, or (C) a controlled foreign corporation described in section 881(c)(3)(C) of the Code and (y) duly completed copies of Internal Revenue Service Form W-8BEN, or
(vii) any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in United States Federal withholding tax duly completed together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower to determine the withholding or deduction required to be made.
Upon the reasonable request of the Borrower or the Administrative Agent, any Lender or the Issuing Bank shall update any form or certification previously delivered pursuant to this Section 2.19(e). Each Lender and the Issuing Bank agrees that if any form or certification previously delivered by such Lender or the Issuing Bank pursuant to this Section 2.19(e) expires or becomes obsolete or inaccurate in any material respect, such Lender or the Issuing Bank shall, on or before the date on which such form or certification expires or becomes obsolete or inaccurate, update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of such Lenders or the Issuing Banks legal inability to do so.
(f) Treatment of Certain Refunds. If the Administrative Agent, a Lender or the Issuing Bank determines, in its sole discretion and good faith, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 2.19, it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of
all out-of-pocket expenses of the Administrative Agent, such Lender or the Issuing Bank, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Borrower, upon the request of the Administrative Agent, such Lender or the Issuing Bank, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent, such Lender or the Issuing Bank in the event the Administrative Agent, such Lender or the Issuing Bank is required to repay such refund to such Governmental Authority. This paragraph shall not be construed to require the Administrative Agent, any Lender or the Issuing Bank to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person.
(g) Cooperation. If the Borrower determines in good faith that a reasonable basis exists for contesting any Indemnified Taxes or Other Taxes for which additional amounts have been paid under this Section 2.19, the relevant Lender, Administrative Agent or Issuing Bank, if reasonably requested by the Borrower in writing, will use reasonable efforts to cooperate with the Borrower at the Borrowers expense in challenging such Indemnified Taxes or Other Taxes. Nothing in this Section 2.19(g) shall relieve the Borrower of its obligation to promptly pay any additional amounts pursuant to this Section 2.19.
SECTION 2.20. Mitigation Obligations; Replacement of Lenders. (a) Designation of a Different Lending Office. If any Lender requests compensation under Section 2.13, or requires the Borrower to pay additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.19, then such Lender shall (at the request of the Borrower) use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.13 or 2.19, as the case may be, in the future, and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
(b) Replacement of Lenders. If any Lender requests compensation under Section 2.13, or if the Borrower is required to pay additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.19 and, in each case, such Lender has declined or is unable to designate a different lending office in accordance with Section 2.20(a), or if any Lender is a Defaulting Lender or a Non-Consenting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 9.03), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that:
(i) the Borrower shall have paid to the Administrative Agent the assignment fee (if any) specified in Section 9.03;
(ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in L/C Disbursements, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 2.15) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);
(iii) in the case of any such assignment resulting from a claim for compensation under Section 2.13 or payments required to be made pursuant to Section 2.19, such assignment will result in a reduction in such compensation or payments thereafter;
(iv) such assignment does not conflict with applicable law; and
(v) in the case of any assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent.
A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.
SECTION 2.21. Letters of Credit. (a) General. The Borrower may request the issuance of a standby Letter of Credit for its own account or for the account of any Restricted Subsidiary (in which case the Borrower and such Restricted Subsidiary shall be co-applicants with respect to such Letter of Credit), in a form reasonably acceptable to the Administrative Agent and the Issuing Bank, at any time and from time to time while the L/C Commitment remains in effect; provided that the Issuing Bank shall not be required to issue, extend or renew any Letter of Credit after the date that is 30 days prior to the Maturity Date. This Section 2.21 shall not be construed to impose an obligation upon the Issuing Bank to issue any Letter of Credit that is inconsistent with the terms and conditions of this Agreement. Notwithstanding anything to the contrary contained in this Section 2.21 or elsewhere in this Agreement, in the event that a Lender is a Defaulting Lender, the Issuing Bank shall not be required to issue any Letter of Credit unless the Issuing Bank has entered into arrangements satisfactory to it and the Borrower to eliminate the Issuing Banks risk with respect to the participation in Letters of Credit by all such Defaulting Lenders, including by Cash Collateralizing each such Defaulting Lenders Applicable Commitment Percentage of each Letter of Credit.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. In order to request the issuance of a Letter of Credit (or to amend, renew or extend an existing Letter of Credit), the Borrower shall hand deliver or fax to the Issuing Bank and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit,
or identifying the Letter of Credit to be amended, renewed or extended, the date of issuance, amendment, renewal or extension, the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section 2.21), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare such Letter of Credit. A Letter of Credit shall be issued, amended, renewed or extended only if, and upon issuance, amendment, renewal or extension of each Letter of Credit the Borrower shall be deemed to represent and warrant that, after giving effect to such issuance, amendment, renewal or extension (i) the L/C Exposure shall not exceed $5,000,000 and (ii) the Aggregate Revolving Credit Exposure shall not exceed the Total Commitment.
(c) Expiration Date. Each Letter of Credit shall expire at the close of business on the earlier of the date one year after the date of the issuance of such Letter of Credit and the date that is five Business Days prior to the Maturity Date, unless such Letter of Credit expires by its terms on an earlier date; provided, however, that a Letter of Credit may, upon the request of the Borrower, include a provision whereby such Letter of Credit shall be renewed automatically for additional consecutive periods of 12 months or less (but not beyond the date that is five Business Days prior to the Maturity Date) unless the Issuing Bank notifies the beneficiary thereof at least 30 days (or such longer period as may be specified in such Letter of Credit) prior to the then-applicable expiration date that such Letter of Credit will not be renewed.
(d) Participations. By the issuance of a Letter of Credit and without any further action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Lender, and each such Lender hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal to such Lenders Applicable Commitment Percentage of the aggregate amount available to be drawn under such Letter of Credit, effective upon the issuance of such Letter of Credit (or, in the case of the Existing Letters of Credit, effective upon the Closing Date). In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such Lenders Applicable Commitment Percentage of each L/C Disbursement made by the Issuing Bank and not reimbursed by the Borrower (or, if applicable, another party pursuant to its obligations under any other Loan Document) forthwith on the date due as provided in paragraph (e) of this Section 2.21. Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or an Event of Default, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any L/C Disbursement in respect of a Letter of Credit, the Borrower shall pay to the Administrative Agent an amount equal to such L/C Disbursement not later than two hours after the Borrower shall have received notice from the Issuing Bank that payment of such draft will be made, or, if the Borrower shall have received such notice later than 10:00 a.m., New York City time,
on any Business Day, not later than 10:00 a.m., New York City time, on the immediately following Business Day.
(f) Obligations Absolute. The Borrowers obligations to reimburse L/C Disbursements as provided in paragraph (e) of this Section 2.21 shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement, under any and all circumstances whatsoever, and irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit or any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure from all or any of the provisions of any Letter of Credit or any Loan Document;
(iii) the existence of any claim, setoff, defense or other right that the Borrower, any other party guaranteeing, or otherwise obligated with, the Borrower, any Subsidiary or other Affiliate thereof or any other Person may at any time have against the beneficiary under any Letter of Credit, the Issuing Bank, the Administrative Agent or any Lender or any other Person, whether in connection with this Agreement, any other Loan Document or any other related or unrelated agreement or transaction;
(iv) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;
(v) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of the Issuing Bank, any Lender, the Administrative Agent or any other Person or any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section 2.21, constitute a legal or equitable discharge of the Borrowers obligations hereunder.
Without limiting the generality of the foregoing, it is expressly understood and agreed that the absolute and unconditional obligation of the Borrower hereunder to reimburse L/C Disbursements will not be excused by the gross negligence or willful misconduct of the Issuing Bank. However, the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Banks gross negligence or willful misconduct in determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. It is further understood and agreed that the Issuing Bank may accept documents that appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary and, in making any payment under any Letter of Credit (i) the Issuing Banks exclusive reliance on the documents presented to it under such Letter of Credit as to any and all matters set forth therein, including reliance on the amount of any draft presented under such Letter of Credit, whether or not the amount due to the beneficiary thereunder equals the amount of such draft and whether or not any document presented pursuant to such Letter of Credit proves to be insufficient in any respect, if such document on its face appears to be in order, and whether or not any other statement or any other document presented pursuant to such Letter of Credit proves to be forged or invalid or any statement therein proves to be inaccurate or untrue in any respect whatsoever and (ii) any noncompliance in any immaterial respect of the documents presented under such Letter of Credit with the terms thereof shall, in each case, be deemed not to constitute gross negligence or willful misconduct of the Issuing Bank.
(g) Disbursement Procedures. The Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. The Issuing Bank shall as promptly as possible give telephonic notification, confirmed by fax, to the Administrative Agent and the Borrower of such demand for payment and whether the Issuing Bank has made or will make an L/C Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to any such L/C Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any L/C Disbursement in respect of a Letter of Credit, then, unless the Borrower shall reimburse such L/C Disbursement in full on such date, the unpaid amount thereof shall bear interest for the account of the Issuing Bank, for each day from and including the date of such L/C Disbursement, to but excluding the earlier of the date of payment by the Borrower or the date on which interest shall commence to accrue thereon as provided in Section 2.02(f), at the rate per annum that would apply to such amount if such amount were an ABR Loan.
(i) Resignation or Removal of the Issuing Bank. The Issuing Bank may resign at any time by giving 30 days prior written notice to the Administrative Agent, the Lenders and the Borrower, and may be removed at any time by the Borrower by notice to the Issuing Bank, the Administrative Agent and the Lenders. Upon the acceptance of any appointment as the Issuing Bank hereunder by a Lender that shall agree to serve as successor Issuing Bank, such successor shall succeed to and become vested with all the interests, rights and obligations of the retiring Issuing Bank. At the time such removal or resignation shall become effective, the Borrower shall pay all accrued and unpaid fees pursuant to Section 2.05(c)(ii). The acceptance of any appointment as the Issuing Bank hereunder by a successor Lender shall be evidenced by an agreement entered into by such successor, in a form satisfactory to the Borrower and the Administrative Agent, and, from and after the effective date of such agreement, (i) such successor Lender shall have all the rights and obligations of the previous Issuing Bank under this Agreement and the other Loan Documents and (ii) references herein and in the other Loan Documents to the term Issuing Bank shall be deemed to refer to such successor or to any previous Issuing
Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the resignation or removal of the Issuing Bank hereunder, the retiring Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement and the other Loan Documents with respect to Letters of Credit issued by it prior to such resignation or removal, but shall not be required to issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall occur and be continuing, the Borrower shall, on the Business Day it receives notice from the Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated, Lenders holding participations in outstanding Letters of Credit representing greater than 50% of the aggregate undrawn amount of all outstanding Letters of Credit) thereof, Cash Collateralize the aggregate L/C Exposure as of such date in an amount not less than the Minimum Collateral Amount. Such Cash Collateral shall be held by the Administrative Agent as collateral for the payment and performance of the Bank Obligations. Such Cash Collateral shall (i) automatically be applied by the Administrative Agent to reimburse the Issuing Bank for L/C Disbursements for which it has not been reimbursed, (ii) be held for the satisfaction of the reimbursement obligations of the Borrower for the L/C Exposure at such time and (iii) if the maturity of the Loans has been accelerated (but subject to the consent of Lenders holding participations in outstanding Letters of Credit representing greater than 50% of the aggregate undrawn amount of all outstanding Letters of Credit), be applied to satisfy the Bank Obligations. If the Borrower is required to provide Cash Collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three Business Days after all Events of Default have been cured or waived.
(k) Additional Issuing Banks. The Borrower may, at any time and from time to time with the consent of the Administrative Agent (which consent shall not be unreasonably withheld or delayed) and such Lender, designate one or more additional Lenders to act as an issuing bank under the terms of this Agreement. Any Lender designated as an issuing bank pursuant to this paragraph (k) shall be deemed to be an Issuing Bank (in addition to being a Lender) in respect of Letters of Credit issued or to be issued by such Lender, and, with respect to such Letters of Credit, such term shall thereafter apply to the other Issuing Bank and such Lender.
SECTION 2.22. Defaulting Lender. (a) Defaulting Lender Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:
(i) Waivers and Amendments. Such Defaulting Lenders right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of Required Lenders.
(ii) Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such
Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VII or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 9.05 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to the Issuing Bank or Swingline Lender hereunder; third, to Cash Collateralize the Issuing Banks Fronting Exposure with respect to such Defaulting Lender in accordance with Section 2.24; fourth, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lenders potential future funding obligations with respect to Loans under this Agreement and (y) Cash Collateralize the Issuing Banks future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with Section 2.24; sixth, to the payment of any amounts owing to the Lenders, the Issuing Bank or Swingline Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the Issuing Bank or Swingline Lender against such Defaulting Lender as a result of such Defaulting Lenders breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lenders breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or L/C Disbursements in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 4.01 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Disbursements owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Disbursements owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Obligations and Swingline Loans are held by the Lenders pro rata in accordance with the Commitments without giving effect to Section 2.22(a)(iv). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.22(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.
(iii) Certain Fees. (A) No Defaulting Lender shall be entitled to receive any Commitment Fee for any period during which that Lender is a Defaulting
Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).
(B) Each Defaulting Lender shall be entitled to receive L/C Participation Fees for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Applicable Commitment Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 2.24.
(C) With respect to any L/C Participation Fee not required to be paid to any Defaulting Lender pursuant to clause (A) or (B) above, the Borrower shall (x) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lenders participation in L/C Obligations or Swingline Loans that has been reallocated to such Non-Defaulting Lender pursuant to clause (iv) below, (y) pay to the Issuing Bank and Swingline Lender, as applicable, the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to the Issuing Banks or Swingline Lenders Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such fee.
(iv) Reallocation of Participations to Reduce Fronting Exposure. All or any part of such Defaulting Lenders participation in L/C Obligations and Swingline Loans shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Applicable Commitment Percentages (calculated without regard to such Defaulting Lenders Commitment) but only to the extent that (x) the conditions set forth in Section 4.01 are satisfied at the time of such reallocation (and, unless the Borrower shall have otherwise notified the Administrative Agent at such time, the Borrower shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (y) such reallocation does not cause the aggregate Revolving Credit Exposure of any Non-Defaulting Lender to exceed such Non-Defaulting Lenders Commitment. No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lenders increased exposure following such reallocation.
(v) Cash Collateral, Repayment of Swingline Loans. If the reallocation described in clause (iv) of this Section 2.22(a) cannot, or can only partially, be effected, the Borrower shall, without prejudice to any right or remedy available to it hereunder or under law, (x) first, prepay Swingline Loans in an amount equal to the Swingline Lenders Fronting Exposure and (y) second, Cash Collateralize the Issuing Banks Fronting Exposure in accordance with the procedures set forth in Section 2.24.
(b) Defaulting Lender Cure. If the Borrower, the Administrative Agent and the Swingline Lender and Issuing Bank agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swingline Loans to be held pro rata by the Lenders in accordance with the Commitments (without giving effect to Section 2.22(a)(iv)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lenders having been a Defaulting Lender.
(c) New Swingline Loans/Letters of Credit. So long as any Lender is a Defaulting Lender, (i) the Swingline Lender shall not be required to fund any Swingline Loans unless it is satisfied that it will have no Fronting Exposure after giving effect to such Swingline Loan and (ii) the Issuing Bank shall not be required to issue, extend, renew or increase any Letter of Credit unless it is satisfied that it will have no Fronting Exposure after giving effect thereto.
SECTION 2.23. Swingline Loans. (a) Swingline Commitment. Subject to the terms and conditions and relying upon the representations and warranties herein set forth, the Swingline Lender agrees to make loans to the Borrower at any time and from time to time after the Closing Date and until the earlier of the Maturity Date and the termination of the Commitments, in an aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of all Swingline Loans exceeding $10,000,000 in the aggregate or (ii) the aggregate Revolving Credit Exposure, after giving effect to any Swingline Loan, exceeding the aggregate Commitments. Each Swingline Loan shall be in a principal amount that is an integral multiple of $250,000. The Swingline Commitment may be terminated or reduced from time to time as provided herein. Within the foregoing limits, the Borrower may borrow, pay or prepay and reborrow Swingline Loans hereunder, subject to the terms, conditions and limitations set forth herein. Notwithstanding anything to the contrary contained in this Section 2.23 or elsewhere in this Agreement, the Swingline Lender shall not be obligated to make any Swingline Loan at a time when a Lender is a Defaulting Lender unless the Swingline Lender has entered into arrangements satisfactory to it and the Borrower to eliminate the Swingline Lenders risk with respect to the Defaulting Lenders participation in such Swingline Loans, including by Cash Collateralizing such Defaulting Lenders Applicable Commitment Percentage of the outstanding Swingline Loans.
(b) Swingline Loans. The Borrower shall notify the Administrative Agent and the Swingline Lender by fax, or by telephone (promptly confirmed by fax), not later than 12:00 noon, New York City time, on the day of a proposed Swingline Loan. Such notice
shall be delivered on a Business Day, shall be irrevocable and shall refer to this Agreement and shall specify the requested date (which shall be a Business Day) and amount of such Swingline Loan and the wire transfer instructions for the account of the Borrower to which the proceeds of the Swingline Loan should be transferred. The Swingline Lender shall make each Swingline Loan by wire transfer to the account specified in such request.
(c) Prepayment. The Borrower shall have the right at any time and from time to time to prepay any Swingline Loan, in whole or in part, upon giving written or fax notice (or telephone notice promptly confirmed by written, or fax notice) to the Administrative Agent and the Swingline Lender no later than 12:00 noon, New York City time, on the date of prepayment at the Administrative Agents and Swingline Lenders respective addresses for notices specified herein.
(d) Interest. Each Swingline Loan shall be an ABR Loan and, subject to the provisions of Section 2.07, shall bear interest as provided in Section 2.06(a).
(e) Participations. The Swingline Lender may by written notice given to the Administrative Agent not later than 12:00 noon, New York City time, on any Business Day require the Lenders to acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding. Such notice shall specify the aggregate amount of Swingline Loans in which Lenders will participate. The Administrative Agent will, promptly upon receipt of such notice, give notice to each Lender, specifying in such notice such Lenders Applicable Commitment Percentage of such Swingline Loan or Loans. In furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the account of the Swingline Lender, such Lenders Applicable Commitment Percentage of such Swingline Loan or Loans. Each Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or an Event of Default, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.02(c) with respect to Loans made by such Lender (and Section 2.02(c) shall apply, mutatis mutandis, to the payment obligations of the Lenders) and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Lenders. The Administrative Agent shall notify the Borrower of any participations in any Swingline Loan acquired pursuant to this paragraph and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender. Any amounts received by the Swingline Lender from the Borrower (or other party on behalf of the Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve the Borrower (or other party liable for obligations of the Borrower) of any default in the payment thereof.
SECTION 2.24. Cash Collateral. At any time that there shall exist a Defaulting Lender, within one Business Day following the written request of the Administrative Agent or the Issuing Bank (with a copy to the Administrative Agent) the Borrower shall Cash Collateralize the Issuing Banks Fronting Exposure with respect to such Defaulting Lender (determined after giving effect to Section 2.22(a)(iv) and any Cash Collateral provided by such Defaulting Lender) in an amount not less than the Minimum Collateral Amount.
(a) Grant of Security Interest. The Borrower, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to the Administrative Agent, for the benefit of the Issuing Bank, and agrees to maintain, a first priority security interest in all such Cash Collateral as security for the Defaulting Lenders obligation to fund participations in respect of L/C Obligations, to be applied pursuant to clause (b) of this Section 2.24. If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent and the Issuing Bank as herein provided (other than applicable Permitted Liens), or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Borrower will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency (after giving effect to any Cash Collateral provided by the Defaulting Lender).
(b) Application. Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under this Section 2.24 or Section 2.22 in respect of Letters of Credit shall be applied to the satisfaction of the Defaulting Lenders obligation to fund participations in respect of L/C Obligations (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.
(c) Termination of Requirement. Cash Collateral (or the appropriate portion thereof) provided to reduce the Issuing Banks Fronting Exposure shall no longer be required to be held as Cash Collateral pursuant to this Section 2.24 following (i) the elimination of the applicable Fronting Exposure (including by the termination of Defaulting Lender status of the applicable Lender), or (ii) the determination by the Administrative Agent and the Issuing Bank that there exists excess Cash Collateral; provided that, subject to Section 2.22, the Person providing Cash Collateral and the Issuing Bank may agree that Cash Collateral shall be held to support future anticipated Fronting Exposure or other obligations and provided further that to the extent that such Cash Collateral was provided by the Borrower, such Cash Collateral shall remain subject to the security interest granted pursuant to the Loan Documents.
ARTICLE III
Representations and Warranties
The Borrower represents and warrants to the Administrative Agent, the Collateral Agent, the Issuing Bank and each of the Lenders that:
SECTION 3.01. Organization; Powers. The Borrower and each of the Restricted Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has all requisite power and authority to own its property and assets and to carry on its business as now conducted and as proposed to be conducted, (c) is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required, except where the failure so to qualify could not reasonably be expected to result in a Material Adverse Effect, and (d) has the power and authority to execute, deliver and perform its obligations under each of the Loan Documents and each other agreement or instrument contemplated thereby to which it is or will be a party and, in the case of the Borrower, to borrow hereunder.
SECTION 3.02. Authorization. The Transactions (a) have been duly authorized by all requisite corporate, limited liability company and, if required, stockholder or member action and (b) will not (i) violate (A) any provision of law, statute, rule or regulation, or of the certificate or articles of incorporation or other constitutive documents or by-laws of the Borrower or any Restricted Subsidiary, (B) any order of any Governmental Authority or (C) any provision of any indenture, agreement or other instrument to which the Borrower or any Restricted Subsidiary is a party or by which any of them or any of their property is or may be bound, (ii) be in conflict with, result in a breach of or constitute (alone or with notice or lapse of time or both) a default under, or give rise to any right to accelerate or to require the prepayment, repurchase or redemption of any obligation under any such indenture, agreement or other instrument or (iii) result in the creation or imposition of any Lien upon or with respect to any property or assets now owned or hereafter acquired by the Borrower or any Restricted Subsidiary (other than any Lien created hereunder or under the Security Documents).
SECTION 3.03. Enforceability. This Agreement has been duly executed and delivered by the Borrower and constitutes, and each other Loan Document when executed and delivered by each Loan Party party thereto will constitute, a legal, valid and binding obligation of such Loan Party enforceable against such Loan Party in accordance with its terms.
SECTION 3.04. Governmental Approvals. No action, consent or approval of, registration or filing with or any other action by any Governmental Authority is or will be required in connection with the Transactions, except for (a) the filing of Uniform Commercial Code financing statements and filings with the United States Patent and Trademark Office and the United States Copyright Office and (b) such as have been made or obtained and are in full force and effect.
SECTION 3.05. Financial Statements. (a) The Borrower has heretofore furnished to the Lenders the consolidated balance sheets and related statements of income, stockholders equity and cash flows of each of CheckSmart Financial Company and California Check Cashing Stores, LLC as of and for the fiscal years ended December 31, 2008, 2009 and 2010, each audited by and accompanied by the unqualified opinion of McGladrey & Pullen, LLP, independent public accountants. Such financial statements present fairly the financial condition and results of operations and cash flows of CheckSmart Financial Company and California Check Cashing Stores, LLC and their respective consolidated subsidiaries as of such dates and for such periods. Such balance sheets and the notes thereto disclose all material liabilities, direct or contingent, of CheckSmart Financial Company and California Check Cashing Stores, LLC and their respective consolidated subsidiaries as of the dates thereof. Such financial statements were prepared in accordance with GAAP applied on a consistent basis.
(b) The Borrower has heretofore delivered to the Lenders its unaudited pro forma consolidated balance sheet and related pro forma statements of income as of and for the 12-month period ending on December 31, 2010, prepared giving effect to the Transactions as if they had occurred, with respect to such balance sheet, on such date and, with respect to such other financial statements, on the first day of the 12-month period ending on such date. Such pro forma financial statements have been prepared in good faith by the Borrower, based on the assumptions set forth in the Senior Secured Notes Offering Circular (which assumptions are believed by the Borrower on the date hereof and on the Closing Date to be reasonable) are based on the best information available to the Borrower as of the date of delivery thereof, accurately reflect all adjustments required to be made to give effect to the Transactions and present fairly on a pro forma basis the estimated consolidated financial position of the Borrower and its consolidated Subsidiaries as of such date and for such period, assuming that the Transactions had actually occurred at such date or at the beginning of such period, as the case may be.
SECTION 3.06. No Material Adverse Change. No event, change or condition has occurred that has had, or could reasonably be expected to have, a material adverse effect on the business, assets, liabilities, operations, condition (financial or otherwise), operating results or prospects of the Borrower and the Subsidiaries, taken as a whole, since December 31, 2010.
SECTION 3.07. Title to Properties; Possession Under Leases. (a) Each of the Borrower and the Restricted Subsidiaries has good and marketable title to, or valid leasehold interests in, all its material properties and assets, except for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties and assets for their intended purposes. All such material properties and assets are free and clear of Liens, other than Liens expressly permitted by Section 6.02.
(b) Each of the Borrower and the Restricted Subsidiaries has complied, in all material respects, with all obligations under all material leases to which it is a party and all such leases are in full force and effect. Each of the Borrower and the Restricted
Subsidiaries enjoys peaceful and undisturbed possession under all such material leases, except to the extent not reasonably likely to result in a Material Adverse Effect.
SECTION 3.08. Subsidiaries. (a) Schedule 3.08(a) sets forth as of the Closing Date a complete and accurate list of all Subsidiaries, the percentage ownership interest of the Borrower or any other Subsidiary therein and the jurisdiction of incorporation of each Subsidiary. The shares of capital stock or other ownership interests so indicated on Schedule 3.08(a) are fully paid and non-assessable and are owned by the Borrower or any Subsidiary, directly or indirectly, free and clear of all Liens, other than Liens expressly permitted by Section 6.02.
(b) Schedule 3.08(b) sets forth as of the Closing Date a complete and accurate list of all Unrestricted Subsidiaries, the percentage ownership interest of the Borrower or any other Subsidiary therein and the jurisdiction of incorporation of each Unrestricted Subsidiary. The shares of capital stock or other ownership interests so indicated on Schedule 3.08(b) are fully paid and non-assessable and are owned by the Borrower or any Subsidiary, directly or indirectly, free and clear of all Liens.
SECTION 3.09. Litigation; Compliance with Laws. (a) Except as set forth on Schedule 3.09, there are no actions, suits or proceedings at law or in equity or by or before any Governmental Authority now pending or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any Restricted Subsidiary or any business, property or rights of any such Person (i) that involve any Loan Document or the Transactions or (ii) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.
(b) Since the Closing Date, there has been no change in the status of the matters disclosed on Schedule 3.09 that, individually or in the aggregate, has resulted in, or materially increased the likelihood of, a Material Adverse Effect.
(c) None of the Borrower or any of the Restricted Subsidiaries or any of their respective material properties or assets is in violation of, nor will the continued operation of their material properties and assets as currently conducted violate, any law, rule or regulation (including any zoning, building, Environmental Law, ordinance, code or approval or any building permits), or is in default with respect to any judgment, writ, injunction, decree or order of any Governmental Authority, where such violation or default could reasonably be expected to result in a Material Adverse Effect.
SECTION 3.10. Agreements. (a) None of the Borrower or any of the Restricted Subsidiaries is a party to any agreement or instrument or subject to any corporate restriction that has resulted or could reasonably be expected to result in a Material Adverse Effect.
(b) None of the Borrower or any of the Restricted Subsidiaries is in default in any manner under any provision of any indenture or other agreement or instrument evidencing Indebtedness, or any other material agreement or instrument to which it is a
party or by which it or any of its properties or assets are or may be bound, where such default could reasonably be expected to result in a Material Adverse Effect.
SECTION 3.11. Federal Reserve Regulations. (a) None of the Borrower or any of the Restricted Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of buying or carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of Credit will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, for any purpose that entails a violation of, or that is inconsistent with, the provisions of the Regulations of the Board, including Regulation T, U or X.
SECTION 3.12. Investment Company Act. None of the Borrower or any Restricted Subsidiary is an investment company as defined in, or subject to regulation under, the Investment Company Act of 1940.
SECTION 3.13. Use of Proceeds. The Borrower will use the proceeds of the Loans and will request the issuance of Letters of Credit only for the purposes specified in the introductory statement to this Agreement.
SECTION 3.14. Tax Returns. Each of the Borrower and the Restricted Subsidiaries has filed or caused to be filed all material Federal, state, local and foreign tax returns or reports required to have been filed by it and has paid or caused to be paid all taxes due and payable by it and all assessments received by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which the Borrower or such Restricted Subsidiary, as applicable, shall have set aside on its books adequate reserves or (b) to the extent that the failure to do so would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
SECTION 3.15. No Material Misstatements. No information, report, financial statement, exhibit or schedule furnished by or on behalf of the Borrower to the Administrative Agent or any Lender in connection with the negotiation of any Loan Document or included therein or delivered pursuant thereto contained, contains or will contain any material misstatement of fact or omitted, omits or will omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which, and as of the date, they were, are or will be made, not misleading; provided that to the extent any such information, report, financial statement, exhibit or schedule was based upon or constitutes a forecast or projection, the Borrower represents only that it acted in good faith and utilized reasonable assumptions (based upon accounting principles consistent with the historical audited financial statements of CheckSmart Financial Company) and due care in the preparation of such information, report, financial statement, exhibit or schedule.
SECTION 3.16. Employee Benefit Plans. Each of the Borrower and its ERISA Affiliates is in compliance in all material respects with the applicable provisions of ERISA and the Code and the regulations and published interpretations thereunder. No ERISA Event has occurred or is reasonably expected to occur that, when taken together
with all other such ERISA Events, could reasonably be expected to result in a Material Adverse Effect. The present value of all benefit liabilities under each Plan (based on the assumptions used for purposes of Accounting Standards Codification Topic 715) did not, as of the last annual valuation date applicable thereto, exceed the fair market value of the assets of such Plan by an amount that could reasonably be expected to result in a Material Adverse Effect, and the present value of all benefit liabilities of all underfunded Plans (based on the assumptions used for purposes of Accounting Standards Codification Topic 715) did not, as of the last annual valuation dates applicable thereto, exceed the fair market value of the assets of all such underfunded Plans by an amount that could reasonably be expected to result in a Material Adverse Effect.
SECTION 3.17. Environmental Matters. (a) Except as set forth in Schedule 3.17 and except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, none of the Borrower or any of the Restricted Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any pending or threatened claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability.
(b) Since the Closing Date, there has been no change in the status of the matters disclosed on Schedule 3.17 that, individually or in the aggregate, has resulted in, or materially increased the likelihood of, a Material Adverse Effect.
SECTION 3.18. Insurance. Schedule 3.18 sets forth a true, complete and correct description of all insurance maintained by the Borrower or by the Borrower for its Subsidiaries as the Closing Date. As of such date, such insurance is in full force and effect and all premiums have been duly paid. The Borrower and the Subsidiaries have insurance in such amounts and covering such risks and liabilities as are in accordance with normal industry practice.
SECTION 3.19. Security Documents. (a) The Collateral Agreement, upon execution and delivery thereof by the parties thereto, will create in favor of the Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral (as defined in the Collateral Agreement) and the proceeds thereof and (i) when the Pledged Collateral (as defined in the Collateral Agreement) is delivered to the Collateral Agent, the Lien created under Collateral Agreement shall constitute a fully perfected first priority Lien on, and security interest in, all right, title and interest of the Loan Parties in such Pledged Collateral, in each case prior and superior in right to any other Person, and (ii) when financing statements in appropriate form are filed in the offices specified on Schedule 3.19(a), the Lien created under the Collateral Agreement will constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such Collateral (other than Intellectual Property, as defined in the Collateral Agreement), in each case prior and superior in right to any other Person, other than with respect to Liens expressly permitted by Section 6.02.
(b) Upon the recordation of the Collateral Agreement (or a short-form security agreement in form and substance reasonably satisfactory to the Borrower and the Administrative Agent) with the United States Patent and Trademark Office and the United States Copyright Office, together with the financing statements in appropriate form filed in the offices specified on Schedule 3.19(a), a Lien created under the Collateral Agreement shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in the Intellectual Property (as defined in the Collateral Agreement) in which a security interest may be perfected by filing in the United States and its territories and possessions, in each case prior and superior in right to any other Person (it being understood that subsequent recordings in the United States Patent and Trademark Office and the United States Copyright Office may be necessary to perfect a Lien on registered trademarks and patents, trademark and patent applications and registered copyrights acquired by the Loan Parties after the date hereof).
SECTION 3.20. Location of Real Property and Leased Premises. (a) Schedule 3.20(a) lists completely and correctly as of the Closing Date all real property owned by the Borrower and the Subsidiaries and the addresses thereof. The Borrower and the Subsidiaries own in fee all the real property set forth on Schedule 3.20(a).
(b) Schedule 3.20(b) lists completely and correctly as of the Closing Date all real property leased by the Borrower and the Subsidiaries and the addresses thereof. The Borrower and the Subsidiaries have valid leases in all the real property set forth on Schedule 3.20(b).
SECTION 3.21. Labor Matters. As of the date hereof and the Closing Date, there are no strikes, lockouts or slowdowns against the Borrower or any Restricted Subsidiary pending or, to the knowledge of the Borrower, threatened. The hours worked by and payments made to employees of the Borrower and the Restricted Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable Federal, state, local or foreign law dealing with such matters. All payments due from the Borrower or any Restricted Subsidiary, or for which any claim may be made against the Borrower or any Restricted Subsidiary, on account of wages and employee health and welfare insurance and other benefits, have been in all material respects paid or accrued as a liability on the books of the Borrower or such Restricted Subsidiary. The consummation of the Transactions will not give rise to any right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which the Borrower or any Restricted Subsidiary is bound.
SECTION 3.22. Solvency. Immediately after the consummation of the Transactions to occur on the Closing Date and immediately following the making of each Loan and after giving effect to the application of the proceeds of each Loan, (a) the fair value of the assets of each Loan Party, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise; (b) the present fair saleable value of the property of each Loan Party will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (c) each Loan Party will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as
such debts and liabilities become absolute and matured; and (d) each Loan Party will not have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted following the Closing Date.
SECTION 3.23. Transaction Documents. The Borrower has delivered to the Administrative Agent a complete and correct copy of the Merger Agreement (including all schedules, exhibits, amendments, supplements and modifications thereto). Neither the Borrower nor any Loan Party or, to the knowledge of the Borrower or each Loan Party, any other Person party thereto is in default as of the Closing Date in the performance or compliance with any material provisions thereof. The Merger Agreement complies in all material respects with all applicable laws. All representations and warranties of the Borrower and each Loan Party set forth in the Merger Agreement were true and correct in all material respects at the time as of which such representations and warranties were made (or deemed made).
SECTION 3.24. Sanctioned Persons. None of the Borrower or any Restricted Subsidiary nor, to the knowledge of the Borrower, any director, officer, agent, employee or Affiliate of the Borrower or any Restricted Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (OFAC); and the Borrower will not directly or indirectly use the proceeds of the Loans or the Letters of Credit or otherwise make available such proceeds to any Person, for the purpose of financing the activities of any Person currently subject to any U.S. sanctions administered by OFAC.
ARTICLE IV
Conditions of Lending
The obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder are subject to the satisfaction of the following conditions:
SECTION 4.01. All Credit Events. On the date of each Borrowing, including each Borrowing of a Swingline Loan and on the date of each issuance, amendment, extension or renewal of a Letter of Credit (each such event being called a Credit Event):
(a) The Administrative Agent shall have received a notice of such Borrowing as required by Section 2.03 (or such notice shall have been deemed given in accordance with Section 2.03) or, in the case of the issuance, amendment, extension or renewal of a Letter of Credit, the Issuing Bank and the Administrative Agent shall have received a notice requesting the issuance, amendment, extension or renewal of such Letter of Credit as required by Section 2.21(b) or, in the case of the Borrowing of a Swingline Loan, the Swingline Lender and the Administrative Agent shall have received a notice requesting such Swingline Loan as required by Section 2.23(b).
(b) The representations and warranties set forth in Article III and in each other Loan Document shall be true and correct in all material respects on and as of the date of such Credit Event with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date.
(c) At the time of and immediately after such Credit Event, no Default or Event of Default shall have occurred and be continuing.
(d) Immediately after giving effect to such Credit Event and the use of proceeds thereof, the Borrower shall be in pro forma compliance with the financial covenant set forth in Section 6.09.
Each Credit Event shall be deemed to constitute a representation and warranty by the Borrower on the date of such Credit Event as to the matters specified in paragraphs (b), (c) and (d) of this Section 4.01.
SECTION 4.02. First Credit Event. On the Closing Date:
(a) The Administrative Agent shall have received, on behalf of itself, the Lenders and the Issuing Bank, a favorable written opinion of (i) Jones Day, counsel for the Borrower, substantially to the effect set forth in Exhibit E-1, and (ii) each local counsel listed on Schedule 4.02(a), substantially to the effect set forth in Exhibit E-2, in each case (A) dated the Closing Date, (B) addressed to the Issuing Bank, the Administrative Agent and the Lenders, and (C) covering such other matters relating to the Loan Documents and the Transactions as the Administrative Agent shall reasonably request, and the Borrower hereby requests such counsel to deliver such opinions.
(b) All legal matters incident to this Agreement, the Borrowings and extensions of credit hereunder and the other Loan Documents shall be satisfactory to the Lenders, to the Issuing Bank and to the Administrative Agent.
(c) The Administrative Agent shall have received (i) a copy of the certificate or articles of incorporation, including all amendments thereto, of each Loan Party, certified as of a recent date by the Secretary of State of the state of its organization, and a certificate as to the good standing of each Loan Party as of a recent date, from such Secretary of State; (ii) a certificate of the Secretary or Assistant Secretary of each Loan Party dated the Closing Date and certifying (A) that attached thereto is a true and complete copy of the by-laws of such Loan Party as in effect on the Closing Date and at all times since a date prior to the date of the resolutions described in clause (B) below, (B) that attached thereto is a true and complete copy of resolutions duly adopted by the board of directors or members of such Loan Party authorizing the execution, delivery and performance of the Loan Documents to which such Person is a party and, in the case of the Borrower, the borrowings hereunder, and that such resolutions have not been modified, rescinded or amended and are in full force and effect, (C) that the certificate or articles of incorporation of such Loan Party have not been amended since the date of the last amendment thereto shown on the certificate of good standing furnished pursuant to clause (i) above, and (D) as to the incumbency and specimen signature of each officer
executing any Loan Document or any other document delivered in connection herewith on behalf of such Loan Party; (iii) a certificate of another officer as to the incumbency and specimen signature of the Secretary or Assistant Secretary executing the certificate pursuant to clause (ii) above; and (iv) such other documents as the Lenders, the Issuing Bank or the Administrative Agent may reasonably request.
(d) The Administrative Agent shall have received a certificate, dated the Closing Date and signed by a Financial Officer of the Borrower, confirming compliance with the conditions precedent set forth in paragraphs (b), (c) and (d) of Section 4.01.
(e) The Administrative Agent shall have received all Fees and other amounts due and payable on or prior to the Closing Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder or under any other Loan Document.
(f) The Security Documents shall have been duly executed by each Loan Party that is to be a party thereto and shall be in full force and effect on the Closing Date. The Collateral Agent on behalf of the Secured Parties shall have a security interest in the Collateral of the type and priority described in each Security Document.
(g) The Administrative Agent and the Collateral Agent shall have received a Perfection Certificate with respect to the Loan Parties dated the Closing Date and duly executed by a Responsible Officer of the Borrower, and shall have received the results of a search of the Uniform Commercial Code filings (or equivalent filings) made with respect to the Loan Parties in the states (or other jurisdictions) of formation of such Persons, in which the chief executive office of each such Person is located and in the other jurisdictions in which such Persons maintain property, in each case as indicated on such Perfection Certificate, together with copies of the financing statements (or similar documents) disclosed by such search, and accompanied by evidence satisfactory to the Administrative Agent that the Liens indicated in any such financing statement (or similar document) would be permitted under Section 6.02 or have been or will be contemporaneously released or terminated.
(h) The Administrative Agent shall have received a copy of, or a certificate as to coverage under, the insurance policies required by Section 5.02 and the applicable provisions of the Security Documents, each of which shall be endorsed or otherwise amended to include a customary lenders loss payable endorsement and to name the Collateral Agent as additional insured, in form and substance satisfactory to the Administrative Agent.
(i) The business combination contemplated under the Merger Agreement shall have been, or substantially simultaneously with extension of Commitments on the Closing Date shall be, consummated in accordance with the terms of the Merger Agreement and applicable law, without giving effect to any amendment, modification or waiver of any material term or condition of the Merger Agreement not approved by the Required Lenders. The Administrative Agent shall have received copies of the Merger
Agreement and all certificates, opinions and other documents delivered thereunder, certified by a Financial Officer as being complete and a correct copy thereof.
(j) The Borrower shall have received the net proceeds from the issuance of the Senior Secured Notes. The terms and conditions of the Senior Secured Notes and the provisions of the Senior Secured Note Documents shall be satisfactory to the Lenders. The Administrative Agent shall have received copies of the Senior Secured Note Documents, certified by a Financial Officer as being complete and a correct copy thereof.
(k) All principal, premium, if any, interest, fees and other amounts due or outstanding under the Existing Credit Agreements shall have been paid in full, the commitments thereunder terminated and all guarantees and security in support thereof discharged and released, and the Administrative Agent shall have received reasonably satisfactory evidence thereof. Immediately after giving effect to the Transactions and the other transactions contemplated hereby, the Borrower and the Restricted Subsidiaries shall have outstanding no Indebtedness or preferred stock other than (a) Indebtedness outstanding under this Agreement, (b) the Senior Secured Notes and (c) Indebtedness set forth on Schedule 6.01.
(l) The Lenders shall have received the financial statements and opinion referred to in Section 3.05, none of which shall demonstrate a material adverse change in the financial condition of the Borrower from (and shall not otherwise be materially inconsistent with) the financial statements or forecasts previously provided to the Lenders.
(m) The Administrative Agent shall have received a certificate, in form and substance satisfactory to the Administrative Agent, from the chief financial officer of the Borrower certifying that the Borrower and the Subsidiaries, on a consolidated basis after giving effect to the Transactions to occur on the Closing Date, are solvent.
(n) All requisite Governmental Authorities and third parties shall have approved or consented to the Transactions and the other transactions contemplated hereby to the extent required, all applicable appeal periods shall have expired and there shall not be any pending or threatened litigation, governmental, administrative or judicial action that could reasonably be expected to restrain, prevent or impose burdensome conditions on the Transactions or the other transactions contemplated hereby.
(o) The Lenders shall have received, to the extent requested, all documentation and other information required by regulatory authorities under applicable know your customer and anti-money laundering rules and regulations, including the USA PATRIOT Act.
(p) The Alabama Revolving Credit Agreement shall have been, or substantially simultaneously with extension of Commitments on the Closing Date shall be, amended in form and substance satisfactory to the Administrative Agent. The Administrative Agent shall have received copies of the Alabama Revolving Credit Agreement, certified by a Financial Officer as being complete and a correct copy thereof.
(q) Each Lender that has requested at least two (2) Business Days prior to the Closing Date a promissory note pursuant to Section 2.04(e) shall have received such promissory note.
ARTICLE V
Affirmative Covenants
The Borrower covenants and agrees with each Lender that so long as this Agreement shall remain in effect and until the Commitments have been terminated and the principal of and interest on each Loan, all Fees and all other expenses or amounts payable under any Loan Document shall have been paid in full and all Letters of Credit have been canceled or have expired and all amounts drawn thereunder have been reimbursed in full, unless the Required Lenders shall otherwise consent in writing, the Borrower will, and will cause each of the Restricted Subsidiaries to:
SECTION 5.01. Existence; Compliance with Laws; Businesses and Properties. (a) Do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence, except as otherwise expressly permitted under Section 6.04.
(b) Do or cause to be done all things necessary to obtain, preserve, renew, extend and keep in full force and effect the rights, licenses, permits, franchises, authorizations, patents, copyrights, trademarks and trade names material to the conduct of its business; maintain and operate such business in substantially the manner in which it is presently conducted and operated; comply in all material respects with all applicable laws, rules, regulations and decrees and orders of any Governmental Authority, whether now in effect or hereafter enacted; and at all times maintain and preserve all property material to the conduct of such business and keep such property in good repair, working order and condition and from time to time make, or cause to be made, all needful and proper repairs, renewals, additions, improvements and replacements thereto necessary in order that the business carried on in connection therewith may be properly conducted at all times.
SECTION 5.02. Insurance. (a) Keep its insurable properties adequately insured at all times by financially sound and reputable insurers; maintain such other insurance, to such extent and against such risks, including fire and other risks insured against by extended coverage, as is customary with companies in the same or similar businesses operating in the same or similar locations, including public liability insurance against claims for personal injury or death or property damage occurring upon, in, about or in connection with the use of any properties owned, occupied or controlled by it; and maintain such other insurance as may be required by law.
(b) Cause all such policies covering any Collateral to be endorsed or otherwise amended to include a customary lenders loss payable endorsement, in form and substance satisfactory to the Administrative Agent, which endorsement shall provide that, from and after the Closing Date, if the insurance carrier shall have received written notice from the Administrative Agent or the Collateral Agent of the occurrence of an Event of
Default, the insurance carrier shall pay all proceeds otherwise payable to the Borrower or any other Loan Party under such policies directly to the Collateral Agent; cause all such policies to provide that neither the Borrower, the Administrative Agent, the Collateral Agent nor any other party shall be a coinsurer thereunder and to contain a Replacement Cost Endorsement, without any deduction for depreciation, and such other provisions as the Administrative Agent may reasonably require from time to time to protect their interests; deliver original or certified copies of all such policies to the Collateral Agent; cause each such policy to provide that it shall not be canceled, modified or not renewed (i) by reason of nonpayment of premium upon not less than 10 days prior written notice thereof by the insurer to the Administrative Agent and the Collateral Agent (giving the Administrative Agent and the Collateral Agent the right to cure defaults in the payment of premiums) or (ii) for any other reason upon not less than 30 days prior written notice thereof by the insurer to the Administrative Agent and the Collateral Agent; deliver to the Administrative Agent and the Collateral Agent, prior to the cancellation, modification or nonrenewal of any such policy of insurance, a copy of a renewal or replacement policy (or other evidence of renewal of a policy previously delivered to the Administrative Agent and the Collateral Agent) together with evidence satisfactory to the Administrative Agent of payment of the premium therefor.
(c) Notify the Administrative Agent and the Collateral Agent immediately whenever any separate insurance concurrent in form or contributing in the event of loss with that required to be maintained under this Section 5.02 is taken out by any Loan Party; and promptly deliver to the Administrative Agent and the Collateral Agent a duplicate original copy of such policy or policies.
SECTION 5.03. Obligations and Taxes. Pay its Indebtedness and other obligations promptly and in accordance with their terms and pay and discharge promptly when due all material Taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or in respect of its property, before the same shall become delinquent or in default, as well as all lawful claims for labor, materials and supplies or otherwise that, if unpaid, might give rise to a Lien upon such properties or any part thereof; provided, however, that such payment and discharge shall not be required with respect to any such obligation, claim, Tax, assessment, charge, levy or claim so long as the validity or amount thereof shall be contested in good faith by appropriate proceedings and the Borrower shall have set aside on its books adequate reserves with respect thereto in accordance with GAAP and such contest operates to suspend collection of the contested obligation, tax, assessment or charge and enforcement of a Lien.
SECTION 5.04. Financial Statements, Reports, etc. In the case of the Borrower, furnish to the Administrative Agent, which shall furnish to each Lender:
(a) within 90 days after the end of each fiscal year, its consolidated balance sheet and related statements of income, stockholders equity and cash flows showing the financial condition of the Borrower and its consolidated Subsidiaries as of the close of such fiscal year and the results of its operations and the operations of such Subsidiaries during such year, together with comparative figures for the immediately preceding fiscal year, all audited by McGladrey & Pullen, LLP or other independent public accountants of
recognized national standing and accompanied by an opinion of such accountants (which opinion shall not include (i) an explanatory paragraph expressing doubt about the ability of the Borrower and its consolidated Subsidiaries to continue as a going concern or (ii) any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements fairly present the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied;
(b) commencing with the fiscal quarter ended March 31, 2011, within 60 days of the end of such fiscal quarter and, thereafter, within 45 days after the end of each of the first three fiscal quarters of each fiscal year, its consolidated balance sheet and related statements of income, stockholders equity and cash flows showing the financial condition of the Borrower and its consolidated Subsidiaries as of the close of such fiscal quarter and the results of its operations and the operations of such Subsidiaries during such fiscal quarter and the then elapsed portion of the fiscal year, and comparative figures for the same periods in the immediately preceding fiscal year, all certified by one of its Financial Officers as fairly presenting the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments; provided, however, that with respect to the fiscal quarter ending March 31, 2011, the furnished consolidated balance sheets and related statements of income, stockholders equity and cash flows shall be those of Checksmart Financial Holdings Corp., shall be delivered together with a Managements Discussion and Analysis of Financial Condition and Results of Operations, with respect to the interim financial information contained therein, prepared on a basis substantially consistent with, and with the same level of detail as, the corresponding information included in the Senior Secured Notes Offering Circular or, at the option of the Borrower, the then applicable SEC requirements and shall be certified by a Financial Officer as provided herein;
(c) concurrently with any delivery of financial statements under paragraph (a) or (b) of this Section 5.04, a certificate of the accounting firm (in the case of paragraph (a)) or Financial Officer (in the case of paragraph (b)) opining on or certifying such statements (which certificate, when furnished by an accounting firm, may be limited to accounting matters and disclaim responsibility for legal interpretations) (i) certifying that no Event of Default or Default has occurred or, if such an Event of Default or Default has occurred, specifying the nature and extent thereof and any corrective action taken or proposed to be taken with respect thereto and (ii) setting forth computations in reasonable detail satisfactory to the Administrative Agent demonstrating the Leverage Ratio (whether or not compliance with the covenant contained in Section 6.09 is then required);
(d) within 90 days after the beginning of each fiscal year of the Borrower, a detailed consolidated budget for such fiscal year (including a projected consolidated balance sheet and related statements of projected operations and cash flows as of the end of and for such fiscal year and setting forth the assumptions used for purposes of preparing such budget) and, promptly when available, any significant revisions of such budget;
(e) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Borrower or any Restricted Subsidiary with the Securities and Exchange Commission, or any Governmental Authority succeeding to any or all of the functions of said Commission, or with any national securities exchange, or distributed to its shareholders, as the case may be;
(f) promptly after the receipt thereof by the Borrower or any Subsidiary, a copy of any management letter received by any such Person from its certified public accountants and the managements response thereto;
(g) promptly after the request by any Lender, all documentation and other information that such Lender reasonably requests in order to comply with its ongoing obligations under applicable know your customer and anti-money laundering rules and regulations, including the USA PATRIOT Act;
(h) promptly after the request by the Administrative Agent or any Lender, copies of (i) any documents described in Section 101(k)(1) of ERISA that the Borrower or any of its ERISA Affiliates may request with respect to any Multiemployer Plan and (ii) any notices described in Section 101(l)(1) of ERISA that the Borrower or any of its ERISA Affiliates may request with respect to any Multiemployer Plan; provided that if the Borrower or any of its ERISA Affiliates has not requested such documents or notices from the administrator or sponsor of the applicable Multiemployer Plan, the Borrower or the applicable ERISA Affiliate shall promptly make a request for such documents or notices from such administrator or sponsor and shall provide copies of such documents and notices promptly after receipt thereof; and
(i) promptly, from time to time, such other information regarding the operations, business affairs and financial condition of the Borrower or any Subsidiary, or compliance with the terms of any Loan Document, as the Administrative Agent or any Lender may reasonably request.
SECTION 5.05. Litigation and Other Notices. Furnish to the Administrative Agent, the Issuing Bank and each Lender prompt written notice of the following:
(a) any Event of Default or Default, specifying the nature and extent thereof and the corrective action (if any) taken or proposed to be taken with respect thereto;
(b) the filing or commencement of, or any threat or notice of intention of any Person to file or commence, any action, suit or proceeding, whether at law or in equity or by or before any Governmental Authority, against the Borrower or any Affiliate thereof that could reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Borrower and the Subsidiaries in an aggregate amount exceeding $1,000,000;
(d) any development that has resulted in, or could reasonably be expected to result in, a Material Adverse Effect; and
(e) any change in the Borrowers corporate rating by S&P, in the Borrowers corporate family rating by Moodys, or any notice from either such agency indicating its intent to effect such a change or to place the Borrower on a CreditWatch or WatchList or any similar list, in each case with negative implications, or its cessation of, or its intent to cease, rating the Borrower.
SECTION 5.06. Information Regarding Collateral. (a) Furnish to the Administrative Agent prompt written notice of any change (i) in any Loan Partys corporate name, (ii) in the jurisdiction of organization or formation of any Loan Party, (iii) in any Loan Partys identity or corporate structure or (iv) in any Loan Partys Federal Taxpayer Identification Number. The Borrower agrees not to effect or permit any change referred to in the preceding sentence unless all filings have been made under the Uniform Commercial Code or otherwise that are required in order for the Collateral Agent to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral. The Borrower also agrees promptly to notify the Administrative Agent if any material portion of the Collateral is damaged or destroyed.
(b) In the case of the Borrower, each year, at the time of delivery of the annual financial statements with respect to the preceding fiscal year pursuant to Section 5.04(a), deliver to the Administrative Agent a certificate of a Financial Officer setting forth the information required pursuant to Section 2 of the Perfection Certificate or confirming that there has been no change in such information since the date of the Perfection Certificate delivered on the Closing Date or the date of the most recent certificate delivered pursuant to this Section 5.06.
SECTION 5.07. Maintaining Records; Access to Properties and Inspections; Maintenance of Ratings. (a) Keep proper books of record and account in which full, true and correct entries in conformity with GAAP and all requirements of law are made of all dealings and transactions in relation to its business and activities. Each Loan Party will, and will cause each of its subsidiaries to, permit any representatives designated by the Administrative Agent or any Lender to visit and inspect the financial records and the properties of such Person at reasonable times and as often as reasonably requested (but no more than twice per fiscal year of the Borrower, unless an Event of Default has occurred and is continuing) and to make extracts from and copies of such financial records, and permit any representatives designated by the Administrative Agent or any Lender to discuss the affairs, finances and condition of such Person with the officers thereof and independent accountants therefor.
(b) In the case of the Borrower, use commercially reasonable efforts to maintain a corporate rating from S&P and a corporate family rating from Moodys, in each case in respect of the Borrower.
SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans and request the issuance of Letters of Credit only for the purposes specified in the introductory statement to this Agreement.
SECTION 5.09. Employee Benefits. (a) Comply in all material respects with the applicable provisions of ERISA and the Code and (b) furnish to the Administrative Agent as soon as possible after, and in any event within ten days after any responsible officer of the Borrower or any ERISA Affiliate knows or has reason to know that, any ERISA Event has occurred that, alone or together with any other ERISA Event could reasonably be expected to result in liability of the Borrower or any ERISA Affiliate in an aggregate amount exceeding $1,000,000, a statement of a Financial Officer of the Borrower setting forth details as to such ERISA Event and the action, if any, that the Borrower proposes to take with respect thereto.
SECTION 5.10. Compliance with Environmental Laws. Comply, and cause all lessees and other Persons occupying its properties to comply, in all material respects with all Environmental Laws applicable to its operations and properties; obtain and renew all environmental permits necessary for its operations and properties; and conduct any remedial action in accordance with Environmental Laws; provided, however, that none of the Borrower or any Restricted Subsidiary shall be required to undertake any remedial action required by Environmental Laws to the extent that its obligation to do so is being contested in good faith and by proper proceedings, and appropriate reserves are being maintained with respect to such circumstances in accordance with GAAP.
SECTION 5.11. Preparation of Environmental Reports. If a Default caused by reason of a breach of Section 3.17 or Section 5.10 shall have occurred and be continuing for more than 20 days without the Borrower or any Restricted Subsidiary commencing activities reasonably likely to cure such Default, at the written request of the Required Lenders through the Administrative Agent, provide to the Lenders within 45 days after such request, at the expense of the Loan Parties, an environmental site assessment report regarding the matters which are the subject of such Default, prepared by an environmental consulting firm reasonably acceptable to the Administrative Agent and indicating the presence or absence of Hazardous Materials and the estimated cost of any compliance or remedial action in connection with such Default.
SECTION 5.12. Further Assurances. (a) Execute any and all further documents, financing statements, agreements and instruments, and take all further action (including filing Uniform Commercial Code and other financing statements, mortgages and deeds of trust) that may be required under applicable law, or that the Required Lenders, the Administrative Agent or the Collateral Agent (upon instruction from the Administrative Agent) may reasonably request, in order to effectuate the transactions contemplated by the Loan Documents and in order to grant, preserve, protect and perfect the validity and priority of the security interests created or intended to be created by the Security Documents. The Borrower will cause any subsequently acquired or organized Restricted Subsidiary that is a Domestic Subsidiary, any Domestic Subsidiary that has ceased being an Unrestricted Subsidiary and any other Restricted Subsidiary, if such Restricted Subsidiary guarantees Indebtedness of any Loan Party, to become a Loan Party by
executing the Guarantee Agreement in favor of the Administrative Agent and the Collateral Agreement and each other applicable Security Document in favor of the Collateral Agent. In addition, from time to time, the Borrower will, at its cost and expense, promptly secure the Secured Obligations by pledging or creating, or causing to be pledged or created, perfected security interests with respect to such of its assets and properties as the Administrative Agent or the Required Lenders shall designate (it being understood that it is the intent of the parties that the Secured Obligations shall be secured by substantially all the assets of the Borrower and its Domestic Subsidiaries (other than any Unrestricted Subsidiaries) (including real and other properties acquired subsequent to the Closing Date)); provided, however, that no outstanding voting equity or other voting ownership interests of any Foreign Subsidiary or any Restricted DRE in excess of 65% of the voting power of all classes of equity or other ownership interests of such Foreign Subsidiary or Restricted DRE, in each case, that are entitled to vote shall be required to be pledged. Such security interests and Liens will be created under the Security Documents and other security agreements, mortgages, deeds of trust and other instruments and documents in form and substance satisfactory to the Administrative Agent, and the Borrower shall deliver or cause to be delivered to the Lenders all such instruments and documents (including legal opinions, title insurance policies and lien searches) as the Administrative Agent shall reasonably request to evidence compliance with this Section 5.12. The Borrower agrees to provide such evidence as the Administrative Agent shall reasonably request as to the perfection and priority status of each such security interest and Lien. In furtherance of the foregoing, the Borrower will give prompt notice to the Administrative Agent of the acquisition by it or any of the Subsidiaries of an ownership interest in any real property (or any interest in real property) having a value in excess of $1,000,000.
(b) As soon as practicable but in any event within 60 days after the Closing Date, the Borrower shall take or cause its Subsidiaries to take the actions set forth on Schedule 5.12.
SECTION 5.13. Alabama Excess Cash Flow Distribution. So long as the Alabama Subsidiary remains a Subsidiary of the Borrower and the Alabama Revolving Credit Agreement remains outstanding, within 45 days of the end of each fiscal quarter, the Borrower shall cause the Alabama Subsidiary to declare and pay a dividend, other payment or distribution on account of its Equity Interests to the holders of such Equity Interests on a pro rata basis in an amount equal to the Alabama Excess Cash Flow for such fiscal quarter, and shall deliver to the Administrative Agent an Officers Certificate setting forth a reasonably detailed calculation of Alabama Excess Cash Flow for such fiscal quarter and confirming that such dividend or other payment or distribution has been made.
ARTICLE VI
Negative Covenants
The Borrower covenants and agrees with each Lender that, so long as this Agreement shall remain in effect and until the Commitments have been terminated and
the principal of and interest on each Loan, all Fees and all other expenses or amounts payable under any Loan Document have been paid in full and all Letters of Credit have been cancelled or have expired and all amounts drawn thereunder have been reimbursed in full, unless the Required Lenders shall otherwise consent in writing:
SECTION 6.01. Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Borrower will not, and will not permit any of the Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, incur and collectively, an incurrence) any Indebtedness (including Acquired Indebtedness) and the Borrower will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Borrower may incur Indebtedness (including Acquired Indebtedness) and issue shares of Disqualified Stock, and any of the Subsidiary Guarantors may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Borrower and the Restricted Subsidiaries most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The foregoing limitations will not apply to:
(i) the incurrence of Indebtedness under this Agreement;
(ii) the incurrence of Indebtedness under the Alabama Revolving Credit Agreement by the Alabama Subsidiary, up to an aggregate principal amount outstanding at any one time not to exceed $7,000,000;
(iii) the incurrence by the Borrower and any Subsidiary Guarantor of Indebtedness represented by the Senior Secured Notes (including any guarantee thereof) (other than any Additional Notes (as defined in the Senior Secured Notes Indenture), but including any Exchange Notes (as defined in the Senior Secured Notes Indenture and guarantees thereof), up to an aggregate principal amount outstanding at any one time not to exceed $395,000,000;
(iv) Indebtedness of the Borrower and the Restricted Subsidiaries in existence on the Closing Date (other than Indebtedness described in clause (i), (ii) or (iii)) and set forth on Schedule 6.01;
(v) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred by the Borrower or any of the Restricted Subsidiaries to finance the purchase, lease, construction, installation or
improvement of property (real or personal), equipment or other asset that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, and Indebtedness, Disqualified Stock and Preferred Stock incurred or issued to refund, refinance, replace, renew, extend or defease any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued as permitted under this clause (v); provided that the aggregate amount of Indebtedness, Disqualified Stock and Preferred Stock incurred pursuant to this clause (v), when aggregated with the outstanding amount of Indebtedness, Disqualified Stock and Preferred Stock incurred or issued to refund, refinance, replace, renew, extend or defease Indebtedness, Disqualified Stock or Preferred Stock initially incurred or issued in reliance on this clause (v), does not exceed the greater of $10,000,000 and 2.0% of Total Assets;
(vi) Indebtedness incurred by the Borrower or any of the Restricted Subsidiaries constituting reimbursement obligations with respect to bankers acceptances, bank guarantees, letters of credit, warehouse receipts or similar facilities entered into in the ordinary course of business, including letters of credit in respect of workers compensation claims, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers compensation claims, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, in each case (other than in the case of performance or surety bonds incurred to satisfy a regulatory requirement) incurred in the ordinary course of business; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(vii) Indebtedness arising from agreements of the Borrower or the Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Borrower and the Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Borrower to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Subsidiary Guarantor is expressly subordinated in right of payment to the Secured Obligations; provided further, that any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary
ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Borrower or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this clause;
(ix) Indebtedness of a Restricted Subsidiary owing to the Borrower or another Restricted Subsidiary; provided that if a Subsidiary Guarantor incurs such Indebtedness owing to a Restricted Subsidiary that is not a Subsidiary Guarantor, such Indebtedness shall be expressly subordinated in right of payment to the Guarantee of such Subsidiary Guarantor, as the case may be; provided further, that any subsequent transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Borrower or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this clause;
(x) shares of Preferred Stock of a Restricted Subsidiary issued to the Borrower or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Borrower or another of the Restricted Subsidiaries or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed in each case to be an issuance of such shares of Preferred Stock not permitted by this clause;
(xi) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 6.01, exchange rate risk or commodity pricing risk;
(xii) obligations in respect of self-insurance and obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Borrower or any of the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, incurred in the ordinary course of business;
(xiii) (A) Indebtedness or Disqualified Stock of the Borrower and Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary in an aggregate principal amount or liquidation preference up to 100.0% of the net cash proceeds received by the Borrower since immediately after the Closing Date from the issue or sale of Equity Interests of the Borrower or cash contributed to the capital of the Borrower (in each case, other than Excluded Contributions, proceeds of Disqualified Stock or Designated Preferred Stock and sales of Equity
Interests to any Subsidiary of the Borrower) as determined in accordance with clause (3)(b) or (3)(c) of the first paragraph of Section 6.05 to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to the second paragraph of Section 6.05 or to make Permitted Investments (other than Permitted Investments specified in clause (i), (ii) or (iii) of the definition thereof) and (B) Indebtedness or Disqualified Stock of the Borrower and Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, that, when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred or issued pursuant to this clause (xiii)(B), does not exceed $35,000,000 (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued pursuant to this clause (xiii)(B) shall cease to be deemed incurred or issued for purposes of this clause (xiii)(B) but shall be deemed incurred pursuant to Section 6.01(a) from and after the first date on which the Borrower or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under the first paragraph of this Section 6.01 without reliance on this clause (xiii)(B); provided that, in the case of any such Indebtedness that is secured by a Lien, the foregoing reclassification shall only be effective if and to the extent that the Borrower and the Restricted Subsidiaries would be able to incur (and as a result of such reclassification are deemed to have incurred) such Lien pursuant to clause (xix) or (xxxviii) of the definition of Permitted Liens);
(xiv) the incurrence by the Borrower or any Restricted Subsidiary of Indebtedness or the issuance by the Borrower or any Restricted Subsidiary of Disqualified Stock or Preferred Stock that serves to refund, refinance, replace, renew, extend or defease any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under the first paragraph of this Section 6.01 or clause (iii), (iv) or (xiii)(A) above, or clause (xv) below or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund, refinance, replace, renew, extend or defease such Indebtedness, Disqualified Stock or Preferred Stock, including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees and accrued and unpaid interest in connection therewith (the Refinancing Indebtedness) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A) has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred that is not less than the remaining Weighted Average Life to Maturity, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded, refinanced, replaced, renewed, extended or defeased,
(B) to the extent such Refinancing Indebtedness refunds, refinances, replaces, renews, extends or defeases (I) Indebtedness subordinated or pari passu (without giving effect to security interests) to the Secured Obligations, such Refinancing Indebtedness is subordinated or pari passu (without giving effect to security interests) to the same extent as the Indebtedness being refunded, refinanced, replaced, renewed, extended or defeased or (II) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively, and
(C) shall not include (I)Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary that is not a Subsidiary Guarantor or the Borrower that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Borrower; (II) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary that is not a Subsidiary Guarantor or the Borrower that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary Guarantor; or (I) Indebtedness, Disqualified Stock or Preferred Stock of the Borrower or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Borrower or a Restricted Subsidiary incurred or issued to finance an acquisition or (y) Persons that are acquired by the Borrower or any Restricted Subsidiary or merged into, amalgamated with or consolidated with the Borrower or a Restricted Subsidiary in accordance with the terms of this Agreement; provided that after giving pro forma effect to such acquisition, amalgamation, merger or consolidation, either
(A) the Borrower would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of this Section 6.01, or
(B) the Fixed Charge Coverage Ratio of the Borrower and the Restricted Subsidiaries is greater than such Fixed Charge Coverage Ratio immediately prior to such acquisition, amalgamation, merger or consolidation;
(xvi) cash management obligations and other Indebtedness in respect of netting services, automatic clearing house arrangements, employees credit or purchase cards, endorsements of instruments for deposit, overdraft protections and similar arrangements, in each case incurred in the ordinary course of business;
(xvii) [Intentionally Omitted];
(xviii) any guarantee by the Borrower or a Restricted Subsidiary of Indebtedness or other obligations of the Borrower or any Restricted Subsidiary so
long as the incurrence of such guaranteed Indebtedness is permitted under the terms of this Agreement and the Senior Secured Notes Indenture;
(xix) Indebtedness of Foreign Subsidiaries of the Borrower not to exceed at any one time outstanding, and together with any other Indebtedness incurred under this clause (xix), the greater of $35,000,000 and 7.0% of Total Assets;
(xx) Indebtedness of the Borrower or any of the Restricted Subsidiaries consisting of (I) the financing of insurance premiums or (II) take-or-pay obligations contained in supply arrangements, in each case, incurred in the ordinary course of business;
(xxi) Indebtedness of the Borrower or any of the Restricted Subsidiaries undertaken in connection with cash management and related activities with respect to any Subsidiary or joint venture in the ordinary course of business;
(xxii) Indebtedness consisting of Indebtedness issued by the Borrower or any of the Restricted Subsidiaries to future, current or former officers, directors and employees thereof, their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Borrower or any Parent Entity to the extent described in clause (4) of the second paragraph of Section 6.05; and
(xxiii) any obligation, or guaranty of any obligation, of the Borrower or any Restricted Subsidiary to reimburse or indemnify a Person extending credit to customers of the Borrower or a Restricted Subsidiary incurred in the ordinary course of business as part of a Similar Business for all or any portion of the amounts payable by such customers to the Person extending such credit.
Notwithstanding the foregoing, Restricted Subsidiaries that are not Subsidiary Guarantors shall not be permitted to incur Indebtedness or issue Disqualified Stock or Preferred Stock pursuant to clause (v), (xiii)(B) or (xix) above if, after giving effect to such incurrence or issuance, the aggregate principal amount of Indebtedness of Restricted Subsidiaries that are not Subsidiary Guarantors outstanding pursuant to such clauses, together with the aggregate liquidation preference of Disqualified Stock and Preferred Stock issued by Restricted Subsidiaries that are not Subsidiary Guarantors outstanding pursuant to such clauses, would exceed the greater of $55,000,000 and 11.0% of Total Assets.
(c) For purposes of determining compliance with this Section 6.01:
(i) in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of more than one of the categories of permitted Indebtedness, Disqualified Stock or Preferred Stock described in clauses (i) through (xxii) of the preceding paragraph or is entitled to be incurred pursuant to the first paragraph of this Section 6.01, the Borrower, in its sole discretion, will classify, and may later reclassify, such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) in
any manner that complies with this Section 6.01; provided that (x) all Indebtedness outstanding under this Agreement will be treated as incurred under clause (i) of the preceding paragraph, (y) all Indebtedness outstanding under the Alabama Revolving Credit Agreement will be treated as incurred under clause (ii) of the preceding paragraph and (z) the Borrower shall not be permitted to reclassify all or any portion of any Indebtedness incurred pursuant to such clause (i) or (ii); and
(ii) at the time of incurrence, the Borrower will be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in Sections 6.01(a) and 6.01(b).
(d) Accrual of interest or dividends, the accretion of accreted value, the accretion or amortization of original issue discount and the payment of interest or dividends in the form of additional Indebtedness, Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this Section 6.01.
(e) For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed (i) the principal amount of such Indebtedness being refinanced plus (ii) the aggregate amount of accrued interest, fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing.
(f) The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.
(g) The Borrower will not, and will not permit any Subsidiary Guarantor to, directly or indirectly, incur any Indebtedness (including Acquired Indebtedness) that is subordinated or junior in right of payment to any Indebtedness of the Borrower or such Subsidiary Guarantor, as the case may be, unless such Indebtedness is expressly subordinated in right of payment to the Secured Obligations or such Subsidiary Guarantors Guarantee to the extent and in the same manner as such Indebtedness is subordinated to other Indebtedness of the Borrower or such Subsidiary Guarantor, as the case may be.
(h) For the purposes of this Section 6.01, (i) unsecured Indebtedness shall not be treated as subordinated or junior to Secured Indebtedness merely because it is unsecured and (ii) Indebtedness shall not be treated as subordinated or junior to any other Indebtedness merely because it has a junior priority with respect to the same collateral.
SECTION 6.02. Liens. (a) The Borrower will not, and will not permit any Restricted Subsidiary to, directly or indirectly, create, incur or suffer to exist any Lien (except Permitted Liens) (each, a Subject Lien) that secures Obligations under any Indebtedness on any asset or property of the Borrower or any Restricted Subsidiary, except for:
(i) in the case of Subject Liens on any Collateral, any Subject Lien, if such Subject Lien expressly has Junior Lien Priority on the Collateral relative to the Secured Obligations; or
(ii) in the case of Subject Liens on any other asset or property, any Subject Lien, if the Secured Obligations are equally and ratably secured with (or on a senior basis to, in the case such Subject Lien secures any Subordinated Indebtedness) the Obligations secured by such Subject Lien.
(b) Any Lien created for the benefit of the Lenders pursuant to clause (ii) of Section 6.02(a) may provide by its terms that such Lien shall be automatically and unconditionally released and discharged upon the release and discharge of the Subject Lien that gave rise to the obligation to so secure the Bank Obligations (which release and discharge in the case of any sale of any such asset or property shall not affect any Lien that the Collateral Agent may otherwise have on the proceeds from such sale).
(c) Any reference to a Permitted Lien is not intended to subordinate or postpone, and shall not be interpreted as subordinating or postponing, or as any agreement to subordinate or postpone, any Lien in favor of the Collateral Agent in respect of the Collateral.
SECTION 6.03. Asset Sales. (a) The Borrower will not, and will not permit any Restricted Subsidiary to, consummate, directly or indirectly, an Asset Sale, unless:
(1) the Borrower or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the fair market value (measured at the time of contractually agreeing to such Asset Sale) of the assets sold or otherwise disposed of;
(2) except in the case of a Permitted Asset Swap, at least 75% of the consideration therefor received by the Borrower or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; and
(3) to the extent that any consideration received by the Borrower or any Restricted Subsidiary in such Asset Sale (including, for avoidance of doubt, any Designated Non-cash Consideration and any assets received in a Permitted Asset Swap) consists of assets of the type that would constitute Collateral, such assets, including the assets of any Person that
becomes a Subsidiary Guarantor as a result of such transaction, are as soon as reasonably practicable (and in any event within 90 days) after their acquisition added to the Collateral.
Within 365 days after the receipt of any Net Proceeds of any Asset Sale, the Borrower or such Restricted Subsidiary, at its option, may apply the Net Proceeds from such Asset Sale,
(i) to prepay Loans and correspondingly reduce any outstanding Commitments in accordance with Sections 2.11 and 2.09; provided that reductions in Commitments pursuant to this clause (i) shall not be required to the extent that such reductions would cause the Total Commitment to be less than $25,000,000 ;
(ii) to make one or more Asset Sale Offers in accordance with the terms of the Senior Secured Notes Indenture;
(iii) to make (A) one or more Investments in any business or businesses, provided that any such Investment is in the form of the acquisition of Capital Stock that results in the Borrower or a Restricted Subsidiary, as the case may be, owning an amount of the Capital Stock of such business such that it constitutes or continues to constitute a Restricted Subsidiary, (B) capital expenditures or (C) acquisitions of other assets that are, in the case of each of (A), (B) and (C), used or useful in a Similar Business or replace the businesses, properties and/or assets that are the subject of such Asset Sale (any businesses, properties or assets acquired pursuant to clause (A), (B) or (C) together, the Additional Assets); provided that, without limitation of Section 5.12, any such Additional Assets acquired with Net Proceeds from an Asset Sale of Collateral are as soon as reasonably practicable (and in any event, within 90 days) after their acquisition added to the Collateral; or
(iv) to the extent such Net Proceeds are not from Asset Sales of Collateral, to permanently reduce Indebtedness of a Restricted Subsidiary that is not the Borrower or a Subsidiary Guarantor, other than Indebtedness owed to the Borrower, a Subsidiary Guarantor or a Restricted Subsidiary;
provided that, in the case of clause (iii) above, a binding commitment to acquire Additional Assets shall be treated as a permitted application of the Net Proceeds from the date of such commitment so long as the Borrower or such Restricted Subsidiary enters into such commitment with the good faith expectation that such Net Proceeds will be applied to satisfy such commitment within 180 days of such commitment (an Acceptable Commitment) and, in the event any Acceptable Commitment is later cancelled or terminated for any reason before the Net Proceeds are applied in connection therewith, then such Net Proceeds shall constitute Excess Proceeds unless the Net Proceeds are otherwise applied pursuant to any or all of clauses (i) through (iv) above, including, subject to the proviso below, the entry into a new Acceptable Commitment, prior to the later of (x) the date that is six months following the date of such cancellation or termination or (y) the expiration of the Application Period; provided, further that the Borrower or such Restricted Subsidiary may only enter into a new Acceptable Commitment under the foregoing provision one time with respect to each Asset Sale.
Any Net Proceeds from the Asset Sales covered by this clause (a) that are not invested or applied as provided and within the time period set forth in the preceding paragraph, less the amount of cash applied by the Borrower during the six months preceding the date of receipt of such Net Proceeds to redeem the Senior Secured Notes pursuant to the Senior Secured Indenture (other than any such cash applied in respect of accrued and unpaid interest), will be deemed to constitute Excess Proceeds; provided that, in the event there have been multiple Asset Sales, cash applied with respect to any particular redemption pursuant to such paragraph shall only be deducted from the calculation of Excess Proceeds one time.
(b) Pending the final application of any Net Proceeds pursuant to this Section 6.03, the holder of such Net Proceeds may apply such Net Proceeds to prepay Loans in accordance with Section 2.09 or otherwise invest such Net Proceeds in any manner not prohibited by this Agreement.
(c) For purposes of this Section 6.03, the following are deemed to be cash or Cash Equivalents:
(i) any liabilities (as shown on the Borrowers or such Restricted Subsidiarys most recent balance sheet or in the notes thereto or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been shown on the Borrowers or such Restricted Subsidiarys balance sheet or in the footnotes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet, as determined in good faith by the Borrower) of the Borrower or any Restricted Subsidiary, that are assumed by the transferee of any such assets (or are otherwise extinguished in connection with the transactions relating to such Asset Sale) and for which the Borrower and all Restricted Subsidiaries have been validly released by all creditors in writing;
(ii) any securities, notes or other obligations received by the Borrower or such Restricted Subsidiary from such transferee that are converted by the Borrower or such Restricted Subsidiary into cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received) within 180 days following the closing of such Asset Sale; and
(iii) any Designated Non-cash Consideration received by the Borrower or such Restricted Subsidiary in such Asset Sale having an aggregate fair market value, taken together with all other Designated Non-cash Consideration received pursuant to this clause (iii) that is at that time outstanding, not to exceed the greater of $15,000,000 and 3.0% of Total Assets at the time of the receipt of such Designated Non-cash Consideration, with the fair market value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value.
SECTION 6.04. Merger, Consolidation or Sale of All or Substantially All Assets. (a) The Borrower shall not consolidate, merge or amalgamate with or into or wind up into (whether or not the Borrower is the surviving Person), or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to any Person unless:
(i) the Borrower is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a Person organized or existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof (such Person, as the case may be, being herein called the Successor Company);
(ii) the Successor Company expressly assumes all the obligations of the Borrower under this Agreement and the other Loan Documents pursuant to joinders or other documents or instruments in form reasonably satisfactory to the Administrative Agent;
(iii) immediately after such transaction, no Default exists;
(iv) immediately after giving pro forma effect to such transaction and any related financing transactions, as if such transactions had occurred at the beginning of the applicable four-quarter period, (A) the Successor Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the Section 6.01(a), or (B) the Fixed Charge Coverage Ratio for the Borrower (or the Successor Company, as applicable) and the Restricted Subsidiaries on a consolidated basis would be greater than the Fixed Charge Coverage Ratio for the Borrower and the Restricted Subsidiaries on a consolidated basis immediately prior to such transaction;
(v) [Intentionally Omitted];
(vi) the Borrower shall have delivered to the Administrative Agent an Officers Certificate, stating that such consolidation, amalgamation, merger or transfer and such supplemental indentures, if any, comply with this Agreement;
(vii) to the extent any assets of the Person that is merged, amalgamated or consolidated with or into the Successor Company are assets of the type that would constitute Collateral under the Security Documents, the Successor Company will take such action as may be reasonably necessary to cause such property and assets to be made subject to the Lien of the Security Documents in the manner and to the extent required by this Agreement or any of the Security Documents and shall take all reasonably necessary action so that such Lien is perfected to the extent required by this Agreement and the Security Documents; and
(viii) the Collateral owned by or transferred to the Successor Company shall: (A) continue to constitute Collateral under the Loan Documents, (B) be subject to the Lien in favor of the Collateral Agent for the benefit of the Bank Secured Parties and (C) not be subject to any Lien other than Permitted Liens and other Liens permitted under Section 6.02.
The Successor Company will succeed to, and be substituted for the Borrower under the Loan Documents. Notwithstanding the foregoing clauses (iii) and (iv), (A) any Restricted Subsidiary may consolidate or amalgamate with or merge into or transfer all or part of its properties and assets to the Borrower or any Restricted Subsidiary; and (B) the Borrower may consolidate, amalgamate or merge with an Affiliate of the Borrower solely for the purpose of reincorporating the Borrower in another state in the United States, the District of Columbia or any territory thereof so long as the amount of Indebtedness of the Borrower and the Restricted Subsidiaries is not increased thereby.
(b) No Subsidiary Guarantor will, and the Borrower will not permit any such Subsidiary Guarantor to, consolidate, amalgamate or merge with or into or wind up into (whether or not such Subsidiary Guarantor is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to any Person unless:
(i) (A) such Subsidiary Guarantor is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than such Subsidiary Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a Person organized or existing under (I) the laws of the jurisdiction of organization of such Subsidiary Guarantor or (II) the laws of the United States, any state thereof, the District of Columbia or any territory thereof (such Subsidiary Guarantor or such Person, as the case may be, being herein called the Successor Subsidiary Guarantor); (B) the Successor Subsidiary Guarantor, if other than such Subsidiary Guarantor, expressly assumes all the obligations of such Subsidiary Guarantor under this Agreement and such Subsidiary Guarantors related Guarantee and the Security Documents pursuant to documents or instruments in form reasonably satisfactory to the Administrative Agent; (C) immediately after such transaction, no Default exists; (D) the Borrower shall have delivered to the Administrative Agent an Officers Certificate, stating that such consolidation, amalgamation, merger or transfer and such supplemental indentures, if any, comply with this Agreement; (E) to the extent any assets of the Person that is merged, amalgamated or consolidated with or into the Successor Subsidiary Guarantor are assets of the type that would constitute Collateral under the Security Documents, the Successor Subsidiary Guarantor will take such action as may be reasonably necessary to cause such property and assets to be made subject to the Lien of the Security Documents in the manner and to the extent required by the Loan Documents and shall take all reasonably necessary action so that such Lien is perfected to the extent required by the Loan Documents; and (F) the Collateral owned by or transferred to the Successor Subsidiary Guarantor shall: (I) continue to constitute Collateral under the Loan Documents, (II) be subject to the Lien in favor of the Collateral Agent for the benefit of the Bank Secured Parties and (III) not be subject to any Lien other than Permitted Liens and other Liens permitted under Section 6.02; or
(ii) the transaction is made in compliance with Section 6.03.
(c) Subject to the provisions of this Agreement, the Successor Subsidiary Guarantor will succeed to, and be substituted for, such Subsidiary Guarantor under the Loan Documents. Notwithstanding the foregoing, any such Subsidiary Guarantor may (i) merge into or transfer all or part of its properties and assets to another Subsidiary Guarantor or the Borrower or (ii) merge with an Affiliate of the Borrower solely for the purpose of reincorporating or reorganizing such Subsidiary Guarantor in the United States, any state thereof, the District of Columbia or any territory thereof so long as the amount of Indebtedness of the Borrower and the Restricted Subsidiaries is not increased thereby.
SECTION 6.05. Restricted Payments. The Borrower will not, and will not permit any of the Restricted Subsidiaries to, directly or indirectly:
(I) declare or pay any dividend or make any payment or distribution on account of the Borrowers or any of the Restricted Subsidiaries Equity Interests, including any dividend or distribution payable in connection with any merger, consolidation or amalgamation, other than:
(a) dividends, payments or distributions by the Borrower payable solely in Equity Interests (other than Disqualified Stock) of the Borrower; or
(b) dividends, payments or distributions by a Restricted Subsidiary so long as, in the case of any dividend, payment or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary other than a Wholly-Owned Subsidiary of the Borrower, the Borrower or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities;
(II) purchase, redeem, defease or otherwise acquire or retire for value any Equity Interests of the Borrower or any Parent Entity, including in connection with any merger, consolidation or amalgamation;
(III) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value or give any irrevocable notice of redemption with respect to, in each case, prior to any scheduled repayment, sinking fund payment or maturity, any Subordinated Indebtedness of the Borrower or any Subsidiary Guarantor, other than:
(a) Indebtedness permitted to be incurred under clause (viii) or (ix) of Section 6.01(b);
(b) the purchase, repurchase or other acquisition of Subordinated Indebtedness purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of purchase, repurchase or acquisition; or
(c) the giving of an irrevocable notice of redemption with respect to transactions described in clause (2) or (3) of the second paragraph of this Section 6.05; or
(IV) make any Restricted Investment
(all such payments and other actions set forth in clauses (I) through (IV) (other than any exception thereto) above being collectively referred to as Restricted Payments), unless, at the time of such Restricted Payment:
(1) no Default shall have occurred and be continuing or would occur as a consequence thereof;
(2) immediately after giving effect to such transaction on a pro forma basis, the Borrower could incur $1.00 of additional Indebtedness under Section 6.01(a) and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Borrower and the Restricted Subsidiaries after the Closing Date (including Restricted Payments made pursuant to clause (1), (4), (8) or (11) of the next succeeding paragraph, but excluding all other Restricted Payments made pursuant to the next succeeding paragraph), is less than the sum of (without duplication):
(a) 50% of the Consolidated Net Income of the Borrower for the period (taken as one accounting period) beginning on the first day of the fiscal quarter commencing prior to the Closing Date to the end of the Borrowers most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment, or, in the case such Consolidated Net Income for such period is a deficit, minus 100% of such deficit; plus
(b) 100% of the aggregate cash proceeds and the fair market value of marketable securities or other property received by the Borrower since immediately after the Closing Date (other than cash proceeds to the extent such cash proceeds have been used to incur Indebtedness, Disqualified Stock or Preferred Stock pursuant to Section 6.01(xiii)(A) or have been used to make Restricted Payments pursuant to clause (2) of the second paragraph of this Section 6.05) from the issue or sale of: (i)(A) Equity Interests of the Borrower, excluding cash proceeds and the marketable securities or other property received from the sale of: (x) Equity Interests to any future, current or former employee, director or consultant of the Borrower, any Parent Entity or any of the Borrowers Subsidiaries after the Closing Date to the extent such amounts have been applied to Restricted Payments made in accordance with clause (4) of the next succeeding paragraph; and (y)Designated Preferred Stock; and (B) Equity Interests of Parent Entities, to the extent such cash proceeds are actually contributed to the Borrower (excluding contributions of the proceeds from the sale of Designated Preferred Stock of Parent Entities or contributions to the extent such amounts have been applied to Restricted Payments made in accordance with clause (4) of the next succeeding paragraph); or (ii)debt securities of the Borrower that have been subsequently converted into or exchanged for Equity Interests of the Borrower; provided, however, that this clause (b) shall not include the proceeds from (X) Equity Interests or convertible debt securities of the Borrower sold to a Restricted Subsidiary, (Y) Disqualified Stock or debt securities that have been converted into Disqualified Stock or (Z) Excluded Contributions; plus
(c) 100% of the aggregate amount of cash and the fair market value of marketable securities or other property contributed to the capital of the Borrower following the Closing Date (other than cash proceeds, marketable securities or other property to the extent such cash proceeds, marketable securities or other property (i) have been used to incur Indebtedness, Disqualified Stock or Preferred Stock pursuant to Section 6.01(b)(xiii)(A), (ii) have been used to make Restricted Payments pursuant clause (2) of the second paragraph of this Section 6.05, (iii) are contributed by a Restricted Subsidiary or (iv) constitute Excluded Contributions); plus
(d) 100% of the aggregate amount received in cash and the fair market value of marketable securities or other property received by means of:
(i) the sale or other disposition (other than to the Borrower or a Restricted Subsidiary) of Restricted Investments made by the Borrower or the Restricted Subsidiaries and repurchases and redemptions of such Restricted Investments from the Borrower or the Restricted Subsidiaries and repayments of loans or advances, and releases of guarantees, that constitute Restricted Investments made by the Borrower or the Restricted Subsidiaries, in each case, after the Closing Date;
(ii) the sale (other than to the Borrower or a Restricted Subsidiary) of the stock of an Unrestricted Subsidiary after the Closing Date (other than to the extent any Investments made in such Unrestricted Subsidiary constituted Permitted Investments); or
(iii) a distribution or a dividend from an Unrestricted Subsidiary after the Closing Date (only to the extent such distribution or dividend is not already included in the calculation of Consolidated Net Income); plus
(e) in the case of the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary after the Closing Date (other than to the extent any Investments made in such Unrestricted Subsidiary constituted Permitted Investments), the fair market value, as determined by the board of directors of the Borrower in good faith, of the Investment in such Unrestricted Subsidiary (if such fair market value exceeds $35,000,000, the fair market value thereof shall be as determined (and confirmed in writing) by an Independent Financial Advisor), at the time of the redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary.
The foregoing provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption within 60 days after the date of declaration thereof or the giving of such irrevocable notice, as applicable, if at the date of declaration or the giving of such notice such payment would have complied with the provisions of this Agreement;
(2) the redemption, repurchase, retirement or other acquisition of any Equity Interests or Subordinated Indebtedness of the Borrower in exchange for, or out of the proceeds of the substantially concurrent sale (other than to the Borrower or a Restricted Subsidiary)
of, Equity Interests of the Borrower or contributions to the equity capital of the Borrower (other than Excluded Contributions) (in each case, other than any Disqualified Stock or, except in the case of a redemption, repurchase, retirement or other acquisition of Subordinated Indebtedness, Preferred Stock); provided that the amount of any such proceeds that are utilized for any such Restricted Payment are excluded from clause 3(b) of the preceding paragraph;
(3) the redemption, defeasance, repurchase or other acquisition or retirement of (i) Subordinated Indebtedness of the Borrower or a Subsidiary Guarantor made in exchange for, or out of the proceeds of a sale made within 45 days of, new Indebtedness of the Borrower or a Subsidiary Guarantor, as the case may be, or (ii) Disqualified Stock of the Borrower or a Subsidiary Guarantor made in exchange for, or out of the proceeds of a sale made within 45 days of, Disqualified Stock of the Borrower or a Subsidiary Guarantor, that, in each case, is incurred in compliance with Section 6.01, so long as:
(a) the principal amount (or accreted value, if applicable) of such new Indebtedness or the liquidation preference of such new Disqualified Stock does not exceed the principal amount of (or accreted value, if applicable), plus any accrued and unpaid interest on, the Subordinated Indebtedness, or the liquidation preference of, plus any accrued and unpaid dividends on, the Disqualified Stock, being so defeased, redeemed, repurchased, exchanged, acquired or retired for value, plus the amount of any reasonable premium (including reasonable tender premiums), defeasance costs and any reasonable fees and expenses incurred in connection with the issuance of such new Indebtedness or Disqualified Stock;
(b) such new Indebtedness is subordinated to the Indebtedness hereunder at least to the same extent as such Subordinated Indebtedness so purchased, defeased, exchanged, redeemed, repurchased, acquired or retired for value;
(c) such new Indebtedness or Disqualified Stock has a final scheduled maturity date equal to or later than the final scheduled maturity date of the Subordinated Indebtedness or Disqualified Stock being so purchased, defeased, redeemed, repurchased, exchanged, acquired or retired; and
(d) such new Indebtedness or Disqualified Stock has a Weighted Average Life to Maturity equal to or greater than the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness or Disqualified Stock being so purchased, defeased, redeemed, repurchased, exchanged, acquired or retired;
(4) a Restricted Payment to pay for the repurchase, retirement or other acquisition or retirement for value of Equity Interests (other than Disqualified Stock) of the Borrower or any Parent Entity held by any future, present or former employee, director or consultant of the Borrower or any of its Subsidiaries or any Parent Entity pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement, or any stock subscription or shareholder agreement; provided, however, that the aggregate Restricted Payments made under this clause (4) do not exceed in any calendar year $7,500,000 (with unused amounts in any calendar year being
carried over to succeeding calendar years subject to a maximum (without giving effect to the following proviso) of $15,000,000 in any calendar year); provided further that such amount in any calendar year may be increased by an amount not to exceed:
(a) the cash proceeds from the sale of Equity Interests (other than Disqualified Stock and Preferred Stock) of the Borrower and, to the extent contributed to the Borrower, the cash proceeds from the sale of Equity Interests of any Parent Entity, in each case to any future, present or former employees, directors or consultants of the Borrower; any of its Subsidiaries or any Parent Entity, that occurs after the Closing Date; provided that the amount of such cash proceeds utilized for any such repurchase, retirement or other acquisition or retirement for value will not increase the amount available for Restricted Payments under clause (3) of the immediately preceding paragraph; plus
(b) the cash proceeds of key man life insurance policies received by the Borrower or the Restricted Subsidiaries after the Closing Date; less
(c) the amount of any Restricted Payments previously made with the cash proceeds described in clause (a) or (b) of this clause (4);
(5) the declaration and payment of dividends to holders of any class or series of Disqualified Stock of the Borrower or any of the Restricted Subsidiaries or any class or series of Preferred Stock of any Restricted Subsidiary, in each case issued in accordance with Section 6.01; provided that all such dividends are included in the calculation of Fixed Charges;
(6) the declaration and payment of dividends to holders of any class or series of Designated Preferred Stock issued by the Borrower or any of the Restricted Subsidiaries after the Closing Date and the declaration and payment of dividends to a Parent Entity, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock of such Parent Entity issued after the Closing Date; provided that (x) for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock, after giving effect to such issuance (and the payment of related dividends) on a pro forma basis, the Fixed Charge Coverage Ratio on a consolidated basis for the Borrower and the Restricted Subsidiaries would have been at least 2.00 to 1.00 and (y) the amount of dividends paid pursuant to this clause (6) shall not exceed the aggregate amount of cash actually received by the Borrower or the Restricted Subsidiaries from the sale of such Designated Preferred Stock; and provided further that all such dividends are included in the calculation of Fixed Charges;
(7) payments made by the Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Equity Interests by any future, present or former employee, director or consultant and repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;
(8) the declaration and payment of dividends on the Borrowers common equity (or the payment of dividends to any Parent Entity to fund a payment of dividends on such Parent Entitys common equity), following consummation of the first public offering of the Borrowers common equity or the common equity of such Parent Entity after the Closing Date, of up to 6% per annum on the net cash proceeds received by or contributed to the Borrower in or from any such public offering, other than public offerings with respect to the Borrowers common equity registered on Form S-8 and other than any public sale, the proceeds of which constitute an Excluded Contribution;
(9) Restricted Payments in an amount equal to the unused amount of Excluded Contributions previously received;
(10) [Intentionally Omitted];
(11) the repurchase, redemption, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in accordance with provisions similar to those described in Sections 4.10 and 4.14 of the Senior Secured Notes Indenture;
(12) the declaration and payment of dividends by the Borrower to, or the making of loans to, any Parent Entity in amounts required for any Parent Entity to pay, in each case without duplication,
(a) franchise and excise taxes and other fees, taxes and expenses required to maintain their corporate existence;
(b) foreign, federal, state and local income and similar taxes, to the extent such income taxes are attributable to the income, revenue, receipts, capital or margin of the Borrower and the Restricted Subsidiaries and, to the extent of the amount actually received from the Borrowers Unrestricted Subsidiaries, in amounts required to pay such taxes to the extent attributable to the income of such Unrestricted Subsidiaries; provided that in each case the amount of such payments in any calendar year does not exceed the amount that the Borrower and its Subsidiaries would be required to pay in respect of foreign, federal, state and local taxes for such calendar year were the Borrower, the Restricted Subsidiaries and the Borrowers Unrestricted Subsidiaries (to the extent described above) to pay such taxes separately from any such Parent Entity;
(c) (i) customary salary, bonus and other benefits payable to officers, employees and directors of any Parent Entity and (ii) general corporate operating (including, without limitation, expenses related to auditing or other accounting matters) and overhead costs and expenses of any Parent Entity, in each case, to the extent such salary, bonus, other benefits, costs and expenses are attributable to the ownership or operation of the Borrower and the Restricted Subsidiaries, including the Borrowers proportionate share of such amounts relating to such Parent Entity being a public company;
(d) fees and expenses (other than to Affiliates of the Borrower) related to any unsuccessful equity or debt offering of such Parent Entity;
(e) cash payments in lieu of issuing fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Equity Interests of any Parent Entity; and
(f) amounts that would be permitted to be paid by the Borrower under clause (iii), (iv), (v), (viii) or (xi) of Section 6.06; provided that the amount of any dividend or distribution under this clause (12)(f) to permit any such payment shall reduce Consolidated Net Income of the Borrower to the extent, if any, that such payment would have reduced Consolidated Net Income of the Borrower if such payment had been made directly by the Borrower and increase (or, without duplication of any reduction of Consolidated Net Income, decrease) EBITDA to the extent, if any, that Consolidated Net Income is reduced under this clause (12)(f) and such payment would have been added back to (or, would have been deducted from) EBITDA if such payment had been made directly by the Borrower, in each case, in the period such payment is made;
(13) the repurchase, redemption, or other acquisition for value of Equity Interests of the Borrower deemed to occur in connection with paying cash in lieu of fractional shares of such Equity Interests in connection with a share dividend, distribution, share split, reverse share split, merger, consolidation, amalgamation or other business combination of the Borrower, in each case, permitted under this Agreement;
(14) the distribution, by dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to the Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries the primary assets of which are cash and/or Cash Equivalents);
(15) Restricted Payments by the Borrower to any Parent Entity to finance Investments that would otherwise be permitted to be made pursuant to this Section 6.05 if made by the Borrower; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment, (B) such Parent Entity shall, immediately following the closing thereof, cause (i) all property acquired (whether Equity Interests or other assets) to be contributed to the capital of the Borrower or one of the Restricted Subsidiaries (and which contribution is not an Excluded Contribution) or (ii) the merger or amalgamation of the Person formed or acquired into the Borrower or one of the Restricted Subsidiaries (to the extent not prohibited by Section 6.04) in order to consummate such Investment, (C) such Parent Entity and its Affiliates (other than the Borrower or a Restricted Subsidiary) receives no consideration or other payment in connection with such transaction except to the extent the Borrower or a Restricted Subsidiary could have given such consideration or made such payment in compliance with this Agreement, (D) any property received by the Borrower shall not increase amounts available for Restricted Payments pursuant to clause (3) of the preceding paragraph or any other provision of this paragraph and (E) such Investment shall have been permitted by and shall be deemed to be made by the Borrower or such Restricted Subsidiary pursuant to another provision of this Section 6.05 or pursuant to the definition of Permitted Investments pursuant to which the Borrower would have been entitled to have made such Investment if made by the Borrower; and
(16) the Special Dividend and the Special Options Distribution;
provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under clause (15), no Default shall have occurred and be continuing or would occur as a consequence thereof.
For purposes of determining compliance with this Section 6.05, in the event that a payment or other action meets the criteria of more than one of the exceptions described in clauses (1) through (16) above, or is permitted to be made pursuant to the first paragraph of this Section 6.05 (including by virtue of qualifying as a Permitted Investment), the Borrower will be permitted to classify such payment or other action on the date of its occurrence in any manner that complies with this Section 6.05. Payments or other actions permitted by this Section 6.05 need not be permitted solely by reference to one provision permitting such payment or other action but may be permitted in part by one such provision and in part by one or more other provisions of this Section 6.05 permitting such payment or other action (including pursuant to any section of the definition of Permitted Investment).
As of the Closing Date, all of the Borrowers Subsidiaries, other than the Initial Unrestricted Subsidiary, will be Restricted Subsidiaries. The Borrower will not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the last sentence of the definition of Unrestricted Subsidiary. For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Borrower and the Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated will be deemed to be Restricted Payments in an amount determined as set forth in the last sentence of the definition of Investments. Such designation will be permitted only if a Restricted Payment in such amount would be permitted at such time, whether pursuant to the first paragraph of this Section 6.05 or under clause (9) of the second paragraph of this Section 6.05, or pursuant to the definition of Permitted Investments, and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.
SECTION 6.06. Transactions with Affiliates. (a) The Borrower will not, and will not permit any of the Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Borrower (each of the foregoing, an Affiliate Transaction) involving aggregate payments or consideration in excess of $5,000,000 unless:
(i) such Affiliate Transaction is on terms that are not materially less favorable to the Borrower or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Borrower or such Restricted Subsidiary with an unrelated Person on an arms-length basis; and
(ii) the Borrower delivers to the Administrative Agent with respect to any Affiliate Transaction or series of related Affiliate Transactions involving
aggregate payments or consideration in excess of $15,000,000, a resolution adopted by the majority of the board of directors of the Borrower approving such Affiliate Transaction and set forth in an Officers Certificate certifying that such Affiliate Transaction complies with clause (i) above.
(b) The foregoing provisions will not apply to the following:
(i) transactions between or among the Borrower or any of the Restricted Subsidiaries or any entity that becomes a Restricted Subsidiary as a result of such transaction, so long as such transaction is otherwise consummated in compliance with this Agreement;
(ii) Restricted Payments permitted by Section 6.05 and Permitted Investments permitted by clause (viii) or (xiii) of the definition of Permitted Investments;
(iii) the payment of management, consulting, monitoring and advisory fees and related expenses (including indemnification and other similar agreements) to the Investors pursuant to the Investor Management Agreement (plus any unpaid management, consulting, monitoring, advisory and other fees and related expenses (including indemnification and other similar amounts) accrued in any prior year) and the termination fees pursuant to the Investor Management Agreement, in each case, in amounts not in excess of those contemplated by the Investor Management Agreement as in effect on the Closing Date or as the same may be amended after the Closing Date, so long as any amendments thereto, when taken as a whole, are not disadvantageous in any material respect to the Lenders;
(iv) the payment of indemnification and other similar amounts to the Investors and reimbursement of expenses of the Investors approved by, or pursuant to arrangements approved by, the board of directors of the Borrower in good faith;
(v) the payment of reasonable and customary fees and compensation paid to, and indemnities and reimbursements and employment and severance arrangements provided on behalf of, or for the benefit of, future, current or former officers, directors, employees or consultants of the Borrower, any of the Restricted Subsidiaries or any Parent Entity;
(vi) transactions in which the Borrower or any of the Restricted Subsidiaries, as the case may be, delivers to the Administrative Agent a letter from an Independent Financial Advisor stating that such transaction is fair to the Borrower or such Restricted Subsidiary from a financial point of view or stating that the terms are not materially less favorable to the Borrower or its relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Borrower or such Restricted Subsidiary with an unrelated Person on an arms-length basis;
(vii) any agreement or arrangement as in effect as of the Closing Date, as the same may be amended after the Closing Date, so long as any such amendments, when taken as a whole, are not disadvantageous in any material respect to the Lenders;
(viii) the existence of, or the performance by the Borrower or any of the Restricted Subsidiaries of its obligations under the terms of, any stockholders agreement or the equivalent thereof (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Closing Date and any amendment thereto or any similar agreement that it may enter into thereafter; provided, however, that any such amendment and any similar agreement shall not contain terms that, when taken as a whole, are disadvantageous in any material respect to the Lenders;
(ix) transactions with customers, clients, suppliers or purchasers or sellers of goods or services that are Affiliates, in each case in the ordinary course of business and otherwise in compliance with the terms of this Agreement and that are fair to the Borrower and the Restricted Subsidiaries, in the reasonable determination of the board of directors of the Borrower or the senior management thereof, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party;
(x) the issuance or transfer of Equity Interests (other than Disqualified Stock) of the Borrower to any Parent Entity or to any Permitted Holder or to any director, officer, employee or consultant (or their respective estates, investment funds, investment vehicles, spouses or former spouses) of the Borrower, any of the Borrowers Subsidiaries or any Parent Entity and the granting and performing of reasonable and customary registration rights with respect to such Equity Interests;
(xi) payments by the Borrower or any of the Restricted Subsidiaries to the Sponsor made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures; provided that such payments are approved by the board of directors of the Borrower in good faith;
(xii) payments or loans (or cancellation of loans) to employees, directors or consultants of the Borrower, any of the Restricted Subsidiaries or any Parent Entity and employment agreements, stock option plans and other similar arrangements with such employees, directors or consultants that, in each case, that are approved by the board of directors of the Borrower in good faith;
(xiii) investments by the Investors in securities of the Borrower or any of the Restricted Subsidiaries (and payment of reasonable out-of-pocket expenses incurred by the Investors in connection therewith) so long as (A) the investment is being offered generally to other investors on the same or more favorable terms
and (B) the investment by the Investors, in the aggregate, constitutes less than 5% of the proposed issue amount of such class of securities;
(xiv) payments to any future, current or former employee, director, officer or consultant of the Borrower, any of its Subsidiaries or any Parent Entity pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement; and any employment agreements, stock option plans and other compensatory arrangements (and any successor plans thereto) and any health, disability and similar insurance or benefit plans or supplemental executive retirement benefit plans or arrangements with any such employees, directors, officers or consultants that are, in each case, approved by the board of directors of the Borrower in good faith;
(xv) transactions with a Person (other than an Unrestricted Subsidiary) that is an Affiliate of the Borrower solely because the Borrower owns any Equity Interest in, or controls, such Person; provided that, no Affiliate of the Borrower, other than the Borrower or a Restricted Subsidiary, shall have a beneficial interest or otherwise participate in such Person other than through such Affiliates ownership of the Borrower;
(xvi) payments by the Borrower and its Subsidiaries pursuant to tax sharing agreements among the Borrower (and any Parent Entity) and its Subsidiaries; provided that in each case the amount of such payments in any calendar year does not exceed the amount that the Borrower, the Restricted Subsidiaries and the Borrowers Unrestricted Subsidiaries (to the extent of the amount received from Unrestricted Subsidiaries) would be required to pay in respect of foreign, federal, state and local taxes for such calendar year were the Borrower, the Restricted Subsidiaries and the Borrowers Unrestricted Subsidiaries (to the extent described above) to pay such taxes separately from any such Parent Entity; and
(xvii) intellectual property licenses entered into in the ordinary course of business.
SECTION 6.07. Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries. (a) The Borrower will not, and will not permit any of the Restricted Subsidiaries that are not Subsidiary Guarantors to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:
(i) (A) pay dividends or make any other distributions to the Borrower or any of the Restricted Subsidiaries on its Capital Stock or with respect to any other interest or participation in, or measured by, its profits, or (B) pay any Indebtedness owed to the Borrower or any of the Restricted Subsidiaries;
(ii) make loans or advances to the Borrower or any of the Restricted Subsidiaries; or
(iii) sell, lease or transfer any of its properties or assets to the Borrower or any of the Restricted Subsidiaries, except (in each case) for such encumbrances or restrictions existing under or by reason of:
(A) contractual encumbrances or restrictions in effect on the Closing Date, including pursuant to the Alabama Revolving Credit Agreement, this Agreement and the related documentation and related Hedging Obligations;
(B) the Senior Secured Notes Indenture;
(C) purchase money obligations for property acquired in the ordinary course of business and Capital Lease Obligations that impose restrictions of the nature described in clause (iii) above, in each case, only with respect to the property so acquired;
(D) applicable law or any applicable rule, regulation or order;
(E) any agreement or other instrument of a Person acquired by or merged, amalgamated or consolidated with or into the Borrower or any Restricted Subsidiary in existence at the time of such acquisition or at the time it merges, amalgamates or consolidates with or into the Borrower or any Restricted Subsidiary or assumed in connection with the acquisition of assets from such Person (but, in each case, not created in contemplation thereof); provided that such encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person and its Subsidiaries, or the property or assets of the Person and its Subsidiaries, so acquired;
(F) contracts for the sale of assets, including customary restrictions with respect to a Subsidiary of the Borrower pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of such Subsidiary, pending the sale of such assets;
(G) Secured Indebtedness otherwise permitted to be incurred pursuant to Sections 6.01 and 6.02 that limit the right of the debtor to dispose of the assets securing such Indebtedness;
(H) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;
(I) customary provisions in joint venture agreements or arrangements and other similar agreements relating solely to such joint venture;
(J) customary provisions contained in leases, sub-leases, licenses, sub-licenses or similar agreements, including with respect to intellectual property and other agreements, in each case, entered into in the ordinary course of business to the extent such obligations impose restrictions of the nature described in clause (iii) above on the property subject to such lease, sub-lease, license, sub-license or other similar agreement;
(K) restrictions or conditions contained in any trading, netting, operating, construction, service, supply, purchase, sale or other agreement to which the Borrower or any of the Restricted Subsidiaries is a party entered into in the ordinary course of business; provided that such agreement prohibits the encumbrance of solely the property or assets of the Borrower or such Restricted Subsidiary that are the subject of such agreement, the payment rights arising thereunder or the proceeds thereof and does not extend to any other asset or property of the Borrower or such Restricted Subsidiary or the assets or property of another Restricted Subsidiary;
(L) any encumbrance or restriction with respect to a Restricted Subsidiary that was previously an Unrestricted Subsidiary pursuant to or by reason of an agreement that such Subsidiary is a party to or entered into before the date on which such Subsidiary became a Restricted Subsidiary; provided that such agreement was not entered into in anticipation of an Unrestricted Subsidiary becoming a Restricted Subsidiary and any such encumbrance or restriction does not extend to any assets or property of the Borrower or any other Restricted Subsidiary other than the assets and property of such Subsidiary;
(M) other Indebtedness, Disqualified Stock or Preferred Stock of Foreign Subsidiaries that are not Guarantors that is permitted to be incurred subsequent to the Closing Date pursuant to Section 6.01;
(N) other Indebtedness, Disqualified Stock or Preferred Stock permitted to be incurred subsequent to the Closing Date pursuant to Section 6.01; provided that, in the good faith judgment of the Borrower, the encumbrances and restrictions contained therein will not materially impair the Borrowers ability to make payments hereunder or under the Senior Secured Notes when due; and
(O) any encumbrances or restrictions of the type referred to in clause (i), (ii) or (iii) above imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in any of clauses (A) through (N) above; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings (I) are, in the good faith judgment of the Borrower, not materially more restrictive with respect to such
encumbrance and other restrictions taken as a whole than those prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing, and (II) in the case of the Alabama Revolving Credit Agreement, do not affect the ability of the Alabama Subsidiary to comply with Section 6.11.
SECTION 6.08. Business of the Borrower and the Restricted Subsidiaries. The Borrower will not, and will not permit any of the Restricted Subsidiaries to engage at any time in any business or business activity other than the business currently conducted by it and business activities reasonably incidental thereto.
SECTION 6.09. Maximum Leverage Ratio. The Borrower will not, and will not permit any of the Restricted Subsidiaries to, as long as any Loan is outstanding as of the last day of any fiscal quarter, permit the Leverage Ratio as of the last day of such fiscal quarter to be greater than 5.00 to 1.00.
SECTION 6.10. Fiscal Year. The Borrower will not change its fiscal year-end to a date other than December 31.
SECTION 6.11. Designated Priority Obligations. The Borrower will not designate any Revolving Credit Facility Obligations as Designated Priority Obligations under the Collateral Agreement without the prior written consent of the Required Lenders.
ARTICLE VII
Events of Default
In case of the happening of any of the following events (Events of Default):
(a) any representation or warranty made or deemed made in or in connection with any Loan Document or the borrowings or issuances of Letters of Credit hereunder, or any representation, warranty, statement or information contained in any report, certificate, financial statement or other instrument furnished in connection with or pursuant to any Loan Document, shall prove to have been false or misleading in any material respect when so made, deemed made or furnished;
(b) default shall be made in the payment of any principal of any Loan or the reimbursement with respect to any L/C Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or by acceleration thereof or otherwise;
(c) default shall be made in the payment of any interest on any Loan or any Fee or L/C Disbursement or any other amount (other than an amount referred to in (b) of this Article VII) due under any Loan Document, when and as the same shall become due and payable, and such default shall continue unremedied for a period of three Business Days;
(d) default shall be made in the due observance or performance by the Borrower or any Restricted Subsidiary of any covenant, condition or agreement contained in Section 5.01(a), 5.05 or 5.08 or in Article VI;
(e) default shall be made in the due observance or performance by the Borrower or any Restricted Subsidiary of any covenant, condition or agreement contained in any Loan Document (other than those specified in (b), (c) or (d) above) and such default shall continue unremedied for a period of 30 days after notice thereof from the Administrative Agent or any Lender to the Borrower;
(f) (i) the Borrower or any Restricted Subsidiary shall fail to pay any principal, interest or other amount due in respect of any Material Indebtedness, when and as the same shall become due and payable or (ii) any other event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity or that results in the termination or permits any counterparty to terminate any Hedging Obligation the obligations under which constitute Material Indebtedness; provided that this clause (ii) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;
(g) an involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (i) relief in respect of the Borrower or any Restricted Subsidiary, or of a substantial part of the property or assets of the Borrower, or a Restricted Subsidiary, under Title 11 of the United States Code, as now constituted or hereafter amended, or any other Federal, state or foreign bankruptcy, insolvency, receivership or similar law, (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Restricted Subsidiary or for a substantial part of the property or assets of the Borrower or any Restricted Subsidiary or (iii) the winding-up or liquidation of the Borrower or any Restricted Subsidiary; and such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;
(h) the Borrower or any Restricted Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking relief under Title 11 of the United States Code, as now constituted or hereafter amended, or any other Federal, state or foreign bankruptcy, insolvency, receivership or similar law, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or the filing of any petition described in (g) above, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Restricted Subsidiary or for a substantial part of the property or assets of the Borrower or any Restricted Subsidiary, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, (vi) become unable, admit in writing its inability or fail generally to
pay its debts as they become due or (vii) take any action for the purpose of effecting any of the foregoing;
(i) one or more judgments shall be rendered against the Borrower or any Restricted Subsidiary or any combination thereof and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to levy upon assets or properties of the Borrower or any Subsidiary to enforce any such judgment and such judgment either (i) is for the payment of money in an aggregate amount in excess of $25,000,000 or (ii) is for injunctive relief and could reasonably be expected to result in a Material Adverse Effect;
(j) an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other such ERISA Events, could reasonably be expected to result in liability of the Borrower and its ERISA Affiliates in an aggregate amount exceeding $3,000,000;
(k) any Guarantee under the Guarantee Agreement for any reason shall cease to be in full force and effect (other than in accordance with its terms), or any Subsidiary Guarantor shall deny in writing that it has any further liability under the Guarantee Agreement (other than as a result of the discharge of such Subsidiary Guarantor in accordance with the terms of the Loan Documents);
(l) any security interest purported to be created by any Security Document shall cease to be, or shall be asserted by the Borrower or any other Loan Party not to be, a valid, perfected, first priority (except as otherwise expressly provided in this Agreement or such Security Document) security interest in the securities, assets or properties covered thereby, except to the extent that any such loss of perfection or priority results from the failure of the Collateral Agent to maintain possession of certificates delivered to the Collateral Agent representing securities pledged under the Collateral Agreement and except to the extent that such loss is covered by a lenders title insurance policy and the related insurer promptly after such loss shall have acknowledged in writing that such loss is covered by such title insurance policy;
(m) there shall have occurred a Change of Control; or
(n) so long as any Senior Secured Notes are outstanding, the intercreditor provisions of the Collateral Agreement shall, in whole or in part, cease to be effective or cease to be legally valid, binding and enforceable against any party thereto (or against any Person on whose behalf any such party makes any covenants or agreements therein), or otherwise not be effective to create the rights and obligations purported to be created thereunder, unless the same results directly from the action or inaction of the Administrative Agent;
then, and in every such event (other than an event with respect to the Borrower described in paragraph (g) or (h) of this Article VII), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the
Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate forthwith the Commitments and (ii) declare the Loans then outstanding to be forthwith due and payable in whole or in part, whereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and any unpaid accrued Fees and all other liabilities of the Borrower accrued hereunder and under any other Loan Document, shall become forthwith due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by the Borrower, anything contained herein or in any other Loan Document to the contrary notwithstanding; and in any event with respect to the Borrower described in paragraph (g) or (h) of this Article VII, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and any unpaid accrued Fees and all other liabilities of the Borrower accrued hereunder and under any other Loan Document, shall automatically become due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by the Borrower, anything contained herein or in any other Loan Document to the contrary notwithstanding.
ARTICLE VIII
Agency
SECTION 8.01. Appointment and Authority. Each of the Lenders and the Issuing Bank hereby irrevocably appoints Credit Suisse AG to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the Issuing Bank, and the Borrower shall not have rights as a third-party beneficiary of any of such provisions. It is understood and agreed that the use of the term agent herein or in any other Loan Documents (or any other similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.
SECTION 8.02. Rights as a Lender. The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and the term Lender or Lenders shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for, and generally engage in any kind of business with, the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.
SECTION 8.03. Exculpatory Provisions. (a) The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Administrative Agent:
(i) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;
(ii) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents); provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law; and
(iii) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.
(b) The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Section 9.07), or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent in writing by the Borrower, a Lender or the Issuing Bank.
(c) The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the Administrative Agent.
SECTION 8.04. Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance, extension, renewal or increase of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the Issuing Bank, the Administrative Agent may presume that such condition is satisfactory to such Lender or the Issuing Bank unless the Administrative Agent shall have received notice to the contrary from such Lender or the Issuing Bank prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
SECTION 8.05. Delegation of Duties. The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article VIII shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the arranging of the Credit Facilities as well as activities as Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and non appealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.
SECTION 8.06. Resignation of Administrative Agent. (a) The Administrative Agent may at any time give notice of its resignation to the Lenders, the Issuing Bank and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which shall be a bank with an office in New York, New York or Cincinnati, Ohio, or an Affiliate of any such bank. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the Resignation Effective Date), then the retiring Administrative Agent may (but shall not be obligated to), on behalf of the Lenders and the Issuing Bank, appoint a successor Administrative Agent meeting the qualifications set forth above.
Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date. If no successor Administrative Agent has been appointed, the Required Lenders shall thereafter perform all the duties of such Administrative Agent hereunder and under any other Loan Document until such time, if any, as the Required Lenders appoint a successor Administrative Agent.
(b) If the Person serving as Administrative Agent is a Defaulting Lender pursuant to clause (d) of the definition thereof, the Required Lenders may, to the extent permitted by applicable law, by notice in writing to the Borrower and such Person remove such Person as Administrative Agent and, in consultation with the Borrower, appoint a successor. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days (or such earlier day as shall be agreed by the Required Lenders) (the Removal Effective Date), then such removal shall nonetheless become effective in accordance with such notice on the Removal Effective Date.
(c) With effect from the Resignation Effective Date or the Removal Effective Date (as applicable) (1) the retiring or removed Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Secured Parties under any of the Loan Documents, the retiring or removed Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (2) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and the Issuing Bank directly, until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided for above. Upon the acceptance of a successors appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring or removed Administrative Agent, and the retiring or removed Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents. The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring or removed Administrative Agents resignation or removal hereunder and under the other Loan Documents, the provisions of this Article VIII and Section 9.04 shall continue in effect for the benefit of such retiring or removed Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring or removed Administrative Agent was acting as Administrative Agent.
SECTION 8.07. Non-Reliance on Administrative Agent and Other Lenders. Each Lender and the Issuing Bank acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and Issuing Bank also acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.
SECTION 8.08. No Other Duties, Etc. Anything herein to the contrary notwithstanding, neither the Bookrunner nor the Arranger listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or the Issuing Bank hereunder.
SECTION 8.09. Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Secured Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the Issuing Bank and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the Issuing Bank and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the Issuing Bank and the Administrative Agent under Sections 2.05 and 9.04) allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and Issuing Bank to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the Issuing Bank, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.05 and 9.04.
SECTION 8.10. Collateral and Guarantee Matters. (a) The Bank Secured Parties irrevocably authorize and direct the Administrative Agent (i) to execute and deliver the Collateral Agreement and to exercise and enforce its rights and remedies and perform its obligations thereunder and (ii) to release any Subsidiary Guarantor from its
obligations under the Guarantee Agreement if such Person ceases to be a Subsidiary as a result of a transaction permitted under the Loan Documents.
Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agents authority to release any Guarantor from its obligations under the Guarantee Agreement pursuant to this Section 8.10(a).
No Bank Secured Party shall have any right individually to realize upon any of the Collateral or to enforce any Guarantee of the Bank Obligations, it being understood and agreed that all powers, rights and remedies under the Loan Documents may be exercised solely by the Administrative Agent (or any sub-agent thereof) on behalf of the Bank Secured Parties in accordance with the terms thereof
(b) The Administrative Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Administrative Agents Lien thereon, or any certificate prepared by any Loan Party in connection therewith, nor shall the Administrative Agent be responsible or liable to the Lenders for any failure to monitor or maintain any portion of the Collateral.
SECTION 8.11. Collateral Agreement. Each Lender agrees that it will be bound by, and shall take no actions contrary to (and shall take all actions required by), the provisions of the Collateral Agreement, the Alabama Intercreditor Agreement and the Junior Lien Intercreditor Agreement and authorizes (i) the Administrative Agent to enter into the Collateral Agreement on its behalf and (ii) the Collateral Agent to enter into the Collateral Agreement, the Alabama Intercreditor Agreement and, if the Borrower incurs any obligations in respect of Junior Lien Indebtedness, the Junior Lien Intercreditor Agreement on its behalf and to act on its behalf to the extent set forth in the Collateral Agreement. The Lenders acknowledge that the Collateral Agreement provides for the allocation of proceeds of Collateral among the Secured Parties as set forth therein and contains limits on the ability of the Administrative Agent and the Lenders to take remedial actions with respect to the Collateral. The Lenders acknowledge that the Secured Obligations are secured by the Collateral on a pari passu basis to the extent set forth in the Collateral Agreement.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices; Effectiveness; Electronic Communication. (a) Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in paragraph (b) of this Section 9.01), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile as follows:
(i) if to the Borrower or to any other Loan Party, to it at 7001 Post Road, Suite 200, Dublin, Ohio 43016, Attention of General Counsel, Fax No.: (614) 760-4057;
(ii) if to the Administrative Agent or the Issuing Bank, to Credit Suisse AG, Eleven Madison Avenue, New York, New York 10010, Attention of Agency Group, Fax No.: (212) 325-8304, Email: agency.loanops@credit-suisse.com;
(iii) if to the Swingline Lender, to Fifth Third Bank, 5050 Kingsley Drive, MD 1MOC2B, Cincinnati, Ohio 45227, Fax No.: (513) 358-3479, with a copy to Fifth Third Bank, 21 East State Street, MD 468371, Columbus, Ohio 43215, Attention of Jonathan A. Deshler, Fax No.: (614) 744-7688;
(iv) if to the Collateral Agent, to U.S. Bank National Association, 1350 Euclid Avenue, CN OH RN 11, Cleveland, Ohio 44115, Attention of Corporate Trust Services, Fax No.: (216) 623-9202; and
(v) if to a Lender, to it at its address (or fax number) set forth in its Administrative Questionnaire or in the Assignment and Assumption pursuant to which such Lender shall have become a party hereto.
Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices delivered through electronic communications, to the extent provided in paragraph (b) of this Section 9.01, shall be effective as provided in said paragraph (b).
(b) Electronic Communications. Notices and other communications to the Lenders and the Issuing Bank hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or the Issuing Bank pursuant to Article II if such Lender or the Issuing Bank, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.
Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the senders receipt of an acknowledgement from the intended recipient (such as by the return receipt requested function, as available, return e-mail or other written acknowledgement), and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient, at its e-mail address as
described in the foregoing clause (i), of notification that such notice or communication is available and identifying the website address therefore; provided that, for both clauses (i) and (ii) above, if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.
(c) Change of Address, Etc. Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto.
(d) Platform.
(i) The Borrower agrees that the Administrative Agent may, but shall not be obligated to, make the Communications (as defined below) available to the Issuing Bank and the other Lenders by posting the Communications on Debt Domain, Intralinks, Syndtrak or a substantially similar and industry recognized electronic transmission system (the Platform).
(ii) The Platform is provided as is and as available. The Agent Parties (as defined below) do not warrant the adequacy of the Platform and expressly disclaim liability for errors or omissions in the Communications. No warranty of any kind, express, implied or statutory, including any warranty of merchantability, fitness for a particular purpose, non-infringement of third-party rights or freedom from viruses or other code defects, is made by any Agent Party in connection with the Communications or the Platform. In no event shall the Administrative Agent or any of its Related Parties (collectively, the Agent Parties) have any liability to the Borrower or the other Loan Parties, any Lender or any other Person or entity for damages of any kind, including, without limitation, direct or indirect, special, incidental or consequential damages, losses or expenses (whether in tort, contract or otherwise) arising out of the Borrowers, any Loan Partys or the Administrative Agents transmission of communications through the Platform. Communications means, collectively, any notice, demand, communication, information, document or other material that any Loan Party provides to the Administrative Agent pursuant to any Loan Document or the transactions contemplated therein which is distributed to the Administrative Agent, any Lender or the Issuing Bank by means of electronic communications pursuant to this Section 9.01, including through the Platform.
The Borrower hereby agrees, unless directed otherwise by the Administrative Agent or unless the e-mail address referred to in this paragraph below has not been provided by the Administrative Agent to the Borrower, that it will, or will cause the Subsidiaries to, provide the Communications to the Administrative Agent in an electronic/soft medium that is properly identified in a format acceptable to the Administrative Agent to an e-mail address as directed by the Administrative Agent. In addition, the Borrower agrees, and agrees to cause the Subsidiaries, to continue to provide the Communications to the Administrative Agent or the Lenders, as the case may
be, in the manner otherwise specified in the Loan Documents but only to the extent requested by the Administrative Agent.
The Borrower hereby acknowledges that (a) the Administrative Agent will make available to the Lenders and the Issuing Bank materials and/or information provided by or on behalf of the Borrower hereunder (collectively, the Borrower Materials) by posting the Borrower Materials on the Platform and (b) certain of the Lenders may be public-side Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to the Borrower or its securities) (each, a Public Lender). The Borrower hereby agrees that (i) all Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked PUBLIC which, at a minimum, shall mean that the word PUBLIC shall appear prominently on the first page thereof; (ii) by marking Borrower Materials PUBLIC, the Borrower shall be deemed to have authorized the Administrative Agent and the Lenders to treat such Borrower Materials as not containing any material non-public information with respect to the Borrower or its securities for purposes of United States Federal and state securities laws (provided, however, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 9.13); (iii) all Borrower Materials marked PUBLIC are permitted to be made available through a portion of the Platform designated as Public Investor; and (iv) the Administrative Agent shall be entitled to treat any Borrower Materials that are not marked PUBLIC as being suitable only for posting on a portion of the Platform not marked as Public Investor and shall post the same only on such portion. Notwithstanding the foregoing, the following Borrower Materials shall be marked PUBLIC, unless the Borrower notifies the Administrative Agent promptly that any such document contains material non-public information: (A) the Loan Documents and (B) notification of changes in the terms of the Credit Facilities.
Each Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the Private Side Information or similar designation on the content declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lenders compliance procedures and applicable law, including United States Federal and state securities laws, to make reference to Communications that are not made available through the Public Side Information portion of the Platform and that may contain material non-public information with respect to the Borrower or its securities for purposes of United States Federal or state securities laws.
The Administrative Agent agrees that the receipt of the Communications by the Administrative Agent at its e-mail address set forth above shall constitute effective delivery of the Communications to the Administrative Agent for purposes of the Loan Documents. Each Lender agrees that receipt of notice to it (as provided in the next sentence) specifying that the Communications have been posted to the Platform shall constitute effective delivery of the Communications to such Lender for purposes of the Loan Documents. Each Lender agrees to notify the Administrative Agent in writing (including by electronic communication) from time to time of such Lenders e-mail address to which the foregoing notice may be sent by electronic transmission and that the foregoing notice may be sent to such e-mail address.
Nothing herein shall prejudice the right of the Administrative Agent or any Lender to give any notice or other communication pursuant to any Loan Document in any other manner specified in such Loan Document.
SECTION 9.02. Survival of Agreement. All covenants, agreements, representations and warranties made by the Borrower herein and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the Lenders and the Issuing Bank and shall survive the making by the Lenders of the Loans and the issuance of Letters of Credit by the Issuing Bank, regardless of any investigation made by the Lenders or the Issuing Bank or on their behalf, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any Fee or any other amount payable under this Agreement or any other Loan Document is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not been terminated. The provisions of Sections 2.13, 2.15, 2.19 (subject to the requirements of Section 2.19) and 9.04 shall remain operative and in full force and effect regardless of the expiration of the term of this Agreement, the consummation of the transactions contemplated hereby, the repayment of any of the Loans, the expiration of the Commitments, the expiration of any Letter of Credit, the invalidity or unenforceability of any term or provision of this Agreement or any other Loan Document, or any investigation made by or on behalf of the Administrative Agent, the Collateral Agent, any Lender or the Issuing Bank.
SECTION 9.03. Successors and Assigns. (a) Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender, and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of paragraph (b) of this Section 9.03, (ii) by way of participation in accordance with the provisions of paragraph (d) of this Section 9.03, or (iii) by way of pledge or assignment of a security interest subject to the restrictions of paragraph (f) of this Section 9.03 (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in paragraph (d) of this Section 9.03 and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.
(b) Assignments by Lenders. Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it); provided that any such assignment shall be subject to the following conditions:
(i) Minimum Amounts.
(A) in the case of an assignment of the entire remaining amount of the assigning Lenders Commitment and/or the Loans at the time owing to it or contemporaneous assignments to related Approved Funds that equal at least the amount specified in paragraph (b)(i)(B) of this Section 9.03 in the aggregate or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and
(B) in any case not described in paragraph (b)(i)(A) of this Section 9.03, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if Trade Date is specified in the Assignment and Assumption, as of the Trade Date) shall not be less than $1,000,000 unless each of the Administrative Agent and, so long as no Event of Default of the type described in paragraph (b), (c), (g) or (h) of Article VII has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed).
(ii) Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lenders rights and obligations under this Agreement with respect to the Loan or the Commitment assigned.
(iii) Required Consents. No consent shall be required for any assignment except to the extent required by paragraph (b)(i)(B) of this Section 9.03 and, in addition:
(A) the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (x) an Event of Default of the type described in paragraph (b), (c), (g) or (h) of Article VII has occurred and is continuing at the time of such assignment, or (y) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within 5 Business Days after having received notice thereof; and
(B) the consent of the Administrative Agent, the Issuing Bank and the Swingline Lender (such consent not to be unreasonably withheld or delayed) shall be required for any assignment if such assignment is to a Person that is not a Lender, an Affiliate of a Lender or an Approved Fund with respect to such Lender.
(iv) Assignment and Assumption. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption,
together with a processing and recordation fee of $3,500; provided that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire and any tax forms required by applicable law or reasonably requested by the Administrative Agent to support such assignees position that no withholding is required in respect o amount received hereunder.
(v) No Assignment to Certain Persons. No such assignment shall be made to (A) the Borrower or any of the Borrowers Affiliates or Subsidiaries or (B) to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B).
(vi) No Assignment to Natural Persons. No such assignment shall be made to a natural Person.
(vii) Certain Additional Payments. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, the Issuing Bank, the Swingline Lender and each other Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit and Swingline Loans in accordance with its Applicable Commitment Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.
Subject to acceptance and recording thereof by the Administrative Agent pursuant to paragraph (c) of this Section 9.03, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lenders rights and obligations
under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 2.13, 2.15, 2.19 (subject to the requirements of Section 2.19) and 9.04 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided, that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lenders having been a Defaulting Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (d) of this Section 9.03.
(c) Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at one of its offices in The City of New York a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the Register). The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice. No assignment shall be effective unless it has been recorded in the Register as provided in this Section 9.03(c).
(d) Participations. Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural Person or the Borrower or any of the Borrowers Affiliates or Subsidiaries) (each, a Participant) in all or a portion of such Lenders rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lenders obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, and (iii) the Borrower, the Administrative Agent, the Issuing Bank and Lenders shall continue to deal solely and directly with such Lender in connection with such Lenders rights and obligations under this Agreement. For the avoidance of doubt, each Lender shall be responsible for the indemnity under Section 2.18(c) with respect to any payments made by such Lender to its Participant(s).
Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver decreasing any fees payable to such Participant hereunder or the amount of principal of or the rate at which interest is payable on the Loans in which such Participant has an interest, extending any scheduled principal payment date or date fixed for the payment of interest on the Loans in which such Participant has an interest,
increasing or extending the Commitments in which such Participant has an interest or releasing any Subsidiary Guarantor (other than in connection with the sale of such Subsidiary Guarantor in a transaction permitted by Section 6.04) or all or substantially all of the Collateral. The Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.13(a) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section 9.03; provided that such Participant agrees to be subject to the provisions of Sections 2.13(b) and 2.13(c) as if it were an assignee under paragraph (b) of this Section 9.03. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.05 as though it were a Lender; provided that such Participant agrees to be subject to Section 2.17 as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each participant and the principal amounts (and stated interest) of each participants interest in the Loans or other obligations under this Agreement (the Participant Register). The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.
(e) Limitations upon Participant Rights. A Participant shall not be entitled to receive any greater payment under Sections 2.13 and 2.19 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrowers prior written consent. A Participant shall not be entitled to the benefits of Section 2.19 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 2.19(e) as though it were a Lender.
(f) Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.
(g) Any Lender or participant may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 9.03, disclose to the assignee or participant or proposed assignee or participant any information relating to the Borrower furnished to such Lender by or on behalf of the Borrower; provided that, prior to any such disclosure of information designated by the Borrower as confidential, each such assignee or participant or proposed assignee or participant shall execute an agreement whereby such assignee or participant shall agree (subject to customary exceptions) to preserve the confidentiality of such confidential information on terms no less restrictive than those applicable to the Lenders pursuant to Section 9.13.
(h) Notwithstanding anything to the contrary contained herein, and in accordance with 9.03(a), any Lender (a Granting Lender) may grant to a special
purpose funding vehicle (an SPC), identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Borrower, the option to provide to the Borrower all or any part of any Loan that such Granting Lender would otherwise be obligated to make to the Borrower pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to make any Loan and (ii) if an SPC elects not to exercise such option or otherwise fails to provide all or any part of such Loan, the Granting Lender shall be obligated to make such Loan pursuant to the terms hereof. The making of a Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Loan were made by such Granting Lender. Each party hereto hereby agrees that neither the grant to any SPC nor the exercise by any SPC of such option shall increase the costs or expenses or otherwise increase or change the obligations of the Borrower or any other Loan Party under this Agreement, and no SPC shall be liable for any indemnity or similar payment obligation under this Agreement (all liability for which shall remain with the Granting Lender). In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior indebtedness of any SPC, it will not institute against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under the laws of the United States of America or any State thereof. In addition, notwithstanding anything to the contrary contained in this Section 9.03, any SPC may (i) with notice to, but without the prior written consent of, the Borrower and the Administrative Agent and without paying any processing fee therefor, assign all or a portion of its interests in any Loans to the Granting Lender or to any financial institutions (consented to by the Borrower and Administrative Agent) providing liquidity and/or credit support to or for the account of such SPC to support the funding or maintenance of Loans and (ii) disclose on a confidential basis any non-public information relating to its Loans to any rating agency, commercial paper dealer or provider of any surety, guarantee or credit or liquidity enhancement to such SPC.
(i) The Borrower shall not assign or delegate any of its rights or duties hereunder without the prior written consent of the Administrative Agent, the Issuing Bank and each Lender, and any attempted assignment without such consent shall be null and void.
(j) In the event that any Lender shall become a Defaulting Lender or S&P, Moodys and Thompsons BankWatch (or InsuranceWatch Ratings Service, in the case of Lenders that are insurance companies (or Bests Insurance Reports, if such insurance company is not rated by Insurance Watch Ratings Service)) shall, after the date that any Lender becomes a Lender, downgrade the long-term certificate deposit ratings of such Lender, and the resulting ratings shall be below BBB-, Baa3 and C (or BB, in the case of a Lender that is an insurance company (or B, in the case of an insurance company not rated by InsuranceWatch Ratings Service)) (or, with respect to any Lender that is not rated by any such ratings service or provider, the Issuing Bank or the Swingline Lender shall have reasonably determined that there has occurred a material adverse change in the financial condition of any such Lender, or a material impairment of the ability of any such Lender to perform its obligations hereunder, as compared to such condition or ability as of the date that any such Lender became a Lender) then the Issuing Bank and
the Swingline Lender shall have the right, but not the obligation, at its own expense, upon notice to such Lender and the Administrative Agent, to replace such Lender with an assignee (in accordance with and subject to the restrictions contained in paragraph (b) of this Section 9.03), and such Lender hereby agrees to transfer and assign without recourse (in accordance with and subject to the restrictions contained in paragraph (b) of this Section 9.03) all its interests, rights and obligations in respect of its Commitment to such assignee; provided, however, that (i) no such assignment shall conflict with any law, rule and regulation or order of any Governmental Authority and (ii) the Issuing Bank, the Swingline Lender or such assignee, as the case may be, shall pay to such Lender in immediately available funds on the date of such assignment the principal of and interest accrued to the date of payment on the Loans made by such Lender hereunder and all other amounts accrued for such Lenders account or owed to it hereunder.
SECTION 9.04. Expenses; Indemnity; Damage Waiver. (a) Costs and Expenses. The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent, its Affiliates, the Collateral Agent and the Swingline Lender (including the reasonable fees, charges and disbursements of one primary counsel to the Administrative Agent and its Affiliates, one primary counsel to the Collateral Agent, one primary counsel to the Swingline Lender, one local counsel in each relevant jurisdiction, one special counsel in each relevant specialty and, in the event of any actual or potential conflict of interest, one additional counsel in each relevant jurisdiction for each Person subject to such conflict), in connection with the arranging of the Credit Facilities, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents, or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing Bank (including the reasonable fees, charges and disbursements of one primary counsel to the Issuing Bank, one local counsel in each relevant jurisdiction, one special counsel in each relevant specialty and, in the event of any actual or potential conflict of interest, one additional counsel in each relevant jurisdiction for each Person subject to such conflict) in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder, and (iii) all out-of-pocket expenses incurred by the Administrative Agent, the Collateral Agent, any Lender or the Issuing Bank (including the reasonable fees, charges and disbursements of one primary counsel to the Administrative Agent, the Lenders and the Issuing Bank, one primary counsel to the Collateral Agent, one primary counsel to the Swingline Lender, one local counsel in each relevant jurisdiction, one special counsel in each relevant specialty and, in the event of any actual or potential conflict of interest, one additional counsel in each relevant jurisdiction for each Person subject to such conflict), in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section 9.04(a), or (B) in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.
(b) Indemnification by the Borrower. The Borrower shall indemnify the Administrative Agent (and any sub-agent thereof), the Collateral Agent, each Lender and
the Issuing Bank, and each Related Party of any of the foregoing Persons (each such Person being called an Indemnitee) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of one primary counsel to the Indemnitees, one local counsel in each relevant jurisdiction, one special counsel in each relevant specialty and, in the event of any actual or potential conflict of interest, one additional counsel in each relevant jurisdiction for each Person subject to such conflict), incurred by any Indemnitee or asserted against any Indemnitee by any Person (including the Borrower or any other Loan Party) other than such Indemnitee and its Related Parties arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the Transactions and the other transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or Release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any other Loan Party, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee, (y) result from a claim brought by the Borrower or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitees obligations hereunder or under any other Loan Document, if the Borrower or such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction or (z) are Taxes and reasonable expenses for which the Borrower or any Loan Party has indemnified an Indemnitee pursuant to Section 2.19(c).
(c) Reimbursement by Lenders. To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under paragraph (a) or (b) of this Section 9.04 to be paid by it to the Administrative Agent (or any sub-agent thereof), the Collateral Agent, the Issuing Bank, any Swingline Lender or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), the Collateral Agent, the Issuing Bank, the Swingline Lender or such Related Party, as the case may be, such Lenders pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought based on each Lenders share of the Total Credit Exposure at such time) of such unpaid amount (including any such unpaid amount in respect of a claim asserted by such Lender); provided that with respect to such unpaid amounts owed to the Issuing Bank or Swingline Lender solely in its capacity as such, the Lenders shall be required to pay such unpaid amounts severally among them based on such Lenders Applicable Commitment
Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) provided, further, that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent), the Collateral Agent, the Issuing Bank or the Swingline Lender in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent), the Collateral Agent, the Issuing Bank or the Swingline Lender in connection with such capacity.
(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit, or the use of the proceeds thereof. No Indemnitee referred to in paragraph (b) of this Section 9.04 shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.
(e) Payments. All amounts due under this Section 9.04 shall be payable promptly after demand therefor.
(f) Survival. Each partys obligations under this Section 9.04 shall survive the termination of the Loan Documents and payment of the obligations hereunder.
SECTION 9.05. Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender, the Issuing Bank, and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held, and other obligations (in whatever currency) at any time owing, by such Lender, the Issuing Bank or any such Affiliate, to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under this Agreement or any other Loan Document to such Lender or the Issuing Bank or their respective Affiliates, irrespective of whether or not such Lender, the Issuing Bank or Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrower may be contingent or unmatured or are owed to a branch, office or Affiliate of such Lender or the Issuing Bank different from the branch, office or Affiliate holding such deposit or obligated on such indebtedness; provided that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.22 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Bank and the Lenders, and
(y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Secured Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender, the Issuing Bank and their respective Affiliates under this Section 9.05 are in addition to other rights and remedies (including other rights of setoff) that such Lender, the Issuing Bank or their respective Affiliates may have. Each Lender and the Issuing Bank agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application.
SECTION 9.06. Governing Law; Jurisdiction; Etc. (a) Governing Law. This Agreement and the other Loan Documents and any claims, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Agreement or any other Loan Document (except, as to any other Loan Document, as expressly set forth therein) and the transactions contemplated hereby and thereby shall be governed by, and construed in accordance with, the law of the State of New York (without regard to principles of conflict of laws).
(b) Jurisdiction. The Borrower irrevocably and unconditionally agrees that it will not commence any action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, against the Administrative Agent, any Lender, the Issuing Bank, or any Related Party of the foregoing in any way relating to this Agreement or any other Loan Document or the transactions relating hereto or thereto, in any forum other than the courts of the State of New York sitting in New York County, and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, and each of the parties hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such action, litigation or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by applicable law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action, litigation or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or in any other Loan Document shall affect any right that the Administrative Agent, any Lender or the Issuing Bank may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or its properties in the courts of any jurisdiction.
(c) Waiver of Venue. The Borrower irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section 9.06. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
(d) Service of Process. Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing in this Agreement
will affect the right of any party hereto to serve process in any other manner permitted by applicable law.
SECTION 9.07. Waivers; Amendment. (a) No failure or delay of the Administrative Agent, the Collateral Agent, any Lender or the Issuing Bank in exercising any power or right hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent, the Collateral Agent, the Issuing Bank and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or any other Loan Document or consent to any departure by the Borrower or any other Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section 9.07, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice or demand on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders; provided, however, that no such agreement shall (i) decrease the principal amount of, or extend the maturity of or any scheduled principal payment date or date for the payment of any interest on any Loan or any date for reimbursement of an L/C Disbursement, or waive or excuse any such payment or any part thereof, or decrease the rate of interest on any Loan or L/C Disbursement, without the prior written consent of each Lender directly adversely affected thereby, (ii) increase or extend the Commitment or decrease or extend the date for payment of any Fees of any Lender without the prior written consent of such Lender, (iii) amend or modify the pro rata requirements of Section 2.16, the provisions of Section 9.03(i) or the provisions of this Section 9.07 or release any Subsidiary Guarantor (other than in connection with the sale of such Subsidiary Guarantor) or all or substantially all of the Collateral, without the prior written consent of each Lender, (iv) modify the protections afforded to an SPC pursuant to the provisions of Section 9.03(h) without the written consent of such SPC, (v) reduce the percentage contained in the definition of the term Required Lenders without the prior written consent of each Lender (it being understood that with the consent of the Required Lenders, additional extensions of credit pursuant to this Agreement may be included in the determination of the Required Lenders on substantially the same basis as the Commitments on the date hereof), (vi) if any Lender shall hold 50% or more of the aggregate Total Credit Exposures of all Lenders, amend or modify Section 6.09 without the prior written consent of such Lender and one additional Lender or (vii) if any Lender shall hold 50% or more of the aggregate Total Credit Exposures of all Lenders, amend or modify Section 4.02 of the Collateral Agreement without the prior written consent of such Lender and one additional Lender; provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent, the Collateral Agent, the Issuing Bank or the Swingline Lender hereunder or under any other
Loan Document without the prior written consent of the Administrative Agent, the Collateral Agent, the Issuing Bank or the Swingline Lender.
(c) The Administrative Agent and the Borrower may amend any Loan Document to correct administrative or manifest errors or omissions, or to effect administrative changes that are not adverse to any Lender; provided, however, that no such amendment shall become effective until the fifth Business Day after it has been delivered to the Lenders or otherwise posted for their attention on the Platform, and then only if the Required Lenders have not objected in writing thereto within such five Business Day period.
SECTION 9.08. Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan or participation in any L/C Disbursement, together with all fees, charges and other amounts which are treated as interest on such Loan or participation in such L/C Disbursement under applicable law (collectively the Charges), shall exceed the maximum lawful rate (the Maximum Rate) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan or participation in accordance with applicable law, the rate of interest payable in respect of such Loan or participation hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan or participation but were not payable as a result of the operation of this Section 9.08 shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or participations or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.
SECTION 9.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.09.
SECTION 9.10. Severability. In the event any one or more of the provisions contained in this Agreement or in any other Loan Document should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
SECTION 9.11. Counterparts; Integration; Effectiveness; Electronic Execution. (a) Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and the Engagement Letter constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.02, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic (i.e., pdf or tif) format shall be effective as delivery of a manually executed counterpart of this Agreement.
(b) Electronic Execution of Assignments. The words execution, signed, signature and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
SECTION 9.12. Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.
SECTION 9.13. Treatment of Certain Information; Confidentiality. Each of the Administrative Agent, the Lenders and the Issuing Bank agree to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential); (b) to the extent required or requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as the National Association of Insurance Commissioners); (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process; (d) to any
other party hereto; (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder; (f) subject to an agreement containing provisions substantially the same as those of this Section 9.13, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights and obligations under this Agreement, or (ii) any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to the Borrower and its obligations, this Agreement or payments hereunder; (g) on a confidential basis to (i) any rating agency in connection with rating the Borrower or its Subsidiaries or the Credit Facilities or (ii) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers with respect to the Facilities; (h) with the consent of the Borrower; or (i) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section 9.13, or (y) becomes available to the Administrative Agent, any Lender, the Issuing Bank or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrower.
For purposes of this Section 9.13, Information means all information received from the Borrower or any of its Subsidiaries relating to the Borrower or any of its Subsidiaries or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender or the Issuing Bank on a nonconfidential basis prior to disclosure by the Borrower or any of its Subsidiaries; provided that, in the case of information received from the Borrower or any of its Subsidiaries after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section 9.13 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
SECTION 9.14. USA PATRIOT Act Notice. Each Lender and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower in accordance with the USA PATRIOT Act.
SECTION 9.15. Lender Action. Each Lender agrees that it shall not take or institute any actions or proceedings, judicial or otherwise, for any right or remedy against any Loan Party or any other obligor under any of the Loan Documents (including the exercise of any right of setoff, rights on account of any bankers lien or similar claim or other rights of self-help), or institute any actions or proceedings, or otherwise commence any remedial procedures, with respect to any Collateral or any other property of any such Loan Party, unless expressly provided for herein or in any other Loan Document, without the prior written consent of the Administrative Agent. The provisions of this Section
9.15 are for the sole benefit of the Lenders and shall not afford any right to, or constitute a defense available to, any Loan Party.
SECTION 9.16. Application of Proceeds. Upon receipt from the Collateral Agent of the proceeds of any collection, sale, foreclosure or other realization upon any Collateral, including any Collateral consisting of cash, following the exercise of remedies provided for in Article VII (or after the Loans have automatically become due and payable as set forth in Article VII), the Administrative Agent shall apply such proceeds as follows:
FIRST, to the payment of all costs and expenses incurred by the Administrative Agent (in its capacity as such hereunder or under any other Loan Document) in connection with such collection, sale, foreclosure or realization or otherwise in connection with this Agreement or any other Loan Document, including all court costs and the fees and expenses of its agents and legal counsel, the repayment of all advances made by the Administrative Agent hereunder or under any other Loan Document on behalf of any Loan Party and any other costs or expenses incurred in connection with the exercise of any right or remedy hereunder or under any other Loan Document;
SECOND, to the payment in full of Unfunded Advances/Participations (the amounts so applied to be distributed between or among the Administrative Agent, the Swingline Lender and the Issuing Bank pro rata in accordance with the amounts of Unfunded Advances/Participations owed to them on the date of any such distribution); and
THIRD, to the payment in full of all other Bank Obligations (the amounts so applied to be distributed among the Bank Secured Parties pro rata in accordance with the amounts of the Bank Obligations owed to them on the date of any such distribution).
The Administrative Agent shall apply any such proceeds, moneys or balances in accordance with this Agreement promptly after receipt thereof.
SECTION 9.17. Third Party Beneficiary. The Collateral Agent shall be a third-party beneficiary to Section 9.04 and shall have the right to enforce such Section 9.04 directly to the extent the Collateral Agent may deem such enforcement necessary or advisable to protect the Collateral Agents rights.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
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COMMUNITY CHOICE FINANCIAL INC., | ||
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by |
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/s/ Michael Durbin | |
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Name: |
Michael Durbin |
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Title: |
Senior Vice President, Chief |
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Financial Officer and |
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CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, individually as a Lender and as Administrative Agent and Issuing Bank, | ||
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by |
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/s/ Doreen Barr | |
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Name: |
Doreen Barr |
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Title: |
Director |
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by |
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/s/ Sanja Gazahi | |
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Name: |
Sanja Gazahi |
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Title: |
Associate |
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FIFTH THIRD BANK, individually as a Lender and as Swingline Lender, | ||
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by |
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/s/ Jonathan A. Deshler | |
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Name: |
Jonathan A. Deshler |
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Title: |
Vice President |
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JEFFERIES FINANCE LLC, individually as a Lender, | ||
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by |
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/s/ J. Paul McDonnell | |
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Name: |
J. Paul McDonnell |
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Title: |
Managing Director |
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THE BANK OF KENTUCKY, INC., individually as a Lender, | ||
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by |
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/s/ Aric A. Hassel | |
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Name: |
Aric A. Hassel |
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Title: |
Vice President |
Exhibit 4.4
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (Agreement) is entered into as of this 29th day of April, 2011, by and between INSIGHT CAPITAL, LLC, an Alabama limited liability company (the Company), and REPUBLIC BANK OF CHICAGO (the Bank), for the Banks commitment to make credit available to the Company, subject to all the terms and conditions hereof and on the basis of the representations and warranties hereinafter set forth. This Agreement replaces the Credit Agreement dated as of July 31, 2009, as amended, by and between the Company and the Bank.
1. THE CREDIT.
1.1 The credit (Credit) shall consist of a revolving credit (Revolving Credit) in the amount of Seven Million and No/100 Dollars ($7,000,000.00). The Revolving Credit shall be available to the Company, may be availed of by the Company in its discretion from time to time, and be repaid and used again, during the period from the date hereof to July 31, 2012, at which time the commitment of the Bank shall expire and all sums outstanding under the Revolving Credits shall be due and payable. The Revolving Credit shall be evidenced by the Revolving Credit Note dated July 31, 2010, and any amendments, renewals, or replacements thereof (the Note). Advances under the Revolving Credit shall bear interest (computed on the basis of a year of 360 days and the actual number of days elapsed) prior to the expiration of the Banks commitment hereunder on the principal sum from time to time remaining unpaid thereon at a rate per annum equal to the Banks prime rate of interest published from time to time plus one percent (1.0%) (with any change in said interest rate for such periods resulting from a change in said prime rate to be and become effective as of and on the day of the relevant change in said prime rate). At no time shall the per annum interest rate for the Revolving Credit be less than five and percent (5.00%). Interest on the Revolving Credit shall be payable commencing on August 1, 2010, and on the first day of each month thereafter.
1.2 Execution by the Company and the delivery to the Bank of this Agreement shall constitute notice from the Company to the Bank of its intent to avail itself of the Revolving Credit. The proceeds thereof shall be made available to the Company at the offices of the Bank upon satisfaction of the terms and conditions set forth in Section 6 hereof.
1.3 Except as may be otherwise provided for herein, any notice from the Company to the Bank may be made in writing or by telephone, telex, telecopy or similar means. The Company agrees that the Bank is authorized to honor or act upon any such notice which it reasonably believes to have been made or authorized by a responsible representative of the Company and shall hold the Bank harmless from and indemnify the Bank against any loss or damage occasioned by any reliance by the Bank upon the authority conferred upon the Bank hereby.
2. PLACE AND APPLICATION OF PAYMENTS. All payments due hereunder shall be made to the Bank in immediately available funds at its offices in Oak Brook, Illinois.
3. SECURITY.
3.1 The property in which a security interest is granted as described in Sections 3.2, 3.3 and 3.4 below is herein collectively called the Collateral. The Collateral, together with all of Companys other personal property of any kind held by the Bank shall stand as one general continuing collateral security for all Debt of the Company to the Bank and may be retained by the Bank under this Agreement and the Note until all such Debt has been satisfied in full.
3.2 As security for the proper satisfaction of all of the Debt of the Company to the Bank under this Agreement and the Note, the Company grants the Bank a lien upon and a security interest in all amounts that may be owing from time to time by the Bank to the Company in any capacity, including but not limited to, any balance or share belonging to the Company in any deposit or other account with the Bank. Said lien and security interest shall be independent of any right of set-off which the Bank may have.
3.3 As further security for the proper satisfaction of all of the Debt of the Company to the Bank, the Company has granted to the Bank a lien upon and a security interest in all of the property and assets described in the Security Agreement, dated as of July 31, 2009. In accord with the provisions of the Security Agreement, the Company authorizes such financing agreements, financing statements and other documents as the Bank reasonably may require from time to time in its sole discretion.
4. DEFINITIONS. The terms hereinafter set forth when used herein shall have the following meanings. Terms used but not defined herein shall have the meanings assigned in the Senior Secured Notes Indenture.
4.1 Accounts shall mean any and all accounts, instruments, documents, chattel paper, General Intangibles (including, but not limited to choses in action, tax refunds, and insurance proceeds); any other obligations or indebtedness owed to Company from whatever source arising in the ordinary course of Companys business; all rights of Company to receive any payments in money or kind; all guaranties of the foregoing and security therefor; all of the right, title and interest of Company in and with respect to the goods, services, or other property that gave rise to or that secure any of the foregoing and insurance policies and proceeds relating thereto, and all rights of Company as an unpaid seller of goods and services, including, but not limited to, the rights of stoppage in transit, replevin, reclamation, and resale; and all of the foregoing, whether now owned or existing or hereafter created or acquired.
4.2 Account Debtor shall mean any Person who is or who may become obligated to Company under, with respect to, or on account of an Account.
4.3 Affiliate shall mean with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with, such Person. The term control (including the terms controlled by or under common control with) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership, by contract, or otherwise. Any Person shall be deemed to be an Affiliate of any specified Person if such Person owns more than twenty percent (20%) of the voting securities (by vote or by value)
of the specified Person, if the specified Person owns more than twenty percent (20%) of the voting securities (by vote or by value) of such Person, or if more than twenty percent (20%) of the voting securities (by vote or by value) of the specified Person and such Person are under common control.
4.4 Alabama Excess Cash Flow shall have the meaning set forth in the Senior Secured Notes Indenture.
4.5 Consolidated Gross Revenues shall mean consolidated gross revenues of a Company, excluding revenues from inter-Company transactions, as determined in accordance with generally accepted accounting principles.
4.6 Consolidated Net Worth shall mean the amount of capital stock accounts (less the amount of any treasury stock) plus (or minus in the case of a deficit) the amount of surplus and retained earnings accounts of a Company, all as determined on a consolidated basis for a Company net of any inter-Company transactions in accordance with generally accepted accounting principles.
4.7 Contingent Liabilities shall mean any agreements by which a Company assumes, guarantees, endorses (other than negotiable instruments, for collection or deposit in the ordinary course of business), contingently agrees to purchase or provide funds for the payment of or otherwise becomes liable upon the obligation of any other Person or agrees to maintain the net worth or working capital or other financial condition of any other Person or otherwise assures any creditor of such other Person against loss and shall include, without limitation, the contingent liability of a Company under any letter of credit, performance bond or similar obligation.
4.8 Current Assets shall mean cash and other assets of a Company commonly identified as such by it using generally accepted accounting principles as those which are reasonably expected to be realized in cash or sold or consumed within one year from the date of their creation.
4.9 Current Debt shall mean any obligation for borrowed money, the deferred purchase price of property or any notes payable and drafts accepted representing extensions of credit whether or not representing obligations for either borrowed money or the deferred purchase price of property payable on demand or within a period of one year from the date of the creation thereof (excluding in all events the current maturities of Funded Debt); provided that any obligation shall be treated as Funded Debt, regardless of its term, if such obligation is renewable, pursuant to the terms thereof or of a revolving credit or similar agreement, to a date more than one year after the date of the creation of such obligation.
4.10 Debt with respect to any Company shall mean the sum of Funded Debt, Current Debt, Contingent Liabilities (whether or not such obligation would be shown as a liability upon any balance sheet) and any other obligation which would be included in any computation of total liabilities as shown on a consolidated balance sheet of such Company and its Subsidiaries prepared in accord with generally accepted accounting principles.
4.11 Eligible Accounts shall mean those Accounts included in a Borrowing Base Certificate which, as of the date of such Borrowing Base Certificate and at all times thereafter, (i) satisfy the requirements for eligibility as described in Section 9.1 of this Agreement, and (ii) do not violate the negative covenants and other provisions of this Agreement and do satisfy the affirmative covenants and other provisions of this Agreement.
4.12 Funded Debt shall mean any obligation for borrowed money, the deferred purchase price of property or any notes payable or drafts accepted representing extensions of credit whether or not representing obligations for either borrowed money or the deferred purchase price of property payable more than one year from the date of the creation thereof.
4.13 Generally accepted accounting principles shall mean such principles as were followed by a Company in the preparation of its financial statements for the most recent fiscal year prior to the date of this Agreement, except that such principles may be changed to the extent, but only to the extent, as may be required by the Financial Accounting Standards Board or any other successor organization.
4.14 Intercreditor Agreement shall mean that certain Intercreditor Agreement, dated as of the date hereof, by and among the Company, the Bank and U.S. Bank National Association.
4.15 Loan Documents shall mean collectively this Agreement, the Note, any guaranty of a Companys obligations hereunder, any pledge, financing or security agreements delivered to the Bank with regard to a Companys obligations hereunder and any and all other agreements, statements, reports, documents or similar items delivered to the Bank by any Person at any time in connection with, related to or arising from the Agreement or a Companys obligations hereunder.
4.16 Note shall mean the Revolving Credit Note delivered to the Bank.
4.17 Officers Statement shall mean a statement signed in the name of a Company by its President, one of its Vice Presidents, its Treasurer, or its Secretary.
4.18 Person shall mean and include an individual, partnership, corporation, limited liability company, trust, unincorporated organization or governmental body, department or agency.
4.19 Senior Secured Notes shall mean the 10.75% Senior Secured Notes due 2019 issued by the Issuer pursuant to the Senior Secured Notes Indenture.
4.20 Senior Secured Notes Indenture shall mean the Indenture dated as of the date hereof, among the Issuer, the Senior Secured Notes Guarantors and U.S. Bank National Association, as trustee and collateral agent.
4.21 Senior Secured Notes Guarantee shall have the meaning assigned to Guarantee in the Senior Secured Notes Indenture.
4.22 Senior Secured Notes Guarantor shall have the meaning assigned to Subsidiary Guarantor in the Senior Secured Notes Indenture.
4.23 Subordinated Debt shall mean any Debt subordinated in form and substance acceptable to the Bank and its counsel in their sole discretion, to all sums outstanding hereunder.
4.24 Subsidiary shall mean any Person of which fifty percent (50%) or more of either the ownership rights, membership interest, or the stock having the power to vote for the election of directors, shall, at the time as of which any determination is being made, be owned by a Company and/or any Person which itself is a Subsidiary.
4.25 Syndicated Credit Agreement shall mean that certain Revolving Credit Agreement, dated as of the date hereof (as the same may be amended, modified, supplemented, extended, refinanced or replaced from time to time), among Community Choice Financial Inc., the Lenders (as defined therein), and Credit Suisse AG, as administrative agent, and the other Loan Documents (as defined therein).
4.26 Syndicated Credit Agreement Guarantee shall mean the Guarantee Agreement, dated as of the date hereof (as the same may be amended, modified, supplemented, extended or replaced from time to time), among Community Choice Financial Inc., certain of its Subsidiaries party thereto (including the Company), and Credit Suisse AG, as administrative agent.
5. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants as follows:
5.1 The Company (a) is duly organized and existing under the laws of the State of Alabama; (b) have all necessary authority to carry on its present business; (c) is fully licensed or qualified in all jurisdictions wherein the nature of the business conducted or assets owned or leased by it require such licensing or qualifying; and (d) has the necessary power, right and authority to enter into this Agreement, to make the borrowings herein provided for, to issue the Note and to perform each and all of the matters and things herein provided for.
5.2 This Agreement does not, nor will the performance or observance by the Company of any of the matters and things herein provided for contravene in any material respect (a) any applicable provision of law; (b) any organizational document or bylaw provision of the Company, or (c) any material covenant, indenture or agreement of or affecting the Company or its properties.
5.3 The execution and delivery by the Company of this Agreement, the Note, any pledge, security or financing agreements to be delivered to the Bank hereunder and any other document to be delivered to the Bank hereunder and the performance by the Company of its obligations hereunder have been duly authorized by proper corporate proceedings and such documents and agreements constitute valid and binding obligations of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors rights generally.
5.4 No order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any governmental or public body or authority or any subdivision thereof is required to authorize, or is required in connection with, the execution,
delivery and performance of the legality, validity, binding effect or enforceability of any of the Loan Documents.
5.5 The federal income tax returns of the Company for the most recently completed fiscal year and for all fiscal years under or prior to said date have been filed with the Internal Revenue Service. No federal tax liens have been filed and no federal claims are being asserted with respect to any federal income tax returns or other tax returns of the Company.
5.6 As of the closing of this loan and the application of the proceeds of the initial advance thereunder to repay in full an existing loan, there are no security interests, liens, charges or encumbrances of any sort on any of the assets or properties of the Company, except as permitted by Section 7 hereof.
5.7 The Company is in compliance in all material respects with all laws, rules, regulations and orders of any governmental authority, including without limitation, the Employment Retirement Income Security Act of 1974, with respect to which neither the Company nor any Subsidiary have received any notice to the contrary of the Pension Benefit Guaranty Corporation or any other governmental entity, authority or agency.
5.8 No information, exhibit or report furnished by the Company to the Bank in connection herewith contained or contains any material misstatement of fact or omitted material fact or any fact necessary to make the statements contained therein not misleading.
5.9 The Company has heretofore delivered to the Bank a copy of its financial statements (including a balance sheet and profit and loss statement) for the most recently completed fiscal year. Such financial statements have been prepared in accordance with generally accepted accounting principles consistently applied and fairly present on a consolidated basis their financial condition as of the dates thereof and the results of operations for the periods covered thereby, except that any interim financial statements are subject to year-end adjustments.
5.10 The Company has no Contingent Liabilities other than those disclosed in such financial statements referred to in Section 5.9 or in any comments or footnotes thereto and other than the Contingent Liabilities arising under the Syndicated Credit Agreement Guarantee and the Senior Secured Notes Guarantee. There has not been any change in the financial condition or assets and liabilities of the Company which could materially adversely affect the business and properties of the Company.
5.11 There is no litigation or governmental proceeding pending nor, to the knowledge of the Company, threatened against it, which would materially adversely affect its financial condition, business affairs or properties, taken as a whole.
5.12 The Company is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System) and no part of the proceeds of any loan or advance hereunder will be used to purchase or carry any margin stock or to extend credit to others for such a purpose.
6. CONDITIONS PRECEDENT.
6.1 The obligation of the Bank to make an initial advance hereunder shall be subject to the following conditions precedent:
(a) The Bank shall have received the Note hereinabove provided for and the Loan Documents;
(b) Legal matters incident to the execution and delivery of the Loan Documents and to the making of any advance shall be reasonably satisfactory to the Bank and its counsel;
(c) The Bank shall have received copies (executed or certified as it may require) of all governmental or administrative certificates or proceedings reasonably requested by the Bank or taken in connection with the execution and delivery of the Loan Documents; and
(d) The Bank shall have received such other documents and materials as it may reasonably request.
6.2 The obligation of the Bank to make any advance hereunder (other than the initial advance) shall be subject to the following conditions precedent:
(a) Legal matters incident to such advance shall be reasonably satisfactory to the Bank and its counsel; and
(b) The Bank shall have received such other documents and materials as it may reasonably request.
6.3 As of the time of the making of each advance hereunder:
(a) Each of the representations and warranties set forth in Section 5 hereof shall be and remain true and correct in all material respects as of said time; and
(b) No Event of Default as defined in Section 8.1 hereof shall have occurred and be continuing, and no event shall have occurred and be continuing which, with the lapse of time, the giving of notice, or both, would constitute such an Event of Default thereunder.
The delivery by the Company of any notice pursuant hereto shall be and constitute a representation and warranty to the foregoing effect.
7. COMPANYS COVENANTS. The Company agrees that for so long as the Credit is available to or in use by the Company hereunder and except to the extent compliance therewith is waived in writing by the Bank:
7.1 The Company will in all material respects maintain, preserve and keep their plant, properties and equipment in good repair, working order and condition, and will from time to time make all needful and proper repairs, renewals, replacements, additions and betterments thereto so that at all times the efficiency thereof shall be preserved and maintained.
7.2 The Company will duly pay and discharge all taxes, rates, assessments, fees and governmental charges upon or against the Company, or against its respective properties, in each case before the same becomes delinquent and before penalties accrue thereon, unless and to the extent that the same is being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been set aside.
7.3 The Company will insure and keep insured, with good and responsible insurance companies, all insurable property owned by it which is of a character and against loss or damage from such hazards or risks as are insured by companies similarly situated and operating like properties. To the extent usually insured by companies similarly situated and conducting similar businesses, the Company will also insure employers and public liability risks with good and responsible insurance companies. The Company will, upon request of the Bank, furnish a certificate setting forth in summary form the nature and extent of the insurance maintained pursuant to this Section 7.3.
7.4 The Company will maintain for itself a system of accounting established and administered in accordance with generally accepted accounting principals and will furnish to the Bank:
(a) Such information with respect to the business and financial condition of the Company as may be reasonably requested; and
(b) Without any request:
(i) as soon as available, and in any event within thirty (30) days after the close of each quarterly fiscal period of the Company (excluding the last such period in each fiscal year), a consolidated balance sheet and profit and loss statement for the Company accompanied by a statement from a responsible financial officer thereof to the effect that to his or her best knowledge and belief such financial statements are true, correct and complete; and
(ii) as soon as available, and in any event within thirty (30) days after completion, a consolidated financial statement for the Company, including a balance sheet, a profit and loss statement and a statement of changes in financial position, showing in comparative form the figures for the previous fiscal year, prepared on an audited basis by an independent public accountant acceptable to the Bank; and
(iii) copies of filed federal and state income tax returns within thirty (30) days of filing.
7.5 Each financial statement, report and federal and state income tax return furnished to the Bank pursuant to Sections 7.4(b)(i), 7.4(b)(ii) and 7.4(b)(iii) shall be accompanied by an Officers Statement to the effect that, to the best of his or her knowledge and belief, no Event of Default, and no event which, with the lapse of time, the giving of notice, or both, would constitute such an Event of Default, has occurred during the period covered by such statements, or, if any such Event of Default or other event has occurred during such period, setting forth the description of such Event of Default or other event and specifying the action, if any, taken by the Company to remedy the same. Such certificate shall also set forth a computation in reasonable detail as at the end of the period covered by such statements of (a) the principal amount of
Funded Debt of the Company then outstanding, and (b) the values and ratios required by Sections 7.17 through 7.20.
7.6 The Company shall give the Bank written notice of the occurrence of any Event of Default, or of any other event, which, with the lapse of time, the giving of notice, or both, would constitute such an Event of Default promptly after knowledge of the occurrence thereof shall have come to the attention of the Company.
7.7 The Company will use the proceeds of any advance hereunder for general corporate purposes, including acquisitions, except as may be prohibited by the terms hereof. The Company will permit the Bank by its representatives and agents at the Banks expense, upon reasonable prior notice and during normal business hours to inspect any of the properties, corporate books or financial records of the Company, to conduct an annual appraisal of the Companys machinery and equipment, to examine or make copies of the books of accounts and other financial records of the Company, to discuss the affairs, finances and accounts of the Company with, and to be advised as the same by the officers of the Company all at such times and such intervals as the Bank may designate.
7.8 The Company will carry on and conduct its business in substantially the same manner and in substantially the same fields of enterprise as it is presently conducted or as may be allowed hereunder.
7.9 The Company will do all things necessary to remain duly incorporated or established, validly existing and in good standing in its jurisdiction of incorporation or existence and maintain all records of authority to conduct its business in such jurisdictions as may be required hereunder.
7.10 The Company will comply in all material respects with all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which they may be subject except for those being contested in good faith by appropriate proceedings and, as appropriate in the Banks reasonable discretion, as to which adequate reserves have been set aside.
7.11 The Company will deliver to the Bank as soon as available and, in any event, within ten (10) days after the provision of such statements to shareholders or regulatory or governing bodies or agencies, as the case may be, copies of all reports, submissions, proxy or registration statements, applications or other communications provided thereto.
7.12 The Company will not create or permit to exist any lien or encumbrance (including any charge upon assets purchased under a conditional sales or other title retention agreement) upon any of its assets, whether now owned or hereafter acquired except:
(a) Liens for taxes not yet due or which are being contested in good faith by appropriate proceedings and for which adequate reserves have been set aside;
(b) Other liens and encumbrances incidental to the conduct of their business or the ownership of their assets which were not incurred in connection with the borrowing of
money or the obtaining of advances or credit, and which do not in the aggregate materially detract from the value of their assets or impair the use thereof in the operation of their business;
(c) The liens upon the Collateral provided for in Section 3 hereof; and
(d) Liens securing the Syndicated Credit Agreement, the Syndicated Credit Agreement Guarantee, the Senior Secured Notes and the Senior Secured Notes Guarantees; and
(e) Liens securing indebtedness incurred pursuant to Section 4.09 of the Senior Secured Notes Indenture or Section 6.01 of the Syndicated Credit Agreement.
7.13 The Company will not issue, incur, assume or permit to remain outstanding any Debt other than:
(a) Debt represented by the Note;
(b) Any Senior Secured Notes Guarantee by the Company (including any Senior Secured Notes Guarantee of any Additional Notes or Exchange Notes) and any Syndicated Credit Agreement Guarantee;
(c) Any indebtedness, or guarantee of indebtedness, incurred pursuant to Section 4.09 of the Senior Secured Notes Indenture or Section 6.01 of the Syndicated Credit Agreement; and
(d) Other Debt provided that such Debt does not cause default under any of Sections 7.17, 7.18 and 7.19 and is otherwise within the limitations of this Section 7.
7.14 The Company will not issue, incur, assume or permit to remain outstanding any Contingent Liabilities except that it may (a) endorse negotiable instruments for collection in the ordinary course of business; (b) make or permit to be outstanding product guarantees with respect to its products in the ordinary course of business; (c) subject to the Intercreditor Agreement, incur and enter into a Senior Secured Notes Guarantee (including any Senior Secured Notes Guarantee of any Additional Notes or Exchange Notes) and a Syndicated Credit Agreement Guarantee; and (d) incur, or guarantee indebtedness pursuant to Section 4.09 of the Senior Secured Notes Indenture or Section 6.01 of the Syndicated Credit Agreement.
7.15 The Company will not merge or consolidate with any other Person, or sell, lease or transfer or otherwise dispose of all or a substantial part of its assets to any Person without prior written notice to the Bank, except that the Company may merge with another entity if the Company is the surviving entity and after giving effect thereto no Event of Default as defined in Section 8.1 hereof shall have occurred and be continuing and no event shall have occurred and be continuing which, with the lapse of time, the giving of notice, or both, would constitute such an event of default. For purposes of this Section 7.15, the term substantial part shall mean more than ten percent (10%) of the total assets of a Company taken in accordance with generally accepted accounting principles.
7.16 The Company will deliver to the Bank at closing its federal and state income tax returns for the prior three (3) years, and will provide copies of its tax returns annually within thirty (30) days after filing.
7.17 The Company will at the end of each calendar quarter maintain the ratio of Current Assets to Current Debt at not less than 1.00 to 1.00.
7.18 The Company will at the end of each calendar quarter maintain the ratio of earnings before interest, taxes, depreciation and amortized expenses (excluding for this purpose all inter-Company transactions) to the sum of all principal and interest payments accrued or paid on Debt at not less than 1.20 to 1.00.
7.19 The Company will, on a consolidated basis, at the end of each calendar quarter maintain the ratio of Debt (excluding Subordinated Debt) to the sum of Consolidated Net Worth and Subordinated Debt at no more than 5.00 to 1.00.
7.20 The Company will not loan or advance money to any employee, officer, director or shareholder of it in excess of $10,000.00 in the aggregate without obtaining the prior written consent of the Bank, and the Company agrees to cause all such debt of any amount to be Subordinated Debt.
7.21 The Company shall maintain cash on hand plus Eligible Accounts equal to or greater than 110% of the balance of the Credit, and will deliver quarterly Borrowing Base Certificates to the Bank evidencing compliance with this covenant.
7.22 The Company will make distributions to its members (other than salary) (a) in amounts solely to satisfy the tax liabilities of the members related to their membership interests in the Company and (b) within 45 days of the end of each fiscal quarter, in an amount equal to the Alabama Excess Cash Flow for such fiscal quarter, distributed on a pro rata basis to its members.
7.23 The Company shall maintain its primary operating accounts at the Bank during the term of this Agreement.
7.24 Company hereby acknowledges and grants to Bank a continuing security interest in any and all property of Company now or hereafter in the possession or control of the Bank, including but not limited to any deposit accounts with Bank, and Company hereby acknowledges and consents that any such property may be retained by the Bank under this Agreement and the Note until any Debt of Company to the Bank has been satisfied in full.
8. EVENTS OF DEFAULT AND REMEDIES.
8.1 Any one or more of the following shall constitute an Event of Default:
(a) default for a period of ten (10) days in the payment when due of principal or interest on the Note, whether at the stated maturity thereof or at any other time provided in this Agreement, or of any fee payable by the Company hereunder;
(b) default in the observance or performance of any covenant set forth in Section 7 hereof;
(c) default in the observance or performance of any other provision of the Loan Documents which is not remedied within thirty (30) days after notice thereof to the Company by the Bank;
(d) default shall occur under any evidence of indebtedness in an outstanding amount of not less than $10,000.00 issued, assumed or guaranteed by a Company or under any indenture, agreement or other instrument under which the same may be issued and such default shall continue for a period of time sufficient to permit the acceleration of the maturity of any such indebtedness without cure or waiver;
(e) any representation or warranty made by the Company in the Loan Documents, or in any statement or certificate furnished by a Company pursuant thereto or in connection with any advance made hereunder proves untrue in any material respect as of the date of the issuance or making thereof;
(f) the Company becomes insolvent or bankrupt, admits in writing its inability to pay its debts as they mature, makes an assignment for the benefit of creditors or applies for or consents to the appointment of a trustee or receiver for it or for any part of its property;
(g) a trustee or receiver is appointed for the Company or for any part of its property;
(h) bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other proceedings for relief under any bankruptcy law or laws for the relief of debtors are instituted by or against the Company, and, if instituted against the Company, are consented to or are not dismissed within sixty (60) days after such institution; and
(i) any default that occurs and is continuing by the Company or Checksmart Financial Company (Checksmart) under the Senior Secured Notes or the Syndicated Credit Agreement that entitles the holders of such obligations to accelerate the maturity thereof.
8.2 When any Event of Default described in Sections 8.1(a), 8.1(b), 8.1(c), 8.1(d), 8.1(e) or 8.1(i) has occurred or is continuing, the Bank may take any or all of the following actions:
(a) terminate the remaining commitment hereunder of the Bank;
(b) declare the principal of and the accrued interest on all sums outstanding hereunder to be forthwith due and payable, and thereupon all of said sums, including both principal and interest, shall be and become immediately due and payable without further demand, presentment, protest or notice of any kind;
(c) setoff against any and all accounts maintained by the Company with the Bank in order to pay all amounts due and owing to the Bank by the Company.
8.3 When any Event of Default described in Sections 8.1(f), 8.1(g) or 8.1(h) has occurred and is continuing, then all sums outstanding hereunder shall immediately become due and payable without presentment, demand, protest, or notice of any kind, and the obligation of the Bank to extend further credit pursuant to any of the terms hereof shall immediately terminate.
8.4 The Company agrees to pay to the Bank all reasonable expenses incurred or paid by the Bank, including reasonable attorneys fees and court costs, in connection with the occurrence of any Event of Default or of an event which solely by the passage of time would constitute an Event of Default hereunder or in connection with the enforcement of any of the terms of any of the Loan Documents.
9. ELIGIBLE ACCOUNTS.
9.1 Eligible Account shall mean an Account owing to Company if it meets, and so long as it continues to meet the following requirements:
(a) It is genuine and in all respects what it purports to be;
(b) It is owned by Company, Company has the right to subject it to a security interest in favor of Bank or assign it to Bank and it is subject to a first priority perfected security interest in favor of Bank and to no other claim, lien, security interest or encumbrance whatsoever, other than any permitted liens by Bank;
(c) It arises from the performance of services by Company in the ordinary course of Companys business, and such services have been fully performed and acknowledged and accepted by the Account Debtor thereunder;
(d) It does not remain unpaid ninety (90) days past the due date thereof;
(e) It is a valid, legally enforceable and unconditional obligation of the Account Debtor thereunder, and is not subject to setoff, counterclaim, credit, allowance or adjustment by such Account Debtor, or to any claim by such Account Debtor denying liability thereunder in whole or in part;
(f) It does not arise out of a contract or order which fails in any material respect to comply with the requirements of applicable law;
(g) The Account Debtor thereunder is not Company, a director, officer, employee or agent of Company, or a Subsidiary, parent or Affiliate;
(h) The Account Debtor is located within the United States of America;
(i) It is not an Account (i) with respect to which any representation or warranty contained in this Agreement is untrue; or (ii) which violates any of the covenants of Company contained in this Agreement.
10. MISCELLANEOUS.
10.1 No delay or failure on the part of the Bank in the exercise of any power or right shall operate as a waiver thereof, nor as an acquiescence of any Event of Default, nor shall any single or partial exercise of any power or right preclude any other or further exercise thereof, or the exercise of any other power or right. The rights and remedies hereunder of the Bank are cumulative to, and not exclusive of, any rights or remedies which the Bank would otherwise have.
10.2 If any principal payment hereunder shall fall due on a Saturday, Sunday or on another day which is a legal holiday in the State of Illinois, interest at the rate such indebtedness bears for the period prior to maturity shall continue to accrue on such principal from the stated due date thereof to and including the next succeeding business day on which the same shall be payable.
10.3 All representations and warranties made herein or in certificates given pursuant hereto shall survive the execution and delivery of this Agreement, the Note and the other Loan Documents and shall continue in full force and effect with respect to the date as of which they were made as long as any portion of the Credit is in use or available hereunder.
10.4 All communications provided for herein shall be in writing and shall be deemed to have been given or made when served personally or when deposited in the United States mail addressed to:
the Company: |
Chief Financial Officer |
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Checksmart Financial Company |
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7001 Post Road |
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Dublin, Ohio 43016 |
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the Bank: |
David S. Ryan |
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Vice President |
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Republic Bank of Chicago |
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2221 Camden Court, Suite 390 |
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Oak Brook, Illinois 60523 |
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with a copy to: |
David A. Kallick |
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Tishler & Wald, Ltd. |
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200 S. Wacker Dr., Suite 3000 |
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Chicago, Illinois 60606 |
or at such other address as shall be designated by any party hereto in a written notice to each other party pursuant to this Section 10.4.
10.5 The Company agrees to reimburse the Bank for reasonable legal fees and disbursements of counsel for the Bank in connection with the preparation and execution of this Agreement and the supervision of legal matters in connection therewith.
10.6 This Agreement may be executed in any number of counterparts, and all such counterparts taken together shall be deemed to constitute one and the same instrument.
10.7 This Agreement shall be binding upon the Company and its successors and assigns, and shall inure to the benefit of the Bank and its successors and assigns.
10.8 This Agreement, and the rights and duties of the parties hereto, shall be construed and determined in accordance with the laws of the State of Illinois.
10.9 This Agreement constitutes the entire understanding of the parties with respect to the subject matter hereof, and any prior agreements, whether written or oral, with respect thereto are superseded hereby; provided, however, that prior agreements among the parties hereto with respect to the confidentiality and non-competition shall survive the execution of this Agreement. This Agreement may not be amended, modified, extended or otherwise altered or the terms hereof changed except by the prior express written consent of the Company and the Bank.
[SIGNATURE PAGE TO FOLLOW]
IN WITNESS WHEREOF, this Credit Agreement is executed as of the day and year first written above.
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INSIGHT CAPITAL, LLC, an Alabama limited | |||
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By: |
/s/ Michael Durbin | ||
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Name: |
Michael Durbin | |
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Title: |
Chief Financial Officer, Treasurer, | |
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Senior Vice President, Manager | |
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ACCEPTED: |
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REPUBLIC BANK OF CHICAGO |
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By: |
/s/ Authorized Signatory |
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Its Vice President |
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Exhibit 4.5
FIRST MODIFICATION TO AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST MODIFICATION TO AMENDED AND RESTATED CREDIT AGREEMENT (First Modification) is entered into as of this 31st day of July, 2011, by and between INSIGHT CAPITAL, LLC, an Alabama limited liability company (the Borrower), and REPUBLIC BANK OF CHICAGO (the Bank).
WITNESSETH:
WHEREAS, the Borrower executed a Credit Agreement dated as of July 31, 2009 (the Credit Agreement), the terms and conditions of which are incorporated herein by reference; and
WHEREAS, the Credit Agreement sets forth the terms and conditions of a revolving credit in the principal amount of Five Million and No/100 Dollars ($5,000,000.00) (the Credit); and
WHEREAS, the Credit is evidenced by that certain Revolving Credit Note dated July 31, 2009 in the original principal amount of Five Million and No/100 Dollars ($5,000,000.00) (Original Note 1); and
WHEREAS, pursuant to that certain First Modification to Credit Agreement dated December 1, 2009 (the First Modification) an additional revolving credit in the amount of Four Million and No/100 Dollars ($4,000,000.00) (the Additional Credit) was provided by Bank to Borrower; and
WHEREAS, the Additional Credit was evidenced by that certain Revolving Credit Note dated December 1, 2009 in the original principal amount of Four Million and No/100 Dollars ($4,000,000.00) (Original Note 2); and
WHEREAS, pursuant to the terms of that certain Second Modification to Credit Agreement dated March 1, 2010 (the Second Modification) the guaranties of the guarantors were cancelled, Borrower was acquired by CHECKSMART FINANCIAL COMPANY, a Delaware corporation (Checksmart), and certain terms of the Credit Agreement were amended; and
WHEREAS, pursuant to the terms of that Third Modification to Credit Agreement and Revolving Credit Notes (the Third Modification) dated July 31, 2010: 1.) the maturity of the Credit was extended to July 31, 2012; 2.) the principal amount advanced under the Credit was increased from $5,000,000.00 to $7,000,000.00; 3.) the principal amount advanced under the Additional Credit was decreased from $4,000,000.00 to $2,000,000.00; 4.) the interest rate floor charged under the Credit was increased to five percent (5.0%); 5.) certain financial covenants were revised as more particularly described in the Third Modification; and 6.) the Additional Credit was renewed for the period between January 1, 2011 and March 15, 2011; and
WHEREAS, the Borrower executed an Amended and Restated Credit Agreement dated April 29, 2011 (the Amended Credit Agreement) which restated the terms and conditions of the Credit Agreement; and
WHEREAS, the Borrower has requested and the Bank, under the terms and conditions as set forth herein, has agreed to 1.) renew the Credit in the amount of $7,000,000.00 to July 31, 2013; and 2.) require that the Company agree to the revision of certain covenants as set forth herein; and
WHEREAS, contemporaneously herewith Borrower shall execute and deliver to the Bank that certain Revolving Credit Note of even date herewith in the original principal amount
of Seven Million and No/100 Dollars ($7,000,000.00) (the New Note) in replacement and substitution of the prior Revolving Credit Note.
NOW THEREFORE, in consideration of the recitals above and other good and valuable consideration, the receipt of which and the sufficiency of which are hereby acknowledged,
IT IS HEREBY AGREED TO AS FOLLOWS:
1. The foregoing recitals are adopted herein as if stated herein.
2. Section 1.1 of the Amended Credit Agreement is hereby amended to read as follows:
1.1 The credit (Credit) shall consist of a revolving credit (Revolving Credit) in the amount of Seven Million and No/100 Dollars ($7,000,000.00). The Revolving Credit shall be available to the Company, may be availed of by the Company in its discretion from time to time, and be repaid and used again, during the period from the date hereof to July 31, 2013, at which time the commitment of the Bank shall expire and all sums outstanding under the Revolving Credit shall be due and payable. The Revolving Credit shall be evidenced by the Revolving Credit Note dated July 31, 2011, and any amendments, renewals, or replacements thereof (the Note). Advances under the Revolving Credit shall bear interest (computed on the basis of a year of 360 days and the actual number of days elapsed) prior to the expiration of the Banks commitment hereunder on the principal sum from time to time remaining unpaid thereon at a rate per annum equal to the Banks prime rate of interest published from time to time plus one percent (1.0%) (with any change in said interest rate for such periods resulting from a change in said prime rate to be and become effective as of and on the day of the relevant change in said prime rate). At no time shall the per annum interest rate for Revolving Credit be less than five percent (5.0%). Interest on the Revolving Credit shall be payable commencing on August 1, 2011, and on the first day of each month thereafter.
3. Borrower has executed and delivered to Bank that certain Revolving Credit Note of even date herewith in the original principal amount of Seven Million and No/100 Dollars ($7,000,000.00) and maturing on July 31, 2013 (the New Note).
4. Subsections 7.4(b)(i) and (ii) of the Amended Agreement are hereby modified and shall now read as follows:
(b) Without any request:
(i) as soon as available, and in any event within forty-five (45) days after the close of each quarterly fiscal period of the Company (excluding the last such period in each fiscal year), a consolidated balance sheet and profit and loss statement for the Company accompanied by a statement from a responsible financial officer thereof to the effect that to his or her best knowledge and belief such financial statements are true, correct and complete; and
(ii) as soon as available, and in any event within thirty (30) days after completion, consolidated financial statements for the Company and Community Choice Financial, Inc., including a balance sheet, a profit and loss statement and a statement of changes in financial position, showing in comparative form the figures for the previous fiscal year, prepared on a review basis for the Company and on an audited basis for Community Choice Financial, Inc. by independent public accountants acceptable to the Bank.
5. Subsection 7.19 of the Amended Credit Agreement is hereby modified and shall now read as follows:
7.19 The Company will, on a consolidated basis, at the end of each calendar quarter, maintain the ratio of Debt (excluding Subordinated Debt) to the sum of Consolidated Net Worth (minus goodwill) and Subordinated Debt at no more than 4.50 to 1.00.
6. A new Subsection 7.25 is hereby added to the Amended Credit Agreement to read as follows:
7.25 The Company shall maintain, at the end of each calendar quarter, the sum of Consolidated Net Worth (minus goodwill) and Subordinated Debt at no less than $2,500,000.00.
7. The Borrower will pay to the Bank upon execution of this First Modification a commitment fee in the amount of Twenty Thousand and No/100 Dollars ($20,000.00), plus the Banks attorneys fees and costs incurred in connection with this First Modification and related documents.
8. Except as amended herein, all of the terms and conditions of the Amended Credit Agreement are hereby ratified and confirmed in all respects by the Borrower.
9. Borrower agrees to execute any and all documents requested by the Bank to effectuate the terms and conditions contained in this First Modification.
10. This First Modification may be executed in counterparts, each of which taken together shall constitute one and the same document.
[SIGNATURE PAGE TO FOLLOW]
Exhibit 4.6
EXECUTION COPY
$395,000,000
COMMUNITY CHOICE FINANCIAL INC.
10.75% Senior Secured Notes due 2019
REGISTRATION RIGHTS AGREEMENT
April 29, 2011
Credit Suisse Securities (USA) LLC
Jefferies & Company, Inc.
Stephens Inc.
c/o Credit Suisse Securities (USA) LLC
Eleven Madison Avenue
New York, New York 10010-3629
Dear Sirs:
Community Choice Financial Inc., an Ohio corporation (the Issuer), proposes to issue and sell to Credit Suisse Securities (USA) LLC, Jefferies & Company, Inc. and Stephens Inc. (collectively, the Initial Purchasers), upon the terms set forth in a purchase agreement dated April 20, 2011 (the Purchase Agreement), $395,000,000 aggregate principal amount of its 10.75% Senior Secured Notes due 2019 (the Initial Securities) to be unconditionally guaranteed (the Guarantees) on a senior secured basis by each of the Guarantors (as defined in the Purchase Agreement) (the Guarantors, together with the Issuer, the Company). The Initial Securities will be issued pursuant to an indenture of even date herewith (the Indenture) among the Issuer, the Guarantors named therein and U.S. Bank National Association, as trustee (the Trustee). As an inducement to the Initial Purchasers to purchase the Initial Securities, the Company agrees with the Initial Purchasers, for the benefit of the holders of the Initial Securities (including the Initial Purchasers), the Exchange Securities (as defined below) and the Private Exchange Securities (as defined below) (collectively the Holders), as follows:
1. Registered Exchange Offer. The Company shall, at its own cost, prepare and, not later than 420 days (or if the 420th day is not a business day, the first business day thereafter) (such 420th day or the first business day thereafter being an Exchange Offer Filing Deadline) after the date of original issue of the Initial Securities (the Issue Date), file with the Securities and Exchange Commission (the Commission) a registration statement (the Exchange Offer Registration Statement) on an appropriate form under the Securities Act of 1933, as amended (the Securities Act), with respect to a proposed offer (the Registered Exchange Offer) to the Holders of Initial Securities, who are not prohibited by any law or policy of the Commission from participating in the Registered Exchange Offer, to issue and deliver to such Holders, in exchange for the Initial Securities, a like aggregate principal amount of debt securities (the Exchange Securities) of the Company issued under the Indenture and identical in all material respects to the Initial Securities (except for the transfer restrictions relating to the Initial Securities and the provisions relating to the matters described in Section 6 hereof) and that would be registered under the Securities Act. The Company shall use its reasonable best efforts to (i) cause such Exchange Offer Registration Statement to become effective under the Securities Act within 510 days (or if the 510th day is not a business day, the first business day thereafter) after the Issue Date (such 510th day (or the first business day thereafter) being an Effectiveness Deadline) and (ii) keep the Exchange Offer Registration Statement effective for not less than 20 days (or longer, if required by applicable law) after the date notice
of the Registered Exchange Offer is mailed to the Holders (such period being called the Exchange Offer Registration Period).
If the Company commences the Registered Exchange Offer, the Company (i) will be entitled to close the Registered Exchange Offer 20 business days after the commencement thereof provided that the Company has accepted all the Initial Securities theretofore validly tendered in accordance with the terms of the Registered Exchange Offer and (ii) shall consummate the Registered Exchange Offer no later than 30 days (or longer if required by applicable law) after the date on which the Exchange Offer Registration Statement is declared effective (or if the 30th day is not a business day, the first business day thereafter) (such day being the Consummation Deadline) by the Commission.
Following the declaration of the effectiveness of the Exchange Offer Registration Statement, the Company shall as soon as practicable commence the Registered Exchange Offer, it being the objective of such Registered Exchange Offer to enable each Holder of Initial Securities electing to exchange the Initial Securities for Exchange Securities (assuming that such Holder is not an affiliate of the Company within the meaning of the Securities Act, acquires the Exchange Securities in the ordinary course of such Holders business and has no arrangements with any person to participate in the distribution of the Exchange Securities and is not prohibited by any law or policy of the Commission from participating in the Registered Exchange Offer) to trade such Exchange Securities from and after their receipt without any limitations or restrictions under the Securities Act and without material restrictions under the securities laws of the several states of the United States.
The Company acknowledges that, pursuant to current interpretations by the Commissions staff of Section 5 of the Securities Act, in the absence of an applicable exemption therefrom, (i) each Holder that is a broker-dealer electing to exchange Initial Securities, acquired for its own account as a result of market making activities or other trading activities, for Exchange Securities (an Exchanging Dealer), is required to deliver a prospectus containing the information set forth in (a) Annex A hereto on the cover, (b) Annex B hereto in the Exchange Offer Procedures section and the Purpose of the Exchange Offer section, and (c) Annex C hereto in the Plan of Distribution section, in each case, of such prospectus in connection with a sale of any such Exchange Securities received by such Exchanging Dealer pursuant to the Registered Exchange Offer and (ii) if an Initial Purchaser that elects to sell Exchange Securities acquired in exchange for Initial Securities constituting any portion of an unsold allotment, it is required to deliver a prospectus containing the information required by Items 507 or 508 of Regulation S-K under the Securities Act, as applicable, in connection with such sale.
The Company shall use its reasonable best efforts to keep the Exchange Offer Registration Statement effective and to amend and supplement the prospectus contained therein, in order to permit such prospectus to be lawfully delivered by all persons subject to the prospectus delivery requirements of the Securities Act for such period of time as such persons must comply with such requirements in order to resell the Exchange Securities; provided, however, that (i) in the case where such prospectus and any amendment or supplement thereto must be delivered by an Exchanging Dealer or an Initial Purchaser, such period shall be the lesser of 180 days and the date on which all Exchanging Dealers and the Initial Purchasers have sold all Exchange Securities held by them (unless such period is extended pursuant to Section 3(j) below) and (ii) the Company shall make such prospectus and any amendment or supplement thereto, available to any broker-dealer for use in connection with any resale of any Exchange Securities for a period of not less than 90 days after the consummation of the Registered Exchange Offer.
If, upon consummation of the Registered Exchange Offer, any Initial Purchaser holds Initial Securities acquired by it as part of its initial distribution, the Company, simultaneously with the delivery of the Exchange Securities pursuant to the Registered Exchange Offer, shall issue and deliver to such Initial Purchaser upon the written request of such Initial Purchaser, in exchange (the Private Exchange) for the Initial Securities held by such Initial Purchaser, a like principal amount of debt securities of the Company issued under the Indenture and identical in all material respects (including the existence of restrictions on
transfer under the Securities Act and the securities laws of the several states of the United States, but excluding provisions relating to the matters described in Section 6 hereof) to the Initial Securities (the Private Exchange Securities). The Initial Securities, the Exchange Securities and the Private Exchange Securities are herein collectively called the Securities.
In connection with the Registered Exchange Offer, the Company shall:
(a) mail to each Holder a copy of the prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents;
(b) keep the Registered Exchange Offer open for not less than 20 business days (or longer, if required by applicable law) after the date notice thereof is mailed to the Holders;
(c) utilize the services of a depositary for the Registered Exchange Offer with an address in the Borough of Manhattan, The City of New York, which may be the Trustee or an affiliate of the Trustee;
(d) permit Holders to withdraw tendered Initial Securities at any time prior to the close of business, New York time, on the last business day on which the Registered Exchange Offer shall remain open; and
(e) otherwise comply with all applicable laws.
As soon as practicable after the close of the Registered Exchange Offer or the Private Exchange, as the case may be, the Company shall:
(x) accept for exchange all the Initial Securities validly tendered and not withdrawn pursuant to the Registered Exchange Offer and the Private Exchange;
(y) deliver to the Trustee for cancellation all the Initial Securities so accepted for exchange; and
(z) cause the Trustee to authenticate and deliver promptly to each Holder of the Initial Securities, Exchange Securities or Private Exchange Securities, as the case may be, equal in principal amount to the Initial Securities of such Holder so accepted for exchange.
The Indenture will provide that the Exchange Securities will not be subject to the transfer restrictions set forth in the Indenture and that all the Securities will vote and consent together on all matters as one class and that none of the Securities will have the right to vote or consent as a class separate from one another on any matter.
Interest on each Exchange Security and Private Exchange Security issued pursuant to the Registered Exchange Offer and in the Private Exchange will accrue from the last interest payment date on which interest was paid on the Initial Securities surrendered in exchange therefor or, if no interest has been paid on the Initial Securities, from the date of original issue of the Initial Securities.
Each Holder participating in the Registered Exchange Offer shall be required to represent to the Company that at the time of the consummation of the Registered Exchange Offer (i) any Exchange Securities received by such Holder will be acquired in the ordinary course of business, (ii) such Holder will have no arrangements or understanding with any person to participate in the distribution of the Securities or the Exchange Securities within the meaning of the Securities Act, (iii) such Holder is not an affiliate, as defined in Rule 405 of the Securities Act, of the Company or if it is an affiliate, such Holder will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable,
(iv) if such Holder is not a broker-dealer, that it is not engaged in, and does not intend to engage in, the distribution of the Exchange Securities and (v) if such Holder is a broker-dealer, that it will receive Exchange Securities for its own account in exchange for Initial Securities that were acquired as a result of market-making activities or other trading activities and that it will be required to acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities.
Notwithstanding any other provisions hereof, the Company will ensure that (i) any Exchange Offer Registration Statement and any amendment thereto and any prospectus forming part thereof and any supplement thereto complies in all material respects with the Securities Act and the rules and regulations thereunder, (ii) any Exchange Offer Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any prospectus forming part of any Exchange Offer Registration Statement, and any supplement to such prospectus, does not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
2. Shelf Registration. If, (i) because of any change in law or in applicable interpretations thereof by the staff of the Commission, the Company is not permitted to effect a Registered Exchange Offer, as contemplated by Section 1 hereof, (ii) the Registered Exchange Offer is not consummated within 540 days of the Issue Date (or if the 540th day is not a business day, the first business day thereafter), (iii) any Initial Purchaser so requests with respect to the Initial Securities (or the Private Exchange Securities) not eligible to be exchanged for Exchange Securities in the Registered Exchange Offer and held by it following consummation of the Registered Exchange Offer or (iv) any Holder (other than an Exchanging Dealer) is not eligible to participate in the Registered Exchange Offer or, in the case of any Holder (other than an Exchanging Dealer) that participates in the Registered Exchange Offer, such Holder does not receive freely tradeable Exchange Securities on the date of the exchange, the Company shall take the following actions:
(a) The Company shall, at its cost, as promptly as practicable (but in no event more than 30 days after so required or requested pursuant to this Section 2) (such 30th day being a Shelf Registration Statement Filing Deadline, together with the Exchange Offer Filing Deadline, each, a Filing Deadline) file with the Commission and thereafter (x) in the case of Section 2(i) above, use its reasonable best efforts to cause to be declared effective on or prior to the 510th day after the Issue Date or (y) in the case of Section 2(ii), (iii) or (iv) above, use its reasonable best efforts to cause to be declared effective (unless it becomes effective automatically upon filing) on or prior to the 60th day after the Shelf Registration Statement Filing Deadline (such 510th or 60th day, respectively, being an Effectiveness Deadline) a shelf registration statement (the Shelf Registration Statement and, together with the Exchange Offer Registration Statement, a Registration Statement) on an appropriate form under the Securities Act relating to the offer and sale of the Transfer Restricted Securities (as defined in Section 6 hereof) by the Holders thereof from time to time in accordance with the methods of distribution set forth in the Shelf Registration Statement and Rule 415 under the Securities Act (hereinafter, the Shelf Registration); provided, however, that no Holder (other than an Initial Purchaser) shall be entitled to have the Securities held by it covered by such Shelf Registration Statement unless such Holder agrees in writing to be bound by all the provisions of this Agreement applicable to such Holder.
(b) The Company shall use its reasonable best efforts to keep the Shelf Registration Statement continuously effective in order to permit the prospectus included therein to be lawfully delivered by the Holders of the relevant Securities, for a period of two years (or for such longer period if extended pursuant to Section 3(j) below) from the Issue Date or such shorter period that will terminate when all the Securities covered by the Shelf Registration Statement have been sold pursuant thereto (the Shelf Registration Period). The Company shall be deemed not to have
used its reasonable best efforts to keep the Shelf Registration Statement effective during the requisite period if it voluntarily takes any action that would result in Holders of Securities covered thereby not being able to offer and sell such Securities during that period, unless such action is required by applicable law.
(c) Notwithstanding any other provisions of this Agreement to the contrary, the Company shall cause the Shelf Registration Statement and the related prospectus and any amendment or supplement thereto, as of the effective date of the Shelf Registration Statement, amendment or supplement, (i) to comply in all material respects with the applicable requirements of the Securities Act and the rules and regulations of the Commission and (ii) not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
3. Registration Procedures. To the extent applicable, in connection with any Shelf Registration contemplated by Section 2 hereof and any Registered Exchange Offer contemplated by Section 1 hereof, the following provisions shall apply:
(a) The Company shall (i) furnish to each Initial Purchaser, prior to the filing thereof with the Commission, a copy of the Registration Statement and each amendment thereof and each supplement, if any, to the prospectus included therein and, in the event that an Initial Purchaser (with respect to any portion of an unsold allotment from the original offering) is participating in the Registered Exchange Offer or the Shelf Registration Statement, the Company shall use its reasonable best efforts to reflect in each such document, when so filed with the Commission, such comments as such Initial Purchaser reasonably may propose; (ii) in the case of a Registered Exchange Offer, include the information set forth in Annex A hereto on the cover, in Annex B hereto in the Exchange Offer Procedures section and the Purpose of the Exchange Offer section and in Annex C hereto in the Plan of Distribution section of the prospectus forming a part of the Exchange Offer Registration Statement and include the information set forth in Annex D hereto in the Letter of Transmittal delivered pursuant to the Registered Exchange Offer; (iii) in the case of a Registered Exchange Offer, if requested by an Initial Purchaser, include the information required by Items 507 or 508 of Regulation S-K under the Securities Act, as applicable, in the prospectus forming a part of the Exchange Offer Registration Statement; (iv) in the case of a Registered Exchange Offer, include within the prospectus contained in the Exchange Offer Registration Statement a section entitled Plan of Distribution, reasonably acceptable to the Initial Purchasers, which shall contain a summary statement of the positions taken or policies made by the staff of the Commission with respect to the potential underwriter status of any broker-dealer that is the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the Exchange Act)) of Exchange Securities received by such broker-dealer in the Registered Exchange Offer (a Participating Broker-Dealer), whether such positions or policies have been publicly disseminated by the staff of the Commission or such positions or policies, in the reasonable judgment of the Initial Purchasers based upon advice of counsel (which may be in-house counsel), represent the prevailing views of the staff of the Commission; and (v) in the case of a Shelf Registration Statement, include in the prospectus included in the Shelf Registration Statement (or, if permitted by Commission Rule 430B(b), in a prospectus supplement that becomes a part thereof pursuant to Commission Rule 430B(f)) that is delivered to any Holder pursuant to Section 3(d) and (f), the names of the Holders, who propose to sell Securities pursuant to the Shelf Registration Statement, as selling security holders.
(b) The Company shall give written notice to the Initial Purchasers, the Holders of the Securities and any Participating Broker-Dealer from whom the Company has received prior written notice that it will be a Participating Broker-Dealer in the Registered Exchange Offer (which notice
pursuant to clauses (ii)-(v) hereof shall be accompanied by an instruction to suspend the use of the prospectus until the requisite changes have been made):
(i) when the Registration Statement or any amendment thereto has been filed with the Commission and when the Registration Statement or any post-effective amendment thereto has become effective;
(ii) of any request by the Commission for amendments or supplements to the Registration Statement or the prospectus included therein or for additional information;
(iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose, of the issuance by the Commission of a notification of objection to the use of the form on which the Registration Statement has been filed, and of the happening of any event that causes the Company to become an ineligible issuer, as defined in Commission Rule 405;
(iv) of the receipt by the Company or its legal counsel of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and
(v) of the happening of any event that requires the Company to make changes in the Registration Statement or the prospectus in order that the Registration Statement or the prospectus do not contain an untrue statement of a material fact nor omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the prospectus, in light of the circumstances under which they were made) not misleading.
(c) The Company shall make every reasonable effort to obtain the withdrawal at the earliest possible time, of any order suspending the effectiveness of the Registration Statement.
(d) The Company shall furnish to each Holder of Securities included within the coverage of any Shelf Registration, without charge, at least one copy of the Shelf Registration Statement and any post-effective amendment or supplement thereto, including financial statements and schedules, if any, included therein, and, if the Holder so requests in writing, all exhibits thereto (including those incorporated by reference and not available on the SECs EDGAR service, if any); provided that, prior to the effectiveness of any Shelf Registration Statement, the Company shall not be required to furnish exhibits incorporated by reference. The Company shall not, without the prior consent of the Initial Purchasers, make any offer relating to the Securities that would constitute a free writing prospectus, as defined in Commission Rule 405.
(e) The Company shall deliver to each Exchanging Dealer and each Initial Purchaser, and to any other Holder who so requests, without charge, at least one copy of the Exchange Offer Registration Statement and any post-effective amendment thereto, including financial statements and schedules, if any, included therein, and, if any Initial Purchaser or any such Holder requests, all exhibits thereto (including those incorporated by reference and not available on the SECs EDGAR service, if any); provided that, prior to the effectiveness of the Exchange Offer Registration Statement, the Company shall not be required to furnish exhibits incorporated by reference.
(f) The Company shall, during the Shelf Registration Period, deliver to each Holder of Securities included within the coverage of the Shelf Registration, without charge, as many copies of the prospectus (including each preliminary prospectus) included in the Shelf Registration
Statement and any amendment or supplement thereto as such person may reasonably request. The Company consents, subject to the provisions of this Agreement, to the use of the prospectus or any amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Securities covered by the prospectus, or any amendment or supplement thereto, included in the Shelf Registration Statement.
(g) The Company shall deliver to each Initial Purchaser, any Exchanging Dealer, any Participating Broker-Dealer and such other persons required to deliver a prospectus following the Registered Exchange Offer, without charge, as many copies of the final prospectus included in the Exchange Offer Registration Statement and any amendment or supplement thereto as such persons may reasonably request. The Company consents, subject to the provisions of this Agreement, to the use of the prospectus or any amendment or supplement thereto by any Initial Purchaser, if necessary, any Participating Broker-Dealer and such other persons required to deliver a prospectus following the Registered Exchange Offer in connection with the offering and sale of the Exchange Securities covered by the prospectus, or any amendment or supplement thereto, included in such Exchange Offer Registration Statement.
(h) Prior to any public offering of the Securities, pursuant to any Registration Statement, the Company shall register or qualify or cooperate with the Holders of the Securities included therein and their respective counsel in connection with the registration or qualification of the Securities for offer and sale under the securities or blue sky laws of such states of the United States as any Holder reasonably requests in writing and do any and all other acts or things necessary or advisable to enable the offer and sale in such jurisdictions of the Securities covered by such Registration Statement; provided, however, that the Company shall not be required to (i) qualify generally to do business in any jurisdiction where it is not then so qualified or (ii) take any action which would subject it to general service of process or to taxation in any jurisdiction where it is not then so subject.
(i) Unless the Securities are in book-entry form, the Company shall cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing the Securities to be sold pursuant to any Registration Statement free of any restrictive legends and in such denominations and registered in such names as the Holders may request a reasonable period of time prior to sales of the Securities pursuant to such Registration Statement.
(j) Upon the occurrence of any event contemplated by paragraphs (ii) through (v) of Section 3(b) above during the period for which the Company is required to maintain an effective Registration Statement, the Company shall promptly prepare and file a post-effective amendment to the Registration Statement or a supplement to the related prospectus and any other required document so that, as thereafter delivered to Holders or purchasers of Securities, the prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies the Initial Purchasers, the Holders and any known Participating Broker-Dealer in accordance with paragraphs (ii) through (v) of Section 3(b) above to suspend the use of the prospectus until the requisite changes to the prospectus have been made, then the Initial Purchasers, the Holders and any such Participating Broker-Dealers shall suspend use of such prospectus, and the period of effectiveness of the Shelf Registration Statement provided for in Section 2(b) above and the Exchange Offer Registration Statement provided for in Section 1 above shall each be extended by the number of days from and including the date of the giving of such notice to and including the date when the Initial Purchasers, the Holders and any known Participating Broker-Dealer shall have received such amended or supplemented prospectus pursuant to this Section 3(j). During the period during which the Company is required to maintain an effective Shelf Registration Statement pursuant to this Agreement, the Company will prior to the three-year expiration of that Shelf Registration
Statement file, and use its reasonable best efforts to cause to be declared effective (unless it becomes effective automatically upon filing) within a period that avoids any interruption in the ability of Holders of Securities covered by the expiring Shelf Registration Statement to make registered dispositions, a new registration statement relating to the Securities, which shall be deemed the Shelf Registration Statement for purposes of this Agreement.
(k) Not later than the effective date of the applicable Registration Statement, the Company will provide a CUSIP number for the Initial Securities, the Exchange Securities or the Private Exchange Securities, as the case may be, and provide the applicable trustee with printed certificates for the Initial Securities, the Exchange Securities or the Private Exchange Securities, as the case may be, in a form eligible for deposit with The Depository Trust Company.
(l) The Company will comply with all rules and regulations of the Commission to the extent and so long as they are applicable to the Registered Exchange Offer or the Shelf Registration and will make generally available to its security holders (or otherwise provide in accordance with Section 11(a) of the Securities Act and Rule 158 thereunder) an earnings statement satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder, no later than 45 days after the end of a 12-month period (or 90 days, if such period is a fiscal year) beginning with the first month of the Companys first fiscal quarter commencing after the effective date of the Registration Statement, which statement shall cover such 12-month period.
(m) The Company shall cause the Indenture to be qualified under the Trust Indenture Act of 1939, as amended, in a timely manner as required by the rules and regulations of the Commission and containing such changes, if any, as shall be necessary for such qualification. In the event that such qualification would require the appointment of a new trustee under the Indenture, the Company shall appoint a new trustee thereunder pursuant to the applicable provisions of the Indenture.
(n) The Company may require each Holder of Securities to be sold pursuant to the Shelf Registration Statement to furnish to the Company such information regarding the Holder and the distribution of the Securities as the Company may from time to time reasonably require for inclusion in the Shelf Registration Statement, and the Company may exclude from such registration the Securities of any Holder that unreasonably fails to furnish such information within a reasonable time after receiving such request.
(o) The Company shall enter into such customary agreements (including, if requested, an underwriting agreement in customary form) and take all such other action, if any, as any Holder of Securities to be sold pursuant to any Shelf Registration Statement shall reasonably request in order to facilitate the disposition of the Securities pursuant to any Shelf Registration.
(p) In the case of any Shelf Registration, the Company shall (i) make reasonably available for inspection by the Holders of Securities to be sold pursuant to any Shelf Registration Statement, any underwriter participating in any disposition pursuant to the Shelf Registration Statement and any attorney, accountant or other agent retained by the Holders or any such underwriter all relevant financial and other records, pertinent corporate documents and properties of the Company and (ii) cause the Companys officers, directors, employees, accountants and auditors to supply all relevant information reasonably requested by the Holders or any such underwriter, attorney, accountant or agent in connection with the Shelf Registration Statement, in each case, as shall be reasonably necessary to enable such persons, to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act; provided, however, that the foregoing inspection and information gathering shall be coordinated on behalf of the Initial Purchasers by you and on behalf of the other parties, by one counsel designated by and on behalf of such other parties as described in Section 4 hereof.
(q) In the case of any Shelf Registration, the Company, if requested by any Holder covered thereby, shall cause (i) its counsel to deliver an opinion and updates thereof relating to the Securities in customary form addressed to such Holders and the managing underwriters, if any, thereof and dated, in the case of the initial opinion, the effective date of such Shelf Registration Statement (it being agreed that the matters to be covered by such opinion shall include the due incorporation and good standing of the Company and its subsidiaries; the qualification of the Company and its subsidiaries to transact business as foreign corporations; the authorization by all necessary corporate action, due execution and delivery of the relevant agreement of the type referred to in Section 3(o) hereof; the authorization by all necessary corporate action, due execution, authentication and issuance, and the validity and enforceability, of the applicable Securities; the absence of material legal or governmental proceedings involving the Company and its subsidiaries; the absence of governmental approvals required to be obtained in connection with the Shelf Registration Statement, the offering and sale of the applicable Securities, or any agreement of the type referred to in Section 3(o) hereof; the compliance as to form of such Shelf Registration Statement and any documents incorporated by reference therein and of the Indenture with the requirements of the Securities Act and the Trust Indenture Act, respectively; and (A) as of the date of the opinion and as of the effective date of the Shelf Registration Statement or most recent post-effective amendment thereto, as the case may be, the absence from such Shelf Registration Statement and the prospectus included therein, as then amended or supplemented, and from any documents incorporated by reference therein and (B) as of an applicable time identified by such Holders or managing underwriters, the absence from such prospectus taken together with any other documents identified by such Holders or managing underwriters, in the case of (A) and (B), of an untrue statement of a material fact or the omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any such incorporated documents, in the light of the circumstances existing at the time that such documents were filed with the Commission under the Exchange Act); (ii) its officers to execute and deliver all customary documents and certificates and updates thereof requested by any underwriters of the applicable Securities and (iii) its independent registered public accounting firm and the independent registered public accounting firm with respect to any other entity for which financial information is provided in the Shelf Registration Statement to provide to the selling Holders of the applicable Securities and any underwriter therefor a comfort letter in customary form and covering matters of the type customarily covered in comfort letters in connection with primary underwritten offerings, subject to receipt of appropriate documentation as contemplated, and only if permitted, by Statement of Auditing Standards No. 72 (or any successor bulletins).
(r) In the case of the Registered Exchange Offer, if requested by any Initial Purchaser or any known Participating Broker-Dealer, the Company shall cause (i) its counsel to deliver to such Initial Purchaser or such Participating Broker-Dealer a signed opinion in the form set forth in Exhibit A of the Purchase Agreement with such changes as are customary in connection with the preparation of a Registration Statement and (ii) its independent registered public accounting firm and the independent registered public accounting firm with respect to any other entity for which financial information is provided in the Registration Statement to deliver to such Initial Purchaser or such Participating Broker-Dealer a comfort letter, in customary form, meeting the requirements as to the substance thereof as set forth in Exhibit D of the Purchase Agreement, with appropriate date changes.
(s) If a Registered Exchange Offer or a Private Exchange is to be consummated, upon delivery of the Initial Securities by Holders to the Company (or to such other Person as directed by the Company) in exchange for the Exchange Securities or the Private Exchange Securities, as the case may be, the Company shall mark, or cause to be marked, on the Initial Securities so exchanged that such Initial Securities are being canceled in exchange for the Exchange Securities
or the Private Exchange Securities, as the case may be; in no event shall the Initial Securities be marked as paid or otherwise satisfied.
(t) The Company will use its reasonable best efforts to (a) if the Initial Securities have been rated prior to the initial sale of such Initial Securities, confirm such ratings will apply to the Securities covered by a Registration Statement, or (b) if the Initial Securities were not previously rated, cause the Securities covered by a Registration Statement to be rated with the appropriate rating agencies, if so requested by Holders of a majority in aggregate principal amount of Securities covered by such Registration Statement, or by the managing underwriters, if any.
(u) In the event that any broker-dealer registered under the Exchange Act shall underwrite any Securities or participate as a member of an underwriting syndicate or selling group or assist in the distribution (within the meaning of the Conduct Rules (the Rules) of the Financial Industry Regulatory Authority, Inc. (FINRA)) thereof, whether as a Holder or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, the Company will assist such broker-dealer in complying with the requirements of such Rules, including by (i) if such Rules, including NASD Rule 2720, shall so require, engaging a qualified independent underwriter (as defined in NASD Rule 2720) to participate in the preparation of the Registration Statement relating to such Securities, to exercise usual standards of due diligence in respect thereto and, if any portion of the offering contemplated by such Registration Statement is an underwritten offering or is made through a placement or sales agent, to recommend the yield of such Securities, (ii) indemnifying any such qualified independent underwriter to the extent of the indemnification of underwriters provided in Section 5 hereof and (iii) providing such information to such broker-dealer as may be required in order for such broker-dealer to comply with the requirements of the Rules.
(v) The Company shall use its reasonable best efforts to take all other steps necessary to effect the registration of the Securities covered by a Registration Statement contemplated hereby.
4. Registration Expenses. The Company shall bear all fees and expenses incurred in connection with the performance of its obligations under Sections 1 through 3 hereof (including the reasonable fees and expenses, if any, of Cravath, Swaine & Moore LLP, counsel for the Initial Purchasers, incurred in connection with the Registered Exchange Offer), whether or not the Registered Exchange Offer or a Shelf Registration is filed or becomes effective, and, in the event of a Shelf Registration, shall bear or reimburse the Holders of the Securities covered thereby for the reasonable fees and disbursements of one firm of counsel designated, who shall be Cravath, Swaine & Moore LLP unless another firm shall be chosen by the Holders of a majority in principal amount of the Initial Securities covered thereby to act as counsel for the Holders of the Initial Securities in connection therewith.
5. Indemnification. (a) The Issuer and the Guarantors, jointly and severally, agree to indemnify and hold harmless each Holder, any Participating Broker-Dealer and each person, if any, who controls such Holder or such Participating Broker-Dealer within the meaning of the Securities Act or the Exchange Act (each Holder, any Participating Broker-Dealer and such controlling persons are referred to collectively as the Indemnified Parties) from and against any losses, claims, damages or liabilities, joint or several, or any actions in respect thereof (including, but not limited to, any losses, claims, damages, liabilities or actions relating to purchases and sales of the Securities) to which each Indemnified Party may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus or issuer free writing prospectus, as defined in Commission Rule 433 (Issuer FWP), relating to a Shelf Registration, or arise out of, or are based upon, the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and shall reimburse, as incurred, the Indemnified Parties for any legal or
other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action in respect thereof; provided, however, that (i) the Company shall not be liable in any such case to the extent that such loss, claim, damage or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in a Registration Statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus or Issuer FWP relating to a Shelf Registration in reliance upon and in conformity with written information pertaining to such Holder and furnished to the Company by or on behalf of such Holder specifically for inclusion therein and (ii) with respect to any untrue statement or omission or alleged untrue statement or omission made in any preliminary prospectus relating to a Shelf Registration Statement, the indemnity agreement contained in this subsection (a) shall not inure to the benefit of any Holder or Participating Broker-Dealer from whom the person asserting any such losses, claims, damages or liabilities purchased the Securities concerned, to the extent that a prospectus relating to such Securities was required to be delivered (including through satisfaction of the conditions of Commission Rule 172) by such Holder or Participating Broker-Dealer under the Securities Act in connection with such purchase and any such loss, claim, damage or liability of such Holder or Participating Broker-Dealer results from the fact that there was not conveyed to such person, at or prior to the time of the sale of such Securities to such person, an amended or supplemented prospectus or, if permitted by Section 3(d), an Issuer FWP correcting such untrue statement or omission or alleged untrue statement or omission if the Company had previously furnished copies thereof to such Holder or Participating Broker-Dealer; provided further, however, that this indemnity agreement will be in addition to any liability which the Issuer and the Guarantors may otherwise have to such Indemnified Party. The Issuer and the Guarantors shall also indemnify underwriters, their officers and directors and each person who controls such underwriters within the meaning of the Securities Act or the Exchange Act to the same extent as provided above with respect to the indemnification of the Holders if requested by such Holders.
(b) Each Holder, severally and not jointly, will indemnify and hold harmless the Issuer, the Guarantors and each person, if any, who controls the Issuer or the Guarantors, as the case may be, within the meaning of the Securities Act or the Exchange Act from and against any losses, claims, damages or liabilities or any actions in respect thereof, to which the Issuer, the Guarantors or any such controlling person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus or Issuer FWP relating to a Shelf Registration, or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary to make the statements therein not misleading, but in each case only to the extent that the untrue statement or omission or alleged untrue statement or omission was made in reliance upon and in conformity with written information pertaining to such Holder and furnished to the Company by or on behalf of such Holder specifically for inclusion therein; and, subject to the limitation set forth immediately preceding this clause, shall reimburse, as incurred, the Issuer or the Guarantors, as the case may be, for any legal or other expenses reasonably incurred by the Company or any such controlling person in connection with investigating or defending any loss, claim, damage, liability or action in respect thereof. This indemnity agreement will be in addition to any liability which such Holder may otherwise have to the Issuer, the Guarantors or any of its controlling persons.
(c) Promptly after receipt by an indemnified party under this Section 5 of notice of the commencement of any action or proceeding (including a governmental investigation), such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 5, notify the indemnifying party of the commencement thereof; but the failure to notify the indemnifying party shall not relieve the indemnifying party from any liability that it may have under subsection (a) or (b) above except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided further that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party otherwise than under subsection (a) or (b) above. In case any such action is brought against any indemnified party, and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party of its election to assume the defense thereof the indemnifying party will not be liable to such indemnified party under this Section 5 for any legal or other expenses, other than reasonable costs of investigation, subsequently incurred by such indemnified party in connection with the defense thereof. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement (i) includes an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action, and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 5 is unavailable or insufficient to hold harmless an indemnified party under subsections (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party on the other from the exchange of the Securities, pursuant to the Registered Exchange Offer, or (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the indemnifying party or parties on the one hand and the indemnified party on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof) as well as any other relevant equitable considerations. The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or such Holder or such other indemnified party, as the case may be, on the other, and the parties relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding any other provision of this Section 5(d), the Holders shall not be required to contribute any amount in excess of the amount by which the net proceeds received by such Holders from the sale of the Securities pursuant to a Registration Statement exceeds the amount of damages which such Holders have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this subsection (d), each person, if any, who controls such indemnified party within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as such indemnified party and each person, if any, who controls the Issuer or the Guarantors within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as the Issuer or the Guarantors, as the case may be.
(e) The agreements contained in this Section 5 shall survive the sale of the Securities pursuant to a Registration Statement and shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of any indemnified party.
6. Additional Interest Under Certain Circumstances. (a) Additional interest (the Additional Interest) with respect to the Transfer Restricted Securities shall be assessed as follows if any of the following events occur (each such event in clauses (i) through (iv) below a Registration Default):
(i) any Registration Statement required by this Agreement is not filed with the Commission on or prior to the applicable Filing Deadline;
(ii) any Registration Statement required by this Agreement is not declared effective by the Commission on or prior to the applicable Effectiveness Deadline;
(iii) if after the Exchange Offer Registration Statement becomes effective, the Registered Exchange Offer is not consummated on or prior to the applicable Consummation Deadline;
(iv) if after either the Exchange Offer Registration Statement or the Shelf Registration Statement is declared (or becomes automatically) effective (A) such Registration Statement thereafter ceases to be effective or (B) such Registration Statement or the related prospectus ceases to be usable (except as permitted in paragraph (b)) in connection with resales of Transfer Restricted Securities during the periods specified herein because either (1) any event occurs as a result of which the related prospectus forming part of such Registration Statement would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, (2) it shall be necessary to amend such Registration Statement or supplement the related prospectus to comply with the Securities Act or the Exchange Act or the respective rules thereunder or (3) such Registration Statement is a Shelf Registration Statement that has expired before a replacement Shelf Registration Statement has become effective.
Additional Interest shall accrue on the Transfer Restricted Securities over and above the interest set forth in the title of the Transfer Restricted Securities from and including the date on which any such Registration Default shall occur to but excluding the date on which all such Registration Defaults have been cured, at a rate of 0.25% per annum (the Additional Interest Rate) for the first 90-day period immediately following the occurrence of such Registration Default. The Additional Interest Rate shall increase by an additional 0.25% per annum with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum Additional Interest rate of 1.0% per annum; provided that the Company shall in no way be required to pay Additional Interest for more than one Registration Default at any given time.
(b) A Registration Default referred to in Section 6(a)(iv)(B) hereof shall be deemed not to have occurred and be continuing in relation to a Shelf Registration Statement or the related prospectus if (i) such Registration Default has occurred solely as a result of (x) the filing of a post-effective amendment to such Shelf Registration Statement to incorporate annual audited financial information with respect to the Company where such post-effective amendment is not yet effective and needs to be declared effective to permit Holders to use the related prospectus or (y) other material events, with respect to the Company that would need to be described in such Shelf Registration Statement or the related prospectus and (ii) in the case of clause (y), the Company is proceeding promptly and in good faith to amend or supplement such Shelf Registration Statement and related prospectus to describe such events; provided, however, that in any case if such Registration Default occurs for a continuous period in excess of 30 days, Additional Interest shall be payable in accordance with the above paragraph from the day such Registration Default occurs until such Registration Default is cured.
(c) Any amounts of Additional Interest due pursuant to Section 6(a) above will be payable in cash on the regular interest payment dates with respect to the Transfer Restricted Securities. The amount of Additional Interest will be determined by multiplying the applicable Additional Interest Rate by the principal amount of the Transfer Restricted Securities and further multiplied by a fraction, the numerator of which is the number of days such Additional Interest Rate was applicable during such period (determined on the basis of a 360-day year comprised of twelve 30-day months), and the denominator of which is 360.
(d) Transfer Restricted Securities means each Initial Security until (i) the date on which such Initial Security has been exchanged by a person other than a broker-dealer for a freely transferable Exchange Security in the Registered Exchange Offer, (ii) following the exchange by a broker-dealer in the Registered Exchange Offer of an Initial Security for an Exchange Note, the date on which such Exchange Note is sold to a purchaser who receives from such broker-dealer on or prior to the date of such sale a copy of the prospectus contained in the Exchange Offer Registration Statement, (iii) the date on which such Initial Security has been effectively registered under the Securities Act and disposed of in accordance with the Shelf Registration Statement, or (iv) the date on which such Initial Security is distributed to the public pursuant to Rule 144 under the Securities Act.
7. Rules 144 and 144A. The Company shall use its reasonable best efforts to file the reports required to be filed by it under the Securities Act and the Exchange Act in a timely manner and, if at any time the Company is not required to file such reports, it will, upon the request of any Holder of Initial Securities, make publicly available other information so long as necessary to permit sales of their Securities pursuant to Rules 144 and 144A. The Company covenants that it will take such further action as any Holder of Initial Securities may reasonably request, all to the extent required from time to time to enable such Holder to sell Initial Securities without registration under the Securities Act within the limitation of the exemptions provided by Rules 144 and 144A (including the requirements of Rule 144A(d)(4)). The Company will provide a copy of this Agreement to prospective purchasers of Initial Securities identified to the Company by the Initial Purchasers upon request. Upon the request of any Holder of Initial Securities, the Company shall deliver to such Holder a written statement as to whether it has complied with such requirements. Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to require the Company to register any of its securities pursuant to the Exchange Act.
8. Underwritten Registrations. If any of the Transfer Restricted Securities covered by any Shelf Registration are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will administer the offering (Managing Underwriters) will be selected by the Holders of a majority in aggregate principal amount of such Transfer Restricted Securities to be included in such offering.
No person may participate in any underwritten registration hereunder unless such person (i) agrees to sell such persons Transfer Restricted Securities on the basis reasonably provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements.
9. Miscellaneous.
(a) Remedies. The Company acknowledges and agrees that any failure by the Company to comply with its obligations under Sections 1 and 2 hereof may result in material irreparable injury to the Initial Purchasers or the Holders for which there is no adequate remedy at al, that it will not be possible to measure damages for such injuries precisely and that, in the event of any such failure, the Initial Purchasers or any Holder may obtain such relief as may be required to specifically enforce the Companys obligations under Sections 1 and 2 hereof. The Company further agrees to waive the defense in any action for specific performance that a remedy at law would be adequate. The Initial Purchasers and the Holders acknowledge and agree that the Additional Interest provided by Section 6 of this Agreement shall be the exclusive monetary remedy available to Holders for any Registration Default.
(b) Third-Party Beneficiaries. The Holders shall be third-party beneficiaries to the agreements made hereunder between the Company, on the one hand, and the Initial Purchasers, on the other hand, and shall have the right to enforce such agreements directly to the extent they may deem such enforcement necessary or advisable to protect their rights or the rights of Holders hereunder.
(c) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, except by the Company and the written consent of the Holders of a majority in aggregate principal amount of the Securities affected by such amendment, modification, supplement, waiver or consents. Without the consent of the Holder of each Security, however, no modification may change the provisions hereof relating to the payment of Additional Interest.
(b) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, first-class mail, facsimile transmission, or air courier which guarantees overnight delivery:
(1) if to a Holder, at the most current address given by such Holder to the Company.
(2) if to the Initial Purchasers;
Credit Suisse Securities (USA) LLC
Eleven Madison Avenue
New York, NY 10010-3629
Fax No.: (212) 325-4296
Attention: LCD-IBD
with a copy to:
Cravath, Swaine & Moore LLP
825 Eighth Avenue
New York, NY 10019-7475
Fax No.: (212) 474-3700
Attention: Craig F. Arcella
(3) if to the Company, at its address as follows:
Community Choice Financial Inc.
7001 Post Road
Dublin, OH 43016
Attention: General Counsel
with a copy to:
Jones Day
222 East 41st Street
New York, NY 10017-6702
Fax No.: (212) 755-7306
Attention: Christopher M. Kelly
All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; three business days after being deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged by recipients facsimile machine operator, if sent by facsimile transmission; and on the day delivered, if sent by overnight air courier guaranteeing next day delivery.
(c) No Inconsistent Agreements. The Company has not, as of the date hereof, entered into, nor shall it, on or after the date hereof, enter into, any agreement with respect to its securities that is inconsistent with the rights granted to the Holders herein or otherwise conflicts with the provisions hereof.
(d) Successors and Assigns. This Agreement shall be binding upon the Company and its successors and assigns.
(e) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL AND STATE COURTS IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN ANY SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(h) Severability. If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.
(i) Securities Held by the Company. Whenever the consent or approval of Holders of a specified percentage of principal amount of Securities is required hereunder, Securities held by the Company or its affiliates (other than subsequent Holders if such subsequent Holders are deemed to be affiliates solely by reason of their holdings of such Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.
[The remainder of this page is left intentionally blank]
If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Issuer a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement among the several Initial Purchasers, the Issuer and the Guarantors in accordance with its terms.
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Community Choice Financial Inc. | ||
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By: |
/s/ Michael Durbin | |
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Michael Durbin |
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Senior Vice President, Chief Financial Officer and Treasurer |
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Each of the Guarantors Listed on | ||
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Schedule I Hereto | ||
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By: |
/s/ Michael Durbin | |
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Name: |
Michael Durbin |
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Senior Vice President, Chief Financial Officer, Treasurer and Manager |
The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date first above written.
CREDIT SUISSE SECURITIES (USA) LLC
JEFFERIES & COMPANY, INC.
STEPHENS INC.
by: |
CREDIT SUISSE SECURITIES (USA) LLC |
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By: |
/s/ Ali R. Mehdi |
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Name: |
Ali R. Mehdi |
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Title: |
Managing Director |
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by: |
JEFFERIES & COMPANY, INC. |
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By: |
/s/ Michael Leder |
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Name: |
Michael Leder |
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Title: |
Managing Director |
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by: |
STEPHENS INC. |
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By: |
/s/ A. Davidson Hall |
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A. Davidson Hall |
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Managing Director |
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[Signature page to the Registration Rights Agreement]
ANNEX A
Each broker-dealer that receives Exchange Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an underwriter within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Securities received in exchange for Initial Securities where such Initial Securities were acquired by such broker-dealer as a result of market-making activities or other trading activities. The Company has agreed that, for a period of 180 days after the Expiration Date (as defined herein), it will make this Prospectus available to any broker-dealer for use in connection with any such resale. See Plan of Distribution.
ANNEX B
Each broker-dealer that receives Exchange Securities for its own account in exchange for Initial Securities, where such Initial Securities were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. See Plan of Distribution.
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Securities received in exchange for Initial Securities where such Initial Securities were acquired as a result of market-making activities or other trading activities. The Company has agreed that, for a period of 180 days after the Expiration Date, it will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition, until , 201 , all dealers effecting transactions in the Exchange Securities may be required to deliver a prospectus.(1)
The Company will not receive any proceeds from any sale of Exchange Securities by broker-dealers. Exchange Securities received by broker-dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the Exchange Securities or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such Exchange Securities. Any broker-dealer that resells Exchange Securities that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such Exchange Securities may be deemed to be an underwriter within the meaning of the Securities Act and any profit on any such resale of Exchange Securities and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an underwriter within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date the Company will promptly send additional copies of this Prospectus and any amendment or supplement to this Prospectus to any broker-dealer that requests such documents in the Letter of Transmittal. The Company has agreed to pay all expenses incident to the Exchange Offer (including the expenses of one counsel for the Holders of the Securities) other than commissions or concessions of any brokers or dealers and will indemnify the Holders of the Securities (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.
(1) In addition, the legend required by Item 502(b) of Regulation S-K will appear on the back cover page of the Exchange Offer prospectus.
ANNEX D
o CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.
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If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Securities. If the undersigned is a broker-dealer that will receive Exchange Securities for its own account in exchange for Initial Securities that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Securities; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an underwriter within the meaning of the Securities Act.
SCHEDULE I
List of Guarantors
Subsidiary |
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Jurisdiction of Incorporation |
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ARH-Arizona, LLC |
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Delaware |
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BCCI CA, LLC |
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Delaware |
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BCCI Management Company |
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Ohio |
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Buckeye Check Cashing II, Inc. |
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Ohio |
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Buckeye Check Cashing of Arizona, Inc. |
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Ohio |
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Buckeye Check Cashing of California, LLC |
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Delaware |
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Buckeye Check Cashing of Florida, Inc. |
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Ohio |
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Buckeye Check Cashing of Illinois, LLC |
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Delaware |
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Buckeye Check Cashing of Kansas, LLC |
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Delaware |
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Buckeye Check Cashing of Kentucky, Inc. |
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Ohio |
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Buckeye Check Cashing of Michigan, Inc. |
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Delaware |
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Buckeye Check Cashing of Missouri, LLC |
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Delaware |
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Buckeye Check Cashing of Texas, LLC |
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Delaware |
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Buckeye Check Cashing of Utah, Inc. |
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Ohio |
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Buckeye Check Cashing of Virginia, Inc. |
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Ohio |
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Buckeye Check Cashing, Inc. |
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Ohio |
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Buckeye Commercial Check Cashing of Florida, LLC |
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Delaware |
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Buckeye Credit Solutions, LLC |
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Delaware |
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Buckeye Credit Solutions of Arizona, LLC |
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Delaware |
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Buckeye Lending Solutions of Arizona, LLC |
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Delaware |
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Buckeye Lending Solutions, LLC |
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Delaware |
Subsidiary |
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Jurisdiction of Incorporation |
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Buckeye Small Loans, LLC |
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Delaware |
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Buckeye Title Loans of California, LLC |
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Delaware |
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Buckeye Title Loans of Kansas, LLC |
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Delaware |
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Buckeye Title Loans of Missouri, LLC |
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Delaware |
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Buckeye Title Loans of Utah, LLC |
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Delaware |
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Buckeye Title Loans of Virginia, LLC |
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Delaware |
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Buckeye Title Loans, Inc. |
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Ohio |
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Checksmart Financial Company |
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Delaware |
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Checksmart Financial Holdings Corp. |
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Delaware |
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Checksmart Financial, LLC |
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Delaware |
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Checksmart Money Order Services of Arizona, Inc. |
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Delaware |
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Checksmart Money Order Services, Inc. |
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Delaware |
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CS-Arizona, LLC |
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Delaware |
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Express Payroll Advance of Ohio, Inc. |
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Ohio |
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First Virginia Credit Solutions, LLC |
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Delaware |
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First Virginia Financial Services, LLC |
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Delaware |
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Hoosier Check Cashing of Ohio, LTD |
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Ohio |
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Insight Capital, LLC |
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Alabama |
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National Tax Lending, LLC |
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Delaware |
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California Check Cashing Stores, LLC |
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Delaware |
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CCCIS, Inc. |
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California |
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CCCS Corporate Holdings, Inc. |
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Delaware |
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CCCS Holdings, LLC |
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Delaware |
Subsidiary |
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Jurisdiction of Incorporation |
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Fast Cash, Inc. |
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California |
Exhibit 4.7
FIRST SUPPLEMENTAL INDENTURE
First Supplemental Indenture (this Supplemental Indenture), dated as of April 1, 2012, among the Subsidiaries listed on Schedule I hereto (the Guaranteeing Subsidiaries), each a direct or indirect subsidiary of Community Choice Financial Inc., an Ohio corporation (CCFI), as Issuer (under the Indenture referred to below), CCFI, and U.S. Bank National Association, as trustee (under the Indenture referred to below) (the Trustee).
W I T N E S S E T H
WHEREAS, each of the Issuer and the Subsidiary Guarantors has heretofore executed and delivered to the Trustee an indenture (the Indenture), dated as of April 29, 2011, providing for the issuance of an unlimited aggregate principal amount of 10.75% senior secured notes due 2019 (the Notes);
WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiaries shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiaries shall unconditionally guarantee all of the Issuers Obligations under the Notes and the Indenture on the terms and conditions set forth herein and under the Indenture (the Guarantee); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture;
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:
(1) Capitalized Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.
(2) Agreement to Guarantee. Each Guaranteeing Subsidiary hereby agrees to be a Guarantor under the Indenture and to be bound by the terms of the Indenture applicable to Subsidiary Guarantors, including Article 10 thereof.
(3) Execution and Delivery. Each Guaranteeing Subsidiary agrees that the Guarantee shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Guarantee on the Notes.
(4) Governing Law. THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
(5) Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
(6) Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.
(7) The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by each Guaranteeing Subsidiary.
[Remainder of Page Blank Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first above written.
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EACH OF THE GUARANTEEING SUBSIDIARIES LISTED ON SCHEDULE I HERETO, as a Guaranteeing Subsidiary | ||
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By: |
/s/ Bridgette C. Roman | |
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Name: |
Bridgette C. Roman |
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Title: |
Senior Vice President, Secretary and |
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General Counsel |
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COMMUNITY CHOICE FINANCIAL INC., as Issuer | ||
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By: |
/s/ Bridgette C. Roman | |
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Name: |
Bridgette C. Roman |
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Title: |
Senior Vice President, Secretary and |
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General Counsel |
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U.S. BANK NATIONAL ASSOCIATION, as Trustee | ||
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By: |
/s/ David A. Schlabach | |
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Name: |
David A. Schlabach |
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Title: |
Vice President |
SCHEDULE I
Subsidiary |
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Jurisdiction of Incorporation |
Direct Financial Solutions, LLC |
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Delaware |
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Cash Central of Alabama, LLC |
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Alabama |
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Cash Central of Alaska, LLC |
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Alaska |
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Cash Central of California, LLC |
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California |
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Cash Central of Delaware, LLC |
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Delaware |
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Cash Central of Hawaii, LLC |
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Hawaii |
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Cash Central of Idaho, LLC |
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Idaho |
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Cash Central of Kansas, LLC |
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Kansas |
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Cash Central of Minnesota, LLC |
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Minnesota |
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Cash Central of Missouri, LLC |
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Missouri |
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Cash Central of Nevada, LLC |
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Nevada |
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Cash Central of North Dakota, LLC |
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North Dakota |
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Cash Central of South Dakota, LLC |
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South Dakota |
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Cash Central of Texas, LLC |
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Texas |
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Cash Central of Utah, LLC |
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Utah |
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Cash Central of Washington, LLC |
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Washington |
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Cash Central of Wyoming, LLC |
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Wyoming |
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Cash Central of Wisconsin, LLC |
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Wisconsin |
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Reliant Software, Inc. |
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Utah |
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Community Choice Family Insurance Agency, LLC |
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Delaware |
Exhibit 5.1
[Jones Day Letterhead]
June 22, 2012
Community Choice Financial Inc.
7001 Post Road, Suite 200
Dublin, Ohio 43016
Re: Registration Statement on Form S-4 Filed by Community Choice Financial Inc.
Relating to the Exchange Offer (as defined below)
Ladies and Gentlemen:
We have acted as counsel to Community Choice Financial Inc., an Ohio corporation (the Company), and the Guarantors (as defined below) in connection with the Registration Statement on Form S-4 to which this opinion has been filed as an exhibit (the Registration Statement). The Registration Statement relates to the proposed issuance and exchange (the Exchange Offer) of up to $395,000,000 aggregate principal amount of 10.75% Senior Secured Notes due 2019 of the Company (the Exchange Notes) for an equal principal amount of 10.75% Senior Secured Notes due 2019 of the Company outstanding on the date hereof (the Outstanding Notes). The Outstanding Notes have been, and the Exchange Notes will be, issued pursuant to an Indenture, dated as of April 29, 2011 (as amended, supplemented or otherwise modified, the Indenture), by and among the Company, the guarantors listed on Annex A hereto (collectively, the Covered Guarantors), the companies listed on Annex B hereto (collectively, the Other Guarantors and, together with the Covered Guarantors, the Guarantors) and U.S. Bank National Association, as trustee (the Trustee). The Outstanding Notes are, and the Exchange Notes will be, guaranteed (each, a Guarantee) on a joint and several basis by the Guarantors.
In connection with the opinions expressed herein, we have examined such documents, records and matters of law as we have deemed relevant or necessary for purposes of such opinions.
Based on the foregoing, and subject to the further limitations, qualifications and assumptions set forth herein, we are of the opinion that:
1. The Exchange Notes, when they are executed by the Company, authenticated by the Trustee in accordance with the Indenture and issued and delivered in exchange for the Outstanding Notes in accordance with the terms of the Exchange Offer, will constitute valid and binding obligations of the Company.
2. The Guarantee of the Exchange Notes of each Guarantor, when it is issued and delivered in exchange for the Guarantee of the Outstanding Notes of that Guarantor in accordance with the terms of the Exchange Offer, will constitute a valid and binding obligation of that Guarantor.
The opinions set forth above are subject to the following limitations, qualifications and assumptions:
For purposes of the opinions expressed herein, we have assumed that the Trustee has authorized, executed and delivered the Indenture and that the Indenture is the valid, binding and enforceable obligation of the Trustee.
For the purposes of our opinion set forth in paragraph 2 above, we have assumed that (a) each of the Other Guarantors is a corporation or limited liability company existing and in good standing under the laws of its jurisdiction of incorporation or organization as listed opposite such Other Guarantors name on Annex B hereto (each, a Jurisdiction); (b) the Indenture and the Exchange Notes (i) have been authorized by all necessary corporate or limited liability company action, as applicable, of each of the Other Guarantors and (ii) have been executed and delivered by each of the Other Guarantors under the laws of the applicable Jurisdiction; and (c) the execution, delivery, performance and compliance with the terms and provisions of the Indenture and the Exchange Notes by each of the Other Guarantors do not violate or conflict with the laws of the applicable Jurisdiction the provisions of its articles of incorporation, bylaws or other similar formation or organizational documents, as applicable, or any rule, regulation, order, decree, judgment, instrument or agreement binding upon or applicable to such Other Guarantor or its properties.
The opinions expressed herein are limited by (i) bankruptcy, insolvency, reorganization, fraudulent transfer and fraudulent conveyance, voidable preference, moratorium or other similar laws, and related regulations and judicial doctrines from time to time in effect relating to or affecting creditors rights and remedies generally, and (ii) general equitable principles and public policy considerations, whether such principles and considerations are considered in a proceeding at law or in equity.
As to facts material to the opinions and assumptions expressed herein, we have relied upon oral or written statements and representations of officers and other representatives of the Company, the Guarantors and others. The opinions expressed herein are limited to (i) the laws of the State of New York, (ii) the laws of the State of California, (iii) the laws of the State of Texas, (iv) the laws of the State of Ohio and (v) the General Corporation Law and the Limited Liability Company Act of the State of Delaware, and we express no opinion as to the effect of the laws of any other jurisdiction on the opinions expressed herein.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement and to the reference to Jones Day under the caption Legal Matters in the prospectus constituting a part of such Registration Statement. In giving such consent, we do not hereby admit that we are included in the category of persons whose consent is required under Section 7 of the Securities Act of 1933 or the rules and regulations of the Securities and Exchange Commission promulgated thereunder.
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Very truly yours, |
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/s/ Jones Day |
Annex A
Name of Covered Guarantor |
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State of Incorporation or |
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ARH-Arizona, LLC |
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Delaware |
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BCCI CA, LLC |
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Delaware |
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BCCI Management Company |
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Ohio |
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Buckeye Check Cashing II, Inc. |
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Ohio |
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Buckeye Check Cashing of Arizona, Inc. |
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Ohio |
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Buckeye Check Cashing of California, LLC |
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Delaware |
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Buckeye Check Cashing of Florida, Inc. |
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Ohio |
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Buckeye Check Cashing of Illinois, LLC |
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Delaware |
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Buckeye Check Cashing of Kansas, LLC |
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Delaware |
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Buckeye Check Cashing of Kentucky, Inc. |
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Ohio |
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Buckeye Check Cashing of Michigan, Inc. |
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Delaware |
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Buckeye Check Cashing of Missouri, LLC |
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Delaware |
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Buckeye Check Cashing of Texas, LLC |
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Delaware |
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Buckeye Check Cashing of Utah, Inc. |
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Ohio |
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Buckeye Check Cashing of Virginia, Inc. |
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Ohio |
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Buckeye Check Cashing, Inc. |
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Ohio |
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Buckeye Commercial Check Cashing of Florida, LLC |
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Delaware |
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Buckeye Credit Solutions, LLC |
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Delaware |
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Buckeye Lending Solutions of Arizona, LLC |
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Delaware |
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Buckeye Lending Solutions, LLC |
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Delaware |
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Buckeye Small Loans, LLC |
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Delaware |
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Buckeye Title Loans of California, LLC |
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Delaware |
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Buckeye Title Loans of Kansas, LLC |
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Delaware |
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Buckeye Title Loans of Missouri, LLC |
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Delaware |
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Buckeye Title Loans of Utah, LLC |
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Delaware |
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Buckeye Title Loans of Virginia, LLC |
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Delaware |
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Buckeye Title Loans, Inc. |
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Ohio |
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California Check Cashing Stores, LLC |
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Delaware |
Cash Central of California, LLC |
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California |
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Cash Central of Delaware, LLC |
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Delaware |
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Cash Central of Texas, LLC |
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Texas |
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CCCIS, Inc. |
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California |
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CCCS Corporate Holdings, Inc. |
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Delaware |
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CCCS Holdings, LLC |
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Delaware |
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CheckSmart Financial Company |
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Delaware |
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Checksmart Financial Holdings Corp. |
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Delaware |
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CheckSmart Financial, LLC |
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Delaware |
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Checksmart Money Order Services, Inc. |
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Delaware |
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Community Choice Family Insurance Agency, LLC |
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Delaware |
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CS-Arizona, LLC |
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Delaware |
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Direct Financial Solutions, LLC |
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Delaware |
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Express Payroll Advance of Ohio, Inc. |
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Ohio |
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Fast Cash, Inc. |
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California |
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First Virginia Credit Solutions, LLC |
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Delaware |
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First Virginia Financial Services, LLC |
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Delaware |
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Hoosier Check Cashing of Ohio, Ltd |
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Ohio |
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National Tax Lending, LLC |
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Delaware |
Annex B
Name of Other Guarantor |
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State of Incorporation or |
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Cash Central of Alabama, LLC |
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Alabama |
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Cash Central of Alaska, LLC |
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Alaska |
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Cash Central of Hawaii, LLC |
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Hawaii |
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Cash Central of Idaho, LLC |
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Idaho |
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Cash Central of Kansas, LLC |
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Kansas |
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Cash Central of Minnesota, LLC |
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Minnesota |
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Cash Central of Missouri, LLC |
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Missouri |
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Cash Central of Nevada, LLC |
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Nevada |
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Cash Central of North Dakota, LLC |
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North Dakota |
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Cash Central of South Dakota, LLC |
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South Dakota |
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Cash Central of Utah, LLC |
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Utah |
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Cash Central of Washington, LLC |
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Washington |
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Cash Central of Wisconsin, LLC |
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Wisconsin |
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Cash Central of Wyoming, LLC |
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Wyoming |
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Insight Capital, LLC |
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Alabama |
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Reliant Software, Inc. |
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Utah |
Exhibit 5.2
[Letterhead of Kutak Rock LLP]
June 22, 2012
Community Choice Financial Inc.
7001 Post Road, Suite 200
Dublin, Ohio 43016
Re: Exchanges Notes under the Indenture
Ladies and Gentlemen:
We have acted as special Kansas (State) counsel to Cash Central of Kansas, LLC, a Kansas limited liability company (the Company), a wholly owned subsidiary of Community Choice Financial, Inc. (CCFI), in connection with the Registration Statement on Form S-4 to which this opinion has been filed as an exhibit (the Registration Statement). The Registration Statement relates to the proposed issuance and exchange of up to $395,000,000 aggregate principal amount of 10.75% Senior Secured Notes due 2019 (the Exchange Notes) of CCFI for an equal principal amount of 10.75% Senior Secured Notes due 2019 of CCFI outstanding on the date hereof (the Outstanding Notes). The Outstanding Notes have been, and the Exchange Notes will be, issued pursuant to the Indenture (defined below). The Outstanding Notes are, and the Exchange Notes will be, guaranteed on a joint and several basis by the guarantors party to the Indenture, including the Company. Capitalized terms used herein and not otherwise defined herein have the meanings assigned to such terms in the Indenture.
In connection with the opinions expressed herein, we have examined such documents, records, and matters of law as we have deemed necessary for the purposes of such opinions. We have examined the following:
(1) an executed copy of the Indenture dated as of April 29, 2011 (Original Indenture), by and among CCFI, the subsidiaries of CCFI identified therein, and U.S. Bank National Association, as Trustee and Collateral Agent (U.S. Bank), as amended by that certain First Supplemental Indenture dated as of April 1, 2012 (First Supplemental Indenture), by and among the Company, CCFI, the subsidiaries of CCFI identified therein, and U.S. Bank (collectively, with the Original Indenture, the Indenture);
(2) a form of the Global Note executed by CCFI in favor of CEDE & CO;
(3) a copy of the Articles of Organization of the Company, which has been issued by the Secretary of State for the State and certified to us by an authorized Officer of the Company as being complete and correct and in full force and effect as of the date hereof;
(4) an executed copy of the Amended and Restated Operating Agreement of the Company dated as of April 1, 2012, which has been certified to us by an authorized Officer of the Company as being complete and correct and in full force and effect as of the date hereof;
(5) a copy of a certificate, dated as of June 11, 2012, of the Secretary of State for the State of as to the good standing in the State of the Company as of the applicable date set forth in such certificate together with a bring down certification from CT Corporation dated as of June 22, 2012;
(6) an executed copy of the Joint Unanimous Written Consent of the Managers or Directors of the Subsidiaries of Community Choice Financial Inc. delivered to us in connection with this opinion letter (the Consent); and
(7) the Omnibus Secretarys Certificate of Subsidiary Guarantors of Community Choice Financial Inc. dated April 1, 2012 (Original Certificate), and the Omnibus Secretarys Certificate of Subsidiary Guarantors of Community Choice Financial Inc. dated June 22, 2012, delivered to us in connection with this opinion letter (collectively, the Certificates).
The documents described in items (1) and (2) above are referred to herein collectively as the Documents. The organizational documents described in items (3) and (4) above are referred to herein collectively as the Certified Organizational Documents, and the certificate described in item (5) above is referred to herein as an Official Status Certificate.
Assumptions
In rendering this opinion, we have assumed, without investigation, verification or inquiry that:
(a) with respect to the Original Indenture, First Supplemental Indenture, and Original Certificate, we reviewed the final documents in their entirety as presented for our review and there have been no changes, amendments or supplements thereto (other than the First Supplemental Indenture) or changes in facts or circumstances which relate thereto which would effect the opinions set forth herein;
(b) with respect to each of the parties to the Documents (other than the Company) at the time of execution and delivery of the Documents: (i) such parties are or were duly organized, validly existing and in good standing within its applicable jurisdiction of organization; (ii) such parties have or had the necessary power, authority and right to enter into, execute and deliver, and to perform, observe and be bound by its obligations under the Documents; (iii) the transactions contemplated in the Documents have been duly authorized by such parties; (iv) the Documents have been duly executed, delivered and accepted by such parties; and (v) the Documents constitute the legal, valid and binding obligations of such parties, enforceable against such parties in accordance with their respective terms;
(c) all natural persons who are signatories to the Documents were legally competent at the time of execution; all signatures on the Documents and the other documents reviewed by us are genuine; and all copies of all documents submitted to us are accurate and complete, each such document
that is an original is authentic and each such document that is a copy conforms to an authentic original;
(d) the certifications, representations, warranties and statements of fact of the Company and any other party, as the case may be, set forth in the Documents, Certified Organizational Documents, Official Status Certificate and Certificates are true, correct and accurate;
(e) there have been no undisclosed modifications of any provision of the Documents reviewed by us in connection with the rendering of this opinion and no undisclosed waiver of any right or any remedy contained in such Documents;
(f) the parties to the Documents and their successors and assigns: (i) will act in good faith and in a commercially reasonable manner in the exercise of any rights or enforcement of any remedies under the Documents; (ii) will not engage in any conduct in the exercise of such rights or enforcement of such remedies that would constitute other than fair dealing; and (iii) will comply with all requirements of applicable procedural and substantive law in exercising any rights or enforcing any remedies under the Documents;
(g) the exercise of any rights or enforcement of any remedies under the Documents would not be unconscionable, result in a breach of the peace, or otherwise be contrary to public policy;
(h) there has been no mutual mistake of fact or fraud or duress with respect to the Documents or the transaction that is the subject matter of this opinion;
(i) there exists or existed valid, lawful and enforceable consideration for the parties thereto to enter into the Documents and perform the transactions contemplated thereby;
(j) there are no written or oral terms and conditions agreed to by and between the parties to the Documents, nor course of prior dealings between the parties, that vary or could be deemed to vary the truth, completeness, correctness, validity, or effect of any of the Documents in any material manner; and
(k) the transactions contemplated by the Documents that were consummated prior to or on the date hereof have been consummated prior to or simultaneously with the delivery of this opinion letter.
Furthermore, in connection with the opinion expressed in the first sentence of paragraph (1) below, we have relied solely upon the Certified Organizational Documents and Official Status Certificate, and without independent investigation or verification, as to the factual matters and the legal and factual conclusions set forth therein.
With respect to the opinions below, (i) we express no opinion whatsoever with respect to special, local, state and federal laws and regulations not applicable to business organizations generally, including, without limitation: (a) the statutes administered by, the rules and regulations of, and matters subject to the jurisdiction of the Federal Trade Commission, the Consumer Financial Protection Bureau, the Federal Reserve Board, the United States Department of the Treasury, and any comparable state or local governmental authority or agency; and (b) certain federal, state, and local laws, rules and regulations, and orders of governmental agencies or regulatory bodies governing check cashing services, short-term loan
products (including deferred presentment, payday loans, line of credit loans, and title loans), and prepaid debit cards and related services (collectively, the Special Laws) or the business activities of the Company subject thereto; and (ii) our opinions are limited to only those laws and regulations (excluding the Special Laws) that, in our experience, are normally applicable to transactions of the type contemplated by the Documents.
Opinion
Based upon the foregoing, and subject to the limitations, qualifications, and assumptions set forth herein, we are of the opinion that:
1. The Company is a limited liability company existing and in good standing under the laws of the State as of June 22, 2012. As of the date of the First Supplemental Indenture, the Company had all requisite limited liability company power and authority, and had obtained all requisite organizational, third party and governmental authorizations, consents and approvals under its Certified Organizational Documents to enable it to execute and deliver the First Supplemental Indenture. As of the date hereof, the Company has all requisite limited liability company power and authority, and has obtained all requisite organizational, third party and governmental authorizations, consents and approvals under its Certified Organizational Documents to enable it to perform its guaranty obligations under the Indenture.
2. The Companys guaranty obligations under the Indenture have been authorized by all necessary limited liability company action of the Company under the laws of the State.
Qualifications and Limitations
The opinions set forth above are subject to the following qualifications and limitations:
(a) This opinion is limited by bankruptcy, insolvency, liquidation, reorganization, fraudulent conveyance, recharacterization, suretyship, and similar federal and state laws affecting debtors, creditors rights, and sureties generally and general principles of equity, including without limitation, concepts of materiality, reasonableness, good faith and fair dealing (regardless of whether the application of such principles is considered in a proceeding in equity or at law). In this regard, we call to your attention those provisions of Section 548 of the United States Bankruptcy Code that permit a bankruptcy trustee to avoid any conveyance made by a bankrupt debtor within two (2) years of the commencement of its bankruptcy proceeding where such debtor did not receive reasonably equivalent value in exchange for the conveyance. We express no opinion on (i) whether the Company is receiving any value whatsoever in exchange for its execution of the Indenture (or the Companys guaranty obligations under the Indenture), or (ii) whether the Companys guaranty obligations under the Indenture may or may not be avoided pursuant to 11 U.S.C.A. §548.
(b) For purposes of our opinions above, we have assumed that the Companys obligations under the Documents are, and would be deemed by a court of competent jurisdiction to be, in furtherance of
its corporate purposes and necessary or convenient to the conduct, promotion, or attainment of its business.
(c) Except as set forth above, we express no opinion as to the validity or enforceability of any provision in the Documents. We express no opinion as to any choice of law or choice of judicial forum provisions contained in any of the Documents.
(d) Our opinion as to the enforceability of the Companys guaranty obligations under the Indenture is further qualified to the extent (i) that judicial decisions may permit the introduction of extrinsic evidence to modify or supplement the terms, or to aid in the interpretation, of the Documents; and (ii) that any choice of law provisions in the Documents are determined to be against public policy of the State or if it is determined that there are not sufficient contacts with the State.
(e) We express no opinion as to the enforceability of any provisions of the Documents: (i) relating to self-help; (ii) relating to any agreement to waive a jury trial or to control the venue or jurisdiction of any future litigation between the parties; (iii) relating to waiver of remedies (or the delay or omission of enforcement thereof), disclaimers, liability limitations with respect to third parties, releases or legal or equitable discharge of defenses, liquidated damages or penalties; (iv) the availability of specific performance or other equitable remedies; and (v) the enforceability of rights to indemnity under federal or state securities laws. The provisions regarding the remedies available to U.S. Bank in its capacity as Trustee and Collateral Agent in the case of a default or otherwise, as set forth in the Documents, are subject to any available defenses and to procedural requirements which are not necessarily reflected therein and which may affect and/or restrict the rights and remedies stated to be available to U.S. Bank.
(f) We express no opinion as to the validity or enforceability of any power of attorney purportedly granted by the Documents, whether or not coupled with an interest
(g) The supreme court of the State in Kearny County Bank v. Nunn, 156 Kan. 563, 134 P.2d 635 (1943), and cases following it, such as Home State Bank v. P.B. Hoidale Co., Inc., 239 Kan. 165, 718 P.2d 292 (1986), has adopted a broad rule against splitting causes of action, thereby implementing the legal principle of res judicata, which may have a very limiting effect upon loan documents containing language relating to the various remedies being cumulative, including foreclosure of other liens in other counties or states, and enforcement of an assignment of rents. We expressly disclaim any opinion with respect to the enforceability of various remedies which may otherwise be permissible at law because of the State courts views with respect to these principles.
(h) Except as expressly stated herein, we express no opinion as to the enforceability of any provisions of the Documents: (i) relating to summary remedies without consent, notice or opportunity for hearing or cure; (ii) purporting to establish evidentiary standards; (iii) whereby any party waives statutory, procedural, substantive or constitutional rights (or the delay or omission of enforcement thereof); (iv) which purport to control the venue of any future litigation between the parties; (v) which impose continued liability or that survive following the collection or repayment of the obligations secured by the Documents; (vi) relating to waiver of remedies, including punitive or exemplary damages (or the delay or omission of enforcement thereof), or to disclaimers, liquidated damages, liability limitations with respect to third parties, releases of other legal or
equitable rights, or the discharge of defenses to the extent such provisions may be prohibited by law or deemed contrary to public policy; (vii) which exclude, waive or limit the liability of any party for its own negligence, gross fault, intentional fault, unlawful actions, or for causing physical injury to the other party; (viii) requiring the payment of attorneys fees and expenses in an amount in excess of reasonable attorneys fees and expenses actually incurred or any provision which allows for the collection of both attorneys fees and collection fees; (ix) prohibiting the oral modification of such documents, or the enforceability of any provision in the Documents requiring that waivers of provisions in such documents be in writing; and (x) the enforceability of any provision of the Documents providing for the right to injunctive relief without a showing of irreparable harm or injury.
(i) We express no opinion as to the enforceability of any provisions in any Document which purports to change or waive the right to a jury trial, any rules of evidence, trial rules, statutory or constitutional rights, or waive or fix any statute of limitations or the method or quantum of proof to be applied in litigation or similar proceedings.
(j) We give no opinion as to any consumer transaction or whether or not the Company is a transmitting utility, and, for purposes of this opinion, we assume that the Company is not a transmitting utility.
(k) The opinions expressed herein are limited to the laws of the State, as currently in effect, and are based on the assumption that, notwithstanding the choice of law provisions in the Documents, Kansas law will govern the enforceability of the Indenture against the Company.
(l) We express no opinion whatsoever with respect to the Special Laws and the business activities of the Company subject thereto. In addition, we express no opinion as to: (i) federal or state environmental, pension or benefit, labor, antitrust or unfair competition, or security laws, rules or regulations, or any blue sky laws, rules or regulations, including, without limitation, the Securities Act of 1933, as amended, the Securities Act of 1934, as amended, the Trust Indenture Act of 1939, as amended, and the Investment Company Act of 1940, as amended in connection with the Documents; (ii) the statutes, ordinances, administrative decisions, rules, regulations, or requirements of any county, municipality, subdivision, or local authority of any jurisdiction; and (iii) federal or state tax laws, including, without limitation, franchise, income, transfer, sales, use, or mortgage taxes.
(m) We express no opinion as to any document, instrument, agreement or matter or the content thereof which is incorporated by reference into the Documents.
(n) Whenever the terms to our knowledge or known to us or the like terms appear herein, such terms mean, with respect to any factual matters, to the actual knowledge of the individual lawyers in our firm who have devoted substantial attention to this matter.
(o) Our opinions are limited to those expressly set forth herein, and we express no opinions by implication.
This opinion is rendered as of the date first written above. We assume no obligation to advise you of facts, circumstances, events, or developments which hereafter may be brought to our attention and
which may alter, affect, or modify the opinions expressed herein. This opinion constitutes an expression of our professional legal opinion on the matters set forth herein, and is not a guaranty of any particular result.
The opinions expressed herein are solely for the benefit of the addressee hereof in connection with the transaction contemplated by the Documents. The opinions expressed in this letter may not be relied upon, in whole or part, by the addressee hereof or its counsel for any other purpose, or relied upon by any other person, firm or corporation for any purposes, without prior express written consent.
We hereby consent to the filing of this opinion with the Commission as Exhibit 5.2 to the Registration Statement. We also consent to the reference to our firm under the heading Legal Matters in the Registration Statement.
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Very truly yours, |
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/s/ Kutak Rock LLP |
Exhibit 5.3
Minneapolis · Denver · Sioux Falls |
Amy L. Arndt |
Lindquist & Vennum PLLP |
aarndt@lindquist.com |
100 South Dakota Avenue |
www.lindquist.com |
Sioux Falls, SD 57104 |
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Phone: (605) 978-5200 |
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Fax: (605) 978-5225 |
June 22, 2012
Cash Central of South Dakota, LLC
c/o Jones Day
222 East 41st Street
New York, NY 10017
Re: |
Cash Central of South Dakota, LLC |
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Opinion Letter for Subsidiary Guarantor/South Dakota entity |
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Registration Statement on From S-4 |
Ladies and Gentlemen:
We have acted as counsel to Cash Central of South Dakota, LLC, a South Dakota limited liability company (the Company), as a subsidiary guarantor in connection with the preparation and filing by the Company with the Securities and Exchange Commission of a Registration Statement on Form S-4 (the Registration Statement), under the Securities Act of 1933, as amended (the Act). The Registration Statement relates to the issuance by Community Choice Financial Inc. (CCFI) of up to $395,000,000 aggregate principal amount of its 10.75% Senior Secured Notes due 2019 (the Exchange Notes) in exchange for an equal principal amount of CCFIs outstanding 10.75% Senior Secured Notes due 2019 (the Original Notes). The Original Notes were issued, and the Exchange Notes will be issued, pursuant to the Indenture, dated April 29, 2011, among CCFI, the subsidiary guarantors party thereto and U.S. Bank National Association, as trustee, as supplemented by the First Supplemental Indenture, dated April 1, 2012 (as amended and supplemented, the Indenture). The Exchange Notes will be guaranteed by the subsidiary guarantors party to the Indenture, including the Company, in accordance with the terms of the Indenture (the Exchange Guarantees). This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Act.
We have examined copies of such corporate records of the Company and other certificates and documents of officials of the Company, public officials and others as we have deemed appropriate for purposes of this letter. We have assumed the genuineness of all signatures, the legal capacity of all natural persons, the authenticity of all documents submitted to us as originals, the conformity to authentic original documents of all copies submitted to us as conformed, certified or reproduced copies, that the Exchange Notes when issued, will conform to the specimen thereof we have reviewed and that the Exchange Notes will be duly authenticated in accordance with the terms of the Indenture. We have also assumed the due authorization, execution issuance and delivery of the Indenture and authentication of the Original Securities by the Trustee and that the Indenture is a valid and binding obligation of the Trustee, enforceable
against the Trustee in accordance with its terms. As to various questions of fact relevant to this letter, we have relied, without independent investigation, upon certificates of public officials and certificates of officers of the Company, all of which we assume to be true, correct and complete, which include the following: (1) a Certificate of Existence of Limited Liability issued by the South Dakota Secretary of State dated June 12, 2012 and a bring-down certificate dated June 22, 2012, in each case to the effect that Cash Central of South Dakota, LLC legally exists and is in good standing under the laws of State of South Dakota as of the date thereof, (2) Certificate of Organization dated June 28, 2005 and corresponding Articles of Organization of Cash Central of South Dakota, LLC dated June 24, 2005 and all Amendments thereto, dated May 24, 2007 and April 23, 2012, respectively, (3) Amended and Restated Operating Agreement of Cash Central of South Dakota, LLC dated April 1, 2012 and (4) Action of Governing Body Taken by Unanimous Written Consent dated April 1, 2012 and June , 2012.
Based upon the foregoing and subject to the assumptions, exceptions, qualifications and limitations set forth herein, we are of the opinion that:
1. Cash Central of South Dakota, LLC is a limited liability company existing and in good standing under the laws of the State of South Dakota.
2. As of the date of the Indenture, the Company had the limited liability power to enter into the Indenture and, as of the date hereof, the Company has the limited liability company power to perform its respective obligations thereunder.
3. The Company has authorized the execution, delivery and performance of the obligations set forth in such Indenture, including the issuance of the Exchange Guarantee, by all necessary limited liability company action.
The opinions and other matters in this letter are qualified in their entirety and subject to the following:
(a). We express no opinion as to the laws of any jurisdiction other than the laws of the State of South Dakota.
(b). The matters expressed in this letter are subject to and qualified and limited by (i) applicable bankruptcy, insolvency, fraudulent transfer and conveyance, reorganization, moratorium and similar laws affecting creditors rights and remedies generally; (ii) general principles of equity, including without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief (regardless of whether considered in a proceeding in equity or at law); and (iii) securities laws and public policy underlying such laws with respect to rights to indemnification and contribution.
(c). This opinion letter is limited to the matters expressly stated herein and no opinion is to be inferred or implied beyond the opinion expressly set forth herein. We undertake no, and hereby disclaim any, obligation to make any inquiry after the date hereof or to advise you of any changes in any matter set forth herein, whether based on a change in the law, a change in any fact relating to the Company of any other person or any other circumstance.
(d). We express no opinion on behalf of any other Subsidiary Guarantor under the Indenture and pursuant to the Exchange Offer.
We hereby consent to the filing of this opinion as Exhibit 5.3 to the Registration Statement and to the use of our name in the Prospectus forming a part of the Registration Statement under the caption Legal Matters. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Act and the rules and regulations thereunder.
Sincerely,
LINDQUIST & VENNUM PLLP |
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/s/ Amy L. Arndt |
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Amy L. Arndt |
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ALA/crr |
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Exhibit 5.4
[Letterhead of McCorriston Miller Mukai MacKinnon LLP]
June 22, 2012
Community Choice Financial Inc.
7001 Post Road, Suite 200
Dublin, Ohio 43016
Re: Community Choice Financial Inc. Exchange Offer
Ladies and Gentlemen:
We have acted as transaction counsel to Cash Central of Hawaii, LLC, a Hawaii limited liability company (the Company), in connection with the Registration Statement on Form S-4 to which this opinion has been filed as an exhibit (the Registration Statement). The Registration Statement relates to the proposed issuance and exchange of up to $395,000,000 aggregate principal amount of 10.75% Senior Secured Notes due 2019 (the Exchange Notes) of Community Choice Financial Inc., an Ohio corporation and ultimate parent entity of the Company (CCFI), for an equal principal amount of 10.75% Senior Secured Notes due 2019 of CCFI outstanding on the date hereof (the Outstanding Notes and, together with the Exchange Notes, the Notes). As set forth in the Registration Statement, the Outstanding Notes have been, and the Exchange Notes will be, issued pursuant to the Indenture referenced in paragraph (iii) below, and the Outstanding Notes are, and the Exchange Notes will be, guaranteed on a joint and several basis by the Subsidiary Guarantors (as such term is defined in the Indenture). This opinion is being furnished to you at the request of the Company pursuant to its obligations under the Indenture.
As such transaction counsel, and in connection with rendering this legal opinion, we have reviewed and relied upon originals or copies, certified or otherwise identified to our satisfaction as being true copies, of the following:
(i) The Articles of Organization for Limited Liability Company of the Company filed with the Director of the Department of Commerce and Consumer Affairs of the State of Hawaii on September 9, 2005, as amended by the Articles of Amendment to Change Limited Liability Company Name for the Company filed with the Director of the Department of Commerce and Consumer Affairs of the State of Hawaii on May 25, 2007 (as so amended, the Articles of Organization).
(ii) The Amended and Restated Operating Agreement of Cash Central of Hawaii, LLC dated as of June 19, 2012 (the Operating Agreement) by the sole Member of the Company.
(iii) The Indenture dated as of April 29, 2011 by and among Community Choice Financial Inc., the Subsidiary Guarantors party thereto, and U.S. Bank National Association, as Trustee and Collateral Agent, with respect to the Notes (the Indenture).
(iv) The First Supplemental Indenture dated as of April 1, 2012 by and among Community Choice Financial Inc., the several direct and indirect subsidiaries of CCFI party thereto, including the Company, and U.S. Bank National Association, as Trustee under the Indenture, with respect to the Notes (the First Supplemental Indenture).
(v) A Certificate of the Director of the Department of Commerce and Consumer Affairs of the State of Hawaii dated June 20, 2012 as to the valid existence and good standing of the Company in the State of Hawaii (the Good Standing Certificate).
(vi) An Action by Governing Body Taken by Unanimous Written Consent dated April 1, 2012 with respect to the Company, with attached Resolutions of the Governing Body, authorizing and approving the execution, delivery, and performance of the First Supplemental Indenture.
(vii) An Action by Governing Body Taken by Unanimous Written Consent dated June 22, 2012 with respect to the Company, with attached Resolutions of the Governing Body, ratifying and confirming the execution, delivery, and performance of the Indenture, as Supplementend by the First Supplemental Indenture.
(viii) A Secretarys Certificate of the Company of even date herewith with respect to certain matters with respect to the Company (the Secretarys Certificate).
(ix) A Supplemental Secretarys Certificate of even date herewith with respect to certain other matters with respect to the Company (the Supplemental Secretarys Certificate).
In our review of the documents described above, we have assumed without independent investigation, analysis, or verification the genuineness of all signatures, the legal competence and capacity of all individual signatories, the completeness of all Company documents and other records provided to us for review, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as copies, and the authenticity of the originals of such latter documents. We have also relied upon and assumed the accuracy of all information, statements, representations, agreements, and covenants made (a) in the Registration Statement, (b) by the Company, its Managers, and its Members in the Operating Agreement, (c) by all parties to the Indenture and the First Supplemental Indenture (including, without limitation, the Company), (d) by the person signing the Secretarys Certificate and the Supplemental Secretarys Certificate, and (e) in certificates of public officials, with respect to the factual circumstances underlying the legal conclusions set forth herein. We have not attempted to verify independently such information, statements, representations, agreements, or covenants.
For purposes of this opinion, we have assumed that (a) each of the Managers and the sole Member of the Company have full right, power, capacity, and authority to execute and deliver the Operating Agreement, (b) that the Operating Agreement is enforceable against the Company, the Managers of the Company, and the sole Member of the Company, (c) the Secretary of the Company has full right, power, capacity, and authority and the requisite knowledge and information to make, execute, and deliver the Secretarys Certificate and the Supplemental Secretarys Certificate, (d) that each of the parties to the Indenture and the First Supplemental Indenture, other than the Company has full right, power, capacity, and authority to execute, deliver, and perform the Indenture and the First Supplemental Indenture, (e) each of the Indenture and the First Supplemental Indenture has been duly authorized, executed and delivered by each of the parties thereto other than the Company, and (f) each of the Indenture and the First Supplemental Indenture is enforceable against each of the parties thereto (including, without limitation, the Company) in accordance with its terms.
We have assumed that the Operating Agreement contains an accurate and complete description of all facts and circumstances relevant to the activities of the Company and that the activities of the Company will be conducted in accordance with the terms of the Operating Agreement. Our opinions below are limited to the matters expressly set forth in this opinion letter, and no opinion is to be implied or may be inferred beyond the matters expressly so stated. We are expressing no opinion herein with respect to compliance by the Company with federal or state securities laws or antifraud laws. We express no opinion as to whether the Managers of the Company have complied with their fiduciary duties in connection with their approval of the Indenture and the First Supplemental Indenture.
For purposes of our opinions expressed in paragraph 1 below as to the valid existence and good standing of the Company in the State of Hawaii, we have relied solely on the Good Standing Certificate, and such opinion is limited accordingly, and rendered as of the date of such Good Standing Certificate.
We are opining herein solely as to the federal laws of the United States and the laws of the State of Hawaii, including the Hawaii Uniform Limited Liability Company Act. For purposes of our opinions expressed below, we have assumed that the facts and law governing the future performance by the Company and the Managers and the sole Member of the Company of their respective obligations under the Indenture and the First Supplemental Indenture will be identical to the facts and law governing their respective performances on the date of this opinion.
We understand that you are relying on the opinion of Jones Day with respect to all matters relating to the authorization and issuance of the Exchange Notes by CCFI, the enforceability of each of the Indenture and the First Supplemental Indenture (including, without limitation, with respect to the Company), and the other matters set forth therein, and we express no view or opinion as to any of the matters set forth in the Jones Day opinion.
Based upon and subject to the foregoing, and subject also to the assumptions, exceptions, limitations, comments, and qualifications set forth in this opinion letter, and having considered such questions of law as we have deemed necessary to form a basis for the opinions expressed below, we are of the opinion that:
1. The Company is validly existing and in good standing as a limited liability company under the laws of the State of Hawaii.
2. As of the date of the First Supplemental Indenture the Company had the requisite limited liability company power to enter into the First Supplemental Indenture, and as of the date of this opinion the Company has the requisite limited liability company power to perform its obligations under the Indenture, as supplemented by the First Supplemental Indenture.
3. The execution and delivery of the First Supplemental Indenture by the Company and the performance of its obligations under the Indenture, as supplemented by the First Supplemental Indenture, have been duly authorized by all requisite limited liability company action on behalf of the Company.
This opinion is provided to CCFI as a legal opinion only, and not as a guaranty or warranty of the matters discussed herein. This opinion is based upon currently existing statutes, rules, regulations and judicial decisions and is rendered as of the date hereof, and we disclaim any obligation to advise you of any change in any of the foregoing sources of law or subsequent developments in law or changes in facts and circumstances which might affect any matters or opinions set forth herein. We direct your attention to the fact that our engagement by the Company is limited solely to representation of the Company for the purpose of rendering a legal opinion in connection with CCFIs issuance of the Exchange Notes and the transactions contemplated thereby, and that there may exist many items concerning the transactions contemplated by the Indenture, the First Supplemental Indenture, and the transaction documents entered into in connection with the issuance of the Exchange Notes, and the business and legal affairs of the Company generally, for which we have not been consulted. For purposes of rendering the opinions expressed herein, we have relied solely upon the limited examinations and inquiries hereinabove described and have made no independent review of any of the Companys operations, transactions, records, or contractual arrangements, nor any other inquiries, investigations, or review of any public or other records. We hereby advise you that our engagement with respect to the foregoing matters has concluded with the issuance of this opinion letter.
This opinion letter shall be interpreted in accordance with the Legal Opinion Principles issued by the Committee on Legal Opinions of the American Bar Associations Section of Business Law as published in 57 Bus. Law. 875, 882 (Feb. 2002). We call to your attention the fact that under various reports published by committees of the Hawaii State Bar Association certain assumptions, exceptions, limitations, and qualifications are implicit in the legal opinions rendered by lawyers practicing in the State of Hawaii. Although we have expressly set forth in
this opinion letter certain assumptions, exceptions, limitations, and qualifications, we are not limiting or omitting any others set forth in the various reports of the committees of the Hawaii State Bar Association or otherwise deemed standard practice for attorneys in the State of Hawaii.
This opinion is rendered only to CCFI and is solely for its benefit in connection with the issuance by CCFI of the Exchange Notes, and, as an accommodation to CCFI and for its benefit, this opinion may be relied upon by Jones Day, legal counsel to CCFI, to the limited extent necessary to allow Jones Day to render to CCFI its principal legal opinion in connection with the overall issuance of the Exchange Notes and the related transactions contemplated thereby. This opinion may not be relied upon by CCFI or Jones Day for any other purpose, nor may this opinion be relied upon by or furnished, made available, disclosed, circulated, or quoted to any other person or entity, except as set forth in the final paragraph of this opinion letter, without our prior written consent.
We hereby consent to the filing of this opinion letter as Exhibit 5.4 to the Registration Statement. We also consent to the use of our name under the caption Legal Matters in the Registration Statement. In giving such consent, we do not thereby admit that we are included in the category of persons whose consent is required under Section 7 of the Securities Act of 1933 or the rules and regulations of the Securities and Exchange Commission promulgated thereunder.
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Respectfully submitted, |
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/s/ MCCORRISTON MILLER MUKAI MACKINNON LLP |
Exhibit 5.5
June 22, 2012
[Letterhead of Serkland Law Firm]
Community Choice Financial Inc.
7001 Post Road, Suite 200
Dublin, Ohio 43016
Re: Cash Central of North Dakota, LLC
Opinion Letter for Subsidiary Guarantor/North Dakota entity
Registration Statement on From S-4
Ladies and Gentlemen:
We have acted as counsel to Cash Central of North Dakota, LLC, a North Dakota limited liability company (the Company), as a subsidiary guarantor in connection with the preparation and filing by the Company with the Securities and Exchange Commission of a Registration Statement on Form S-4 (the Registration Statement), under the Securities Act of 1933, as amended (the Act). The Registration Statement relates to the issuance by Community Choice Financial Inc. (CCFI) of up to $395,000,000 aggregate principal amount of its 10.75% Senior Secured Notes due 2019 (the Exchange Notes) in exchange for an equal principal amount of CCFIs outstanding 10.75% Senior Secured Notes due 2019 (the Original Notes). The Original Notes were issued, and the Exchange Notes will be issued, pursuant to the Indenture, dated April 29, 2011, among CCFI, the subsidiary guarantors party thereto and U.S. Bank National Association, as trustee, as supplemented by the First Supplemental Indenture, dated April 1, 2012 (as amended and supplemented, the Indenture). The Exchange Notes will be guaranteed by the subsidiary guarantors party to the Indenture, including the Company, in accordance with the terms of the Indenture (the Exchange Guarantees). This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Act.
We have examined copies of such corporate records of the Company and other certificates and documents of officials of the Company, public officials and others as we have deemed appropriate for purposes of this letter. We have assumed the genuineness of all signatures, the legal capacity of all natural persons, the authenticity of all documents submitted to us as originals, the conformity to authentic original documents of all copies submitted to us as conformed, certified or reproduced copies, that the Exchange Notes when issued, will conform to
the specimen thereof we have reviewed and that the Exchange Notes will be duly authenticated in accordance with the terms of the Indenture. We have also assumed the due authorization, execution issuance and delivery of the Indenture and authentication of the Original Securities by the Trustee and that the Indenture is a valid and binding obligation of the Trustee, enforceable against the Trustee in accordance with its terms. As to various questions of fact relevant to this letter, we have relied, without independent investigation, upon certificates of public officials and certificates of officers of the Company, all of which we assume to be true, correct and complete, which include the following: (1) a Certificate of Existence of Limited Liability issued by the North Dakota Secretary of State dated June 12, 2012 and a bring-down certificate dated June 22, 2012, in each case to the effect that Cash Central of North Dakota, LLC legally exists and is in good standing under the laws of State of North Dakota as of the date thereof, (2) Certificate of Organization dated June 28, 2005 and corresponding Articles of Organization of Cash Central of North Dakota, LLC dated June 24, 2005 and all Amendments thereto, dated May 24, 2007 and April 23, 2012, respectively, (3) Amended and Restated Operating Agreement of Cash Central of North Dakota, LLC dated April 1, 2012 and (4) Action of Governing Body Taken by Unanimous Written Consent dated April 1, 2012 and June 22, 2012.
Based upon the foregoing and subject to the assumptions, exceptions, qualifications and limitations set forth herein, we are of the opinion that:
1. Cash Central of North Dakota, LLC is a limited liability company existing and in good standing under the laws of the State of North Dakota.
2. As of the date of the Indenture, the Company had the limited liability company power to enter into the Indenture and, as of the date hereof, the Company has the limited liability company power to perform its respective obligations thereunder.
3. The Company has authorized the execution, delivery and performance of the obligations set forth in such Indenture, including the issuance of the Exchange Guarantee, by all necessary limited liability company action.
The opinions and other matters in this letter are qualified in their entirety and subject to the following:
(a). We express no opinion as to the laws of any jurisdiction other than the laws of the State of North Dakota.
(b). The matters expressed in this letter are subject to and qualified and limited by (i) applicable bankruptcy, insolvency, fraudulent transfer and conveyance, reorganization, moratorium and similar laws affecting creditors rights and remedies generally; (ii) general principles of equity, including without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief (regardless of whether considered in a proceeding in equity or at law); and (iii) securities laws and public policy underlying such laws with respect to rights to indemnification and contribution.
(c). This opinion letter is limited to the matters expressly stated herein and no opinion is to be inferred or implied beyond the opinion expressly set forth herein. We undertake no, and hereby disclaim any, obligation to make any inquiry after the date hereof or to advise you of any changes in any matter set forth herein, whether based on a change in the law, a change in any fact relating to the Company of any other person or any other circumstance.
(d). We express no opinion on behalf of any other Subsidiary Guarantor under the Indenture and pursuant to the Exchange Offer.
We hereby consent to the filing of this opinion as Exhibit 5.5 to the Registration Statement and to the use of our name in the Prospectus forming a part of the Registration Statement under the caption Legal Matters. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Act and the rules and regulations thereunder.
Very truly yours, |
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SERKLAND LAW FIRM |
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/s/ Timothy G. Richard |
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Timothy G. Richard |
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TGR/tal |
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Exhibit 5.6
Sirote & Permutt, PC
2311 Highland Avenue South
Birmingham, AL 35205-2972
June 22, 2012
Cash Central of Alabama, LLC
84 East 2400 North
North Logan, UT 84341
Re: Community Choice Financial Inc.
Registration Statement on Form S-4
Ladies and Gentlemen:
We have acted as special Alabama counsel to Cash Central of Alabama, LLC, an Alabama limited liability company (the Alabama Guarantor), a wholly-owned subsidiary of Community Choice Financial Inc., an Ohio corporation (the Company), in connection with the filing by the Company of its registration statement on Form S-4 with the Securities and Exchange Commission (the Commission) on June 22, 2012 (as amended or supplemented, the Registration Statement), relating to the proposed issuance and exchange (the Exchange Offer) of up to $395,000,000 aggregate principal amount of 10.75% Senior Secured Notes due 2019 of the Company (the Exchange Notes) for an equal principal amount of 10.75% Senior Secured Notes due 2019 of the Company outstanding on the date hereof (the Original Notes). The Original Notes were issued, and the Exchange Notes will be issued, pursuant to the terms and conditions of, and in the form set forth in, that certain Indenture dated as of April 29, 2011, as supplemented by that certain First Supplemental Indenture, dated as of April 1, 2012 (as amended and supplemented, the Indenture), by and among the Company, the other subsidiaries of the Company that are guaranteeing the Exchange Notes (collectively, and including the Alabama Guarantor, the Guarantors), and U.S. Bank National Association, as trustee and collateral agent. The Exchange Notes will be guaranteed by the Guarantor in accordance with the terms of the Indenture (the Guarantees). No opinion is expressed herein as to any matter pertaining to the contents of the Registration Statement or related prospectus, other than as expressly stated herein with respect to the Guarantee by the Alabama Guarantor.
In connection with this opinion, we have examined originals or copies of the Indenture and such documents, corporate records, instruments, certificates of public officials and of the Alabama Guarantor, made such inquiries of officials of the Alabama Guarantor, and considered such questions of law as we have deemed necessary for the purpose of rendering the opinions set forth herein. With your consent, we have relied upon certificates and other assurances of officers of the Alabama
Birmingham Huntsville Mobile Pensacola
sirote.com
Guarantor, the other Guarantors, the Company, and others as to factual matters without having independently verified such factual matters.
In such examination, we have assumed the genuineness of all signatures and the authenticity of all items submitted to us as originals and the conformity with originals of all items submitted to us as copies. In making our examination of documents executed by entities for the purposes of the opinions expressed hereby we have assumed: (i) other than with respect to the Alabama Guarantor, that each other entity is validly existing and in good standing (or its equivalent) as a corporation, limited liability company or other applicable legal entity under the laws of its jurisdiction of organization and has the requisite power and authority to execute and deliver, and to perform and observe the provisions of such documents to which it is a party and to carry out and consummate all transactions contemplated by such documents, and the due authorization by each such entity of all requisite action; and (ii) the due execution and delivery of such documents by each such entity, and that such documents constitute the legal, valid and binding obligations of each such entity, enforceable in accordance with their respective terms. We also have assumed that all natural persons who are signatories to such documents were legally competent at the time of their execution thereof.
We express no opinion as to the applicability of, compliance with or effect of, the law of any jurisdiction other than the substantive laws (excluding its applicable choice of law rules) of the State of Alabama. None of the opinions or other advice contained in this letter considers or covers any federal, state or foreign securities (or blue sky) laws or regulations. This opinion is limited to the laws, including the rules and regulations, as in effect on the date of this opinion, which laws are subject to change with possible retroactive effect.
Based upon and subject to the limitations, assumptions and qualifications set forth herein, we are of the opinion that:
1. The Alabama Guarantor is a limited liability company validly existing under the laws of the State of Alabama and is presently subsisting under the laws of such jurisdiction.
2. The Alabama Guarantor has the limited liability company power and authority to enter into and perform its obligations under the Indenture.
3. The execution, delivery and performance of the Indenture by the Alabama Guarantor (including the issuance of the Guarantee by the Alabama Guarantor with respect to the Exchange Notes) have been duly authorized by all necessary limited liability company action on the part of the Alabama Guarantor.
4. The Indenture has been duly executed and delivered by the Alabama Guarantor.
These opinions are given as of the date hereof, they are intended to apply only to those facts and circumstances that exist as of the date hereof, and we assume no obligation or responsibility to update or supplement these opinions to reflect any facts or circumstances that may hereafter come to our attention or any changes in laws that may hereafter occur, or to inform the addressee of any change in circumstances occurring after the date hereof that would alter the opinions rendered herein. Our opinion in paragraph 1 is based solely upon our review of certificates from the Secretary of State of the State of Alabama and the Alabama Department of Revenue.
This opinion is limited to the matters set forth herein, and no opinion may be inferred or implied beyond the matters expressly contained herein. This opinion is being provided solely for the benefit of the addressee hereof and may not be relied upon by any other persons or entities or used for any other purpose (nor may this letter or any copies hereof be furnished to any third party, filed with a governmental agency, quoted, cited, or otherwise referred to) except as expressly set forth below.
We hereby consent to the filing of this opinion as an Exhibit to the Registration Statement and further consent to the reference to our name under the caption Legal Matters in the Prospectus which is a part of the Registration Statement and any supplement or supplements to such prospectus. In giving this consent, we do not admit that we are experts within the meaning of Section 11 of the Securities Act or within the category of persons whose consent is required under Section 7 of the Securities Act.
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Very truly yours, |
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SIROTE & PERMUTT, P.C. |
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/s/ Sirote & Permutt, P.C. |
Exhibit 5.7
[Letterhead of Stoel Rives LLP]
June 22, 2012
Community Choice Financial Inc. |
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7001 Post Road, Suite 200 |
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Dublin, Ohio 43016 |
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Re: Registration Statement of Community Choice Financial Inc.
Ladies and Gentlemen:
Reference is made to the Registration Statement (the Registration Statement) on Form S-4 filed by Community Choice Financial Inc., an Ohio corporation (the Company), with the Securities and Exchange Commission (the Commission) on June 22, 2012 in connection with the registration by the Company under the Securities Act of 1933, as amended (the Securities Act), of the offer and exchange by the Company (the Exchange Offer) of up to $395,000,000 aggregate principal amount of the Companys 10.75% Senior Secured Notes due 2019 to be registered under the Securities Act (the New Notes), which New Notes will be guaranteed by each of the guarantors named in Schedule I hereto (the Note Guarantors), for a like principal amount of the Companys outstanding 10.75% Senior Secured Notes due 2019 which have not been registered under the Securities Act (the Old Notes), which Old Notes have also been guaranteed by the Note Guarantors.
In connection with the preparation of this opinion letter and as the basis for the opinions (the Opinions) set forth below, we have made such investigations of the laws of the State of Alaska, the laws of the State of Idaho, the laws of the State of Minnesota, the laws of the State of Nevada, the laws of the State of Utah, the laws of the State of Washington and the laws of the State of Wyoming as we have deemed necessary, and we have examined such documents and records as we have deemed necessary, including the following:
(a) a photocopy of an executed counterpart of the Indenture, dated as of April 29, 2011, among the Company, as issuer, subsidiary guarantors party thereto, including the Note Guarantors, and U.S. Bank National Association, as trustee and collateral agent (the Indenture, which term includes the First Supplemental Indenture, dated as of April 1, 2012 (the First Supplemental Indenture));
(b) the forms of the Old Notes and of the New Notes;
(c) a photocopy of the articles of incorporation and bylaws of Reliant Software, Inc. (Reliant), certified to our satisfaction;
(d) a photocopy of the certificate of formation or articles of organization, as applicable, and the limited liability company agreement or operating agreement, as applicable, of Cash Central of Alaska, LLC (Cash Alaska), Cash Central of Idaho, LLC (Cash Idaho), Cash Central of Minnesota, LLC (Cash Minnesota), Cash Central of Nevada, LLC (Cash Nevada), Cash Central of Utah, LLC (Cash Utah), Cash Central of Washington, LLC (Cash Washington) and Cash Central of Wyoming, LLC (Cash Wyoming), each with any amendments thereto and each certified to our satisfaction (as applicable, the Organizational Documents);
(e) (1) a certificate of compliance as to Cash Alaska, issued by the Secretary of State of the State of Alaska; (2) a certificate of existence as to Cash Idaho, issued by the Secretary of State of the State of Idaho; (3) a certificate of good standing as to Cash Minnesota, issued by the Secretary of State of the State of Minnesota; (4) a certificate of existence as to Cash Nevada, issued by the Secretary of State of the State of Nevada; (5) certificates of existence as to each of Reliant and Cash Utah, issued by the Secretary of State of the State of Utah; (6) a certificate of existence as to Cash Washington, issued by the Secretary of State of the State of Washington; and (7) a good standing certificate as to Cash Wyoming, issued by the Secretary of State of the State of Wyoming; and
(f) the certificate of an officer of Reliant, Cash Alaska, Cash Idaho, Cash Minnesota, Cash Nevada, Cash Utah, Cash Washington and Cash Wyoming, dated as of the date of this opinion letter, certifying to the matters specified therein and as to the resolutions adopted by the board of directors, managers, shareholders or members, as applicable, of such Note Guarantors authorizing the transactions contemplated by the Indenture.
For purposes of this opinion letter, the following terms and phrases have the following meanings:
(i) laws of the State of Alaska or Alaska law means and is limited to the present published statutes of the State of Alaska, the applicable provisions of the Alaska constitution, the administrative rules and regulations of agencies of the State of Alaska as contained in the present published Alaska Administrative Code, and the present published decisions of the courts of the State of Alaska that in each instance are normally applicable to transactions of the type contemplated by the Exchange Offer.
(ii) laws of the State of Idaho or Idaho law means and is limited to the present published statutes of the State of Idaho, the applicable provisions of the Idaho constitution, the administrative rules and regulations of agencies of the State of Idaho as contained in the present published Idaho Administrative Code, and the present published decisions of the courts of the State of Idaho that in each instance are normally applicable to transactions of the type contemplated by the Exchange Offer.
(iii) laws of the State of Minnesota or Minnesota law means and is limited to the present published statutes of the State of Minnesota, the applicable provisions of the Minnesota constitution, the administrative rules and regulations of agencies of the State of Minnesota as contained in the present published Minnesota Rules, and the present published decisions of the courts of the State of Minnesota that in each instance are normally applicable to transactions of the type contemplated by the Exchange Offer.
(iv) laws of the State of Nevada or Nevada law means and is limited to the present published statutes of the State of Nevada, the applicable provisions of the Nevada constitution, the administrative rules and regulations of agencies of the State of Nevada as contained in the present published Nevada Administrative Code, and the present published decisions of the courts of the State of Nevada that in each instance are normally applicable to transactions of the type contemplated by the Exchange Offer.
(v) laws of the State of Utah or Utah law means and is limited to the present published statutes of the State of Utah, the applicable provisions of the Utah constitution, the administrative rules and regulations of agencies of the State of Utah as contained in the present published Utah Administrative Code, and the present published decisions of the courts of the State of Utah that in each instance are normally applicable to transactions of the type contemplated by the Exchange Offer.
(vi) laws of the State of Washington or Washington law means and is limited to the present published statutes of the State of Washington, the applicable provisions of the Washington constitution, the administrative rules and regulations of agencies of the State of Washington as contained in the present published Washington Administrative Code, and the present published decisions of the courts of the State of Washington that in each instance are normally applicable to transactions of the type contemplated by the Exchange Offer.
(vii) laws of the State of Wyoming or Wyoming law means and is limited to the present published statutes of the State of Wyoming, the applicable provisions of the Wyoming constitution, the administrative rules and regulations of agencies of the State of Wyoming as contained in the present published Wyoming Administrative Code, and the present published decisions of the courts of the State of Wyoming that in each instance are normally applicable to transactions of the type contemplated by the Exchange Offer.
Based upon the examination described above, subject to the assumptions, qualifications, limitations and exceptions set forth in this opinion letter and under current interpretations of the laws of the State of Alaska, the laws of the State of Idaho, the laws of the State of Minnesota, the laws of the State of Nevada, the laws of the State of Utah, the laws of the State of Washington and the laws of the State of Wyoming, we are of the opinion that:
1. Reliant is validly existing as a corporation in good standing under the laws of the State of Utah.
2. Cash Alaska is validly existing as a limited liability company in good standing under the laws of the State of Alaska.
3. Cash Idaho is validly existing as a limited liability company under the laws of the State of Idaho.
4. Cash Minnesota is validly existing as a limited liability company in good standing under the laws of the State of Minnesota.
5. Cash Nevada is validly existing as a limited liability company in good standing under the laws of the State of Nevada.
6. Cash Utah is validly existing as a limited liability company in good standing under the laws of the State of Utah.
7. Cash Washington is validly existing as a limited liability company under the laws of the State of Washington.
8. Cash Wyoming is validly existing as a limited liability company in good standing under the laws of the State of Wyoming.
9. As of the date of the First Supplemental Indenture, Reliant had the requisite corporate power and the requisite corporate authority to enter into the First Supplemental Indenture, and as of the date hereof, Reliant has the requisite corporate power and the requisite corporate authority to perform its obligations under the Indenture (including the guarantee of the New Notes pursuant to the Indenture).
10. As of the date of the First Supplemental Indenture, Cash Alaska had the requisite limited liability company power and the requisite limited liability company authority to enter into the First Supplemental Indenture, and as of the date hereof, Cash Alaska has the requisite limited liability company power and the requisite limited liability company authority to perform its obligations under the Indenture (including the guarantee of the New Notes pursuant to the Indenture).
11. As of the date of the First Supplemental Indenture, Cash Idaho had the requisite limited liability company power and the requisite limited liability company authority to enter into the First Supplemental Indenture, and as of the date hereof, Cash Idaho has the requisite
limited liability company power and the requisite limited liability company authority to perform its obligations under the Indenture (including the guarantee of the New Notes pursuant to the Indenture).
12. As of the date of the First Supplemental Indenture, Cash Minnesota had the requisite limited liability company power and the requisite limited liability company authority to enter into the First Supplemental Indenture, and as of the date hereof, Cash Minnesota has the requisite limited liability company power and the requisite limited liability company authority to perform its obligations under the Indenture (including the guarantee of the New Notes pursuant to the Indenture).
13. As of the date of the First Supplemental Indenture, Cash Nevada had the requisite limited liability company power and the requisite limited liability company authority to enter into the First Supplemental Indenture, and as of the date hereof, Cash Nevada has the requisite limited liability company power and the requisite limited liability company authority to perform its obligations under the Indenture (including the guarantee of the New Notes pursuant to the Indenture).
14. As of the date of the First Supplemental Indenture, Cash Utah had the requisite limited liability company power and the requisite limited liability company authority to enter into the First Supplemental Indenture, and as of the date hereof, Cash Utah has the requisite limited liability company power and the requisite limited liability company authority to perform its obligations under the Indenture (including the guarantee of the New Notes pursuant to the Indenture).
15. As of the date of the First Supplemental Indenture, Cash Washington had the requisite limited liability company power and the requisite limited liability company authority to enter into the First Supplemental Indenture, and as of the date hereof, Cash Washington has the requisite limited liability company power and the requisite limited liability company authority to perform its obligations under the Indenture (including the guarantee of the New Notes pursuant to the Indenture).
16. As of the date of the First Supplemental Indenture, Cash Wyoming had the requisite limited liability company power and the requisite limited liability company authority to enter into the First Supplemental Indenture, and as of the date hereof, Cash Wyoming has the requisite limited liability company power and the requisite limited liability company authority to perform its obligations under the Indenture (including the guarantee of the New Notes pursuant to the Indenture).
17. The First Supplemental Indenture has been duly authorized, executed and delivered by Reliant, Cash Alaska, Cash Idaho, Cash Minnesota, Cash Nevada, Cash Utah, Cash Washington and Cash Wyoming.
The Opinions are predicated upon and are limited by the matters set forth in the Opinions and, with your permission, are further subject to the qualifications, exceptions, assumptions and limitations set forth below (with the understanding that we have not undertaken any independent investigation to verify the accuracy or completeness of any such qualifications, exceptions, assumptions or limitations):
A. The Opinions are limited to the laws of the State of Alaska, the laws of the State of Idaho, the laws of the State of Minnesota, the laws of the State of Nevada, the laws of the State of Utah, the laws of the State of Washington and the laws of the State of Wyoming. We express no opinion as to local laws or the laws of any other state or country.
B. In rendering the Opinions, we have assumed that each Note Guarantor has complied with the provisions of the securities laws, blue sky laws, securities regulations, and securities rules of any applicable state and the United States of America.
C. The Opinions that relate to specific agreements or documents, relate only to the specified agreements or documents and do not extend to documents, agreements or instruments referred to in such agreements or documents (even if incorporated therein by reference) or to any exhibits, annexes or schedules that are not expressly identified in such Opinion.
D. In rendering the Opinions, we have assumed (i) the genuineness of all signatures, (ii) the capacity of all individuals executing documents and the authority of such individuals executing documents (other than officers of Reliant, Cash Alaska, Cash Idaho, Cash Minnesota, Cash Nevada, Cash Utah, Cash Washington or Cash Wyoming), (iii) the conformity to the original documents of all photocopies or facsimile copies submitted to us, whether certified or not, (iv) the authenticity of all documents submitted to us as originals, (v) the enforceability, completeness and accuracy of the Organizational Documents, and (vi) the conformity, in all material respects, of all copies of the Indenture to the copy of the Indenture examined by us.
E. The Opinions are limited to those expressly stated, and no other opinions may be implied or inferred.
F. We assume no obligation to update or supplement the Opinions to reflect any facts or circumstances that may come to our attention after the effectiveness of the Registration Statement or any change in the law that may occur after the date of the effectiveness of the Registration Statement.
G. We have assumed that all material factual matters contained in the Indenture, including without limitation any representations and warranties, are true, accurate and complete as set forth therein, to the extent such factual matters bear on the Opinions.
H. Under the laws of the State of Nevada, the interpretation of any agreement is based upon the intent of the parties and evidence extrinsic to an agreement may be introduced to ascertain the intent of the parties regardless of the presence or absence of ambiguity, and regardless of a statement by the parties that their written agreement constitutes an integral expression of their agreement and, as such, the Opinions with respect to Cash Nevada are expressly qualified to the extent that a determination of the intent of the parties is based on evidence other than the words used in the Indenture (and in the guarantee of the New Notes pursuant to the Indenture), if such would lead to a result differing from any such Opinions.
We hereby consent to the use of this opinion letter as an exhibit to the Registration Statement and to the reference to our firm under the heading Legal Matters in the Registration Statement with respect to the laws of the State of Alaska, the laws of the State of Idaho, the laws of the State of Minnesota, the laws of the State of Nevada, the laws of the State of Utah, the laws of the State of Washington and the laws of the State of Wyoming. In giving this consent, we do not thereby admit that we are included in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations promulgated thereunder.
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Respectfully submitted, |
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/s/ STOEL RIVES LLP |
SCHEDULE I
Name of Guarantor |
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Jurisdiction of |
Reliant Software, Inc. |
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Utah |
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Cash Central of Alaska, LLC |
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Alaska |
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Cash Central of Idaho, LLC |
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Idaho |
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Cash Central of Minnesota, LLC |
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Minnesota |
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Cash Central of Nevada, LLC |
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Nevada |
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Cash Central of Utah, LLC |
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Utah |
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Cash Central of Washington, LLC |
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Washington |
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Cash Central of Wyoming, LLC |
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Wyoming |
Exhibit 5.8
[Letterhead of Whyte Hirschboeck Dudek S.C.]
June 22, 2012
Community Choice Financial, Inc.
7001 Post Road, Suite 200
Dublin, Ohio 43016
Re: Registration Statement on Form S-4 Filed by Community Choice Financial, Inc.
(CCFI) Relating to the Exchange Offer (as defined below).
Ladies/Gentlemen:
We have acted as Wisconsin local counsel to Cash Central of Wisconsin, LLC, a Wisconsin limited liability company (the Company), which you have advised is an indirect subsidiary of CCFI, in connection with the Registration Statement referred to above and the Companys issuance of its guaranty (the Guarantee) of the Exchange Notes being offered thereunder (the Exchange Offer), pursuant to an Indenture dated as of April 29, 2011 among CCFI, the subsidiary guarantors named on the signature pages thereto and U.S. Bank National Association, as Trustee and Collateral Agent (the Indenture), as amended and supplemented by the First Supplemental Indenture dated as of April 1, 2012 (the First Supplemental Indenture).
The opinions expressed below are furnished at your request, pursuant to the Indenture. Unless otherwise defined herein, terms defined in the Indenture and used herein shall have the meanings given to them in the Indenture.
In arriving at the opinions expressed below:
(a) We have examined and relied on copies of the Indenture and the First Supplemental Indenture;
(b) We have examined all of the following: (1) copies of resolutions adopted by the Companys Managers on April 1, 2012 and June 22, 2012, as certified to us by the Companys Secretary, (2) the Articles of Organization, as amended, of the Company as certified on March 20, 2012 by the Wisconsin Department of Financial Institutions (WDFI), and (3) the Amended and Restated Operating Agreement of the Company dated as of April 1, 2012, as certified to us by the Companys Secretary (the Articles of Organization and Operating Agreement described in (2) and (3) are sometimes referred to herein as the Companys Organizational Documents);
(c) We have examined and relied on such other instruments and certificates of public officials and of other Persons, and we have made such investigations of law, in each case as we have deemed necessary or appropriate as a basis for such opinions; and
(d) We have relied as to the matters stated therein on an Omnibus Secretarys Certificate of the Senior Vice President, Secretary and General Counsel of the Company dated June 22, 2012 (the Officers Certificate); we have made no independent investigation as to such matters.
In addition to the documents listed above, we have reviewed such other documents as we have deemed necessary for the purpose of rendering the opinions set forth herein.
In rendering the opinions expressed below, we have assumed, with your permission, without independent investigation or inquiry, (a) the authenticity of all documents submitted to us as originals, (b) the genuineness of all signatures on all documents that we examined, (c) that the Companys Organizational Documents were, at all times relevant to these opinions (and in particular at the time at which the First Supplemental Indenture was executed and delivered by the Company) identical to the Organizational Documents reviewed by us, (d) the conformity to authentic originals of all documents submitted to us as certified, conformed or photostatic copies, (e) the accuracy of the statements contained in the Officers Certificate, and (f) the legal capacity of signers to execute the First Supplemental Indenture and all other documents reviewed by us.
Based upon the foregoing, and subject to the assumptions, qualifications and limitations that are identified in this letter, we are of the opinion that:
1. The Company: (i) is a limited liability company duly organized and validly existing under the Wisconsin Limited Liability Company Law, Chapter 183 of the Wisconsin Statutes, (ii) has filed its most recent required annual report, and (iii) has not filed articles of dissolution.
2. The Company (a) has the requisite limited liability company power and authority under the laws of the State of Wisconsin to execute and deliver the First Supplemental Indenture and (b) has taken all limited liability company action necessary to authorize the execution and delivery of the First Supplemental Indenture. The Company has the requisite limited liability company power and authority under the laws of the State of Wisconsin to perform its obligations under the Indenture and First Supplemental Indenture and has taken all limited liability company action necessary to authorize the performance thereof.
Assumptions and Qualifications
a. For purposes of numbered paragraph 1 above, we have relied exclusively upon a Certificate of Status with respect to the Company, dated June 11, 2012 and issued by the WDFI, and such opinion is not intended to provide any conclusion or assurance beyond that conveyed by such Certificate of Status.
b. We call to your attention that we have reviewed the Indenture and the First Supplemental Indenture solely for the purpose of rendering to the addressee(s) hereof the opinions contained in this letter as Wisconsin counsel to the Company, and not for any other purpose.
c. We have assumed that each of the parties (other than the Company): (i) validly exists; (ii) has the necessary right, power and authority, and has all registrations, qualifications and licenses, necessary to execute and deliver and perform its obligations under the Indenture and the First Supplemental Indenture and the other instruments and documents executed and delivered by such party in connection therewith; and (iii) has duly authorized the transactions contemplated by the Indenture and the First Supplemental Indenture.
d. We have assumed that the Indenture and the First Supplemental Indenture have been duly executed, delivered and accepted by all parties thereto (other than the Company).
e. We have assumed that the Company has received adequate consideration for the Guarantee.
f. Except as expressly stated herein, we have not examined the records of the Company, the Trustee, CCFI or any court or any public, quasi-public, private or other office in any jurisdiction, or the files of our firm, and our opinions are subject to matters that an examination of such records would reveal.
The opinions expressed herein are limited to (1) the federal laws of the United States and (2) the laws of the State of Wisconsin, as in effect on the date hereof as they currently apply; and we express no opinion herein as to the laws of any other jurisdiction.
These opinions are given as of the date hereof, they are intended to apply only to those facts and circumstances that exist as of the date hereof, and we assume no obligation or responsibility to update or supplement these opinions to reflect any facts or circumstances that may hereafter come to our attention or any changes in laws that may hereafter occur, or to inform the addressee(s) of any change in circumstances occurring after the date hereof that would alter the opinions rendered herein.
This opinion is limited to the matters set forth herein, and no opinion may be inferred or implied beyond the matters expressly contained herein. Except as expressly set forth herein, this opinion is being provided solely for the purpose of complying with the requirements of the Indenture, and is being rendered solely for the benefit of the addressee(s) hereof. We hereby consent to the filing of this opinion with the United States Securities and Exchange Commission (Commission) as Exhibit 5.8 to the Registration Statement referred to above. We also consent to the reference to our firm under the heading Legal Matters in the Registration Statement. In giving this consent, we do not thereby admit that we are in the category of persons whose
consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Commission.
Except as expressly provided above, this opinion may not be used or relied upon for any other purpose, relied upon by any other party, or filed with or disclosed to any governmental authority, other than to a court in connection with the enforcement or protection of the rights or remedies of the Trustee, without our prior written consent.
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Very truly yours, | |
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WHYTE HIRSCHBOECK DUDEK S.C. | |
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By: |
/s/ John F. Emanuel |
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John F. Emanuel |
Exhibit 5.9
[Letterhead of Kutak Rock LLP]
June 22, 2012
Community Choice Financial Inc.
7001 Post Road, Suite 200
Dublin, Ohio 43016
Re: Exchanges Notes under the Indenture
Ladies and Gentlemen:
We have acted as special Missouri (State) counsel to Cash Central of Missouri, LLC, a Missouri limited liability company (the Company), a wholly owned subsidiary of Community Choice Financial, Inc. (CCFI), in connection with the Registration Statement on Form S-4 to which this opinion has been filed as an exhibit (the Registration Statement). The Registration Statement relates to the proposed issuance and exchange of up to $395,000,000 aggregate principal amount of 10.75% Senior Secured Notes due 2019 (the Exchange Notes) of CCFI for an equal principal amount of 10.75% Senior Secured Notes due 2019 of CCFI outstanding on the date hereof (the Outstanding Notes). The Outstanding Notes have been, and the Exchange Notes will be, issued pursuant to the Indenture (defined below). The Outstanding Notes are, and the Exchange Notes will be, guaranteed on a joint and several basis by the guarantors party to the Indenture, including the Company. Capitalized terms used herein and not otherwise defined herein have the meanings assigned to such terms in the Indenture.
In connection with the opinions expressed herein, we have examined such documents, records, and matters of law as we have deemed necessary for the purposes of such opinions. We have examined the following:
(1) an executed copy of the Indenture dated as of April 29, 2011 (Original Indenture), by and among CCFI, the subsidiaries of CCFI identified therein, and U.S. Bank National Association, as Trustee and Collateral Agent (U.S. Bank), as amended by that certain First Supplemental Indenture dated as of April 1, 2012 (First Supplemental Indenture), by and among the Company, CCFI, the subsidiaries of CCFI identified therein, and U.S. Bank (collectively, with the Original Indenture, the Indenture);
(2) a form of the Global Note executed by CCFI in favor of CEDE & CO;
(3) a copy of the Articles of Organization of the Company, which has been issued by the Secretary of State for the State and certified to us by an authorized Officer of the Company as being complete and correct and in full force and effect as of the date hereof;
(4) an executed copy of the Amended and Restated Operating Agreement of the Company dated as of April 1, 2012, which has been certified to us by an authorized Officer of the Company as being complete and correct and in full force and effect as of the date hereof;
(5) a copy of a certificate, dated as of June 11, 2012, of the Secretary of State for the State of as to the good standing in the State of the Company as of the applicable date set forth in such certificate, together with a bring down certification from CT Corporation dated as of June 22, 2012;
(6) an executed copy of the Joint Unanimous Written Consent of the Managers or Directors of the Subsidiaries of Community Choice Financial Inc. delivered to us in connection with this opinion letter (the Consent); and
(7) the Omnibus Secretarys Certificate of Subsidiary Guarantors of Community Choice Financial Inc. dated April 1, 2012, and the Omnibus Secretarys Certificate of Subsidiary Guarantors of Community Choice Financial Inc. dated June 22, 2012, delivered to us in connection with this opinion letter (collectively, the Certificates).
The documents described in items (1) and (2) above are referred to herein collectively as the Documents. The organizational documents described in items (3) and (4) above are referred to herein collectively as the Certified Organizational Documents, and the certificate described in item (5) above is referred to herein as an Official Status Certificate.
Assumptions
In rendering this opinion, we have assumed, without investigation, verification or inquiry that:
(a) with respect to the Original Indenture, we reviewed the final document in its entirety as presented for our review and there have been no changes, amendments or supplements thereto (other than the First Supplemental Indenture) or changes in facts or circumstances which relate thereto which would effect the opinions set forth herein;
(b) with respect to each of the parties to the Documents (other than the Company) at the time of execution and delivery of the Documents: (i) such parties are or were duly organized, validly existing and in good standing within its applicable jurisdiction of organization; (ii) such parties have or had the necessary power, authority and right to enter into, execute and deliver, and to perform, observe and be bound by its obligations under the Documents; (iii) the transactions contemplated in the Documents have been duly authorized by such parties; (iv) the Documents have been duly executed, delivered and accepted by such parties; and (v) the Documents constitute the legal, valid and binding obligations of such parties, enforceable against such parties in accordance with their respective terms;
(c) all natural persons who are signatories to the Documents were legally competent at the time of execution; all signatures on the Documents and the other documents reviewed by us are genuine; and all copies of all documents submitted to us are accurate and complete, each such document that is an original is authentic and each such document that is a copy conforms to an authentic original;
(d) the certifications, representations, warranties and statements of fact of the Company and any other party, as the case may be, set forth in the Documents, Certified Organizational Documents, Official Status Certificate and Certificates are true, correct and accurate;
(e) there have been no undisclosed modifications of any provision of the Documents reviewed by us in connection with the rendering of this opinion and no undisclosed waiver of any right or any remedy contained in such Documents;
(f) the parties to the Documents and their successors and assigns: (i) will act in good faith and in a commercially reasonable manner in the exercise of any rights or enforcement of any remedies under the Documents; (ii) will not engage in any conduct in the exercise of such rights or enforcement of such remedies that would constitute other than fair dealing; and (iii) will comply with all requirements of applicable procedural and substantive law in exercising any rights or enforcing any remedies under the Documents;
(g) the exercise of any rights or enforcement of any remedies under the Documents would not be unconscionable, result in a breach of the peace, or otherwise be contrary to public policy;
(h) there has been no mutual mistake of fact or fraud or duress with respect to the Documents or the transaction that is the subject matter of this opinion;
(i) there exists or existed valid, lawful and enforceable consideration for the parties thereto to enter into the Documents and perform the transactions contemplated thereby;
(j) there are no written or oral terms and conditions agreed to by and between the parties to the Documents, nor course of prior dealings between the parties, that vary or could be deemed to vary the truth, completeness, correctness, validity, or effect of any of the Documents in any material manner; and
(k) the transactions contemplated by the Documents that were consummated prior to or on the date hereof have been consummated prior to or simultaneously with the delivery of this opinion letter.
Furthermore, in connection with the opinion expressed in the first sentence of paragraph (1) below, we have relied solely upon the Certified Organizational Documents and Official Status Certificate, and without independent investigation or verification, as to the factual matters and the legal and factual conclusions set forth therein.
With respect to the opinions below, (i) we express no opinion whatsoever with respect to special, local, state and federal laws and regulations not applicable to business organizations generally, including, without limitation: (a) the statutes administered by, the rules and regulations of, and matters subject to the jurisdiction of the Federal Trade Commission, the Consumer Financial Protection Bureau, the Federal Reserve Board, the United States Department of the Treasury, and any comparable state or local governmental authority or agency; and (b) certain federal, state, and local laws, rules and regulations, and orders of governmental agencies or regulatory bodies governing check cashing services, short-term loan products (including deferred presentment, payday loans, line of credit loans, and title loans), and prepaid debit cards and related services (collectively, the Special Laws) or the business activities of the Company subject thereto; and (ii) our opinions are limited to only those laws and regulations (excluding
the Special Laws) that, in our experience, are normally applicable to transactions of the type contemplated by the Documents.
Opinion
Based upon the foregoing, and subject to the limitations, qualifications, and assumptions set forth herein, we are of the opinion that:
1. The Company is a limited liability company existing and in good standing under the laws of the State as of June 22, 2012. As of the date of the First Supplemental Indenture, the Company had all requisite limited liability company power and authority, and had obtained all requisite organizational, third party and governmental authorizations, consents and approvals under its Certified Organizational Documents to enable it to execute and deliver the First Supplemental Indenture. As of the date hereof, the Company has all requisite limited liability company power and authority, and has obtained all requisite organizational, third party and governmental authorizations, consents and approvals under its Certified Organizational Documents to enable it to perform its guaranty obligations under the Indenture.
2. The Companys guaranty obligations under the Indenture have been authorized by all necessary limited liability company action of the Company under the laws of the State.
Qualifications and Limitations
The opinions set forth above are subject to the following qualifications and limitations:
(a) This opinion is limited by bankruptcy, insolvency, liquidation, reorganization, fraudulent conveyance, recharacterization, suretyship, and similar federal and state laws affecting debtors, creditors rights, and sureties generally and general principles of equity, including without limitation, concepts of materiality, reasonableness, good faith and fair dealing (regardless of whether the application of such principles is considered in a proceeding in equity or at law). In this regard, we call to your attention those provisions of Section 548 of the United States Bankruptcy Code that permit a bankruptcy trustee to avoid any conveyance made by a bankrupt debtor within two (2) years of the commencement of its bankruptcy proceeding where such debtor did not receive reasonably equivalent value in exchange for the conveyance. We express no opinion on (i) whether the Company is receiving any value whatsoever in exchange for its execution of the Indenture (or the Companys guaranty obligations under the Indenture), or (ii) whether the Companys guaranty obligations under the Indenture may or may not be avoided pursuant to 11 U.S.C.A. §548.
(b) For purposes of our opinions above, we have assumed that the Companys obligations under the Documents are, and would be deemed by a court of competent jurisdiction to be, in furtherance of its corporate purposes and necessary or convenient to the conduct, promotion, or attainment of its business.
(c) Except as set forth above, we express no opinion as to the validity or enforceability of any provision in the Documents. We express no opinion as to any choice of law or choice of judicial forum provisions contained in any of the Documents.
(d) Our opinion as to the enforceability of the Companys guaranty obligations under the Indenture is further qualified to the extent (i) that judicial decisions may permit the introduction of extrinsic evidence to modify or supplement the terms, or to aid in the interpretation, of the Documents; and (ii) that any choice of law provisions in the Documents are determined to be against public policy of the State or if it is determined that there are not sufficient contacts with the State.
(e) We express no opinion as to the enforceability of any provisions of the Documents: (i) relating to self-help; (ii) relating to any agreement to waive a jury trial or to control the venue or jurisdiction of any future litigation between the parties; (iii) relating to waiver of remedies (or the delay or omission of enforcement thereof), disclaimers, liability limitations with respect to third parties, releases or legal or equitable discharge of defenses, liquidated damages or penalties; (iv) the availability of specific performance or other equitable remedies; and (v) the enforceability of rights to indemnity under federal or state securities laws. The provisions regarding the remedies available to U.S. Bank in its capacity as Trustee and Collateral Agent in the case of a default or otherwise, as set forth in the Documents, are subject to any available defenses and to procedural requirements which are not necessarily reflected therein and which may affect and/or restrict the rights and remedies stated to be available to U.S. Bank.
(f) We express no opinion as to the validity or enforceability of any power of attorney purportedly granted by the Documents, whether or not coupled with an interest
(g) Except as expressly stated herein, we express no opinion as to the enforceability of any provisions of the Documents: (i) relating to summary remedies without consent, notice or opportunity for hearing or cure; (ii) purporting to establish evidentiary standards; (iii) whereby any party waives statutory, procedural, substantive or constitutional rights (or the delay or omission of enforcement thereof); (iv) which purport to control the venue of any future litigation between the parties; (v) which impose continued liability or that survive following the collection or repayment of the obligations secured by the Documents; (vi) relating to waiver of remedies, including punitive or exemplary damages (or the delay or omission of enforcement thereof), or to disclaimers, liquidated damages, liability limitations with respect to third parties, releases of other legal or equitable rights, or the discharge of defenses to the extent such provisions may be prohibited by law or deemed contrary to public policy; (vii) which exclude, waive or limit the liability of any party for its own negligence, gross fault, intentional fault, unlawful actions, or for causing physical injury to the other party; (viii) requiring the payment of attorneys fees and expenses in an amount in excess of reasonable attorneys fees and expenses actually incurred or any provision which allows for the collection of both attorneys fees and collection fees; (ix) prohibiting the oral modification of such documents, or the enforceability of any provision in the Documents requiring that waivers of provisions in such documents be in writing; and (x) the enforceability of any provision of the Documents providing for the right to injunctive relief without a showing of irreparable harm or injury.
(h) We express no opinion as to the enforceability of any provisions in any Document which purports to change or waive the right to a jury trial, any rules of evidence, trial rules, statutory or
constitutional rights, or waive or fix any statute of limitations or the method or quantum of proof to be applied in litigation or similar proceedings.
(i) We give no opinion as to any consumer transaction or whether or not the Company is a transmitting utility, and, for purposes of this opinion, we assume that the Company is not a transmitting utility.
(j) The opinions expressed herein are limited to the laws of the State, as currently in effect, and are based on the assumption that, notwithstanding the choice of law provisions in the Documents, Missouri law will govern the enforceability of the Indenture against the Company.
(k) We express no opinion whatsoever with respect to the Special Laws and the business activities of the Company subject thereto. In addition, we express no opinion as to: (i) federal or state environmental, pension or benefit, labor, antitrust or unfair competition, or security laws, rules or regulations, or any blue sky laws, rules or regulations, including, without limitation, the Securities Act of 1933, as amended, the Securities Act of 1934, as amended, the Trust Indenture Act of 1939, as amended, and the Investment Company Act of 1940, as amended in connection with the Documents; (ii) the statutes, ordinances, administrative decisions, rules, regulations, or requirements of any county, municipality, subdivision, or local authority of any jurisdiction; and (iii) federal or state tax laws, including, without limitation, franchise, income, transfer, sales, use, or mortgage taxes.
(l) We express no opinion as to any document, instrument, agreement or matter or the content thereof which is incorporated by reference into the Documents.
(m) Whenever the terms to our knowledge or known to us or the like terms appear herein, such terms mean, with respect to any factual matters, to the actual knowledge of the individual lawyers in our firm who have devoted substantial attention to this matter.
(n) Our opinions are limited to those expressly set forth herein, and we express no opinions by implication.
This opinion is rendered as of the date first written above. We assume no obligation to advise you of facts, circumstances, events, or developments which hereafter may be brought to our attention and which may alter, affect, or modify the opinions expressed herein. This opinion constitutes an expression of our professional legal opinion on the matters set forth herein, and is not a guaranty of any particular result.
The opinions expressed herein are solely for the benefit of the addressee hereof in connection with the transaction contemplated by the Documents. The opinions expressed in this letter may not be relied upon, in whole or part, by the addressee hereof or its counsel for any other purpose, or relied upon by any other person, firm or corporation for any purposes, without prior express written consent.
We hereby consent to the filing of this opinion with the Commission as Exhibit 5.9 to the Registration Statement. We also consent to the reference to our firm under the heading Legal Matters in the Registration Statement.
Exhibit 10.1
SHAREHOLDERS AGREEMENT
AMONG
COMMUNITY CHOICE FINANCIAL INC.
AND
THE SHAREHOLDERS OF
COMMUNITY CHOICE FINANCIAL INC.
Dated as of: April 29, 2011
TABLE OF CONTENTS
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ARTICLE |
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DEFINITIONS AND INTERPRETATIVE MATTERS |
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1.1 |
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Definitions |
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1.2 |
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Other Definitional and Interpretative Matters |
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ARTICLE |
2 |
GOVERNANCE |
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2.1 |
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Election of Board of Directors |
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2.2 |
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Removal and Vacancies |
13 |
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2.3 |
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Subsidiary Boards |
14 |
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2.4 |
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Expenses |
14 |
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2.5 |
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Governing Documents Provisions |
14 |
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2.6 |
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Board Meetings |
14 |
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2.7 |
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Corporate Opportunity |
14 |
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2.8 |
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Committees |
15 |
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ARTICLE |
3 |
TRANSFER RESTRICTIONS |
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3.1 |
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General Restrictions on Transfer |
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3.2 |
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Legends |
17 |
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3.3 |
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Permitted Transferees |
18 |
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3.4 |
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Tag-Along Rights |
19 |
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3.5 |
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Drag-Along Rights |
20 |
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3.6 |
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Miscellaneous Provisions Related to Tag-Along and Drag-Along Sales |
22 |
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ARTICLE |
4 |
CERTAIN SHAREHOLDER RIGHTS |
26 | |
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4.1 |
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Preemptive Rights |
26 |
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4.2 |
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Information Rights |
27 |
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4.3 |
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Access |
28 |
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4.4 |
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Tax Considerations |
29 |
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ARTICLE |
5 |
REGISTRATION RIGHTS |
29 | |
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5.1 |
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Demand Registration |
29 |
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5.2 |
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Piggyback Registration |
32 |
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5.3 |
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Shelf Registrations |
34 |
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5.4 |
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Lock-Up Agreements |
35 |
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5.5 |
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Registration Procedures |
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5.6 |
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Indemnification by the Company |
39 | |
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5.7 |
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Indemnification by the Participating Shareholders |
39 | |
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5.8 |
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Conduct of Indemnification Proceedings |
40 | |
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5.9 |
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Contribution |
41 | |
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5.10 |
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Other Indemnification |
42 | |
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5.11 |
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Participation in Public Offering |
42 | |
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5.12 |
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Rule 144 Sale |
43 | |
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5.13 |
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No Inconsistent Agreements |
43 | |
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ARTICLE |
6 |
ADDITIONAL AGREEMENTS |
44 | ||
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6.1 |
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Payment of Tax Savings Amount |
44 | |
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6.2 |
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Certain Approval Rights |
44 | |
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ARTICLE |
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CONFIDENTIALITY |
45 | ||
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7.1 |
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Confidentiality |
45 | |
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7.2 |
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Confidential Information |
46 | |
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ARTICLE |
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MISCELLANEOUS |
47 | ||
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8.1 |
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Authority; Effect |
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8.2 |
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Notices |
47 | |
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8.3 |
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Binding Effect, Etc |
48 | |
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8.4 |
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Waiver; Amendment; Termination |
48 | |
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8.5 |
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Descriptive Headings |
49 | |
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8.6 |
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Counterparts |
49 | |
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8.7 |
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Severability |
49 | |
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8.8 |
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No Recourse |
50 | |
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8.9 |
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Control of 2006 Rollover Holders |
50 | |
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8.10 |
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Spouses |
50 | |
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8.11 |
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Corporate Opportunities |
50 | |
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8.12 |
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No Conflicting Agreements |
51 | |
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8.13 |
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Governing Law |
52 | |
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8.14 |
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Submission to Jurisdiction; Consent to Service of Process |
52 | |
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8.15 |
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Waiver of Jury Trial |
52 | |
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8.16 |
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Aggregation of Shares |
52 | |
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8.17 |
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Rollover Holder Owner Agreements and Obligations |
53 | |
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8.18 |
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Termination of Checksmart Stockholders Agreement |
53 | |
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Exhibit A |
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Form of Joinder Agreement |
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Schedule A |
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Initial Shares of Common Stock |
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Schedule 6.2 |
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Certain Approval Rights |
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SHAREHOLDERS AGREEMENT
This Shareholders Agreement (this Agreement) is made as of April 29, 2011, by and among Community Choice Financial Inc., an Ohio corporation (the Company), Diamond Castle Partners IV, L.P. (DCP IV), Diamond Castle Partners IV-A, L.P. (DCP IV-A), Deal Leaders Fund, L.P. (DCP Leaders and, together with DCP IV and DCP IV-A, the DCP Investor), each Person listed as a 2006 Rollover Holder on Schedule A hereto or executing a Joinder Agreement as a 2006 Rollover Holder (each, a 2006 Rollover Holder and, collectively, the 2006 Rollover Holders), each Person listed as a 2011 Rollover Holder on Schedule A hereto or executing a Joinder Agreement as a 2011 Rollover Holder (each, a 2011 Rollover Holder and, collectively, the 2011 Rollover Holders and, together with the 2006 Rollover Holders, the Rollover Holders), and each Person listed as a Management Holder on Schedule A hereto or executing a Joinder Agreement as a Management Holder (each, a Management Holder and, collectively, the Management Holders and, together with the Rollover Holders, the Minority Holders). This Agreement shall be effective as set forth under Section 8.19 below.
WHEREAS, the execution and delivery of this Agreement by and among the parties hereto is a condition to the consummation of the transactions contemplated by that certain Agreement and Plan of Merger, dated as of April 13, 2011, by and among the Company, Checksmart Financial Holdings Corp., CCFI Merger Sub I, Inc., CCFI Merger Sub II, Inc., and the other parties thereto (the 2011 Merger Agreement).
NOW, THEREFORE, in consideration of the covenants and agreements contained herein, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATIVE MATTERS
1.1 Definitions. The following terms, as used herein, shall have the following meanings:
2006 Purchase Agreement shall mean the Stock Purchase Agreement dated as of February 27, 2006, by and among the DCP Investor and the parties named therein.
2006 Rollover Holder shall have the meaning set forth in the Preamble and shall include any of their respective Permitted Transferees that hold Company Securities.
2006 Rollover Holder Owners shall have the meaning set forth in Section 8.9.
2006 Rollover Holder Shares shall mean shares of Common Stock owned by a 2006 Rollover Holder as of the date hereof and indicated as 2006 Rollover Holder Shares on Schedule A hereto.
2011 Merger Agreement shall have the meaning set forth in the Preamble.
2011 Rollover Holder shall have the meaning set forth in the Preamble and shall include any of their respective Permitted Transferees that hold Company Securities.
Accredited Investors shall have the meaning set forth in Rule 501(a) of the Securities Act.
Affiliate shall mean, with respect to any specified Person, (a) any other Person which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person (for the purposes of this definition, control (including, with correlative meanings, the terms controlling, controlled by and under common control with), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise); provided, however, that neither the Company nor any of its Subsidiaries shall be deemed an Affiliate of any of the Shareholders (and vice versa), and (b) if such specified Person is an investment fund, any other investment fund the primary investment advisor to which is the primary investment advisor to such specified Person.
Agreement shall have the meaning set forth in the preamble of this Agreement (Preamble).
Amendment shall have the meaning set forth in Section 8.4(a)(i).
Approval Majority shall mean (i) Shareholders holdings no less than 50.1% of the then outstanding Voting Securities in the aggregate, which Shareholders may include the 2011 Rollover Holders and the other Shareholders, and (ii) the Golden Gate Investor so long as the Golden Gate Investor owns at least 6.5% of the then outstanding Voting Securities.
Board shall mean the Board of Directors of the Company.
Business Day shall mean any day that is not a Saturday, a Sunday or other day on which commercial banks in New York City are required or authorized by law to be closed.
CCCS Holders shall mean California Check Cashing Stores, Inc., California Check Cashing Stores II, Inc. and California Check Cashing Stores IV, Inc., collectively, and shall include any Permitted Transferee of any of the foregoing.
CCCSI Investor shall mean California Check Cashing Stores, Inc. and any Permitted Transferee thereof.
CEO Director shall have the meaning set forth in Section 2.1(a)(i).
Change Date shall have the meaning set forth in Section 3.1(b)(i).
Change of Control shall mean (a) any transaction or series of related transactions, whether or not the Company is a party thereto, in which, after giving effect to such transaction or transactions any person or group (as such terms are used in Section 13(d) of the Exchange
Act) other than (i) a Person that is an Affiliate of the DCP Investor or any Diamond Castle Fund or (ii) a group of which the DCP Investor, any Diamond Castle Fund or any of their respective Affiliates is a member, acquires, directly or indirectly, in excess of 50% of the Voting Securities, or (b) a sale, lease or other disposition of all or substantially all of the assets of the Company and its Subsidiaries on a consolidated basis (including securities of the Companys directly or indirectly owned Subsidiaries) to a Person that is not an Affiliate of the Company, the DCP Investor or any Diamond Castle Fund.
Code means the Internal Revenue Code of 1986, as amended.
Commission shall mean the U.S. Securities and Exchange Commission or any similar agency then having jurisdiction to enforce the Securities Act and the Exchange Act.
Common Stock means the Companys authorized shares of common stock, par value $0.01 per share, and any stock into which such common stock may hereafter be converted, changed, reclassified or exchanged.
Company shall have the meaning set forth in the Preamble.
Company Competitor means (a) any Person that is reasonably determined by the Board to be a competitor of the Company or any of its Subsidiaries in any material respect and (b) any Affiliate of any such Person specified in clause (a). For purposes hereof, without limiting the foregoing, any Person with, or whose Affiliate has, substantial operations as a provider of alternative financial services to unbanked and underbanked consumers, including short-term consumer loans, check cashing or prepaid debit cards, shall be presumed to be a Company Competitor unless the Board otherwise determines; provided, however, that for purposes of this Agreement, neither the Diamond Castle Fund nor the Golden Gate Fund shall be deemed a Company Competitor solely due to its investment in a portfolio company where such portfolio company would be deemed a Company Competitor.
Company Securities shall mean without duplication, (i) the Common Stock, (ii) any other securities convertible into, or exchangeable or exercisable for, or options, warrants or other rights to acquire, directly or indirectly, Common Stock or any other equity securities issued by the Company, and (iii) any other equity or equity-linked security issued by the Company.
Confidential Information shall have the meaning set forth in Section 7.2.
Covered Persons shall have the meaning set forth in Section 8.11.
Damages shall have the meaning set forth in Section 5.6.
DCH shall mean Diamond Castle Holdings, LLC.
DCP IV shall have the meaning set forth in the Preamble.
DCP IV-A shall have the meaning set forth in the Preamble.
DCP Leaders shall have the meaning set forth in the Preamble.
DCP Investor shall have the meaning set forth in the Preamble and shall include any Permitted Transferee thereof.
DCP Directors shall have the meaning set forth in Section 2.1(a)(v).
Demand Registration shall have the meaning set forth in Section 5.1(a).
Determination Time shall have the meaning set forth in Section 3.1(b)(iii).
Diamond Castle Fund shall mean DCH and any investment fund Affiliated with DCP IV, DCP IV-A, DCP Leaders or DCP IV GP, L.P. or any other investment fund managed by DCH.
Disclosing Party shall have the meaning set forth in Section 7.1(c).
Drag-Along Sale shall have the meaning set forth in Section 3.5(a).
Drag-Along Sale Notice shall have the meaning set forth in Section 3.5(a).
Exchange Act shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
Excluded Securities shall mean (a) Company Securities issued pursuant to any Management Incentive Plan, (b) any capital stock or other equity interests of the Company issued as a dividend or upon any split or other subdivision or combination of Company Securities and, to the extent required by Section 6.2, approved by the Board and an Approval Majority, (c) capital stock or other equity interests, options, warrants or convertible securities (in all cases of the Company) issued as consideration to any Person (other than the DCP Investor, any Diamond Castle Fund or any of their respective Affiliates or partners) for acquisitions or mergers by or involving the Company or any Subsidiary or in connection with an Initial Public Offering, and, in each case, to the extent required by Section 6.2, approved by the Board and an Approval Majority, (d) capital stock or other equity interests, options, warrants or convertible securities issued to any Person (other than the DCP Investor, and Diamond Castle Fund or any of their respective Affiliates or partners) in connection with any debt financing of the Company or any of its Subsidiaries, and (e) any Company Securities issued upon the exercise of any of the foregoing issuances.
Existing Management Incentive Plan shall have the meaning set forth in Management Incentive Plan.
Fair Market Value shall mean, as of any date of determination, the Boards good faith determination of the fair value of the Company Securities as of such date.
Family Member shall mean, with respect to any natural Person, (a) any lineal descendant or ancestor or sibling (by birth or adoption) of such natural Person, (b) any spouse or
former spouse of any of the foregoing, (c) any legal representative or estate of any of the foregoing and (d) any trust maintained for the sole benefit of the foregoing.
Frauenberg shall mean James H. Frauenberg, Sr.
GAAP shall mean United States generally accepted accounting principles.
Golden Gate Demand Eligibility means the earlier of (i) six (6) months after the DCP Investor consummates a Demand Registration and (ii) one (1) year after the consummation of an Initial Public Offering.
Golden Gate Director shall have the meaning set forth in Section 2.1(a)(iii).
Golden Gate Fund shall mean any investment fund Affiliated with the Golden Gate Investor.
Golden Gate Investor means Golden Gate Capital Investment Fund II, L.P., Golden Gate Capital Investment Fund II-A, L.P., Golden Gate Capital Investment Fund II (AI) , L.P., Golden Gate Capital Investment Fund II-A AI, L.P., Golden Gate Capital Associates II-QP, L.L.C., Golden Gate Capital Associates II-AI, L.L.C., CCG AV, L.L.C. - series C, CCG AV, L.L.C. - series A, CCG AV, L.L.C. - series G, and CCG AV, L.L.C. - series I, collectively, and shall include any Permitted Transferee of any of the foregoing.
Indemnified Party shall have the meaning set forth in Section 5.8.
Indemnifying Party shall have the meaning set forth in Section 5.8.
Independent Person shall mean a Person who (a) is not an officer or other employee of the Company or a Subsidiary of the Company, or a Person related by blood, adoption or marriage to an officer or other employee of the Company or a Subsidiary of the Company, or (b) is not an officer or employee, partner or member of any Shareholder or an Affiliate of any Shareholder.
Initial Public Offering shall mean the Companys first Public Offering.
Initial Shares shall mean with respect to any Shareholder or group of Shareholders, the number of Company Securities owned by such Shareholder or group of Shareholders, as of the date hereof, listed opposite their respective names on Schedule A hereto, adjusted to reflect any stock splits, combinations or the like.
Inspectors shall have the meaning set forth in Section 5.5(g).
Joinder Agreement shall mean the form of agreement attached as Exhibit A.
Lenhart shall mean Michael W. Lenhart.
Management Holder shall have the meaning set forth in the Preamble and shall include any current or future employee of the Company or any of its Subsidiaries and any
Permitted Transferee of any current or future employee of the Company or any of its Subsidiaries that, at any time, holds Company Securities.
Management Incentive Plan shall mean (i) the Checksmart Financial Holdings Corp 2006 Management Equity Incentive Plan, effective May 1, 2006 and as amended, as the same is adopted in accordance with the terms of the 2011 Merger Agreement to become the equity incentive plan of the Company (the Existing Management Incentive Plan), and (ii) any other incentive plan providing for the right of certain employees, officers and directors of, and other Persons providing services to, the Company or its Subsidiaries to purchase or acquire Company Securities or to be granted options therefor, which plan has been adopted and approved by the Board and by an Approval Majority, and, in the case of any of the foregoing under clause (i) or (ii), shall include any grant agreements or any documentation executed thereto in accordance therewith.
Maximum Offering Size shall have the meaning set forth in Section 5.1(f).
Minority Holders shall have the meaning set forth in Preamble.
Monitoring Agreement shall mean the Advisory Services and Monitoring Agreement, dated as of the date hereof, among Diamond Castle Holdings, LLC, GGC Administration LLC, the Company (including its subsidiaries), CheckSmart Financial Company and California Check Cashing Stores, LLC.
NASD shall mean the National Association of Securities Dealers, Inc.
New Securities shall have the meaning set forth in Section 4.1(a).
Notice of Proposed Issuance shall have the meaning set forth in Section 4.1 (a).
Original Agreement shall have the meaning set forth in Section 8.18.
Other Company Securities shall have the meaning set forth in Section 3.4(d).
Other Holder shall have the meaning set forth in Section 3.5(a).
Participation Period shall have the meaning set forth in Section 4.1(b).
Permitted Transferee means:
(i) means, with respect to the DCP Investor, (A) the owners of such Shareholders equity interests or any other Diamond Castle Fund, or (B) an Affiliate (other than any portfolio company, as described below) of the DCP Investor or any Diamond Castle Fund; provided, however, that in both cases such transferee shall execute a Joinder Agreement or otherwise agree to be bound by the terms of this Agreement applicable to the DCP Investor; provided, further, however, that in no event shall (x) the Company or any of its Subsidiaries or (y) any portfolio company (as such term is customarily used among institutional investors) of
the DCP Investor or any Diamond Castle Fund or any entity controlled by any portfolio company of the DCP Investor or any Diamond Castle Fund constitute a Permitted Transferee;
(ii) means, with respect to the Golden Gate Investor, (A) the owners of such Shareholders equity interests or any Golden Gate Fund, or (B) an Affiliate (other than any portfolio company, as described below) of the Golden Gate Investor or any Golden Gate Fund; provided, however, that in both cases such transferee shall execute a Joinder Agreement or otherwise agree to be bound by the terms of this Agreement applicable to the Golden Gate Investor; provided, further, however, that in no event shall (x) the Company or any of its Subsidiaries or (y) any portfolio company (as such term is customarily used among institutional investors) of the Golden Gate Investor or any Golden Gate Fund or any entity controlled by any portfolio company of the Golden Gate Investor or any Golden Gate Fund constitute a Permitted Transferee; and
(iii) in the case of any Shareholder other than the DCP Investor and the Golden Gate Investor, (A) if such Shareholder is natural person, (x) any Family Member of such Shareholder; (y) a trust, partnership, corporation, limited liability company or other similar entity solely for the benefit of such Shareholder or Family Member of such Shareholder; and (z) upon such Shareholders death, the executors, administrators, testamentary trustees, legatees or beneficiaries of such Shareholder, and (B) if such Shareholder is a trust, partnership, corporation, limited liability company or other similar entity, any other trust, partnership, corporation, limited liability company or other similar entity or family member, in each case solely for estate planning purposes or gift planning purposes.
Person shall mean any individual, partnership, corporation, company, association, trust, joint venture, limited liability company, unincorporated organization, entity or division, or any government, governmental department or agency or political subdivision thereof.
Piggyback Registration shall have the meaning set forth in Section 5.2(a).
Preamble shall have the meaning set forth in the definition of Agreement.
Public Offering shall mean an underwritten public offering and sale of shares of Common Stock for cash pursuant to an effective registration statement under the Securities Act, other than pursuant to a registration statement on Form S-4 or Form S-8 or any similar or successor form.
Receiving Party shall have the meaning set forth in Section 7.1(c).
Records shall have the meaning set forth in Section 5.5(g).
Registering Shareholder shall have the meaning set forth in Section 5.1(a)(ii).
Registrable Securities shall mean, at any time, (i) shares of Common Stock owned by the Shareholders, (ii) shares of Common Stock issuable to the Shareholders upon exercise, conversion or exchange of any option, warrant or other security of the Company or any of its
Subsidiaries, and (iii) shares of Common Stock directly or indirectly issued or issuable to the Shareholders with respect to the securities referred to in clauses (i) or (ii) above by way of stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation, reorganization, reclassification or similar transaction, in the case of each of clause (i), (ii) and (iii) above, whether owned on the date hereof or acquired hereafter; provided that in no event shall Registrable Securities include any shares of Common Stock (A) the sale of which has been registered pursuant to the Securities Act and which shares have been sold pursuant to such registration, except as otherwise provided in clause (C) of this proviso, (B) which have been sold pursuant to Rule 144 or Rule 145, or (C) registered for resale pursuant to an effective registration statement on Form S-8 (or any successor or similar form).
Registration Expenses means any and all reasonable expenses incident to the performance of or compliance with any registration or marketing of securities, including all (i) SEC registration and filing fees, and all other fees and expenses payable in connection with the listing of securities on any securities exchange or automated interdealer quotation system, (ii) fees and expenses of compliance with any securities or blue sky laws (including reasonable fees and disbursements of counsel in connection with blue sky qualifications of the securities registered), (iii) expenses in connection with the preparation, printing, mailing and delivery of any registration statements, prospectuses and other documents in connection therewith and any amendments or supplements thereto, (iv) security engraving and printing expenses, (v) internal expenses of the Company (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), (vi) reasonable fees and disbursements of counsel for the Company and customary fees and expenses for independent certified public accountants retained by the Company (including the expenses relating to any comfort letters or costs associated with the delivery by independent certified public accountants of any comfort letters), (vii) reasonable fees and expenses of any special experts retained by the Company in connection with such registration, (viii) reasonable fees and out-of-pocket expenses of counsel to the Shareholders participating in the offering selected by the Shareholders holding the majority of the Registrable Securities to be sold for the account of all Shareholders in the offering (and including the expenses of counsel for each of the DCP Investor and the Golden Gate Investor (and, if applicable, any CCCS Holder) relating to the preparation and delivery of legal opinions for the DCP Investor and the Golden Gate Investor), provided that the Company shall be required to bear the fees and expenses of no more than one deal counsel for each of the DCP Investor and the Golden Gate Investor (it being understood that local counsel shall not be deemed deal counsel for such purposes), (ix) fees and expenses in connection with any review by the NASD of the underwriting arrangements or other terms of the offering, (x) fees and disbursements of underwriters customarily paid by issuers or sellers of securities, but excluding any underwriting fees, discounts and commissions attributable to the sale of Registrable Securities, (xi) costs of printing and producing any agreements among underwriters, underwriting agreements, any blue sky or legal investment memoranda and any selling agreements and other documents in connection with the offering, sale or delivery of the Registrable Securities, (xii) expenses relating to any analyst or investor presentations or any road shows undertaken in connection with the registration, marketing or selling of the Registrable Securities, to the extent not otherwise paid or reimbursed by the underwriters of the
offering, and (xiii) transfer agents and registrars fees and expenses and the fees and expense of any other agent or trustee appointed in connection with such offering.
Relative Ownership Percentage shall have the meaning set forth in Section 3.1(b)(iii).
Requesting Shareholder shall have the meaning set forth in Section 5.1(a).
Rights Holders shall have the meaning set forth in Section 4.1(a).
Rollover Holders shall have the meaning set forth in the Preamble and shall include any of their respective Permitted Transferees that hold Company Securities.
Rule 144 shall mean Rule 144 under the Securities Act (or any successor rule).
Rule 145 shall mean Rule 145 under the Securities Act (or any successor rule).
Sale Obligations shall mean any liabilities and obligations, including liabilities and obligations for indemnification, amounts paid into escrow and post-closing adjustments (other than any such liabilities and obligations that relate solely to a particular Shareholder, such as indemnification with respect to individual covenants made by a Shareholder or representations and warranties given by a Shareholder regarding such Shareholders title to and ownership of Company Securities being sold, in respect of which only such Shareholder shall be liable), incurred by the Company and its Subsidiaries in connection with any applicable transaction.
SEC shall mean the United States Securities and Exchange Commission.
Securities Act shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
Shareholders shall mean each Person (other than the Company) who shall be a party to or bound by this Agreement (as may be amended from time to time).
Shelf Request shall have the meaning set forth in Section 5.3(a).
Shelf Registration shall have the meaning set forth in Section 5.3(a).
Subsidiary shall mean any Person as to which the Company owns or controls, directly or indirectly, more than 50% percent of the voting securities of such Person.
Successor Security shall have the meaning set forth in Section 6.1(c).
Tag-Along Notice shall have the meaning set forth in Section 3.4(a).
Tag-Along Offer Period shall have the meaning set forth in Section 3.4(b).
Tag-Along Offerees shall have the meaning set forth in Section 3.4(a).
Tag-Along Response Notice shall have the meaning set forth in Section 3.4(b).
Tag-Along Sale shall have the meaning set forth in Section 3.4(a).
Tag Seller shall have the meaning set forth in Section 3.4(a).
Tagging Persons shall have the meaning set forth in Section 3.4(b).
Tax Savings Amount, with respect to a Taxable Disposition, shall mean the product obtained by multiplying (x) $5.4 million by (y) a fraction, the numerator of which is the number of 2006 Rollover Holder Shares disposed of in such Taxable Disposition and the denominator of which is the total number of 2006 Rollover Holder Shares as of the date hereof, adjusted for stock dividends, stock splits and other corporate transactions, it being understood and agreed that in no event shall any gain, loss, saving, carry-over, adjustment or other amount arising in favor of or for the account of the Company or any of its Subsidiaries, be within the meaning of Tax Savings Amount.
Taxable Disposition shall mean a sale or other disposition, directly or indirectly (including through another entity), of a 2006 Rollover Holder Share by a 2006 Rollover Holder in which gain or loss is recognized, in whole or in part, for federal income tax purposes.
Third Party Prospect means a prospective purchaser (except a Permitted Transferee of the prospective selling Shareholder) of Company Securities in a bona fide arms-length transaction (it being understood that a non-Affiliated limited partner of any Diamond Castle Fund or Golden Gate Fund shall not be considered a Third Party Prospect to the extent such limited partner is receiving from such Diamond Castle Fund or Golden Gate Fund, as applicable, a pro rata in-kind distribution of Company Securities).
Transfer shall mean (i) when used as a verb, to sell, assign, dispose of, exchange, pledge, encumber, hypothecate or otherwise transfer Company Securities or any participation or interest therein, whether directly or indirectly (including by Transfer of any equity interest in a Shareholder other than to a Permitted Transferee), or agree or commit to do any of the foregoing, and (ii) when used as a noun, a direct or indirect sale, assignment, disposition, exchange, pledge, encumbrance, hypothecation, or other transfer of Company Securities or any participation or interest therein or any agreement or commitment to do any of the foregoing.
Underwritten Shelf Takedown shall have the meaning set forth in Section 5.3(b).
Unrestricted Securities shall have the meaning set forth in Section 3.1(b)(iii).
Unwinding Event shall have the meaning set forth in Section 3.3(b).
U.S. Securities Exchange Act means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, in effect in the United States of America.
Voting Securities shall mean any Company Securities that have the ordinary power to vote in the election of directors (other than Company Securities having such power upon the happening of an event, including exercise or conversion).
1.2 Other Definitional and Interpretative Matters. Unless otherwise expressly provided or the context otherwise requires, for purposes of this Agreement, the following rules of interpretation apply:
(a) Calculation of Time Period. When calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period is excluded. If the last day of such period is a non-Business Day, the period in question ends on the next succeeding Business Day.
(b) Currency. Any reference in this Agreement to $ means U.S. dollars.
(c) Exhibits and Schedules. The Exhibits and Schedules to this Agreement are hereby incorporated and made a part hereof as if set forth in full in this Agreement and are an integral part of this Agreement.
(d) Gender and Number. Unless the context otherwise requires, any reference in this Agreement to gender includes all genders, and words imparting the singular number only include the plural and vice versa.
(e) Headings. The provision of a Table of Contents, the division of this Agreement into Articles, Sections and other subdivisions and the insertion of headings are for convenience of reference only and do not alter the meaning of, or affect the construction or interpretation of, this Agreement.
(f) Article, Section and Similar References. Unless the context otherwise requires, all references in this Agreement to any Article, Section, Schedule or Exhibit are to the corresponding Article, Section, Schedule or Exhibit of this Agreement.
(g) Hereby and Similar Words. Unless the context otherwise requires, the words hereby, herein, hereinafter, hereof, and hereunder refer to this Agreement as a whole and not merely to the provision in which such words appear.
(h) Including. The word including, or any variation thereof, means including, without limitation and does not limit any general statement that it follows to the specific or similar items or matters immediately following it.
(i) Parties to this Agreement. Any reference in this Agreement to the parties to this Agreement means the signatories to this Agreement, any Person who executes a Joinder Agreement to his Agreement and their successors and permitted assigns, and does not include any third party.
ARTICLE 2
GOVERNANCE
2.1 Election of Board of Directors.
(a) Each Shareholder shall take all action and cast all votes, to which such holder is entitled (or execute written consents in lieu thereof) in respect of the Voting Securities owned by it, and the Company shall take all necessary and desirable actions within its control, to cause the authorized number of directors of the Board to be the number of directors determined by DCP, in its sole discretion, and to cause and maintain the election to the Board as follows:
(i) one director who at all times shall be the then current chief executive officer of the Company (the CEO Director), who will initially be Ted Saunders;
(ii) Frauenberg, to the extent he determines (in his sole discretion) is physically capable of serving as a director, or his designee, in each case so long as the 2006 Rollover Holders collectively own at least 10% of the then outstanding Voting Securities;
(iii) one director designated by the Golden Gate Investor (the Golden Gate Director), so long as the Golden Gate Investor owns at least 3.5% of the then outstanding Voting Securities (it being agreed that from and after such time as the Golden Gate Investor owns less than 3.5% of the then outstanding Voting Securities (but at least 2.5% of the then outstanding Voting Securities) the Golden Gate Investor shall have the right to appoint one Board observer pursuant to Section 2.1(d) below);
(iv) if desired from time to time by the DCP Investor, one or more Independent Persons satisfactory to the DCP Investor; and
(v) the remaining directors (which in no event shall constitute less than a majority of the Board) designated by the DCP Investor (the DCP Directors).
(b) After an Initial Public Offering, the Shareholders shall negotiate in good faith such changes to the composition of the members of the Board and its committees as may be necessary for the appointment of independent directors to the extent required in order to comply with applicable securities laws and listing standards; provided, however, that unless otherwise agreed by the DCP Investor, the DCP Investor shall retain the right to appoint a majority of the directors of the Board.
(c) At any time, whether before or after an Initial Public Offering, the Golden Gate Investor shall have the right exercisable in its sole and absolute discretion to relinquish or terminate its right pursuant to Section 2.1(a)(iii) to have any Golden Gate Director serve on the Board.
(d) (i) Prior to an Initial Public Offering, and for so long as the Golden Gate Investor owns at least 2.5% of the then outstanding Voting Securities (or successor securities) and does not have a Golden Gate Director, the Company and each other Shareholder will permit and enable an individual designated by the Golden Gate Investor to attend all meetings of the Board or any committee thereof and of the governing board of any Subsidiary of the Company, in each case as an observer. Prior to an Initial Public Offering, and for so long as the CCCS Holders collectively own at least 2.5% of the then outstanding Voting Securities (or successor securities), the Company and each other Shareholder will permit and enable an individual designated by the CCCSI Investor to attend all meetings of the Board or any committee thereof and of the governing board of any Subsidiary of the Company, in each case as an observer.
(ii) In the event the DCP Investor or its Permitted Transferees sells any Voting Securities to a third party in compliance with the provisions of this Agreement, and such third party owns at least 2.5% of the then outstanding Voting Securities (or successor securities), then, upon the request of the DCP Investor and solely prior to an Initial Public Offering, the Company and each other Shareholder will permit and enable an individual designated by such third party to attend all meetings of the Board or any committee thereof as an observer so long as such third party continues to own at least 2.5% of the then outstanding Voting Securities (or successor securities).
(iii) Any Board observer shall receive proper notices of all meetings of the Board or any committee thereof (and shall have the right to participate in all discussions thereat but shall not be entitled to vote on any matter submitted to the Board for approval) and shall receive all written materials distributed or required to be distributed to the Board members or any committee thereof reasonably in advance of Board meetings. The Company shall pay the reasonable out-of-pocket expenses incurred by such Board observer in connection with attending the meetings of the Board and any committee thereof (but in no event shall the Board observer enjoy compensation from the Company for the performance of such role). Notwithstanding anything to the contrary, the Company reserves the right to exclude the Board observer from access to any material or meeting or portion thereof if the Company believes upon advice of counsel that such exclusion is reasonably necessary to preserve the attorney-client privilege.
2.2 Removal and Vacancies.
(a) Except for the CEO Director, who will be subject to removal under Section 2.2(c), if any Person(s) entitled to designate a director pursuant to Section 2.1 requests that any of its or their designees be removed as a director, each Shareholder shall take all action and cast all votes to which such holder is entitled in respect of the Voting Securities owned by it, to cause the removal of such director(s). Except for the CEO Director, who will be subject to removal under Section 2.2(c), each Shareholder agrees that it shall not vote any of its Voting Securities (or execute written consents in lieu thereof) in favor of, or take any other action
related to, the removal of any director who has been designated pursuant to Section 2.1 unless, pursuant to the preceding sentence, requested by the Person(s) entitled to designate such director.
(b) If as a result of death, disability, retirement, resignation or removal of a director designated pursuant to Section 2.1 there shall exist or occur any vacancy on the Board (other than the CEO Director), (i) the Person or Persons entitled pursuant to Section 2.1 to designate such director whose death, disability, retirement, resignation or removal resulted in such vacancy shall (so long as such Person is then entitled) have the right exercisable in its sole and absolute discretion to designate another Person to fill such position, and (ii) each Shareholder shall take all action and cast all votes to which such holder is entitled (or execute written consents in lieu thereof) in respect of the Voting Securities owned by it, to cause the election of such designee.
(c) If at any time a Person serving as the CEO Director ceases to be the chief executive officer of the Company, each Shareholder shall take all action and cast all votes to which such holder is entitled (or execute written consents in lieu thereof) in respect of the Voting Securities owned by it, or over which it has voting power, to cause the removal of such Person as CEO Director and, at such time as a succeeding chief executive officer is appointed in conformity with the provisions hereof, the appointment or election of such Person as the CEO Director.
2.3 Subsidiary Boards. The Company and each Shareholder hereby agree to take all action and cast all votes to which such holder is entitled (or execute written consents in lieu thereof) in respect of the Voting Securities owned by it, and the Company shall take all necessary and desirable actions within its control, to cause the composition of the boards of directors or other governing body of any Subsidiary of the Company to be comprised of (i) a majority of DCP Investor designees and (ii) one Golden Gate Investor designee so long as the Golden Gate Investor is entitled to appoint a director to the Board pursuant to Section 2.1(a)(iii).
2.4 Expenses. The Company shall pay all reasonable and documented out-of-pocket expenses incurred by each member of the Board in connection with traveling to and from and attending meetings of the Board (and any committees thereof) or the boards of directors or other governing body (and any committees thereof) of any Subsidiaries of the Company and while conducting business at the request of the Company or any of its Subsidiaries. The Board shall determine in good faith any fees payable to the Independent Persons serving on the Board; otherwise no member of the Board shall be entitled to any fee for serving in such capacity.
2.5 Governing Documents Provisions. Each Shareholder agrees to vote all of its Voting Securities or execute proxies or written consents, as the case may be, and to take all other actions reasonably necessary, to ensure that the Companys charter and code of regulations and any other organizational or constitutive documents of the Company or any Subsidiary of the Company (a) facilitate, and do not at any time conflict with, any provision of this Agreement and (b) permit each Shareholder to receive the benefits to which each such Shareholder is entitled under this Agreement.
2.6 Board Meetings. The Board shall meet at least once each calendar quarter.
2.7 Corporate Opportunity. [intentionally omitted]
2.8 Committees. Subject to Section 2.1(b), in the event that the Board establishes any committees in accordance with the terms of this Agreement, such committee shall consist of (i) a majority of DCP Investor designees and (ii) one Golden Gate Investor designee so long as the Golden Gate Investor is entitled to appoint a director to the Board pursuant to Section 2.1(a)(iii) (it being understood that following an Initial Public Offering, the audit committee shall consist of independent directors as required by applicable laws, rules and regulations).
ARTICLE 3
TRANSFER RESTRICTIONS
3.1 General Restrictions on Transfer.
(a) Each Shareholder understands and agrees that the Company Securities held by it on the date hereof have not been registered under the Securities Act and are restricted securities under the Securities Act and the rules and regulations promulgated thereunder. Each Shareholder agrees that it shall not Transfer any Company Securities (or solicit any offers in respect of any Transfer of any Company Securities), except in compliance with the Securities Act, any other applicable securities or blue sky laws and any restrictions on Transfer contained in this Agreement and in, if applicable, the terms of any Management Incentive Plan. No Shareholder shall Transfer any Company Securities to any Person if such Transfer would, in the Boards good faith determination, result in adverse regulatory consequences to the Company, including, without limitation, obligations of the Company to file periodic reports with the Commission under the Exchange Act.
(b) Notwithstanding anything in this Agreement to the contrary (including any rights afforded to a Minority Holder pursuant to Article 5):
(i) from the date hereof until the earlier of (a) the one year anniversary of the date hereof and (b) an Initial Public Offering (such earlier date, the Change Date), no Shareholder may Transfer any of its Company Securities, except (A) to a Permitted Transferee in accordance with Section 3.3, (B) the DCP Investor may Transfer all (but not less than all) of its Company Securities so long as it exercises its rights under a Drag-Along Sale pursuant to Section 3.5 in compliance with the terms thereof, (C) in the case of the Other Holders, in a Transfer of Company Securities in a Drag-Along Sale described in Section 3.1(b)(i)(B) (in compliance with the terms thereof) or (D) to another Shareholder or the Company pursuant to an indemnification claim under the 2011 Merger Agreement.
(ii) if an Initial Public Offering does not occur on or prior to the one year anniversary of the date hereof, then from the Change Date until an Initial Public Offering, no Minority Holder may Transfer any of its Company Securities, except (A) to a Permitted Transferee in accordance with Section 3.3, (B) in a
Transfer of Company Securities in a Tag-Along Sale or Drag-Along Sale pursuant to Sections 3.4 or 3.5 (in each case, in compliance with the terms thereof) or (C) to another Shareholder or the Company pursuant to an indemnification claim under the 2011 Merger Agreement. Notwithstanding anything to the contrary, from the Change Date until the Initial Public Offering (if such period exists), no Shareholder may Transfer Company Securities to a Company Competitor without the approval of the Board except in connection with the sale of the Company.
(iii) following an Initial Public Offering, and subject to Section 3.1(a), no Minority Holder may Transfer any of its Company Securities, except (A) to a Permitted Transferee in accordance with Section 3.3 and (B) shares of Common Stock, other than any unvested shares of Common Stock issued or granted pursuant to the Management Incentive Plan (such shares of Common Stock that may be Transferred, Unrestricted Securities), but only to the extent such Transfer would not result in the Relative Ownership Percentage (as defined below) of the Unrestricted Securities owned by such Minority Holder immediately following the effective time of such Transfer (the Determination Time) being less than the aggregate Relative Ownership Percentage of the Company Securities owned by the DCP Investor immediately following the Determination Time; provided, however, that this Section 3.1(b)(iii) will not apply to the Golden Gate Investor and any other 2011 Rollover Holder. For purposes of this Section 3.1(b)(iii), Relative Ownership Percentage means:
(1) with respect to the Unrestricted Securities held by a Minority Holder, a fraction (expressed as a percentage), (A) the numerator of which is the number of Unrestricted Securities owned by such Minority Holder immediately following the Determination Time and (B) the denominator of which is the sum of (x) the number of Unrestricted Securities owned by such Minority Holder immediately following the Initial Public Offering and (y) the number of Company Securities owned by such Minority Holder that were not Unrestricted Securities immediately following the Initial Public Offering but that have subsequently become Unrestricted Securities, and
(2) with respect to Company Securities owned by the DCP Investor, a fraction (expressed as a percentage), (A) the numerator of which is the aggregate number of Company Securities owned by the DCP Investor immediately following the Determination Time and (B) the denominator of which is the aggregate number of Company Securities owned by the DCP Investor immediately following the Initial Public Offering.
(iv) Following the Initial Public Offering, if any DCP Investor Transfers Company Securities to a third party, it shall notify the Company promptly following the consummation of such Transfer of the number and type of Company Securities Transferred. Any Minority Holder subject to Section
3.1(b)(iii) wishing to Transfer Company Securities pursuant to Section 3.1(b)(iii) shall be entitled to obtain prior to such Transfer, and rely upon, a statement from the Company of the number of Unrestricted Securities that such Minority Holder may Transfer pursuant to Section 3.1(b)(iii).
(c) Any attempt to Transfer any Company Securities not in compliance with this Agreement shall be null and void.
3.2 Legends.
(a) In addition to any other legend that may be required, each certificate for Company Securities issued to any Shareholder shall bear a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY FOREIGN OR STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD EXCEPT IN COMPLIANCE THEREWITH. THIS SECURITY IS ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THE SHAREHOLDERS AGREEMENT DATED AS OF April 29, 2011, COPIES OF WHICH MAY BE OBTAINED UPON REQUEST FROM COMMUNITY CHOICE FINANCIAL INC. OR ANY SUCCESSOR THERETO.
(b) If any shares of Common Stock shall become freely transferable under the Securities Act, the Company, upon the written request of the holder thereof, shall issue to such holder a new certificate evidencing such shares of Common Stock without the first sentence of the legend required by Section 3.2(a) endorsed thereon; provided, however, as a condition thereto, the Company may request that the holder provide an opinion of legal counsel reasonably acceptable to the Company stating that such shares of Common Stock are freely transferable under the Securities Act. If any shares of Common Stock cease to be subject to any and all restrictions on Transfer and all other obligations set forth in this Agreement, the Company, upon the written request of the holder thereof, shall issue to such holder a new certificate evidencing such shares of Common Stock without the second sentence of the legend required by Section 3.2(a) endorsed thereon.
3.3 Permitted Transferees.
(a) Subject to Section 3.1 and, if applicable, any Management Incentive Plan, any Shareholder may at any time Transfer any or all of its Company Securities to a Permitted Transferee of such Shareholder; provided that (i) such Transfer does not involve any economic realization in respect of such Transfer, (ii) such Permitted Transferee shall have executed and delivered to the Company a Joinder Agreement agreeing to be bound by the terms of this Agreement, (iii) such Shareholder shall have given written prior notice to the Company of any proposed Transfer to a Permitted Transferee, including the identity of such proposed Permitted
Transferee and such other information reasonably requested by the Company to ensure compliance with the terms of this Agreement, and (iv) the Company shall be entitled to condition any such Transfer on receipt of an opinion of counsel reasonably acceptable to the Company that such Transfer is exempt from the registration requirements of the Securities Act.
(b) If, while a Permitted Transferee holds any Company Securities, a Permitted Transferee ceases to qualify as a Permitted Transferee in relation to the initial transferring Shareholder from whom or which such Permitted Transferee or any previous Permitted Transferee of such initial transferring Shareholder received such shares (an Unwinding Event), then:
(i) the relevant initial transferor Shareholder shall forthwith notify the other Shareholders and the Company of the pending occurrence of such Unwinding Event; and
(ii) prior to such Unwinding Event, such initial transferor Shareholder shall take all actions necessary to effect a Transfer of all the Company Securities held by the relevant Permitted Transferee either back to such Shareholder or, pursuant to this Section 3.3, to another Person which qualifies as a Permitted Transferee of such initial transferring Shareholder.
(c) Notwithstanding anything to the contrary contained in this Agreement, no party shall avoid the provisions of this Agreement by making one or more Transfers to one or more Permitted Transferees and then disposing of all or any portion of such partys interest in such Permitted Transferee.
3.4 Tag-Along Rights.
(a) If the DCP Investor (a Tag Seller) proposes to Transfer shares of Common Stock representing more than 25% of its Initial Shares to any Third Party Prospect(s) (a Tag-Along Sale), then at least 15 days before the closing of any such proposed Transfer the Tag Seller shall give written notice (a Tag-Along Notice) to each Rollover Holder (the Tag-Along Offerees), which shall (i) state the number and type of shares of Common Stock proposed to be Transferred, (ii) state the proposed amount and type of consideration to be paid by such Third Party Prospect(s) for the shares of Common Stock proposed to be Transferred and all other material terms and conditions of the proposed Transfer, and (iii) contain an offer for each Tag-Along Offeree to participate in such Transfer pursuant to this Section 3.4; provided, however, that the Golden Gate Investor and the other 2011 Rollover Holders shall be entitled to a Tag-Along Notice (and each shall be, accordingly a Tag-Along Offeree for purposes thereof) regardless of whether the Tag Seller proposed to Transfer more or less than 25% of its Initial Shares, and the Golden Gate Investor and the other 2011 Rollover Holders shall be entitled to participate in any such Transfer pursuant to this Section 3.4 notwithstanding the fact that the Tag Seller proposed to Transfer less than 25% of its Initial Shares.
(b) For a period of 10 days after receipt of the Tag-Along Notice (the Tag-Along Offer Period), each Tag-Along Offeree shall have the right, by delivering written notice
(a Tag-Along Response Notice) to the Tag Seller prior to the expiration of the Tag-Along Offer Period, to elect to include in the proposed Transfer all or any portion of its pro rata portion of vested shares of Common Stock proposed to be Transferred in such Tag-Along Sale, which shall be the proportion that the number of shares of Common Stock owned by such Tag-Along Offeree bears to the aggregate number of shares of Common Stock owned by the Tag Seller and all Tag-Along Offerees (the Tagging Persons); provided, however, that if the consideration to be received in the Tag-Along Sale includes securities, only Tagging Persons that have certified to the reasonable satisfaction of the Tag Seller that they are Accredited Investors shall be entitled to participate in such Transfer. The Tag Seller shall reduce to the extent necessary the number of shares of Common Stock it otherwise would have sold in the proposed Transfer so as to permit the Tagging Persons to sell the shares of Common Stock elected by them to be included in the Tag-Along Sale (it being agreed that in the event that the Third Party Prospect(s) in such proposed Transfer do not permit a Tag-Along Offeree that has exercised its right pursuant to and in accordance with the terms of this Section 3.4 to participate in such Transfer to so participate, the Tag-Seller shall not consummate such proposed Transfer). A Tagging Persons participation in a Tag-Along Sale is conditioned upon (i) the consummation of the transactions contemplated in the Tag-Along Notice with the transferee named therein and (ii) subject to the other provisions of this Section 3.4 and Section 3.6, such Tagging Persons execution and delivery of all agreements and other documents as the Tag Seller executes and delivers in connection with the Tag-Along Sale. The consummation of the Tag-Along Sale shall be in accordance with all of the material terms and conditions set forth in the Tag-Along Notice and each participating Tagging Person shall receive the same consideration per share of Common Stock (including the same form of consideration) as received by the Tag Seller (and on the same date as the Tag Seller) and shall otherwise be on the same economic terms and subject to the same conditions, as the Tag Seller is selling its shares of Common Stock in such Tag-Along Sale; provided, however, that in no event shall any Tagging Person have any greater obligations (measured on a pro rata basis based on proceeds received) in connection with such sale than the Tag Seller. The Tag Sellers right to consummate the Tag-Along Sale as proposed in the applicable Tag-Along Notice (and, then, solely in accordance with the requirements of this Section 3.4 and Section 3.6) shall survive (without any requirement for sending a new Tag-Along Notice to the Tag-Along Offerees) for a period lasting until the date that is later of (i) 90 days after receipt of the Tag-Along Notice by the Tag-Along Offerees and (ii) 30 days after receipt of any material required approval of such sales from any governmental entity that is a condition precedent in the definitive documentation with respect to such Tag-Along Sale; provided that, in the event that any of the material terms or conditions of such proposed Tag-Along Sale change compared to those set forth in the Tag-Along Notice, the Tag Seller shall give the Tag-Along Offerees notice of such change and a period of 10 days to determine whether such Tag-Along Offerees desire to participate in the Tag-Along Sale as provided in this Section 3.4.
(c) This Section 3.4 shall not apply to (i) any Transfer of Company Securities in a Drag-Along Sale or (ii) any Transfer of Company Securities to a Permitted Transferee or in connection with an Initial Public Offering.
(d) Notwithstanding anything to the contrary, in the event the Company issues Company Securities (other than Common Stock or securities issued pursuant to the Management
Incentive Plan) (the Other Company Securities), then this Section 3.4 shall be modified to provide that if the Tag Seller sells any of its Other Company Securities, the Tag-Along Offerees owning such type of Company Securities shall have the rights set forth in this Section 3.4 with respect to such proposed sale of other Company Securities by the Tag Seller (i.e., such sale shall constitute a Tag-Along Sale), including equal opportunity to participate ratably in such transaction; provided, however, that the Tag-Along Offerees (other than the Golden Gate Investor and the other 2011 Rollover Holders) shall not have an opportunity to so participate unless the DCH Investor sells at least 25% of its Other Company Securities. Such modifications shall include provisions that the consideration per share, terms and conditions shall be adjusted as necessary to the extent such Tagging Person and the Tag Seller are selling different series or classes of Company Securities and that any adjustment between any preferred Company Securities and Common Stock shall be made by determining the valuation implied by such sale (by extrapolating such valuation to a sale of all Company Securities) and determining the proceeds of such sale which would have been distributed to the Company with respect to a share of such preferred Company Security and Common Stock in a complete liquidation pursuant to the rights and preferences set forth in the Companys articles of incorporation as in effect immediately prior to such sale.
(e) For the avoidance of doubt, the foregoing provisions of this Section 3.4 will only apply from the Change Date until an Initial Public Offering (it being agreed that from the date hereof until the Change Date, the provisions of Section 3.1(b)(i) shall apply).
3.5 Drag-Along Rights.
(a) If the DCP Investor proposes that it or the Company enter into a transaction (other than with a Permitted Transferee) that would result in the Transfer of an amount of Company Securities that would result in a Change of Control (a Drag-Along Sale), then such DCP Investor shall provide written notice (a Drag-Along Sale Notice) to each other Shareholder (an Other Holder) not less than 12 Business Days prior to the consummation of the proposed Drag-Along Sale. The Drag-Along Sale Notice shall state the proposed amount and type of consideration to be paid by such Third Party Prospect in such Drag-Along Sale and all other material terms and conditions of the Drag-Along Sale.
(b) Each Other Holder shall be required to participate in the Drag-Along Sale on the same economic terms and conditions as are applicable to the DCP Investor, including the same consideration per Company Security (including the same form of consideration) as received by the DCP Investor (on no later than the same date as the DCP Investor); provided, however, that in no event shall any Other Holder have any greater obligations in connection with such sale than the DCP Investor; provided, further, that the consideration per share, terms and conditions shall be adjusted as necessary to the extent such Other Holder and the DCP Investor are selling different series or classes of Company Securities; provided, further, that any adjustment between any preferred Company Securities and Common Stock shall be made by determining the valuation implied by such sale (by extrapolating such valuation to a sale of all Company Securities) and determining the proceeds of such sale which would have been distributed to the Company with respect to a share of such preferred Company Security and Common Stock in a complete liquidation pursuant to the rights and preferences set forth in the
Companys articles of incorporation as in effect immediately prior to such sale. Notwithstanding the foregoing, if the consideration to be received in the Drag-Along Sale includes securities, any Other Holder that is unable to certify to the reasonable satisfaction of the DCP Investor that it is an Accredited Investor may, at the election of the DCP Investor, be required to receive, in lieu of the securities to which it would otherwise be entitled to receive in such Drag-Along Sale, an amount in cash equal to the Fair Market Value thereof.
(c) If the Drag-Along Sale is structured as a sale of Company Securities, the DCP Investor or the Company may require each Other Holder to Transfer a portion of its Company Securities that represents the same percentage of the Company Securities held by such Other Holder as the number of Company Securities being sold by the DCP Investor (for example, if the DCP Investor is selling 70% of its Company Securities, then such Other Holders will be required to sell 70% of their Company Securities).
(d) If the Drag-Along Sale is structured as a merger, sale of assets or other transaction that requires approval of the Shareholders, then each Other Holder shall cooperate in, and shall take all actions that the DCP Investor deems reasonably necessary or desirable to consummate the Drag-Along Sale, including, without limitation, (i) voting their respective Company Securities (or executing and delivering written consents in lieu thereof) in favor of, or otherwise consenting to, the Drag-Along Sale and against any action or proposal that may prevent, hinder or impede the consummation of the Drag-Along Sale, and (ii) not exercising any dissenters or appraisal rights to which they may be entitled in connection with the Drag-Along Sale. Each Other Holder (other than the Golden Gate Investor and the other 2011 Rollover Holders) hereby grants to the DCP Investor, an irrevocable proxy to vote, including in any action by written consent, such Other Holders Company Securities in accordance with this Section 3.5.
(e) Except as set forth in Section 3.5(b), upon the consummation of such Drag-Along Sale, all Shareholders holding the same kind of Company Security participating in such Drag-Along Sale shall receive (on the same date as the DCP Investor in the case of the Golden Gate Investor and the other 2011 Rollover Holders) the same form and amount of consideration per Company Security, or, if any Shareholder is given an option as to the form and amount of consideration to be received, all Shareholders participating therein with the same Company Securities will be given the same option.
(f) The DCP Investors right to consummate (or cause the consummation of) the Drag-Along Sale as proposed in the applicable Drag-Along Sale Notice (and, then, solely in accordance with the requirements of this Section 3.5 and Section 3.6) shall survive (without any requirement for sending a new Drag-Along Sale Notice to the Other Holder) for a period lasting until the date that is later of (i) 90 days after receipt of the Drag-Along Sale Notice by the Other Holder and (ii) 30 days after the receipt of any material required approval of such sales from any governmental entity (that is a condition precedent in the definitive documentation with respect to such sale).
(g) Notwithstanding anything contained herein to the contrary, (i) no Drag-Along Sale shall be permitted to be effectuated (whether by combination of shares, recapitalization, merger, consolidation, reorganization, reclassification or similar transaction)
whereby the DCP Investor, any Diamond Castle Funds, the Golden Gate Investor or any Golden Gate Funds would hold interests in a successor to the Company which is a limited liability company, a partnership or any other non corporate entity which is treated as a partnership for income tax purposes in a manner that would reasonably be likely to cause any of the DCP Investor, any Diamond Castle Fund, the Golden Gate Investor or any Golden Gate Fund to recognize (A) any unrelated business taxable income (within the meaning of Section 512 of the Code) or (B) any income that is effectively connected with the conduct of a trade or business within the United States (as described in Section 864(c) of the Code), unless the DCP Investor and the Golden Gate Investor are given 10 days prior written notice of such transaction and consent (in their sole discretion) thereto; and (ii) regardless of the form a Drag-Along Sale would take (whether by combination of shares, recapitalization, merger, consolidation, reorganization, reclassification or other transaction), the proceeds of any such Drag-Along Sale shall be distributed to the Shareholders in accordance with the liquidation preference and distribution allocation requirements contained in the Companys charter.
3.6 Miscellaneous Provisions Related to Tag-Along and Drag-Along Sales. With respect to any Tag-Along Sale or Drag-Along Sale pursuant to this Agreement:
(a) Each Tagging Person or Other Holder as applicable, shall, upon request, deliver to the DCP Investor (or the Company, if applicable) the certificate or certificates representing the Company Securities of such Shareholders to be included in the Tag-Along Sale or Drag-Along Sale, as applicable, duly endorsed, in proper form for Transfer, together with (except in the case of the 2011 Rollover Holders) an irrevocable power-of-attorney or a blank stock power authorizing the DCP Investor to Transfer such Company Securities and to execute and deliver on behalf of such Shareholder all other documents required to be executed in connection with such transaction.
(b) Notwithstanding anything to the contrary contained in this Agreement, (i) each Tagging Person or Other Holder, as applicable, will agree to be responsible only for the following customary representations and warranties and solely to the extent related to shares of such Tagging Person or Other Holder proposed to be transferred or such Tagging Person or Other Holder itself (and not the Company or any other Person): ownership, no liens, no conflicts, no consents, authorization, organization and good standing, enforceability, no litigation and financial advisors. Any liability for breach thereof shall be several and not joint and the liabilities thereunder shall be borne on a pro rata basis based on the consideration received by each such Tagging Person or Other Holder, as applicable; provided that in no event shall any Tagging Person or Other Holder, as applicable, be liable for a breach of any representations or covenants made by any other Person in such agreement that are specific to such Person; (ii) any general indemnity given by the Tag Seller or DCP Investor, as applicable, applicable to liabilities not specific to the Tag Seller or DCP Investor, as applicable, to the purchaser in connection with such sale shall be apportioned among the Tag Seller or DCP Investor, as applicable, on the one hand, and the Tagging Persons or Other Holders, as applicable, participating in such sale, on the other, according to the consideration received by each of them and shall not exceed the net proceeds from the sale received by each of them; (iii) any representation relating specifically to a Tagging Person or Other Holder, as applicable, shall be made only by that Tagging Person or Other Holder, as applicable, and any indemnity given with respect to such representation shall be
given only by such Tagging Person or Other Holder, as applicable, and not in an amount exceeding the amount of the net proceeds received by such Tagging Person or Other Holder, as applicable, in the sale; and (iv) no non-solicitation or non-competition covenant may be imposed upon any Tagging Person or Other Holder, as applicable, in connection with such sale (except for covenants with respect to the non-solicitation of employees or key customer or vendor relationships, it being understood that any such non-solicitation covenant shall not apply to any portfolio company Affiliated with the Golden Gate Investor or any Golden Gate Fund so long as such portfolio company has not received Confidential Information).
(c) Subject to the limitations set forth in Sections 3.4 or 3.5, as applicable, if requested by the DCP Investor, the Company and each Tagging Seller or Other Holder, as applicable, will reasonably cooperate, solely in their respective capacities as a Shareholder, with the proposed transferee and their respective advisors, to facilitate and effect any Tag-Along Sale or Drag-Along Sale, including reasonably cooperating in the obtaining of all third party and governmental approvals, provided, however, that nothing herein shall require any Tagging Seller or Other Holder, as applicable, to incur any expense that is not reimbursed by the Company. Each Shareholder shall be obligated to pay only its pro rata share (based on the aggregate consideration received by such Shareholder in respect of the Company Securities Transferred by such Shareholder) of expenses reasonably incurred in connection with a consummated Tag-Along Sale or Drag-Along Sale), including all attorneys fees and charges, all accounting fees and charges and all finders, brokerage or investment banking fees, charges or commissions, to the extent such expenses are not otherwise paid by the Company or another Person; provided, however, that no Tag-Along Sale or Drag-Along Sale shall include any fees or amounts payable to the DCP Investor or its Affiliates other than such fees and expense reimbursement it may be entitled to receive as set forth in the Monitoring Agreement (as may be amended after the date hereof in accordance with the requirements of Section 6.2 of this Agreement).
(d) Notwithstanding anything contained in this Agreement, there shall be no liability on the part of the DCP Investor to the Company or any Shareholder if any proposed Tag-Along Sale or Drag-Along Sale is not consummated for whatever reason. The decision to effect a Tag-Along Sale or Drag-Along Sale is in the sole and absolute discretion of the DCP Investor.
ARTICLE 4
CERTAIN SHAREHOLDER RIGHTS
4.1 Preemptive Rights.
(a) If following the date hereof the Company desires to issue any Company Securities, other than Excluded Securities, it shall first give prior written notice (the Notice of Proposed Issuance) to each Shareholder other than the Management Holders (the Rights Holders) at least 15 days prior to the date of such proposed issuance which shall: (i) state the number and type of Company Securities which the Company then desires to issue (the New Securities), (ii) state the terms and other material conditions of the issuance, including the price, upon which the Company proposes to issue the New Securities, and (iii) contain an offer to
Transfer the New Securities to the Rights Holders pursuant to this Section 4.1. Each Rights Holder shall be entitled to purchase, at the price and on the other terms and conditions specified in the Issuance Notice, an amount equal to (x) the number of Company Securities to be issued by the Company (including all Company Securities issued to Rights Holders with respect to this provision) multiplied by (y) a fraction determined as of immediately prior to such issuance, the numerator of which is the number of Company Securities of such Rights Holder and the denominator of which is the number of issued Company Securities then outstanding.
(b) For a period of 10 days after receipt of the Notice of Proposed Issuance (the Participation Period), each Rights Holder shall have the right, by delivering written notice to the Company to elect to purchase, at the price and on the terms and conditions specified in the Notice of Proposed Issuance, the number of Company Securities specified in such Shareholders notice, not to exceed the amount set forth in Section 4.1(a). If, any Shareholder has not exercised its right to purchase any of its pro rata share of such Company Securities during the Participation Period, such Shareholder shall be deemed to have waived all of its rights under this Section 4.1 with respect to, and only with respect to, the purchase of such Company Securities specified in the Notice of Proposed Issuance.
(c) If all of the New Securities have not been purchased by the Rights Holders pursuant to Section 4.1(b), then the Company shall have the right until 120 days following the expiration of the Participation Period, to issue the New Securities not purchased by the Rights Holders on terms (including price) no more favorable to the purchaser than are specified in the Notice of Proposed Issuance. If for any reason the New Securities not purchased by the Rights Holders are not issued within such period and at such price and on such terms, the right to issue in accordance with the Notice of Proposed Issuance shall expire and the provisions of this Agreement shall continue to be applicable to the New Securities not purchased by the Rights Holders; provided that, in the event that any of the material terms or conditions specified in the Notice of Proposed Issuance shall change within such 120-day period, the Company shall give the Rights Holders notice of such change and an additional period of 8 Business Days to determine whether to elect to purchase the Company Securities as provided in Section 4.1(b).
(d) The purchase price for the New Securities shall, unless otherwise agreed in writing by the parties to such transaction, be paid in cash or by certified check at the date of the closing.
(e) The Company shall set the place, time and date for the closing of the purchase of the New Securities. At such closing, the Rights Holders participating in such issuance shall deliver the consideration required by Section 4.1(d), and the Company shall deliver to them certificates representing the New Securities.
(f) The Company may offer and sell Company Securities subject to the preemptive rights under this Section 4.1 to a Rights Holder without first offering such Company Securities to each Rights Holder or complying with the procedures of this Section 4.1, so long as (i) each of the Rights Holders receives prompt written notice of the consummation of such sales (in any event within 10 days after the close of such sale) and thereafter is given the opportunity (exercisable as soon as practicable, and in any event within 10 Business Days after receipt of
notice referred to herein) to purchase Company Securities (from either the Company or the initial purchaser of such Company Securities) of the identical kind as offered and sold so that the number of shares of Company Securities the Rights Holder can hold immediately after such purchase shall bear the same proportion to the number of then issued and outstanding Company Securities (determined after the exercise of the right to purchase by other Rights Holders under this Section 4.1(f)) as the number of Company Securities held by such Rights Holder possessed to the number of issued and outstanding Company Securities immediately prior to the offer and sale of any Company Securities under this Section 4.1(f), on the same terms and conditions as such prior sale, and (ii) the price per unit of Company Securities shall be identical to the price per unit paid in such prior sale.
4.2 Information Rights. During such time as the Company shall not be obligated to file periodic reports pursuant to Section 13 or 15(d) of the Exchange Act, the Company will deliver, or will cause to be delivered, the following to each DCP Investor, the Golden Gate Investor, each CCCS Holder and, so long as any individual Rollover Holder beneficially owns at least 5% of the Shares of Common Stock, such Rollover Holders:
(a) as soon as available after the end of each fiscal year of the Company, and in any event within 90 days thereafter, a consolidated balance sheet of the Company and its Subsidiaries as of the end of such fiscal year, and consolidated statements of income, retained earnings and cash flows of the Company and its Subsidiaries for such year, prepared in accordance with GAAP and setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and accompanied by the opinion of the Companys independent public accountants;
(b) as soon as available after the end of the first, second and third quarterly accounting periods in each fiscal year of the Company, and in any event within 45 days thereafter, a consolidated balance sheet of the Company and its Subsidiaries as of the end of each such quarterly period, and consolidated statements of income, retained earnings and cash flows of the Company and its Subsidiaries for such period and for the current fiscal year to date, prepared in accordance with GAAP (subject to normal year-end audit adjustments and the absence of notes thereto) and setting forth in comparative form the figures for the corresponding periods of the previous fiscal year, all in reasonable detail and certified by the principal financial or accounting officer of the Company;
(c) as soon as available after the end of each month and in any event within 20 days thereafter, a consolidated balance sheet of the Company and its Subsidiaries as of the end of such month and consolidated statements of operations, income, cash flows, retained earnings and shareholders equity of the Company and its Subsidiaries, for each month and for the current fiscal year of the Company to date, prepared in accordance with GAAP (subject to normal year-end audit adjustments and the absence of notes thereto); and
(d) a proposed annual budget and a business plan and financial forecasts for the Company for the next fiscal year of the Company, no later than 30 days before the beginning of the Companys next fiscal year, in such manner and form as approved by the Board, which shall include at least a projection of income and a projected cash flow statement for each fiscal
quarter in such fiscal year and a projected balance sheet as of the end of each fiscal quarter in such fiscal year, in each case prepared in reasonable detail, with appropriate presentation and discussion of the principal assumptions upon which such budgets and projections were prepared.
4.3 Access. The Company shall, and shall cause its and its Subsidiaries officers, directors, employees, auditors and other agents to (a) afford the officers, employees, auditors and other agents of each DCP Investor, the Golden Gate Investor and each CCCS Holder, during normal business hours and upon reasonable notice, reasonable access and consultation rights at all reasonable times to its officers, employees, auditors, legal counsel, properties, offices, plants and other facilities and to all books and records, and (b) afford each of the DCP Investor and the Golden Gate Investor the opportunity to discuss the Companys affairs, finances and accounts with the Companys officers, accountants and auditors from time to time as each such DCP Investor and the Golden Gate Investor may reasonably request (including access to accountants work papers, books of account, financial and other records).
4.4 Tax Considerations. Notwithstanding anything contained herein to the contrary, no transaction involving the Company or its Subsidiaries shall be permitted to be effectuated (whether by combination of shares, recapitalization, merger, consolidation, reorganization, reclassification or similar transaction) whereby the DCP Investor, any Diamond Castle Funds, the Golden Gate Investor or any Golden Gate Funds would hold interests in a successor to the Company which is a limited liability company, a partnership or any other non corporate entity which is treated as a partnership for income tax purposes in a manner that would reasonably be likely to cause any of the DCP Investor, any Diamond Castle Fund, the Golden Gate Investor or any Golden Gate Fund to recognize (A) any unrelated business taxable income (within the meaning of Section 512 of the Code) or (B) any income that is effectively connected with the conduct of a trade or business within the United States (as described in Section 864(c) of the Code), unless (i) such transaction is entered into good faith and (ii) the DCP Investor and the Golden Gate Investor are given 10 days prior written notice of such transaction and each of them consents (in each of its sole and absolute discretion) thereto.
ARTICLE 5
REGISTRATION RIGHTS
5.1 Demand Registration.
(a) Subject to the restrictions set forth herein, if at any time the Company receives a written request from the DCP Investor or, after the Golden Gate Demand Eligibility, the Golden Gate Investor (as such, and as applicable, the Requesting Shareholder) that the Company effect the registration under the Securities Act of all or any portion of the Requesting Shareholders Registrable Securities, and specifying the intended method of disposition thereof (each such request shall be referred to herein as a Demand Registration), then, within five Business Days, the Company shall promptly give notice of such Demand Registration to the other Shareholders and thereupon shall use its best efforts to effect, as expeditiously as possible, the registration under the Securities Act of:
(i) all Registrable Securities for which the Requesting Shareholders have requested registration under this Section 5.1, and
(ii) all other Registrable Securities that any other Shareholders (all such Shareholders, together with the Requesting Shareholders, the Registering Shareholders) have requested that the Company register within five Business Days of such Shareholders receipt of the Companys notice of the Demand Registration (which request to the Company shall specify the number of Registrable Securities requested to be registered by such Shareholders);
provided that no Person may participate in any registration statement pursuant to this Section 5.1(a) unless such Person agrees to sell their Registrable Securities to the underwriters selected as provided in Section 5.5(f) on the same terms and conditions as apply to the Requesting Shareholders; and provided, further, that the Company shall not be obligated to effect (a) more than five Demand Registrations by the DCP Investor, (b) more than two Demand Registrations by the Golden Gate Investor and not until after the Golden Gate Demand Eligibility, (c) any Demand Registration unless the aggregate gross proceeds expected to received from the sale of the Registrable Securities requested to be included by all Registering Shareholders in such Demand Registration are at least $50 million (unless such Registrable Securities identified in the Demand Registration constitute all remaining Registrable Securities held by the Requesting Shareholder), or (d) more than one Demand Registration during any six-month period.
(b) Notwithstanding the foregoing, the Company may delay the filing of a registration statement, or suspend the continued use of a registration statement, required by Section 5.1 (i) for a period up to 90 days after the request to file a registration statement if at the time the Company receives the request to register Registrable Securities, the Company or any of its Subsidiaries are engaged in confidential negotiations or other confidential business activities, disclosure of which would be required in such registration statement (but would not be required if such registration statement were not filed), and the Board determines in good faith, after consultation with external legal counsel, that such disclosure would have a material adverse effect on the Company or its business or on the Companys ability to effect a proposed material acquisition, disposition, financing, reorganization, recapitalization or similar transaction and (ii) for a period of time required by an underwriting agreement relating to a Public Offering of newly issued shares by the Company; provided that such period of time shall not exceed 90 days from the date of such underwriting agreement. A deferral of the filing of a registration statement, or the suspension of the continued use of a registration statement, pursuant to this Section 5.1(b), shall be lifted, and the requested registration statement shall be filed forthwith, if, in the case of a deferral, the negotiations or other activities are disclosed or terminated. In order to defer the filing of a registration statement, or suspend the continued use of a registration statement, pursuant to this Section 5.1(b), the Company shall promptly (but in any event within five days), upon determining to seek such deferral or suspension, deliver to the Requesting Shareholder a certificate signed by an executive officer of the Company stating that the Company is deferring such filing, or suspending the continued use of a registration statement, pursuant to this Section 5.1(b) and a general statement of the reason for such deferral or suspension, as the case may be, and an approximation of the anticipated delay. The Company
may defer the filing, or suspend the continued use of, a particular registration statement pursuant to this Section 5.1(b) no more than twice and for no more than 120 days in the aggregate in any twelve-month period; provided that there must be an interim period of at least 60 days between the end of one deferral or suspension period and the beginning of a subsequent deferral or suspension period. The Company agrees, that in the event it exercises its rights under this Section 5.1(b), it shall, within seven days following receipt by the holders of Registrable Securities of the notice of deferral or suspension, as the case may be, update the deferred or suspended registration statement as may be necessary to permit the holders of Registrable Securities to resume use thereof in connection with the offer and sale of their Registrable Securities in accordance with applicable law.
(c) Promptly after the expiration of the five Business Day period referred to in Section 5.1(a)(ii), the Company will notify in writing all Registering Shareholders of the identities of the other Registering Shareholders and the number of shares of Registrable Securities requested to be included therein. At any time prior to the effective date of the registration statement relating to such Demand Registration, the Requesting Shareholders may revoke in writing such request, without liability to any of the other Registering Shareholder, by providing a notice to the Company revoking such request; provided, however, that no such withdrawn demand request shall be deemed to have been a Demand Registration if (i) such demand request is withdrawn prior to the filing by the Company of a registration statement pursuant thereto, or (ii) such withdrawal is due to the disclosure of material adverse information relating specifically to the Company that was not known by the Requesting Shareholder at the time it submitted its demand request, provided, that, in either event, the Requesting Shareholder elects to bear all expenses associated with such withdrawn demand request and the registration statement pursuant thereto.
(d) Except as expressly set forth herein, the Company shall be liable for and pay all Registration Expenses in connection with each Demand Registration, regardless of whether such Registration is effected. Notwithstanding the foregoing sentence, the Registering Shareholders of such Registrable Securities shall be responsible for any brokerage or underwriting commissions and taxes of any kind (including, without limitation, transfer taxes) with respect to any disposition, sale or transfer of Registrable Securities.
(e) A Demand Registration shall not be deemed to have occurred unless the registration statement relating thereto (A) has become effective under the Securities Act, and (B) has remained effective for a period of at least 180 days (or such shorter period in which all Registrable Securities of the Registering Shareholders included in such registration have actually been sold thereunder); provided, that such registration statement shall not be considered a Demand Registration if, after such registration statement becomes effective, (1) such registration statement is interfered with by any stop order, injunction or other order or requirement of the SEC or other governmental agency or court, and (2) less than 75% of the Registrable Securities included in such registration statement have been sold thereunder; or if the Maximum Offering Size is reduced in accordance with Section 5.1(f) such that less than 75% of the Registrable Securities of the Requesting Shareholder sought to be included in such registration are included.
(f) If a Demand Registration involves a Public Offering and the managing underwriter advises the Company and the Requesting Shareholder that, in its view, the number of Registrable Securities that the Registering Shareholders and the Company (if any) propose to include in such registration exceeds the largest number of Registrable Securities that can be sold without having an adverse effect on such offering, including the price at which such shares can be sold (the Maximum Offering Size), the Company shall include in such registration, in the priority listed below, up to the Maximum Offering Size:
(i) first, all Registrable Securities requested to be registered by the Registering Shareholders (such Registrable Securities allocated, if necessary for the offering not to exceed the Maximum Offering Size, pro rata among the Requesting Shareholder and the other holders of Registrable Securities on the basis of the relative number of Registrable Securities so requested to be included in such registration by each, unless the managing underwriter reasonably determines otherwise, in which case the allocation of such Registrable Securities shall be in the manner reasonably determined by the managing underwriter); and
(ii) second, all Registrable Securities proposed to be registered by the Company.
5.2 Piggyback Registration.
(a) If the Company proposes to register any securities of the Company under the Securities Act (whether for itself or otherwise in connection with a sale of securities by another Person, but other than in connection with a Shelf Registration and any resale of Registrable Securities pursuant to a Shelf Registration, which shall be governed by the terms of Section 5.3, a registration on Form S-8 or S-4 or any successor or similar forms, relating to securities of the Company issuable upon exercise of employee stock options or in connection with employee benefit or similar plans or arrangements of the Company, or in connection with a merger of the Company into or with another Person or an acquisition by the Company of another Person or substantially all the assets of another Person or any transaction with respect to which Rule 145 (or any successor provision) under the Securities Act applies), whether or not for sale for its own account, the Company shall on each such occasion give prompt written notice at least five Business Days prior to the anticipated filing date of the registration statement relating to such registration to each of the Shareholders, which notice shall set forth such Shareholders rights under this Section 5.2 and shall offer such Shareholder the opportunity to include in such registration statement all or any portion of the Registrable Securities held by such Shareholder (a Piggyback Registration), subject to the restrictions set forth herein; provided, however, that (x) no holder of Registrable Securities shall be entitled to register any of its Registrable Securities pursuant to this Section 5.2 in an Initial Public Offering, other than (i) the DCP Investor, (ii) the Golden Gate Investor (it being agreed that if the DCP Investor is participating as a seller of Registrable Securities in such Initial Public Offering, then the Golden Gate Investor may sell up to its pro rata number of Registrable Securities in such Initial Public Offering based on the number of shares the DCP Investor is selling in such Initial Public Offering compared to the number of shares the DCP Investor owned prior to such Initial Public Offering), and (iii) the CCCS Holders (it being agreed that if the DCP Investor is participating as a seller of Registrable
Securities in such Initial Public Offering, then each CCCS Holder may sell up to its pro rata number of Registrable Securities in such Initial Public Offering based on the number of shares the DCP Investor is selling in such Initial Public Offering compared to the number of shares the DCP Investor owned prior to such Initial Public Offering), and (y) the provisions of Section 5.1 with respect to Registering Shareholders and not this Section 5.2 shall apply to the ability of any Shareholder to participate in any registration being effected pursuant to a Demand Registration contemplated by Section 5.1. Upon the request of any such Shareholder made within five Business Days after the receipt of notice from the Company (which request shall specify the number of Registrable Securities requested to be registered by such Shareholder), the Company shall use its best efforts to effect the registration under the Securities Act of all Registrable Securities that the Company has been so requested to register by all such Shareholders, to the extent necessary to permit the disposition of the Registrable Securities so to be registered; provided, that (i) if such registration involves a Public Offering, all such Shareholders requesting to be included in the Companys registration must sell their Registrable Securities to the underwriters selected as provided in Section 5.5(f) (i) on the same terms and conditions as apply to the Company or any other selling Shareholders, and (ii) if, at any time after giving notice of its intention to register any Registrable Securities pursuant to this Section 5.2(a) and prior to the effective date of the registration statement filed in connection with such registration, the Company or the initiating holders, as applicable, shall determine for any reason not to register such securities, the Company shall give notice to all such Shareholders and, thereupon, shall be relieved of its obligation to register any Registrable Securities in connection with such registration. No registration effected under this Section 5.2 shall relieve the Company of its obligations to effect a Demand Registration to the extent required by Section 5.1. The Shareholder(s) participating in such Piggyback Registration shall be permitted to withdraw all or part of the Registrable Securities from a Piggyback Registration at any time prior to the effective time of such Piggyback Registration. The Company shall be liable for and pay all Registration Expenses in connection with each Piggyback Registration, regardless of whether such registration is effected, provided that the participating Shareholders shall be responsible for any brokerage or underwriting commissions and taxes of any kind (including, without limitation, transfer taxes) with respect to any disposition, sale or transfer of Registrable Securities.
(b) If a Piggyback Registration involves a Public Offering (other than any Demand Registration, in which case the provisions with respect to priority of inclusion in such offering set forth in Section 5.1(f) shall apply) and the managing underwriter advises the Company that, in its view, the number of Registrable Securities that the Company and all selling Shareholders propose to include in such registration exceeds the Maximum Offering Size, the Company shall include in such registration, in the following priority, up to the Maximum Offering Size:
(i) With respect to a Public Offering initiated by the Company for its own account:
(1) first, such number of Registrable Securities proposed to be registered for the account of the Company, if any, as would not cause the offering to exceed the Maximum Offering Size, and
(2) second, all Registrable Securities requested to be included in such registration by any Shareholders pursuant to this Section 5.2 (such Registrable Securities allocated, if necessary for the offering not to exceed the Maximum Offering Size, pro rata among such Shareholders based on their relative number of Registrable Securities requested to be included in the Piggyback Registration, unless the managing underwriter reasonably determines otherwise (which, for the avoidance of doubt, could, in the reasonable determination of the managing underwriter include the exclusion of all Registrable Securities of any Shareholder), in which case the allocation of such Registrable Securities shall be in the manner reasonably determined by the managing underwriter).
(ii) With respect to a Public Offering initiated by a selling shareholder:
(1) first, all Registrable Securities requested to be included in such registration by any Shareholders pursuant to this Section 5.2 (such Registrable Securities allocated, if necessary for the offering not to exceed the Maximum Offering Size, pro rata among such Shareholders based on their relative number of Registrable Securities requested to be included in the Piggyback Registration, unless the managing underwriter reasonably determines otherwise (which, for the avoidance of doubt, could, in the reasonable determination of the managing underwriter include the exclusion of all Registrable Securities of any Management Holder), in which case the allocation of such Registrable Securities shall be in the manner reasonably determined by the managing underwriter); and
(2) second, such number of Registrable Securities proposed to be registered for the account of the Company, if any, as would not cause the offering to exceed the Maximum Offering Size.
(c) Notwithstanding anything to the contrary contained herein, the provisions of this Section 5.2 shall not be applicable to any shelf registration effected pursuant to Section 5.3 or with respect to any resales of securities pursuant to any such shelf registration.
5.3 Shelf Registrations.
(a) At any time after the one year anniversary of the consummation by the Company of the Initial Public Offering, upon receipt of a written request (the Shelf Request) from the DCP Investor, the Golden Gate Investor or any CCCS Holder that the Company file a shelf registration statement pursuant to Rule 415 under the Securities Act (the Shelf Registration) on Form S-3 (or any successor form to Form S-3, or any similar short-form registration statement), covering the resale of Registrable Securities, the reasonably anticipated gross proceeds from all resales covered thereunder of which would exceed $40 million, the Company shall use its reasonable best efforts consistent with the terms of this Agreement to (i) cause the Shelf Registration to be filed with the SEC as soon as practicable (but in no event later than 30 days of its receipt of the Shelf Request) and to include all Registrable Securities
held by such Requesting Shareholder to be registered on such form, and (ii) cause such Shelf Registration to be declared effective by the SEC as soon as possible. As soon as reasonably practicable after the Initial Public Offering, the Company will use its reasonable best efforts, consistent with the terms of this Agreement, to qualify for and remain eligible to use Form S-3 registration or a similar short-form registration. The provisions of Section 5.5 shall be applicable to each Shelf Registration initiated under this Section 5.3 and any subsequent resale of Registrable Securities pursuant thereto; provided, that the gross proceeds therefrom equal at least $40 million.
(b) In connection with any proposed underwritten resale of Registrable Securities which is not pursuant to a Demand Registration under Section 5.1 (an Underwritten Shelf Takedown) pursuant to a Shelf Registration, each of the DCP Investor and the Golden Gate Investor, as applicable, agrees, in an effort to conduct any such Underwritten Shelf Takedown in the most efficient and organized manner, to coordinate with the Company prior to initiating any sales efforts and cooperate with the Company as to the terms and consummation of such Underwritten Shelf Takedown.
(c) The Company shall be liable for and pay all Registration Expenses in connection with each Shelf Registration, regardless of whether such Shelf Registration is effected, and any Underwritten Shelf Takedown; provided that the DCP Investor shall be responsible for any brokerage or underwriting commissions and taxes of any kind (including, without limitation, transfer taxes) with respect to any disposition, sale or transfer of Registrable Securities.
5.4 Lock-Up Agreements. In connection with any underwritten Public Offering (including an Underwritten Shelf Takedown), each Shareholder agrees, for the benefit of the Company or the selling Shareholders in such Public Offering and for the benefit of the managing underwriter in such Public Offering, not to effect any public sale or private offer or distribution of any Registrable Securities during the 10 days prior to the consummation of such Public Offering and during such time period after the consummation of such Public Offering, not to exceed 180 days in the case of the Initial Public Offering or any underwritten offering, 30 days in the case of any offering exclusively of securities for resale that is not underwritten and is pursuant to a shelf registration and 120 days in the case of all other secondary offerings; provided that the DCP Investor, the Golden Gate Investor and their Affiliates shall not consent to any waiver or termination of such lock-up period applicable to it by the managing underwriter, and shall not sell or otherwise dispose of any of its Company Securities prior to the expiration date of the lock-up period as provided in its lock-up letter, unless a proportional waiver or termination of such lock-up is granted to the other Shareholders by the managing underwriter. Notwithstanding the foregoing, this Section 5.4 shall not apply to any sale by a Shareholder or a director or officer of a Shareholder of Company Securities acquired in open market transactions or block purchases by such Shareholder or its Affiliates subsequent to the Initial Public Offering.
5.5 Registration Procedures. In connection with any registration of any Registrable Securities pursuant to Sections 5.1, 5.2 or 5.3 hereof, subject to the provisions of such Sections, the Company shall use its best efforts to effect the registration and the sale of such Registrable
Securities in accordance with the intended method of disposition thereof as quickly as practicable, and, in connection with any such request:
(a) The Company shall as expeditiously as possible, and, if the Company is not qualified for the use of Form S-3, no later than 20 days from the date of receipt by the Company of the written request, and if the Company is qualified for the use of Form S-3, no later than 10 days from the date of receipt by the Company of the written request, prepare and file with the SEC a registration statement on any form for which the Company or that counsel for the Company shall deem appropriate and which form shall be available for the sale of the Registrable Securities to be registered thereunder in accordance with the intended method of distribution thereof, and use its best efforts to cause such filed registration statement to become and remain effective for a period of not less than 180 days, or in the case of a Shelf Registration, not less than two years (or such shorter period in which all of the Registrable Securities of the Registering Shareholders included in such registration statement shall have actually been sold thereunder, but not before the expiration of the periods referred to in Section 4(3) and Rule 174 of the Securities Act or any successor provision, if applicable); provided, however, that such 180-day period or two-year period, as applicable, shall be extended for a period of time equal to the period any Shareholder refrains from selling any securities included in such registration at the request of an underwriter and in the case of any Shelf Registration, subject to compliance with applicable SEC rules, such two-year period shall be extended, if necessary, to keep the registration statement effective until all such Registrable Securities are sold.
(b) Prior to filing a registration statement or prospectus or any amendment or supplement thereto, the Company shall, if requested, furnish to each participating Shareholder and each underwriter, if any, of the Registrable Securities covered by such registration statement copies of such registration statement as proposed to be filed, and thereafter the Company shall furnish to such Shareholder and underwriter, if any, such number of copies of such registration statement, each amendment and supplement thereto (in each case including all exhibits thereto and documents incorporated by reference therein), the prospectus included in such registration statement (including each preliminary prospectus and any summary prospectus) and any other prospectus filed under Rule 424 or Rule 430A under the Securities Act and such other documents as such Shareholder or underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Shareholder.
(c) After the filing of the registration statement, the Company shall (i) cause the related prospectus to be supplemented by any required prospectus supplement, and, as so supplemented, to be filed pursuant to Rule 424 under the Securities Act, (ii) comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such registration statement during the applicable period in accordance with the intended methods of disposition by the Shareholders thereof set forth in such registration statement or supplement to such prospectus and (iii) promptly notify each Shareholder holding Registrable Securities covered by such registration statement of any stop order issued or threatened by the SEC or any state securities commission and take all reasonable actions required to prevent the entry of such stop order or to remove it if entered.
(d) The Company shall use its best efforts to (i) register or qualify the Registrable Securities covered by such registration statement under such other securities or blue sky laws of such jurisdictions in the United States as any Shareholder holding such Registrable Securities reasonably (in light of such Shareholders intended plan of distribution) requests, and (ii) cause such Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be reasonably necessary or advisable to enable such Shareholder to consummate the disposition of the Registrable Securities owned by such Shareholder; provided, that the Company shall not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 5.5(d), (B) subject itself to taxation in any such jurisdiction or (C) consent to general service of process in any such jurisdiction.
(e) The Company shall immediately notify each Shareholder holding such Registrable Securities covered by such registration statement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the occurrence of an event requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and promptly prepare and make available to each such Shareholder and file with the SEC any such supplement or amendment.
(f) Except for a Demand Registration or and Underwritten Shelf Takedown, the Board shall have the right to select the underwriter or underwriters in connection with any Public Offering. In connection with the offering of Registrable Securities pursuant to a Demand Registration, the Requesting Shareholder shall have the right, in its sole discretion, to select the managing underwriter in connection with any Public Offering resulting from a Demand Registration or an Underwritten Shelf Takedown. In connection with any Public Offering, the Company shall enter into customary agreements (including an underwriting agreement in customary form, provided that the scope of the indemnity contained in such underwriting agreement is not more extensive than the indemnity described in Section 5.7 hereof), provided that such agreements are consistent with this Agreement, and take all such other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities in any such Public Offering. Each Shareholder participating in such underwriting shall also enter into such agreements, provided that the terms of any such agreement are consistent with this Agreement.
(g) Upon execution of confidentiality agreements in form and substance reasonably satisfactory to the Company, the Company shall make available for inspection by any Registering Shareholder and any underwriter participating in any disposition pursuant to a registration statement, being filed by the Company pursuant to this Section 5.5 and any attorney, accountant or other professional retained by any such Shareholder or underwriter (collectively, the Inspectors), all financial and other records, pertinent corporate documents and properties of the Company (collectively, the Records) as shall be reasonably necessary or desirable to enable them to exercise their due diligence responsibility, and cause the Companys officers, directors and employees to supply all information reasonably requested by any Inspectors in
connection with such registration statement. Records that the Company determines, in good faith, to be confidential and that it notifies the Inspectors are confidential shall not be disclosed by the Inspectors unless (i) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in such registration statement, or (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction or is otherwise required by law; provided, however, that any decision regarding the disclosure of information pursuant to subclause (i) shall be made only after consultation with counsel for the Company. Each Registering Shareholder agrees that information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it or its Affiliates as the basis for any market transactions in the Company Securities unless and until such information is made generally available to the public. Each Registering Shareholder further agrees that, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, it shall give notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of the Records deemed confidential.
(h) The Company shall furnish to each Registering Shareholder and to each such underwriter, if any, a signed counterpart, addressed to such Shareholder or underwriter, of (i) an opinion or opinions of counsel to the Company and (ii) a comfort letter or comfort letters from the Companys independent public accountants, each in customary form and covering such matters of the kind customarily covered by opinions or comfort letters, as the case may be, as a majority of such Shareholders or the managing underwriter therefor reasonably requests.
(i) The Company shall otherwise use its best efforts to comply with all applicable rules and regulations of the SEC, and make available to its security holders, as soon as reasonably practicable, an earning statement or such other document that shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder no later than 45 days after the end of any 12-month period (or 90 days after the end of any 12-month period if such period is a fiscal year) (or in each case within such shorter period of time as may be required by the Commission for filing the applicable report with the Commission) (i) commencing the end of any fiscal quarter in which Registrable Securities are sold to underwriters in an underwritten offering or (ii) if not sold to underwriters in such an offering, commencing on the first day of the first fiscal quarter of the Company after the effective date of a Registration Statement, which earnings statement shall cover said 12-month period.
(j) The Company may require each Shareholder whose Registrable Securities are covered by a Registration Statement, by written notice given to each such Shareholder not less than 10 days prior to the filing date of such registration statement, to promptly, and in any event within seven days after receipt of such notice, furnish in writing to the Company such information regarding the distribution of the Registrable Securities as the Company may from time to time request and such other information as may be legally required in connection with such registration.
(k) Each such Shareholder agrees that, upon receipt of any written notice from the Company of the occurrence of any event requiring the preparation of a supplement or amendment of a prospectus relating to the Registrable Securities covered by a registration statement that is required to be delivered under the Securities Act so that, as thereafter delivered
to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or to make the statements therein not misleading, such Shareholder shall forthwith discontinue disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until such Shareholders receipt of the copies of a supplemented or amended prospectus, and, if so directed by the Company, such Shareholder shall deliver to the Company all copies, other than any permanent file copies then in such Shareholders possession, of the most recent prospectus covering such Registrable Securities at the time of receipt of such notice. If the Company shall give such notice, the Company shall extend the period during which such registration statement shall be maintained effective (including the period referred to in Section 5.5(a)) by the number of days during the period from and including the date of the giving of notice pursuant to Section 5.5(e) to the date when the Company shall make available to such Shareholder a prospectus supplemented or amended to conform with the requirements of Section 5.5(e).
(l) The Company shall use its reasonable best efforts to list all Registrable Securities covered by such registration statement on any securities exchange or quotation system on which any of the Registrable Securities are then listed or traded.
(m) The Company shall have appropriate officers of the Company (i) prepare and make presentations at any road shows and before analysts and rating agencies, as the case may be, (ii) take other actions to obtain ratings for any Registrable Securities and (iii) otherwise use their reasonable best efforts to cooperate as requested by the underwriters in the offering, marketing or selling of the Registrable Securities.
5.6 Indemnification by the Company. The Company agrees to indemnify and hold harmless each Shareholder holding Registrable Securities covered by a registration statement, its officers, directors, employees, managers, members, partners and agents, and each Person, if any, who controls any such Persons within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, damages, liabilities and expenses (including reasonable expenses of investigation and reasonable attorneys fees and expenses) (Damages) caused by or relating to any untrue statement or alleged untrue statement of a material fact contained in any registration statement or prospectus relating to the Registrable Securities (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) or any preliminary prospectus, or caused by or relating to any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law, or any common law or regulation applicable to the Company and relating to the registration of the Registrable Securities, except insofar as such Damages are caused by or related to any such untrue statement or omission or alleged untrue statement or omission so made based upon information furnished in writing to the Company by such Shareholder or on such Shareholders behalf expressly for use therein. In connection with an underwritten offering, the Company shall indemnify the underwriters thereof, their officers, directors and agents and each Person who controls such underwriters (within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act) to the same extent as provided above with respect to the indemnification of each Shareholder. Notwithstanding the foregoing, with respect to any untrue statement or omission or alleged untrue statement or omission made in any preliminary prospectus, or in any prospectus, as the case may be, the indemnity agreement contained in this paragraph shall not apply to the extent that any Damages result from the fact that a current copy of the prospectus (or amended or supplemented prospectus, as the case may be) was not sent or given to the Person asserting any such Damages at or prior to the written confirmation of the sale of the Registrable Securities concerned to such Person if it is determined that the Company has provided such prospectus to such Shareholder and it was the responsibility of such Shareholder to provide such Person with a current copy of the prospectus (or such amended or supplemented prospectus, as the case may be) and such current copy of the prospectus (or such amended or supplemented prospectus, as the case may be) would have cured the defect giving rise to such Damages.
5.7 Indemnification by the Participating Shareholders. Each Shareholder holding Registrable Securities included in any registration statement agrees, severally but not jointly, to indemnify and hold harmless the Company, its officers, directors and agents and each Person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company to such Shareholder, but only (i) with respect to information furnished in writing to the Company by such Shareholder expressly for use in any registration statement or prospectus relating to the Registrable Securities, or any amendment or supplement thereto, or any preliminary prospectus or (ii) to the extent that any Damages result from the fact that a current copy of the prospectus (or such amended or supplemented prospectus, as the case may be) was not sent or given to the Person asserting any such Damages at or prior to the written confirmation of the sale of the Registrable Securities concerned to such Person if it is determined that it was the responsibility of such Shareholder to provide such Person with a current copy of the prospectus (or such amended or supplemented prospectus, as the case may be) and such current copy of the prospectus (or such amended or supplemented prospectus, as the case may be) was available to such Shareholder and would have cured the defect giving rise to such Damages. As a condition to including Registrable Securities in any registration statement filed in accordance with this Article 5, the Company may require that it shall have received an undertaking reasonably satisfactory to it from any underwriter to indemnify and hold it harmless to the extent customarily provided by underwriters with respect to similar securities. Notwithstanding anything to the contrary set forth in this Section 5.7, no Shareholder shall be liable under this Section 5.7 for any Damages in excess of the net proceeds realized by such Shareholder in the sale of Registrable Securities of such Shareholder to which such Damages relate.
5.8 Conduct of Indemnification Proceedings. If any proceeding (including any governmental investigation) shall be instituted involving any Person in respect of which indemnity may be sought pursuant to this Article 5, such Person (an Indemnified Party) shall promptly notify the Person against whom such indemnity may be sought (the Indemnifying Party) in writing and the Indemnifying Party shall have the right to assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Party, and shall have the right to assume the payment of all fees and expenses; provided, that the failure of any Indemnified Party so to notify the Indemnifying Party shall not relieve the Indemnifying
Party of its obligations hereunder except to the extent that the Indemnifying Party is materially prejudiced by such failure to notify. In any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel, or (ii) in the reasonable judgment of such Indemnified Party representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that, in connection with any proceeding or related proceedings in the same jurisdiction, the Indemnifying Party shall not be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for all such Indemnified Parties, and that all such fees and expenses shall be reimbursed as they are incurred. In the case of any such separate firm for the Indemnified Parties, such firm shall be designated in writing by the Indemnified Parties. The Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent, or if there be a final judgment for the plaintiff, the Indemnifying Party shall indemnify and hold harmless such Indemnified Parties from and against any Damages (to the extent stated above) by reason of such settlement or judgment. Without the prior written consent of the Indemnified Party, no Indemnifying Party shall effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability arising out of such proceeding.
5.9 Contribution.
(a) If the indemnification provided for in this Article 5 is unavailable to the Indemnified Parties in respect of any Damages, then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Damages (i) as between the Company and the Shareholders holding Registrable Securities covered by a registration statement on the one hand and the underwriters on the other, in such proportion as is appropriate to reflect the relative benefits received by the Company and such Shareholders on the one hand and the underwriters on the other, from the offering of the Registrable Securities, or if such allocation is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits but also the relative fault of the Company and such Shareholders on the one hand and of such underwriters on the other in connection with the statements or omissions that resulted in such Damages, as well as any other relevant equitable considerations, and (ii) as between the Company on the one hand and each such Shareholder on the other, in such proportion as is appropriate to reflect the relative fault of the Company and of each such Shareholder in connection with such statements or omissions, as well as any other relevant equitable considerations. The relative benefits received by the Company and such Shareholders on the one hand and such underwriters on the other shall be deemed to be in the same proportion as the total proceeds from the offering (net of underwriting discounts and commissions but before deducting expenses) received by the Company and such Shareholders bear to the total underwriting discounts and commissions received by such underwriters, in each case as set forth in the table on the cover page of the prospectus. The relative fault of the Company and such
Shareholders on the one hand and of such underwriters on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and such Shareholders or by such underwriters. The relative fault of the Company on the one hand and of each such Shareholder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such party, and the parties relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
(b) The Company and Shareholders agree that it would not be just and equitable if contribution pursuant to this Section 5.9 were determined by pro rata allocation (even if the underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an Indemnified Party as a result of the Damages referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 5.9, no underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any Damages that such underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission, and no Shareholder shall be required to contribute any amount in excess of the amount by which the net proceeds realized by such Shareholder in the sale of Registrable Securities of such Shareholder to which such Damages relate exceeds the amount of any Damages that such Shareholder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. Each Shareholders obligation to contribute pursuant to this Section 5.9 is several in the proportion that the proceeds of the offering received by such Shareholder bears to the total proceeds of the offering received by all such Shareholders and not joint.
5.10 Other Indemnification. Indemnification similar to that specified herein (with appropriate modifications) shall be given by the Company and each Shareholder participating therein with respect to any required registration or other qualification of securities under any federal or state law or regulation or governmental authority other than the Securities Act.
5.11 Participation in Public Offering. No Shareholder will be permitted to participate in any registration of any Registrable Securities in any Public Offering hereunder unless such Shareholder (i) agrees to sell such Registrable Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (ii) completes and executes, and complies with, all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements and the provisions of this Agreement in respect of
registration rights; provided, however, that, notwithstanding anything to the contrary in this Article 5, (a) the participating Shareholders (other than the Requesting Shareholder) will agree to be responsible only for the same customary representations, covenants, indemnities and agreements as the Requesting Shareholder is responsible and then only so long as the liability for breach thereof is several and not joint and the liabilities thereunder are borne on a pro rata basis based on the consideration to be received by each Shareholder; provided that in no event shall any Shareholder be liable for a breach of any representations, conditions or covenants made by any other Person in such agreement which are specific to such Person; and (b) no restrictive covenant (other than a lock-up pursuant to Section 5.4) may be imposed upon any Shareholder in connection with such sale. If a Public Offering is to be effected by a subsidiary of the Company, then, unless each of the DCP Investor and the Golden Gate Investor otherwise agree (in each of its sole and absolute discretion), the Company and any applicable Subsidiaries shall be liquidated and dissolved so that the Shareholders holding Registrable Securities shall hold directly the shares of the relevant publicly-traded entity (and not indirectly through any intermediate entity).
5.12 Rule 144 Sale. If any Shareholder shall transfer any Registrable Securities pursuant to Rule 144, the Company shall cooperate, to the extent commercially reasonable, with such Shareholder and shall provide to such Shareholder such information as such Shareholder shall reasonably request. Without limiting the generality of the foregoing, with a view to making available the benefits of certain rules and regulations of the SEC that may permit the sale of the Registrable Securities to the public without registration, the Company agrees that, after such time as the Company shall have consummated a Public Offering, it will:
(a) make and keep public information available, as those terms are understood and defined in Rule 144, at all times after the effective date that the Company becomes subject to the reporting requirements of the Securities Act or the Exchange Act;
(b) use its reasonable best efforts to file with the SEC in a timely manner all reports and other documents required to be filed by the Company under the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements);
(c) furnish to any Shareholder, so long as such Shareholder owns any Registrable Securities, upon request by such Shareholder, (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144 (at any time after 90 days after the effective date of the first registration statement filed by the Company for a Public Offering), and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements) or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company and (iii) such other reports and documents of the Company and other information in the possession of or reasonably obtainable by the Company as a Shareholder may reasonably request in availing itself of any rule or regulation of the SEC allowing a Shareholder to sell any such securities without registration; and
(d) upon the request of any Shareholder, instruct the transfer agent in writing that it shall rely on the written legal opinion of such Shareholders counsel, and shall act in
accordance with the written instructions of such Shareholders counsel, with respect to any transfer of Company Securities.
5.13 No Inconsistent Agreements. The Company covenants and agrees that it and each of its Subsidiaries shall not grant or be bound by registration rights that are more favorable, individually or in the aggregate than those under this Agreement with respect to the Company Securities or any other securities without the prior written consent of the Board and an Approval Majority, it being agreed that in no event will the Company or any of its Subsidiaries grant or be bound by rights to Piggyback Registration that are more favorable individually or in the aggregate than the Piggyback Registration rights of the 2011 Rollover Holders set forth in this Agreement. In the event the Company shall at any time hereafter provide to any holder of any Company Securities rights with respect to the registration of such securities under the Securities Act as permitted hereunder, (i) such rights shall be subordinate or pari passu, and shall not be in conflict with any of the rights provided in this Agreement to any Minority Holder and (ii) if such rights are provided on terms or conditions more favorable to such holder than the terms and conditions provided in this Article 5 to the Minority Holders, the Company shall provide (by way of amendment to this Article 5 or otherwise) such more favorable terms or conditions to each Minority Holder. The Company represents and warrants that, except as set forth in this Agreement, neither it nor any of its Subsidiaries is currently a party to or bound by any agreement with respect to any of its equity or debt securities granting any registration rights to any Person.
ARTICLE 6
ADDITIONAL AGREEMENTS
6.1 Payment of Tax Savings Amount.
(a) If a 2006 Rollover Holder engages in a Taxable Disposition, such 2006 Rollover Holder shall pay his or its Tax Savings Amount resulting from such Taxable Disposition in immediately available funds to DCH or its designee within five days of the date such Tax Saving Amount is agreed or determined pursuant to paragraph (b) below.
(b) Within five days following the occurrence of a Taxable Disposition by a 2006 Rollover Holder, such 2006 Rollover Holder shall deliver to DCH a written statement setting forth in reasonable detail the computation of such 2006 Rollover Holders Tax Savings Amount resulting from such Taxable Disposition. If DCH objects to the computation of the Tax Savings Amount set forth in such statement, DCH shall deliver to such 2006 Rollover Holder a written notice setting forth such objection in reasonable detail within ten Business Days of receipt of such statement. If DCH shall have delivered such notice of objection, DCH and the 2006 Rollover Holder shall seek to resolve any dispute in good faith, and if they are unable to resolve such dispute within 10 Business Days of delivery of the objection notice by DCH, they shall submit such dispute for resolution by the Accounting Firm (as such term is defined in the 2006 Purchase Agreement) in a manner consistent with the procedures set forth in Section 6.9(h)(ii) of the 2006 Purchase Agreement.
(c) If a 2006 Rollover Holder engages in an exchange of a 2006 Rollover Holder Share for another security (a Successor Security) in a transaction in which any portion of the gain or loss realized by such 2006 Rollover Holder for federal income tax purposes is not recognized for federal income tax purposes, then this Section 6.1 shall apply to a disposition of such Successor Security as if it were a 2006 Rollover Holder Share, and the Tax Savings Amount owed by such 2006 Rollover Holder by reason of the Taxable Disposition of such Successor Security shall be reduced (but not more than once) by the Tax Savings Amount (if any) previously paid by such 2006 Rollover Holder pursuant to this Section 6.1.
(d) If a Permitted Transferee of a 2006 Rollover Holder engages in a Taxable Disposition, this Section 6.1 shall be applied as if such 2006 Rollover Holder engaged in such Taxable Disposition on the same terms as such Permitted Transferee.
6.2 Certain Approval Rights. The actions set forth on Schedule 6.2 attached hereto shall require the approval of the Board and shall also be subject to the prior approval of an Approval Majority in accordance with the requirements specified therein.
ARTICLE 7
CONFIDENTIALITY
7.1 Confidentiality. The parties to this Agreement acknowledge that each has, knows and will obtain certain Confidential Information (as defined herein) about the others. The parties to this Agreement agree that the following terms and conditions will continue indefinitely:
(a) All Confidential Information will be kept strictly confidential by each party.
(b) Each party will afford such Confidential Information at least the same degree of confidential treatment that an ordinarily prudent business person would afford to his or her own confidential proprietary information and trade secrets, but, in any event, treatment which is at least equivalent to the treatment such party affords its own Confidential Information.
(c) Except as otherwise provided herein, or as required by applicable Law, no party hereto receiving Confidential Information (a Receiving Party) will directly or indirectly disclose to any third party any Confidential Information in any manner whatsoever without the prior, written consent of the party that provided such information (a Disclosing Party). A Receiving Party may, however, disclose such portions of the Confidential Information to its (and its Permitted Transferees) employees, directors, authorized agents, financing sources and representatives, who, in the discharge of their duties need to know such Confidential Information, provided however, that any such recipient agrees to abide by the terms of this Section 7.1.
(d) A Receiving Party shall be responsible for any unauthorized disclosure of such Confidential Information by its and its Affiliates directors, officers, employees, agents or representatives.
(e) Notwithstanding anything contained herein to the contrary, the DCP Investor, the Golden Gate Investor and any CCCS Holder may disclose any Confidential Information (including the terms of this Agreement) (i) on a confidential basis to limited partners or prospective limited partners or investors of the DCP Investor, the Diamond Castle Fund, the Golden Gate Investor or any Golden Gate Fund or any of their Affiliated investment funds, as applicable, (ii) to the extent that such party is legally compelled (by oral questions, interrogatories, request for information or documents, subpoena, civil investigative demand or similar process), (iii) in connection with litigation, arbitration or other similar judicial or regulatory proceedings arising hereunder to the extent necessary for purposes of litigating, arbitrating or otherwise negotiating, mediating or resolving such dispute or proceeding as may be permitted hereunder, (iv) for purposes of including applicable information in its financial statements and (v) to the extent required to be disclosed by applicable law, rule or regulation; provided, that in connection with any such disclosure under any of the foregoing, (x) the DCP Investor, the Golden Gate Investor and the applicable CCCS Holder shall only disclose such Confidential Information as is required to be disclosed in connection with the foregoing, (y) to the extent reasonably practicable, the DCP Investor, the Golden Gate Investor and the applicable CCCS Holder, as applicable, that is making a disclosure pursuant to clauses (ii) or (v) shall provide the Disclosing Party with prompt and advance written notice of any such intended disclosure so that the Disclosing Party has a reasonable opportunity to limit such disclosure, or (if applicable, and to the extent reasonable practicable) seek a protective order or other appropriate remedy to prevent such disclosure, and (z) the DCP Investor, the Golden Gate Investor and the applicable CCCS Holder, as applicable, shall use its reasonable efforts to seek confidential treatment (consistent with the terms hereof) by the Person to whom such disclosure is made with respect to a disclosure pursuant to clauses (ii), (iii) or (v).
(f) Notwithstanding anything contained herein to the contrary, the Company may disclose any Confidential Information on a confidential basis to current and prospective lenders in connection with a loan or prospective loan and to prospective purchasers of Company Securities from the Company, the DCP Investor or the Golden Gate Investor, as well as such lenders or purchasers legal counsel, auditors, agents and representatives.
(g) The parties acknowledge that money damages would not be a sufficient remedy for any breach of the provisions of this Section 7.1 and that the party whose Confidential Information is subject to disclosure or potential disclosure in violation of this Section 7.1 shall be entitled to seek equitable relief in a court of law in the event of, or to prevent, a breach or threatened breach of this Section 7.1, without any requirement for the posting of a bond.
7.2 Confidential Information. The term Confidential Information shall mean all information concerning the Company or any of its Subsidiaries as the case may be, including, without limitation, financial statements and other financial and accounting data and information, trade secrets, information regarding contracts, assets and properties, marketing plans and strategies, personnel information, know-how and all other private, non-public or other
confidential proprietary information relating to the Company or any of its Subsidiaries as the case may be. Confidential Information shall also include all analyses, compilations, studies, notes and other materials prepared by the Receiving Party, containing or based in whole or in part on Confidential Information. However, Confidential Information does not include information which (i) is or becomes generally available to the public, other than as a result of a disclosure by a Receiving Party in violation of any applicable confidentiality obligations contained herein or in any other agreement between the applicable Receiving Party and the Disclosing Party, (ii) was provided to or otherwise made available to a Receiving Party, its Affiliates, agents or representatives by a Disclosing Party, its Affiliates, agents or representatives on a non-confidential basis prior to the date hereof, or (iii) is or has been provided to or otherwise made available to a Receiving Party, its Affiliates, agents or representatives on a non-confidential basis from a source other than the Disclosing Party, its Affiliates, agents or representatives, provided such source is not bound by a confidentiality agreement with the Disclosing Party or otherwise prohibited from transmitting such information by reason of a contractual, legal or fiduciary relationship with the Disclosing Party.
ARTICLE 8
MISCELLANEOUS
8.1 Authority; Effect. Each party hereto represents and warrants to each other party that the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized on behalf of such party and do not violate any agreement or other instrument applicable to such party or by which its assets are bound. This Agreement does not, and shall not be construed to, give rise to the creation of a partnership among any of the parties hereto, or to constitute any of such parties members of a joint venture or other association.
8.2 Notices. Any notices and other communications required or permitted in this Agreement shall be effective if in writing and (a) delivered personally, (b) sent by facsimile or electronic mail, or (c) sent by overnight courier, in each case, addressed as follows:
If to the Company, to:
Community Choice Financial Inc.
7001 Post Road, Suite 200
Dublin, Ohio 43016
Facsimile: (614) 760-2601
Attn: Chief Executive Officer
Email: tsaunders@checksmart.com
with copies to (which shall not constitute notice):
Community Choice Financial Inc.
7001 Post Road, Suite 200
Dublin, Ohio 43016
Facsimile: (614) 760-2601
Attn: Secretary/General Counsel
Email: broman@checksmart.com
If to the DCP Investor:
Diamond Castle Holdings, LLC
280 Park Avenue, 25th Floor, East Tower
New York, New York 10017
Facsimile: (212) 983-1234
Attention: Andrew H. Rush
Email: arush@dchold.com
with copies to (which shall not constitute notice):
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Facsimile: (212) 310-8007
Attention: David M. Blittner, Esq.
Email: david.blittner@weil.com
If to a Shareholder, to its address set forth in the records of the Company.
Notice to the holder of record of any Company Securities, other than the DCP Investor, shall be deemed to be notice to the holder of such Company Securities for all purposes hereof.
Unless otherwise specified herein, such notices or other communications shall be deemed effective (a) on the date received, if personally delivered, (b) on the date received if delivered by facsimile or electronic mail (in each case with confirmation of transmission or return receipt) on a Business Day, or if not delivered on a business day, on the first Business Day thereafter or (c) two Business Days after being sent by overnight courier. Each of the parties hereto shall be entitled to specify a different address by giving notice as aforesaid to each of the other parties hereto.
8.3 Binding Effect, Etc. This Agreement, the schedules and exhibits hereto, the other agreements and documents referred to herein, any Management Incentive Plan and any agreements or documents entered into in connection therewith, constitute the entire agreement of the parties with respect to its subject matter, supersedes all prior or contemporaneous oral or written agreements or discussions with respect to such subject matter, and shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, representatives, successors and permitted assigns. Except as otherwise provided herein, no party hereto may assign any of its respective rights or delegate any of its respective obligations under this Agreement including its rights under Article 2 (it being agreed that the rights under this Agreement are personal to the parties hereto and, for the avoidance of doubt, the rights of the Golden Gate Investor, any Golden Gate Fund or any other 2011 Rollover Holder, including those set forth in Sections 2.1, 2.2, 2.3,
2.8, Article 3 and Article 5, shall not be Transferred to any purchaser, assignee or other transferee of the Company Securities from the Golden Gate Investor, any Golden Gate Fund or any other 2011 Rollover Holder).
8.4 Waiver; Amendment; Termination.
(a) This Agreement (including any schedule hereto) may be amended, modified, extended or terminated, and the provisions hereof may be waived, only by an agreement in writing signed by the Company, and Stockholders holding no less than a majority of the then outstanding Voting Securities; provided, however, that:
(i) the consent of any 2006 Rollover Holder shall be required for any amendment, modification, extension, waiver, or termination under this Agreement (an Amendment) that discriminates against such 2006 Rollover Holder or adversely affects the rights of such 2006 Rollover Holder as such under this Agreement;
(ii) if the Golden Gate Investor owns at least 3.5% of the then outstanding Voting Securities, the consent of the Golden Gate Investor shall be required for any Amendment; and if the Golden Gate Investor owns less than 3.5% of the then outstanding Voting Securities, the consent of the Golden Gate Investor shall be required for any Amendment that discriminates against the Golden Gate Investor or adversely affects the rights of the Golden Gate Investor under this Agreement;
(iii) if the CCCS Holders collectively own at least 3.5% of the then outstanding Voting Securities, the consent of holders of a majority of the Company Securities held by such CCCS Holders shall be required for any Amendment; and if the CCCS Holders collectively own less than 3.5% of the then outstanding Voting Securities, the consent of holders of a majority of the Company Securities held by such CCCS Holders shall be required for any Amendment that discriminates against any CCCS Holder or adversely affects the rights of any CCCS Holder under this Agreement;
(iv) the consent of the holders of a majority of the Company Securities held by all Management Holders shall be required for any Amendment that discriminates against the Management Holders or adversely affects the rights of such Management Holders as such under this Agreement; and
(v) the consent of any party shall be required for any Amendment that discriminates against such party or adversely affects the rights of such party.
Each such Amendment shall be binding upon each party hereto. In addition, each party hereto may waive any right hereunder by an instrument in writing signed by such party or holder, and no waiver of any right hereunder will be effective unless in writing signed by the party against whom such waiver would purport to be enforceable. To the extent the Amendment of any
Section of this Agreement would require a specific consent pursuant this Section 8.4, any Amendment to the definitions used in such Section shall also require the specified consent.
(b) No action taken pursuant to this Agreement, including any investigation by or on behalf of any party hereto, constitutes a waiver by the party taking such action of compliance with any provision of this Agreement. The waiver by any party hereto of any provision of this Agreement is effective only in the instance and only for the purpose that it is given and does not operate and is not to be construed as a further or continuing waiver of such provision or as a waiver of any other provision. No failure on the part of any party hereto to exercise, and no delay in exercising, any right, power or remedy under this Agreement, and no course of dealing between the parties hereto, operates as a waiver or estoppel thereof. No single or partial exercise of any right, power or remedy under this Agreement by any party hereto precludes any other or further exercise thereof or the exercise of any other right, power or remedy. All remedies under this Agreement are cumulative, not alternative and are not exclusive of any other remedies provided by Law.
(c) This Agreement shall terminate upon the earlier to occur of (i) an Initial Public Offering; provided, however, that the provisions of (x) Sections 3.1(b)(iii) and (iv), 3.2 and 3.3 and Articles 5 (other than Section 5.13, which shall terminate upon an Initial Public Offering), 6, 7 and 8 shall survive the Initial Public Offering in accordance with their respective terms, and (y) Article 2 shall survive the Initial Public Offering in accordance with its terms unless and until the DCP Investor sells a majority of its Initial Shares to one or more independent third parties (that are not its Affiliates) in a bona fide, arms-length transaction; (ii) a Change of Control; provided, however, the provisions of Articles 5 (other than Section 5.13, which shall terminate upon a Change of Control), 6, 7 and 8 shall survive a Change of Control; or (iii) the bankruptcy, liquidation or dissolution of the Company.
8.5 Descriptive Headings. The headings of this Agreement are for convenience of reference only, are not to be considered a part hereof and shall not be construed to define or limit any of the terms or provisions hereof.
8.6 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one instrument. The signatures of all the parties hereto need not appear on the same counterpart.
8.7 Severability. In the event that any provision hereof would, under applicable law, be invalid or unenforceable in any respect, such provision shall be construed by modifying or limiting it so as to be valid and enforceable to the maximum extent compatible with, and possible under, applicable law. The provisions hereof are severable, and in the event any provision hereof should be held invalid or unenforceable in any respect, it shall not invalidate, render unenforceable or otherwise affect any other provision hereof.
8.8 No Recourse. Notwithstanding anything that may be expressed or implied in this Agreement, the Company and each Shareholder covenant, agree and acknowledge that no recourse under this Agreement or any documents or instruments delivered in connection with this Agreement shall be had against any current or future director, officer, employee, general or
partner or member of the DCP Investor, the Golden Gate Investor, any CCCS Holder or of any Affiliate or assignee thereof, as such, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any current or future officer, agent or employee of the DCP Investor, the Golden Gate Investor, any CCCS Holder or any current or future director, officer, employee, partner, Shareholder or member of the DCP Investor, the Golden Gate Investor, any CCCS Holder or of any Affiliate or assignee thereof, as such, for any obligation of the DCP Investor, the Golden Gate Investor or any CCCS Holder under this Agreement or any documents or instruments delivered in connection with this Agreement for any claim based on, in respect of or by reason of such obligations or their creation.
8.9 Control of 2006 Rollover Holders. Effective as of the date hereof, the interest holders of each 2006 Rollover Holder are set forth on Schedule 8.9 hereto (such persons, the 2006 Rollover Holder Owners). Except for a transfer to a Permitted Transferee, each 2006 Rollover Holder Owner hereby covenants and agrees that, during the term of this Agreement, each Person at all times will continue to directly own, of record and beneficially, all of the equity interests in each 2006 Rollover Holder that it owns as of the date hereof and set forth on Schedule 8.9, that such Person will not pledge or otherwise permit such equity interests to be encumbered in any manner and that such Person will not grant any proxy or otherwise transfer voting power or economic rights of ownership or enter into any voting agreement with respect to any such equity interests.
8.10 Spouses. This Agreement must be executed by the spouse of each Shareholder who is a resident of a community property state. By executing this Agreement, such spouse acknowledges that she or he has read this Agreement and knows its contents and agrees to be bound in all respects by the terms of this Agreement to the same extent as the Shareholders. Each such spouse further agrees that should she or he predecease the Shareholder to whom she or he is married or should she or he become divorced from such Shareholder, any of the Company Securities which such spouse may own or in which she or he may have any interest shall remain subject to all of the restrictions and to all of the rights of the Shareholders contained in this Agreement.
8.11 Corporate Opportunities. In recognition of the fact that the Company and its Subsidiaries, on the one hand, and the DCP Investor, any Diamond Castle Fund, the Golden Gate Investor, any Golden Gate Fund, any 2011 Rollover Holder or any of their respective Affiliates (collectively, Covered Persons), on the other hand, may currently engage in, and may in the future engage in, the same or similar activities or lines of business and have an interest in the same areas and types of corporate opportunities, and in recognition of the benefits to be derived by the Company and its Subsidiaries, through their continued contractual, corporate and business relations with the Covered Persons (including possible service of directors, officers and employees of the Covered Persons as directors, managers, officers and employees of the Company and its Subsidiaries), the provisions of this Section 8.11 are set forth to regulate and define the conduct of certain affairs of the Company and its Subsidiaries, as they may involve the Covered Persons, and the powers, rights, duties and liabilities of the Company and its Subsidiaries, as well as its directors, managers, officers and employees in connection therewith.
To the fullest extent permitted by law and except as otherwise agreed in writing and, with respect to the 2011 Rollover Holders, except for obligations expressly set forth in the 2011 Merger Agreement: (i) each member of the Covered Persons shall have the right to, and shall have no duty (contractual or otherwise) not to, directly or indirectly: (A) engage or participate in the same, similar or competing business activities or lines of business as the Company or its Subsidiaries, (B) do business with any client or customer of the Company or its Subsidiaries, or (C) make investments in competing businesses of the Company or its Subsidiaries, and such acts shall not be deemed wrongful or improper; (ii) no member of the Covered Persons shall be liable to the Company, for breach of any duty (contractual or otherwise), including fiduciary duties, by reason of any such activities or of such Persons participation therein; and (iii) in the event any member of the Covered Persons acquires knowledge of a potential transaction or matter that may be a corporate opportunity for the Company or its Subsidiaries, on the one hand, and any member of the Covered Persons, on the other hand, or any other Person, no member of any Covered Persons shall have any duty (contractual or otherwise), including fiduciary duties, to communicate, present or offer such corporate opportunity to the Company or its Subsidiaries and shall not be liable to the Company or its Subsidiaries for breach of any duty (contractual or otherwise), including fiduciary duties, by reason of the fact that any member of any Covered Persons directly or indirectly pursues or acquires such opportunity for itself, directs such opportunity to another Person, or does not present or communicate such opportunity to the Company or its Subsidiaries, regardless of whether such corporate opportunity may be of a character that, if presented to the Company or its Subsidiaries, could be taken by the Company or its Subsidiaries. The Company, on behalf of itself and each of its current or future Subsidiaries, hereby renounces any interest, right, or expectancy in any such opportunity not offered to it by any Covered Persons to the fullest extent permitted by law, and the Company and each Shareholder hereby waives any claim against each member of the Covered Persons or any DCP Director or Golden Gate Director, respectively, based on the corporate opportunity doctrine, any alleged unfairness to the Company or such Shareholder or otherwise that would require any member of any Covered Persons or any DCP Director or Golden Gate Director, respectively, to offer any opportunity relating thereto to the Company or the Board. Notwithstanding the foregoing, nothing in this Section 8.11 shall exculpate any Covered Persons from any willful misconduct, willful misuse of information that is proprietary to the Company or breach of its obligation to maintain as confidential or proprietary any information that is confidential or proprietary, respectively, to the Company or its Subsidiaries.
8.12 No Conflicting Agreements. Each Shareholder represents that it has not, and agrees that it shall not, (a) grant any proxy or enter into or agree to be bound by any voting trust or agreement with respect to its Company Securities, except as expressly contemplated by this Agreement, (b) enter into any agreement or arrangement of any kind with any Person with respect to its Company Securities inconsistent with the provisions of this Agreement or for the purpose or with the effect of denying or reducing the rights of any other Shareholder under this Agreement, including agreements or arrangements with respect to the Transfer or voting of its Company Securities, or (c) act, for any reason, as a member of a group or in concert with any other Person in connection with the Transfer or voting of its Voting Securities in any manner that is inconsistent with the provisions of this Agreement.
8.13 Governing Law. The corporate laws of the State of Ohio (without regard to the conflicts of laws rules of such state) shall govern all issues concerning the relative rights of the Company and the Shareholders and the duties and obligations of the Companys directors to the Company and the Shareholders. All other issues concerning the construction, validity and interpretation of this Agreement, and the obligations, rights and remedies of the parties hereunder, shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts made and performed entirely within such state, without regard to the conflicts of laws rules of such state.
8.14 Submission to Jurisdiction; Consent to Service of Process.
(a) The parties hereto hereby irrevocably submit to the exclusive jurisdiction of the state and federal courts sitting in the State of New York located in the City of New York over any legal proceeding arising out of or relating to this Agreement or any of the transactions contemplated hereby and each party hereto hereby irrevocably agrees that all claims in respect of such legal proceeding may be heard and determined in such courts. The parties hereto hereby irrevocably waive any objection which they may now or hereafter have to the laying of venue of such legal proceeding brought in such court or any claim that such legal proceeding brought in such court has been brought in an inconvenient forum. Each of the parties hereto agrees that a judgment in such legal proceeding may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
(b) Each of the parties hereto hereby irrevocably consents to process being served by any party to this Agreement in any legal proceeding by delivery of a copy thereof in accordance with the provisions of Section 8.2.
8.15 Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY, IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ALL DOCUMENTS, AGREEMENTS AND INSTRUMENTS EXECUTED IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY (WHETHER IN CONTRACT, TORT OR OTHERWISE) AND WHETHER OCCURRING PRIOR TO OR AFTER THE DATE OF THIS AGREEMENT.
8.16 Aggregation of Shares. All Company Securities held by a Shareholder and its Permitted Transferees shall be aggregated together for purposes of determining the availability of any rights under this Agreement. For purposes of clarity, (i) all Company Securities held by the DCP Investor, any Diamond Castle Fund and their respective Permitted Transferees shall be aggregated together for purposes of determining the availability of any rights applicable to the DCP Investor under this Agreement, (ii) all Company Securities held by the Golden Gate Investor, any Golden Gate Funds and their respective Permitted Transferees (but, for the avoidance of doubt, the Company Securities of the other 2011 Rollover Holders (i.e., other than the Golden Gate Investor, any Golden Gate Funds and their respective Permitted Transferees) shall not be included) shall be aggregated together for purposes of determining the availability of any rights applicable to the Golden Gate Investor under this Agreement, and (iii) all Company
Securities held by the 2011 Rollover Holders (including the Golden Gate Investor, any Golden Gate Funds and their respective Permitted Transferees) and their respective Permitted Transferees shall be aggregated together for purposes of determining the availability of any rights applicable to the 2011 Rollover Holders collectively under this Agreement.
8.17 Rollover Holder Owner Agreements and Obligations. The 2006 Rollover Holder Owners hereby agree to be jointly and severally liable, as primary obligors and not merely guarantors or as a surety, for the prompt complete performance of the respective 2006 Rollover Holders obligations under this Agreement, but subject to the same limitations on each respective 2006 Rollover Holders obligations hereunder, including obligations under Section 6.1, as if the 2006 Rollover Holder Owners had delivered the representations of the 2006 Rollover Holders set forth in this Agreement on a joint and several basis. The 2006 Rollover Holder Owners respective obligations are unconditional and irrespective of any circumstances which might otherwise constitute, by operation of law, a discharge of a guarantor and it shall not be necessary for the DCP Investor to institute or exhaust any remedies or causes of action against any 2006 Rollover Holders or any other Person as a condition to the obligations of the 2006 Rollover Holder Owners hereunder. Each 2006 Rollover Holder Owner hereby waives any defense of a surety or guarantor or any other obligor arising in connection with or in respect of its obligations under this Section 8.17. For purposes of clarity, Frauenberg is the 2006 Rollover Holder Owner of the James H. Frauenberg 1998 Trust and the James H. Frauenberg 1998 Descendants Trust; and Lenhart is the 2006 Rollover Holder Owner of the Michael W. Lenhart 1998 Trust and the Michael W. Lenhart 1998 Descendants Trust.
8.18 Termination of Checksmart Stockholders Agreement. Those Shareholders that are a party to the Stockholders Agreement, dated as of May 1, 2006, as amended by Amendment No. 1 to the Stockholders Agreement, dated as of July 26, 2007 (the Original Agreement) (which agreement was with respect to their former ownership of Checksmart Financial Holdings Corp., which is now a Subsidiary of the Company) hereby terminate the Original Agreement, and the Original Agreement, including any and all rights, duties, obligations and covenants contained therein, is hereby cancelled and terminated in full concurrently with the execution by all parties of this Agreement; provided, however, that for purposes of the Existing Management Incentive Plan and any joinder agreement to the Original Agreement executed in connection therewith or any award or grant made thereunder, this Agreement shall be deemed to be an amendment, supplement or modification, and successor, to the Original Agreement.
8.19 Effectiveness of Agreement. This Agreement shall be effective, and in full force and effect, only upon the later of the Checksmart Effective Time and the CCCS Effective Time under the 2011 Merger Agreement and, concurrently therewith, this Agreement shall be fully effective automatically and without any further action by any party hereto. In the event that the 2011 Merger Agreement is terminated in accordance with the terms thereof, this Agreement shall be void ab nitio and of no force or effect as if this Agreement had not been executed.
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[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, each of the undersigned has duly executed this Agreement (or caused this Agreement to be executed on its behalf by its officer or representative thereunto duly authorized) as of the date first above written.
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COMMUNITY CHOICE FINANCIAL INC. | ||
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/s/ Bridgette C. Roman | |
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Bridgette C. Roman |
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Secretary |
[SIGNATURE PAGE TO SHAREHOLDERS AGREEMENT]
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DIAMOND CASTLE PARTNERS IV, L.P. | ||
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By: DCP IV GP, L.P., its general partner | ||
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By: DCP IV GP-GP, L.P., its general partner | ||
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/s/ Ari Benacerraf | |
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Ari Benacerraf | |
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Managing Member | |
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DIAMOND CASTLE PARTNERS IV-A, L.P. | ||
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By: DCP IV GP, L.P., its general partner | ||
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By: DCP IV GP-GP, L.P., its general partner | ||
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DEAL LEADERS FUND, L.P. | ||
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By: DCP IV GP, L.P., its general partner | ||
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By: DCP IV GP-GP, L.P., its general partner | ||
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[SIGNATURE PAGE TO SHAREHOLDERS AGREEMENT]
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2006 ROLLOVER HOLDERS | ||||
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JAMES H. FRAUENBERG 1998 TRUST | |||
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/s/ James H. Frauenberg | ||
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James H. Frauenberg | |
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JAMES H. FRAUENBERG 1998 | |||
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DESCENDANTS TRUST | |||
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MICHAEL W. LENHART 1998 TRUST | |||
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By: |
/s/ Michael W. Lenhart | ||
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Name: |
Michael W. Lenhart | |
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Title: |
Trustee | |
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MICHAEL W. LENHART 1998 | |||
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DESCENDANTS TRUST | |||
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By: |
/s/ Irene S. Lenhart | ||
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Name: |
Irene S. Lenhart | |
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Title: |
Trustee | |
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/s/ Chad M. Streff | ||
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CHAD M. STREFF | ||
[SIGNATURE PAGE TO SHAREHOLDERS AGREEMENT]
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2006 ROLLOVER HOLDER OWNERS, as to Section 8.9 | |||
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/s/ James H. Frauenberg, Sr. |
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JAMES H. FRAUENBERG, SR. |
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/s/ Michael W. Lenhart |
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MICHAEL W. LENHART |
[SIGNATURE PAGE TO SHAREHOLDERS AGREEMENT]
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2011 ROLLOVER HOLDERS | |||
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GOLDEN GATE CAPITAL INVESTMENT FUND II, L.P. | ||
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GOLDEN GATE CAPITAL INVESTMENT FUND II A, L.P. | ||
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GOLDEN GATE CAPITAL INVESTMENT FUND II (AI), L.P. | ||
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GOLDEN GATE CAPITAL INVESTMENT FUND II A (AI), L.P. | ||
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GOLDEN GATE CAPITAL ASSOCIATES II QP, L.L.C. | ||
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GOLDEN GATE CAPITAL ASSOCIATES II AI, L.L.C. | ||
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By: |
Golden Gate Capital Management II, L.L.C. | |
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Its: |
Authorized Representative | |
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/s/ David Dominik | ||
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By: |
David Dominik | |
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Its: |
Managing Director | |
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CCG AV, L.L.C. SERIES A | ||
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CCG AV, L.L.C. SERIES C | ||
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CCG AV, L.L.C. SERIES G | ||
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CCG AV, L.L.C. SERIES I | ||
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By: |
Golden Gate Capital Management, L.L.C. | |
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Its: |
Authorized Representative | |
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/s/ David Dominik | ||
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By: |
David Dominik | |
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Its: |
Managing Director | |
[SIGNATURE PAGE TO SHAREHOLDERS AGREEMENT]
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CALIFORNIA CHECK CASHING STORES, INC. | |||
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By: |
/s/ Jonathan Eager | |
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Name: |
Jonathan Eager |
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Title: |
President |
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CALIFORNIA CHECK CASHING STORES II, INC. | |||
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By: |
/s/ Mark Tavill | |
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Name: |
Mark Tavill |
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Title: |
President |
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CALIFORNIA CHECK CASHING STORES IV, INC. | |||
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By: |
/s/ Richard Lake | |
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Name: |
Richard Lake |
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Title: |
President |
[SIGNATURE PAGE TO SHAREHOLDERS AGREEMENT]
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MANAGEMENT HOLDERS: | ||||
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/s/ William E. Saunders, Jr. | |
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WILLIAM E. SAUNDERS, JR. | |
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FOR PURPOSES OF SECTION 8.18 ONLY: | ||||
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CHECKSMART FINANCIAL HOLDINGS CORP. | ||||
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By: |
/s/ Bridgette C. Roman | ||
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Name: |
Bridgette C. Roman | |
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Title: |
Secretary |
[SIGNATURE PAGE TO SHAREHOLDERS AGREEMENT]
EXHIBIT A
FORM OF JOINDER AGREEMENT
This Joinder Agreement (this Joinder Agreement) is made as of the date written below by the undersigned (the Joining Party) in accordance with the Shareholders Agreement dated as of , 2011 (the Shareholders Agreement) among Community Choice Financial Inc. and certain other persons named therein, as the same may be amended from time to time. Capitalized terms used, but not defined, herein shall have the meaning ascribed to such terms in the Shareholders Agreement.
The Joining Party hereby acknowledges, agrees and confirms that, by its execution of this Joinder Agreement, the Joining Party shall be deemed to be a party to, and a [Management Holder] under, the Shareholders Agreement as of the date hereof and shall have all of the rights and obligations of a Shareholder and [Management Holder] as he, she or if it had executed the Shareholders Agreement. The Joining Party hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Shareholders Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Joinder Agreement as of the date written below.
Date: , 20
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Name: |
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Title: |
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Address for Notices: |
AGREED ON THIS day of , 20 :
COMMUNITY CHOICE FINANCIAL INC. |
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By: |
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SCHEDULE A
INITIAL SHARES OF COMMON STOCK
(as of the Closing under the 2011 Merger Agreement)
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Number of Shares of Common Stock |
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Diamond Castle Partners IV, L.P. |
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575,176 |
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Diamond Castle Partners IV-A, L.P. |
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218,100 |
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Deal Leaders Fund, L.P. |
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7,724 |
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2006 Rollover Holder Shares: |
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James H. Frauenberg 1998 Trust |
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139,300 |
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James H. Frauenberg 1998 Descendants Trust |
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7,000 |
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Michael W. Lenhart 1998 Trust |
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46,400 |
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Michael W. Lenhart 1998 Descendants Trust |
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2,300 |
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Chad M Streff |
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4,000 |
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2006 Rollover Holder Shares Total |
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199,000 |
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2011 Rollover Holder Shares: |
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Golden Gate Capital Investment Fund II, L.P. |
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165,750 |
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Golden Gate Capital Investment Fund II-A, L.P. |
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10,300 |
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Golden Gate Capital Investment Fund II (AI) , L.P. |
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4,133 |
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Golden Gate Capital Investment Fund II-A AI, L.P. |
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257 |
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Golden Gate Capital Associates II-QP, L.L.C. |
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4,086 |
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Golden Gate Capital Associates II-AI, L.L.C. |
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65 |
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CCG AV, L.L.C. - series C |
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6,590 |
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CCG AV, L.L.C. - series A |
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1,945 |
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CCG AV, L.L.C. - series G |
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1,915 |
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CCG AV, L.L.C. - series I |
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1,328 |
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California Check Cashing Stores, Inc. |
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74,527 |
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California Check Cashing Stores II, Inc. |
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11,183 |
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California Check Cashing Stores IV, Inc. |
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24,921 |
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2011 Rollover Holder Shares Total |
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307,000 |
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Management Holder Shares: |
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William E. Saunders, Jr. |
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23,256 |
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Management Holder Shares Total |
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23,256 |
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Total |
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1,330,256 |
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SCHEDULE 6.2
CERTAIN APPROVAL RIGHTS
Neither the Company nor any of its Subsidiaries may take any of the actions set forth below without the approval of the Board. Notwithstanding anything to the contrary contained in this Agreement, until the first to occur of (A) the date that is six months after an Initial Public Offering consummated in accordance herewith yielding aggregate proceeds to the Company and any shareholders, net of any underwriting fees, discounts and commissions attributable thereto, of not less than $50 million (Clause A Event) and (B) the date on which the Golden Gate Investor (including its Permitted Transferees) owns less than 6.5% of the then outstanding Voting Securities, neither the Company nor any of its Subsidiaries may take any of the actions that are set forth below and noted with an asterisk (*) without the prior written approval of an Approval Majority in its or their capacities as Shareholders (provided, that the approval right described in clause (xxiii) below shall survive until the first to occur of (i) the date, following a Clause A Event, on which the Golden Gate Investor owns less than 5% of the then outstanding Voting Securities and (ii) the date on which the Golden Gate Investor owns less than 1% of the then outstanding Voting Securities):
(i) (A) the appointment, authorization, or removal of and (B) any delegation of the Boards authority to any executive officer of the Company or any Subsidiary of the Company;
(ii) any change in the right to designate directors provided for in Section 2.1; (*)
(iii) the approval or amendment, as applicable, of any operating budget (the Annual Budget) which would result in a deviation of more than 10% in excess of the aggregate expenditures set forth in the then-current Annual Budget;
(iv) the adoption or amendment of the Articles of Incorporation or the adoption or amendment of the code of regulations or other organizational documents of the Company or any of its Subsidiaries (*); provided, however, that the (*) does not apply to any such amendment effected in connection with (A) a Drag-Along Sale effected in accordance with the requirements of Sections 3.5 and 3.6, (B) an issuance of securities for which the (*) does not apply under clause (xvi) of this Schedule 6.2, (C) an Initial Public Offering or (D) the sale or Transfer of less than all of the equity interests of any Company Securities (directly or indirectly);
(v) unless otherwise approved by the compensation committee of the Board, compensation and other benefits of any executive officer of the Company or any Subsidiary of the Company and, except as in existence as of the date hereof, the adoption or modification of any material benefit plans for employees of the Company or any Subsidiary of the Company;
(vi) the approval of annual financial statements of the Company or any Subsidiary of the Company and the approval of filing of any material return or other document relating to income tax of the Company or any Subsidiary of the Company with any Person;
(vii) entering into or amending any material contract of the Company or any of its Subsidiaries outside of the ordinary course of business;
(viii) the initiation, failure to defend or appear, or settlement by the Company or any of its Subsidiaries of litigation, arbitration or other similar judicial or regulatory proceedings, except for litigation, arbitration or other similar proceedings relating to amounts of less than $250,000;
(ix) any incurrence, creation or assumption of (or amendment of any instrument representing) Indebtedness (as such term is defined in the 2011 Merger Agreement) by the Company or any Subsidiary of the Company that is not set forth in the Annual Budget;
(x) the making of any material loans or advances to, guarantees for the benefit of, or investments by the Company or any of its Subsidiaries in, any Person (other than (1) to the Company or a wholly owned Subsidiary of the Company, (2) loans or advances to officers and employees of the Company and its Subsidiaries made in the ordinary course of business, (3) trade credit in the ordinary course of business or (4) as set forth in the Annual Budget);
(xi) any incurrence or refinancing of a Lien (as such term is defined in the 2011 Merger Agreement) on any material assets or property of the Company or any Subsidiary of the Company by the Company or any Subsidiary of the Company, other than (1) in the ordinary course of business, (2) in connection with any incurrence of Indebtedness (as such term is defined in the 2011 Merger Agreement) approved in accordance herewith or (3) as set forth in the Annual Budget;
(xii) any adoption or modification of any material financial accounting methods, practices, procedures or policies (including material write-offs) or any material tax policies or elections (it being agreed that the Golden Gate Investor will be provided with notice as promptly as practicable prior to any such adoption or modification);
(xiii) any change to the fiscal year of the Company (for federal income tax purposes, financial reporting purposes or otherwise); (*)
(xiv) removal or replacement of principal auditors unless such removal or replacement is approved by the audit committee of the Board; (*) (it being understood that if audit committee approval is obtained, no board or shareholder approval is required);
(xv) dividends or distributions by the Company to its Shareholders in respect of Company Securities, or any repurchase by the Company or any of its Subsidiaries of any Common Stock or other Company Securities; (*) provided, however, that the (*) does not apply with respect to (A) repurchases of Company Securities from former directors, officers and employees on the termination of service or employment or (B) any such dividend, distribution or repurchase made with respect to all Company Securities of a particular class or series on a pro rata basis in accordance with the Companys articles of incorporation;
(xvi) any issuance or authorization of Company Securities or other securities of the Company or any of its Subsidiaries, or any interests convertible into or exchangeable for
interests of the Company or any of its Subsidiaries; (*) provided, however, that the (*) does not apply to (A) this clause (xvi) if none of the DCP Investor, the Diamond Castle Fund or any Affiliate of any of the foregoing purchases or otherwise acquires any Company Securities in any issuance, or (B) any such issuances or authorizations in connection with an Initial Public Offering, or under or with respect to a Management Incentive Plan;
(xvii) combination of shares, recapitalization (whether leveraged or otherwise), merger, consolidation, reorganization, reclassification or similar transaction affecting the Company or any Subsidiary of the Company or any participation outside the ordinary course of business in joint ventures, partnerships or similar arrangements between the Company or any Subsidiary of the Company and any third party; (*) provided, however, that the (*) does not apply to this clause (xvii) (A) if such combination, recapitalization, merger, consolidation, reorganization, reclassification or similar transaction is effected solely for purposes of completing an acquisition in accordance with the requirements of clause (xix) (without regard to the $10,000,000 threshold set forth in clause (xix)), (B) for any transaction described in clause (ix), (xi), (xv), (xx) or (xxii) of this Section 6.2, but only if such transaction is effected in accordance with the requirements of such clause (including the application of any (*) with respect thereto), (C) for any Drag-Along Sale effected in accordance with the requirements of Sections 3.5 and 3.6, or (D) in connection with an Initial Public Offering;
(xviii) any sale or Transfer of all or substantially all of the assets or equity interests of the Company or any Subsidiary of the Company (whether effected by merger, consolidation, recapitalization, reorganization, reclassification or similar transaction; (*) provided, however, that the (*) does not apply to (A) any Drag-Along Sale effected in accordance with the requirements of Sections 3.5 and 3.6 or (B) in connection with an Initial Public Offering;
(xix) any acquisition (in a single transaction or a series of related transactions) of assets or properties or a business or an entity (or a part thereof) (including by acquisition of securities or by merger or other transaction) by the Company or any Subsidiary of the Company, if the value of the assets or properties proposed to be acquired exceeds $10,000,000 in the aggregate and is not set forth in the Annual Budget;
(xx) any capital or research and development expenditures by the Company or any Subsidiary of the Company, if the amount of the expenditures proposed to be made exceed the budgeted amounts specified in the Annual Budget by 10%;
(xxi) any material sales, transfers, leases, pledges or other dispositions of any property or assets by the Company or any Subsidiary of the Company not set forth in the Annual Budget other than any such transaction made in the ordinary course of business;
(xxii) the filing of any petition by or on behalf of the Company or any of its Subsidiaries seeking relief under any bankruptcy, insolvency or other similar law (other than an involuntary filing), or the voluntary dissolution, liquidation, winding up or reorganization of the Company or any Subsidiary of the Company;
(xxiii) any transaction by the Company or any of its Subsidiaries (on the one hand) with the DCP Investor, any Diamond Castle Fund or any of their respective Affiliates (on the other hand), other than on terms not less favorable to the Company or such Subsidiary as would be obtainable by the Company or such Subsidiary at the time in a comparable bona fide, arms length transaction with an independent third party (that is not its Affiliate) (it also being agreed that (A) the Golden Gate Investor shall be provided prior notice of any transaction by the Company or any of its Subsidiaries with the DCP Investor, any Diamond Castle Fund or any of their respective Affiliates involving aggregate payments in any single transaction or series of related transactions in excess of $250,000 and (B) if the Golden Gate Investor disputes that any such notified transaction meets the requirements set forth in this clause (xxiii), the Golden Gate Investor may obtain competitive quotes for alternative products and services of similar size, scope and quality which the Company shall duly consider in determining whether such alternative products and services provide terms more favorable than those proposed to be entered into by the Company with the DCP Investor, any Diamond Castle Fund or any of their respective Affiliates); (*) provided, however, that shareholder approval shall not be required for (A) the Monitoring Agreement (as in effect on the date hereof), (B) director indemnification (including entering into director indemnification agreements), director expense reimbursement or indemnity provided on behalf of directors of the Company or any Subsidiary of the Company as determined by the Board or senior management, or (C) transactions effected in accordance with the terms and conditions of Sections 3.4, 3.5, and 3.6 in this Agreement;
(xxiv) any entry into any line of business by the Company of any Subsidiary of the Company or any material modification of the line of business of the Company or any Subsidiary of the Company, other than check cashing, payday lending, money transfers, tax preparation or any other financial services or any logical extensions of any of the foregoing; (*)
(xxv) any other material matters not within the ordinary course of the Companys business;
(xxvi) settle or otherwise compromise any material issue in any federal, state or municipal tax or regulatory examination, tax audit or other proceeding; and
(xxvii) any entry into, execution or delivery of any contract, agreement or understanding to do any of the foregoing. ((*) as it relates to the foregoing asterisked items only).
* * * * *
SCHEDULE 8.9
2006 ROLLOVER HOLDER OWNERS
2006 Rollover Holder Owner |
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2006 Rollover Holder |
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James H. Frauenberg |
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James H. Frauenberg 1998 Trust |
James H. Frauenberg |
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James H. Frauenberg 1998 Descendants Trust |
Michael W. Lenhart |
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Michael W. Lenhart 1998 Trust |
Michael W. Lenhart |
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Michael W. Lenhart 1998 Descendants Trust |
Exhibit 10.2
COMMUNITY CHOICE FINANCIAL INC.
2011 MANAGEMENT EQUITY INCENTIVE PLAN
Effective as of April 29, 2011
COMMUNITY CHOICE FINANCIAL INC.
2011 MANAGEMENT EQUITY INCENTIVE PLAN
WHEREAS, pursuant to that certain Agreement and Plan of Merger, dated as of April 13, 2011, as amended, by and among the Company, Checksmart Financial Holdings Corp. (Checksmart), CCFI Merger Sub I Inc., CCFI Merger Sub II Inc., and the other parties thereto (the 2011 Merger Agreement), all of the issued and outstanding shares of Checksmart stock were converted into the Shares.
WHEREAS, Section 3.4 of the 2011 Merger Agreement required that the Company adopt the Checksmart Financial Holdings Corp. 2006 Management Equity Incentive Plan (as amended) as this Plan.
WHEREAS, this Plan has been adopted by the Board, and this Plan has been approved by the shareholders of the Company by virtue of their execution and delivery of the Shareholders Agreement.
SECTION 1. PURPOSE.
The purpose of this Plan is to attract and retain the best available personnel, to provide additional incentive to persons who provide services to the Company and its Subsidiaries, and to promote the success of the Companys business. Unless the context otherwise requires, capitalized terms used herein are defined in Section 17.
SECTION 2. ADMINISTRATION.
This Plan shall be administered by the Board. The Board shall have full authority and sole discretion to take any actions it deems necessary or advisable for the administration and operation of this Plan, subject to the terms and conditions of this Plan, including, without limitation, the right to construe and interpret the provisions of this Plan or any Award, to provide for any omission in this Plan, to resolve any ambiguity or conflict under this Plan or any Award, to accelerate vesting of or otherwise waive any requirements applicable to any Award, to extend the term or any period of exercisability of any Award, to modify the purchase price or exercise price under any Award, to establish terms or conditions applicable to any Award and to review any decisions or actions made or taken by the Board. All decisions, interpretations and other actions of the Board shall be final and binding on all Participants and other persons deriving their rights from a Participant. Notwithstanding anything to the contrary herein, no action taken by the Board shall adversely affect in any material respect the rights granted to any Participant under any outstanding Award without the Participants written consent.
SECTION 3. ELIGIBILITY
The Board is authorized to grant Awards to employees, directors and consultants of the Company or any Subsidiary of the Company. Persons who have been granted Awards shall be Participants in this Plan with respect to such Awards.
SECTION 4. SHARES SUBJECT TO PLAN.
a. Basic Limitation. Subject to the following provisions of this Section 4 and Section 13, the maximum number of Shares that may be issued pursuant to Awards under this Plan is 259,291 Shares.
b. Additional Shares. In the event that any outstanding Award expires, is cancelled or otherwise terminated, any rights to acquire Shares allocable to the unexercised or unvested portion of such Award shall again be available for the purposes of this Plan. In the event that Shares issued under this Plan are reacquired by the Company pursuant to any forfeiture provision, such Shares shall again be available for the purposes of this Plan. In the event a Participant pays for any Award through the delivery of previously acquired Shares, the number of Shares available shall be increased by the number of Shares delivered by the Participant.
SECTION 5. AWARDS.
a. Types of Awards. The Board may, in its sole discretion, make Awards of one or more of the following: Options, Stock Appreciation Rights, Restricted Stock and Restricted Stock Units. The Company shall make Awards directly or cause one or more of its Subsidiaries to make Awards; provided, however, that the Company shall be responsible for causing any such Subsidiary to comply with the terms of any Award and this Plan. Awards may be granted singly or in tandem.
b. Award Agreements. Each Award made under this Plan shall be evidenced by a written agreement between the Participant and the Company, and no Award shall be valid without any such agreement. An Award shall be subject to all applicable terms and conditions of this Plan and to any other terms and conditions which the Board in its sole discretion deems appropriate for inclusion in the Award agreement provided such terms and conditions are not inconsistent with this Plan. Accordingly, in the event of any conflict between the provisions of this Plan and any such agreement, the provisions of this Plan shall prevail. Each agreement evidencing an Award shall provide, in addition to any terms and conditions required to be provided in such agreement pursuant to any other provision of this Plan, the following terms:
(i) Number of Shares. The number of Shares subject to the Award, if any, which number shall be subject to adjustment in accordance with Section 13 of this Plan.
(ii) Price. Where applicable, each agreement shall designate the price, if any, to acquire any Shares underlying the Award, which price shall be payable in a form described in Section 11 and subject to adjustment pursuant to Section 13.
(iii) Vesting. Each agreement shall specify the dates and events on which all or any installment of the Award shall be vested and nonforfeitable.
c. No Rights as a Shareholder. A Participant, or a transferee of a Participant, shall have no rights as a shareholder with respect to any Shares covered by an Award until Shares are actually issued in the name of such person (or if Shares will be held in street name, to a broker who will issued in the name of such person (or if Shares will be held in street name, to a broker who will
hold such Shares on behalf of such person), except as set forth in Section 8(d) or as may be set forth in the Award agreement.
SECTION 6. OPTIONS.
a. Grant of Options. The Board may, in its sole discretion, grant Options. All Options shall be nonqualified stock options. This Plan does not provide for the grant of incentive stock options within the meaning of Section 422 of the Code.
b. Options Award Agreement. Each agreement evidencing an Award of Options shall contain the following information, which shall be determined by the Board, in its sole discretion:
(i) Exercise Price. Each agreement shall state the per share exercise price, which shall not be less than the Fair Market Value of a Share on the date of grant unless such Option otherwise would satisfy Section 409A of the Code.
(ii) Exercisability. Each agreement shall specify the dates and events when all or any installment of the Option becomes exercisable.
(iii) Term. Each agreement shall state the term of each Option (including the circumstances under which such Option will expire prior to the stated term thereof), which shall not exceed ten years from the date of grant.
c. Method of Exercise. Options shall be exercised by the delivery of a notice of exercise to the Company or an agent designated by the Company in a form specified or accepted by the Board, or by complying with any alternative procedures which may be authorized by the Board, setting forth the number of Shares with respect to which the Option is to be exercised, accompanied by full payment for the Shares. As soon as practicable after receipt of written notification of exercise and full payment (including satisfaction of any applicable tax withholding), the Company shall deliver to the Participant evidence of book entry Shares, or upon the Participants request, Share certificates in an appropriate amount based upon the number of Shares purchased under the Option(s). The Company, at its election and in its sole discretion, may settle any SARs requested to be exercised in Shares or cash.
SECTION 7. STOCK APPRECIATION RIGHTS.
a. Generally. The Board may, in its sole discretion, grant Stock Appreciation Rights. A Stock Appreciation Right means a right to receive a payment in cash, Shares or a combination thereof, in the sole discretion of the Board, in an amount equal to the excess of (i) the Fair Market Value, or other specified valuation, of a number of Shares on the date the right is exercised over (ii) the Initial Base Value (as determined in any grant agreement). If a Stock Appreciation Right is granted in tandem with or in substitution for an Option, the designated Fair Market Value in the Award agreement shall reflect the Fair Market Value of the Shares underlying the Awards on the date the Option is granted.
b. Stock Appreciation Rights Award Agreement. Each agreement evidencing an Award of Stock Appreciation Rights shall contain the following information, which shall be determined by the Board, in its sole discretion:
(i) Base Value. Each agreement shall specify the base value of the Shares above which a Participant shall be entitled to share in the appreciation in the value of such Shares. The per share Initial Base Value shall not be less than the Fair Market Value of a Share on the date of grant unless such Stock Appreciation Right otherwise would satisfy Section 409A of the Code
(ii) Exercisability. Each agreement shall specify how all or any portion of a Stock Appreciation Right shall be exercisable.
(iii) Term. Each agreement shall state the term of each Stock Appreciation Right (including the circumstances under which such Stock Appreciation Right will expire prior to the stated term thereof), which shall not exceed ten years from the date of grant.
SECTION 8. RESTRICTED STOCK
a. Generally. The Committee is hereby authorized to grant Shares that are subject to a risk of forfeiture and contain such other restrictions, including restrictions on transferability, as the Committee shall determine. Each such share shall be known as a share of Restricted Stock.
b. Restricted Stock Award Agreement. Each agreement evidencing an Award of Restricted Stock shall specify the restriction period and such other such terms, including as to vesting, term and transfer restrictions, as determined by the Board, in its sole discretion. If Restricted Stock will be granted or the restrictions shall have lapsed upon the achievement of performance goals over a performance period, such Award of Restricted Stock shall be referred to as Performance Shares.
c. Voting Rights. Unless otherwise determined by the Committee and set forth in a Participants award agreement, to the extent permitted or required by law, as determined by the Committee, Participants holding Shares of Restricted Stock granted hereunder shall have the right to exercise full voting rights with respect to those Shares during the period of restriction.
d. Section 83(b) Election. The Committee may provide in an award agreement that the Award of Restricted Stock is conditioned upon the Participant making or refraining from making an election with respect to the Award under Section 83(b) of the Code. If a Participant makes an election pursuant to Section 83(b) of the Code concerning a Restricted Stock Award, the Participant shall be required to file promptly a copy of such election with the Company.
SECTION 9. RESTRICTED STOCK UNITS.
a. Generally. The Board may, in its sole discretion, grant Restricted Stock Units, where in each case one unit shall be a notional account representing one Share.
b. Settlement of Restricted Stock Units. Restricted Stock Units shall be settled in Shares unless the agreement evidencing the Award expressly provides for settlement of all or a portion of the Restricted Stock Units in cash equal to the value of the Shares that would otherwise be distributed in settlement of such units. Shares distributed to settle a Restricted Stock Unit may be issued with or without payment or consideration therefor, except as may be required by
applicable law or the Board in its sole discretion as set forth in the agreement evidencing the Award. The Board may, in its sole discretion, establish a program to permit participants to defer payments and distributions made in respect of Restricted Stock Units.
SECTION 10. DIVIDEND EQUIVALENT RIGHTS.
a. Generally. The Board may, in its sole discretion, grant Dividend Equivalent Rights with respect to any Award.
b. Settlement of Dividend Equivalent Rights. Dividend Equivalent Rights may be settled in cash, Shares, additional Awards or other securities or property, all as provided in the Award agreement. The Board may, in its sole discretion, establish a program to permit participants to defer payments and distributions made in respect Dividend Equivalent Rights.
SECTION 11. PAYMENT FOR SHARES.
a. General Rule. The exercise price of Options and/or the purchase price (if any) of Shares issuable under this Plan shall be payable in cash or personal check at the time when such Shares are purchased, except as otherwise provided in this Section 11.
b. Surrender of Shares. At the sole discretion of the Board, all or any part of the purchase price and any applicable withholding requirements may be paid by surrendering, or attesting to the ownership of Shares that have fully vested, and are already owned by the Participant. Such Shares shall be surrendered to the Company in good form for transfer and shall be valued at their Fair Market Value on the date when the Option is exercised or payment is made. The Participant shall not surrender, or attest to the ownership of, Shares in payment of any portion of the purchase price (or withholding) if such action would cause the Company or any Subsidiary thereof to recognize a compensation expense (or additional compensation expense) with respect to the applicable Award for financial reporting purposes, unless the Board consents thereto.
c. Services Rendered. At the sole discretion of the Board, and except as required by applicable law, Shares may be awarded under this Plan in consideration of services rendered to the Company or a Subsidiary thereof prior to or after the Award.
d. Promissory Note. At the sole discretion of the Board, all or a portion of the exercise price of Options and/or the purchase price (if any) of Shares issuable under this Plan and any applicable withholding requirements may be paid with a full-recourse promissory note. However, the par value of the Shares, if newly issued, shall be paid in cash. The Shares shall be pledged as security for payment of the principal amount of the promissory note and interest thereon. The interest rate payable under the terms of the promissory note shall not be less than the minimum rate (if any) required to avoid the imputation of additional interest or the creation of original issue discount under the Code. Subject to the foregoing, the Board (at its sole discretion) shall specify the term, interest rate, amortization requirements (if any) and other provisions of such note.
e. Net Exercise. At the sole discretion of the Board, payment of all or any portion of the purchase price under any Award under this Plan and any applicable withholding requirements may be made by reducing the number of Shares otherwise deliverable pursuant to the Award by
the number of such Shares having a Fair Market Value equal to the purchase price. For the avoidance of doubt, the Company will not withhold any amounts greater than the statutory minimum.
f. Exercise/Sale. At the sole discretion of the Board on or after an Initial Public Offering, at any time, payment may be made in whole or in part by the delivery (on a form prescribed by the Company) of an irrevocable direction (i) to a securities broker approved by the Company to sell Shares and to deliver all or part of the sales proceeds to the Company, or (ii) to pledge Shares to a securities broker or lender approved by the Company as security for a loan, and to deliver all or part of the loan proceeds to the Company, in each case in payment of all or part of the purchase price and any withholding requirements.
g. Discretion of Board. Should the Board exercise its sole discretion to permit the Participant to pay the purchase price under an Award in whole or in part in accordance with Sections 11(b) through (f) above, it shall not be bound to permit such alternative method of payment for the remainder of any such Award or with respect to any other Award or Participant under this Plan.
SECTION 12. TERMINATION OF SERVICE.
a. Termination of Service. If a Participants Service terminates for any reason, then the Award shall be subject to termination, rights of repurchase, and the other provisions, set forth in the written agreement with the Participant governing such Award.
b. Leave of Absence. For purposes of this Section 12, Service shall be deemed to continue while a Participant is a bona fide leave of absence, if such leave is approved by the Company in writing or if continued crediting of service for this purpose is expressly required by the terms of such leave or by applicable law (as determined by the Board).
SECTION 13. ADJUSTMENT OF SHARES.
a. General. If there shall be a Recapitalization, the Board shall substitute or adjust, in its sole discretion, to prevent dilution or enlargement of Participants rights under this Plan and outstanding Awards, (a) the number and kind of Shares or other securities that may be issued under this Plan or under particular forms of Awards, (b) the number and kind of Shares or other securities subject to outstanding Awards, (c) the exercise price, base price or purchase price applicable to outstanding Awards, (d) the grant of a Dividend Equivalent, and/or (e) other value determinations applicable to this Plan or outstanding Awards. Should the vesting of any Award be conditioned upon the Companys attainment of performance conditions, the Board may, in a fair and equitable manner, make such adjustments to the terms and conditions of such Awards and the criteria therein to recognize unusual and nonrecurring events affecting the Company or in response to changes in applicable laws, regulations or accounting principles.
b. Mergers and Consolidations. In the event that the Company is a party to a merger or consolidation, outstanding Awards shall be subject to the agreement of merger or consolidation. Subject to the terms of the applicable Award agreement, the agreement with respect to such merger or consolidation, without the Participants consent, may provide for:
(i) The continuation or assumption of such outstanding Awards under this Plan by the Company (if it is the surviving entity) or by the surviving entity or its direct or indirect parent;
(ii) The substitution by the surviving entity or its direct or indirect parent of share awards with substantially the same terms and economic value for such outstanding Awards;
(iii) The acceleration of the vesting of or right to exercise such outstanding Awards immediately prior to or as of the date of the merger or consolidation, and the expiration of such outstanding Awards to the extent not timely exercised or purchased by the date of the merger or consolidation or other date thereafter designated by the Board, after reasonable advance written notice thereof to the holder of each such Award; or
(iv) The cancellation of all or any portion of such outstanding Awards; provided that, with respect to vested in-the-money Awards, such cancellation must be made in exchange for a cash payment of the excess of the fair market value of the Shares subject to such outstanding Awards or portion thereof being canceled over the exercise price or purchase price, if any, with respect to such Awards or the portion thereof being canceled.
SECTION 14. SECURITIES LAW REQUIREMENTS.
Shares shall not be issued under this Plan unless the issuance and delivery of such Shares comply with (or are exempt from) all applicable requirements of law, including (without limitation) the Securities Act, state or foreign securities laws and regulations, and the regulations of any stock exchange or other securities market on which the Companys securities may then be traded. The Company shall not be obligated to file any registration statement under any applicable securities laws to permit the purchase or issuance of any Shares under this Plan, and accordingly any certificates for Shares may have an appropriate legend or statement of applicable restrictions endorsed thereon. Each Participant and any person deriving its rights from any Participant shall, as a condition to the purchase or issuance of any Shares under this Plan, deliver to the Company an agreement or certificate containing such representations, warranties and covenants as the Company may deem necessary or appropriate to ensure that the issuance of Shares is not required to be registered under any applicable securities laws.
SECTION 15. GENERAL TERMS.
a. Nontransferability of Awards. No Award may be transferred, assigned, pledged or hypothecated by any Participant except in compliance with the terms of the agreement governing such Award. The exercisability of an Option or other right to acquire Shares under this Plan by someone other than the Participant shall be governed by the agreement pursuant to which such Option or other right is granted.
b. Restrictions on Transfer of Shares. Any Shares issued under this Plan shall be subject to such vesting and special forfeiture conditions, repurchase rights, rights of first offer and other transfer restrictions as the Board may determine. Such restrictions shall be set forth in the
applicable Award agreement and shall apply in addition to any restrictions that may apply to holders of Shares generally.
c. Compliance with Section 409A of the Code. To the extent applicable, it is intended that this Plan and all Awards comply with the provisions of Section 409A of the Code and this Plan and all Awards shall be administered accordingly. Notwithstanding anything in this Plan to the contrary, the Board shall have authority to amend this Plan and modify any Award to the extent necessary to fulfill this intent and any provision that would cause this Plan or any Award to fail to satisfy Section 409A of the Code shall have no force and effect unless and until amended or modified to comply with Section 409A of the Code. Reference to Section 409A of the Code includes reference to any proposed, temporary or final regulations and any other guidance promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service.
d. Withholding Requirements. As a condition to the receipt or purchase of Shares pursuant to an Award, a Participant shall make such arrangements as the Board may require for the satisfaction of any federal, state, local or foreign withholding obligations that may arise in connection with such receipt or purchase. The Participant shall also make such arrangements as the Board may require for the satisfaction of any federal, state, local or foreign withholding obligations that may arise in connection with the disposition of Shares acquired pursuant to an Award.
e. No Retention Rights. Nothing in this Plan or in any Award granted under this Plan shall confer upon a Participant any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Subsidiary thereof employing or retaining the Participant) or of the Participant, which rights are hereby expressly reserved by each, to terminate his or her Service at any time and for any reason, with or without cause.
f. Unfunded Plan. Participants shall have no right, title or interest whatsoever in or to any investments which the Company may make to aid it in meeting its obligations under this Plan. Nothing contained in this Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, nor a fiduciary relationship between the Company and any Participant, beneficiary, legal representative or any other person. To the extent that any person acquires a right to receive payments from the Company under this Plan, such right shall be no greater than the rights of an unsecured general creditor of the Company. All payments to be made hereunder shall be paid from the general funds of the Company and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such amounts. This Plan is not intended to be subject to the Employee Retirement Income Security Act of 1974, as amended.
SECTION 16. DURATION AND AMENDMENTS.
a. Term of this Plan. This Plan, as set forth herein, shall become effective on the date of its adoption by the Board, subject to (i) the approval of the holders of a majority of the Shares and (ii) any other shareholder approval required pursuant to the Shareholders Agreement. If the requisite shareholder approvals set forth in the immediately preceding sentence to approve this
Plan are not obtained within 12 months of its adoption by the Board, any Awards that have already been made shall be rescinded, and no additional Awards shall be made thereafter under this Plan. This Plan shall terminate automatically on the day preceding the tenth anniversary of its adoption by the Board unless earlier terminated pursuant to Section 16(b) below.
b. Right to Amend or Terminate this Plan. The Board may amend, suspend or terminate this Plan at any time and for any reason; provided, however, that any amendment of this Plan (except as provided in Section 13) which increases the maximum number of Shares available for issuance under this Plan in the aggregate, or changes the legal entity authorized to make Awards under this Plan from the Company (or its successor) to any other legal entity, shall be subject to: (i) the approval of the holders of a majority of the Shares and (ii) any other shareholder approval required pursuant to the Shareholders Agreement. Except as may be required by the Shareholders Agreement, approval of the holders of the Shares shall not be required for any other amendment of this Plan.
c. Effect of Amendment or Termination. Except as provided in Section 15(c), any amendment of this Plan shall not adversely affect in any respect any Participants rights under any Award previously made or granted under this Plan without the Participants consent. No Shares shall be issued or sold under this Plan after the termination thereof, except pursuant to an Award granted prior to such termination. The termination of this Plan shall not affect any Awards outstanding on the termination date.
d. Modification, Extension and Assumption of Awards. Within the limitations of this Plan, the Board may modify, extend or assume outstanding Awards or may provide for the cancellation of outstanding Awards in return for the grant of new Awards for the same or a different number of Shares and at the same or a different price. The foregoing notwithstanding, except as provided in Section 15(c), no modification of an Award shall, without the consent of the Participant, impair the Participants rights or increase the Participants obligations under such Award or impair the economic value of any such Award.
e. Initial Public Offering. Prior to an Initial Public Offering, the Board may amend and restate this Plan to include such provisions as the Board determines in good faith necessary or appropriate as a result of the Company becoming, after an Initial Public Offering, a publicly traded company, subject to Section 16(c).
SECTION 17. DEFINITIONS.
a. 2011 Merger Agreement shall have the meaning described in the preamble to this Plan.
b. Affiliate shall mean, with respect to any specified Person, (a) any other Person which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person (for the purposes of this definition, control (including, with correlative meanings, the terms controlling, controlled by and under common control with), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise);
provided, however, that neither the Company nor any of its Subsidiaries shall be deemed an Affiliate of any of the shareholders of the Company (and vice versa), and (b) if such specified Person is an investment fund, any other investment fund the primary investment advisor to which is the primary investment advisor to such specified Person.
c. Award shall mean the grant of an Option, Stock Appreciation Right, Restricted Stock or Restricted Stock Unit under this Plan.
d. Board shall mean the Board of Directors of the Company, as constituted from time to time, or if such Board of Directors has appointed a Compensation Committee, the Compensation Committee.
e. Change of Control shall have the meaning ascribed to such term in the Shareholders Agreement.
f. Checksmart shall have the meaning described in the preamble to this Plan.
g. Code shall mean the Internal Revenue Code of 1986, as amended.
h. Company shall mean Community Choice Financial Inc., an Ohio corporation.
i. Fair Market Value shall mean, as of any date of determination, the Boards good faith determination of the fair value of the Company Securities as of such date.
j. Initial Public Offering shall mean the Companys first underwritten public offering and sale of Shares for cash pursuant to an effective registration statement under the Securities Act, other than pursuant to a registration statement on Form S-4 or Form S-8 or any similar or successor form.
k. Option shall mean an Option granted under this Plan and entitling the holder to purchase Shares.
l. Participant shall mean an eligible individual to whom and Award is granted to under this Plan.
m. Performance Shares shall have the meaning described in Section 8(b).
n. Person shall mean any individual, partnership, corporation, company, association, trust, or joint venture, limited liability company, unincorporated organization, entity or division, or any government, governmental department or agency or political subdivision thereof.
o. Plan shall mean the Checksmart Financial Holdings Corp. 2006 Management Equity Incentive Plan, effective as of May 1, 2006 (as amended), as the same has been adopted by the Board in accordance with the terms of the 2011 Merger Agreement to become this Community Choice Financial Inc. 2011 Management Equity Incentive Plan.
p. Recapitalization shall mean an event or series of events affecting the capital structure of the Company including, but not limited to, stock dividends, stock splits, rights offers or recapitalizations through large, non-recurring cash dividends.
q. Restricted Stock shall have the meaning described in Section 8(a).
r. Restricted Stock Unit shall have the meaning described in Section 9(a).
s. Securities Act means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
t. Service shall mean service as an employee or consultant of the Company or any Subsidiary thereof.
u. Shares shall mean shares of Common Stock of the Company, par value $0.01 per share.
v. Stock Appreciation Right shall have the meaning described in Section 7(a).
w. Shareholders Agreement shall mean that certain Shareholders Agreement, dated as of April 29, 2011, by and among the Company, Diamond Castle Partners IV, L.P., Diamond Castle Partners IV-A, L.P., Deal Leaders Fund, L.P., each Person listed as a 2006 Rollover Holder on Schedule A thereto or executing a Joinder Agreement as a 2006 Rollover Holder, each Person listed as a 2011 Rollover Holder on Schedule A thereto or executing a Joinder Agreement as a 2011 Rollover Holder, and each Person listed as a Management Holder on Schedule A hereto or executing a Joinder Agreement as a Management Holder (as the same shall be amended, supplemented or modified from time to time).
x. Subsidiary shall mean any Person as to which the Company owns or controls, directly or indirectly, more than 50% percent of the voting securities of such Person.
SECTION 18. MISCELLANEOUS
a. Choice of Law. All issues concerning the relative rights of the Company and any Participants with respect to each other shall be governed by the laws of the State of Ohio. All other issues concerning the construction, validity and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts made and performed entirely within such state, without regard to the conflicts of laws rules of such state. Any legal action or proceeding with respect to this Plan shall be brought in the courts of the United States for the Southern District of New York
b. Adoption. This Plan has been duly adopted by the Board on April 19, 2011 to be effective as of April 29, 2011 and was approved by the shareholders of the Company as of April 29, 2011 by virtue of their execution and delivery of the Shareholders Agreement.
AMENDMENT NO. 1 TO THE 2011 MANAGEMENT EQUITY INCENTIVE PLAN
This AMENDMENT NO. 1 to the Community Choice Financial Inc. 2011 Management Equity Incentive Plan (the Plan) is made and entered into as of February 1, 2012 (this Amendment), by the Board of Directors (the Board) of Community Choice Financial Inc. (the Corporation) and as approved by a majority of the stockholders of the Corporation in accordance with Section 16(b) of the Plan.
RECITALS:
WHEREAS, the Plan was adopted by the Board and became effective on April 29, 2011, and approved by the stockholders of the Corporation on that same date; and
WHEREAS, the Board or its Compensation Committee have retained authority to amend the Plan pursuant to Section 16 thereof; and
WHEREAS, the maximum number of shares permitted to be issued pursuant to awards under the Plan have been substantially exhausted and the Corporation desires to issue additional shares; and
WHEREAS, the Board believes if to be in the best interests of the Corporation to increase the maximum number of shares permitted to be issued pursuant to awards under the plan from the current 259,291 shares to 490,291 shares; and
WHEREAS, the Board believes it to be in the best interests of the Corporation to allow for the grant of options to directors and certain employees of the Corporation; and
WHEREAS, a majority of the stockholders of the Corporation will approved this Amendment in accordance with Section 16(b) of the Plan.
NOW, THEREFORE, the Board of Directors of the Corporation amends the Plan as follows:
Section 1. AMENDMENT TO THE PLAN.
(a) The first sentence of Section 4(a) of the Plan is hereby amended and replaced in its entirety with the following sentence:
Subject to the following provisions of this Section 4 and Section 13, the maximum number of Shares that may be issued pursuant to Awards under this Plan is 490,291 Shares.
Section 2. GENERAL PROVISIONS.
(a) This Amendment may be executed in one or more counterparts, which may be delivered by facsimile transmission, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood that all parties need not sign the same counterpart.
(b) This Amendment shall be construed in accordance with and governed by the internal laws (without reference to choice or conflict of laws) of the State of Ohio.
(c) On and after the date hereof each reference in the Plan to this Plan, herein, or words of like import shall mean and be a reference to the Plan as amended hereby. No reference to this Amendment need be made in any instrument or document at any time referring to the Plan, a reference to the Plan in any of such to be deemed to be a reference to the Plan as amended hereby.
(d) Except as specifically provided for in this Amendment, all other provisions of the Plan shall continue in full force and effect.
* * * * *
IN WITNESS WHEREOF, the Board of Directors of the Corporation have executed this Amendment as of the date first above written.
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/s/ Eugene Lockhart |
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Eugene Lockhart |
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/s/ Lee A. Wright |
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Lee A. Wright |
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/s/ James H. Frauenberg, Sr. |
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James H. Frauenberg, Sr. |
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/s/ Michael Langer |
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Michael Langer |
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/s/ Andrew Rush |
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Andrew Rush |
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/s/ David M. Wittels |
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David M. Wittels |
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/s/ William E. Saunders, Jr. |
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William E. Saunders, Jr. |
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/s/ Felix Lo |
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Felix Lo |
Exhibit 10.3
ADVISORY SERVICES
AND MONITORING AGREEMENT
This Advisory Services and Monitoring Agreement (this Agreement) is entered into as of April 29, 2011, by and among Community Choice Financial Inc., an Ohio corporation (together with its subsidiaries, including Subsidiary and CCCS (as defined below), collectively, the Company), CheckSmart Financial Company (the Subsidiary), California Check Cashing Stores, LLC (CCCS), Diamond Castle Holdings, LLC (DCH) and GGC Administration, LLC (GGC).
WHEREAS, in connection with the transactions (the Merger) contemplated by that certain Agreement and Plan of Merger, dated April 13, 2011, by and among Checksmart Financial Holdings Corp., the Company, CCFI Merger Sub I, Inc., CCFI Merger Sub II, Inc., and the other parties thereto, which is being consummated as of the date hereof, DCH provided advice and analysis including assistance with due diligence and other investigatory matters related to the Company, and advice with respect to structuring the Merger and structuring several transactions and arrangements ancillary to the Merger (collectively, the Advisory Services);
WHEREAS, DCH is a party to the Advisory Services and Monitoring Agreement, dated as of May 1, 2006 (the Original Agreement), between the Subsidiary and DCH, and the Original Agreement is being terminated pursuant to Section 19 hereof concurrently with the consummation of the Merger, and, in lieu of receiving a payment for its Advisory Services pursuant to the Original Agreement, DCH will be paid for its Advisory Services under this Agreement;
WHEREAS, the Company will receive financial advisory services from each of DCH and GGC;
WHEREAS, each of DCH and GGC have staff specially skilled in corporate finance, strategic corporate planning, transaction structuring and other management skills and advisory and business monitoring services and the Company will require such skills and services from DCH and GGC in connection with their business operations and execution of their strategic plan;
WHEREAS, each of DCH and GGC is willing to provide such skills and services to the Company; and
NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
1. Appointment.
(a) The Company hereby appoints each of DCH and GGC, or their respective designee, as its financial advisors with respect to the following services to the extent appropriate and requested by the Company: (i) assisting the Company in analyzing its operations and historical performance; (ii) assisting the Company in analyzing future prospects; (iii) assisting the Company with respect to future proposals for acquisitions, sales, spin-offs, joint ventures,
mergers, financings (other than with respect to any registered public offering of any securities of the Company), exchange offers, recapitalizations, restructurings or other similar transactions (Subsequent Transactions); and (iv) providing financial and business monitoring services, including with respect to assisting the Company in preparing a strategic plan.
(b) Neither DCH nor GGC make any representations or warranties, express or implied, in respect of the services to be provided by DCH, GGC or their designees hereunder. In no event shall DCH, GGC or their respective affiliates be liable to the Company or any of its respective affiliates for any act, alleged act, omission or alleged omission that does not constitute gross negligence or willful misconduct of DCH, GGC or their designees as determined by a final, non-appealable determination of a court of competent jurisdiction.
(c) DCH and GGC shall devote such time and efforts to the performance of services contemplated hereby as DCH and GGC deem reasonably necessary or appropriate; provided, however, that no minimum number of hours is required to be devoted by DCH or GGC on a weekly, monthly, annual or other basis. The Company acknowledges that DCHs and GGCs services are not exclusive to the Company and that DCH and GGC will render similar services to other persons and entities.
2. Term and Termination.
(a) This Agreement shall be effective as of the date hereof and continue until the fifth anniversary of the date hereof. This Agreement shall automatically renew on each anniversary of the date hereof and, in connection with each such renewal, the term of this Agreement shall be five years from the date of such renewal.
(b) This Agreement (i) may be terminated by the joint written approval of DCH and GGC at any time prior to the consummation of an Initial Public Offering (as such term is defined in the Shareholders Agreement, dated as of the date hereof (the Shareholders Agreement), among the Company and the shareholders party thereto), (ii) shall terminate automatically upon the consummation of an Initial Public Offering, (iii) shall terminate automatically with respect to DCH, and shall continue in force with respect to GGC unless otherwise terminated, on the first date on which DCH (together with its affiliated investment funds) beneficially owns less than (W) if at least one director on the Companys board of directors at such time is a DCP Director (as defined in the Shareholders Agreement), 5%, or (X) if no director on the Companys board of directors at such time is a DCP Director, 10%, of Company Securities (as defined in the Shareholders Agreement) (without giving effect to any unexercised options) (the DCH Ownership Threshold), and (iv) shall terminate automatically with respect to GGC, and shall continue in force with respect to DCH unless otherwise terminated, on the first date on which GGC (together with its affiliated investment funds) beneficially owns less than (Y) if at least one director on the Companys board of directors at such time is a Golden Gate Director (as defined in the Shareholders Agreement), 3.5%, or (Z) if no director on the Companys board of directors at such time is a Golden Gate Director, 6.5%, of Company Securities (as defined in the Shareholders Agreement) (without giving effect to any unexercised options) (the GGC Ownership Threshold). In the event that this Agreement is automatically terminated pursuant to clause (ii) above, the Company agrees to pay DCH and GGC (or any of their designees), at the time of such termination, a cash lump-sum termination
fee (each a Termination Fee) equal to the net present value of the amount of the aggregate Quarterly Fees (as defined below in Section 3(b)) that otherwise would have been payable from the Company to DCH and GGC, as the case may be, from the date of such termination until the expiration date in effect immediately prior to such termination pursuant to Section 2(a), calculated using a discount rate equal to the ten-year treasury rate on the date of such termination.
(c) Upon any termination of this Agreement (or termination with respect to either DCH or GGC), DCH and GGC, as applicable, will each be entitled to prompt payment of all fees accruing and payable through such termination (including any pro rata portion of any Quarterly Fee) and reimbursement of all out-of-pocket expenses as described herein. No termination of DCHs or GGCs engagement hereunder shall affect the Companys obligations under this Agreement, including, without limitation, the Companys indemnity obligations as set forth herein.
(d) The terms and provisions of Sections 2(b), 2(c), 2(d), 2(e), 4 and 5 shall survive any termination of this Agreement.
(e) (i) The Company represents to DCH and GGC that it has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement; that the execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary corporate action on the part of the Company; that this Agreement has been duly executed and delivered by the Company and, assuming due authorization, execution and delivery by the other parties hereto, represents the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, fraudulent conveyance and other similar laws and principles of equity affecting creditors rights and legal and equitable remedies generally; that the execution, delivery and effectiveness of this Agreement does not violate or conflict with any other agreement to which the Company or any of its subsidiaries is a party or by which any of them is bound; and, except as otherwise permitted pursuant to the Shareholders Agreement, that there exists no agreement or understanding (other than this Agreement and the Shareholders Agreement) between the Company or any of its subsidiaries, on the one hand, and DCH, GGC or any other person on the other, regarding the subject matter hereof, including the payment of any fees to such other person.
(ii) DCH represents to the Company and GGC that it has all requisite limited liability company power and authority to execute, deliver and perform its obligations under this Agreement; that the execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary corporate action on the part of DCH; that this Agreement has been duly executed and delivered by DCH and, assuming due authorization, execution and delivery by the other parties hereto, represents the legal, valid and binding obligation of DCH, enforceable against DCH in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, fraudulent conveyance and other similar laws and principles of equity affecting creditors rights and legal and
equitable remedies generally; that the execution, delivery and effectiveness of this Agreement does not violate or conflict with any other agreement to which DCH is a party or by which it is bound; and, except as otherwise permitted pursuant to the Shareholders Agreement, that there exists no agreement or understanding (other than this Agreement and the Shareholders Agreement) between DCH or any of its affiliates, on the one hand, and the Company or any of its subsidiaries, on the other, regarding the subject matter hereof, including the payment of any fees to DCH or such other affiliate.
(iii) GGC represents to the Company and DCH that it has all requisite limited liability company power and authority to execute, deliver and perform its obligations under this Agreement; that the execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary corporate action on the part of GGC, that this Agreement has been duly executed and delivered by GGC and, assuming due authorization, execution and delivery by the other parties hereto, represents the legal, valid and binding obligation of GGC, enforceable against GGC in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, fraudulent conveyance and other similar laws and principles of equity affecting creditors rights and legal and equitable remedies generally; that the execution, delivery and effectiveness of this Agreement does not violate or conflict with any other agreement to which GGC is a party or by which it is bound; and, except as otherwise permitted pursuant to the Shareholders Agreement, that there exists no agreement or understanding (other than this Agreement and the Shareholders Agreement) between GGC or any of its affiliates, on the one hand, and the Company or any of its subsidiaries, on the other, regarding the subject matter hereof, including the payment of any fees to GGC or such other affiliate.
3. Payment of Fees.
(a) In consideration of the Advisory Services provided by DCH in connection with the transactions related to the consummation of the Merger, the Company agrees to pay to DCH (or any of its designees) on the date hereof a one-time fee (the Transaction Fee) equal to $3,800,000. For the avoidance of doubt, GGC shall not be entitled to share in the Transaction Fee.
(b) In consideration of the ongoing management and other advisory services to be provided by DCH and GGC to the Company and its subsidiaries, the Company will pay to DCH and GGC (or any of their designees), a quarterly fee in an amount as set forth below (the Quarterly Fee), payable on the first business day of each calendar quarter (January 1, April 1, July 1 and October 1) and shall continue through the date of termination of this Agreement (if payable upon termination of this Agreement, such final installment to be paid on the effective date of such termination and prorated for any final period consisting of less than 90 days); provided, that, the first Quarterly Fee shall be a pro-rated amount to reflect the period from the date hereof through the end of the calendar quarter. The amount of the Quarterly Fee payable by the Company to DCH and GGC shall be equal to the product of (x) the greater of (i) $150,000 or
(ii) 25% multiplied by 1.5% of the EBITDA (as defined below) for the previous 12-month period (on a pro forma basis after giving effect to any acquisition or disposition as if such acquisition or disposition occurred on the first day of such 12-month period and including any pro forma synergies or cost savings) ending on the last day of the quarter immediately preceding the date any Quarterly Fee is due (e. g., quarter ended June 30 for any July 1 payment) as determined from the Companys financial statements, and (y) the Applicable Ratio (as defined below). As used in this Section 3(b), EBITDA shall have the meaning ascribed to Consolidated EBITDA in that certain Credit Agreement, dated May 1, 2006, among CheckSmart Financial Company, Bear, Sterns & Co. Inc, RBS Securities Corporation and the other parties thereto, regardless of whether such credit agreement is in effect. As used in this Agreement, Applicable Ratio means (x) with respect to the calculation of any Quarterly Fee or fee pursuant to Section 3(c) below payable to DCH, 78%, and (y) with respect to the calculation of any Quarterly Fee or fee pursuant to Section 3(c) below payable to GGC, 22%; provided, however, that (i) if GGC (together with its affiliated investment funds) beneficially owns less than the GGC Ownership Threshold but DCH (together with its affiliated investment funds) continues to beneficially own at least the DCH Ownership Threshold, then from the date GGC (together with its affiliated investment funds) beneficially owns less than the GGC Ownership Threshold, the Applicable Ratio shall be 100% with respect to any fee payable to DCH (and 0% for any fee payable to GGC) and (ii) if DCH (together with its affiliated investment funds) beneficially owns less than the DCH Ownership Threshold but GGC (together with its affiliated investment funds) continues to beneficially own at least the GGC Ownership Threshold, then from the date DCH (together with its affiliated investment funds) beneficially owns less than the DCH Ownership Threshold, the Applicable Ratio shall be 100% with respect to any fee payable to GGC (and 0% for any fee payable to DCH).
(c) In connection with the provision by DCH and GGC of advisory services in connection with any Subsequent Transaction consummated during the term of this Agreement, the Company shall pay to DCH and GGC (or any of its designees), at the closing of such Subsequent Transaction, a fee equal to the product of (x) one percent (1%) of the total value of any such Subsequent Transaction as determined in accordance with Exhibit A attached hereto (the Value), and (y) the Applicable Ratio (with the DCH Ownership Threshold and GGC Ownership Threshold being determined immediately prior to the consummation of such Subsequent Transaction).
(d) If the Company reasonably anticipates that making any payments pursuant to Section 3 will exceed the amount permitted under the terms of any indenture or loan agreement to which it or any of its subsidiaries is a party, the Company shall pay such portion of the fee as the Company reasonably anticipates will not exceed the amount permitted under the terms of such indenture or loan agreement and shall pay the remainder of such fee at the earliest date that it reasonably anticipates the making of such payment will not violate the terms of such indenture or loan agreement. The Company (together with its subsidiaries including Subsidiary and CCCS) will be responsible to DCH and GGC jointly and severally (and without duplication) for any and all payments due and owing pursuant to this Section 3 and for any reimbursements owing pursuant to Section 4.
(e) All payments and reimbursements made pursuant to Sections 2, 3 and 4 will be paid by wire transfer of immediately available U.S. Dollars to the accounts specified by DCH and GGC (or any of their designees), as applicable, in writing to the Company.
4. Expenses. In addition to the compensation to be paid pursuant to Sections 2(b), 3(a), 3(b), 3(c), 3(d) and 3(e) above, promptly upon request by DCH and GGC from time to time upon presentation of invoices for such expenses, the Company shall reimburse DCH and GGC for (i) all reasonable and documented out-of-pocket expenses incurred by each director appointed by such party to the board of directors of the Company in connection with attending regular and special meetings of such board of directors and any committee thereof and (ii) their reasonable out-of-pocket expenses incurred in connection with the provision of services hereunder to the Company, including, without limitation, the reasonable fees and disbursements of any counsel, consultants, accountants, advisors, financing sources or other agents or representatives of DCH, GGC and their affiliates (other than the Company) (collectively, Representatives), in connection with the enforcement, preservation or analysis of rights or taking of actions under this Agreement or otherwise resulting from or arising out of this engagement.
5. Indemnification.
(a) The Company shall indemnify and hold harmless DCH and GGC and their respective members, directors, managers, officers, employees and affiliates (other than the Company) and each of their respective officers, managers, directors, employees, partners, members, shareholders, and Representatives (each, an Indemnified Person) from and against any loss, liability, claim, damage or expense (collectively, Losses), and shall promptly reimburse each Indemnified Person for all fees and expenses (including the reasonable fees and expenses of counsel) (collectively, Expenses) incurred in connection with any claim, action, suit, proceeding or investigation (Actions), arising out of, relating to, or in connection with the Advisory Services or this Agreement (including the advisory services of each of DCH and GGC under this Agreement); provided, however, that the Company shall not be responsible for any Losses or Expenses of any Indemnified Person that are determined by a judgment of a court of competent jurisdiction that is no longer subject to appeal or further review to have resulted from such Indemnified Persons gross negligence or willful misconduct in connection with the Advisory Services or any other advisory services provided hereunder, to the extent that such Losses or Expenses are so determined to have resulted from such gross negligence or willful misconduct.
(b) Upon receipt by an Indemnified Person of actual notice of an Action against such Indemnified Person with respect to which indemnity may be sought hereunder, such Indemnified Person shall promptly notify the Company and other party hereto in writing; provided, however, that failure to give such notice shall not affect the indemnification provided hereunder except to the extent the Company shall have been actually and materially prejudiced as a result of such failure. Thereafter, the Indemnified Person shall deliver to the Company and the other party hereto, promptly following the Indemnified Persons receipt thereof, copies of all notices and documents (including court papers) received by the Indemnified Person relating to the Action.
(c) The Company shall be entitled to participate in the defense of any Action and, if is so chooses, to assume the defense thereof with counsel selected by the Company; provided, however, that such counsel is not reasonably objected to by the Indemnified Person. Should the Company so elect to assume the defense of an Action, the Company shall not be liable to the Indemnified Person for any legal expenses subsequently incurred by the Indemnified Person in connection with the defense thereof. If the Company assumes such defense, the Indemnified Person shall have the right to participate in the defense thereof and to employ counsel, at its own expense, separate from the counsel employed by the Company, it being understood that the Company shall control such defense. The Company shall be liable for the reasonable fees and expenses of counsel employed by the Indemnified Person for any period during which the Company has not assumed the defense thereof. If the Company chooses to defend or prosecute an Action, all the Indemnified Persons shall cooperate in the defense or prosecution thereof. Such cooperation shall include the retention and (upon the Companys request) the provision to the Company of records and information that are reasonably relevant to such Action, and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. The Company shall have the ability to settle, compromise or discharge an Action without the prior written consent of DCH or GGC (subject to the provisions of the Shareholders Agreement). Notwithstanding the foregoing, the Company shall not be entitled to assume the defense of any Action (and shall be liable for the reasonable fees and expenses of counsel incurred by the Indemnified Person in defending such Action) if the Action seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnified Person that the Indemnified Person reasonably determines, after conferring with its outside counsel, cannot be separated from any related claim for money damages. If such equitable relief or other relief portion of the Action can be so separated from that for money damages, the Company shall be entitled to assume the defense of the portion relating to money damages.
(d) In the event the foregoing indemnity is unavailable to an Indemnified Person, the Company shall contribute to the Losses and Expenses paid or payable by such Indemnified Person in such proportion as is appropriate to reflect (i) the relative benefits received by the Company, on the one hand, and by DCH or GGC, on the other hand, of the matters contemplated by this Agreement or (ii) if the allocation provided by the immediately preceding clause is not permitted by the applicable law, not only such relative benefits but also the relative fault of the Company, on the one hand, and DCH or GGC, on the other hand, in connection with the matters as to which such Losses or Expenses relate, as well as any other relevant equitable considerations; provided, however, that in no event shall the Indemnified Persons be required to contribute an amount in excess of the aggregate fees received by DCH or GGC, as the case may be, pursuant to Section 3.
(e) The Company also agrees that no Indemnified Person shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company or any of their respective officers, directors, employees, members, partners, security holders, creditors or representatives or agents arising out of, relating to, or in connection with the Advisory Services or this Agreement (including the advisory services provided under this Agreement) except for Losses and Expenses that are determined by a judgment of a court of competent jurisdiction that is no longer subject to appeal or further review to have resulted from such Indemnified Persons gross negligence or willful misconduct in connection with the Advisory Services, to the extent
such Losses or Expenses are so determined to have resulted from such gross negligence or willful misconduct.
(f) If any provision of this indemnity (or any portion thereof) or the application of any such provision (or any portion thereof) to any person or circumstance shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision hereof (or the remaining portion thereof) or the application of such provision to any other persons or circumstances.
(g) The Company further agrees that with respect to any Indemnified Person who is employed, retained or otherwise associated with, or appointed or nominated by, DCH or GGC or any of their affiliates and who acts or serves as a director, officer, manager, fiduciary, employee, consultant, advisor or agent of, for or to the Company or any of its subsidiaries, that the Company or such subsidiaries, as applicable, shall be primarily liable for all indemnification, reimbursements, advancements or similar payments (the Indemnity Obligations) afforded to such Indemnified Person acting in such capacity or capacities on behalf or at the request of the Company, whether the Indemnity Obligations are created by law, organizational or constituent documents, contract (including this Agreement) or otherwise. Notwithstanding the fact that DCH, GGC and/or any of their affiliates, other than the Company (such persons, together with its and their heirs, successors and assigns, the Sponsor Parties), may have concurrent liability to an Indemnified Person with respect to the Indemnity Obligations, the Company hereby agrees that in no event shall the Company or any of its subsidiaries have any right or claim against any of the Sponsor Parties for contribution or have rights of subrogation against any Sponsor Parties through an Indemnified Person for any payment made by the Company or any of its subsidiaries with respect to any Indemnity Obligation. In addition, the Company hereby agrees that in the event that any Sponsor Parties pay or advance an Indemnified Person any amount with respect to an Indemnity Obligation, the Company will, or will cause its subsidiaries to, as applicable, promptly reimburse such Sponsor Parties for such payment or advance upon request and presentation of invoices for such expenses.
(h) The obligations set forth in this Section 5 shall be in addition to any liability the Company or its subsidiaries may have to any Indemnified Person at common law or otherwise.
6. No Exclusive Duty to the Company. In recognition that (i) DCH and GGC (or one or more affiliates, associated investment funds or portfolio companies) currently have, and will in the future have or will consider acquiring, investments in numerous companies with respect to which DCH or GGC may serve as an advisor, a director or in some other capacity, (ii) DCH and GGC may have a myriad of duties to various investors and partners, (iii) DCH and GGC (or one or more affiliates, associated investment funds or portfolio companies) may engage in the same or similar activities or lines of business as the Company and have an interest in the same areas of corporate opportunities, (iv) the Company will derive certain benefits hereunder and (v) DCH and GGC who desires and endeavors fully to satisfy DCHs and GGCs duties may confront difficulties in determining the full scope of such duties in any particular situation, the provisions of this Section 6 are set forth to regulate, define and guide the conduct of certain affairs of the Company as they may involve DCH and GGC.
(a) DCH and GGC shall have the right:
(i) to directly or indirectly engage in any business (including, without limitation, any business activities or lines of business that are the same as or similar to those pursued by, or competitive with, the Company and its subsidiaries or affiliates),
(ii) to directly or indirectly do business with any client or customer of the Company and its subsidiaries or affiliates,
(iii) to take any other action that DCH or GGC believes in good faith is necessary to or appropriate to fulfill its duties and obligations, and
(iv) not to communicate or present potential transactions, matters or business opportunities to the Company and its subsidiaries or affiliates, and to pursue, directly or indirectly, any such opportunity for itself, and to direct any such opportunity to another person.
(b) None of DCH, GGC or any of their affiliates shall have any duty (contractual or otherwise) to communicate or present any corporate opportunities to the Company or any of its affiliates or to refrain from any actions specified in Section 6(a), and the Company, on its own behalf and on behalf of its affiliates, hereby renounce and waive any right to require DCH, GGC or any of their affiliates to act in a manner inconsistent with the provisions of Section 6(a).
(c) None of DCH, GGC or any of their affiliates shall be liable to the Company or any of its affiliates for breach of any duty (contractual or otherwise) by reason of any activities or omissions of the types referred to in Section 6(a) or DCHs or GGCs or their affiliates participation therein.
(d) Nothing in this Section 6 will exculpate DCH, GGC or any of their affiliates from any willful misconduct, willful misuse of information that is proprietary to the Company or its subsidiaries or breach of its obligation to maintain as confidential or proprietary any information that is confidential or proprietary, respectively, to the Company or its subsidiaries.
7. Amendments and Waivers. No amendment or waiver of any term, provision or condition of this Agreement shall be effective, unless in writing and executed by DCH, GGC and the Company; provided, however, that any such waiver shall be effective against DCH or GGC, respectively, only to the extent the right so waived by DCH or GGC, respectively, was enforceable solely by DCH or GGC, as applicable; provided, further, however, that notwithstanding anything to the contrary, DCH may unilaterally, in its sole discretion, waive the last sentence of Section 2(b) so long as such waiver applies to both DCH and GGC collectively (i.e., DCH may not waive such provision with respect to GGC unless it also waives such provision with respect to itself), in which case the benefit of such sentence shall not apply to each of DCH and GGC. No waiver on any one occasion shall extend to or effect or be construed as a waiver of any right or remedy on any future occasion. No course of dealing of any person
nor any delay or omission in exercising any right or remedy shall constitute an amendment of this Agreement or a waiver of any right or remedy of any party hereto.
8. Miscellaneous.
(a) Choice of Law. All issues concerning this Agreement, the rights and obligations of the parties under this Agreement, and any claim or controversy directly or indirectly based upon or arising out of this Agreement or the transactions contemplated by this Agreement (whether based upon contact, tort or any other theory), including all matters of construction, validity and performance, shall be governed by and construed in accordance with the domestic substantive laws of the State of New York without giving effect to any choice or conflict of law provision or rule that would cause the application of the domestic substantive laws of any other jurisdiction.
(b) CONSENT TO JURISDICTION. EACH OF THE PARTIES AGREES THAT ALL ACTIONS, SUITS OR PROCEEDINGS ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE FEDERAL AND STATE COURTS OF THE STATE OF NEW YORK LOCATED IN THE BOROUGH OF MANHATTAN. EACH OF THE PARTIES HERETO BY EXECUTION HEREOF (I) HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE FEDERAL AND STATE COURTS IN THE STATE OF NEW YORK LOCATED IN THE BOROUGH OF MANHATTAN FOR THE PURPOSE OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF AND (II) HEREBY WAIVES TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW, AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH ACTION, SUIT OR PROCEEDING, ANY CLAIM THAT IT IS NOT SUBJECT PERSONALLY TO THE JURISDICTION OF THE ABOVE-NAMED COURTS, THAT IT IS IMMUNE FROM EXTRATERRITORIAL INJUNCTIVE RELIEF OR OTHER INJUNCTIVE RELIEF, THAT ITS PROPERTY IS EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT ANY SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR MAINTAINED IN ONE OF THE ABOVE-NAMED COURTS, THAT ANY SUCH ACTION, SUIT OR PROCEEDING BROUGHT OR MAINTAINED IN ONE OF THE ABOVE-NAMED COURTS SHOULD BE DISMISSED ON GROUNDS OF FORUM NON CONVENIENS, SHOULD BE TRANSFERRED TO ANY COURT OTHER THAN ONE OF THE ABOVE-NAMED COURTS, SHOULD BE STAYED BY VIRTUE OF THE PENDENCY OF ANY OTHER ACTION, SUIT OR PROCEEDING IN ANY COURT OTHER THAN ONE OF THE ABOVE-NAMED COURTS, OR THAT THIS AGREEMENT OR THE SUBJECT MATTER HEREOF MAY NOT BE ENFORCED IN OR BY ANY OF THE ABOVE-NAMED COURTS. EACH OF THE PARTIES HERETO HEREBY CONSENTS TO SERVICE OF PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY MANNER PERMITTED BY THE LAWS OF THE STATE OF NEW YORK, AGREES THAT SERVICE OF PROCESS BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, AT THE ADDRESS SPECIFIED IN OR PURSUANT TO SECTION 13 IS REASONABLY CALCULATED TO GIVE ACTUAL NOTICE AND WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH ACTION, SUIT OR PROCEEDING ANY CLAIM THAT SERVICE OF PROCESS MADE IN
ACCORDANCE WITH SECTION 13 DOES NOT CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS. THE PROVISIONS OF THIS SECTION 8(B) SHALL NOT RESTRICT THE ABILITY OF ANY PARTY TO ENFORCE IN ANY COURT ANY JUDGMENT OBTAINED IN A FEDERAL OR STATE COURT OF THE STATE OF NEW YORK.
(c) Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH OF THE PARTIES HERETO HEREBY WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT, OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, CAUSE OF ACTION, ACTION, SUIT OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT HEREOF, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT OR TORT OR OTHERWISE. Each of the parties hereto acknowledges that it has been informed by each other party that the provisions of this Section 8(c) constitute a material inducement upon which such party is relying and will rely in entering into this Agreement and the transactions contemplated hereby. Any of the parties hereto may file an original counterpart or a copy of this Agreement with any court as written evidence of the consent of each of the parties hereto to the waiver of its right to trial by jury.
9. Independent Contractor. The parties agree and understand that each of DCH and GGC is and shall act as an independent contractor of the Company in the performance of its duties hereunder. Each of DCH and GGC is not, and in the performance of their duties hereunder will not hold itself out as, an employee, agent or partner of the Company.
10. Information. The Company shall furnish and make available to DCH and GGC all financial and other information concerning the Company as DCH shall deem appropriate in connection with the performance of the services contemplated by this engagement and, in connection therewith, will provide DCH and GGC with reasonable access to the Companys officers, directors, employees, agents, accountants, counsel and other representatives. The Company acknowledges and confirms that each of DCH and GGC (i) will rely solely on such information and information that is available from public sources in the performance of the services contemplated by this engagement without assuming any responsibility for independent investigation or verification thereof, (ii) assume no responsibility for the accuracy or completeness of such information or any other information regarding the Company and (iii) will not make any appraisal of any assets of the Company.
11. Confidentiality. No advice rendered by DCH, GGC or both, whether formal or informal, may be disclosed, in whole or in part, or summarized, excerpted from or otherwise referred to without DCHs or GGCs, as the case may be, prior written consent. To the extent consistent with legal requirements, all information given to one party of this Agreement (the Recipient Party) by another party (the Providing Party), including, without limitation, this Agreement, unless publicly available or otherwise available to the Recipient Party without restriction or breach of any confidentiality agreement, will be held by the Recipient Party in confidence and will not, without the Providing Partys prior approval, be disclosed to anyone other than the Recipients agents and advisors who require such information to perform services for the Providing Party as contemplated by this Agreement (and who agree to use such
information only in connection with such services) or used by such person for any purpose other than those contemplated by this Agreement. Each party hereto shall be responsible for violations of its respective agents and advisors of the obligations set forth in this Section 11. Notwithstanding anything to the contrary set forth herein or in any other agreement to which the parties hereto are parties or by which they are bound, the obligations of confidentiality contained herein and therein, as they relate to the services to be provided hereunder, shall not apply to the tax structure or tax treatment of the transactions subject to the services to be provided hereunder, and each party hereto (and any employee, representative, or agent of any party hereto) may disclose to any and all persons, without limitation of any kind, the tax structure and tax treatment of the transaction subject to the services to be provided hereunder and all materials of any kind (including opinions or other tax analysis) that are provided to such party relating to such tax treatment and tax structure; provided, however, that such disclosure shall not include the name (or other identifying information not relevant to the tax structure or tax treatment) of any person and shall not include information for which nondisclosure is reasonably necessary in order to comply with applicable securities laws.
12. Merger/Entire Agreement. This Agreement and the other agreements referred to herein (including, without limitation, the Shareholders Agreement), contain the entire understanding of the parties with respect to the specific subject matter hereof and supersedes any prior communication or agreement (including the Original Agreement) with respect thereto.
13. Notice. All notices, requests, consents and other communications hereunder to any party shall be deemed to be sufficient if contained in a written instrument delivered in person or sent by telecopy, nationally-recognized overnight courier or first class registered or certified mail, return receipt requested, postage prepaid, addressed to such party at the address set forth below or such other address as may hereafter be designated in writing by such party to the other parties:
If to the Company, to:
Community Choice Financial Inc.
4001 Post Road
Suite 200
Dublin, Ohio 43016
Fax: (614) 760-2601
Attn: Chief Executive Officer
with copies to (which shall not constitute notice):
Community Choice Financial Inc.
4001 Post Road
Suite 200
Dublin, Ohio 43016
Fax: (614) 760-2601
Attn: Secretary/General Counsel
If to DCH, to:
Diamond Castle Holdings, LLC
280 Park Avenue
25th Floor, East Tower
New York, New York 10017
Fax: (212) 983-1234
Attn: Andrew H. Rush
If to GGC, to:
GGC Administration, LLC
c/o Golden Gate Private Equity, Inc.
One Embarcadero Center, 39th Floor
San Francisco, California 94111
Fax: (415) 983-2701
Attn: Chief Operating Officer
All such notices, requests, consents and other communications shall be deemed to have been delivered (a) in the case of personal delivery or delivery by telecopy, on the date of such delivery, (b) in the case of dispatch by nationally-recognized overnight courier, on the next business day following such dispatch and (c) in the case of mailing, on the third business day after the posting thereof.
14. Severability. If in any judicial or arbitral proceedings a court or arbitrator shall refuse to enforce any provision of this Agreement, then such unenforceable provision shall be deemed eliminated from this Agreement for the purpose of such proceedings to the extent necessary to permit the remaining provisions to be enforced. To the full extent, however, that the provisions of any applicable law may be waived, they are hereby waived to the end that this Agreement be deemed to be a valid and binding agreement enforceable in accordance with its terms, and in the event that any provision hereof shall be found to be invalid or unenforceable, such provision shall be construed by limiting it so as to be valid and enforceable to the maximum extent consistent with and possible under applicable law.
15. Counterparts. This Agreement may be executed in any number of counterparts and by each of the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which together shall constitute one and the same agreement.
16. Descriptive Headings. All descriptive headings in this Agreement are inserted for convenience only and shall be disregarded in construing or applying any provision of this Agreement.
17. Prevailing Party. If any legal action or other proceedings is brought for a breach of this Agreement, the prevailing party shall be entitled to recover its reasonable attorneys fees and other costs incurred in bringing such action or proceeding, in addition to any other relief to which such party may be entitled.
18. Non-Recourse. No past, present or future director, officer, employee, incorporator, member, partner, shareholder, manager, affiliate, agent, attorney, or representative of DCH, GGC or the Company or any of their respective affiliates shall have any liability for any obligations or liabilities of DCH, GGC or the Company or any of their respective affiliates (except in the case of the Company and its subsidiaries as set forth herein) under this Agreement or for any claim based on, in respect of, or by reason of, the transactions or other matters contemplated hereby.
19. Termination. DCH and the Subsidiary hereby terminate the Original Agreement; provided, however, that that the termination shall not relieve or terminate the Subsidiary of any obligation (i) to pay DCH for fees or expenses accruing or payable through the date hereof (including any pro rata portion of any quarterly advisory fee), the aggregate amount of which will not exceed $750,000, it being understood and agreed that the Transaction Fee payable to DCH (or any of its designees) pursuant to Section 3(a) above shall be in lieu of any fees or expenses payable under the Original Agreement in respect of any transactions relating to the Merger (including for the performance of Advisory Services), or (ii) with respect to Subsidiarys continuing indemnification obligations thereunder toward DCH. As of the date hereof, DCH is not aware of any claim (or any basis for, or state of facts that could give rise to any claim) for indemnification against the Company or any of its subsidiaries (including the Subsidiary) that would trigger the Subsidiarys indemnification obligations.
* * * * *
[Signatures on the following page]
IN WITNESS WHEREOF, each of the undersigned parties has duly executed this Agreement (or caused this Agreement to be executed on its behalf by its duly authorized officer or representative) as of the date first above written.
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DIAMOND CASTLE HOLDINGS, LLC | ||
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/s/ Andrew H. Rush | |
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Andrew H. Rush |
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Senior Managing Director |
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COMMUNITY CHOICE FINANCIAL INC. | ||
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By: |
/s/ Bridgette C. Roman | |
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Bridgette C. Roman |
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Secretary |
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GGC ADMINISTRATION, LLC | ||
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By: |
/s/ David Dominik | |
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Name: |
David Dominik |
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Managing Director |
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CHECKSMART FINANCIAL COMPANY | ||
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By: |
/s/ Bridgette C. Roman | |
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Bridgette C. Roman |
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Secretary |
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CALIFORNIA CHECK CASHING STORES, LLC | ||
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By: |
/s/ Bridgette C. Roman | |
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Bridgette C. Roman |
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Secretary |
SIGNATURE PAGE TO
ADVISORY SERVICES AND MONITORING AGREEMENT
EXHIBIT A
Upon closing of any Subsequent Transaction the Value will be determined as follows:
(i) Acquisition Transaction (as defined below):
Value will equal the purchase price of the assets or equity of the business purchased or acquired by merger plus the value of any existing debt (including any preferred stock) assumed from the purchased business plus, without duplication, any Financing Transaction.
(ii) Financing Transaction (as defined below)
Value will equal any new indebtedness incurred (including any preferred stock) by the Company plus any equity invested in the Company (including any Financing Transaction closed in conjunction with an Acquisition Transaction).
(ii) Sale Transaction (as defined below)
Value shall equal Capital (as defined below)
Definitions
Acquisition Transaction shall mean, for any Subsequent Transaction, the acquisition by the Company of any other business whether by purchase of stock or assets in a cash sale or for other consideration, or by merger in which the Company is substantially the surviving entity.
Sale Transaction shall mean, for any Subsequent Transaction, sale of all or part of the equity of the Company or all or part of the assets of the Company or any of its subsidiaries (other than a sale of de minimis assets) in a cash sale or for other consideration, or by a merger in which the Company is not substantially the surviving entity.
Financing Transaction shall mean, for any Subsequent Transaction, the sale of any equity or debt securities by the Company.
Capital shall mean, for the purposes of this Exhibit A as follows:
(i) In any Subsequent Transaction in which less than 50% of the voting stock of the Company is acquired by a purchaser, Capital shall equal the fair market value determined reasonably and in good faith by the Companys governing board (FMV) of the consideration paid or committed for such stock, whether the stock was newly issued by the Company or sold by shareholders (Shareholders) of the Company.
(ii) In any Subsequent Transaction in which 50% or more of the voting stock of the Company is acquired by a purchaser, Capital shall equal the FMV of the consideration paid or committed for such stock and all other securities purchased, whether the stock or other securities were newly issued by the Company or sold by Shareholders, plus the FMV of the liabilities of the Company.
(iii) In any Subsequent Transaction in which all or part of the assets of the Company or any of its subsidiaries (other than a de minimis sale of assets) are acquired by a purchaser, Capital shall equal the FMV of the consideration paid or committed for such assets plus the FMV of debt committed to the Company (including any preferred stock) or other liabilities assumed by the purchaser.
(iv) In any Subsequent Transaction that is implemented through a merger or business combination, Capital shall equal the FMV of the Companys equity plus the FMV of the Companys liabilities.
Exhibit 10.4
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of May 1, 2006 (this Employment Agreement) by and between CheckSmart Financial Company, a Delaware corporation (the Company), and William E. Saunders, Jr. (Executive).
WHEREAS, the Company wishes to employ Executive and Executive wishes to be employed by, and make his services available to, the Company on the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the premises and the mutual covenants set forth below, the parties hereby agree as follows:
1. Employment. Effective as of the date hereof (the Commencement Date), the Company hereby agrees to employ Executive as the Chief Financial Officer (the CFO), and Executive hereby accepts such employment on the terms and conditions hereinafter set forth.
2. Position and Duties. Executive shall serve as CFO, and shall report directly to the Companys Chief Executive Officer (the CEO). Executive shall have those powers and duties normally associated with the position of CFO of entities comparable to the Company and such other powers and duties as may be prescribed by the Company; provided that, such other powers and duties are consistent with Executives position as CFO of the Company. In fulfilling his duties, Executives principal place of employment shall be in or around Columbus, Ohio. Notwithstanding the above, Executive shall be permitted, to the extent such activities do not interfere with the performance by Executive of his duties and responsibilities hereunder, to (i) manage Executives personal, financial and legal affairs and (ii) to serve on civic or charitable boards or committees.
3. Term. The term of employment of Executive under this Employment Agreement shall commence on the Commencement Date and shall continue in full force and effect until December 31, 2009 unless terminated earlier as provided herein (including any renewals hereunder, the Term); provided, however, that unless the Companys Board of Directors (the Board) or Executive provides the other with written notice of termination of this Employment Agreement at least 90 days prior to any date on which this Employment Agreement would otherwise expire or as otherwise set forth herein, the term of employment hereunder shall be automatically extended for an additional period of one fiscal year from each such date.
4. Compensation and Related Matters.
(a) Base Salary. For performance of services under this Employment Agreement, Executive shall receive a base salary of $325,000 per fiscal year (Base Salary). Executives Base Salary shall be paid in approximately equal installments in accordance with the Companys customary payroll practices. The compensation committee of the Board (Committee) shall review Executives Base Salary annually and in a manner consistent with the compensation practices and guidelines of the Company and, in its sole discretion, may increase (but not decrease) such salary during the Term on an annual basis. If Executives Base Salary is increased by the Company, such increased Base Salary shall then constitute the Base Salary for all purposes of this Agreement as of such increase.
(b) Annual Bonus. In addition to Base Salary, Executive is eligible to receive an annual bonus with a target amount of up to $125,000 upon the achievement of annually established performance targets (the Annual Bonus). Such performance targets shall be established by the Board. The Committee may increase the Annual Bonus in the event that the annually established
performance targets are exceeded and the Committee determines, in its sole discretion, that such an increase is merited. The Annual Bonus shall be paid as soon as practicable following the end of the fiscal year to which it relates.
(c) Equity Incentive / Restricted Stock Awards. Simultaneous with the execution and delivery of this Employment Agreement, Executive shall receive, pursuant to the CheckSmart Financial Holdings Corp. 2006 Management Equity Incentive Plan (the Plan), grants of Restricted Stock representing shares of CheckSmart Financial Holdings Corp. Class A Common Stock, and a tandem equity grant consisting of a Restricted Share Unit and Stock Option, each on the terms and subject to the conditions set forth in the Restricted Stock Award Agreement and the Restricted Share Unit/Stock Option Grant Agreement attached hereto as Exhibit A and Exhibit A-1 respectively.
(d) Expenses. The Company shall reimburse Executive for all reasonable business expenses upon the presentation of receipts in accordance with the Companys policies and procedures now in force or as such policies and procedures may be modified with respect to all senior executive officers of the Company. The Company shall reimburse Executive for the reasonable legal fees and out-of-pocket expenses that Executive incurred in connection with his review, negotiation and execution of this Agreement, and, if requested by the Company, Executive will provide reasonable detail supporting such fees and expenses.
(e) Benefit Plans and Perquisites. Executive shall be entitled to participate in and be covered under all employee benefit plans or programs maintained by the Company from time to time for the benefit of its senior executives including, without limitation, 401(k), vacation and medical.
(f) Continuation of Benefits. Following the coverage termination date under the Companys group medical, life and long-term disability insurance plans, Executive, his spouse his dependants shall be entitled to continuation of coverage pursuant to any statutory rights Executive may then have for such continuation coverage (whether under part VI of Subtitle B of Title I of the Executive Retirement Income Security Act of 1974, as amended, or Section 4980B of the Internal Revenue Code of 1986, as amended (together, COBRA), or otherwise). During the time periods that Executive is entitled to continued payment of his Base Salary pursuant to Section 7 herein, the Company shall pay or reimburse Executive for any premium for such continuation coverage to the extent such amount exceeds the premium which Executive would have had to pay for coverage under such plans if he had remained an active employee. Such continuation coverage, whether provided at the Companys or Executives expense, shall be provided in accordance with applicable law and the terms of the plans as they may be amended from time to time and shall be afforded no longer than the period provided by law and only to the extent Executive complies with all conditions of such continuation coverage on a timely basis.
(g) Additional Benefits.
(i) Promptly following the Commencement Date, the Company will purchase, for Executives personal use, Executives 2002 Toyota Landcruiser for $35,750.
(ii) During the period, if any, following the Executives purchase of a new residence in the Columbus, Ohio area (the New Residence), and until the earlier to occur of (x) 15 months from the Commencement Date or (y) the closing of the sale of the Executives residence located at 23 Scenic Point, Little Rock, Arkansas (the Little Rock Residence) (the Little Rock Sale); on the first business day of each month the Company will pay, to Executive, an amount equal to $1,900 per month, representing the monthly interest and real estate taxes on the mortgage currently on the Little Rock Residence. To the extent reasonably requested by Executive to assist in purchasing a new residence in the Columbus, Ohio area (the New
Residence), the Company will provide a bridge loan to Executive in a principle amount equal to the amount of equity that Executive is required to pay as part of such purchase (the Bridge Loan), which Bridge Loan will become due and payable upon the Little Rock Sale, will bear interest at the lowest applicable federal interest rate, and may be, at the Companys sole discretion, secured (on a junior basis to the existing mortgage) by the Little Rock Residence. Executive may accept or reject any offer to purchase the Little Rock Residence prior to the 270th day following the Commencement Date. In the event that the Residence has not been sold prior to such 270th day following the Commencement Date, Executive shall be required to accept the first non-contingent (other than contingencies for financing and inspection) offer to purchase the Little Rock Residence for at least $625,000.
(iii) The Company will reimburse Executive (A) his reasonable moving expenses, (B) any brokers fee or commission payable in connection with the Little Rock Sale (grossed up for taxes) and (C) reasonable closing costs associated with purchasing the New Residence.
(iv) As an alternative to flying with commercial airlines in connection with Executives duties hereunder, Executive will be entitled to use his personal aircraft for business travel purposes (Plane Usage), and, in connection therewith, the Company will reimburse Executive for the actual operating costs directly associated with the Plane Usage on the terms and conditions set forth on Exhibit D.
5. Termination. Executives employment hereunder may be terminated upon the following events:
(a) Death. Executives employment hereunder shall terminate upon his death.
(b) Disability. Executives employment may be terminated if, as a result of Executives incapacity due to physical or mental illness, Executive is unable to perform his duties for 180 consecutive days and, within 30 days after a Notice of Termination (as defined below), which Notice of Termination may not be given until the expiration of such consecutive 180 day period, is given to Executive, Executive has not returned to work (Disability).
(c) Cause. The Company shall have the right to terminate Executives employment for Cause. Cause shall mean:
(i) Executives material breach of this Employment Agreement and Executives failure to cure such breach within 20 days following written notice from the Board or the CEO to Executive of such breach;
(ii) Executives failure or refusal to comply, on a timely basis, with any lawful direction or instruction of the Board or the CEO;
(iii) Executives gross negligence or willful misconduct in the performance of his duties as an employee of the Company;
(iv) Executives commission of fraud, embezzlement, misappropriation of funds, breach of fiduciary duty or act of dishonesty against the Company;
(v) conviction of Executive of a felony or entry by Executive of a plea of nolo contendre or a plea of guilty under an indictment to a felony; or
(vi) the habitual drug addiction or intoxication of Executive.
(d) Good Reason. Executive may resign for Good Reason within 30 days after Executive has actual knowledge of the occurrence, without the written consent of Executive, of one of the following events:
(i) a reduction in Executives Base Salary, or non-timely payment of Base Salary or earned Annual Bonus or benefits or other breach by the Company of this Agreement that is not cured by the Company within 20 days of Executives written notice to the Company of such breach;
(ii) a material diminution in Executives duties or responsibilities not cured by the Company within 20 days after written notice to the Company; or
(iii) a requirement by the Company that Executive be based in an office that is located more than 20 miles from Executives principal place of employment as of the Commencement Date.
(e) Without Cause. The Company shall have the right to terminate Executives employment hereunder without Cause by providing Executive with a Notice of Termination.
6. Termination Procedure.
(a) Notice of Termination. Any termination of Executives employment by the Company or resignation by Executive (other than termination by reason of death) shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 11. For purposes of this Agreement, a Notice of Termination shall mean a notice which shall indicate the specific termination provision in this Employment Agreement relied upon.
(b) Termination Date. Termination Date shall mean (i) if Executives employment is terminated by his death, the date of his death, (ii) if Executives employment is terminated for Disability, 30 days after Notice of Termination, and (iii) if Executives employment is terminated for any other reason, the date on which a Notice of Termination is given or any later date (within 30 days after the giving of such notice) set forth in such Notice of Termination.
7. Compensation Upon Termination. Upon the termination of Executives employment and subject to the terms set forth herein, the Company shall provide Executive with the payments and benefits set forth below. Executive acknowledges and agrees that the payments set forth in this Section 7 constitute liquidated damages for termination of his employment during the Term.
(a) Non-Renewal by the Company. If the Company does not renew Executives employment in accordance with Section 3 above, Executive shall be entitled to receive his Base Salary and Continued Benefits (as defined below) for a period of 90 days following the expiration of the Term (such 90-day period, the Non-Renewal Tail Period).
(b) Termination upon Executives Disability. If Executives employment is terminated by reason of Disability, then:
(i) Company shall pay to Executive (A) any accrued, but unpaid, Base Salary and vacation pay through the Termination Date, (B) any Annual Bonus that is determined to have otherwise been earned with respect to the fiscal year in which termination occurs (the Termination Year), payable in accordance with the Companys usual bonus payment schedule, and (C) continued Base Salary and Continued Benefits (as defined below) for the longer of (i) six months following the Termination Date or (ii) the date on which Executive becomes entitled to long-term disability benefits under the applicable plan or program of the Company, payable in accordance with the usual payroll policies of the Company.
(ii) Continued Benefits means, for the continued benefit of Executive, his spouse and eligible dependents following the Termination Date the medical, hospitalization, dental and life insurance programs of the Company in which Executive, his spouse and his eligible dependents were participating on the Termination Date.
(c) Termination upon Executives Death. If Executives employment terminates during the Term due to Executives death, then:
(i) the Company shall pay to Executives beneficiary, (A) any accrued, but unpaid Base Salary and Annual Bonus through the Termination Date, (B) any accrued but unpaid vacation pay through the Termination Date, and (C) a pro-rata portion of Executives Annual Bonus for the Termination Year; and
(ii) the Company shall provide Executives spouse and dependents with Continued Benefits for 12 months following the Termination Date.
(d) Termination by the Company without Cause or Resignation by Executive for Good Reason. If Executives employment is terminated by the Company without Cause or Executive resigns for Good Reason then, subject to Executives execution and effectiveness of a general release of claims in the form attached hereto as Exhibit B (the Release) and his continued compliance with the Non-Competition Agreement:
(i) In the event that Executive is terminated without Cause or resigns for Good Reason at any time between the Commencement Date and December 31, 2007, the Company shall pay Executive (A) any accrued, but unpaid, Base Salary and vacation pay through the Termination Date, payable as soon as practicable following the Termination Date, (B) any Annual Bonus that is determined to have otherwise been earned with respect to the Termination Year and the fiscal year following the Termination Year (the Following Year), payable in accordance with the Companys usual bonus payment schedule, and (C) Base Salary and Continued Benefits for a period of two years following the Termination Date, payable, in the case of Base Salary, in accordance with the usual payroll policies of the Company;
(ii) In the event that Executive is terminated without Cause or resigns for Good Reason between January 1, 2008 and December 31, 2009, the Company shall pay to Executive (A) any accrued, but unpaid, Base Salary and vacation pay through the Termination Date, payable as soon as practicable following the Termination Date, (B) any Annual Bonus that is determined to have otherwise been earned with respect to the Termination Year, payable in accordance with the Companys usual bonus payment schedule, (C) Base Salary and Continued Benefits for a period of 12 months following the Termination Date (except if such Termination Date is prior to the two-year anniversary of the Commencement Date, in which event the Base Salary and Continued Benefits shall be paid by the Company for a period of 24 months following the Termination Date), payable, in the case of Base Salary, in accordance with
the usual payroll policies of the Company, and (D) any Annual Bonus that is determined to have otherwise been earned with respect to the Following Year prorated for the portion of the Following Year between January 1 of the Following Year and the 12 month anniversary of the Termination Date, payable in accordance with the Companys usual bonus payment schedule;
(e) Termination by the Company for Cause or by Executive without Good Reason.
(i) If Executives employment is terminated by the Company for Cause or Executive resigns other than for Good Reason then the Company shall pay Executive his accrued, but unpaid Base Salary and Annual Bonus, and any accrued but unpaid vacation pay, through the Termination Date as soon as practicable following the Termination Date.
8. Confidentiality, Non-Compete, Non-Solicit/Hire and Intellectual Property Agreement. Simultaneous with the execution and delivery of this Employment Agreement, the Company and Executive shall execute and deliver the non-competition agreement (the Non-Competition Agreement) attached hereto as Exhibit C and incorporated herein by reference. The Non-Competition Agreement shall survive any termination of this Employment Agreement in accordance with the terms of the Non-Competition Agreement.
9. Indemnification. Executive shall be entitled to such indemnification under the terms of the Companys By-Laws, Certificate of Incorporation and such other liability insurance as the Company may purchase for its Board members and senior officers from time to time.
10. Arbitration. Except as provided for in the Non-Competition Agreement, if any contest or dispute arises between the parties with respect to this Employment Agreement, such contest or dispute shall be submitted to binding arbitration for resolution in Cleveland, Ohio, in accordance with the rules and procedures of the Employee Dispute Resolution Rules of the American Arbitration Association then in effect. The decision of the arbitrator shall be final and binding on both parties, and any court of competent jurisdiction may enter judgment upon the award.
11. Notice. For the purposes of this Employment Agreement, notices, demands and all other communications provided for in this Employment Agreement shall be in writing and shall be deemed to have been duly given when delivered either personally or by United States certified or registered mail, return receipt requested, postage prepaid, addressed as follows:
If to Executive:
William E. Saunders, Jr.
23 Scenic Point
Little Rock, Arkansas 72207
Fax: (614) 760-4047
with a copy to:
Mark Wishner
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
12010 Sunset Hills Road; Suite 900
Reston, VA 20190
Telephone: (703) 464-4808
Fax: (703) 464-4895
If to the Company:
CheckSmart Financial Company
7001 Post Road, Suite 200
Dublin , Ohio 43016
Telephone: (614) 798-5900
Fax: (614) 760-2601
Attn: Chief Executive Officer
with a copy to:
Diamond Castle Holdings
280 Park Avenue, 25th floor, East Tower
New York, New York 10017
Attn: Andrew Rush
Fax: (212) 983-1234
or to such other address as any party may have furnished to the others in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
12. Miscellaneous. No provisions of this Employment Agreement may be amended, modified, or waived unless such amendment or modification is agreed to in writing signed by Executive and by a duly authorized officer of the Company, and such waiver is set forth in writing and signed by the party to be charged. No waiver by either party hereto at any time of any breach by the other party hereto of any condition or provision of this Employment Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Employment Agreement or the Purchase Agreement. The respective rights and obligations of the parties hereunder of this Employment Agreement shall survive Executives termination of employment and the termination of this Employment Agreement to the extent necessary for the intended preservation of such rights and obligations. The validity, interpretation, construction and performance of this Employment Agreement and all claims of action (whether in contract or tort) that may be based upon, arise out of or relate to this Employment Agreement, shall be governed by the laws of the State of Delaware without regard to its conflicts of law principles.
13. Validity. The invalidity or unenforceability of any provision or provisions of this Employment Agreement shall not affect the validity or enforceability of any other provision of this Employment Agreement, which shall remain in full force and effect.
14. Counterparts. This Employment Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
15. Entire Agreement. Except as otherwise provided for herein and any Exhibits hereto, this Employment Agreement and the Purchase Agreement set forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersede all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto in respect of such subject matter. Any prior agreement of the parties hereto, or between Executive and any of the Subsidiaries in respect of the subject matter contained herein is hereby terminated and cancelled. Other than any accrued Base
Salary due to Executive as of the date hereof, Executive acknowledges that as of the Commencement Date, he has no claims against the Company or any of its affiliates in respect of any amounts that may be owing to him from any of the Subsidiaries.
16. Withholding. All payments hereunder shall be subject to any required withholding of Federal, state and local taxes pursuant to any applicable law or regulation.
17. Noncontravention. The Company represents that the Company is not prevented from entering into, or performing this Agreement by the terms of any law, order, rule or regulation, its bylaws or declaration of trust, or any agreement to which it is a party, other than which would not have a material adverse effect on the Companys ability to enter into or perform this Employment Agreement.
18. Section Headings. The section headings in this Employment Agreement are for convenience of reference only, and they form no part of this Employment Agreement and shall not affect its interpretation.
19. Section 409A Compliance. The parties intend that any severance or other compensation under this Agreement be paid in compliance with Section 409A of the Code such that there are no adverse tax consequences, interest, or penalties as a result of the payments. The parties agree to modify this Agreement, the timing and/or the amount of the severance to the extent necessary to comply with Section 409A.
[Signature Page to Follow]
IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement on the date first above written.
CheckSmart Financial Company |
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William E. Saunders, Jr. | ||
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/s/ James H. Frauenberg, Sr. |
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/s/ William E. Saunders, Jr. | |
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Name: |
James H. Frauenberg, Sr. |
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Title: |
Chief Executive Officer |
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Exhibit A
Restricted Stock Award Agreement
[Attached]
CHECKSMART FINANCIAL HOLDINGS CORP.
2006 MANAGEMENT EQUITY INCENTIVE PLAN
RESTRICTED SHARE AWARD AGREEMENT
GRANT TO: William E. Saunders, Jr.
THIS AGREEMENT (the Agreement) is made effective as of May 1, 2006 (the Grant Date), between CheckSmart Financial Holdings Corp., a Delaware corporation (together with its successors, the Company), and William E. Saunders, Jr. who is an employee of the Company or one of its Subsidiaries (the Grantee). Capitalized terms, unless defined in Section 9 or a prior section of this Agreement, shall have the same meanings as in the Plan (as defined below).
WHEREAS, in connection with the Grantees employment with the Company or one of its Subsidiaries, the Company desires to grant to the Grantee a certain number of shares of Class A Common Stock, par value $0.01, of the Company (Shares) on the date hereof pursuant to the terms and conditions of this Agreement and the Companys 2006 Management Equity Incentive Plan (the Plan).
WHEREAS, the Board has determined that it would be to the advantage, and in the best interest, of the Company and its shareholders to grant the Restricted Shares (as defined herein) provided for herein to the Grantee as an incentive for increased efforts during his employment with the Company or one of its Subsidiaries.
NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. GRANT OF RESTRICTED SHARE AWARDS
(a) Grant. Subject to the terms and conditions of the Plan and this Agreement, the Company hereby grants to the Grantee 23,256 Restricted Shares (the Restricted Shares). An amount set forth and in accordance with Schedule A will vest on the Grant Date (the Grant Vesting Shares) and the remainder will vest on the one year anniversary of the Grant or in certain other circumstances (the Other Vesting Shares).
(b) Plan. The foregoing awards are granted under the Plan, which is incorporated herein by this reference and made a part of this Agreement.
SECTION 2. ISSUANCE OF SHARES
(a) Share Certificates. The Company shall cause to be issued separate stock certificates for each of the Grant Vesting Shares and the Other Vesting Shares representing each award granted hereunder, registered in the name of the Grantee (or in the names of such person and his spouse as community property or as joint tenants with right of survivorship). In connection with the
execution of this Agreement the Grantee shall deliver to the Company a duly-executed blank share power in the form attached hereto as Exhibit A.
(b) Voting Rights. The Grantee shall have voting rights with respect to the Restricted Shares.
(c) Dividends. All share dividends, if any, that are paid on unvested Restricted Shares and all share dividends, if any, that are paid on any share dividends (any such share dividends, Restricted Share Dividends) and all cash dividends from surplus or returned earnings of the Company paid on unvested Restricted Shares (or on Restricted Share Dividends) (Unvested Shares Cash Dividends) shall be treated as set forth in Section 3(b).
(d) Section 83(b) Election. If the Grantee chooses, the Grantee may make an election under Section 83(b) of the Code, which would cause the Grantee currently to recognize income for U.S. federal income tax purposes in an amount equal to the excess (if any) of the FMV of each of the Restricted Shares awarded hereunder (determined as of the date of each such award) over the Purchase Price (if any), which excess will be subject to U.S. federal income tax (such amount the 83(b) Cost). The form for making a Section 83(b) election is attached as Exhibit B. The Grantee acknowledges that it is the Grantees sole responsibility to timely file the Section 83(b) election and that failure to file a Section 83(b) election within 30 days after the Grant Date may result in the recognition of ordinary income on any future appreciation on the Restricted Shares.
(e) Withholding Requirements. The Company may withhold any tax (or other governmental obligation) required to be withheld in connection with the grant of each award hereunder, the vesting of such award and/or the filing of a Section 83(b) election as a condition to the grant or vesting of each such award. Such withholding may be made from any source (including any salary or other compensation payable to the Grantee), and the Grantee shall make arrangements satisfactory to the Company to enable it to satisfy all such withholding requirements (including by remitting to the Company an amount in cash sufficient to satisfy the withholding obligation). For the avoidance of doubt, the Company will not withhold any amounts greater than the statutory minimum.
SECTION 3. CERTAIN RESTRICTIONS
The following provisions shall apply to each Restricted Share until such share vests in accordance with Section 4:
(a) The certificate representing such Restricted Share shall be held in custody by the Company.
(b) All Restricted Share Dividends, all Unvested Shares Cash Dividends and all new, substituted or additional securities or other property described in Section 6(d) below (Additional Property), shall be subject to the same restrictions as the Restricted Share to which such Restricted Share Dividend, Unvested Cash Dividends or Additional Property relates and will be held in custody by the Company on the same terms as such Restricted Share.
(c) The certificate representing such Restricted Share shall bear the legend provided for in the first sentence of Section 5(d).
(d) The holder of such Restricted Share shall have no liquidation rights with respect thereto.
SECTION 4. VESTING OF RESTRICTED SHARES
(a) Vesting. Subject to the provisions of this Agreement, the following Restricted Shares shall vest as follows:
(i) the Grant Vesting Shares shall vest on the Grant Date in accordance with Schedule A; and
(ii) the Other Vesting Shares shall vest in accordance with the provisions of Schedule B.
(b) Effect of Vesting. Subject to the provisions of this Agreement, upon the vesting of any Restricted Shares:
(i) the restrictions referred to in Section 3 shall cease to exist with respect to such Restricted Shares; it being understood that notwithstanding such vesting, any vested Restricted Shares will continue to be subject to Section 6 hereof; and
(ii) The Company will cause to be delivered to the Grantee (or the applicable Permitted Transferee of the Grantee, if any) any Restricted Share Dividends, Unvested Shares Cash Dividends or Additional Property with respect to such vested Restricted Shares that are held in the custody of the Company.
SECTION 5. SECURITIES LAW ISSUES, TRANSFER RESTRICTIONS
(a) Grantee Acknowledgements and Representations. The Grantee understands and agrees that: (i) the Restricted Shares have not been registered under the Securities Act, (ii) the Restricted Shares are restricted securities under the Securities Act and (iii) the Restricted Shares may not be resold or transferred unless they are first registered under the Securities Act or unless · an exemption from such registration is available. The Grantee hereby makes to the Company the representations and warranties set forth in Exhibit C hereto.
(b) No Registration Rights. Except as otherwise set forth in the Stockholders Agreement with respect to vested Restricted Shares, the Company may, but shall not be obligated to register or qualify the issuance, or the resale of any of the Restricted Shares under the Securities Act or any other applicable law. The Company shall not be obligated to take affirmative action to cause the awards of Restricted Shares to the Grantee to comply with any law.
(c) Transfers. No unvested Restricted Share shall be transferable to any Person for any reason. Any attempt to Transfer any unvested Restricted Share shall be null and void and have no force or effect, and the Company shall not, and shall cause any transfer agent not , give any effect in such entitys share records to such attempted Transfer. All vested Restricted Shares
shall be subject to the restrictions on Transfer set forth in Article 3 of the Stockholders Agreement, except with respect to a Transfer by will or by the laws of descent and distribution. Unless otherwise permitted pursuant to the Stockholders Agreement, the Grantee shall not Transfer any vested Restricted Shares (i) except in compliance with the provisions of Article 3 of the Stockholders Agreement, and (ii) unless the transferee shall have agreed in writing to be bound by the terms of this Agreement in a manner acceptable to the Board and otherwise acknowledging that such vested Restricted Shares are subject to the restrictions set forth in this Agreement. Any attempt to Transfer any Restricted Shares not in compliance with this Agreement shall be null and void and have no force or effect, and the Company shall not, and shall cause any transfer agent not to, give any effect in such entitys share records to such attempted Transfer. The Grantee acknowledges that the transfer restrictions contained in this Agreement are reasonable and in the best interests of the Company.
(d) Legends. Each certificate representing Restricted Shares that have not vested shall be endorsed with a legend in substantially the following form:
The securities represented by this certificate are subject to a certain Share Award Agreement, dated as of May 1, 2006, which provides, among other things, for certain restrictions on the transfer and encumbrance of such securities, and for the vesting of such securities according to particular provisions. A copy of such agreement is on file at the principal offices of the Company.
In addition to the legend set forth in the previous sentence, each certificate representing Restricted Shares shall be endorsed with a legend in substantially in the form set forth in Section 2(a) of the Stockholders Agreement.
SECTION 6. RIGHT OF REPURCHASE
(a) Repurchase Rights upon Termination.
(i) Upon the termination of employment of the Grantee by the Company or any of its Subsidiaries for Cause (the date of such termination, the Termination Date), subject to the provisions of this Section 6 and the prior approval of the Compensation Committee of the Board (or if there is no such Compensation Committee, the Board), the Company shall have the right (but not the obligation) to purchase, and if such right is exercised, the Grantee shall sell, and shall cause any Permitted Transferees of the Grantee to sell (and such Permitted Transferees shall sell), to the Company all or any portion (as determined by the Company) of the vested Restricted Shares owned by the Grantee or its Permitted Transferees at a price per Share equal to an amount (the Termination Price) (as determined pursuant to Section 6(b) below); provided, that the parties acknowledge that any unvested Restricted Shares held by the Grantee as of the Termination Date shall be cancelled and forfeited automatically pursuant to this Agreement.
(ii) With respect to each vested Restricted Share, the Company shall notify the Grantee in writing, within the Call Period, whether the Company will exercise its right to purchase the Restricted Shares (the date on which the Grantee is so notified, the Call Notice Date). The Company may assign its right to purchase all or any portion of the vested Restricted Shares under this Section 6 to the DCP Investor and the DCP Investor may exercise the rights of the Company under this Section 6 in the same manner in which the Company could exercise such rights.
(iii) The closing of the purchase by the Company or the DCP Investor, as applicable, of the vested Restricted Shares pursuant to this Section 6 shall take place at the principal office of the Company on the date chosen by either the Company or the DCP Investor, as applicable, which date shall, except as may be reasonably necessary to determine the Termination Price, in no event be more than 45 days after the Call Notice Date. At such closing, (A) the Company or the DCP Investor, as applicable, shall pay the Grantee and/or such Grantees Permitted Transferees, as applicable, against delivery of duly endorsed certificates described below representing the vested Restricted Shares, the aggregate Termination Price by wire transfer of immediately available federal funds, and (B) the Grantee and/or such Grantees Permitted Transferees, as applicable, shall deliver to the Company a certificate or certificates representing the vested Restricted Shares to be purchased by the Company or the DCP Investor, as applicable, duly endorsed, or with share (or equivalent) powers duly endorsed, for transfer with signature guaranteed, free and clear of any lien or encumbrance, with any necessary share (or equivalent) transfer tax stamps affixed, The delivery of a certificate or certificates for the vested Restricted Shares by any Person selling such vested Restricted Shares pursuant to this Section 6 shall be deemed a representation and warranty by such Person that: (1) such Person has full right, title and interest in and to such vested Restricted Shares; (2) such Person has all necessary power and authority and has taken all necessary action to sell such Restricted Shares as contemplated; (3) such vested Restricted Shares are free and clear of any and all liens or encumbrances and (4) there is no adverse claim with respect to such Termination Securities.
(b) Termination Pricing and Payment Terms. Subject to Section 6(c), the Termination Price of a Restricted Share shall be the lower of (1) the Fair Market Value on the FMV Calculation Date and (2) the 83(b) Cost; it being understood and agreed that, if on the Termination Date any Restricted Shares are unvested, such unvested Restricted Shares shall be cancelled and forfeited automatically without any further action by the Company.
(c) Payment Terms. In the event that the Company, or the DCP Investor if applicable, exercises a Right of Repurchase pursuant to Section 6 of this Agreement, the Company, or the DCP Investor if applicable, shall pay the Termination Price in cash; provided, however, that if the Company has not assigned its right to purchase any or all of the Restricted Shares to the DCP Investor pursuant to Section 6(a)(ii), and is at the time of the closing prohibited from purchasing all or any portion of such Restricted Shares (i) because restrictive covenants or other provisions contained in the documents evidencing such entitys or any of its Affiliates indebtedness for
borrowed money do not permit or allow such entity to make such payments in cash in whole or in part; or (ii) pursuant to applicable law, then, the portion of the Termination Price not permitted to be made in cash may be paid by the execution and delivery by the Company of a promissory note or other deferred cash payment arrangement (if applicable, any promissory note to be subordinated to the indebtedness for borrowed money of such company or any of its Affiliates) bearing interest at the prime rate, as published in the Wall Street Journal, Eastern edition, on the first Business Day immediately prior to the day on which such promissory note or other deferred cash payment is issued, with principal and accrued interest payable at such time as is required in the Boards determination to ensure that any payment pursuant to such promissory note or other deferred cash payment arrangement is not prohibited because of any of the matters described in clauses (i) or (ii) of this Section 6(c) above.
(d) Treatment of Cash Dividends; Restricted Share Dividends; and Additional Property. In the event that, at the time of the exercise of the repurchase rights held by the Company pursuant to subsection (a) of this Section 6 with respect to unvested Restricted Shares, the Company holds pursuant to Section 3(b) Unvested Shares Cash Dividends, Restricted Share Dividends and/or Additional Property with respect to such unvested Restricted Shares, upon the purchase by the Company of such Restricted Shares, notwithstanding anything to the contrary in this Agreement or the Stockholders Agreement, all such Unvested Shares Cash Dividends, Restricted Share Dividends and/or Additional Property shall be forfeited by the Grantee (and any spouse or any Permitted Transferee of the Grantee) and all the Grantees rights, or the rights of any spouse or any Permitted Transferee of the Grantee, to such Unvested Shares Cash Dividends, Restricted Share Dividends and/or Additional Property shall terminate.
SECTION 7. ADJUSTMENT OF SHARES
In the event of a Recapitalization, the terms of this award (including, without limitation, the number and kind of Shares subject to this award) shall be adjusted as set forth in Section 13(a) of the Plan. In the event that the Company is a party to a merger or consolidation, this award shall be subject to the vesting schedule set forth on Schedule C attached hereto and Section 13(b) of the Plan.
SECTION 8. MISCELLANEOUS PROVISIONS
(a) No Retention Rights. Nothing in this Agreement or in the Plan shall confer upon the Grantee any right to continue in Service or interfere with or otherwise restrict in any way the rights of the Company or any Subsidiary employing the Grantee, which rights are hereby expressly reserved by the Company and any Subsidiary employing the Grantee, to terminate the Grantees Service at any time and for any reason, with or without Cause.
(b) Notices. All notices, requests and other communications under this Agreement shall be in writing and shall be delivered in person (by courier or otherwise), mailed by certified or registered mail, return receipt requested, or sent by facsimile transmission, as follows:
If to the Company, to:
c/o CheckSmart Financial Holdings Corp.
7001 Post Road, Suite 200
Dublin, OH 43016
If to the Grantee, to the address that he most recently provided to the Company,
or, in each case, at such other address or fax number as such party may hereafter specify for the purpose of notices hereunder by written notice to the other party hereto. All notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt. Any notice, request or other written communication sent by facsimile transmission shall be confirmed by certified or registered mail, return receipt requested, posted within one Business Day, or by personal delivery, whether by courier or otherwise, made within two Business Days after the date of such facsimile transmissions; provided that such confirmation mailing or delivery shall not affect the date of receipt, which will be the date that the facsimile successfully transmitted the notice, request or other communication.
(c) Entire Agreement. This Agreement and the Plan, together with the Stockholders Agreement, the Grantees employment agreement and the other agreements referred to herein and therein and any schedules, exhibits and other documents referred to herein or therein, constitute the entire agreement and understanding among the parties hereto in respect of the subject matter hereof and thereof and supersede all prior and contemporaneous arrangements, agreements and understandings, both oral and written, whether in term sheets, presentations or otherwise, among the parties hereto, or between any of them, with respect to the subject matter hereof and thereof.
(d) Amendment; Waiver. No amendment or modification of any provision of this Agreement shall be effective unless signed in writing by or on behalf of the Company and the Grantee, except that the Company may amend or modify the Agreement without the Grantees consent in accordance with the provisions of the Plan or as otherwise set forth in this Agreement. The failure of the Company in any instance to exercise the Right of Repurchase shall not constitute a waiver of any other repurchase rights that may subsequently arise under the provisions of this Agreement or any other agreement between the Company and the Grantee. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition whether of like or different nature. Any amendment or modification of or to any provision of this Agreement, or any waiver of any provision of this Agreement, shall be effective only in the specific instance and for the specific purpose for which made or given.
(e) Assignment. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by the Grantee, except pursuant to a Transfer of Restricted Securities in accordance with the provisions of this Agreement.
(f) Successors and Assigns; No Third Party Beneficiaries. This Agreement shall inure to the benefit of and be binding upon the Company and the Grantee and their respective heirs, successors, legal representatives and permitted assigns. Nothing in this Agreement, expressed or
implied, is intended to confer on any Person other than the Company and the Grantee, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.
(g) Governing Law; Venue. This Agreement and any matters or disputes related to, in connection with , or arising under this Agreement shall be governed by the laws of the State of Delaware, without regard to the conflicts of laws rules of such state. Any legal action or proceeding with respect this Agreement shall be brought in the federal or state court sitting in the State of Delaware, and, by execution and delivery of this Agreement, each party hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the exclusive jurisdiction of such courts. Each party irrevocably waives any objection which it may now or hereafter have to the laying of venue of the aforesaid actions or proceedings arising out of or in connection with this Agreement in the courts referred to in this paragraph and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.
(h) Waiver of Jury Trial. The Grantee hereby irrevocably waives all right of trial by jury in any legal action or proceeding (including counterclaims) relating to or arising out of or in connection with this Agreement or any of the transactions or relationships hereby contemplated or otherwise in connection with the enforcement of any rights or obligations hereunder.
(i) Interpretation. Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation apply:
Headings. The division of this Agreement into Sections and other subdivisions and the insertion of headings are for convenience of reference only and do not alter the meaning of, or affect the construction or interpretation of, this Agreement.
Section References. All references in this Agreement to any Section are to the corresponding Section of this Agreement.
Schedules/Exhibits. Any capitalized terms used in any Schedule or Exhibit to this Agreement but are not otherwise defined therein have the meanings set forth in this Agreement.
(j) Severability. If any provision of this Agreement is invalid, illegal, or incapable of being enforced by any law, all other provisions of this Agreement remain in full force and effect so long as the economic and legal substance of the transactions contemplated hereby are not affected in any manner materially adverse to any party. If any provision of this Agreement is held to be invalid, illegal, or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
(k) Counterparts. The parties may execute this Agreement in one or more counterparts, each of which constitutes an original copy of this Agreement and all of which, collectively
constitute only one agreement. The signatures of all the parties need not appear on the same counterpart.
(l) Grantee Undertaking. The Grantee agrees to take whatever additional action and execute whatever additional documents the Company may deem necessary or advisable to carry out or effect one or more of the obligations or restrictions imposed on either the Grantee or upon the Restricted Shares pursuant to the provisions of this Agreement.
(m) Plan; Stockholders Agreement; Counsel. The Grantee acknowledges and understands that material definitions and provisions concerning the Restricted Shares and the Grantees rights and obligations with respect thereto are set forth in the Plan and the Stockholders Agreement. The Grantee has had the opportunity to retain counsel, and has read carefully, and understands, the provisions of such documents. Mintz, Levin, Ferris, Cohn, Glovsky and Popeo, PC (Counsel) has been retained to represent the Grantee in connection with the transactions contemplated by this Agreement. The Grantee has had the opportunity to seek legal advice from Counsel on this Agreement and the transactions contemplated hereby.
SECTION 9. DEFINITIONS
(a) 83(b) Cost has the meaning ascribed to it in Section 2(d).
(b) Affiliate means, with respect to any specified Person, (a) any other Person which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person (for the purposes of this definition, control (including, with correlative meanings, the terms controlling, controlled by and under common control with), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise); provided, however, that neither the Company nor any of its Subsidiaries shall be deemed an Affiliate of any of the Stockholders (and vice versa), and (b) if such specified Person is an investment fund, any other investment fund the primary investment advisor to which is the primary investment advisor to such specified Person.
(c) Board means the Board of Directors of the Company, as constituted from time to time or, if a Committee has been appointed, such Committee.
(d) Business Day has the meaning ascribed to such term in the Stockholders Agreement.
(e) Call Period means the period from the Termination Date until 60 days after the Termination Date.
(f) Cause has the meaning ascribed to such term in the Grantees Employment Agreement.
(g) Class A Common Stock means the voting class A common stock of the Company, and any stock into which such Class A Common Stock may hereafter be converted, changed, reclassified or exchanged.
(h) Closing has the meaning ascribed to such term in the Stock Purchase Agreement.
(i) Code means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated thereunder.
(j) Committee means the compensation committee of the Board of Directors of the Company.
(k) DCP Investor means BCC/DCP Acquisition LLC or any of its Permitted Transferees.
(1) Disability has the meaning ascribed to such term in the Grantees Employment Agreement.
(m) Employment Agreement means the employment agreement between the Grantee and CheckSmart Financial Company, dated as of May 1, 2006.
(n) Fair Market Value or FMV with respect to a share of Class A Common Stock of the Company, shall mean, (i) in the event that such shares are listed on an established U.S. exchange or through the NASDAQ National Market or any established over-the-counter trading system, the average of the closing prices of such Group Equity Securities on such exchange if listed or, if not so listed, the average bid and asked price of such shares reported on the NASDAQ National Market or any established over-the-counter trading system on which prices for such shares are quoted, in each case, for a period of twenty trading days prior to such date of determination, or (ii) if such shares are not publicly traded, a good faith determination by the Board through a reasonable application of a reasonable valuation method (or, if the Grantee objects to such Board determination, such determination of fair market value will be made by a mutually acceptable expert, whose determination will be binding on the parties and whose fees will be paid as follows: (A) split equally between the Grantee and the Company if the experts determination of FMV is equal to or between 95% and 105% of the Boards determination of FMV; (B) entirely by the Grantee if the experts determination of FMV is lower than 95% of the Boards determination of FMV; or (C) entirely by the Company if the experts determination of FMV is greater than 105% of the Boards determination of FMV). Such determination shall be conclusive and binding on all persons.
(o) FMV Calculation Date means the Termination Date.
(p) Good Reason has the meaning ascribed to such term in the Grantees Employment Agreement.
(q) Initial Base Value means $103.50, subject to appropriate adjustment to the extent that there is an adjustment under Section 2.3(b)) of the Stock Purchase Agreement, in connection with the finally determined 2005 EBITDA.
(r) Initial Public Offering has the meaning ascribed to such term in the Stockholders Agreement.
(s) Joinder Agreement means an agreement substantially in the form of Exhibit A of the Stockholders Agreement, pursuant to which the Grantee shall become a party to the Stockholders Agreement and subject to all of the rights, restrictions and obligations contained therein.
(t) Permitted Transferee has the meaning ascribed to such term in the Stockholders Agreement.
(u) Person means an individual, corporation, limited liability company, partnership, association, trust or other entity or organization.
(v) Right of Repurchase means the Companys right of repurchase described in Section 6 of this Agreement.
(w) Securities Act means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(x) Service means service as an Employee.
(y) Stockholders Agreement means that certain Stockholders Agreement dated as of May 1, 2006 by and among the Company, the Grantee and the other parties thereto (as the same shall be amended, modified or supplemented from time to time).
(z) Stock Purchase Agreement means the Stock Purchase Agreement, by and among the DCP Investor, and certain other parties thereto, dated as of February 27, 2006 (as the same shall be amended, modified or supplemented from time to time).
(aa) Subsidiary means, with respect to the Company, any other Person in which the Company, directly or indirectly through one or more Affiliates or otherwise, beneficially owns at least 50% of either the ownership interest (determined by equity or economic interests) in, or the voting control of, such other Person.
(bb) Transfer has the meaning ascribed in such term in the Stockholders Agreement.
[Signatures on the Following Page]
IN WITNESS WHEREOF, the parties have executed this Grant Award Agreement as of the day and year first written above.
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CHECKSMART FINANCIAL HOLDINGS CORP. | ||
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/s/ James H. Frauenberg, Sr. | |
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Name: |
James H. Frauenberg, Sr. |
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Title: |
Chief Executive Officer |
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/s/ William E. Saunders, Jr. | |
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William E. Saunders, Jr. |
EXHIBIT A
SHARE POWER
FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and transfer(s) unto CheckSmart Financial Holdings Corp., a Delaware corporation (the Company), ( ) shares of Class A Common Stock, par value $0.01, of the Company standing in his name on the books of the Company represented by Certificate No. herewith and do(es) hereby irrevocably constitute and appoint his attorney-in-fact, with full power of substitution, to transfer such shares on the books of the Company. Such transfer of shares is being effected for immediate cancellation by the Company.
Dated: |
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Signature: |
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Print Name and Mailing Address |
EXHIBIT B
Section 83(b) Election
This statement is being made under Section 83(b) of the Internal Revenue Code, pursuant to Treas. Reg. Section 1.83-2.
(1) The taxpayer who performed the services is:
Name:
Address:
Social Security Number:
(2) The property with respect to which the election is being made is shares of Class A Common Stock, par value $0.01 per share, of CheckSmart Financial Holdings Corp. (Restricted Shares)
(3) The property was issued on .
(4) The taxable year in which the election is being made is the calendar year .
(5) The property is subject to vesting as follows: an amount of Restricted Shares having a value (assuming such shares were not restricted) equal to the 83(b) Cost (as defined in the Agreement) shall vest on the date of grant. The remainder of the Restricted Shares vest on the earlier of (i) Grantees termination of employment as a result of death, disability, for Good Reason (as defined in the Agreement) or by the Company other than for Cause (as defined in the Agreement) or (ii) the one-year anniversary of the Closing (assuming Executive continues to be employed on such date). CheckSmart Financial Holdings Corp. has the right to repurchase the property if the taxpayers employment with CheckSmart Financial Holdings Corp. or a subsidiary thereof is terminated in certain circumstances. The repurchase right does not lapse until one year after an initial public offering. In addition, the property is subject to forfeiture if the taxpayers employment with CheckSmart Financial Holdings Corp. or a subsidiary thereof is terminated in certain circumstances.
(6) The fair market value at the time of transfer (determined without regard to any restriction other than a restriction which by its terms will never lapse) is $ per share.
(7) The amount paid for such property is $ per share.
(8) A copy of this statement was furnished to CheckSmart Financial Holdings Corp. for whom taxpayer rendered the services underlying the transfer of property.
(9) This statement is executed on .
Spouse (if any) Taxpayer
This election must be filed with the Internal Revenue Service Center with which taxpayer files his U.S. Federal income tax returns and must be made within 30 days after the execution date of the Share Award Agreement. This filing should be made by registered or certified mail, return receipt requested. You should retain two copies of the completed form for filing with your U.S. Federal and state tax returns for the current tax year and an additional copy for your records.
EXHIBIT C
Investment Representations and Warranties
The Grantee hereby represents and warrants to the Company that:
1. The Restricted Shares received by him will be held by him for investment only for his own account, not as a nominee or agent, and not with a view to the sale or distribution of any part thereof in violation of applicable U.S. federal or state or foreign securities laws. The Grantee has no current intention of selling, granting participation in or otherwise distributing the Restricted Shares in violation of applicable U.S. federal or state or foreign securities laws. The Grantee does not have any contract, undertaking, agreement or arrangement with any person or entity to sell, transfer or grant participation to such person or entity, or to any third person or entity, with respect to any of the Restricted Shares, in each case, in violation of applicable U.S. federal or state or foreign securities laws.
2. The Grantee understands that the issuance of the Restricted Shares have not been registered under the Securities Act or any applicable U.S. federal, state or foreign securities laws, and that the Restricted Shares are being issued in reliance on an exemption from registration, which exemption depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Grantees representations as expressed herein.
3. The Grantee has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of his owning the Restricted Shares. The Grantee is a sophisticated investor, has relied upon independent investigations made by the Grantee and, to the extent believed by the Grantee to be appropriate, the Grantees representatives, including the Grantees own professional, tax and other advisors, and is making an independent decision to invest in the Restricted Shares. The Grantee has been furnished with such documents, materials and information that the Grantee deems necessary or appropriate for evaluating an investment in the Company, and the Grantee has read carefully such documents, materials and information and understands and has evaluated the types of risks involved with holding the Restricted Shares. The Grantee has not relied upon any representations or other information (whether oral or written) from the Company or its shareholders, directors, officers or affiliates, or from any other person or entity, in connection with his investment in the Restricted Shares. The Grantee acknowledges that the Company has not given any assurances with respect to the tax consequences of the ownership and disposition of the Restricted Shares.
4. The Grantee has had, prior to his being granted the Restricted Shares, the opportunity to ask questions of, and receive answers from, the Company concerning the terms and conditions of the transactions contemplated by the Agreement and the Grantees holding of the Restricted Shares and to obtain additional information necessary to verify the accuracy of any information furnished to him or to which he had access. The Grantee confirms that he has satisfied himself with respect to any of the foregoing matters.
5. The Grantee acknowledges that Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, PC (Counsel) has been retained by the Company to represent the Grantee in connection with the transactions contemplated by the Agreement, and has had the opportunity to seek legal advice from, and has received legal advice from, Counsel on the Agreement, the transactions contemplated therein and all documents, materials and information that he has requested or read relating to holding the Restricted Shares and confirms that he has satisfied himself with respect to any of the foregoing matters.
6. The Grantee understands that no U.S. federal or state or foreign agency has passed upon the Restricted Shares or upon the Company, or upon the accuracy, validity or completeness of any documentation provided to the Grantee in connection with the transactions contemplated by the Agreement, nor has any such agency made any finding or determination as to holding the Restricted Shares.
7. The Grantee understands that there are substantial restrictions on the transferability of the Restricted Shares and that on the date of the Agreement and for an indefinite period thereafter there will be no public market for the Restricted Shares and, accordingly, it may not be possible for the Grantee to liquidate his investment in case of emergency, if at all. In addition, the Grantee understands that the Agreement and Stockholders Agreement contain substantial restrictions on the transferability of the Restricted Shares and provide that, in the event that the conditions relating to the transfer of any Restricted Shares in such document has not been satisfied, the holder shall not transfer any such Restricted Shares, and unless otherwise specified the Company will not recognize the transfer of any such Restricted Shares on its books and records or issue any share certificates representing any such Restricted Shares, and any purported transfer not in accordance with the terms of the Agreement or the Stockholders Agreement shall be void. As such, Grantee understands that: a restrictive legend or legends in a form to be set forth in the Agreement and the Stockholders Agreement will be placed on the certificates representing the Restricted Shares; a notation will be made in the appropriate records of the Company indicating that each of the Restricted Shares are subject to restrictions on transfer and, if the Company should at some time in the future engage the services of a securities transfer agent, appropriate stop-transfer instructions will be issued to such transfer agent with respect to the Restricted Shares; and the Grantee will sell, transfer or otherwise dispose of the Restricted Shares only in a manner consistent with its representations set forth herein and then only in accordance with the Agreement and the Stockholders Agreement.
8. The Grantee understands that (i) the Restricted Shares may not be sold, transferred or otherwise disposed of without registration under the Securities Act or an exemption therefrom, (ii) the Restricted Shares have not been registered under the Securities Act; (iii) the Restricted Shares must be held indefinitely and he must continue to bear the economic risk of holding the Restricted Shares unless such shares are subsequently registered under the Securities Act or an exemption from such registration is available; (iv) the Grantee is prepared to bear the economic risk of holding the Restricted Shares for an indefinite period of time; (v) it is not anticipated that there will be any public market for the Restricted Shares; (vi) the Restricted Shares are characterized as restricted securities under the U.S. federal securities laws; and (vii) the Restricted Shares may not
be sold, transferred or otherwise disposed of except in compliance with federal, state and local law.
9. The Grantee understands that an investment in the Restricted Shares is not recommended for investors who have any need for a current return on this investment or who cannot bear the risk of losing their entire investment. In that regard, the Grantee understands that his holding the Restricted Shares involves a high degree of risk of loss. The Grantee acknowledges that: (i) he has adequate means of providing for his current needs and possible personal contingencies and has no need for liquidity in this investment; (ii) his commitment to investments which are not readily marketable is not disproportionate to his net worth; and (iii) his holding the Restricted Shares will not cause his overall financial commitments to become excessive.
10. The Grantee is an accredited investor, as such term is defined in Rule 501 of the Securities Act.
SCHEDULE A
Grant Vesting Shares
Upon presentment to the Company by the Grantee of a calculation of the 83(b) Cost, in form and substance reasonably satisfactory to the Company, an amount of Restricted Shares having a value (based on the Initial Base Value per share, without giving effect to any adjustments contemplated by the parenthetical statement in the definition of Initial Base Value) equal to the 83(b) Cost shall vest, which vesting shall be effective as of the date of the Grant Date.
SCHEDULE B
Other Vesting Shares
The Grantees Other Vesting Shares shall vest at the earlier of (i) the termination of Grantees employment by the Company or any of its Subsidiaries as a result of the death or Disability (as defined in the Grantees employment agreement), (ii) the resignation of employment by the Grantee for Good Reason, (iii) the termination by the Company or any of its Subsidiaries other than for Cause or (iv) May 1, 2007 (assuming Grantee continues to be employed on such date).
Exhibit A-1
Restricted Share Unit/Stock Option Grant Agreement
[Attached]
CHECKSMART FINANCIAL HOLDINGS CORP.
2006 MANAGEMENT EQUITY INCENTIVE PLAN
TANDEM STOCK OPTION / STOCK UNIT
LIQUIDITY EVENT AWARD AGREEMENT
GRANTS TO: William E. Saunders
THIS AGREEMENT (this Agreement) is made effective as of May 1, 2006 (the Grant Date), between CheckSmart Financial Holdings Corp., a Delaware corporation (together with its successors, the Company), and Ted Saunders, who is an employee of the Company or one of its Subsidiaries (the Grantee). Capitalized terms, unless defined in Section 10 or a prior section of this Agreement, shall have the same meanings as in the Plan (as defined below)
WHEREAS, in connection with the Grantees employment with the Company or one of its Subsidiaries, the Company desires to grant to the Grantee a tandem stock option/ stock unit award (a Tandem Unit), which at the Grantees election, each Tandem Unit, shall be treated as either a stock option to purchase a share of Class A Common Stock, par value $0.01, of the Company (a Share) or a restricted stock unit the value of which shall be equivalent to one Share (the Award) pursuant to the terms and conditions of this Agreement and the Companys 2006 Management Equity Incentive Plan (the Plan).
WHEREAS, the Board has determined that it would be to the advantage, and in the best interest, of the Company and its shareholders to grant the Award provided for herein to the Grantee as an incentive for increased efforts during his employment with the Company or one of its Subsidiaries.
NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. GRANT OF AWARD
(a) Grant. Subject to the terms and conditions of the Plan and this Agreement, the Company hereby grants to the Grantee Tandem Units, each of which shall be comprised of the following:
(i) a stock option to purchase an aggregate of 23,256 Shares at an exercise price of $103.50 per share (the Option); and in tandem
(ii) 23,256 Restricted Stock Units, where each Unit represents one Share (the Restricted Stock Unit).
(b) Plan. The foregoing Award is granted under the Plan, which is incorporated herein by this reference and made a part of this Agreement.
(c) No Rights as Stockholder. It shall be understood that none of the terms contained herein grant to the Grantee any rights as a stockholder, and such Grantee shall not have any such rights unless and until such Grantee receives Shares pursuant to this Award.
SECTION 2. VESTING OF AWARD
(a) Vesting. Subject to the provisions of this Agreement, the Award shall vest in accordance with Schedule A.
(b) Election and Effect of Vesting. No less than three Business Days prior to a Vesting Event (or within three Business Days after the expiration of the 90-day period referred to in Section (a)(ii)(b) of Schedule A), the Grantee shall make an irrevocable election, which election shall be subject to the occurrence of the Vesting Event, to have the Tandem Unit be, and in all respects be treated as, either (i) the Option, which Option shall be fully vested (the Option Election), or (ii) the Restricted Stock Units (the Restricted Stock Unit Election). In the absence of any such election, the Grantee shall be deemed to have made the Restricted Stock Unit Election.
(c) In connection with any such election (or deemed election), the component of the Tandem Unit not so elected shall automatically, without any further action by any party, be null and void and of no force and effect.
SECTION 3. OPTION EXERCISE PROCEDURE.
If the Grantee makes the Option Election, the exercise and termination of such Option will be governed by the terms and conditions set forth on Exhibit A.
SECTION 4. RESTRICTED STOCK UNIT SETTLEMENT PROCEDURE.
If the Grantee makes (or is deemed to have made) the Restricted Stock Unit Election, the Company shall, on or as soon as possible following the applicable Vesting Event, settle the Restricted Stock Units by issuing a number of Shares equal to the number of Restricted Stock Units that are the subject of this Award, subject to the requirements of Section 5 of this Agreement.
SECTION 5. CONDITIONS TO ISSUANCE OF SHARES.
(a) Issuance of Shares. Upon the settlement of the Restricted Stock Unit, and, if applicable, delivery to the Company by the Grantee of an executed Joinder Agreement to the Stockholders Agreement, the Company shall cause to be issued a certificate or certificates for the number of Shares to the Grantee necessary to settle the Restricted Stock Unit, (such Shares, the Award Shares) registered in the name of the Grantee (or in the names of such person and his spouse as community property or as joint tenants with right of survivorship), with any legend required pursuant to the Stockholders Agreement or otherwise required under the securities laws; provided that the Grantee, as a condition to the issuance of Award Shares hereunder, makes, as of the time of issuance of such Award Shares, representations and warranties in a form satisfactory to the Company and substantially similar to those contained in Exhibit C.
(b) Withholding Requirements. The Company may withhold any tax (or other governmental obligation) required to be withheld in connection with the issuances of Award Shares. Such withholding may be made from any source (including from Award Shares and any salary or other compensation payable to the Grantee), and the Grantee shall make arrangements satisfactory to the Company to enable it to satisfy all such withholding requirements as a condition to the issuance of Award Shares. For the avoidance of doubt, the Company will not withhold any amounts greater than the statutory minimum.
SECTION 6. SECURITIES LAW ISSUES; TRANSFER RESTRICTIONS
(a) Grantee Acknowledgements and Representations. The Grantee understands and agrees that: (i) the Award and any Award Shares will not be registered under the Securities Act, (ii) the Award and any Award Shares will be restricted securities under the Securities Act and (iii) neither the this Award nor any Award Shares may be resold or transferred unless they are first registered under the Securities Act or unless an exemption from such registration is available. The Grantee hereby makes to the Company the representations and warranties set forth in Exhibit C hereto with respect to the Award and any Award Shares.
(b) No Registration Rights. Except as otherwise set forth in the Stockholders Agreement with respect to any Award Shares, the Company may, but shall not be obligated to, register or qualify the issuance of such Shares to, or the resale of any such Shares by, the Grantee under the Securities Act or any other applicable law.
(c) Transfers.
(i) Award Not Transferable. The Award shall not be transferable to any Person for any reason. Any attempt to Transfer the Award shall be null and void and have no force or effect, and the Company shall not, and shall cause any transfer agent not to, give any effect in such entitys share records to such attempted Transfer.
(ii) Award Shares Subject to Stockholders Agreement. The Award Shares shall be subject to the restrictions on Transfer as set forth in Article 3 of the Stockholders Agreement, except with respect to a Transfer by will or by the laws of descent and distribution. Unless otherwise permitted pursuant to the Stockholders Agreement, the Grantee shall not Transfer any Award Shares (A) except in compliance with the provisions of Article 3 of the Stockholders Agreement, and (B) unless the transferee shall have agreed in writing to be bound by the terms of this Agreement in a manner acceptable to the Board and otherwise acknowledging that such Award Shares are subject to the restrictions set forth in this Agreement. Any attempt to Transfer any Award Shares which is not in compliance with this Agreement shall be null and void and have no force or effect, and the Company shall not, and shall cause any transfer agent not to, give any effect in such entitys share records to such attempted Transfer. The Grantee acknowledges that the transfer restrictions contained in this Agreement are reasonable and in the best interests of the Company.
SECTION 7. TERM OF AWARD.
The Award shall expire at the earlier of (A) ten years from the Grant Date or (B) the date on
which the Grantees employment with the Company or any of its Subsidiaries is terminated for any reason, it being understood that the term of any Option, to the extent that the Option Election is made, shall be as set forth on Exhibit A hereto.
SECTION 8. ADJUSTMENT OF SHARES
In the event of a Recapitalization, the terms of the Award (including, without limitation, the number and kind of Shares subject to the Award) shall be adjusted as set forth in Section 13(a) of the Plan. In the event that the Company is a party to a merger or consolidation, this award shall be subject to the vesting schedule set forth on Schedule A attached hereto and Section 13(b) of the Plan.
SECTION 9. MISCELLANEOUS PROVISIONS
(a) No Retention Rights. Nothing in this Agreement or in the Plan shall confer upon the Grantee any right to continue in Service or interfere with or otherwise restrict in any way the rights of the Company or any Subsidiary employing the Grantee, which rights are hereby expressly reserved by the Company and any Subsidiary employing the Grantee, to terminate the Grantees Service at any time and for any reason, with or without Cause.
(b) Notices. All notices, requests and other communications under this Agreement shall be in writing and shall be delivered in person (by courier or otherwise), mailed by certified or registered mail, return receipt requested, or sent by facsimile transmission, as follows:
If to the Company, to:
c/o CheckSmart Financial Holdings Corp.
7001 Post Road, Suite 200
Dublin, OH 43016
Attn: Chief Executive Officer
If to the Grantee, to the address that he most recently provided to the Company,
or, in each case, at such other address or fax number as such party may hereafter specify for the purpose of notices hereunder by written notice to the other party hereto. All notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt. Any notice, request or other written communication sent by facsimile transmission shall be confirmed by certified or registered mail, return receipt requested, posted within one Business Day, or by personal delivery, whether by courier or otherwise, made within two Business Days after the date of such facsimile transmissions; provided that such confirmation mailing or delivery shall not affect the date of receipt, which will be the date that the facsimile successfully transmitted the notice, request or other communication.
(c) Entire Agreement. This Agreement and the Plan, together with the Stockholders Agreement, the Grantees employment agreement and the other agreements referred to herein
and therein and any schedules, exhibits and other documents referred to herein or therein, constitute the entire agreement and understanding among the parties hereto in respect of the subject matter hereof and thereof and supersede all prior and contemporaneous arrangements, agreements and understandings, both oral and written, whether in term sheets, presentations or otherwise, among the parties hereto, or between any of them, with respect to the subject matter hereof and thereof.
(d) Amendment; Waiver. No amendment or modification of any provision of this Agreement shall be effective unless signed in writing by or on behalf of the Company and the Grantee, except that the Company may amend or modify the Agreement without the Grantees consent in accordance with the provisions of the Plan or as otherwise set forth in this Agreement. The failure of the Company in any instance to exercise the Right of Repurchase shall not constitute a waiver of any other repurchase rights that may subsequently arise under the provisions of this Agreement or any other agreement between the Company and the Grantee. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition whether of like or different nature. Any amendment or modification of or to any provision of this Agreement, or any waiver of any provision of this Agreement, shall be effective only in the specific instance and for the specific purpose for which made or given.
(e) Assignment. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by the Grantee except pursuant to a Transfer in accordance with the provisions of this Agreement.
(f) Successors and Assigns; No Third Party Beneficiaries. This Agreement shall inure to the benefit of and be binding upon the Company and the Grantee and their respective heirs, successors, legal representatives and permitted assigns. Nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the Company and the Grantee, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.
(g) Governing Law, Venue. This Agreement and any matters or disputes related to, in connection with , or arising under this Agreement shall be governed by the laws of the State of Delaware, without regard to the conflicts of laws rules of such state. Any legal action or proceeding with respect this Agreement shall be brought in the federal or state court sitting in the State of Delaware, and, by execution and delivery of this Agreement, each party hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the exclusive jurisdiction of such courts. Each party irrevocably waives any objection which it may now or hereafter have to the laying of venue of the aforesaid actions or proceedings arising out of or in connection with this Agreement in the courts referred to in this paragraph and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.
(h) Waiver of Jury Trial. The Grantee hereby irrevocably waives all right of trial by jury in any legal action or proceeding (including counterclaims) relating to or arising out of or in connection with this Agreement or any of the transactions or relationships hereby
contemplated or otherwise in connection with the enforcement of any rights or obligations hereunder.
(i) Interpretation. Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation apply:
Headings. The division of this Agreement into Sections and other subdivisions and the insertion of headings are for convenience of reference only and do not alter the meaning of, or affect the construction or interpretation of, this Agreement.
Section References. All references in this Agreement to any Section are to the corresponding Section of this Agreement.
Schedules/Exhibits. Any capitalized terms used in any Schedule or Exhibit to this Agreement but are not otherwise defined therein have the meanings set forth in this Agreement.
(j) Severability. If any provision of this Agreement is invalid, illegal, or incapable of being enforced by any law, all other provisions of this Agreement remain in full force and effect so long as the economic and legal substance of the transactions contemplated hereby are not affected in any manner materially adverse to any party. If any provision of this Agreement is held to be invalid, illegal, or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
(k) Counterparts. The parties may execute this Agreement in one or more counterparts, each of which constitutes an original copy of this Agreement and all of which, collectively constitute only one agreement. The signatures of all the parties need not appear on the same counterpart.
(l) Grantee Undertaking. The Grantee agrees to take whatever additional action and execute whatever additional documents the Company may deem necessary or advisable to carry out or effect one or more of the obligations or restrictions imposed on either the Grantee or upon the Award or any Award Shares pursuant to the provisions of this Agreement.
(m) Plan; Stockholders Agreement; Counsel. The Grantee acknowledges and understands that material definitions and provisions concerning the Award or any Award Shares and the Grantees rights and obligations with respect thereto are set forth in the Plan and the Stockholders Agreement. The Grantee has had the opportunity to retain counsel, and has read carefully, and understands, the provisions of such documents. Mintz, Levin, Ferris, Cohn, Glovsky and Popeo, PC (Counsel) has been retained to represent the Grantee in connection with the transactions contemplated by this Agreement. The Grantee has had the opportunity to seek legal advice from Counsel on this Agreement and the transactions contemplated hereby.
SECTION 10. DEFINITIONS
(a) Affiliate shall mean, with respect to any specified Person, (a) any other Person which
directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person (for the purposes of this definition, control (including, with correlative meanings, the terms controlling, controlled by and under common control with), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise); provided, however, that neither the Company nor any of its Subsidiaries shall be deemed an Affiliate of any of the Stockholders (and vice versa), and (b) if such specified Person is an investment fund, any other investment fund the primary investment advisor to which is the primary investment advisor to such specified Person.
(b) Board means the Board of Directors of the Company, as constituted from time to time or, if a Committee has been appointed, such Committee.
(c) Business Day has the meaning ascribed to such term in the Stockholders Agreement.
(d) Cause has the meaning ascribed to such term in the Grantees Employment Agreement.
(e) Change of Control shall have the meaning ascribed to it in the Stockholders Agreement.
(f) Class A Common Stock means the voting class A common stock of the Company, and any stock into which such Class A Common Stock may hereafter be converted, changed, reclassified or exchanged.
(g) Closing shall have the meaning ascribed to it in the Stock Purchase Agreement.
(h) Code means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated thereunder.
(i) Committee means the compensation committee of the Board of Directors of the Company.
(j) DCP Investor means BCC/DCP Acquisition LLC or any of its Permitted Transferees.
(k) Disability has the meaning ascribed to such term in the Grantees Employment Agreement.
(l) Employment Agreement means the employment agreement between the Grantee and CheckSmart Financial Company, dated as of May 1, 2006.
(m) Fair Market Value or FMV with respect to a share of stock of the Company, shall mean, in the event that such shares are listed on an established U.S. exchange or through the NASDAQ National Market or any established over-the-counter trading system, the average of the closing prices of such Group Equity Securities on such exchange if listed or, if not so listed, the average bid and asked price of such shares reported on the NASDAQ National Market or any established over-the-counter trading system on which prices for such shares are quoted, in each case, for a period of twenty trading days prior to such date of determination, or (ii) if such shares
are not publicly traded, a good faith determination by the Board through a reasonable application of a reasonable valuation method. Such determination shall be conclusive and binding on all persons.
(n) Good Reason has the meaning ascribed to such term in the Grantees Employment Agreement.
(o) Initial Base Value means $103.50, subject to appropriate adjustment to the extent that there is an adjustment under Section 2.3(b) of the Stock Purchase Agreement, in connection with the finally determined 2005 EBITDA.
(p) Initial Public Offering means the Companys first Public Offering. Public Offering shall mean an underwritten public offering and sale of shares of Common Stock for cash pursuant to an effective registration statement under the Securities Act, other than pursuant to a registration statement on Form S-4 or Form S-8 or any similar or successor form.
(q) Joinder Agreement means an agreement substantially in the form of Exhibit A of the Stockholders Agreement, pursuant to which the Grantee shall become a party to the Stockholders Agreement and subject to all of the rights, restrictions and obligations contained therein.
(r) Liquidity Event shall mean (i) any transaction or series of related transactions resulting in or involving a Change of Control, or (ii) an Initial Public Offering.
(s) Permitted Transferee has the meaning ascribed to such term in the Stockholders Agreement.
(t) Person means any individual, partnership, corporation, company, association, trust, joint venture, limited liability company, unincorporated organization, entity or division, or any government, governmental department or agency or political subdivision thereof.
(u) Purchase Price means the exercise price of the Option.
(v) Securities Act means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(w) Service means service as an Employee.
(x) Share(s) means a share(s) of Class A Common Stock of the Company.
(y) Stockholders Agreement means that certain Stockholders Agreement dated as of May 1, 2006 by and among the Company, the Grantee and the other parties thereto (as the same shall be amended, modified or supplemented from time to time).
(z) Stock Purchase Agreement means the Stock Purchase Agreement, by and among the DCP Investor, and certain other parties thereto, dated as of February 27, 2006.
(aa) Subsidiary means, with respect to the Company, any other Person in which the
Company, directly or indirectly through one or more Affiliates or otherwise, beneficially owns at least 50% of either the ownership interest (determined by equity or economic interests) in, or the voting control of, such other Person.
(bb) Transfer has the meaning ascribed in such term in the Stockholders Agreement.
(cc) Vesting Event means a Liquidity Event in which the Liquidity Event Vesting Target set forth in Section (a)(ii) of Schedule A is, or is expected to be, achieved.
IN WITNESS WHEREOF, the parties have executed this Liquidity Event Award Agreement as of the day and year first written above.
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CHECKSMART FINANCIAL HOLDINGS CORP. | ||
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/s/ James H. Frauenberg, Sr. | |
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Name: |
James H. Frauenberg, Sr. |
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Title: |
Chief Executive Officer |
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/s/ William E. Saunders, Jr. | |
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Name: William E. Saunders |
EXHIBIT A
TERMS AND CONDITIONS OF OPTION GRANTED PURSUANT TO
THIS AWARD
(a) EXERCISE OF OPTION.
(i) Notice of Exercise. The Grantee may exercise all or any portion of its Option prior to its expiration as set forth in Section (c) of this Exhibit A by giving written notice to the Company in the form attached hereto as Exhibit B (such form, a Notice of Exercise) specifying the election to exercise such Option, the portion of the Option which is being exercised and the form of payment. The Notice of Exercise shall be signed by the Grantee. The Grantee shall deliver to the Company, at the time of giving the notice, payment in a form permissible under Section (b) below, for the full amount of the Purchase Price and, if the Grantee is not then a party to the Stockholders Agreement, the Grantee shall be required to execute a Joinder Agreement to the Stockholders Agreement in form and substance reasonably satisfactory to the Company.
(ii) Issuance of Shares. After receiving a properly completed and executed Notice of Exercise and, payment for the full amount of the Purchase Price as required by Section (a)(i) above, and, if applicable, an executed Joinder Agreement to the Stockholders Agreement, the Company shall cause to be issued a certificate or certificates for the number of Shares to the Grantee subject to the Option (such Shares, the Award Shares) registered in the name of the Grantee (or in the names of such person and his spouse as community property or as joint tenants with right of survivorship), with any legend required pursuant to the Stockholders Agreement or otherwise required under the securities laws, provided that as a condition to the issuance of Award Shares hereunder, the Grantee shall make, as of the time of issuance of such Award Shares, representations and warranties in a form satisfactory to the Company and substantially similar to those contained in Exhibit C.
(iii) Withholding Requirements. The Company may withhold any tax (or other governmental obligation) required to be withheld in connection with the exercise of the Option, and as a condition to the settlement of any or exercise of the Option. Such withholding may be made from any source (including any salary or other compensation payable to the Grantee), and the Grantee shall make arrangements satisfactory to the Company to enable it to satisfy all such withholding requirements as a condition to the exercise of the Option (including by remitting to the Company an amount in cash sufficient to satisfy the withholding obligation). For the avoidance of doubt, the Company will not withhold any amounts greater than the statutory minimum.
(b) PAYMENT FOR SHARES.
(i) Cash or Check. In connection with an exercise of the Option, all or part of the Purchase Price may be paid in cash or by check.
(ii) Net Exercise. Notwithstanding anything in this Agreement to the contrary, in connection with an exercise of the Option, all or part of the Purchase Price may be paid by reducing the number of Shares being purchased pursuant to such exercise by the number of such Shares having an Fair Market Value equal to the Purchase Price.
(iii) Other Methods of Payment for Shares. At the sole discretion of the Board, all or any part of the Purchase Price and any applicable withholding requirements may be paid by any other method permissible at the time under the terms of the Plan.
(c) TERMINATION OF OPTION.
The Option granted pursuant to this Award shall terminate on the earlier of (1) ten years from the Grant Date or (2):
(i) if the Grantees Service terminates due to the Grantees resignation for any reason or termination by the Company or any of its Subsidiaries without Cause, the date that is the 60th day after the Grantees Service terminated;
(iii) if the Grantees Service terminates due to the Grantees death or Disability, the date that is the first anniversary of the date that the Grantees Service terminated; and
(iv) if the Grantees Service terminates due to a termination by the Company or any of its Subsidiaries for Cause, the date of such termination.
EXHIBIT B
Notice of Exercise
EXHIBIT C
Investment Representations and Warranties
The Grantee hereby represents and warrants to the Company that:
1. The Tandem Option / Restricted Stock Unit Award and Award Shares (either or both, the Securities) received by him will be held by him for investment only for his own account, not as a nominee or agent, and not with a view to the sale or distribution of any part thereof in violation of applicable U.S. federal or state or foreign securities laws. The Grantee has no current intention of selling, granting participation in or otherwise distributing the Securities in violation of applicable U.S. federal or state or foreign securities laws. The Grantee does not have any contract, undertaking, agreement or arrangement with any person or entity to sell, transfer or grant participation to such person or entity, or to any third person or entity, with respect to any of the Securities, in each case, in violation of applicable U.S. federal or state or foreign securities laws.
2. The Grantee understands that the issuance of the Securities has not been registered under the Securities Act or any applicable U.S. federal, state or foreign securities laws, and that the Securities are being issued in reliance on an exemption from registration, which exemption depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Grantees representations as expressed herein.
3. The Grantee has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of his owning the Securities. The Grantee is a sophisticated investor, has relied upon independent investigations made by the Grantee and, to the extent believed by the Grantee to be appropriate, the Grantees representatives, including the Grantees own professional, tax and other advisors, and is making an independent decision to invest in the Securities. The Grantee has been furnished with such documents, materials and information that the Grantee deems necessary or appropriate for evaluating an investment in the Company, and the Grantee has read carefully such documents, materials and information and understands and has evaluated the types of risks involved with holding the Securities. The Grantee has not relied upon any representations or other information (whether oral or written) from the Company or its shareholders, directors, officers or affiliates, or from any other person or entity, in connection with his investment in the Securities. The Grantee acknowledges that the Company has not given any assurances with respect to the tax consequences of the ownership and disposition of the Securities.
4. The Grantee has had, prior to his being granted the Securities, the opportunity to ask questions of, and receive answers from, the Company concerning the terms and conditions of the transactions contemplated by the Agreement and the Grantees holding of the Securities and to obtain additional information necessary to verify the accuracy of any information furnished to his or to which he had access. The Grantee confirms that he has satisfied himself with respect to any of the foregoing matters.
5. The Grantee acknowledges that Mintz, Levin, Ferris, Cohn, Glovsky and Popeo, PC (Counsel) has been retained to represent the Grantee in connection with the transactions contemplated by the Agreement, and has had the opportunity to seek legal advice from, and has received legal advice from, Counsel on the Agreement, the transactions contemplated therein and all documents, materials and information that he has requested or read relating to holding the Securities and confirms that he has satisfied himself with respect to any of the foregoing matters.
6. The Grantee understands that no U.S. federal or state or foreign agency has passed upon the Securities or upon the Company, or upon the accuracy, validity or completeness of any documentation provided to the Grantee in connection with the transactions contemplated by the Agreement, nor has any such agency made any finding or determination as to holding the Securities.
7. The Grantee understands that there are substantial restrictions on the transferability of the Securities and that on the date of the Agreement and for an indefinite period thereafter there will be no public market for the Securities and, accordingly, it may not be possible for the Grantee to liquidate his investment in case of emergency, if at all. In addition, the Grantee understands that the Agreement and Stockholders Agreement contain substantial restrictions on the transferability of the Securities and provide that, in the event that the conditions relating to the transfer of any Securities in such document has not been satisfied, the holder shall not transfer any such Securities, and unless otherwise specified the Company will not recognize the transfer of any such Securities on its books and records or issue any share certificates representing any such Securities, and any purported transfer not in accordance with the terms of the Agreement or the Stockholders Agreement shall be void. As such, Grantee understands that: a restrictive legend or legends in a form to be set forth in the Agreement and the Stockholders Agreement will be placed on the certificates representing the Securities; a notation will be made in the appropriate records of the Company indicating that each of the Securities are subject to restrictions on transfer and, if the Company should at some time in the future engage the services of a securities transfer agent, appropriate stop-transfer instructions will be issued to such transfer agent with respect to the Securities; and the Grantee will sell, transfer or otherwise dispose of the Securities only in a manner consistent with its representations set forth herein and then only in accordance with the Agreement and the Stockholders Agreement.
8. The Grantee understands that (i) the Securities may not be sold, transferred or otherwise disposed of without registration under the Securities Act or an exemption therefrom, (ii) the Securities have not been registered under the Securities Act; (iii) the Securities must be held indefinitely and he must continue to bear the economic risk of holding the Securities unless such Securities are subsequently registered under the Securities Act or an exemption from such registration is available; (iv) the Grantee is prepared to bear the economic risk of holding the Securities for an indefinite period of time; (v) it is not anticipated that there will be any public market for the Securities; (vi) the Securities are characterized as restricted securities under the U.S. federal securities laws; and (vii) the Securities may not be sold, transferred or otherwise disposed of except in compliance with federal, state and local law.
9. The Grantee understands that an investment in the Securities is not recommended for investors who have any need for a current return on this investment or who cannot bear the risk of losing their entire investment. In that regard, the Grantee understands that his holding the Securities involves a high degree of risk of loss. The Grantee acknowledges that: (i) he has adequate means of providing for his current needs and possible personal contingencies and has no need for liquidity in this investment; (ii) his commitment to investments which are not readily marketable is not disproportionate to his net worth; and (iii) his holding the Securities will not cause his overall financial commitments to become excessive.
10. The Grantee is an accredited investor, as such term is defined in Rule 501 of the Securities Act.
Schedule A
(a) Vesting.
(i) Notwithstanding anything to the contrary set forth in clause (ii) below, one half of Grantees Award will vest upon an Initial Public Offering - regardless of whether the relevant Liquidity Event Vesting Targets are achieved.
(ii) Grantees Award will vest with respect to 100% the Award (to the extent not then vested) if, at the time of such Liquidity Event, the Fair Market Value of a Share equals the Initial Base Value multiplied by a Multiplier (the Liquidity Event Vesting Target), defined in the chart below:
Anniversary of Closing |
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Multiplier |
3rd |
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2.5 |
4th |
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3.0 |
5th |
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3.5 |
To the extent that a Liquidity Event occurs between anniversaries, the Multiplier and the Liquidity Event Vesting Target resulting therefrom will be determined by the following formula:
Multiplier = X + (Y/365 * 0.5);
where,
X = the Multiplier of the immediately preceding anniversary as set forth in the chart above; and
Y = the number of days since the prior anniversary;
it being understood, that if the applicable per Share price threshold is not achieved in connection with such Liquidity Event, none of the Award will vest; provided, however, if the Liquidity Event is an Initial Public Offering and the average closing prices of the Common Stock of the Company for any 90 consecutive trading days during any period following an Initial Public Offering and ended on or prior to April 30, 2011, equals or exceeds the relevant Liquidity Event Vesting Target for the date on in which such 90-day period ends, the Award will fully vest.
(b) No Appraisal Rights. The Grantee shall not be entitled to appraisal rights in connection with any Liquidity Event.
(c) Employment Required for Vesting. The Grantee must be employed by the Company or one of its Subsidiaries at the date of the Liquidity Event in order for the Award to vest.
Exhibit B
GENERAL RELEASE OF CLAIMS
A general release is required as a condition for receiving the severance benefits described in Section 7(d) of the employment agreement between CheckSmart Financial Company (the Company) and William E. Saunders, Jr. (Executive) dated May 1, 2006, (the Employment Agreement); thus, by executing this general release (General Release), you have advised us that you hold no claims against the Company, CheckSmart Financial Holdings Corp., their predecessors, successors or assigns, affiliates, shareholders or members and each of their respective officers, directors, agents and employees (collectively, the Releasees), and by execution of this General Release you agree to waive and release any such claims, except relating to any compensation, severance pay and benefits described in the Employment Agreement.
You understand and agree that this General Release will extend to all claims, demands, liabilities and causes of action of every kind, nature and description whatsoever, whether known, unknown or suspected to exist, which you ever had or may now have against the Releasees in your capacity as an employee of the Company, including, without limitation, any claims, demands, liabilities and causes of action arising from your employment with the Releasees and the termination of that employment, including any claims for severance or vacation pay, business expenses, and/or pursuant to any federal, state, county, or local employment laws, regulations, executive orders, or other requirements, including, but not limited to, Title VII of the 1964 Civil Rights Act, the 1866 Civil Rights Act, the Age Discrimination in Employment Act as amended by the Older Workers Benefit Protection Act, the Americans with Disabilities Act, the Civil Rights Act of 1991, the Workers Adjustment and Retraining Notification Act and any other local, state or federal fair employment laws, and any contract or tort claims.
It is further understood and agreed that you are waiving any right to initiate an action in state or federal court by you or on your behalf alleging discrimination on the basis of race, sex, religion, national origin, age, disability, marital status, or any other protected status or involving any contract or tort claims based on your termination from the Company. It is also acknowledged that your termination is not in any way related to any work-related injury.
Based on executing this General Release, it is further understood and agreed that you covenant not to sue to challenge the enforceability of this General Release. It also is understood and agreed that the remedy at law for breach of the Employment Agreement and/or General Release shall be inadequate, and the Company shall be entitled to injunctive relief.
The ability to receive compensation and benefits under the terms of the Employment Agreement will remain open for a 21 day period after your Termination Date to give you an opportunity to consider the effect of this General Release. At your option, you may elect to execute this General Release on an earlier date. Additionally, you have seven days after the date you execute this General Release to revoke it. As a result, this General Release will not be effective until eight days after you execute it. We also want to advise you of your right to consult with legal counsel prior to executing a copy of this General Release.
Finally, this is to expressly acknowledge:
· You understand that you are not waiving any claims or rights that may arise after the date you execute this General Release.
· You understand and agree that the compensation and benefits described in the Employment Agreement offer you consideration greater than that to which you would otherwise be entitled.
I hereby state that I have carefully read this General Release and that I am signing this General Release knowingly and voluntarily with the full intent of releasing the Releasees from any and all claims, except as set forth herein. Further, if signed prior to the completion of the 21 day review period, this is to acknowledge that I knowingly and voluntarily signed this General Release on an earlier date.
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William E. Saunders, Jr. |
Exhibit C
CONFIDENTIALITY, NON-COMPETITION AND INTELLECTUAL PROPERTY (this Non-Competition Agreement), dated as of May 1, 2006 (the Commencement Date), among CheckSmart Financial Company (the Company) and William E. Saunders, Jr. (Executive).
WHEREAS, Executive has been offered employment with the Company, and has entered into an employment agreement dated as of the date hereto with the Company (the Employment Agreement). In such role, Executive will receive specific confidential information relating to the businesses of the Company, which confidential information is necessary to enable Executive to perform Executives duties and to receive future compensation. Executive will play a significant role in the development and management of the businesses of the Company and will be entrusted with the Companys confidential information relating to the Company, the Companys customers, manufacturers, distributors and others.
WHEREAS, Executive acknowledges that during the course of Executives employment with the Company, Executive will be involved in the current and future businesses of the Company, as set forth above.
WHEREAS, it is a condition to the commencement of Executives employment by the Company that Executive execute and deliver this Non-Competition Agreement.
NOW, THEREFORE, it is mutually agreed as follows:
1. Confidentiality.
(a) Executive shall not, during the term of Executives employment with the Company or at any time thereafter, directly or indirectly, divulge, use, furnish, disclose, exploit or make available to any person or entity, whether or not a competitor of the Company, any Unauthorized (as defined herein) disclosure of Confidential Information (as defined herein). In the event that Executive is requested or required (by deposition, interrogatories, requests for information or documents in legal proceedings, subpoenas, civil demand or similar process) to disclose any Confidential Information, Executive will give the Company prompt written notice of such request or requirement so that the Company may seek an appropriate protective order or other remedy and/or waive compliance with the provisions of this Non-Competition Agreement, and Executive will cooperate with the Companys efforts to obtain such protective order. In the event that such protective order or other remedy is not obtained or the Company waives compliance with the relevant provisions of this Non-Competition Agreement, Executive is permitted to furnish that Confidential Information which is legally required to be disclosed and will use his reasonable efforts to obtain assurances that confidential treatment will be accorded to such information.
As used herein, all capitalized terms used without definition shall have the meanings ascribed to them in the Employment Agreement, and the term:
Confidential Information shall mean trade secrets, confidential or proprietary information, and all other information, documents or materials, relating to, owned, developed or possessed by either of the Company, whether in tangible or intangible form. Confidential Information includes, but is not limited to, (i) financial information, (ii) products, (iii) product and service costs, prices, profits and sales, (iv) new business, technical or other ideas, proposals, plans and designs, (v) business strategies, (vi) product and service plans, (vii) marketing plans and studies, (viii) forecasts, (ix) budgets, (x) projections, (xi) computer programs, (xii) data bases and the documentation (and information contained therein), (xiii) computer access codes and similar information, (xiv) source codes, (xv) know-how, technologies,
concepts and designs, including, without limitation, patent applications, (xvi) research projects and all information connected with research and development efforts, (xvii) records, (xviii) business methods and recommendations, (xix) existing or prospective client, customer, vendor and supplier information (including, but not limited to, identities, needs, transaction histories, volumes, characteristics, agreements, prices, identities of individual contacts, and spending, preferences or habits), (xx) training manuals and similar materials used by the Company in conducting its business operations, (xxi) personnel files of employees, directors and independent contractors of the Company, (xxii) competitive analyses, (xxiii) contracts with other parties, (xxiv) product formulations, and (xxv) other confidential or proprietary information that has not been made available to the trade or general public by the Company. Confidential Information shall not include any information that (A) is or becomes generally available to the public or the trade other than as a result of a disclosure by Executive in violation of this Non-Competition Agreement or (B) becomes available to Executive on a non-confidential basis from a source other than the Company which is not prohibited from disclosing such information to Executive by a legal, contractual or fiduciary obligation to the Company or any other person.
Unauthorized shall mean: (i) in contravention of the policies or procedures of the Company; (ii) otherwise inconsistent with any measures taken by the Company to protect its interests in the Confidential Information; (iii) in contravention of any lawful instruction or directive, either written or oral, of the Board, or an officer or employee of the Company empowered to issue such instruction or directive; (iv) in contravention of any duty existing under law or contract; or (v) to the detriment of the Company; but shall not include any disclosure which is customary in the normal course of business in the trade and consistent with the past practice of the Company.
(b) Executive further agrees to take all reasonable measures to prevent unauthorized persons or entities from obtaining or using Confidential Information. Promptly upon termination, for any reason, of Executives employment with the Company, Executive agrees to deliver to the Company all property and materials within Executives possession or control which belong to the Company or which contain Confidential Information.
2. Non-Competition; Non-Solicitation.
(a) For a period of time equal to the Term plus the greater of (i) any period that Executive is entitled to receive Base Salary and Continued Benefits under the Employment Agreement, or (ii) one year commencing as of the Termination Date, unless the Employment Agreement is terminated by the Company without Cause (including, as a result of non renewal) or Executive resigns with Good Reason, in each case, for a period of time equal to the Term plus the period during which the Company continues to pay Executive his Base Salary and Continued Benefits pursuant to Section 7 of the Employment Agreement (the Non-Compete Period), whenever the same shall occur and for whatever reason, Executive will not, directly or indirectly, engage, anywhere in the Restricted Area (as defined below), whether such engagement be as an individual, officer, director, proprietor, employee, partner, member, investor (other than solely as a holder of less than two percent (2%) of the outstanding capital stock of a corporation whose shares are publicly traded on a national securities exchange or through a national market system or registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended), creditor, consultant, advisor, sales representative, agent or other participant, in a Restricted Business (as defined herein).
(b) During the Non-Compete Period Executive shall not, directly or indirectly, (i) cause, solicit, induce or encourage (each, a Solicitation) any person who is or was, prior to such Solicitation, an employee of the Company, any Subsidiaries, Holdings, Newco or any of their respective subsidiaries to leave employment with the Company, any Subsidiaries, Holdings, Newco or any of their respective subsidiaries, or hire, employ or otherwise engage any such individual; or (ii) cause, induce or
encourage any material actual or prospective client, customer, supplier or licensor of the Company, any Subsidiaries, Holdings, Newco or any of their respective subsidiaries (including any former customer of the Company or the Subsidiaries and any person that becomes a customer of the Company, any Subsidiaries, Holdings, Newco or any of their respective subsidiaries after the Closing) or any other person who has a material business relationship with the Company, any Subsidiaries, Holdings, Newco or any of their respective subsidiaries, to terminate or modify any such actual or prospective relationship.
Restricted Business shall mean any business engaged in a business, directly or indirectly, similar to the business of the Company and its subsidiaries as of the Termination Date, any other consumer finance business that may be reasonably construed as competing with the business of the Company or any of its subsidiaries as of the Termination Date or any future businesses of the Company or any of its subsidiaries as contemplated by any of them as of the Termination Date.
Restricted Area shall be any state in which any of the Subsidiaries (as defined in the Employment Agreement) operate, as of the date hereof or the Termination Date.
3. Intellectual Property. Executive agrees that during the term of Executives employment with the Company, any and all inventions, developments, products, services, discoveries, innovations, writings, domain names, improvements, trade secrets, trade names, designs, drawings, business processes, secret processes and know-how, which Executive may create, conceive, develop or make, either alone or in conjunction with others and related or in any way connected with either of the Company, its strategic plans, products, processes, apparatus or business now or hereafter carried on by either of the Company (collectively, Inventions), shall be fully and promptly disclosed to the Company and shall be the sole and exclusive property of the Company (as they shall determine) as against Executive or any of Executives assignees. Executive further understands that in the course of Executives, Executive may prepare writings, drawings, diagrams, designs, specifications, manuals, instructional and other materials, and computer code and programs (Works of Authorship or Works). Executive agrees that such Works are works made for hire under United States copyright law and the Company will be the owner of my entire right of authorship in such Works. If such Works are deemed by operation of law not to be works made for hire, Executive hereby assigns to the Company Executives entire right of authorship, including copyright ownership in such Works and any and all right, title and interest in and to such Inventions made during the term of Executives employment by either of the Company. Executive further agrees to assist in the preparation and execution, during and subsequent to my employment, of any papers the Company may request to secure patent, copyright or other protection for such Inventions or Works of Authorship.
Whether during or after Executives employment with either of the Company, Executive further agrees to execute and acknowledge all papers and to do, at the Companys expense, any and all other things necessary for or incident to the applying for, obtaining and maintaining of such letters patent, copyrights, trademarks or other intellectual property rights, as the case may be, and to execute, on request, all papers necessary to assign and transfer such Inventions, copyrights, patents, patent applications and other intellectual property rights to the Company, their successors and assigns (as they shall determine). In the event that the Company is unable, after reasonable efforts and, in any event, after thirty (30) business days, to secure Executives signature on a written assignment to the Company, of any application for letters patent, trademark registration or to any common law or statutory copyright or other property right therein to which the Company is entitled to ownership pursuant to this Section 3, whether because of his physical or mental incapacity, or for any other reason whatsoever, Executive irrevocably designates and appoints the Chief Financial Officer of the Company as Executives attorney-in-fact to act on Executives behalf to execute and file any such applications and to do all lawfully permitted acts to further the prosecution or issuance of such assignments, letters patent, copyright or trademark; provided, however, that the provisions of this sentence shall not apply if Executive disputes in writing the
Companys ownership of the intellectual property rights which are the subject of the proposed assignment.
4. No Right to Continued Employment. Nothing in this Non-Competition Agreement shall confer upon Executive any right to continue in the employ of the Company or shall interfere with or restrict in any way the rights of the Company, which, subject to the terms of the Employment Agreement, are hereby reserved, to discharge Executive at any time for any reason whatsoever, with or without cause.
5. No Conflicting Agreements. Executive warrants that Executive is not bound by the terms of a confidentiality agreement, non-competition or other agreement with a third party that would conflict with Executives obligations hereunder.
6. Remedies.
(a) Executive and the Company hereby agree that any controversy or claim arising out of or relating to this Non-Competition Agreement shall be resolved by arbitration in accordance with the provisions of Section 10 of the Employment Agreement; provided, however, that in the event of breach or threatened breach by Executive of any provision hereof, the Company shall be entitled to seek temporary or preliminary injunctive relief or other equitable relief to which either of them may be entitled pending the outcome of any arbitration proceeding, without the posting of any bond or other security.
(b) The period of time during which the restrictions set forth in Section 2(a) hereof will be in effect will be extended by the length of time during which Executive is in breach of the terms of those provisions as finally determined by an arbitrator or any court of competent jurisdiction.
7. Successors and Assigns. This Non-Competition Agreement shall be binding upon Executive and Executives heirs, assigns and representatives and inure to the benefit of the Company and their successors and assigns, including without limitation any entity to which substantially all of the assets or the business of either of the Company are sold or transferred. The obligations of Executive are personal to Executive and shall not be assigned by Executive.
8. Severability. It is expressly agreed that if any restrictions set forth in this Non-Competition Agreement are found by any court having jurisdiction to be unreasonable because they are too broad in any respect, then and in each such case, the remaining provisions herein contained shall, nevertheless, remain effective, and this Non-Competition Agreement, or any portion hereof, shall be considered to be amended, so as to be considered reasonable and enforceable by such court, and the court shall specifically have the right to restrict the time period or the business or geographical scope of such restrictions to any portion of the time period, business or geographic areas to the extent the court deems such restriction to be necessary to cause the covenants to be enforceable and, in such event, the covenants shall be enforced to the extent so permitted and the remaining provisions shall be unaffected thereby. In such event, the parties hereto agree to execute all documents necessary to evidence such amendment so as to eliminate or modify any such unreasonable provision in order to carry out the intent of this Non-Competition Agreement insofar as possible and to render this Non-Competition Agreement enforceable in all respects as so modified. The covenants contained in this Section 8 shall be construed to extend to separate jurisdictions or sub-jurisdictions of the United States in which the Company, during the term of Executives employment, have been or are engaged in business, and to the extent that any such covenant shall be illegal and/or unenforceable with respect to any jurisdiction, said covenant shall not be affected thereby with respect to each other jurisdiction, such covenants with respect to each jurisdiction being construed as severable and independent. Any covenant on Executives part contained hereinabove, which may not be specifically enforceable, shall nevertheless, if breached, give rise to a cause of action for monetary damages. The restrictive covenant provisions of this Non-Competition Agreement shall govern
to the extent there is any conflict between their terms and the terms of any other agreement or understanding with the Company.
9. Notices. Any notice required or permitted to be given under this Non-Competition Agreement shall be in writing and be deemed given when delivered by hand or received by registered or certified mail, postage prepaid, or by nationally reorganized overnight courier service addressed to the party to receive such notice at the following address or any other address substituted therefor by notice pursuant to these provisions:
If to Executive:
William E. Saunders, Jr.
23 Scenic Point
Little Rock, Arkansas 72207
Fax: (614) 760-4047
with a copy to:
Mark Wishner
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
12010 Sunset Hills Road; Suite 900
Reston, VA 20190
Telephone: (703) 464-4808
Fax: (703) 464-4895
If to the Company:
CheckSmart Financial Company
7001 Post Road, Suite 200
Dublin , Ohio 43016
Telephone: (614) 798-5900
Fax: (614) 760-2601
Attn: Chief Executive Officer
with a copy to:
Diamond Castle Holdings
280 Park Avenue, 25th floor, East Tower
New York, New York 10017
Attn: Andrew Rush
Fax: (212) 983-1234
10. Amendment. No provision of this Non-Competition Agreement may be modified, amended, waived or discharged in any manner except by a written instrument executed by the Company and Executive.
11. Entire Agreement. This Non-Competition Agreement and the applicable provisions of Section 6.11 of the Purchase Agreement constitute the entire agreement of the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings of the parties hereto, oral or written, with respect to the subject matter hereof, however, if any portion of this Non-Competition
Agreement is determined to be unenforceable by a court of law, then solely the appropriate conflicting provisions of any other agreement binding upon Executive shall control.
12. Waiver, etc. The failure of the Company to enforce at any time any of the provisions of this Non-Competition Agreement shall not be deemed or construed to be a waiver of any such provision, nor in any way affect the validity of this Non-Competition Agreement or any provision hereof or the right of the Company to enforce thereafter each and every provision of this Non-Competition Agreement. No waiver of any breach of any of the provisions of this Non-Competition Agreement by the Company shall be effective unless set forth in a written instrument executed by the Company, and no waiver of any such breach shall be construed or deemed to be a waiver of any other or subsequent breach.
13. All issues and questions concerning the construction, validity, enforcement and interpretation of this Non-Competition Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. In furtherance of the foregoing, the internal law of the State of Delaware shall control the interpretation and construction of this Agreement (and all schedules and exhibits hereto), even though under that jurisdictions choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply.
14. Enforcement. Subject to Section 10 of the Employment Agreement, if any party shall institute legal action to enforce or interpret the terms and conditions of this Non-Competition Agreement or to collect any monies under it, venue for any such action shall be the State of Delaware. Each party irrevocably consents to the jurisdiction of the courts located in the State of Delaware for all suits or actions arising out of this Non-Competition Agreement. Each party hereto waives to the fullest extent possible, the defense of an inconvenient forum, and each agrees that a final judgment in any action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
IN WITNESS WHEREOF, the parties have caused this Non-Competition Agreement to be executed as of the day written above.
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CheckSmart Financial Company | |
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By: |
/s/ James H. Frauenberg, Sr. |
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Name: |
James H. Frauenberg, Sr. |
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Title: |
Chief Executive Officer |
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William E. Saunders, Jr. | |
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/s/ William E. Saunders, Jr. |
Exhibit D
90% of the Total Cost (no depreciation) per hour for personal aircraft as reflected in the Conklin & de Decker Aviation Information Report last published before the commencement of each calendar quarter which will apply to such calendar quarter. If such Information Report ceases to be published, the parties will substitute a comparable published report and if none is available will negotiate a rate in good faith that will comprise the factors otherwise considered in the Conklin & de Decker Information Report
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to EMPLOYMENT AGREEMENT, dated as of May 23, 2008 (this Amendment) by and between CheckSmart Financial Company, a Delaware corporation (the Company), and William E. Saunders, Jr. (Executive).
WHEREAS, the Company and Executive are parties to that certain employment agreement dated as of May 1, 2006 (the Employment Agreement);
WHEREAS, the Company and Executive desire to amend certain terms and conditions of the Employment Agreement;
WHEREAS, other than as specifically amended and set forth herein, the terms and conditions of the Employment Agreement shall remain unchanged and in full force and effect; and
WHEREAS, capitalized terms used and not otherwise defined herein shall have the meaning ascribed to them in the Employment Agreement.
NOW THEREFORE, in consideration of the premises and the mutual covenants set forth below, the parties hereby agree as follows:
1. Section 1 of the Employment Agreement is hereby deleted and replaced in its entirety with the following:
Employment. Effective as of the date hereof (the Commencement Date), the Company hereby agrees to employ Executive as the Chief Executive Officer (the CEO), and Executive hereby accepts such employment on the terms and conditions hereinafter set forth.
2. Section 2 of the Employment Agreement is hereby deleted and replaced in its entirety with the following:
Position and Duties. Executive shall serve as CEO, and shall report directly to the Companys Board of Directors. Executive shall have those powers and duties normally associated with the position of CEO of entities comparable to the Company and such other powers and duties as may be prescribed by the Company; provided that, such other powers and duties are consistent with Executives position as CEO of the Company. In fulfilling his duties, Executives principal place of employment shall be in or around Columbus, Ohio. Notwithstanding the above, Executive shall be permitted, to the extent such activities do not interfere with the performance by Executive of his duties and responsibilities hereunder, to (i) manage Executives personal, financial and legal affairs and (ii) to serve on civic or charitable boards or committees.
3. Sections 4(a) and 4(b) of the Employment Agreement are hereby deleted and replaced in its entirety with the following:
Compensation and Related Matters.
(a) Base Salary. For performance of services under this Employment Agreement, Executive shall receive a base salary of $500,000 per fiscal year (Base Salary). Executives Base Salary shall be paid in approximately equal installments in accordance with the Companys customary payroll practices. The compensation committee of the Board (Committee) shall review Executives Base Salary annually and in a manner consistent with the compensation practices and
guidelines of the Company and, in its sole discretion, may increase (but not decrease) such salary during the Term on an annual basis. If Executives Base Salary is increased by the Company, such increased Base Salary shall then constitute the Base Salary for all purposes of this Agreement as of such increase.
(b) Annual Bonus. In addition to Base Salary, Executive shall be eligible to receive an annual bonus in the amount and subject to the terms and conditions determined by the Board (the Annual Bonus). The Annual Bonus shall be paid as soon as practicable following the end of the fiscal year to which it relates.
4. A Section 4(h) shall be added to the Employment Agreement which shall read as follows:
4(h) Executive shall be entitled to be paid a retention bonus in the aggregate amount of $1,325,000, which retention bonus shall be paid as follows:
(i) Within 2 Business Days of the date hereof, and so long as Executive is employment by the Company (subject to Section 7(d) below), the Company will pay Executive $125,000;
(ii) 90 days from the date hereof, and so long as Executive is employment by the Company (subject to Section 7(d) below), the Company will pay Executive an additional $100,000;
(iii) 180 days from the date hereof, and so long as Executive is employment by the Company (subject to Section 7(d) below), the Company will pay Executive an additional $100,000;
(iv) On December 31, 2008, and so long as Executive is employment by the Company (subject to Section 7(d) below), the Company will pay Executive an additional $500,000;
(v) On June 30, 2009, and so long as Executive is employment by the Company (subject to Section 7(d) below), the Company will pay Executive an additional $250,000; and
(vi) On December 31, 2009, and so long as Executive is employment by the Company (subject to Section 7(d) below), the Company will pay Executive an additional $250,000 (the payments set forth in subsections (i)-(vi) above, collectively the Retention Bonus).
5. Sections 7(b)(i), (c)(i) and (d)(ii) of the Employment Agreement are hereby deleted and replaced in its entirety with the following:
Compensation Upon Termination. Upon the termination of Executives employment and subject to the terms set forth herein, the Company shall provide Executive with the payments and benefits set forth below. Executive acknowledges and agrees that the payments set forth in this Section 7 constitute liquidated damages for termination of his employment during the Term.
(b) Termination upon Executives Disability. If Executives employment is terminated by reason of Disability, then:
(i) Company shall pay to Executive (A) any accrued, but unpaid, Base Salary and vacation pay through the Termination Date, (B) any Annual Bonus that is determined to have otherwise been earned with respect to the fiscal year in which termination occurs (the Termination Year), payable in accordance with the Companys usual bonus payment schedule, (C) continued Base Salary and Continued Benefits (as defined below) for the
longer of (i) six months following the Termination Date or (ii) the date on which Executive becomes entitled to long-term disability benefits under the applicable plan or program of the Company, payable in accordance with the usual payroll policies of the Company, and (D) the Retention Bonus, to the extent not already paid in accordance with Section 4(h) above.
(c) Termination upon Executives Death. If Executives employment terminates during the Term due to Executives death, then:
(i) the Company shall pay to Executives beneficiary, (A) any accrued, but unpaid Base Salary and Annual Bonus through the Termination Date, (B) any accrued but unpaid vacation pay through the Termination Date, (C) a pro-rata portion of Executives Annual Bonus for the Termination Year, and (D) the Retention Bonus, to the extent not already paid in accordance with Section 4(h) above; and
(d) Termination by the Company without Cause or Resignation by Executive for Good Reason. If Executives employment is terminated by the Company without Cause or Executive resigns for Good Reason then, subject to Executives execution and effectiveness of a general release of claims in the form attached hereto as Exhibit B (the Release) and his continued compliance with the Non-Competition Agreement:
(ii) In the event that Executive is terminated without Cause or resigns for Good Reason between January 1, 2008 and December 31, 2009, the Company shall pay to Executive (A) any accrued, but unpaid, Base Salary and vacation pay through the Termination Date, payable as soon as practicable following the Termination Date, (B) any Annual Bonus that is determined to have otherwise been earned with respect to the Termination Year, payable in accordance with the Companys usual bonus payment schedule, (C) Base Salary and Continued Benefits for a period of 12 months following the Termination Date (except if such Termination Date is prior to the two-year anniversary of the Commencement Date, in which event the Base Salary and Continued Benefits shall be paid by the Company for a period of 24 months following the Termination Date), payable, in the case of Base Salary, in accordance with the usual payroll policies of the Company, (D) any Annual Bonus that is determined to have otherwise been earned with respect to the Following Year prorated for the portion of the Following Year between January 1 of the Following Year and the 12 month anniversary of the Termination Date, payable in accordance with the Companys usual bonus payment schedule, and (E) the Retention Bonus, to the extent not already paid in accordance with Section 4(h) above;
6. Additional Equity Grant. Within 45 Business Days of the date hereof, Executive shall receive, pursuant to the Plan, grants of Restricted Stock representing shares of CheckSmart Financial Holdings Corp. (the Parent) Class A Common Stock equal to an aggregate of 5% of the total equity (on a fully diluted basis) of the Parent, subject to a Restricted Stock Award Agreement, the terms and conditions of which will be negotiated between Executive and the Board in good faith, provided however, that 2.5% of the equity will be subject to customary time vesting over a period of 18 months as of the date hereof (Time Vesting Award) and 2.5% of the equity will be subject to performance based targets of the Company to be mutually agreed upon by the Board and Executive in good faith; provided, further, however, that, in any event of Change of Control (as defined in that certain Stockholders Agreement, dated as of May 1, 2006, by and among the Parent and other parties thereto (as the same shall be amended, modified or supplemented from time to time) or the bankruptcy, liquidation or dissolution of the Company, any unvested Time Vesting Award (unless previously terminated in accordance with the terms of the Plan or the Restricted Stock Award Agreement) shall fully vest immediately prior to the consummation of the Change of Control or the bankruptcy, liquidation or dissolution of the Company.
7. Arbitration. Except as provided for in the Non-Competition Agreement, if any contest or dispute arises between the parties with respect to this Employment Agreement, such contest or dispute shall be submitted to binding arbitration for resolution in Cleveland, Ohio, in accordance with the rules and procedures of the Employee Dispute Resolution Rules of the American Arbitration Association then in effect. The decision of the arbitrator shall be final and binding on both parties, and any court of competent jurisdiction may enter judgment upon the award.
8. Notice. For the purposes of this Amendment, notices, demands and all other communications provided for in this Amendment shall be as set forth in the Employment Agreement.
9. Miscellaneous. No provisions of this Amendment may be amended, modified, or waived unless such amendment or modification is agreed to in writing signed by Executive and by a duly authorized officer of the Company, and such waiver is set forth in writing and signed by the party to be charged. No waiver by either party hereto at any time of any breach by the other party hereto of any condition or provision of this Amendment to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Amendment, the Employment Agreement or the Purchase Agreement. The respective rights and obligations of the parties hereunder of this Amendment shall survive Executives termination of employment and the termination of this Amendment and the Employment Agreement to the extent necessary for the intended preservation of such rights and obligations. The validity, interpretation, construction and performance of this Amendment and all claims of action (whether in contract or tort) that may be based upon, arise out of or relate to this Amendment or the Employment Agreement, shall be governed by the laws of the State of Delaware without regard to its conflicts of law principles.
10. Validity. The invalidity or unenforceability of any provision or provisions of this Amendment shall not affect the validity or enforceability of any other provision of this Amendment or the Employment Agreement, which shall remain in full force and effect. All other terms and conditions of the Employment Agreement other than as set forth herein shall remain unchanged and in full force and effect.
11. Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
12. Entire Agreement. Except as otherwise provided for herein and any Exhibits hereto, this Amendment, the Employment Agreement and the Purchase Agreement set forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersede all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto in respect of such subject matter. Any prior agreement of the parties hereto, or between Executive and any of the Subsidiaries in respect of the subject matter contained herein is hereby terminated and cancelled. Other than any accrued Base Salary due to Executive as of the date hereof, Executive acknowledges that as of the Commencement Date, he has no claims against the Company or any of its affiliates in respect of any amounts that may be owing to him from any of the Subsidiaries.
13. Withholding. All payments hereunder shall be subject to any required withholding of Federal, state and local taxes pursuant to any applicable law or regulation.
14. Noncontravention. The Company represents that the Company is not prevented from entering into, or performing this Agreement by the terms of any law, order, rule or regulation, its bylaws or declaration of trust, or any agreement to which it is a party, other than which would not have a material adverse effect on the Companys ability to enter into or perform this Amendment.
15. Section 409A Compliance. The parties intend that any severance or other compensation under this Amendment and the Employment Agreement be paid in compliance with Section 409A of the Code such that there are no adverse tax consequences, interest, or penalties as a result of the payments. The parties agree to modify this Amendment and/or the Employment Agreement, as applicable, the timing and/or the amount of the severance to the extent necessary to comply with Section 409A.
[Signature Page to Follow]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the date first above written.
CheckSmart Financial Company |
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William E. Saunders, Jr. | |
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By: |
/s/ H. E. Lockhart |
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/s/ William E. Saunders, Jr. |
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Name: |
H. E. Lockhart |
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Title: |
Chairman |
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[Signature Page to Saunders Employment Agreement Amendment]
SECOND AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to EMPLOYMENT AGREEMENT, dated as of March 23, 2009 (this Amendment) by and between CheckSmart Financial Company, a Delaware corporation (the Company), and William E. Saunders, Jr. (Executive).
WHEREAS, the Company and Executive are parties to that certain employment agreement dated as of May 1, 2006, amended as of May 23, 2008 (the Employment Agreement);
WHEREAS, the Company and Executive desire to further amend certain terms and conditions of the Employment Agreement;
WHEREAS, other than as specifically amended and set forth herein, the terms and conditions of the Employment Agreement shall remain unchanged and in full force and effect; and
WHEREAS, capitalized terms used and not otherwise defined herein shall have the meaning ascribed to them in the Employment Agreement.
NOW THEREFORE, in consideration of the premises and the mutual covenants set forth below, the parties hereby agree as follows:
1. The last sentence of Section 2 shall be deleted in its entirety and replaced with the following:
Notwithstanding the above, Executive shall be permitted, to the extent such activities do not interfere with the performance by Executive of his duties and responsibilities hereunder, to (i) manage Executives personal, financial and legal affairs and (ii) to serve on civic or charitable boards or committees including, without limitation, Executives membership in the Young Presidents Organization (the YPO) and the performance of his obligations with respect to his membership with the YPO.
2. Section 4(b) of the Employment Agreement is hereby deleted and replaced with the following:
(b) Annual Bonus. In addition to Base Salary, Executive shall be eligible to receive an annual bonus in the amount and subject to the terms and conditions determined by the Board (the Annual Bonus). For the fiscal year of 2009, the Annual Bonus shall be equal to $200,000 which shall be earned and payable upon the Company achieving EBITDA (as defined below) of at least $55,000,000 for fiscal year 2009. The Annual Bonus shall be paid as soon as practicable following the end of the fiscal year to which it relates.
For purposes of calculating EBITDA of the Company for a particular period means the sum of:
(1) net income (or loss) of the Company for such period; plus
(2) all interest expense of the Company (net of interest income) for such period deducted in calculating such net income (loss), plus
(3) all income taxes of the Company for such period deducted in calculating such net income (loss), plus
(4) all depreciation expenses of the Company for such period deducted in calculating such net income (loss), plus
(5) all amortization expenses of the Company for such period deducted in calculating such net income (loss), plus
(6) all fees paid by the Company or any of its Subsidiaries pursuant to the Advisory Services and Monitoring Agreement (as such term is defined in that certain Stockholders Agreement, dated as of May 1, 2006, by and among CheckSmart Financial Holdings Corp. and certain other parties thereto (as the same shall be amended, modified, or supplemented from time to time)) for such period deducted in calculating such net income (loss),
in each case determined in accordance with generally accepted accounting principles in the United States of America, consistently applied.
3. Section 4(h) is hereby deleted in its entirety and replaced with the following:
4(h) Executive shall be entitled to be paid a retention bonus in the aggregate amount of $1,325,000, which retention bonus shall be paid as follows:
(i) Within 2 Business Days from the date hereof, and so long as Executive is employment by the Company (subject to Section 7(d) below), the Company will pay Executive $125,000;
(ii) 90 days from the date hereof, and so long as Executive is employment by the Company (subject to Section 7(d) below), the Company will pay Executive an additional $100,000;
(iii) 180 days from the date hereof, and so long as Executive is employment by the Company (subject to Section 7(d) below), the Company will pay Executive an additional $100,000;
(iv) On December 31, 2008, and so long as Executive is employment by the Company (subject to Section 7(d) below), the Company will pay Executive an additional $500,000;
(v) On March 31, 2009, and so long as Executive is employment by the Company (subject to Section 7(d) below), the Company will pay Executive an additional $125,000;
(vi) On June 30, 2009, and so long as Executive is employment by the Company (subject to Section 7(d) below), the Company will pay Executive an additional $125,000;
(vii) On September 30, 2009, and so long as Executive is employment by the Company (subject to Section 7(d) below), the Company will pay Executive an additional $125,000; and
(viii) On December 31, 2009, and so long as Executive is employment by the Company (subject to Section 7(d) below), the Company will pay Executive an additional $125,000 (the payments set forth in subsections (i)-(viii) above, collectively the Retention Bonus).
4. Arbitration. Except as provided for in the Non-Competition Agreement, if any contest or dispute arises between the parties with respect to this Employment Agreement, such contest or dispute shall be submitted to binding arbitration for resolution in Cleveland, Ohio, in accordance with the
rules and procedures of the Employee Dispute Resolution Rules of the American Arbitration Association then in effect. The decision of the arbitrator shall be final and binding on both parties, and any court of competent jurisdiction may enter judgment upon the award.
5. Notice. For the purposes of this Amendment, notices, demands and all other communications provided for in this Amendment shall be as set forth in the Employment Agreement.
6. Miscellaneous. No provisions of this Amendment may be amended, modified, or waived unless such amendment or modification is agreed to in writing signed by Executive and by a duly authorized officer of the Company, and such waiver is set forth in writing and signed by the party to be charged. No waiver by either party hereto at any time of any breach by the other party hereto of any condition or provision of this Amendment to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Amendment, the Employment Agreement or the Purchase Agreement. The respective rights and obligations of the parties hereunder of this Amendment shall survive Executives termination of employment and the termination of this Amendment and the Employment Agreement to the extent necessary for the intended preservation of such rights and obligations. The validity, interpretation, construction and performance of this Amendment and all claims of action (whether in contract or tort) that may be based upon, arise out of or relate to this Amendment or the Employment Agreement, shall be governed by the laws of the State of Delaware without regard to its conflicts of law principles.
7. Validity. The invalidity or unenforceability of any provision or provisions of this Amendment shall not affect the validity or enforceability of any other provision of this Amendment or the Employment Agreement, which shall remain in full force and effect. All other terms and conditions of the Employment Agreement other than as set forth herein shall remain unchanged and in full force and effect.
8. Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
9. Entire Agreement. Except as otherwise provided for herein and any Exhibits hereto, this Amendment, the Employment Agreement and the Purchase Agreement set forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersede all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto in respect of such subject matter. Any prior agreement of the parties hereto, or between Executive and any of the Subsidiaries in respect of the subject matter contained herein is hereby terminated and cancelled. Other than any accrued Base Salary due to Executive as of the date hereof, Executive acknowledges that as of the Commencement Date, he has no claims against the Company or any of its affiliates in respect of any amounts that may be owing to him from any of the Subsidiaries.
10. Withholding. All payments hereunder shall be subject to any required withholding of Federal, state and local taxes pursuant to any applicable law or regulation.
11. Noncontravention. The Company represents that the Company is not prevented from entering into, or performing this Agreement by the terms of any law, order, rule or regulation, its by-laws or declaration of trust, or any agreement to which it is a party, other than which would not have a material adverse effect on the Companys ability to enter into or perform this Amendment.
12. Section 409A Compliance. The parties intend that any severance or other compensation under this Amendment and the Employment Agreement be paid in compliance with Section 409A of the Code such that there are no adverse tax consequences, interest, or penalties as a result of the payments. The parties agree to modify this Amendment and/or the Employment Agreement, as applicable, the timing and/or the amount of the severance to the extent necessary to comply with Section 409A.
[Signature Page to Follow]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written.
CheckSmart Financial Company |
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William E. Saunders, Jr. |
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By: |
/s/ H. Eugene Lockhart |
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/s/ William E. Saunders, Jr. | |
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Name: |
H. Eugene Lockhart |
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Title: |
Chairman |
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[Signature Page to Saunders Employment Agreement Amendment]
FOURTH AMENDMENT TO EMPLOYMENT AGREEMENT
This Fourth Amendment to EMPLOYMENT AGREEMENT, dated as of January 1, 2011 (this Amendment), is by and between CheckSmart Financial Company, a Delaware corporation (the Company), and William E. Saunders, Jr. (Executive).
WHEREAS, the Company and Executive are parties to that certain employment agreement, dated as of May 1, 2006, amended as of May 23, 2008 and further amended as of March 23, 2009 (the Second Amendment) and September 15, 2009 (as amended, the Employment Agreement);
WHEREAS, the Company and Executive desire to further amend certain terms and conditions of the Employment Agreement;
WHEREAS, other than as specifically amended and set forth herein, the terms and conditions of the Employment Agreement shall remain unchanged and in full force and effect; and
WHEREAS, capitalized terms used and not otherwise defined herein shall have the meaning ascribed to them in the Employment Agreement.
NOW THEREFORE, in consideration of the premises and the mutual covenants set forth below, the parties hereby agree as follows:
1. The last sentence of Section 2 shall be deleted in its entirety and replaced with the following:
Notwithstanding the above, Executive shall be permitted, to the extent such activities do not interfere with the performance by Executive of his duties and responsibilities hereunder, to (i) manage Executives personal, financial and legal affairs, (ii) to serve on civic or charitable boards or committees, (iii) to serve as a member of the Young Presidents Organization (the YPO) and to perform his obligations with respect to his membership with the YPO with membership dues and related expenses in connection with these obligations to be paid for by the Company; and (iv) to serve on the board of directors of Insight Card Services, LLC (Insight), to actively participate in the growth strategy of Insight and to own up to 7.5% of Insights common stock.
2. Section 4(a) of the Employment Agreement is hereby deleted in its entirety and replaced with the following:
(a) Base Salary. For performance of services under this Employment Agreement, Executive shall receive a base salary of (i) $325,000 for the fiscal years of 2006, 2007 and 2008, (ii) $500,000 for the fiscal year of 2009 and 2010 and (iii) $600,000 for the fiscal year of 2011, to the extent the Term is renewed in accordance with Section 3 of this Employment Agreement and for any subsequent fiscal year in the Term (for each applicable fiscal year of the Term, Base Salary). Executives Base Salary shall be paid in approximately equal installments in accordance with the Companys customary payroll practices. The compensation committee of the Board (Committee) shall review Executives Base Salary annually and in a manner consistent with the compensation practices and guidelines of the Company and, in its sole discretion, may increase (but not decrease) such salary during the Term on an annual basis. If Executives Base Salary is increased by the Company, such increased Base Salary shall then constitute the Base Salary for all purposes of this Agreement as of such increase.
3. Section 4(b) of the Employment Agreement is hereby deleted and replaced with the following:
(b) Annual Bonus. In addition to Base Salary, Executive shall be eligible to receive an annual bonus (the Annual Bonus) in the amounts and with respect to the fiscal years set forth in Schedule 1 hereto, subject to terms and conditions determined by the Board, including with respect to the achievement of the Companys financial budget goals for the fiscal year to which it relates as determined by the Board. The Annual Bonus shall be paid in the fiscal year following the end of the applicable fiscal year in which such bonus was earned.
4. Section 4(f) is hereby deleted in its entirety.
5. Section 4(g)(iv) is hereby deleted in its entirety and replaced with the following:
4(g)(iv) In addition to all business related uses of any aircraft owned or leased by Company, personal use of any such aircraft up to a direct operating cost cap of Twenty Five Thousand Dollars ($25,000.00); provided, however, that Employees personal use of the Company-owned or leased aircraft shall be in accordance with the Companys policy. As part of such personal use, Executive may designate such number of additional passengers on such Company-owned or leased aircraft as seating permits,
6. Section 4(h) is hereby deleted in its entirety and replaced with the following:
4(h) Executive shall be entitled to be paid a retention bonus in the aggregate amounts for each fiscal year set forth in Schedules II-A, II-B and II-C hereto.
7. A new Section 7(d)(iii) and 7(d)(iv) shall be added as follows:
7(d)(iii) in the event that Executive is terminated without Cause or resigns for Good Reason at any time after December 31, 2009, the Company shall pay to Executive (A) any accrued, but unpaid, Base Salary and vacation pay through the Termination Date, payable as soon as practicable in accordance with the usual payroll practices of the Company, (B) any Annual Bonus that is determined to have otherwise been earned with respect to the Termination Year, payable in accordance with the Companys usual bonus payment schedule, (C) Base Salary and Continued Benefits for a period of 12 months following the Termination Date; payable, in the case of Base Salary, in accordance with the usual payroll policies of the Company, and (D) the accrued but unpaid Retention Bonus through the date of termination, to the extent not already paid in accordance with Section 4(f) above, payable within thirty (30) days of the Termination Date.
7(d)(iv)As a condition precedent to receiving any payments under Section 7(d) (other than those amounts already accrued prior to the Termination Date, which shall be payable on the date of termination), Executive shall have executed, within twenty-one (21) days, or if required for an effective release, forty-five (45) days, the Release, which may be updated by the Company from time to time to reflect changes in law, and the seven (7) day revocation period of such Release shall have expired without revocation. Subject to Section 19 and the execution of the Release pursuant to this Section 7(d)(iv), all payments under Section 7(d) shall be payable as described above; provided, that the first payment shall be made on the sixtieth (60th) day after the Termination Date (or such later date as required
by the terms hereof), and such first payment shall include payment of any amounts that would otherwise be due prior thereto.
8. A new Section 7(f) shall be added as follows:
7(f) Except as otherwise specifically set forth herein, any payments due to Executive under this Section 7 shall be paid to Executive as follows: (i) any payment of accrued but unpaid Base Salary and vacation pay shall be paid as soon as practicable in accordance with the usual payroll practices of the Company; (ii) any Annual Bonus shall be payable in accordance with the Companys usual bonus payment schedule; (iii) any continuing payment of Base Salary and Continued Benefits for any period of time following the Termination Date shall be paid in the case of Base Salary, in accordance with the usual payroll policies of the Company; and (iv) any Retention Bonus shall be paid within thirty (30) days of the Termination Date.
9. Section 19 is hereby deleted in its entirety and replaced with the following:
19. Section 409A.
(a) The intent of the parties is that payments and benefit under this Agreement comply with or be exempt from Code Section 409A and the regulations and guidance promulgated thereunder (collectively, Section 409A) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. If the Executive notifies the Company that the Executive has received advice of tax counsel of a national reputation with expertise in Section 409A that any provision of this Agreement (or of any award of compensation, including equity compensation or benefits) would cause the Executive to incur any additional tax or interest under Section 409A (with specificity as to the reason therefor) or the Company independently makes such determination, the Company shall, after consulting with the Executive, reform such provision to try to comply with Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with Section 409A. To the extent that any provision hereof is modified in order to comply with or be exempt from Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to the Executive and the Company of the applicable provision without violating the provisions of Section 409A.
(b) A termination of employment shall not be deemed to have occurred for purposes of this Agreement providing for the payment of any amounts or benefits that are considered nonqualified deferred compensation under Section 409A upon or following a termination of employment, unless such termination is also a separation from service within the meaning of Section 409A and the payment thereof prior to a separation from service would violate Section 409A. As permitted by Treasury Regulation 1.409A-1(h)(1)(ii), 49% shall be substituted in lieu of 20% for the average level of bona fide services performed during the immediately preceding thirty-six (36) month period in order to constitute a separation from service. For purposes of any such provision of this Agreement relating to any such payments or benefits, references to a termination, termination of employment or like terms shall mean separation from service. If the Executive is deemed on the date of termination to be a specified employee within the meaning of that term under Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered nonqualified deferred compensation under Section 409A payable on account of a separation from service, such payment or benefit shall be made or provided on the first business day following the date which is the earlier of (A) the expiration of the six (6) month period measured from the date of such separation from service of the Executive, and (B) the date of the Executives death (the Delay Period). Upon the expiration of the Delay Period, all
payments and benefits delayed pursuant to this Section 19 (whether they would have otherwise been payable in a single lump sum or in installments in the absence of such delay) shall be paid or reimbursed to the Executive in a lump sum with interest at the prime rate as published in the Wall Street Journal on the first business day following the Delay Period, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.
(c) (i) All expenses or other reimbursements as provided herein shall be payable in accordance with the Companys policies in effect from time to time, but in any event shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by the Executive; (ii) no such reimbursement or expenses eligible for reimbursement in any taxable year shall in any way affect the expenses eligible for reimbursement in any other taxable year; provided, that this clause (ii) shall not be violated without regard to expenses reimbursed under any arrangement covered by Code Section 105(b) solely because such expenses are subject to a limit related to the period the arrangement is in effect; and (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchanged for another benefit.
(d) For purposes of Section 409A, the Executives right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments. Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., payment shall be made within thirty (30) days following the date of termination), the actual date of payment within the specified period shall be within the sole discretion of the Company.
10. Notice. For the purposes of this Amendment, notices, demands and all other communications provided for in this Amendment shall be as set forth in the Employment Agreement.
11. Miscellaneous. No provisions of this Amendment may be amended, modified, or waived unless such amendment or modification is agreed to in writing signed by Executive and by a duly authorized officer of the Company (other than Executive), and such waiver is set forth in writing and signed by the party to be charged. No waiver by either party hereto at any time of any breach by the other party hereto of any condition or provision of this Amendment to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Amendment or the Employment Agreement. The respective rights and obligations of the parties hereunder of this Amendment shall survive Executives termination of employment and the termination of this Amendment and the Employment Agreement to the extent necessary for the intended preservation of such rights and obligations. The validity, interpretation, construction and performance of this Amendment and all claims of action (whether in contract or tort) that may be based upon, arise out of or relate to this Amendment or the Employment Agreement, shall be governed by the laws of the State of Delaware without regard to its conflicts of law principles.
12. Validity. The invalidity or unenforceability of any provision or provisions of this Amendment shall not affect the validity or enforceability of any other provision of this Amendment or the Employment Agreement, which shall remain in full force and effect. All other terms and conditions of the Employment Agreement other than as set forth herein shall remain unchanged and in full force and effect.
13. Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
14. Entire Agreement.
(i) Except as otherwise provided for herein and any Exhibits hereto, this Amendment and the Employment Agreement set forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersede all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto in respect of such subject matter. Any prior agreement of the parties hereto, or between Executive and any of the Subsidiaries in respect of the subject matter contained herein is hereby terminated and cancelled.
(ii) Other than any accrued Base Salary due to Executive as of the date hereof, Executive acknowledges that as of the date of this Amendment, he has no claims against the Company or any of its affiliates in respect of any amounts that may be owing to him from any of the Subsidiaries.
15. Withholding. All payments hereunder shall be subject to any required withholding of Federal, state and local taxes pursuant to any applicable law or regulation.
16. Section 409A Compliance. The parties intend that any severance or other compensation under this Amendment and the Employment Agreement be paid in compliance with Section 409A of the Code such that there are no adverse tax consequences, interest, or penalties as a result of the payments. The parties agree to modify this Amendment and/or the Employment Agreement, as applicable, the timing and/or the amount of the severance to the extent necessary to comply with Section 409A.
17. Effectiveness of Employment Agreement. Except as modified by this Amendment, all the terms of the Employment Agreement shall remain unchanged and in full force and effect.
[Signature Page to Follow]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written.
CheckSmart Financial Company |
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William E. Saunders, Jr. | |
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By: |
/s/ H. Eugene Lockhart |
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/s/ William E. Saunders, Jr. |
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Name: |
H. Eugene Lockhart |
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Title: |
Chairman |
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[Signature Page to Saunders Employment Agreement Amendment]
Schedule I
Annual Bonus
Fiscal Year |
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Amount of Annual Bonus |
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2006 |
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$ |
125,000 |
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2007 |
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$ |
125,000 |
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2008 |
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$ |
125,000 |
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2009 |
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$ |
275,000 |
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2010 |
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$ |
325,000 |
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2011 |
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$ |
300,000 |
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Any subsequent fiscal year in the Term, to the extent the Term is renewed in accordance with Section 3 of this Employment Agreement |
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$ |
300,000 |
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For purposes of calculating EBITDA of the Company for a particular period means the sum of:
(1) net income (or loss) of the Company for such period; plus
(2) all interest expense of the Company (net of interest income) for such period deducted in calculating such net income (loss), plus
(3) all income taxes of the Company for such period deducted in calculating such net income (loss), plus
(4) all depreciation expenses of the Company for such period deducted in calculating such net income (loss), plus
(5) all amortization expenses of the Company for such period deducted in calculating such net income (loss), plus
(6) all fees paid by the Company or any of its Subsidiaries pursuant to the Advisory Services and Monitoring Agreement (as such term is defined in that certain Stockholders Agreement, dated as of May 1, 2006, by and among CheckSmart Financial Holdings Corp. and certain other parties thereto (as the same shall be amended, modified, or supplemented from time to time)) for such period deducted in calculating such net income (loss),
in each case determined in accordance with generally accepted accounting principles in the United States of America, consistently applied.
Schedule II-A
Retention Bonus from July 1, 2008 to March 31, 2009
The retention bonus equals an aggregate amount of $1,325,000 from July 1, 2008 to March 31, 2009 (the 2008/2009 Retention Bonus). The 2008/2009 Retention Bonus shall be earned and paid as follows:
(i) Within 2 Business Days of the date hereof, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), the Company will pay Executive $125,000;
(ii) 90 days from the date hereof, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), the Company will pay Executive an additional $100,000;
(iii) 180 days from the date hereof, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), the Company will pay Executive an additional $100,000;
(iv) On December 31, 2008, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), the Company will pay Executive an additional $500,000;
(v) On March 31, 2009, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), the Company will pay Executive an additional $125,000;
(vi) On June 30, 2009, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), the Company will pay Executive an additional $125,000;
(vii) On September 30, 2009, but employed Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), the Company will pay Executive an additional $125,000; and
(viii) On December 31, 2009, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), the Company will pay Executive an additional $125,000 (it being understood that the payments set forth in subsections (i)-(viii) above, to the extent accrued and payable, comprise the 2008/2009 Retention Bonus).
Schedule II-B
Retention Bonus for the Fiscal Year of 2010
The retention bonus equals an the aggregate amount of $500,000 for the fiscal year of 2010 (the 2010 Retention Bonus). The 2010 Retention Bonus shall be earned and paid as follows:
(i) On March 31, 2010, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), (A) the Company will pay Executive $62,500 and (B) Executive will be eligible to receive an additional $62,500 upon the achievement of each of the milestones set forth below;
(ii) On June 30, 2010, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), (A) the Company will pay Executive $62,500 and (B) Executive will be eligible to receive an additional $62,500 upon the achievement of each of the milestones set forth below;
(iii) On September 30, 2010, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), (A) the Company will pay Executive $62,500 and (B) Executive will be eligible to receive an additional $62,500 upon the achievement of each of the milestones set forth below; and
(iv) On December 31, 2010, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), (A) the Company will pay Executive $62,500 and (B) Executive will be eligible to receive an additional $62,500 upon the achievement of each of the milestones set forth below (it being understood that the payments set forth in subsections (i)-(iv) above, to the extent accrued and payable, comprise the 2010 Retention Bonus).
Milestones for the Fiscal year of 2010
MEMORANDUM
TO: |
TED SAUNDERS, CEO |
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FROM: |
H. EUGENE LOCKHART, CHAIRMAN |
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SUBJECT: |
2010 JOB RESPONSIBILITIES AND PERFORMANCE GOALS |
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DATE: |
2/1/2011 |
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CC: |
LEE WRIGHT, DIRECTOR |
Pursuant to the offer to amend and extend your employment contract for the fiscal year 2010, we need to establish, discuss and memorialize my expectations for your role and specific qualitative job duties to be reviewed on an ongoing basis and upon which a portion of your retention compensation will be based.
Job Duties:
As CEO of the Company, you are to lead by example in all facets your professional life. Your decision making and behavior should rise above all and set example for every employee. In your position, your most essential role is to strategically evaluate the path Checksmart should follow to reduce its exposure to the payday loan by developing new products to offer in internally and partnering with other providers of financial services. A second, yet important task is to represent the Company in the legislative arena and community.
Specific 2010 Goals:
· Excellence in conceptual development of new products to replace the payday loan
· In pursuit of new products, work to form strategic relationships with other financial service providers to market their financial products, specifically federally chartered banks and thrifts.
· Represent the Company in the public eye, with the utmost character
The overall success of Checksmart is dependent upon your continued performance as CEO. You have absolutely risen to the challenge in the past 18 months and appreciate what you do to make the Company perform. I look forward to working with you to achieve all our goals in 2010.
Sincerely,
H. Eugene Lockhart, Chairman
Schedule II-C
Retention Bonus for the Fiscal Year of 2011 and any Subsequent Fiscal Year in the Term
The retention bonus equals an aggregate amount of $400,000 for the fiscal year of 2011 (the 2011 Retention Bonus) and for any subsequent fiscal year in the Term, to the extent the Term is renewed in accordance with Section 3 of this Employment Agreement. The 2011 Retention Bonus shall be earned and paid as follows:
(i) On March 31, 2011, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), Executive will be eligible to receive $100,000 upon the achievement of each of the milestones set forth below;
(ii) On June 30, 2011, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), Executive will be eligible to receive $100,000 upon the achievement of each of the milestones set forth below;
(iii) On September 30, 2011, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), Executive will be eligible to receive $100,000 upon the achievement of each of the milestones set forth below; and
(iv) On December 31, 2011, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), Executive will be eligible to receive $100,000 upon the achievement of each of the milestones set forth below (it being understood that the payments set forth in subsections (i)-(iv) above, to the extent accrued and payable, comprise the 2011 Retention Bonus).
Milestones for the Fiscal Year of 2011 and any Subsequent Fiscal Year in the Term
MEMORANDUM
TO: |
TED SAUNDERS, CEO |
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FROM: |
H. EUGENE LOCKHART, CHAIRMAN |
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SUBJECT: |
2011 JOB RESPONSIBILITIES AND PERFORMANCE GOALS |
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DATE: |
1/31/2011 |
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CC: |
LEE WRIGHT, DIRECTOR |
Pursuant to the offer to amend and extend your employment contract for the fiscal year 2011, we need to establish, discuss and memorialize my expectations for your role and specific qualitative job duties to be reviewed on an ongoing basis and upon which a portion of your retention compensation will be based.
Job Duties:
As CEO of the Company, you are to lead by example in all facets your professional life. Your decision making and behavior should rise above all and set example for every employee. In your position, your most essential role is to strategically evaluate the path Checksmart should follow to reduce its exposure to the payday loan by developing new products to offer internally and by partnering with other providers of financial services. Part of reducing that exposure will be to grow the business through acquisitions that reduce the companys exposure to any one legislative body and/or statute. A second, yet important task is to endeavour to reposition Checksmart Financial as the leading financial services retailer to our target customer.
Specific 2011 Goals:
· Continue to oversee and lead the conceptual development of new products to replace the payday loan
· In pursuit of new products, work to form strategic relationships with other financial service providers to market their financial products.
· Represent the Company in the public eye, with the utmost character. This includes the capital markets as well as state and federal political arenas.
· Identify, negotiate and oversee in the execution of diversifying acquisition opportunities
· Oversee and lead the refinancing of the companys debt
· Drive the company to meet the 2011 financial budget
The overall success of Checksmart is dependent upon your continued performance as CEO. You have absolutely risen to the challenge in the past 30 months and appreciate what you do to make the Company perform. I look forward to working with you to achieve all our goals in 2011.
Exhibit 10.5
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of May 1, 2006 (this Employment Agreement) by and between CheckSmart Financial Company, a Delaware corporation (the Company), and Kyle Hanson (Executive).
WHEREAS, the Company wishes to employ Executive and Executive wishes to be employed by, and make his services available to, the Company on the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the premises and the mutual covenants set forth below, the parties hereby agree as follows:
1. Employment. Effective as of the date hereof (the Commencement Date), the Company hereby agrees to employ Executive as the Director of Store Operations, and Executive hereby accepts such employment on the terms and conditions hereinafter set forth.
2. Position and Duties. Executive shall serve as Director of Store Operations of the Company, and shall report directly to the Chief Executive Officer of the Company. Executive shall have those powers and duties as determined by the Chief Executive Officer or the Companys Board of Directors (the Board); provided that, such other powers and duties are consistent with Executives position as Director of Store Operations of the Company. Notwithstanding the above, Executive shall be permitted, to the extent such activities do not interfere with the performance by Executive of his duties and responsibilities hereunder, to (i) manage Executives personal, financial and legal affairs and (ii) to serve on civic or charitable boards or committees.
3. Term. The term of employment of Executive under this Employment Agreement shall commence on the Commencement Date and shall continue in full force and effect until December 31, 2009 unless terminated earlier as provided herein (including any renewals hereunder, the Term); provided, however, that unless the Board or Executive provides the other with written notice of termination of this Employment Agreement at least 90 days prior to any date on which this Employment Agreement would otherwise expire or as otherwise set forth herein, the term of employment hereunder shall be automatically extended for an additional period of one fiscal year from each such date.
4. Compensation and Related Matters.
(a) Base Salary. For performance of services under this Employment Agreement, Executive shall receive a base salary of $193,009 per fiscal year (Base Salary). Executives Base Salary shall be paid in approximately equal installments in accordance with the Companys customary payroll practices. The compensation committee of the Board (Committee) shall review Executives Base Salary annually and in a manner consistent with the compensation practices and guidelines of the Company and, in its sole discretion, may increase (but not decrease) such salary during the Term on an annual basis. If Executives Base Salary is increased by the Company, such increased Base Salary shall then constitute the Base Salary for all purposes of this Agreement as of such increase.
(b) Annual Bonus. In addition to Base Salary, Executive is eligible to receive an annual bonus with a target amount of up to $40,000 upon the achievement of annually established performance targets (the Annual Bonus). Such performance targets shall be established by the Board. The Committee may increase the Annual Bonus in the event that the annually established performance targets are exceeded and the Committee determines, in its sole discretion, that such an increase is merited.
The Annual Bonus shall be paid as soon as practicable following the end of the fiscal year to which it relates.
(c) Stock Options. Promptly following the execution and delivery of this Employment Agreement, Executive shall receive, pursuant to the CheckSmart Financial Holdings Corp. 2006 Management Equity Incentive Plan (the Plan), grants of Stock Options (Options) representing the right to purchase a number of shares of CheckSmart Financial Holdings Corp. Class A Common Stock as determined by the Board and on the terms and subject to the conditions set forth in the Stock Option Grant Agreement attached hereto as Exhibit A (the Option Agreement).
(d) Expenses. The Company shall reimburse Executive for all reasonable business expenses upon the presentation of receipts in accordance with the Companys policies and procedures now in force or as such policies and procedures may be modified with respect to all senior executive officers of the Company.
(e) Benefit Plans and Perquisites. Executive shall be entitled to participate in and be covered under all employee benefit plans or programs maintained by the Company from time to time for the benefit of its senior executives including, without limitation, 401(k), vacation and medical.
(f) Continuation of Benefits. Following the coverage termination date under the Companys group medical, life and long-term disability insurance plans, Executive, his spouse and his dependants shall be entitled to continuation of coverage pursuant to any statutory rights Executive may then have for such continuation coverage (whether under part VI of Subtitle B of Title I of the Executive Retirement Income Security Act of 1974, as amended, or Section 4980B of the Internal Revenue Code of 1986, as amended (together, COBRA), or otherwise). During the time periods that Executive is entitled to continued payment of his Base Salary pursuant to Section 7 herein, the Company shall pay or reimburse Executive for any premium for such continuation coverage to the extent such amount exceeds the premium which Executive would have had to pay for coverage under such plans if he had remained an active employee. Such continuation coverage, whether provided at the Companys or Executives expense, shall be provided in accordance with applicable law and the terms of the plans as they may be amended from time to time and shall be afforded no longer than the period provided by law and only to the extent Executive complies with all conditions of such continuation coverage on a timely basis.
5. Termination. Executives employment hereunder may be terminated upon the following events:
(a) Death. Executives employment hereunder shall terminate upon his death.
(b) Disability. Executives employment may be terminated if, as a result of Executives incapacity due to physical or mental illness, Executive is unable to perform his duties for 180 consecutive days and, within 30 days after a Notice of Termination (as defined below), which Notice of Termination may not be given until the expiration of such 180 consecutive day period, is given to Executive, Executive has not returned to work (Disability).
(c) Cause. The Company shall have the right to terminate Executives employment for Cause. Cause shall mean:
(i) Executives material breach of this Employment Agreement and Executives failure to cure such breach within 20 days following written notice from the Board or the CEO to Executive of such breach;
(ii) Executives failure or refusal to comply, on a timely basis, with any lawful direction or instruction of the Board or the CEO;
(iii) Executives gross negligence or willful misconduct in the performance of his duties as an employee of the Company;
(iv) Executives commission of fraud, embezzlement, misappropriation of funds, breach of fiduciary duty or act of dishonesty against the Company;
(v) conviction of Executive of a felony or entry by Executive of a plea of nolo contendre or a plea of guilty under an indictment to a felony; or
(vi) the habitual drug addiction or intoxication of Executive.
(d) Good Reason. Executive may resign for Good Reason within 30 days after Executive has actual knowledge of the occurrence, without the written consent of Executive, of one of the following events:
(i) a reduction in Executives Base Salary, or non-timely payment of Base Salary or earned Annual Bonus not cured by the Company within five business days;
(ii) a material diminution in Executives duties or responsibilities not cured by the Company within 20 days after written notice to the Company; or
(iii) a requirement by the Company that Executive be based in an office that is located more than 20 miles from Executives principal place of employment as of the Commencement Date.
(e) Without Cause. The Company shall have the right to terminate Executives employment hereunder without Cause by providing Executive with a Notice of Termination.
6. Termination Procedure.
(a) Notice of Termination. Any termination of Executives employment by the Company or resignation by Executive (other than termination by reason of death) shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 11. For purposes of this Agreement, a Notice of Termination shall mean a notice which shall indicate the specific termination provision in this Employment Agreement relied upon.
(b) Termination Date. Termination Date shall mean (i) if Executives employment is terminated by his death, the date of his death, (ii) if Executives employment is terminated for Disability, 30 days after Notice of Termination, and (iii) if Executives employment is terminated for any other reason, the date on which a Notice of Termination is given or any later date (within 30 days after the giving of such notice) set forth in such Notice of Termination.
7. Compensation Upon Termination. Upon the termination of Executives employment and subject to the terms set forth herein, the Company shall provide Executive with the payments and benefits set forth below. Executive acknowledges and agrees that the payments set forth in this Section 7 constitute liquidated damages for termination of his employment during the Term.
(a) Non-Renewal by the Company. If the Company does not renew Executives employment in accordance with Section 3 above, Executive shall be entitled to receive his Base Salary and Continued Benefits (as defined below) for a period of 90 days following the expiration of the Term (such 90-day period, the Non-Renewal Tail Period).
(b) Termination upon Executives Disability. If Executives employment is terminated by reason of Disability, then:
(i) Company shall pay to Executive (A) any accrued, but unpaid, Base Salary and vacation pay through the Termination Date, (B) any Annual Bonus that is determined to have otherwise been earned with respect to the fiscal year in which termination occurs (the Termination Year), payable in accordance with the Companys usual bonus payment schedule, and (C) continued Base Salary and Continued Benefits (as defined below) for the longer of (i) six months or (ii) the date on which Executive becomes entitled to long-term disability benefits under the applicable plan or program of the Company, payable in accordance with the usual payroll policies of the Company.
(ii) Continued Benefits means, for the continued benefit of Executive, his spouse and eligible dependents following the Termination Date the medical, hospitalization, dental and life insurance programs of the Company in which Executive, his spouse and his eligible dependents were participating on the Termination Date.
(c) Termination upon Executives Death. If Executives employment terminates during the Term due to Executives death, then:
(i) the Company shall pay to Executives beneficiary, (A) any accrued, but unpaid Base Salary and Annual Bonus through the Termination Date, (B) any accrued but unpaid vacation pay through the Termination Date, and (C) a pro-rata portion of Executives Annual Bonus for the Termination Year; and
(ii) the Company shall provide Executives spouse and dependents with Continued Benefits for 12 months.
(d) Termination by the Company without Cause or resignation by Executive for Good Reason. If Executives employment is terminated by the Company without Cause or Executive resigns for Good Reason then, subject to Executives execution and effectiveness of a general release of claims in the form attached hereto as Exhibit B (the Release) and his continued compliance with the Non-Competition Agreement:
(i) In the event that Executive is terminated without Cause or resigns for Good Reason at any time between the Commencement Date and December 31, 2006, the Company shall pay Executive (A) any accrued, but unpaid, Base Salary and vacation pay through the Termination Date, payable as soon as practicable following the Termination Date, (B) any Annual Bonus that is determined to have otherwise been earned with respect to the Termination Year and the fiscal year following the Termination Year (the Following Year), payable in accordance with the Companys usual bonus payment schedule, and (C) Base Salary and Continued Benefits from the Termination Date through December 31, 2007, payable, in the case of Base Salary, in accordance with the usual payroll policies of the Company;
(ii) In the event that Executive is terminated without Cause or resigns for Good Reason between January 1, 2007 and December 31, 2008, the Company shall
pay to Executive (A) any accrued, but unpaid, Base Salary and vacation pay through the Termination Date, payable as soon as practicable following the Termination Date, (B) any Annual Bonus that is determined to have otherwise been earned with respect to the Termination Year, payable in accordance with the Companys usual bonus payment schedule, (C) Base Salary and Continued Benefits for a period of 12 months following the Termination Date, payable, in the case of Base Salary, in accordance with the usual payroll policies of the Company, and (D) any Annual Bonus that is determined to have otherwise been earned with respect to the Following Year prorated for the portion of the Following Year between January 1 of the Following Year and the 12 month anniversary of the Termination Date, payable in accordance with the Companys usual bonus payment schedule;
(iii) In the event that Executive is terminated without Cause or resigns for Good Reason at any time after December 31, 2008, the Company shall pay to Executive (A) any accrued, but unpaid, Base Salary and vacation pay through the Termination Date, payable as soon as practicable following the Termination Date, (B) any Annual Bonus that is determined to have otherwise been earned with respect to the Termination Year, payable in accordance with the Companys usual bonus payment schedule, and (C) Base Salary and Continued Benefits for the longer of (i) the Termination Date through December 31 of the Termination Year or (ii) 90 days; payable, in the case of Base Salary, in accordance with the usual payroll policies of the Company.
(e) Termination by the Company for Cause or by Executive without Good Reason.
(i) If Executives employment is terminated by the Company for Cause or Executive resigns other than for Good Reason then the Company shall pay Executive his accrued, but unpaid Base Salary and Annual Bonus, and any accrued but unpaid vacation pay, through the Termination Date as soon as practicable following the Termination Date.
8. Confidentiality, Non-Compete, Non-Solicit/Hire and Intellectual Property Agreement. Simultaneous with the execution and delivery of this Employment Agreement, the Company and Executive shall execute and deliver the non-competition agreement (the Non-Competition Agreement) attached hereto as Exhibit C and incorporated herein by reference. The Non-Competition Agreement shall survive any termination of this Employment Agreement in accordance with the terms of the Non-Competition Agreement.
9. Indemnification. Executive shall be entitled to such indemnification under the terms of the Companys By-Laws, Certificate of Incorporation and such other liability insurance as the Company may purchase for its Board members and senior officers from time to time.
10. Arbitration. Except as provided for in the Non-Competition Agreement, if any contest or dispute arises between the parties with respect to this Employment Agreement, such contest or dispute shall be submitted to binding arbitration for resolution in the City of Cleveland, Ohio, in accordance with the rules and procedures of the Employee Dispute Resolution Rules of the American Arbitration Association then in effect. The decision of the arbitrator shall be final and binding on both parties, and any court of competent jurisdiction may enter judgment upon the award.
11. Notice. For the purposes of this Employment Agreement, notices, demands and all other communications provided for in this Employment Agreement shall be in writing and shall be deemed to have been duly given when delivered either personally or by United States certified or registered mail, return receipt requested, postage prepaid, addressed as follows:
If to Executive:
Kyle Hanson
54 West Short St
Worthington, OH 43085
with a copy to:
Mark Wishner
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
12010 Sunset Hills Road; Suite 900
Reston, VA 20190
Telephone: (703) 464-4808
Fax: (703) 464-4895
If to the Company:
CheckSmart Financial Company
7001 Post Road, Suite 200
Dublin, Ohio 43016
Telephone: (614) 798-5900
Fax: (614) 760-2601
with a copy to:
Diamond Castle Holdings
280 Park Avenue, 25th floor, East Tower
New York, New York 10017
Attn: Andrew Rush
Fax: (212) 983-1234
or to such other address as any party may have furnished to the others in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
12. Miscellaneous. No provisions of this Employment Agreement may be amended, modified, or waived unless such amendment or modification is agreed to in writing signed by Executive and by a duly authorized officer of the Company, and such waiver is set forth in writing and signed by the party to be charged. No waiver by either party hereto at any time of any breach by the other party hereto of any condition or provision of this Employment Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Employment Agreement or the Purchase Agreement. The respective rights and obligations of the parties hereunder of this Employment Agreement shall survive Executives termination of employment and the termination of this Employment Agreement to the extent necessary for the intended preservation of such rights and obligations. The validity, interpretation, construction and performance of this Employment Agreement and all claims of action (whether in contract or tort) that may be based upon, arise out of or relate to this Employment Agreement, shall be governed by the laws of the State of Delaware without regard to its conflicts of law principles.
13. Validity. The invalidity or unenforceability of any provision or provisions of this Employment Agreement shall not affect the validity or enforceability of any other provision of this Employment Agreement, which shall remain in full force and effect.
14. Counterparts. This Employment Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
15. Entire Agreement. Except as otherwise provided for herein and any Exhibits hereto, this Employment Agreement and the Purchase Agreement set forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersede all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto in respect of such subject matter. Any prior agreement of the parties hereto, or between Executive and any of the Subsidiaries in respect of the subject matter contained herein is hereby terminated and cancelled. Other than any accrued Base Salary due to Executive as of the date hereof, Executive acknowledges that as of the Commencement Date, he has no claims against the Company or any of its affiliates in respect of any amounts that may be owing to him from any of the Subsidiaries.
16. Withholding. All payments hereunder shall be subject to any required withholding of Federal, state and local taxes pursuant to any applicable law or regulation.
17. Noncontravention. The Company represents that the Company is not prevented from entering into, or performing this Agreement by the terms of any law, order, rule or regulation, its bylaws or declaration of trust, or any agreement to which it is a party, other than which would not have a material adverse effect on the Companys ability to enter into or perform this Employment Agreement.
18. Section Headings. The section headings in this Employment Agreement are for convenience of reference only, and they form no part of this Employment Agreement and shall not affect its interpretation.
19. Section 409A Compliance. The parties intend that any severance or other compensation under this Agreement be paid in compliance with Section 409A of the Code such that there are no adverse tax consequences, interest, or penalties as a result of the payments. The parties agree to modify this Agreement, the timing and/or the amount of the severance to the extent necessary to comply with Section 409A.
[Signature Page to Follow]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written.
CheckSmart Financial Company |
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Kyle Hanson | |
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/s/ Chad M. Streff |
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/s/ Kyle Hanson |
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Name: |
Chad M. Streff |
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Title: |
COO |
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[Signature Page to Hanson Employment Agreement]
Exhibit A
Stock Option Award Agreement
[Attached]
CHECKSMART FINANCIAL HOLDINGS CORP.
2006 MANAGEMENT EQUITY INCENTIVE PLAN
OPTION GRANT AWARD AGREEMENT
GRANT TO: Kyle Hanson
THIS AGREEMENT (the Agreement) is made as of May 9, 2006 (the Grant Date), between CheckSmart Financial Holdings Corp., a Delaware corporation (together with its successors, the Company), and Kyle Hanson, who is an employee of the Company or one of its Subsidiaries (the Grantee). Capitalized terms, unless defined in Section 10 or a prior section of this Agreement, shall have the same meanings as in the Plan (as defined below).
WHEREAS, in connection with the Grantees employment with the Company or one of its Subsidiaries, the Company desires to grant to the Grantee an option to purchase a certain number of shares of Class A Common Stock, par value $.01, of the Company (Options) on the date hereof pursuant to the terms and conditions of this Agreement and the Companys 2006 Management Equity Incentive Plan (the Plan).
WHEREAS, the Board has determined that it would be to the advantage, and in the best interest, of the Company and its shareholders to grant the Options provided for herein to the Grantee as an incentive for increased efforts during his employment with the Company or one of its Subsidiaries.
NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:
SECTION I. GRANT OF OPTIONS AWARD
(a) Grant. Subject to the terms and conditions of the Plan and this Agreement, the Company hereby grants to the Grantee the following:
(i) 5,814 Options, which will be earned based on time (the Time Options); and
(ii) 5,814 Options which will be earned based on achievement of annual EBITDA Targets (the EBITDA Options);
(b) Plan. The foregoing awards are granted under the Plan, which is incorporated herein by this reference and made a part of this Agreement.
(c) No Rights as Stockholder. It shall be understood that none of the terms contained herein grant to the Grantee any rights as a stockholder, and such Grantee shall not have any such rights unless and until such Grantee receives Shares in connection with the exercise of Options.
SECTION 2. RIGHT TO EXERCISE; VESTING
(a) Vesting. Subject to the provisions of this Agreement, the following Options shall vest as follows:
(i) the Time Options shall vest in accordance with the provisions and terms of Schedule A; and
(ii) the EBITDA Options shall vest in accordance with the provisions and terms of Schedule B.
(b) Effect of Vesting. For each vested Option the Grantee may exercise such Option for one share of Class A Holdings Common Stock.
SECTION 3. EXERCISE PROCEDURES
(a) Notice of Exercise. The Grantee may exercise its Options prior to its expiration as set forth in Section 6 to the extent it they are vested by giving written notice to the Company in form and substance reasonably satisfactory to the Company (such notice, a Notice of Exercise) specifying the election to exercise such Options, the number of vested Options which are being exercised and the form of payment. The Notice of Exercise shall be signed by the Grantee. The Grantee shall deliver to the Company, at the time of giving the notice, payment in a form permissible under Section 4 for the full amount of the Exercise Price and, if such person is not then party to the Stockholders Agreement, such person shall be required to execute a joinder agreement to the Stockholders Agreement in form and substance reasonably satisfactory to the Company.
(b) Issuance of Shares. After receiving a properly completed and executed Notice of Exercise and, payment for the full amount of the Exercise Price as required by Section 3(a) and, if applicable, an executed joinder agreement to the Stockholders Agreement, the Company shall cause to be issued a certificate or certificates for the Purchased Shares (as defined below), registered in the name of the Grantee (or in the names of such person and his spouse as community property or as joint tenants with right of survivorship), provided that as a condition to the issuance of Purchased Shares hereunder, the Grantee shall make, as of the time of issuance of such Purchased Shares, representations and warranties in a form satisfactory to the Company and substantially similar to those contained in Exhibit A. In connection with any exercise of this option, the Person exercising this option shall deliver to the Company a duly executed blank share power in the form attached hereto as Exhibit B. The date of the issuance of the Purchased Shares by the Company to the Grantee, the Exercise Date.
(c) Withholding Requirements. The Company may withhold any tax (or other governmental obligation) required to be withheld in connection with the exercise of the Option, and as a condition to the settlement of any or exercise of the Option. Such withholding may be made from any source (including any salary or other compensation payable to the Grantee), and the Grantee shall make arrangements satisfactory to the Company to enable it to satisfy all such withholding requirements as a condition to the exercise of the Option (including by remitting to
the Company an amount in cash sufficient to satisfy the withholding obligation). For the avoidance of doubt, the Company will not withhold any amounts greater than the statutory minimum.
SECTION 4. PAYMENT OF EXERCISE PRICE
(a) Cash or Check. In connection with an exercise of the Option, all or part of the Exercise Price may be paid in cash or by check.
(b) Net Exercise. Notwithstanding anything in this Agreement to the contrary, in connection with an exercise of the Option, all or part of the Exercise Price may be paid by reducing the number of Shares being purchased pursuant to such exercise by the number of such Shares having an Fair Market Value equal to the Exercise Price.
(c) Other Methods of Payment for Shares. At the sole discretion of the Board, all or any part of the Exercise Price and any applicable withholding requirements may be paid by any other method permissible at the time under the terms of the Plan.
SECTION 5. SECURITIES LAW ISSUES, TRANSFER RESTRICTIONS
(a) Grantee Acknowledgements and Representations. The Grantee understands and agrees that: (x) the Options have not been registered under the Securities Act, (y) the Options are restricted securities under the Securities Act and (z) the Options may not be resold or transferred unless they are first registered under the Securities Act or unless an exemption from such registration is available. The Grantee hereby makes the representations and warranties set forth in Exhibit B hereto.
(b) No Registration Rights. The Company may, but shall not be obligated to, register or qualify the issuance of Purchased Shares to the Grantee, or the resale of any such Purchased Shares by the Grantee under the Securities Act or any other applicable law.
(c) Transfers. No Option shall be transferable to any Person for any reason. Any attempt to Transfer any Option shall be null and void and have no force or effect, and the Company shall not, and shall cause any transfer agent not to, give any effect in such entitys share records to such attempted Transfer. Any Purchased Shares shall be subject to the restrictions on Transfer as set forth in Article 3 of the Stockholders Agreement, except with respect to a Transfer by will or by the laws of descent and distribution. Unless otherwise permitted pursuant to the Stockholders Agreement, the Grantee shall not Transfer any Purchased Shares (x) except in compliance with the provisions of Article 3 of the Stockholders Agreement, and (y) unless the transferee shall have agreed in writing to be bound by the terms of this Agreement in a manner acceptable to the Board and otherwise acknowledging that such Purchased Shares are subject to the restrictions set forth in this Agreement. Any attempt to Transfer any Purchased Shares not in compliance with this Agreement shall be null and void and have no force or effect, and the Company shall not, and shall cause any transfer agent not to, give any effect in such entitys share records to such attempted Transfer. The Grantee acknowledges that the transfer restrictions contained in this Agreement are reasonable and in the best interests of the Company.
SECTION 6. TERM OF GRANT.
The Options granted in this Agreement shall expire 10 years from the Closing Date. In the event that the employment of the Grantee terminates, unless a Notice of Exercise has been given to the Company from the Grantee, all vested Options shall expire on the 60th day after termination of employment, except in the case of (i) termination of the Grantees employment with the Company or any of its Subsidiaries for Cause, or resignation by the Grantee without Good Reason within the first three years after Closing, in which case the vested Options would terminate upon such termination or resignation, or (ii) death or Disability, in which case the vested Options would terminate on the first anniversary of the date of death or Disability. Any Options which are unvested at the date of termination of employment will expire on the date of termination, and shall be forfeited. Further, any part of an Option Award that is vested (but not exercised) as of the Termination Date, if the Termination Event was a termination by the Company or any of its Subsidiaries for Cause at any time or a resignation by the Grantee without Good Reason within the first three years of Service, will be forfeited and there shall be no settlement with respect thereto.
SECTION 7. RIGHT OF REPURCHASE UPON TERMINATION OF EMPLOYMENT
(a) Repurchase Rights.
(i) Upon the termination of employment of the Grantee by the Company or any of its Subsidiaries for any reason (the reason for the termination of such employment, the Termination Event and the date of such termination, the Termination Date), subject to the provisions of this Section 7 and the prior approval of the Compensation Committee of the Board (or if there is no such Compensation Committee, the Board), the Company shall have the right (but not the obligation) to purchase, and if such right is exercised, the Grantee shall sell, and shall cause any Permitted Transferees of the Grantee to sell (and such Permitted Transferees shall sell), to the Company, all or any portion (as determined by the Company) of the Purchased Shares (if any) owned by the Grantee or his Permitted Transferees at a price per Settlement Share equal to an amount (the Termination Price) (as determined pursuant to Section 7(b) below); provided, that the parties acknowledge that any unvested Options held by the Grantee as of the Termination Date shall be cancelled pursuant to this Agreement.
(ii) With respect to the Purchased Shares, the Company shall notify the Grantee in writing, within the Call Period whether the Company will exercise its right to purchase the Purchased Shares (the date on which the Grantee is so notified, the Call Notice Date). The Company may assign its right to purchase all or any portion of the Purchased Shares under this Section 7 to the DCP Investor and the DCP Investor may exercise the rights of the Company under this Section 7 in the same manner in which the Company could exercise such rights.
(iii) The closing of the purchase by the Company or the DCP Investor of Purchased Shares pursuant to this Section 7 shall take place at the principal office of the Company, on the date chosen by either the Company or the DCP Investor, as applicable, which date shall, except as may be reasonably necessary
to determine the Termination Price, in no event be more than 45 days after the Call Notice Date. At such closing, (i) the Company or the DCP Investor, as applicable, shall pay the Grantee and/or such Grantees Permitted Transferees, as applicable, against delivery of duly endorsed certificates described below representing such Purchased Shares, the aggregate Termination Price by wire transfer of immediately available federal funds and (ii) the Grantee and/or such Grantees Permitted Transferees, as applicable, shall deliver to the Company a certificate or certificates representing the Purchased Shares to be purchased by the Company or the DCP Investor, as applicable, duly endorsed, or with share (or equivalent) powers duly endorsed, for transfer with signature guaranteed, free and clear of any lien or encumbrance, with any necessary share (or equivalent) transfer tax stamps affixed. The delivery of a certificate or certificates for the Purchased Shares by any Person selling such Purchased Shares pursuant to this Section 7(a)(iii) shall be deemed a representation and warranty by such Person that: (w) such Person has full right, title and interest in and to such Purchased Shares; (x) such Person has all necessary power and authority and has taken all necessary action to sell such Purchased Shares as contemplated; (y) such Purchased Shares are free and clear of any and all liens or encumbrances; and (z) there is no adverse claim with respect to such Purchased Shares.
(b) Termination Pricing. The Termination Price of any Settlement Share shall be determined as follows:
(i) If the Termination Event was a resignation by the Grantee with Good Reason, or resignation by the Grantee without Good Reason after the first three years of Service, or termination of the employment of the Grantee by the Company or any of its Subsidiaries without Cause, the Termination Price for such Settlement Share shall be the Fair Market Value on the FMV Calculation Date,
(ii) if the Termination Event was as a result of the death or Disability of the Grantee, the Termination Price for such Settlement Share shall be the Fair Market Value on the Termination Date, and
(iii) if the Termination Event was a termination of the employment of the Grantee by the Company or any of its Subsidiaries with Cause, or was a resignation by the Grantee without Good Reason in the first three years of Service, the Termination Price for such Settlement Share shall be the lower of (i) the Fair Market Value on the FMV Calculation Date or (ii) the Exercise Price per Share.
(c) Payment Terms. In the event that the Company, or the DCP Investor if applicable, exercises a Right of Repurchase pursuant to Section 7 of this Agreement, the Company, or the DCP Investor if applicable, shall pay the Termination Price in cash; provided, however, that if the Company has not assigned its right to purchase any or all of the Purchased Shares to the DCP Investor pursuant to Section 7(a)(ii), and is at the time of the Purchase Closing prohibited from purchasing all or any portion of such Purchased Shares (i) because restrictive covenants or other provisions contained in the documents evidencing such entitys or any of its Affiliates
indebtedness for borrowed money do not permit or allow such entity to make such payments in cash in whole or in part; or (ii) pursuant to applicable law, then, the portion of the Termination Price not permitted to be made in cash may be paid by the execution and delivery by the Company of a promissory note or other deferred cash payment arrangement (if applicable, any promissory note to be subordinated to the indebtedness for borrowed money of such company or any of its Affiliates) bearing interest at the prime rate, as published in the Wall Street Journal, Eastern edition, on the first Business Day immediately prior to the day on which such promissory note or other deferred cash payment is issued, with principal and accrued interest payable at such time as is required in the Boards determination to ensure that any payment pursuant to such promissory note or other deferred cash payment arrangement is not prohibited because of any of the matters described in clauses (i) or (ii) of this Section 7(c) above.
SECTION 8. ADJUSTMENT OF SHARES
In the event of a Recapitalization, the terms of this award (including, without limitation, the number and kind of Class A Common Shares subject to this award) shall be adjusted as set forth in Section 11(a) of the Plan. In the event that the Company is a party to a merger or consolidation, this award shall be subject to the vesting schedule set forth on Schedule C attached hereto and Section 11(b) of the Plan.
SECTION 9. MISCELLANEOUS PROVISIONS
(a) No Retention Rights. Nothing in this Agreement or in the Plan shall confer upon the Grantee any right to continue in Service or interfere with or otherwise restrict in any way the rights of the Company or any Subsidiary employing the Grantee, which rights are hereby expressly reserved by the Company and any Subsidiary employing the Grantee, to terminate the Grantees Service at any time and for any reason, with or without Cause.
(b) Notices. All notices, requests and other communications under this Agreement shall be in writing and shall be delivered in person (by courier or otherwise), mailed by certified or registered mail, return receipt requested, or sent by facsimile transmission, as follows:
If to the Company, to:
CheckSmart Financial Holdings Corp.
7001 Post Road, Suite 200
Dublin, OH 43016
If to the Grantee, to the address that he most recently provided to the Company,
or, in each case, at such other address or fax number as such party may hereafter specify for the purpose of notices hereunder by written notice to the other party hereto. All notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt. Any notice, request or other written communication sent by facsimile transmission shall be confirmed by certified or registered mail, return receipt requested, posted within one Business Day, or by personal
delivery, whether by courier or otherwise, made within two Business Days after the date of such facsimile transmissions; provided that such confirmation mailing or delivery shall not affect the date of receipt, which will be the date that the facsimile successfully transmitted the notice, request or other communication.
(c) Entire Agreement. This Agreement and the Plan, together with the Stockholders Agreement, the Grantees employment agreement and the other agreements referred to herein and therein and any schedules, exhibits and other documents referred to herein or therein, constitute the entire agreement and understanding among the parties hereto in respect of the subject matter hereof and thereof and supersede all prior and contemporaneous arrangements, agreements and understandings, both oral and written, whether in term sheets, presentations or otherwise, among the parties hereto, or between any of them, with respect to the subject matter hereof and thereof.
(d) Amendment; Waiver. No amendment or modification of any provision of this Agreement shall be effective unless signed in writing by or on behalf of the Company and the Grantee, except that the Company may amend or modify the Agreement without the Grantees consent in accordance with the provisions of the Plan or as otherwise set forth in this Agreement. The failure of the Company in any instance to exercise the Right of Repurchase shall not constitute a waiver of any other repurchase rights that may subsequently arise under the provisions of this Agreement or any other agreement between the Company and the Grantee. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition whether of like or different nature. Any amendment or modification of or to any provision of this Agreement, or any waiver of any provision of this Agreement, shall be effective only in the specific instance and for the specific purpose for which made or given.
(e) Assignment. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by the Grantee except pursuant to a Transfer in accordance with the provisions of this Agreement.
(f) Successors and Assigns; No Third Party Beneficiaries. This Agreement shall inure to the benefit of and be binding upon the Company and the Grantee and their respective heirs, successors, legal representatives and permitted assigns. Nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the Company and the Grantee, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.
(g) Governing Law, Venue. This Agreement and any matters or disputes related to, in connection with, or arising under this Agreement shall be governed by the laws of the State of Delaware, without regard to the conflicts of laws rules of such state. Any legal action or proceeding with respect this Agreement shall be brought in the federal or state court sitting in the State of Delaware, and, by execution and delivery of this Agreement, each party hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the exclusive jurisdiction of such courts. Each party irrevocably waives any objection which it may now or hereafter have to the laying of venue of the aforesaid actions or proceedings arising out of or in connection with this Agreement in the courts referred to in this paragraph and hereby
further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.
(h) Waiver of Jury Trial. The Grantee hereby irrevocably waives all right of trial by jury in any legal action or proceeding (including counterclaims) relating to or arising out of or in connection with this Agreement or any of the transactions or relationships hereby contemplated or otherwise in connection with the enforcement of any rights or obligations hereunder.
(i) Interpretation. Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation apply:
Headings. The division of this Agreement into Sections and other subdivisions and the insertion of headings are for convenience of reference only and do not alter the meaning of, or affect the construction or interpretation of, this Agreement.
Section References. All references in this Agreement to any Section are to the corresponding Section of this Agreement.
Schedules/Exhibits. Any capitalized terms used in any Schedule or Exhibit to this Agreement but are not otherwise defined therein have the meanings set forth in this Agreement.
(j) Severability. If any provision of this Agreement is invalid, illegal, or incapable of being enforced by any law, all other provisions of this Agreement remain in full force and effect so long as the economic and legal substance of the transactions contemplated hereby are not affected in any manner materially adverse to any party. If any provision of this Agreement is held to be invalid, illegal, or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
(k) Counterparts. The parties may execute this Agreement in one or more counterparts, each of which constitutes an original copy of this Agreement and all of which, collectively constitute only one agreement. The signatures of all the parties need not appear on the same counterpart.
(l) Grantee Undertaking. The Grantee agrees to take whatever additional action and execute whatever additional documents the Company may deem necessary or advisable to carry out or effect one or more of the obligations or restrictions imposed on either the Grantee or upon the Options or any Purchased Shares pursuant to the provisions of this Agreement.
(m) Plan; Stockholders Agreement; Counsel. The Grantee acknowledges and understands that material definitions and provisions concerning the Options or any Purchased Shares and the Grantees rights and obligations with respect thereto are set forth in the Plan and the Stockholders Agreement. The Grantee has had the opportunity to retain counsel, and has read carefully, and understands, the provisions of such documents. Mintz, Levin, Ferris, Cohn, Glovsky and Popeo, PC (Counsel) has been retained to represent the Grantee in connection
with the transactions contemplated by this Agreement. The Grantee has had the opportunity to seek legal advice from Counsel on this Agreement and the transactions contemplated hereby.
SECTION 10. DEFINITIONS
(a) Affiliate shall mean, with respect to any specified Person, (a) any other Person which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person (for the purposes of this definition, control (including, with correlative meanings, the terms controlling, controlled by and under common control with), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise); provided, however, that neither the Company nor any of its Subsidiaries shall be deemed an Affiliate of any of the Stockholders (and vice versa), and (b) if such specified Person is an investment fund, any other investment fund the primary investment advisor to which is the primary investment advisor to such specified Person.
(b) Board means the Board of Directors of the Company, as constituted from time to time or, if a Committee has been appointed, such Committee.
(c) Business Day has the meaning ascribed to such term in the Stockholders Agreement.
(d) Call Period shall mean from the Termination Date until:
(i) if the Termination Event is a termination of the employment of the Grantee by the Company or any of its Subsidiaries without Cause, a resignation by the Grantee with Good Reason or a resignation by the Grantee without Good Reason after three years of Service, the later of (A) the date that is 60 days after such Termination Date and (B) the date that is 190 days after the Exercise Date,
(ii) if the Termination Event is a termination of the employment of the Grantee by the Company or any of its Subsidiaries as a result of the death or Disability of the Grantee, the date that is the later of (i) 60 days after the Termination Date or the date which is 60 days after the Exercise Date, or
(iii) if the Termination Event is a termination of the employment of the Grantee by the Company or any of its Subsidiaries for Cause, or a resignation by the Grantee without Good Reason within the first years of Service the date which is 60 days after the Exercise Date.
(e) Cause has the meaning ascribed to such term in the Grantees Employment Agreement.
(f) Change of Control shall mean (a) any transaction or series of related transactions, whether or not the Company is a party thereto, in which, after giving effect to such transaction or transactions any person or group (as such terms are used in Section 13(d) of the Exchange Act other than a group of which the DCP Investor is a member, acquires, directly or indirectly, in excess of 50% of the Voting Securities, or (b) a sale, lease or other disposition of all or substantially all of the assets of the Company and its Subsidiaries on a consolidated basis
(including securities of the Companys directly or indirectly owned Subsidiaries) to a Person that is not an Affiliate of the Company.
(g) Class A Common Stock means the voting class A common stock of the Company, and any stock into which such Class A Common Stock may hereafter be converted, changed, reclassified or exchanged.
(h) Closing or Closing Date shall mean May 1, 2006.
(i) Code means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated thereunder.
(j) Committee means the compensation committee of the Board of Directors of the Company.
(k) DCP Investor means BCC/DCP Acquisition LLC or any of its Permitted Transferees.
(l) Disability has the meaning ascribed to such term in the Grantees Employment Agreement.
(m) Employee means any individual who is a common-law employee of the Company or a Subsidiary thereof.
(n) Employment Agreement means the employment agreement between the Grantee and CheckSmart Financial Company, dated as of May 1, 2006.
(o) Exercise Price means $103.50, subject to appropriate adjustment to the extent that there is an adjustment under Section 2.3(b) of the Stock Purchase Agreement, in connection with the finally determined 2005 EBITDA.
(p) Fair Market Value or FMV with respect to a share of stock of the Company, shall mean, in the event that such shares are listed on an established U.S. exchange or through the NASDAQ National Market or any established over-the-counter trading system, the average of the closing prices of such Group Equity Securities on such exchange if listed or, if not so listed, the average bid and asked price of such shares reported on the NASDAQ National Market or any established over-the-counter trading system on which prices for such shares are quoted, in each case, for a period of twenty trading days prior to such date of determination, or (ii) if such shares are not publicly traded, a good faith determination by the Board through a reasonable application of a reasonable valuation method. Such determination shall be conclusive and binding on all persons.
(q) FMV Calculation Date means:
(i) if the Termination Event is a termination by the Company or any of its Subsidiaries without Cause, a resignation by the Grantee with Good Reason or a resignation by the Grantee without Good Reason after three years of Service:
(A) if the Exercise Date occurred 180 days or more before the Termination Date, the Termination Date, and
(B) if the Exercise Date occurred 179 days or less before the Termination Date or occurs after the Termination Date, then the Call Notice Date;
(ii) if the Termination Event is as a result of the death or Disability of the Grantee, then the Termination Date; and
(iii) if the Termination Event is a termination by the Company or any of its Subsidiaries with Cause, or a resignation by the Grantee without Good Reason during the Grantees first three years of Service, then the Termination Date.
(r) Good Reason has the meaning ascribed to such term in the Grantees Employment Agreement.
(s) Initial Public Offering has the meaning ascribed to such term in the Stockholders Agreement.
(t) Joinder Agreement means an agreement substantially in the form of Exhibit A of the Stockholders Agreement, pursuant to which the Grantee shall become a party to the Stockholders Agreement and subject to all of the rights, restrictions and obligations contained therein.
(u) Permitted Transferee has the meaning ascribed to such term in the Stockholders Agreement.
(v) Person means an individual, corporation, limited liability company, partnership, association, trust or other entity or organization.
(w) Purchase Shares means any Shares issued pursuant to the exercise of any Option in accordance with the terms of this Agreement.
(x) Right of Repurchase means the Companys right of repurchase described in Section 7 of this Agreement.
(y) Securities Act means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(z) Service means service as an Employee.
(aa) Share(s) means a share(s) of Class A Common Stock of the Company.
(bb) Stockholders Agreement means that certain Stockholders Agreement dated as of May 1, 2006 by and among the Company, the Grantee and the other parties thereto (as the same shall be amended, modified or supplemented from time to time).
(cc) Stock Purchase Agreement means the Stock Purchase Agreement, by and among the DCP Investor, and certain other parties thereto, dated as of February 27, 2006 (as amended).
(dd) Subsidiary means, with respect to the Company, any other Person in which the Company, directly or indirectly through one or more Affiliates or otherwise, beneficially owns at least 50% of either the ownership interest (determined by equity or economic interests) in, or the voting control of, such other Person.
(ee) Transfer has the meaning ascribed in such term in the Stockholders Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above.
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CHECKSMART FINANCIAL HOLDINGS CORP. | ||
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By: |
/s/ Chad M. Streff | |
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Name: |
Chad M. Streff |
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Title: |
COO |
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/s/ Kyle Hanson | |
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Kyle Hanson |
EXHIBIT A
Investment Representations and Warranties
The Grantee hereby represents and warrants to the Company that:
1. The Options and Purchased Shares received by him will be held by him for investment only for his own account, not as a nominee or agent, and not with a view to the sale or distribution of any part thereof in violation of applicable U.S. federal or state or foreign securities laws. The Grantee has no current intention of selling, granting participation in or otherwise distributing the Options or Purchased Shares in violation of applicable U.S. federal or state or foreign securities laws. The Grantee does not have any contract, undertaking, agreement or arrangement with any person or entity to sell, transfer or grant participation to such person or entity, or to any third person or entity, with respect to any of the Options or Purchased Shares, in each case, in violation of applicable U.S. federal or state or foreign securities laws.
2. The Grantee understands that the issuance of the Options and Purchased Shares has not been registered under the Securities Act or any applicable U.S. state or foreign securities laws, and that the Options and Purchased Shares are being issued in reliance on an exemption from registration, which exemption depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Grantees representations as expressed herein.
3. The Grantee has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of his owning the Options and Purchased Shares. The Grantee is a sophisticated investor, has relied upon independent investigations made by the Grantee and, to the extent believed by the Grantee to be appropriate, the Grantees representatives, including the Grantees own professional, tax and other advisors, and is making an independent decision to invest in the Options and Purchased Shares. The Grantee has been furnished with such documents, materials and information that the Grantee deems necessary or appropriate for evaluating an investment in the Company, and the Grantee has read carefully such documents, materials and information and understands and has evaluated the types of risks involved with holding the Options and Purchased Shares. The Grantee has not relied upon any representations or other information (whether oral or written) from the Company or its shareholders, directors, officers or affiliates, or from any other person or entity, in connection with his investment in the Options and Purchased Shares. The Grantee acknowledges that the Company has not given any assurances with respect to the tax consequences of the ownership and disposition of the Options and Purchased Shares.
4. The Grantee has had, prior to his being granted the Options and Purchased Shares, the opportunity to ask questions of, and receive answers from, the Company concerning the terms and conditions of the transactions contemplated by the Agreement and the Grantees holding of the Options and Purchased Shares and to obtain additional information necessary to verify the accuracy of any information furnished to his or to
which he had access. The Grantee confirms that he has satisfied himself with respect to any of the foregoing matters.
5. The Grantee acknowledges that Mintz, Levin, Cohn, Ferris, Glovsky and Popeo PC (Counsel) has been retained by the Company to represent the Grantee in connection with the transactions contemplated by the Agreement, and has had the opportunity to seek legal advice from, and has received legal advice from, Counsel on the Agreement, the transactions contemplated therein and all documents, materials and information that he has requested or read relating to holding the Options or Purchased Shares and confirms that he has satisfied himself with respect to any of the foregoing matters.
6. The Grantee understands that no U.S. federal or state or foreign agency has passed upon the Options or Purchased Shares or upon the Company, or upon the accuracy, validity or completeness of any documentation provided to the Grantee in connection with the transactions contemplated by the Agreement, nor has any such agency made any finding or determination as to holding the Options or Purchased Shares.
7. The Grantee understands that there are substantial restrictions on the transferability of the Options and Purchased Shares and that on the date of the Agreement and for an indefinite period thereafter there will be no public market for the Options or Purchased Shares and, accordingly, it may not be possible for the Grantee to liquidate his investment in case of emergency, if at all. In addition, the Grantee understands that the Agreement and Stockholders Agreement contain substantial restrictions on the transferability of the Options and Purchased Shares and provide that, in the event that the conditions relating to the transfer of any Options or Purchased Shares in such document has not been satisfied, the holder shall not transfer any such Options or Purchased Shares, and unless otherwise specified the Company will not recognize the transfer of any such Options or Purchased Shares on its books and records or issue any share certificates representing any such Options or Purchased Shares, and any purported transfer not in accordance with the terms of the Agreement or the Stockholders Agreement shall be void. As such, Grantee understands that: a restrictive legend or legends in a form to be set forth in the Agreement and the Stockholders Agreement will be placed on the certificates representing the Options and Purchased Shares; a notation will be made in the appropriate records of the Company indicating that each of the Options and Purchased Shares are subject to restrictions on transfer and, if the Company should at some time in the future engage the services of a securities transfer agent, appropriate stop-transfer instructions will be issued to such transfer agent with respect to the Options and Purchased Shares; and the Grantee will sell, transfer or otherwise dispose of the Options or Purchased Shares only in a manner consistent with its representations set forth herein and then only in accordance with the Agreement and the Stockholders Agreement.
8. The Grantee understands that (i) the neither the Options nor the Purchased Shares may not be sold, transferred or otherwise disposed of without registration under the Securities Act or an exemption therefrom, (ii) the Options and Purchased Shares have not been
registered under the Securities Act; (iii) the Options and Purchased Shares must be held indefinitely and he must continue to bear the economic risk of holding the Options and Purchased Shares unless such Options and Purchased Shares are subsequently registered under the Securities Act or an exemption from such registration is available; (iv) the Grantee is prepared to bear the economic risk of holding the Options and Purchased Shares for an indefinite period of time; (v) it is not anticipated that there will be any public market for the Options or Purchased Shares; (vi) the Options and Purchased Shares are characterized as restricted securities under the U.S. federal securities laws; and (vii) the Options and Purchased Shares may not be sold, transferred or otherwise disposed of except in compliance with federal, state and local law.
9. The Grantee understands that an investment in the Options or Purchased Shares is not recommended for investors who have any need for a current return on this investment or who cannot bear the risk of losing their entire investment. In that regard, the Grantee understands that his holding the Options and Purchased Shares involves a high degree of risk of loss. The Grantee acknowledges that: (i) he has adequate means of providing for his current needs and possible personal contingencies and has no need for liquidity in this investment; (ii) his commitment to investments which are not readily marketable is not disproportionate to his net worth; and (iii) his holding the Options and Purchased Shares will not cause his overall financial commitments to become excessive.
10. The Grantee is an accredited investor, as such term is defined in Rule 501 of the Securities Act.
SCHEDULE A
VESTING OF TIME OPTIONS
Subject to the terms set forth in the Agreement and the Plan, the Time Options vest as follows:
(a) Vesting.
· 40% of the Time Options shall vest on May 1, 2008;
· 20% of the Time Options shall vest on May 1, 2009;
· 20% of the Time Options shall vest on May 1, 2010;
· 20% of the Time Options shall vest on May 1, 2011 (May 1 of each of 2008, 2009, 2010 and 2011, a Vesting Date).
(b) Change of Control. In connection with a Change of Control, any unvested Time Options (unless previously terminated in accordance with the terms of the Plan or this Award) shall fully vest immediately prior to the consummation of the Change of Control.
(c) Initial Public Offering. In connection with an Initial Public Offering, any unvested Time Options (unless previously terminated in accordance with the terms of the Plan or this Award) will continue to be subject to vesting in accordance with this schedule after such Initial Public Offering.
SCHEDULE B
VESTING OF EBITDA OPTIONS
Subject to the terms set forth in the Agreement and in the Plan, the EBITDA Options vest, as set forth below, based on the extent to which the annual EBITDA-based targets set forth below are achieved by the Company and its subsidiaries, and the Grantee remains employed.
(a) Establishment of EBITDA Option Performance Targets.
Year |
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EBITDA Option Performance Target ($ in millions) |
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2006 |
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41.0 |
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2007 |
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46.4 |
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2008 |
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54.9 |
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2009 |
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62.8 |
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2010 |
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69.1 |
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(b) Amendment to EBITDA Targets. The Board reserves the right to make adjustments to the EBITDA Option Performance Targets, as the Board and the Chief Executive Officer of the Company mutually determine in good faith are appropriate to take into account the effect of: (A) any material transactions or events during the relevant period, including significant changes to capital expenditure plans and (B) any events during the relevant period outside of the ordinary course. Any adjustments to the EBITDA Option Performance Targets will be made by the Board or Compensation Committee, with the intention to maintain the same fair value of the grants pre- and post-acquisition.
(c) 2006 Vesting. In 2006, all the EBITDA Options available for vesting in such year (i.e., 20% of the total EBITDA Options subject to a particular grant) will vest if 100% of the applicable EBITDA Option Performance Target is reached and the Grantee remains so employed, and none of the EBITDA Options available for vesting for such year will vest if the applicable EBITDA Option Performance Target is not met.
(d) 2007-2010 Vesting. In each of years 2007 through 2010, a maximum of 20% of the total EBITDA Options shall be eligible for vesting in any given year pursuant to the following terms:
· none of the EBITDA Options available for vesting for such year will vest if the Company and its Subsidiaries do not achieve at least 97.5% of the EBITDA Option Performance Target for such year;
· 35% of the EBITDA Options available for vesting for such year will vest if the Company and its Subsidiaries achieve 97.5% of the EBITDA Option Performance Target for such year;
· vesting of the EBITDA Options available for vesting for such year will increase proportionately between 35% and 100% to the extent that the Company and its Subsidiaries achieve more than 97.5% but less than 100% of the EBITDA Option Performance Target for such year;
· all of the EBITDA Options available for vesting for such year will vest if the Company and its Subsidiaries achieve the EBITDA Option Performance Target for such year; and
· to the extent that the Company and its Subsidiaries exceed the EBITDA Option Performance Target for such year (other than 2010), the percentage of EBITDA Option available for vesting that will vest for such year will vary proportionately between 100% and 125% (with a maximum of 125% if the Company and its Subsidiaries achieve 110% or more of the EBITDA Option Performance Target for such year).To the extent that the vesting percentage for any of the years 2007 through 2009 exceeds 100%, the number of EBITDA Options available for vesting in 2010 will decrease by the same number, and in no event will the number of EBITDA Options that vest exceed the number of EBITDA Options subject to the original grant.
(e) Change of Control. Upon a Change of Control, EBITDA Options that are otherwise unvested (from prior or future periods), unless previously terminated in accordance with the terms of the Plan or this Award, shall vest only if, the value per Share in connection with the Change of Control is greater than or equal to the Liquidity Event Vesting Targets set forth on Schedule C. Upon an Initial Public Offering, unvested EBITDA Options will continue to be subject to vesting as set forth above.
(f) Definition of EBITDA. For purposes of calculating EBITDA of a business or entity for a particular period means the sum of:
(1) net income (or loss) of such business or entity for such period; plus
(2) all interest expense of such business or entity (net of interest income) for such period deducted in calculating such net income (loss), plus
(3) all income taxes of such business or entity for such period deducted in calculating such net income (loss), plus
(4) all depreciation expenses of such business or entity for such period deducted in calculating such net income (loss), plus
(5) all amortization expenses of such business or entity for such period deducted in calculating such net income (loss), plus
(6) all fees paid by the Company or any of its Subsidiaries pursuant to the Advisory Services and Monitoring Agreement (as such term is defined in the Stockholders Agreement) for such period deducted in calculating such net income (loss),
in each case determined in accordance with generally accepted accounting principles in the United States of America, consistently applied.
(f) Notice of Vesting. As soon as reasonably practicable following receipt by the Company of audited financial statements of the Company and its Subsidiaries for a Fiscal Year, the Board shall determine the EBITDA for such Fiscal Year and, promptly after such determination, the Company shall notify the Grantee of the amount of EBITDA for such Fiscal Year and the number of the Performance Vesting Shares that vest pursuant to this Schedule B (the date of such notice, the Vesting Date).
EXHIBIT B
Share Power
IRREVOCABLE STOCK POWERS
CHECKSMART FINANCIAL HOLDINGS CORP.
FOR VALUE RECEIVED, Kyle Hanson does hereby sell, assign and transfer unto Shares of Class A Common Stock of CheckSmart Financial Holdings Corp., par value $0.01, represented by Certificate No. herewith and does hereby irrevocably constitute and appoint attorney to transfer the said stock on the books of the within named corporation with full power of substitution in the premises.
Dated: |
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SCHEDULE C
LIQUIDITY EVENT VESTING TARGETS
The Liquidity Event Vesting Target (the Liquidity Event Vesting Target) is a value per Share equal to the Exercise Price multiplied by a Multiplier, which Multiplier shall be defined as set forth below:
(i)
Anniversary of Closing |
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3rd |
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2.5 |
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4th |
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3.0 |
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5th |
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3.5 |
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(ii) To the extent that a Change of Control occurs between anniversaries, the Multiplier and the Liquidity Event Vesting Target resulting therefrom will be determined by the following formula:
Multiplier = X + (Y/365 * 0.5);
where:
X = the Multiplier of the immediately preceding anniversary as set forth in the chart above; and
Y = the number of days since the prior anniversary;
it being understood, that if the applicable per share price threshold is not achieved in connection with such Change of Control, none of the grants subject to vesting upon achievement of the Liquidity Event Vesting Target will vest.
Exhibit B
GENERAL RELEASE OF CLAIMS
A general release is required as a condition for receiving the severance benefits described in Section 7(d) of the employment agreement between CheckSmart Financial Company (the Company) and Kyle Hanson (Executive) dated May 1, 2006, (the Employment Agreement); thus, by executing this general release (General Release), you have advised us that you hold no claims against the Company, CheckSmart Financial Holdings Corp., their predecessors, successors or assigns, affiliates, shareholders or members and each of their respective officers, directors, agents and employees (collectively, the Releasees), and by execution of this General Release you agree to waive and release any such claims, except relating to any compensation, severance pay and benefits described in the Employment Agreement.
You understand and agree that this General Release will extend to all claims, demands, liabilities and causes of action of every kind, nature and description whatsoever, whether known, unknown or suspected to exist, which you ever had or may now have against the Releasees in your capacity as an employee of the Company, including, without limitation, any claims, demands, liabilities and causes of action arising from your employment with the Releasees and the termination of that employment, including any claims for severance or vacation pay, business expenses, and/or pursuant to any federal, state, county, or local employment laws, regulations, executive orders, or other requirements, including, but not limited to, Title VII of the 1964 Civil Rights Act, the 1866 Civil Rights Act, the Age Discrimination in Employment Act as amended by the Older Workers Benefit Protection Act, the Americans with Disabilities Act, the Civil Rights Act of 1991, the Workers Adjustment and Retraining Notification Act and any other local, state or federal fair employment laws, and any contract or tort claims.
It is further understood and agreed that you are waiving any right to initiate an action in state or federal court by you or on your behalf alleging discrimination on the basis of race, sex, religion, national origin, age, disability, marital status, or any other protected status or involving any contract or tort claims based on your termination from the Company. It is also acknowledged that your termination is not in any way related to any work-related injury.
Based on executing this General Release, it is further understood and agreed that you covenant not to sue to challenge the enforceability of this General Release. It also is understood and agreed that the remedy at law for breach of the Employment Agreement and/or General Release shall be inadequate, and the Company shall be entitled to injunctive relief.
The ability to receive compensation and benefits under the terms of the Employment Agreement will remain open for a 21 day period after your Termination Date to give you an opportunity to consider the effect of this General Release. At your option, you may elect to execute this General Release on an earlier date. Additionally, you have seven days after the date you execute this General Release to revoke it. As a result, this General Release will not be effective until eight days after you execute it. We also want to advise you of your right to consult with legal counsel prior to executing a copy of this General Release.
Finally, this is to expressly acknowledge:
· You understand that you are not waiving any claims or rights that may arise after the date you execute this General Release.
· You understand and agree that the compensation and benefits described in the Employment Agreement offer you consideration greater than that to which you would otherwise be entitled.
I hereby state that I have carefully read this General Release and that I am signing this General Release knowingly and voluntarily with the full intent of releasing the Releasees from any and all claims, except as set forth herein. Further, if signed prior to the completion of the 21 day review period, this is to acknowledge that I knowingly and voluntarily signed this General Release on an earlier date.
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Kyle Hanson |
Exhibit C
CONFIDENTIALITY, NON-COMPETITION AND INTELLECTUAL PROPERTY (this Non-Competition Agreement), dated as of May 1, 2006 (the Commencement Date), among CheckSmart Financial Company (the Company) and Kyle Hanson (Executive).
WHEREAS, Executive has been offered employment with the Company, and has entered into an employment agreement dated as of the date hereto with the Company (the Employment Agreement). In such role, Executive will receive specific confidential information relating to the businesses of the Company, which confidential information is necessary to enable Executive to perform Executives duties and to receive future compensation. Executive will play a significant role in the development and management of the businesses of the Company and will be entrusted with the Companys confidential information relating to the Company, the Companys customers, manufacturers, distributors and others.
WHEREAS, Executive acknowledges that during the course of Executives employment with the Company, Executive will be involved in the current and future businesses of the Company, as set forth above.
WHEREAS, it is a condition to the commencement of Executives employment by the Company that Executive execute and deliver this Non-Competition Agreement.
NOW, THEREFORE, it is mutually agreed as follows:
1. Confidentiality.
(a) Executive shall not, during the term of Executives employment with the Company or at any time thereafter, directly or indirectly, divulge, use, furnish, disclose, exploit or make available to any person or entity, whether or not a competitor of the Company, any Unauthorized (as defined herein) disclosure of Confidential Information (as defined herein). In the event that Executive is requested or required (by deposition, interrogatories, requests for information or documents in legal proceedings, subpoenas, civil demand or similar process) to disclose any Confidential Information, Executive will give the Company prompt written notice of such request or requirement so that the Company may seek an appropriate protective order or other remedy and/or waive compliance with the provisions of this Non-Competition Agreement, and Executive will cooperate with the Companys efforts to obtain such protective order. In the event that such protective order or other remedy is not obtained or the Company waives compliance with the relevant provisions of this Non-Competition Agreement, Executive is permitted to furnish that Confidential Information which is legally required to be disclosed and will use his reasonable efforts to obtain assurances that confidential treatment will be accorded to such information.
As used herein, all capitalized terms used without definition shall have the meanings ascribed to them in the Employment Agreement, and the term:
Confidential Information shall mean trade secrets, confidential or proprietary information, and all other information, documents or materials, relating to, owned, developed or possessed by either of the Company, whether in tangible or intangible form. Confidential Information includes, but is not limited to, (i) financial information, (ii) products, (iii) product and service costs, prices, profits and sales, (iv) new business, technical or other ideas, proposals, plans and designs, (v) business strategies, (vi) product and service plans, (vii) marketing plans and studies, (viii) forecasts, (ix) budgets, (x) projections, (xi) computer programs, (xii) data bases and the documentation (and information contained therein), (xiii) computer access codes and similar information, (xiv) source codes, (xv) know-how, technologies,
concepts and designs, including, without limitation, patent applications, (xvi) research projects and all information connected with research and development efforts, (xvii) records, (xviii) business methods and recommendations, (xix) existing or prospective client, customer, vendor and supplier information (including, but not limited to, identities, needs, transaction histories, volumes, characteristics, agreements, prices, identities of individual contacts, and spending, preferences or habits), (xx) training manuals and similar materials used by the Company in conducting its business operations, (xxi) personnel files of employees, directors and independent contractors of the Company, (xxii) competitive analyses, (xxiii) contracts with other parties, (xxiv) product formulations, and (xxv) other confidential or proprietary information that has not been made available to the trade or general public by the Company. Confidential Information shall not include any information that (A) is or becomes generally available to the public or the trade other than as a result of a disclosure by Executive in violation of this Non-Competition Agreement or (B) becomes available to Executive on a non-confidential basis from a source other than the Company which is not prohibited from disclosing such information to Executive by a legal, contractual or fiduciary obligation to the Company or any other person.
Unauthorized shall mean: (i) in contravention of the policies or procedures of the Company; (ii) otherwise inconsistent with any measures taken by the Company to protect its interests in the Confidential Information; (iii) in contravention of any lawful instruction, or directive, either written or oral, of the Board, or an officer or employee of the Company empowered to issue such instruction or directive; (iv) in contravention of any duty existing under law or contract; or (v) to the detriment of the Company; but shall not include any disclosure which is customary in the normal course of business in the trade and consistent with the past practice of the Company.
(b) Executive further agrees to take all reasonable measures to prevent unauthorized persons or entities from obtaining or using Confidential Information. Promptly upon termination, for any reason, of Executives employment with the Company, Executive agrees to deliver to the Company all property and materials within Executives possession or control which belong to the Company or which contain Confidential Information.
2. Non-Competition; Non-Solicitation.
(a) For a period of time equal to the Term plus the greater of (i) any period that Executive is entitled to receive Base Salary and Continued Benefits under the Employment Agreement, or (ii) one year commencing as of the Termination Date, unless the Employment Agreement is terminated by the Company without Cause or Executive resigns with Good Reason, in each case, for a period of time equal to the Term plus the period during which the Company continues to pay Executive his Base Salary and Continued Benefits pursuant to Section 7 of the Employment Agreement (in each case, the Non-Compete Period), whenever the same shall occur and for whatever reason, Executive will not, directly or indirectly, engage, anywhere in the Restricted Area (as defined below), whether such engagement be as an individual, officer, director, proprietor, employee, partner, member, investor (other than solely as a holder of less than two percent (2%) of the outstanding capital stock of a corporation whose shares are publicly traded on a national securities exchange or through a national market system or registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended), creditor, consultant, advisor, sales representative, agent or other participant, in a Restricted Business (as defined herein).
(b) During the Non-Compete Period Executive shall not, directly or indirectly, (i) cause, solicit, induce or encourage (each, a Solicitation) any person who is or was, prior to such Solicitation, an employee of the Company, any Subsidiaries, Holdings, Newco or any of their respective subsidiaries to leave employment with the Company, any Subsidiaries, Holdings, Newco or any of their respective subsidiaries, or hire, employ or otherwise engage any such individual; or (ii) cause, induce or encourage any material actual or prospective client, customer, supplier or licensor of the Company, any
Subsidiaries, Holdings, Newco or any of their respective subsidiaries (including any former customer of the Company or the Subsidiaries and any person that becomes a customer of the Company, any Subsidiaries, Holdings, Newco or any of their respective subsidiaries after the Closing) or any other person who has a material business relationship with the Company, any Subsidiaries, Holdings, Newco or any of their respective subsidiaries, to terminate or modify any such actual or prospective relationship.
Restricted Business shall mean any business engaged in a business, directly or indirectly, similar to the business of the Company or any of its subsidiaries as of the Termination Date, any other consumer finance business that may be reasonably construed as competing with the business of the Company or any of its subsidiaries as of the Termination Date, or any future businesses of the Company or any of its subsidiaries as contemplated by any of them as of the Termination Date.
Restricted Area shall be any state in which any of the Subsidiaries (as defined in the Employment Agreement) operate, as of the date hereof or the Termination Date.
3. Intellectual Property. Executive agrees that during the term of Executives employment with the Company, any and all inventions, developments, products, services, discoveries, innovations, writings, domain names, improvements, trade secrets, trade names, designs, drawings, business processes, secret processes and know-how, which Executive may create, conceive, develop or make, either alone or in conjunction with others and related or in any way connected with either of the Company, its strategic plans, products, processes, apparatus or business now or hereafter carried on by either of the Company (collectively, Inventions), shall be fully and promptly disclosed to the Company and shall be the sole and exclusive property of the Company (as they shall determine) as against Executive or any of Executives assignees. Executive further understands that in the course of Executives, Executive may prepare writings, drawings, diagrams, designs, specifications, manuals, instructional and other materials, and computer code and programs (Works of Authorship or Works). Executive agrees that such Works are works made for hire under United States copyright law and the Company will be the owner of my entire right of authorship in such Works. If such Works are deemed by operation of law not to be works made for hire, Executive hereby assigns to the Company Executives entire right of authorship, including copyright ownership in such Works and any and all right, title and interest in and to such Inventions made during the term of Executives employment by either of the Company. Executive further agrees to assist in the preparation and execution, during and subsequent to my employment, of any papers the Company may request to secure patent, copyright or other protection for such Inventions or Works of Authorship.
Whether during or after Executives employment with either of the Company, Executive further agrees to execute and acknowledge all papers and to do, at the Companys expense, any and all other things necessary for or incident to the applying for, obtaining and maintaining of such letters patent, copyrights, trademarks or other intellectual property rights, as the case may be, and to execute, on request, all papers necessary to assign and transfer such Inventions, copyrights, patents, patent applications and other intellectual property rights to the Company, their successors and assigns (as they shall determine). In the event that the Company is unable, after reasonable efforts and, in any event, after thirty (30) business days, to secure Executives signature on a written assignment to the Company, of any application for letters patent, trademark registration or to any common law or statutory copyright or other property right therein to which the Company is entitled to ownership pursuant to this Section 3, whether because of his physical or mental incapacity, or for any other reason whatsoever, Executive irrevocably designates and appoints the Chief Financial Officer of the Company as Executives attorney-in-fact to act on Executives behalf to execute and file any such applications and to do all lawfully permitted acts to further the prosecution or issuance of such assignments, letters patent, copyright or trademark; provided, however, that the provisions of this sentence shall not apply if Executive disputes in writing the
Companys ownership of the intellectual property rights which are the subject of the proposed assignment.
4. No Right to Continued Employment. Nothing in this Non-Competition Agreement shall confer upon Executive any right to continue in the employ of the Company or shall interfere with or restrict in any way the rights of the Company, which, subject to the terms of the Employment Agreement, are hereby reserved, to discharge Executive at any time for any reason whatsoever, with or without cause.
5. No Conflicting Agreements. Executive warrants that Executive is not bound by the terms of a confidentiality agreement, non-competition or other agreement with a third party that would conflict with Executives obligations hereunder.
6. Remedies.
(a) Executive and the Company hereby agree that any controversy or claim arising out of or relating to this Non-Competition Agreement shall be resolved by arbitration in accordance with the provisions of Section 10 of the Employment Agreement; provided, however, that in the event of breach or threatened breach by Executive of any provision hereof, the Company shall be entitled to seek temporary or preliminary injunctive relief or other equitable relief to which either of them may be entitled pending the outcome of any arbitration proceeding, without the posting of any bond or other security.
(b) The period of time during which the restrictions set forth in Section 2(a) hereof will be in effect will be extended by the length of time during which Executive is in breach of the terms of those provisions as finally determined by an arbitrator or any court of competent jurisdiction.
7. Successors and Assigns. This Non-Competition Agreement shall be binding upon Executive and Executives heirs, assigns and representatives and inure to the benefit of the Company and their successors and assigns, including without limitation any entity to which substantially all of the assets or the business of either of the Company are sold or transferred. The obligations of Executive are personal to Executive and shall not be assigned by Executive.
8. Severability. It is expressly agreed that if any restrictions set forth in this Non-Competition Agreement are found by any court having jurisdiction to be unreasonable because they are too broad in any respect, then and in each such case, the remaining provisions herein contained shall, nevertheless, remain effective, and this Non-Competition Agreement, or any portion hereof, shall be considered to be amended, so as to be considered reasonable and enforceable by such court, and the court shall specifically have the right to restrict the time period or the business or geographical scope of such restrictions to any portion of the time period, business or geographic areas to the extent the court deems such restriction to be necessary to cause the covenants to be enforceable, and, in such event, the covenants shall be enforced to the extent so permitted and the remaining provisions shall be unaffected thereby. In such event, the parties hereto agree to execute all documents necessary to evidence such amendment so as to eliminate or modify any such unreasonable provision in order to carry out the intent of this Non-Competition Agreement insofar as possible and to render this Non-Competition Agreement enforceable in all respects as so modified. The covenants contained in this Section 8 shall be construed to extend to separate jurisdictions or sub-jurisdictions of the United States in which the Company, during the term of Executives employment, has been or are engaged in business, and to the extent that any such covenant shall be illegal and/or unenforceable with respect to any jurisdiction, said covenant shall not be affected thereby with respect to each other jurisdiction, such covenants with respect to each jurisdiction being construed as severable and independent. Any covenant on Executives part contained hereinabove, which may not be specifically enforceable, shall nevertheless, if breached, give rise to a cause of action for monetary damages. The restrictive covenant provisions of this Non-Competition Agreement shall govern
to the extent there is any conflict between their terms and the terms of any other agreement or understanding with the Company.
9. Notices. Any notice required or permitted to be given under this Non-Competition Agreement shall be in writing and be deemed given when delivered by hand or received by registered or certified mail, postage prepaid, or by nationally reorganized overnight courier service addressed to the party to receive such notice at the following address or any other address substituted therefor by notice pursuant to these provisions:
If to Executive:
Kyle Hanson
54 West Short St
Worthington, OH 43085
with a copy to:
Mark Wishner
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
12010 Sunset Hills Road; Suite 900
Reston, VA 20190
Telephone: (703) 464-4808
Fax: (703) 464-4895
If to the Company:
CheckSmart Financial Company
7001 Post Road, Suite 200
Dublin, Ohio 43016
Telephone: (614) 798-5900
Fax: (614) 760-2601
with a copy to:
Diamond Castle Holdings
280 Park Avenue, 25th floor, East Tower
New York, New York 10017
Attn: Andrew Rush
Fax: (212) 983-1234
10. Amendment. No provision of this Non-Competition Agreement may be modified, amended, waived or discharged in any manner except by a written instrument executed by the Company and Executive.
11. Entire Agreement. This Non-Competition Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings of the parties hereto, oral or written, with respect to the subject matter hereof, however, if any portion of this Non-Competition Agreement is determined to be unenforceable by a court of law, then solely the appropriate conflicting provisions of any other agreement binding upon Executive shall control.
12. Waiver, etc. The failure of the Company to enforce at any time any of the provisions of this Non-Competition Agreement shall not be deemed or construed to be a waiver of any such provision, nor in any way affect the validity of this Non-Competition Agreement or any provision hereof or the right of the Company to enforce thereafter each and every provision of this Non-Competition Agreement. No waiver of any breach of any of the provisions of this Non-Competition Agreement by the Company shall be effective unless set forth in a written instrument executed by the Company, and no waiver of any such breach shall be construed or deemed to be a waiver of any other or subsequent breach.
13. All issues and questions concerning the construction, validity, enforcement and interpretation of this Non-Competition Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. In furtherance of the foregoing, the internal law of the State of Delaware shall control the interpretation and construction of this Agreement (and all schedules and exhibits hereto), even though under that jurisdictions choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply.
14. Enforcement. Subject to Section 10 of the Employment Agreement, if any party shall institute legal action to enforce or interpret the terms and conditions of this Non-Competition Agreement or to collect any monies under it, venue for any such action shall be the State of Delaware. Each party irrevocably consents to the jurisdiction of the courts located in the State of Delaware for all suits or actions arising out of this Non-Competition Agreement. Each party hereto waives to the fullest extent possible, the defense of an inconvenient forum, and each agrees that a final judgment in any action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
IN WITNESS WHEREOF, the parties have caused this Non-Competition Agreement to be executed as of the day written above.
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CheckSmart Financial Company | |
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/s/ Chad M. Streff |
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Name: |
Chad M. Streff |
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COO |
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Kyle Hanson | |
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/s/ Kyle Hanson |
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to EMPLOYMENT AGREEMENT, dated as of July 1, 2008 (this Amendment) by and between CheckSmart Financial Company, a Delaware corporation (the Company), and Kyle Hanson (Executive).
WHEREAS, the Company and Executive are parties to that certain employment agreement dated as of May 1, 2006 (the Employment Agreement);
WHEREAS, the Company and Executive desire to amend certain terms and conditions of the Employment Agreement;
WHEREAS, other than as specifically amended and set forth herein, the terms and conditions of the Employment Agreement shall remain unchanged and in full force and effect; and
WHEREAS, capitalized terms used and not otherwise defined herein shall have the meaning ascribed to them in the Employment Agreement.
NOW THEREFORE, in consideration of the premises and the mutual covenants set forth below, the parties hereby agree as follows:
1. Sections 4(a) and 4(b) of the Employment Agreement are hereby deleted and replaced in its entirety with the following:
Compensation and Related Matters.
(a) Base Salary. For performance of services under this Employment Agreement, Executive shall receive a base salary of $325,000 per fiscal year (Base Salary). Executives Base Salary shall be paid in approximately equal installments in accordance with the Companys customary payroll practices. The compensation committee of the Board (Committee) shall review Executives Base Salary annually and in a manner consistent with the compensation practices and guidelines of the Company and, in its sole discretion, may increase (but not decrease) such salary during the Term on an annual basis. If Executives Base Salary is increased by the Company, such increased Base Salary shall then constitute the Base Salary for all purposes of this Agreement as of such increase.
(b) Annual Bonus. In addition to Base Salary, Executive is eligible to receive an annual bonus as determined by the Board (the Annual Bonus). The Annual Bonus shall be paid as soon as practicable following the end of the fiscal year to which it relates.
2. A Section 4(h) shall be added to the Employment Agreement which shall read as follows:
4(h) Executive shall be entitled to be paid a retention bonus in the aggregate amount of $250,000, which retention bonus shall be paid as follows:
(i) Within 2 Business Days from the date hereof, and so long as Executive is employment by the Company (subject to Section 7(d) below), the Company will pay Executive $100,000;
(ii) 90 days from the date hereof, and so long as Executive is employment by the Company (subject to Section 7(d) below), the Company will pay Executive an additional $75,000; and
(iii) 180 days from the date hereof, and so long as Executive is employment by the Company (subject to Section 7(d) below), the Company will pay Executive an additional $75,000 (the payments set forth in subsections (i)-(iii) above, collectively the Retention Bonus).
3. Sections 7(b)(i), (c)(i) and (d)(ii) of the Employment Agreement are hereby deleted and replaced in its entirety with the following:
Compensation Upon Termination. Upon the termination of Executives employment and subject to the terms set forth herein, the Company shall provide Executive with the payments and benefits set forth below. Executive acknowledges and agrees that the payments set forth in this Section 7 constitute liquidated damages for termination of his employment during the Term.
(b) Termination upon Executives Disability. If Executives employment is terminated by reason of Disability, then:
(i) Company shall pay to Executive (A) any accrued, but unpaid, Base Salary and vacation pay through the Termination Date, (B) any Annual Bonus that is determined to have otherwise been earned with respect to the fiscal year in which termination occurs (the Termination Year), payable in accordance with the Companys usual bonus payment schedule, (C) continued Base Salary and Continued Benefits (as defined below) for the longer of (i) six months following the Termination Date or (ii) the date on which Executive becomes entitled to long-term disability benefits under the applicable plan or program of the Company, payable in accordance with the usual payroll policies of the Company, and (D) the Retention Bonus, to the extent not already paid in accordance with Section 4(h) above.
(c) Termination upon Executives Death. If Executives employment terminates during the Term due to Executives death, then:
(i) the Company shall pay to Executives beneficiary, (A) any accrued, but unpaid Base Salary and Annual Bonus through the Termination Date, (B) any accrued but unpaid vacation pay through the Termination Date, (C) a pro-rata portion of Executives Annual Bonus for the Termination Year, and (D) the Retention Bonus, to the extent not already paid in accordance with Section 4(h) above; and
(d) Termination by the Company without Cause or Resignation by Executive for Good Reason. If Executives employment is terminated by the Company without Cause or Executive resigns for Good Reason then, subject to Executives execution and effectiveness of a general release of claims in the form attached hereto as Exhibit B (the Release) and his continued compliance with the Non-Competition Agreement:
(ii) In the event that Executive is terminated without Cause or resigns for Good Reason between January 1, 2007 and December 31, 2008, the Company shall pay to Executive (A) any accrued, but unpaid, Base Salary and vacation pay through the Termination Date, payable as soon as practicable following the Termination Date, (B) any Annual Bonus that is determined to have otherwise been earned with respect to the Termination Year, payable in accordance with the Companys usual bonus payment schedule, (C) Base Salary and Continued Benefits for a period of 12 months following the Termination Date, payable, in the case of Base Salary, in accordance with the usual payroll policies of the Company, (D) any Annual Bonus that is determined to have otherwise been earned with respect to the Following Year prorated for the portion of the Following Year between January 1 of the Following Year and the 12 month anniversary of the Termination Date, payable in accordance with the Companys
usual bonus payment schedule, and (E) the Retention Bonus, to the extent not already paid in accordance with Section 4(h) above;
4. Arbitration. Except as provided for in the Non-Competition Agreement, if any contest or dispute arises between the parties with respect to this Employment Agreement, such contest or dispute shall be submitted to binding arbitration for resolution in Cleveland, Ohio, in accordance with the rules and procedures of the Employee Dispute Resolution Rules of the American Arbitration Association then in effect. The decision of the arbitrator shall be final and binding on both parties, and any court of competent jurisdiction may enter judgment upon the award.
5. Notice. For the purposes of this Amendment, notices, demands and all other communications provided for in this Amendment shall be as set forth in the Employment Agreement.
6. Miscellaneous. No provisions of this Amendment may be amended, modified, or waived unless such amendment or modification is agreed to in writing signed by Executive and by a duly authorized officer of the Company, and such waiver is set forth in writing and signed by the party to be charged. No waiver by either party hereto at any time of any breach by the other party hereto of any condition or provision of this Amendment to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Amendment, the Employment Agreement or the Purchase Agreement. The respective rights and obligations of the parties hereunder of this Amendment shall survive Executives termination of employment and the termination of this Amendment and the Employment Agreement to the extent necessary for the intended preservation of such rights and obligations. The validity, interpretation, construction and performance of this Amendment and all claims of action (whether in contract or tort) that may be based upon, arise out of or relate to this Amendment or the Employment Agreement, shall be governed by the laws of the State of Delaware without regard to its conflicts of law principles.
7. Validity. The invalidity or unenforceability of any provision or provisions of this Amendment shall not affect the validity or enforceability of any other provision of this Amendment or the Employment Agreement, which shall remain in full force and effect. All other terms and conditions of the Employment Agreement other than as set forth herein shall remain unchanged and in full force and effect.
8. Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
9. Entire Agreement. Except as otherwise provided for herein and any Exhibits hereto, this Amendment, the Employment Agreement and the Purchase Agreement set forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersede all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto in respect of such subject matter. Any prior agreement of the parties hereto, or between Executive and any of the Subsidiaries in respect of the subject matter contained herein is hereby terminated and cancelled. Other than any accrued Base Salary due to Executive as of the date hereof, Executive acknowledges that as of the Commencement Date, he has no claims against the Company or any of its affiliates in respect of any amounts that may be owing to him from any of the Subsidiaries.
10. Withholding. All payments hereunder shall be subject to any required withholding of Federal, state and local taxes pursuant to any applicable law or regulation.
11. Noncontravention. The Company represents that the Company is not prevented from entering into, or performing this Agreement by the terms of any law, order, rule or regulation, its by-laws or declaration of trust, or any agreement to which it is a party, other than which would not have a material adverse effect on the Companys ability to enter into or perform this Amendment.
12. Section 409A Compliance. The parties intend that any severance or other compensation under this Amendment and the Employment Agreement be paid in compliance with Section 409A of the Code such that there are no adverse tax consequences, interest, or penalties as a result of the payments. The parties agree to modify this Amendment and/or the Employment Agreement, as applicable, the timing and/or the amount of the severance to the extent necessary to comply with Section 409A.
[Signature Page to Follow]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the date first above written.
CheckSmart Financial Company |
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Kyle Hanson | |
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/s/ William E. Saunders, Jr. |
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/s/ Kyle Hanson |
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Name: |
William E. Saunders, Jr. |
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Title: |
Chief Executive Officer |
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[Signature Page to Kyle Employment Agreement Amendment]
THIRD AMENDMENT TO EMPLOYMENT AGREEMENT
This Third Amendment to EMPLOYMENT AGREEMENT, dated as of January 1, 2011 (this Amendment), is by and between CheckSmart Financial Company, a Delaware corporation (the Company), and Kyle Hanson (Executive).
WHEREAS, the Company and Executive are parties to that certain employment agreement dated as of May 1, 2006, amended as of July 1, 2008 and September 15, 2009 (as amended, the Employment Agreement);
WHEREAS, the Company and Executive desire to amend certain terms and conditions of the Employment Agreement;
WHEREAS, other than as specifically amended and set forth herein, the terms and conditions of the Employment Agreement shall remain unchanged and in full force and effect; and
WHEREAS, capitalized terms used and not otherwise defined herein shall have the meaning ascribed to them in the Employment Agreement.
NOW THEREFORE, in consideration of the premises and the mutual covenants set forth below, the parties hereby agree as follows:
1. The last sentence of Section 2 shall be deleted in its entirety and replaced with the following:
Notwithstanding the above, Executive shall be permitted, to the extent such activities do not interfere with the performance by Executive of his duties and responsibilities hereunder, to (i) manage Executives personal, financial and legal affairs, (ii) to serve on civic or charitable boards or committees, and (iii) to serve on the board of directors of Insight Card Services, LLC (Insight), to actively participate in the growth strategy of Insight and to own up to 7.5% of Insights common stock.
2. Section 4(a) of the Employment Agreement is hereby deleted in its entirety and replaced with the following:
(a) Base Salary. For performance of services under this Employment Agreement, Executive shall receive a base salary of (i) $140,000 for the fiscal years of 2006, 2007 and 2008, (ii) $350,000 for the fiscal year of 2009, (iii) $350,000 for the fiscal year of 2010 and (iv) $450,000 for the fiscal year of 2011 and, to the extent the Terms is renewed in accordance with Section 3 of this Employment Agreement, for any subsequent fiscal year in the Term (for each applicable fiscal year of the Term, Base Salary). Executives Base Salary shall be paid in approximately equal installments in accordance with the Companys customary payroll practices. The compensation committee of the Board (Committee) shall review Executives Base Salary annually and in a manner consistent with the compensation practices and guidelines of the Company and, in its sole discretion, may increase (but not decrease) such salary during the Term on an annual basis. If Executives Base Salary is increased by the Company, such increased Base Salary shall then constitute the Base Salary for all purposes of this Agreement as of such increase.
3. Section 4(b) of the Employment Agreement is hereby deleted in its entirety and replaced with the following:
(b) Annual Bonus. In addition to Base Salary, Executive shall be eligible to receive an annual bonus (the Annual Bonus) in the amounts and with respect to the fiscal years set forth in Schedule 1 hereto, subject to terms and conditions determined by the CEO and Board, including with respect to the achievement of the Companys financial budget goals for the fiscal year to which it relates as determined by the Board. The Annual Bonus shall be paid in the fiscal year following the end of the applicable fiscal year in which such bonus was earned.
4. Section 4(f) is hereby deleted in its entirety.
5. Section 4(h) is hereby deleted in its entirety and replaced with the following:
4(h) Executive shall be entitled to be paid a retention bonus in the aggregate amounts for each fiscal year set forth in Schedules II-A, II-B and II-C hereto.
6. Section 7(b) is hereby deleted in its entirety and replaced with the following:
7(b)(i)Company shall pay to Executive (A) any accrued, but unpaid, Base Salary and vacation pay through the Termination Date, payable in accordance with the usual payroll practices of the Company, (B) any Annual Bonus that is determined to have otherwise been earned with respect to the fiscal year in which termination occurs (the Termination Year), payable in accordance with the Companys usual bonus payment schedule, (C) continued Base Salary and Continued Benefits (as defined below) until the earlier of (i) six months following the Termination Date or (ii) the date on which Executive becomes entitled to long-term disability benefits under the applicable plan or program of the Company, payable, in the case of Base Salary, in accordance with the usual payroll policies of the Company, and (D) the portion of the Retention Bonus that is earned but unpaid through the Termination Date, to the extent not already paid in accordance with Section 4(f) above, payable within thirty (30) days of the Termination Date.
(ii) Continued Benefits means reimbursement of any premiums for continued group medical, dental and vision coverage for the Executive and/or the Executives eligible dependents under Section 4980B of the Internal Revenue Code of 1986, as amended (COBRA), to the extent such amount exceeds the premium which Executive would have had to pay for coverage under such plan if he had remained an active employee. For the avoidance of doubt, any amounts reimbursed pursuant to this Section 7 shall be treated as compensation.
7. Section 7(d)(iii) is hereby deleted in its entirety and replaced with the following:
7(d)(iii) in the event that Executive is terminated without Cause or resigns for Good Reason at any time after December 31, 2008, the Company shall pay to Executive (A) any accrued, but unpaid, Base Salary and vacation pay through the Termination Date, payable as soon as practicable in accordance with the usual payroll practices of the Company, (B) any Annual Bonus that is determined to have otherwise been earned with respect to the Termination Year, payable in accordance with the Companys usual bonus payment schedule, (C) Base Salary and Continued Benefits for the longer of (i) the Termination Date through December 31 of the Termination Year or (ii) 90 days; payable, in the case of Base Salary, in accordance with the usual payroll policies of the Company, and (D) the accrued but unpaid Retention Bonus through the date of termination, to the extent not already paid in accordance with Section 4(f) above, payable within thirty (30) days of the Termination Date.
7(d)(iv)As a condition precedent to receiving any payments under Section 7(d) (other than those amounts already accrued prior to the Termination Date, which shall be payable on the date of termination), Executive shall have executed, within twenty-one (21) days, or if required for an effective release, forty-five (45) days, the Release, which may be updated by the Company from time to time to reflect changes in law, and the seven (7) day revocation period of such Release shall have expired without revocation. Subject to Section 19 and the execution of the Release pursuant to this Section 7(d)(iv), all payments under Section 7(d) shall be payable as described above; provided, that the first payment shall be made on the sixtieth (60th) day after the Termination Date (or such later date as required by the terms hereof), and such first payment shall include payment of any amounts that would otherwise be due prior thereto.
8. A new Section 7(f) shall be added as follows:
7(f) Except as otherwise specifically set forth herein, any payments due to Executive under this Section 7 shall be paid to Executive as follows: (i) any payment of accrued but unpaid Base Salary and vacation pay shall be paid as soon as practicable in accordance with the usual payroll practices of the Company; (ii) any Annual Bonus shall be payable in accordance with the Companys usual bonus payment schedule; (iii) any continuing payment of Base Salary and Continued Benefits for any period of time following the Termination Date shall be paid in the case of Base Salary, in accordance with the usual payroll policies of the Company; and (iv) any Retention Bonus shall be paid within thirty (30) days of the Termination Date.
9. Section 19 is hereby deleted in its entirety and replaced with the following:
19. Section 409A.
(a) The intent of the parties is that payments and benefit under this Agreement comply with or be exempt from Code Section 409A and the regulations and guidance promulgated thereunder (collectively, Section 409A) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. If the Executive notifies the Company that the Executive has received advice of tax counsel of a national reputation with expertise in Section 409A that any provision of this Agreement (or of any award of compensation, including equity compensation or benefits) would cause the Executive to incur any additional tax or interest under Section 409A (with specificity as to the reason therefor) or the Company independently makes such determination, the Company shall, after consulting with the Executive, reform such provision to try to comply with Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with Section 409A. To the extent that any provision hereof is modified in order to comply with or be exempt from Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to the Executive and the Company of the applicable provision without violating the provisions of Section 409A.
(b) A termination of employment shall not be deemed to have occurred for purposes of this Agreement providing for the payment of any amounts or benefits that are considered nonqualified deferred compensation under Section 409A upon or following a termination of employment, unless such termination is also a separation from service within the meaning of Section 409A and the payment thereof prior to a separation from service would violate Section 409A. As permitted by Treasury Regulation 1.409A-1(h)(1)(ii), 49% shall be substituted in lieu of 20% for the average level of bona fide services performed during the immediately preceding thirty-six (36) month period in order to constitute a separation from service. For purposes of any such provision of this Agreement relating to
any such payments or benefits, references to a termination, termination of employment or like terms shall mean separation from service. If the Executive is deemed on the date of termination to be a specified employee within the meaning of that term under Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered nonqualified deferred compensation under Section 409A payable on account of a separation from service, such payment or benefit shall be made or provided on the first business day following the date which is the earlier of (A) the expiration of the six (6) month period measured from the date of such separation from service of the Executive, and (B) the date of the Executives death (the Delay Period). Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section 19 (whether they would have otherwise been payable in a single lump sum or in installments in the absence of such delay) shall be paid or reimbursed to the Executive in a lump sum with interest at the prime rate as published in the Wall Street Journal on the first business day following the Delay Period, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.
(c) (i) All expenses or other reimbursements as provided herein shall be payable in accordance with the Companys policies in effect from time to time, but in any event shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by the Executive; (ii) no such reimbursement or expenses eligible for reimbursement in any taxable year shall in any way affect the expenses eligible for reimbursement in any other taxable year; provided, that this clause (ii) shall not be violated without regard to expenses reimbursed under any arrangement covered by Code Section 105(b) solely because such expenses are subject to a limit related to the period the arrangement is in effect; and (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchanged for another benefit.
(d) For purposes of Section 409A, the Executives right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments. Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., payment shall be made within thirty (30) days following the date of termination), the actual date of payment within the specified period shall be within the sole discretion of the Company.
10. Notice. For the purposes of this Amendment, notices, demands and all other communications provided for in this Amendment shall be as set forth in the Employment Agreement.
11. Miscellaneous. No provisions of this Amendment may be amended, modified, or waived unless such amendment or modification is agreed to in writing signed by Executive and by a duly authorized officer of the Company (other than Executive), and such waiver is set forth in writing and signed by the party to be charged. No waiver by either party hereto at any time of any breach by the other party hereto of any condition or provision of this Amendment to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Amendment or the Employment Agreement. The respective rights and obligations of the parties hereunder of this Amendment shall survive Executives termination of employment and the termination of this Amendment and the Employment Agreement to the extent necessary for the intended preservation of such rights and obligations. The validity, interpretation, construction and performance of this Amendment and all claims of action (whether in contract or tort) that may be based upon, arise out of or
relate to this Amendment or the Employment Agreement, shall be governed by the laws of the State of Delaware without regard to its conflicts of law principles.
12. Validity. The invalidity or unenforceability of any provision or provisions of this Amendment shall not affect the validity or enforceability of any other provision of this Amendment or the Employment Agreement, which shall remain in full force and effect. All other terms and conditions of the Employment Agreement other than as set forth herein shall remain unchanged and in full force and effect.
13. Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
14. Entire Agreement. Except as otherwise provided for herein and any Exhibits hereto, this Amendment and the Employment Agreement set forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersede all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto in respect of such subject matter. Any prior agreement of the parties hereto, or between Executive and any of the Subsidiaries in respect of the subject matter contained herein is hereby terminated and cancelled. Other than any accrued Base Salary due to Executive as of the date hereof, Executive acknowledges that as of the Commencement Date, he has no claims against the Company or any of its affiliates in respect of any amounts that may be owing to him from any of the Subsidiaries.
15. Withholding. All payments hereunder shall be subject to any required withholding of Federal, state and local taxes pursuant to any applicable law or regulation.
16. Section 409A Compliance. The parties intend that any severance or other compensation under this Amendment and the Employment Agreement be paid in compliance with Section 409A of the Code such that there are no adverse tax consequences, interest, or penalties as a result of the payments. The parties agree to modify this Amendment and/or the Employment Agreement, as applicable, the timing and/or the amount of the severance to the extent necessary to comply with Section 409A.
17. Effectiveness of Employment Agreement. Except as modified by this Amendment, all the terms of the Employment Agreement shall remain unchanged and in full force and effect.
[Signature Page to Follow]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the date first above written.
CheckSmart Financial Company |
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Kyle Hanson | |
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By: |
/s/ William E. Saunders, Jr. |
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/s/ Kyle Hanson |
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Name: |
William E. Saunders, Jr. |
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Title: |
CEO |
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[Signature Page to Kyle Employment Agreement Amendment]
Schedule I
Annual Bonus
Fiscal Year |
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Amount of Annual Bonus |
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2006 |
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$ |
40,000 |
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2007 |
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$ |
40,000 |
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2008 |
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$ |
40,000 |
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2009 |
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$ |
200,000 |
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2010 |
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$ |
255,000 |
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2011 |
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$ |
175,000 |
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Any subsequent fiscal year in the Term, to the extent the Term is renewed in accordance with Section 3 of this Employment Agreement |
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$ |
175,000 |
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Schedule II-A
Retention Bonus from July 1, 2008 to December 31, 2008
The retention bonus equals an aggregate amount of $250,000 from July 1, 2008 to December 31, 2008 (the 2008 Retention Bonus). The 2008 Retention Bonus shall be earned and paid as follows:
(i) Within 2 Business Days from July 1, 2008, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), the Company will pay Executive $100,000;
(ii) 90 days from July 1, 2008, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), the Company will pay Executive an additional $75,000; and
(iii) 180 days from July 1, 2008, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), the Company will pay Executive an additional $75,000 (it being understood that the payments set forth in subsections (i)-(iii) above, to the extent accrued and payable, comprise the 2008 Retention Bonus).
Schedule II-B
Retention Bonus for the Fiscal Year of 2010
The retention bonus equals an aggregate amount of $200,000 for the fiscal year of 2010 (the 2010 Retention Bonus). The 2010 Retention Bonus shall be earned and paid as follows:
(i) On March 31, 2010, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), (A) the Company will pay Executive $25,000 and (B) Executive will be eligible to receive an additional $25,000 upon the achievement of each of the milestones set forth below;
(ii) On June 30, 2010, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), (A) the Company will pay Executive $25,000 and (B) Executive will be eligible to receive an additional $25,000 upon the achievement of each of the milestones set forth below;
(iii) On September 30, 2010, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), (A) the Company will pay Executive $25,000 and (B) Executive will be eligible to receive an additional $25,000 upon the achievement of each of the milestones set forth below; and
(iv) On December 31, 2010, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), (A) the Company will pay Executive $25,000 and (B) Executive will be eligible to receive an additional $25,000 upon the achievement of each of the milestones set forth below (it being understood that the payments set forth in subsections (i)-(iv) above, to the extent accrued and payable, comprise the 2010 Retention Bonus).
Milestones for the Fiscal Year of 2010
INTEROFFICE MEMORANDUM
TO: |
KYLE HANSON, PRESIDENT |
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FROM: |
TED SAUNDERS, CEO |
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SUBJECT: |
2010 JOB RESPONSIBILITIES AND PERFORMANCE GOALS |
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DATE: |
2/1/2011 |
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CC: |
H. EUGENE LOCKHART, CHAIRMAN |
Pursuant to the offer to amend and extend your employment contract for the fiscal year 2010, we need to establish, discuss and memorialize my expectations for your role and specific qualitative job duties to be reviewed on an ongoing basis and upon which a portion of your retention compensation will be based.
Job Duties:
As President of the Company, you are to lead by example in all facets your professional life. Your decision making and behavior should rise above all and set example for every employee. You should motivate and develop all employees, but specifically guide and direct the operations team. Excellence in operational performance and compliance with a state and federal laws are the two overarching tenants of success.
Specific 2010 Operational Goals:
· Excellence in execution of new product roll out(s)
· Focus and leadership on all the legacy markets during transition (i.e. keeping the rest of the ship headed in the right direction during the major changes that lie ahead in Ohio and other new product roll outs)
· Relentless pursuit of compliance with all state and federal law
· Assist the CEO in the oversight and direction of all departments and employees
My success as CEO and the overall success of Checksmart are dependent upon your continued performance as President. You have absolutely risen to the challenge in the past 18 months and appreciate what you do to make us all perform. I look forward to working with you to achieve all our goals in 2010.
Sincerely,
William E. Saunders, Jr., CEO
Schedule II-C
Retention Bonus for the Fiscal Year of 2011 and any Subsequent Fiscal Year in the Term
The retention bonus equals an aggregate amount of $100,000 for the fiscal year of 2011 (the 2011 Retention Bonus) and for any subsequent fiscal year in the Term, to the extent the Term is renewed in accordance with Section 3 of this Employment Agreement. The 2011 Retention Bonus shall be earned and paid as follows:
(i) On March 31, 2011, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), Executive will be eligible to receive $25,000 upon the achievement of each of the milestones set forth below;
(ii) On June 30, 2011, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), Executive will be eligible to receive $25,000 upon the achievement of each of the milestones set forth below;
(iii) On September 30, 2011, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), Executive will be eligible to receive $25,000 upon the achievement of each of the milestones s set forth below; and
(iv) On December 31, 2011, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), Executive will be eligible to receive $25,000 upon the achievement of each of the milestones set forth below (it being understood that the payments set forth in subsections (i)-(iv) above, to the extent accrued and payable, comprise the 2011 Retention Bonus).
Milestones for the Fiscal Year of 2011 and any Subsequent Fiscal Year in the Term
INTEROFFICE MEMORANDUM
TO: |
KYLE HANSON, PRESIDENT |
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FROM: |
TED SAUNDERS, CEO |
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SUBJECT: |
2011 JOB RESPONSIBILITIES AND PERFORMANCE GOALS |
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DATE: |
1/20/2011 |
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CC: |
H. EUGENE LOCKHART, CHAIRMAN |
Pursuant to the offer to amend and extend your employment contract for the fiscal year 2011, we need to establish, discuss and memorialize my expectations for your role and specific qualitative job duties to be reviewed on an ongoing basis and upon which a portion of your retention compensation will be based.
Job Duties:
As President of the Company, you are to lead by example in all facets your professional life. Your decision-making and behavior should rise above all and set example for every employee. You should motivate and develop all employees, but specifically guide and direct the operations team. Excellence in operational performance and compliance with all state and federal laws are the two overarching tenants of success.
Specific 2011 Operational Goals:
· Assist the CEO in the oversight and direction of all departments and employees
· Have an active role in any refinancing event into which the Company may enter
· Demonstrate excellence in evaluation and execution of new acquisition(s):
o Have oversight in regards to all aspects of acquisitions the Company may make in 2011
o Maintain a focus on integrating the acquired Company into existing infrastructure from both a Field and Corporate point of view
o Ensure the successful implementation of additional products into the acquired company
o Provide expertise in potential value of new products for modeling upside
· Focus and leadership on all the legacy markets throughout the course of the year:
o Constantly evaluate, on a per market basis, the contributions being made
o Take appropriate steps to correct any non-producing market
o Evaluate and implement new products that may be accretive to revenue
· Drive Company to meet or exceed the 2011 Financial Budget
o Drive number of cards sold and Direct Deposit adoption
o Focus the field level employees on net revenue growth
o Focus the overall company on transition to Financial Services Retailer
· Relentless pursuit of compliance with all state and federal laws
o With input from the Compliance Committee, assess potential areas of weakness and be proactive when it comes to maintaining a high level of compliance on both a State and Federal level
o Lead by example in further solidifying a culture of compliance
My success as CEO and the overall success of Checksmart are dependent upon your continued performance as President. You have absolutely risen to the challenge over the past several years and I appreciate what you do to make us all perform. I look forward to working with you to achieve all of our goals in 2011.
Sincerely,
William E. Saunders, Jr., CEO
Exhibit 10.6
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of May 1, 2006 (this Employment Agreement) by and between CheckSmart Financial Company, a Delaware corporation (the Company), and Chad Streff (Executive).
WHEREAS, the Company wishes to employ Executive and Executive wishes to be employed by, and make his services available to, the Company on the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the premises and the mutual covenants set forth below, the parties hereby agree as follows:
1. Employment. Effective as of the date hereof (the Commencement Date), the Company hereby agrees to employ Executive as the Chief Operating Officer (the COO), and Executive hereby accepts such employment on the terms and conditions hereinafter set forth.
2. Position and Duties. Executive shall serve as COO, and shall report directly to the Companys Chief Executive Officer (the CEO). Executive shall have those powers and duties normally associated with the position of COO of entities comparable to the Company and such other powers and duties as may be prescribed by the Company; provided that, such other powers and duties are consistent with Executives position as COO of the Company. Notwithstanding the above, Executive shall be permitted, to the extent such activities do not interfere with the performance by Executive of his duties and responsibilities hereunder, to (i) manage Executives personal, financial and legal affairs and (ii) to serve on civic or charitable boards or committees.
3. Term. The term of employment of Executive under this Employment Agreement shall commence on the Commencement Date and shall continue in full force and effect until December 31, 2009 unless terminated earlier as provided herein (including any renewals hereunder, the Term); provided, however, that unless the Companys Board of Directors (the Board) or Executive provides the other with written notice of termination of this Employment Agreement at least 90 days prior to any date on which this Employment Agreement would otherwise expire or as otherwise set forth herein, the term of employment hereunder shall be automatically extended for an additional period of one fiscal year from each such date.
4. Compensation and Related Matters.
(a) Base Salary. For performance of services under this Employment Agreement, Executive shall receive a base salary of $300,000 per fiscal year (Base Salary). Executives Base Salary shall be paid in approximately equal installments in accordance with the Companys customary payroll practices. The compensation committee of the Board (Committee) shall review Executives Base Salary annually and in a manner consistent with the compensation practices and guidelines of the Company and, in its sole discretion, may increase (but not decrease) such salary during the Term on an annual basis. If Executives Base Salary is increased by the Company, such increased Base Salary shall then constitute the Base Salary for all purposes of this Agreement as of such increase.
(b) Annual Bonus. In addition to Base Salary, Executive is eligible to receive an annual bonus with a target amount of up to $100,000 upon the achievement of annually established performance targets (the Annual Bonus). Such performance targets shall be established by the Board. The Committee may increase the Annual Bonus in the event that the annually established performance targets are exceeded and the Committee determines, in its sole discretion, that such an
increase is merited. The Annual Bonus shall be paid as soon as practicable following the end of the fiscal year to which it relates.
(c) Stock Appreciation Rights. Simultaneous with the execution and delivery of this Employment Agreement, Executive shall receive, pursuant to the CheckSmart Financial Holdings Corp. 2006 Management Equity Incentive Plan (the Plan), grants of Stock Appreciation Rights (SARs) representing shares of CheckSmart Financial Holdings Corp. Class A Common Stock on the terms and subject to the conditions set forth in the Stock Appreciation Rights Grant Agreement attached hereto as Exhibit A (the SAR Agreement).
(d) Expenses. The Company shall reimburse Executive for all reasonable business expenses upon the presentation of receipts in accordance with the Companys policies and procedures now in force or as such policies and procedures may be modified with respect to all senior executive officers of the Company.
(e) Benefit Plans and Perquisites. Executive shall be entitled to participate in and be covered under all employee benefit plans or programs maintained by the Company from time to time for the benefit of its senior executives including, without limitation, 401(k), vacation and medical.
(f) Continuation of Benefits. Following the coverage termination date under the Companys group medical, life and long-term disability insurance plans, Executive, his spouse or domestic partner (to the extent that domestic partners are eligible for benefits as of such dates under any of the Companys programs) and his dependants shall be entitled to continuation of coverage pursuant to any statutory rights Executive may then have for such continuation coverage (whether under part VI of Subtitle B of Title I of the Executive Retirement Income Security Act of 1974, as amended, or Section 4980B of the Internal Revenue Code of 1986, as amended (together, COBRA), or otherwise). During the time periods that Executive is entitled to continued payment of his Base Salary pursuant to Section 7 herein, the Company shall pay or reimburse Executive for any premium for such continuation coverage to the extent such amount exceeds the premium which Executive would have had to pay for coverage under such plans if he had remained an active employee. Such continuation coverage, whether provided at the Companys or Executives expense, shall be provided in accordance with applicable law and the terms of the plans as they may be amended from time to time and shall be afforded no longer than the period provided by law and only to the extent Executive complies with all conditions of such continuation coverage on a timely basis.
5. Termination. Executives employment hereunder may be terminated upon the following events:
(a) Death. Executives employment hereunder shall terminate upon his death.
(b) Disability. Executives employment may be terminated if, as a result of Executives incapacity due to physical or mental illness, Executive is unable to perform his duties for 180 consecutive days and, within 30 days after a Notice of Termination (as defined below), which Notice of Termination may not be given until the expiration of such consecutive 180 day period, is given to Executive, Executive has not returned to work (Disability).
(c) Cause. The Company shall have the right to terminate Executives employment for Cause. Cause shall mean:
(i) Executives material breach of this Employment Agreement and Executives failure to cure such breach within 20 days following written notice from the Board or the CEO to Executive of such breach;
(ii) Executives failure or refusal to comply, on a timely basis, with any lawful direction or instruction of the Board or the CEO;
(iii) Executives gross negligence or willful misconduct in the performance of his duties as an employee of the Company;
(iv) Executives commission of fraud, embezzlement, misappropriation of funds, breach of fiduciary duty or act of dishonesty against the Company;
(v) conviction of Executive of a felony or entry by Executive of a plea of nolo contendre or a plea of guilty under an indictment to a felony; or
(vi) the habitual drug addiction or intoxication of Executive.
(d) Good Reason. Executive may resign for Good Reason within 30 days after Executive has actual knowledge of the occurrence, without the written consent of Executive, of one of the following events:
(i) a reduction in Executives Base Salary, or non-timely payment of Base Salary or earned Annual Bonus not cured by the Company within five business days;
(ii) a material diminution in Executives duties or responsibilities not cured by the Company within 20 days after written notice to the Company; or
(iii) a requirement by the Company that Executive be based in an office that is located more than 20 miles from Executives principal place of employment as of the Commencement Date.
(e) Without Cause. The Company shall have the right to terminate Executives employment hereunder without Cause by providing Executive with a Notice of Termination.
6. Termination Procedure.
(a) Notice of Termination. Any termination of Executives employment by the Company or resignation by Executive (other than termination by reason of death) shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 11. For purposes of this Agreement, a Notice of Termination shall mean a notice which shall indicate the specific termination provision in this Employment Agreement relied upon.
(b) Termination Date. Termination Date shall mean (i) if Executives employment is terminated by his death, the date of his death, (ii) if Executives employment is terminated for Disability, 30 days after Notice of Termination, and (iii) if Executives employment is terminated for any other reason, the date on which a Notice of Termination is given or any later date (within 30 days after the giving of such notice) set forth in such Notice of Termination.
7. Compensation Upon Termination. Upon the termination of Executives employment and subject to the terms set forth herein, the Company shall provide Executive with the
payments and benefits set forth below. Executive acknowledges and agrees that the payments set forth in this Section 7 constitute liquidated damages for termination of his employment during the Term.
(a) Non-Renewal by the Company. If the Company does not renew Executives employment in accordance with Section 3 above, Executive shall be entitled to receive his Base Salary and Continued Benefits (as defined below) for a period of 90 days following the expiration of the Term (such 90-day period, the Non-Renewal Tail Period).
(b) Termination upon Executives Disability. If Executives employment is terminated by reason of Disability, then:
(i) Company shall pay to Executive (A) any accrued, but unpaid, Base Salary and vacation pay through the Termination Date, (B) any Annual Bonus that is determined to have otherwise been earned with respect to the fiscal year in which termination occurs (the Termination Year), payable in accordance with the Companys usual bonus payment schedule, and (C) continued Base Salary and Continued Benefits (as defined below) for the longer of (i) six months or (ii) the date on which Executive becomes entitled to long-term disability benefits under the applicable plan or program of the Company, payable in accordance with the usual payroll policies of the Company.
(ii) Continued Benefits means, for the continued benefit of Executive, his spouse or domestic partner (to the extent domestic partners are eligible for benefits as of the Termination Date under any of the Companys programs) and eligible dependents following the Termination Date the medical, hospitalization, dental and life insurance programs of the Company in which Executive, his spouse or domestic partner and his eligible dependents were participating on the Termination Date.
(c) Termination upon Executives Death. If Executives employment terminates during the Term due to Executives death, then:
(i) the Company shall pay to Executives beneficiary, (A) any accrued, but unpaid Base Salary and Annual Bonus through the Termination Date, (B) any accrued but unpaid vacation pay through the Termination Date, and (C) a pro-rata portion of Executives Annual Bonus for the Termination Year; and
(ii) the Company shall provide Executives spouse and dependents with Continued Benefits for 12 months.
(d) Termination by the Company without Cause or Resignation by Executive for Good Reason. If Executives employment is terminated by the Company without Cause or Executive resigns for Good Reason then, subject to Executives execution and effectiveness of a general release of claims in the form attached hereto as Exhibit B (the Release) and his continued compliance with the Non-Competition Agreement:
(i) In the event that Executive is terminated without Cause or resigns for Good Reason at any time between the Commencement Date and December 31, 2006, the Company shall pay Executive (A) any accrued, but unpaid, Base Salary and vacation pay through the Termination Date, payable as soon as practicable following the Termination Date, (B) any Annual Bonus that is determined to have otherwise been earned with respect to the Termination Year and the fiscal year following the Termination Year (the Following Year), payable in accordance with the Companys usual bonus payment schedule, and (C) Base Salary
and Continued Benefits from the Termination Date through December 31, 2007, payable, in the case of Base Salary, in accordance with the usual payroll policies of the Company;
(ii) In the event that Executive is terminated without Cause or resigns for Good Reason between January 1, 2007 and December 31, 2008, the Company shall pay to Executive (A) any accrued, but unpaid, Base Salary and vacation pay through the Termination Date, payable as soon as practicable following the Termination Date, (B) any Annual Bonus that is determined to have otherwise been earned with respect to the Termination Year, payable in accordance with the Companys usual bonus payment schedule, (C) Base Salary and Continued Benefits for a period of 12 months following the Termination Date, payable, in the case of Base Salary, in accordance with the usual payroll policies of the Company, and (D) any Annual Bonus that is determined to have otherwise been earned with respect to the Following Year prorated for the portion of the Following Year between January 1 of the Following Year and the 12 month anniversary of the Termination Date, payable in accordance with the Companys usual bonus payment schedule;
(iii) In the event that Executive is terminated without Cause or resigns for Good Reason at any time after December 31, 2008, the Company shall pay to Executive (A) any accrued, but unpaid, Base Salary and vacation pay through the Termination Date, payable as soon as practicable following the Termination Date, (B) any Annual Bonus that is determined to have otherwise been earned with respect to the Termination Year, payable in accordance with the Companys usual bonus payment schedule, and (C) Base Salary and Continued Benefits for the longer of (i) the Termination Date through December 31 of the Termination Year or (ii) 90 days; payable, in the case of Base Salary, in accordance with the usual payroll policies of the Company.
(e) Termination by the Company for Cause or by Executive without Good Reason.
(i) If Executives employment is terminated by the Company for Cause or Executive resigns other than for Good Reason then the Company shall pay Executive his accrued, but unpaid Base Salary and Annual Bonus, and any accrued but unpaid vacation pay, through the Termination Date as soon as practicable following the Termination Date.
8. Confidentiality, Non-Compete, Non-Solicit/Hire and Intellectual Property Agreement. Simultaneous with the execution and delivery of this Employment Agreement, the Company and Executive shall execute and deliver the non-competition agreement (the Non-Competition Agreement) attached hereto as Exhibit C and incorporated herein by reference. The Non-Competition Agreement shall survive any termination of this Employment Agreement in accordance with the terms of the Non-Competition Agreement.
9. Indemnification. Executive shall be entitled to such indemnification under the terms of the Companys By-Laws, Certificate of Incorporation and such other liability insurance as the Company may purchase for its Board members and senior officers from time to time.
10. Arbitration. Except as provided for in the Non-Competition Agreement, if any contest or dispute arises between the parties with respect to this Employment Agreement, such contest or dispute shall be submitted to binding arbitration for resolution in the city of Cleveland, Ohio, in accordance with the rules and procedures of the Employee Dispute Resolution Rules of the American Arbitration Association then in effect. The decision of the arbitrator shall be final and binding on both parties, and any court of competent jurisdiction may enter judgment upon the award.
11. Notice. For the purposes of this Employment Agreement, notices, demands and all other communications provided for in this Employment Agreement shall be in writing and shall be deemed to have been duly given when delivered either personally or by United States certified or registered mail, return receipt requested, postage prepaid, addressed as follows:
If to Executive:
Chad Streff
7545 Duncan Glenn Dr
Westerville, OH 43082
with a copy to:
Mark Wishner
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
12010 Sunset Hills Road; Suite 900
Reston, VA 20190
Telephone: (703) 464-4808
Fax: (703) 464-4895
If to the Company:
CheckSmart Financial Company
7001 Post Road, Suite 200
Dublin, Ohio 43016
Telephone: (614) 798-5900
Fax: (614) 760-2601
with a copy to:
Diamond Castle Holdings
280 Park Avenue, 25th floor, East Tower
New York, New York 10017
Attn: Andrew Rush
Fax: (212) 983-1234
or to such other address as any party may have furnished to the others in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
12. Miscellaneous. No provisions of this Employment Agreement may be amended, modified, or waived unless such amendment or modification is agreed to in writing signed by Executive and by a duly authorized officer of the Company, and such waiver is set forth in writing and signed by the party to be charged. No waiver by either party hereto at any time of any breach by the other party hereto of any condition or provision of this Employment Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Employment Agreement or the Purchase Agreement. The respective rights and obligations of the parties hereunder of this Employment Agreement shall survive Executives termination of employment and the termination of this Employment Agreement to the extent necessary for the intended preservation of such rights and obligations. The validity, interpretation, construction and performance of this Employment Agreement
and all claims of action (whether in contract or tort) that may be based upon, arise out of or relate to this Employment Agreement, shall be governed by the laws of the State of Delaware without regard to its conflicts of law principles.
13. Validity. The invalidity or unenforceability of any provision or provisions of this Employment Agreement shall not affect the validity or enforceability of any other provision of this Employment Agreement, which shall remain in full force and effect.
14. Counterparts. This Employment Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
15. Entire Agreement. Except as otherwise provided for herein, any Exhibits hereto, and in Section 6.11 of the Purchase Agreement, this Employment Agreement and the Purchase Agreement set forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersede all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto in respect of such subject matter. Any prior agreement of the parties hereto, or between Executive and any of the Subsidiaries in respect of the subject matter contained herein is hereby terminated and cancelled. Other than any accrued Base Salary due to Executive as of the date hereof, Executive acknowledges that as of the Commencement Date, he has no claims against the Company or any of its affiliates in respect of any amounts that may be owing to him from any of the Subsidiaries.
16. Withholding. All payments hereunder shall be subject to any required withholding of Federal, state and local taxes pursuant to any applicable law or regulation.
17. Noncontravention. The Company represents that the Company is not prevented from entering into, or performing this Agreement by the terms of any law, order, rule or regulation, its bylaws or declaration of trust, or any agreement to which it is a party, other than which would not have a material adverse effect on the Companys ability to enter into or perform this Employment Agreement.
18. Section Headings. The section headings in this Employment Agreement are for convenience of reference only, and they form no part of this Employment Agreement and shall not affect its interpretation.
19. Section 409A Compliance. The parties intend that any severance or other compensation under this Agreement be paid in compliance with Section 409A of the Code such that there are no adverse tax consequences, interest, or penalties as a result of the payments. The parties agree to modify this Agreement, the timing and/or the amount of the severance to the extent necessary to comply with Section 409A.
[Signature Page to Follow]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written.
CheckSmart Financial Company |
Chad Streff | ||
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/s/ James H. Frauenberg, Sr. |
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/s/ Chad Streff |
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Name: |
James H. Frauenberg, Sr. |
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Title: |
Chief Executive Officer |
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[Signature Page to Streff Employment Agreement]
Exhibit A
Stock Appreciation Award Agreement
[Attached]
CHECKSMART FINANCIAL HOLDINGS CORP.
2006 MANAGEMENT EQUITY INCENTIVE PLAN
STOCK APPRECIATION RIGHT AWARD AGREEMENT
GRANTS TO: Chad M. Streff
THIS AGREEMENT (this Agreement) is made effective as of May 1, 2006 (the Grant Date), between CheckSmart Financial Holdings Corp., a Delaware corporation (together with its successors, the Company), and Chad M. Streff, who is an employee of the Company or one of its Subsidiaries (the Grantee). Capitalized terms, unless defined in Section 9 or a prior section of this Agreement, shall have the same meanings as in the Plan (as defined below).
WHEREAS, in connection with the Grantees employment with the Company or one of its Subsidiaries, the Company desires to grant to the Grantee a certain number of stock appreciation rights with respect to the Class A Common Stock, par value $0.01, of the Company (SARs) on the date hereof pursuant to the terms and conditions of this Agreement and the Companys 2006 Management Equity Incentive Plan (the Plan).
WHEREAS, the Board has determined that it would be to the advantage, and in the best interest, of the Company and its shareholders to grant the SARs provided for herein to the Grantee as an incentive for increased efforts during his employment with the Company or one of its Subsidiaries.
NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. GRANT OF SAR AWARDS
(a) Grant. Subject to the terms and conditions of the Plan and this Agreement, the Company hereby grants to the Grantee the following:
(i) 11,628 SARs, which will be earned based on time (the Time SARs); and
(ii) 11,628 SARs which will be earned based on achievement of annual EBITDA SAR Performance Targets (the EBITDA SARs).
(b) Plan. The foregoing awards are granted under the Plan, which is incorporated herein by this reference and made a part of this Agreement.
(c) No Rights as Stockholder. It shall be understood that none of the terms contained herein grant to the Grantee any rights as a stockholder, and such Grantee shall not have any such rights unless and until such Grantee receives Shares in settlement of an Award.
SECTION 2. VESTING OF SARS
(a) Vesting. Subject to the provisions of this Agreement, the following SARs shall vest as follows:
(i) the Time SARs shall vest in accordance with the provisions and terms of Schedule A; and
(ii) the EBITDA SARs shall vest in accordance with the provisions and terms of Schedule B and Schedule C, where applicable.
(b) Effect of Vesting. For each vested SAR the Grantee is entitled to receive from the Company an amount equal to the excess of (x) the Fair Market Value (as defined below) of one Share on the date of the Notice of Exercise (as defined below) over (y) the Initial Base Value per Share. In the event that vested SARs are exercised by the Grantee subsequent to a Termination Event, the Grantee shall be entitled to receive from the Company an amount equal to the excess of (x) the Fair Market Value of one Share on the Termination Date over (y) the Initial Base Value per Share.
SECTION 3. EXERCISE PROCEDURES
(a) Notice of Exercise. The Grantee may request that any of his vested SARs be exercised prior to their termination as set forth in Section 5 by giving written notice to the Company in the form attached hereto as Exhibit A (such form, a Notice of Exercise), specifying the number of vested SARs which the Grantee requests to be exercised.
(b) Settlement of SARs. The Company at its election and in its sole discretion, may settle any SARs requested to be exercised pursuant to Section 3(a) in Shares (based on their value as of the Settlement Date (as defined below)) or cash, all in accordance with the terms and conditions of the Plan.
(c) Issuance of Shares. After receiving a properly completed and executed Notice of Exercise, if the Company elects to settle the SARs subject to such notice in Shares, the Company shall cause to be issued a certificate or certificates for the number of Shares the Grantee is entitled to receive pursuant to Section 2(b), registered in the name of the Grantee (or in the names of such person and his spouse as community property or as joint tenants with right of survivorship), with any legend required pursuant to the Stockholders Agreement or otherwise required under the securities laws, such Shares the Settlement Shares. In connection with any such settlement of vested SARs, the Person settling such SARs shall deliver to the Company a duly executed blank share power in the form attached hereto as Exhibit B and a fully executed Joinder Agreement. The date of the issuance of the Settlement Shares shall be the Settlement Date.
(d) Withholding Requirements. The Company may withhold any tax (or other governmental obligation) required to be withheld in connection with the settlement of any exercised vested SARs, and as a condition to the settlement of any such SARs. Such withholding may be made from any source (including any consideration issued in settlement of the SARs and any salary or other compensation payable to the Grantee), and the Grantee shall make arrangements satisfactory to the Company to enable it to satisfy all such withholding requirements as a condition to the settlement of any SARs (including by remitting to the Company an amount in cash sufficient to satisfy the withholding obligation). For the avoidance of doubt, the Company will not withhold any amounts greater than the statutory minimum.
SECTION 4. SECURITIES LAW ISSUES, TRANSFER RESTRICTIONS
(a) Grantee Acknowledgements and Representations. The Grantee understands and agrees that: (x) the SARs have not been and any Settlement Shares will not be registered under the Securities Act, (y) the SARs are and any Settlement Shares will be restricted securities under the Securities Act and (z) neither the SARs nor any Settlement Shares may be resold or transferred unless they are first registered under the Securities Act or unless an exemption from such registration is available. The Grantee hereby makes to the Company the representations and warranties set forth in Exhibit C hereto with respect to the SARs and any Settlement Shares.
(b) No Registration Rights. Except as otherwise set forth in the Stockholders Agreement with respect to any Settlement Shares, the Company may, but shall not be obligated to, register or qualify the issuance of Settlement Shares to, or the resale of any such Settlement Shares by, the Grantee under the Securities Act or any other applicable law.
(c) Transfers. No SARs shall be transferable to any Person for any reason. Any attempt to Transfer any SARs shall be null and void and have no force or effect, and the Company shall not, and shall cause any transfer agent not to, give any effect in such entitys share records to such attempted Transfer. Any Settlement Shares shall be subject to the restrictions on Transfer as set forth in Article 3 of the Stockholders Agreement, except with respect to a Transfer by will or by the laws of descent and distribution. Unless otherwise permitted pursuant to the Stockholders Agreement, the Grantee shall not Transfer any Settlement Shares (x) except in compliance with the provisions of Article 3 of the Stockholders Agreement, and (y) unless the transferee shall have agreed in writing to be bound by the terms of this Agreement in a manner acceptable to the Board and otherwise acknowledging that such Settlement Shares are subject to the restrictions set forth in this Agreement. Any attempt to Transfer any Settlement Shares not in compliance with this Agreement shall be null and void and have no force or effect, and the Company shall not, and shall cause any transfer agent not to, give any effect in such entitys share records to such attempted Transfer. The Grantee acknowledges that the transfer restrictions contained in this Agreement are reasonable and in the best interests of the Company.
SECTION 5. TERM OF GRANT
(a) The SARs granted in this Agreement shall expire 10 years from the date hereof. In the event that the employment of the Grantee terminates, unless a Notice of Exercise has been given to the Company from the Grantee, all vested SARs shall expire on the 60th day after termination of employment, except in the case of (i) termination of the Grantees employment with the
Company or any of its Subsidiaries for Cause, or resignation by the Grantee without Good Reason within the first three years after Closing, in which case the SARs would terminate upon such termination or resignation, or (ii) death or Disability, in which case the SARs would terminate on the first anniversary of the date of death or Disability. Any SARs which are unvested at the date of termination of employment will expire on the date of termination, and shall be forfeited. Further, any part of a SAR Award that is vested (but not exercised) as of the Termination Date, if the Termination Event was a termination by the Company or any of its Subsidiaries for Cause at any time or a resignation by the Grantee without Good Reason within the first three years of Service, will be forfeited and there shall be no settlement with respect thereto.
SECTION 6. RIGHT OF REPURCHASE UPON TERMINATION OF EMPLOYMENT
(a) Repurchase Rights.
(i) Upon the termination of employment of the Grantee by the Company or any of its Subsidiaries for any reason (the reason for the termination of such employment, the Termination Event and the date of such termination, the Termination Date), subject to the provisions of this Section 6 and the prior approval of the Compensation Committee of the Board (or if there is no such Compensation Committee, the Board), the Company shall have the right (but not the obligation) to purchase, and if such right is exercised, the Grantee shall sell, and shall cause any Permitted Transferees of the Grantee to sell (and such Permitted Transferees shall sell), to the Company, all or any portion (as determined by the Company) of the Settlement Shares (if any) owned by the Grantee or his Permitted Transferees at a price per Settlement Share equal to an amount (the Termination Price) (as determined pursuant to Section 6(b) below); provided, that the parties acknowledge that any unvested SARs held by the Grantee as of the Termination Date shall be cancelled pursuant to this Agreement.
(ii) With respect to the Settlement Shares, the Company shall notify the Grantee in writing, within the Call Period whether the Company will exercise its right to purchase the Settlement Shares (the date on which the Grantee is so notified, the Call Notice Date). The Company may assign its right to purchase all or any portion of the Settlement Shares under this Section 6 to the DCP Investor and the DCP Investor may exercise the rights of the Company under this Section 6 in the same manner in which the Company could exercise such rights.
(iii) The closing of the purchase by the Company or the DCP Investor of Settlement Shares pursuant to this Section 6 shall take place at the principal office of the Company, on the date chosen by either the Company or the DCP Investor, as applicable, which date shall, except as may be reasonably necessary to determine the Termination Price, in no event be more than 45 days after the Call Notice Date. At such closing, (i) the Company or the DCP Investor, as applicable, shall pay the Grantee and/or such Grantees Permitted Transferees, as applicable, against delivery of duly endorsed certificates described below
representing such Settlement Shares, the aggregate Termination Price by wire transfer of immediately available federal funds and (ii) the Grantee and/or such Grantees Permitted Transferees, as applicable, shall deliver to the Company a certificate or certificates representing the Settlement Shares to be purchased by the Company or the DCP Investor, as applicable, duly endorsed, or with share (or equivalent) powers duly endorsed, for transfer with signature guaranteed, free and clear of any lien or encumbrance, with any necessary share (or equivalent) transfer tax stamps affixed. The delivery of a certificate or certificates for the Settlement Shares by any Person selling such Settlement Shares pursuant to this Section 6(a)(iii) shall be deemed a representation and warranty by such Person that: (w) such Person has full right, title and interest in and to such Settlement Shares; (x) such Person has all necessary power and authority and has taken all necessary action to sell such Settlement Shares as contemplated; (y) such Settlement Shares are free and clear of any and all liens or encumbrances and (z) there is no adverse claim with respect to such Settlement Shares.
(b) Termination Pricing. The Termination Price of any Settlement Share shall be determined as follows:
(i) If the Termination Event was a resignation by the Grantee with Good Reason, or resignation by the Grantee without Good Reason after the first three years of Service, or termination of the employment of the Grantee by the Company or any of its Subsidiaries without Cause, the Termination Price for such Settlement Share shall be the Fair Market Value on the FMV Calculation Date,
(ii) if the Termination Event was as a result of the death or Disability of the Grantee, the Termination Price for such Settlement Share shall be the Fair Market Value on the Termination Date, and
(iii) if the Termination Event was a termination of the employment of the Grantee by the Company or any of its Subsidiaries with Cause, or was a resignation by the Grantee without Good Reason in the first three years of Service, the Termination Price for such Settlement Share shall be the lower of (i) the Fair Market Value on the FMV Calculation Date or (ii) the Initial Base Value per Share.
(c) Payment Terms. In the event that the Company, or the DCP Investor if applicable, exercises a Right of Repurchase pursuant to Section 6 of this Agreement, the Company, or the DCP Investor if applicable, shall pay the Termination Price in cash; provided, however, that if the Company has not assigned its right to purchase any or all of the Settlement Shares to the DCP Investor pursuant to Section 6(a)(ii), and is at the time of the Purchase Closing prohibited from purchasing all or any portion of such Settlement Shares (i) because restrictive covenants or other provisions contained in the documents evidencing such entitys or any of its Affiliates indebtedness for borrowed money do not permit or allow such entity to make such payments in cash in whole or in part; or (ii) pursuant to applicable law, then, the portion of the Termination Price not permitted to be made in cash may be paid by the execution and delivery by the Company of a promissory note or other deferred cash payment arrangement (if applicable, any
promissory note to be subordinated to the indebtedness for borrowed money of such company or any of its Affiliates) bearing interest at the prime rate, as published in the Wall Street Journal, Eastern edition, on the first Business Day immediately prior to the day on which such promissory note or other deferred cash payment is issued, with principal and accrued interest payable at such time as is required in the Boards determination to ensure that any payment pursuant to such promissory note or other deferred cash payment arrangement is not prohibited because of any of the matters described in clauses (i) or (ii) of this Section 6(c) above.
SECTION 7. ADJUSTMENT OF SHARES
In the event of a recapitalization, the terms of this award (including, without limitation, the number and kind of Class A Common Shares subject to this award) shall be adjusted as set forth in Section 11(a) of the Plan. In the event that the Company is a party to a merger or consolidation, this award shall be subject to the vesting schedule set forth on Schedule C attached hereto and Section 11(b) of the Plan.
SECTION 8. MISCELLANEOUS PROVISIONS
(a) No Retention Rights. Nothing in this Agreement or in the Plan shall confer upon the Grantee any right to continue in Service or interfere with or otherwise restrict in any way the rights of the Company or any Subsidiary employing the Grantee, which rights are hereby expressly reserved by the Company and any Subsidiary employing the Grantee, to terminate the Grantees Service at any time and for any reason, with or without Cause.
(b) Notices. All notices, requests and other communications under this Agreement shall be in writing and shall be delivered in person (by courier or otherwise), mailed by certified or registered mail, return receipt requested, or sent by facsimile transmission, as follows:
If to the Company, to:
CheckSmart Financial Holdings Corp.
7001 Post Road, Suite 200
Dublin, OH 43016
If to the Grantee, to the address that he most recently provided to the Company,
or, in each case, at such other address or fax number as such party may hereafter specify for the purpose of notices hereunder by written notice to the other party hereto. All notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt. Any notice, request or other written communication sent by facsimile transmission shall be confirmed by certified or registered mail, return receipt requested, posted within one Business Day, or by personal delivery, whether by courier or otherwise, made within two Business Days after the date of such facsimile transmissions; provided that such confirmation mailing or delivery shall not affect the date of receipt, which will be the date that the facsimile successfully transmitted the notice, request or other communication.
(c) Entire Agreement. This Agreement and the Plan, together with the Stockholders Agreement, the Grantees employment agreement and the other agreements referred to herein and therein and any schedules, exhibits and other documents referred to herein or therein, constitute the entire agreement and understanding among the parties hereto in respect of the subject matter hereof and thereof and supersede all prior and contemporaneous arrangements, agreements and understandings, both oral and written, whether in term sheets, presentations or otherwise, among the parties hereto, or between any of them, with respect to the subject matter hereof and thereof.
(d) Amendment; Waiver. No amendment or modification of any provision of this Agreement shall be effective unless signed in writing by or on behalf of the Company and the Grantee, except that the Company may amend or modify the Agreement without the Grantees consent in accordance with the provisions of the Plan or as otherwise set forth in this Agreement. The failure of the Company in any instance to exercise the Right of Repurchase shall not constitute a waiver of any other repurchase rights that may subsequently arise under the provisions of this Agreement or any other agreement between the Company and the Grantee. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition whether of like or different nature. Any amendment or modification of or to any provision of this Agreement, or any waiver of any provision of this Agreement, shall be effective only in the specific instance and for the specific purpose for which made or given.
(e) Assignment. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by the Grantee except pursuant to a Transfer in accordance with the provisions of this Agreement.
(f) Successors and Assigns; No Third Party Beneficiaries. This Agreement shall inure to the benefit of and be binding upon the Company and the Grantee and their respective heirs, successors, legal representatives and permitted assigns. Nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the Company and the Grantee, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.
(g) Governing Law, Venue. This Agreement and any matters or disputes related to, in connection with, or arising under this Agreement shall be governed by the laws of the State of Delaware, without regard to the conflicts of laws rules of such state. Any legal action or proceeding with respect this Agreement shall be brought in the federal or state court sitting in the State of Delaware, and, by execution and delivery of this Agreement, each party hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the exclusive jurisdiction of such courts. Each party irrevocably waives any objection which it may now or hereafter have to the laying of venue of the aforesaid actions or proceedings arising out of or in connection with this Agreement in the courts referred to in this paragraph and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.
(h) Waiver of Jury Trial. The Grantee hereby irrevocably waives all right of trial by jury in any legal action or proceeding (including counterclaims) relating to or arising out of
or in connection with this Agreement or any of the transactions or relationships hereby contemplated or otherwise in connection with the enforcement of any rights or obligations hereunder.
(i) Interpretation. Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation apply:
Headings. The division of this Agreement into Sections and other subdivisions and the insertion of headings are for convenience of reference only and do not alter the meaning of, or affect the construction or interpretation of, this Agreement.
Section References. All references in this Agreement to any Section are to the corresponding Section of this Agreement.
Schedules/Exhibits. Any capitalized terms used in any Schedule or Exhibit to this Agreement but are not otherwise defined therein have the meanings set forth in this Agreement.
(j) Severability. If any provision of this Agreement is invalid, illegal, or incapable of being enforced by any law, all other provisions of this Agreement remain in full force and effect so long as the economic and legal substance of the transactions contemplated hereby are not affected in any manner materially adverse to any party. If any provision of this Agreement is held to be invalid, illegal, or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
(k) Counterparts. The parties may execute this Agreement in one or more counterparts, each of which constitutes an original copy of this Agreement and all of which, collectively constitute only one agreement. The signatures of all the parties need not appear on the same counterpart.
(l) Grantee Undertaking. The Grantee agrees to take whatever additional action and execute whatever additional documents the Company may deem necessary or advisable to carry out or effect one or more of the obligations or restrictions imposed on either the Grantee or upon the SARs or any Settlement Shares pursuant to the provisions of this Agreement.
(m) Plan; Stockholders Agreement; Counsel. The Grantee acknowledges and understands that material definitions and provisions concerning the SARs or any Settlement Shares and the Grantees rights and obligations with respect thereto are set forth in the Plan and the Stockholders Agreement. The Grantee has had the opportunity to retain counsel, and has read carefully, and understands, the provisions of such documents. Mintz, Levin, Ferris, Cohn, Glovsky and Popeo, PC (Counsel) has been retained to represent the Grantee in connection with the transactions contemplated by this Agreement. The Grantee has had the opportunity to seek legal advice from Counsel on this Agreement and the transactions contemplated hereby.
SECTION 9. DEFINITIONS
(a) Affiliate shall mean, with respect to any specified Person, (a) any other Person which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person (for the purposes of this definition, control (including, with correlative meanings, the terms controlling, controlled by and under common control with), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise); provided, however, that neither the Company nor any of its Subsidiaries shall be deemed an Affiliate of any of the Stockholders (and vice versa), and (b) if such specified Person is an investment fund, any other investment fund the primary investment advisor to which is the primary investment advisor to such specified Person.
(b) Board means the Board of Directors of the Company, as constituted from time to time or, if a Committee has been appointed, such Committee.
(c) Business Day has the meaning ascribed to such term in the Stockholders Agreement.
(d) Call Period shall mean from the Termination Date until:
(i) if the Termination Event is a termination of the employment of the Grantee by the Company or any of its Subsidiaries without Cause, a resignation by the Grantee with Good Reason or a resignation by the Grantee without Good Reason after three years of Service, the later of (A) the date that is 60 days after such Termination Date and (B) the date that is 190 days after the Settlement Date,
(ii) if the Termination Event is a termination of the employment of the Grantee by the Company or any of its Subsidiaries as a result of the death or Disability of the Grantee, the date that is the later of (i) 60 days after the Termination Date or the date which is 60 days after the Settlement Date, or
(iii) if the Termination Event is a termination of the employment of the Grantee by the Company or any of its Subsidiaries for Cause, or a resignation by the Grantee without Good Reason within the first years of Service the date which is 60 days after the Settlement Date.
(e) Cause has the meaning ascribed to such term in the Grantees Employment Agreement.
(f) Change of Control shall mean (a) any transaction or series of related transactions, whether or not the Company is a party thereto, in which, after giving effect to such transaction or transactions any person or group (as such terms are used in Section 13(d) of the Exchange Act other than a group of which the DCP Investor is a member, acquires, directly or indirectly, in excess of 50% of the Voting Securities, or (b) a sale, lease or other disposition of all or substantially all of the assets of the Company and its Subsidiaries on a consolidated basis (including securities of the Companys directly or indirectly owned Subsidiaries) to a Person that is not an Affiliate of the Company.
(g) Class A Common Stock means the voting class A common stock of the Company, and any stock into which such Class A Common Stock may hereafter be converted, changed, reclassified or exchanged.
(h) Code means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated thereunder.
(i) Committee means the compensation committee of the Board of Directors of the Company.
(j) DCP Investor means BCC/DCP Acquisition LLC or any of its Permitted Transferees.
(k) Disability has the meaning ascribed to such term in the Grantees Employment Agreement.
(l) EBITDA SAR Performance Target has the meaning set forth on Schedule B.
(m) Employment Agreement means the employment agreement between the Grantee and CheckSmart Financial Company, dated as of May 1, 2006.
(n) Fair Market Value or FMV with respect to a share of stock of the Company, shall mean, in the event that such shares are listed on an established U.S. exchange or through the NASDAQ National Market or any established over-the-counter trading system, the average of the closing prices of such Group Equity Securities on such exchange if listed or, if not so listed, the average bid and asked price of such shares reported on the NASDAQ National Market or any established over-the-counter trading system on which prices for such shares are quoted, in each case, for a period of twenty trading days prior to such date of determination, or (ii) if such shares are not publicly traded, a good faith determination by the Board through a reasonable application of a reasonable valuation method. Such determination shall be conclusive and binding on all persons.
(o) FMV Calculation Date means:
(i) if the Termination Event is a termination by the Company or any of its Subsidiaries without Cause, a resignation by the Grantee with Good Reason or a resignation by the Grantee without Good Reason after three years of Service:
(A) if the Settlement Date occurred 180 days or more before the Termination Date, the Termination Date, and
(B) if the Settlement Date occurred 179 days or less before the Termination Date or occurs after the Termination Date, then the Call Notice Date;
(ii) if the Termination Event is as a result of the death or Disability of the Grantee, then the Termination Date; and
(iii) if the Termination Event is a termination by the Company or any of its Subsidiaries with Cause, or a resignation by the Grantee without Good Reason during the Grantees first three years of Service, then the Termination Date.
(p) Good Reason has the meaning ascribed to such term in the Grantees Employment Agreement.
(q) Initial Base Value means $103.50, subject to appropriate adjustment to the extent that there is an adjustment under Section 2.3(b) of the Stock Purchase Agreement, in connection with the finally determined 2005 EBITDA.
(r) Initial Public Offering has the meaning ascribed to such term in the Stockholders Agreement.
(s) Joinder Agreement means an agreement substantially in the form of Exhibit A of the Stockholders Agreement, pursuant to which the Grantee shall become a party to the Stockholders Agreement and subject to all of the rights, restrictions and obligations contained therein.
(t) Permitted Transferee has the meaning ascribed to such term in the Stockholders Agreement.
(u) Person means an individual, corporation, limited liability company, partnership, association, trust or other entity or organization.
(v) Right of Repurchase means the Companys right of repurchase described in Section 5 of this Agreement.
(w) Securities Act means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(x) Service means service as an Employee.
(y) Share(s) means a share(s) of Class A Common Stock of the Company.
(z) Stockholders Agreement means that certain Stockholders Agreement dated as of May 1, 2006 by and among the Company, the Grantee and the other parties thereto (as the same shall be amended, modified or supplemented from time to time).
(aa) Stock Purchase Agreement means the Stock Purchase Agreement, by and among the DCP Investor, and certain other parties thereto, dated as of February 27, 2006.
(bb) Subsidiary means, with respect to the Company, any other Person in which the Company, directly or indirectly through one or more Affiliates or otherwise, beneficially owns at least 50% of either the ownership interest (determined by equity or economic interests) in, or the voting control of, such other Person.
(cc) Transfer has the meaning ascribed in such term in the Stockholders Agreement.
IN WITNESS WHEREOF, the parties have executed this Grant Award Agreement as of the day and year first written above.
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/s/ James H. Frauenberg, Sr. | |
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James H. Frauenberg, Sr. |
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Title: |
Chief Executive Officer |
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/s/ Chad M. Streff | |
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Chad M. Streff |
EXHIBIT A
Notice of Exercise
(To be signed only upon an exercise of the vested SAR)
To CheckSmart Financial Holdings Corp.:
The undersigned, the Holder of the Stock Appreciation Right, dated as of , 2006, of CheckSmart Financial Holdings Corp. (the SAR), hereby irrevocably elects to exercise SARs for:
shares of Class A Common Stock of CheckSmart Financial Holdings Corp., at a value of $ per share; or
$ in cash.
The undersigned represents that (i) it is entitled to exercise the number of SARs indicated, and (ii) if he is exercising the SARs to be settled in shares of Class A Common Stock of CheckSmart Financial Holdings Corp. (Award Shares), he is acquiring such Award Shares for his own account for investment and not with a view to or for sale in connection with any distribution thereof (subject, however, to any requirement of law that the disposition thereof shall at all times be within its control).
DATED: , 20
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CHAD M. STREFF | |
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EXHIBIT B
Share Power
IRREVOCABLE STOCK POWERS
CHECKSMART FINANCIAL HOLDINGS CORP.
FOR VALUE RECEIVED, Chad M. Streff does hereby sell, assign and transfer unto Shares of Class A Common Stock of CheckSmart Financial Holdings Corp., par value $0.01, represented by Certificate No. herewith and does hereby irrevocably constitute and appoint attorney to transfer the said stock on the books of the within named corporation with full power of substitution in the premises.
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EXHIBIT C
Investment Representations and Warranties
The Grantee hereby represents and warrants to the Company that:
1. The SARs and Settlement Shares (either or both, the Securities) received by him will be held by him for investment only for his own account, not as a nominee or agent, and not with a view to the sale or distribution of any part thereof in violation of applicable U.S. federal or state or foreign securities laws. The Grantee has no current intention of selling, granting participation in or otherwise distributing the Securities in violation of applicable U.S. federal or state or foreign securities laws. The Grantee does not have any contract, undertaking, agreement or arrangement with any person or entity to sell, transfer or grant participation to such person or entity, or to any third person or entity, with respect to any of the Securities, in each case, in violation of applicable U.S. federal or state or foreign securities laws.
2. The Grantee understands that the issuance of the Securities has not been registered under the Securities Act or any applicable U.S. federal, state or foreign securities laws, and that the Securities are being issued in reliance on an exemption from registration, which exemption depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Grantees representations as expressed herein.
3. The Grantee has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of his owning the Securities. The Grantee is a sophisticated investor, has relied upon independent investigations made by the Grantee and, to the extent believed by the Grantee to be appropriate, the Grantees representatives, including the Grantees own professional, tax and other advisors, and is making an independent decision to invest in the Securities. The Grantee has been furnished with such documents, materials and information that the Grantee deems necessary or appropriate for evaluating an investment in the Company, and the Grantee has read carefully such documents, materials and information and understands and has evaluated the types of risks involved with holding the Securities. The Grantee has not relied upon any representations or other information (whether oral or written) from the Company or its shareholders, directors, officers or affiliates, or from any other person or entity, in connection with his investment in the Securities. The Grantee acknowledges that the Company has not given any assurances with respect to the tax consequences of the ownership and disposition of the Securities.
4. The Grantee has had, prior to his being granted the Securities, the opportunity to ask questions of, and receive answers from, the Company concerning the terms and conditions of the transactions contemplated by the Agreement and the Grantees holding of the Securities and to obtain additional information necessary to verify the accuracy of any information furnished to his or to which he had access. The Grantee confirms that he has satisfied himself with respect to any of the foregoing matters.
5. The Grantee acknowledges that Mintz, Levin, Ferris, Cohn, Glovsky and Popeo, PC (Counsel) has been retained to represent the Grantee in connection with the transactions contemplated by the Agreement, and has had the opportunity to seek legal advice from, and has received legal advice from, Counsel on the Agreement, the transactions contemplated therein and all documents, materials and information that he has requested or read relating to holding the Securities and confirms that he has satisfied himself with respect to any of the foregoing matters.
6. The Grantee understands that no U.S. federal or state or foreign agency has passed upon the Securities or upon the Company, or upon the accuracy, validity or completeness of any documentation provided to the Grantee in connection with the transactions contemplated by the Agreement, nor has any such agency made any finding or determination as to holding the Securities.
7. The Grantee understands that there are substantial restrictions on the transferability of the Securities and that on the date of the Agreement and for an indefinite period thereafter there will be no public market for the Securities and, accordingly, it may not be possible for the Grantee to liquidate his investment in case of emergency, if at all. In addition, the Grantee understands that the Agreement and Stockholders Agreement contain substantial restrictions on the transferability of the Securities and provide that, in the event that the conditions relating to the transfer of any Securities in such document has not been satisfied, the holder shall not transfer any such Securities, and unless otherwise specified the Company will not recognize the transfer of any such Securities on its books and records or issue any share certificates representing any such Securities, and any purported transfer not in accordance with the terms of the Agreement or the Stockholders Agreement shall be void. As such, Grantee understands that: a restrictive legend or legends in a form to be set forth in the Agreement and the Stockholders Agreement will be placed on the certificates representing the Securities; a notation will be made in the appropriate records of the Company indicating that each of the Securities are subject to restrictions on transfer and, if the Company should at some time in the future engage the services of a securities transfer agent, appropriate stop-transfer instructions will be issued to such transfer agent with respect to the Securities; and the Grantee will sell, transfer or otherwise dispose of the Securities only in a manner consistent with its representations set forth herein and then only in accordance with the Agreement and the Stockholders Agreement.
8. The Grantee understands that (i) the Securities may not be sold, transferred or otherwise disposed of without registration under the Securities Act or an exemption therefrom, (ii) the Securities have not been registered under the Securities Act; (iii) the Securities must be held indefinitely and he must continue to bear the economic risk of holding the Securities unless such Securities are subsequently registered under the Securities Act or an exemption from such registration is available; (iv) the Grantee is prepared to bear the economic risk of holding the Securities for an indefinite period of time; (v) it is not anticipated that there will be any public market for the Securities; (vi) the Securities are characterized as restricted securities under the U.S. federal securities laws; and (vii) the Securities may not be sold, transferred or otherwise disposed of except in compliance with federal, state and local law.
9. The Grantee understands that an investment in the Securities is not recommended for investors who have any need for a current return on this investment or who cannot bear the risk of losing their entire investment. In that regard, the Grantee understands that his holding the Securities involves a high degree of risk of loss. The Grantee acknowledges that: (i) he has adequate means of providing for his current needs and possible personal contingencies and has no need for liquidity in this investment; (ii) his commitment to investments which are not readily marketable is not disproportionate to his net worth; and (iii) his holding the Securities will not cause his overall financial commitments to become excessive.
10. The Grantee is an accredited investor, as such term is defined in Rule 501 of the Securities Act.
SCHEDULE A
VESTING OF TIME VESTING SARS
Subject to the terms set forth in the Agreement and the Plan, the Time Vesting SARs vest as follows:
(a) Vesting.
· 40% of the Time SARs shall vest on May 1, 2008;
· 20% of the Time SARs shall vest on May 1, 2009;
· 20% of the Time SARs shall vest on May 1, 2010;
· 20% of the Time SARs shall vest on May 1, 2011 (May 1 of each of 2008, 2009, 2010 and 2011, a Vesting Date).
(b) Change of Control. In connection with a Change of Control, any unvested Time SARs (unless previously terminated in accordance with the terms of the Plan or this Award) shall fully vest immediately prior to the consummation of the Change of Control.
(c) Initial Public Offering. In connection with an Initial Public Offering, any unvested Time SARs (unless previously terminated in accordance with the terms of the Plan or this Award) will continue to be subject to vesting in accordance with this schedule after such Initial Public Offering.
Schedule A-1
SCHEDULE B
VESTING OF EBITDA SARS
Subject to the terms set forth in the Agreement and in the Plan, the EBITDA SARs vest, as set forth below, based on the extent to which the annual EBITDA-based targets set forth below are achieved by the Company and its subsidiaries, and the Grantee remains employed.
(a) Establishment of EBITDA SAR Performance Targets.
Year |
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2006 |
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41.0 |
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2007 |
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46.4 |
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2008 |
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54.9 |
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2009 |
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62.8 |
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2010 |
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69.1 |
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(b) Amendment to EBITDA Targets. The Board reserves the right to make adjustments to the EBITDA SAR Performance Targets, as the Board and the Chief Executive Officer of the Company mutually determine in good faith are appropriate to take into account the effect of: (A) any material transactions or events during the relevant period, including significant changes to capital expenditure plans and (B) any events during the relevant period outside of the ordinary course. Any adjustments to the EBITDA SAR Performance Targets will be made by the Board or Compensation Committee, with the intention to maintain the same fair value of the grants pre- and post-acquisition.
(c) 2006 Vesting. In 2006, all the EBITDA SARs available for vesting in such year (i.e., 20% of the total EBITDA SARs subject to a particular grant) will vest if 100% of the applicable EBITDA SAR Performance Target is reached and the Grantee remains so employed, and none of the EBITDA SARs available for vesting for such year will vest if the applicable EBITDA SAR Performance Target is not met.
Schedule B-1
(d) 2007-2010 Vesting. In each of years 2007 through 2010, a maximum of 20% of the total EBITDA SARs shall be eligible for vesting in any given year pursuant to the following terms:
· none of the EBITDA SARs available for vesting for such year will vest if the Company and its Subsidiaries do not achieve at least 97.5% of the EBITDA SAR Performance Target for such year;
· 35% of the EBITDA SARs available for vesting for such year will vest if the Company and its Subsidiaries achieve 97.5% of the EBITDA SAR Performance Target for such year;
· vesting of the EBITDA SARs available for vesting for such year will increase proportionately between 35% and 100% to the extent that the Company and its Subsidiaries achieve more than 97.5% but less than 100% of the EBITDA SAR Performance Target for such year;
· all of the EBITDA SARs available for vesting for such year will vest if the Company and its Subsidiaries achieve the EBITDA SAR Performance Target for such year; and
· to the extent that the Company and its Subsidiaries exceed the EBITDA SAR Performance Target for such year (other than 2010), the percentage of EBITDA SARs available for vesting that will vest for such year will vary proportionately between 100% and 125% (with a maximum of 125% if the Company and its Subsidiaries achieve 110% or more of the EBITDA SAR Performance Target for such year).To the extent that the vesting percentage for any of the years 2007 through 2009 exceeds 100%, the number of EBITDA SARs available for vesting in 2010 will decrease by the same number, and in no event will the number of EBITDA SARs that vest exceed the number of EBITDA SARs subject to the original grant.
(e) Change of Control. Upon a Change of Control, EBITDA SARs that are otherwise unvested (from prior or future periods), unless previously terminated in accordance with the terms of the Plan or this Award, shall vest only to the extent that, and only if, the Liquidity Event Vesting Targets set forth on Schedule C are achieved. Upon an Initial Public Offering, unvested EBITDA SARs will continue to be subject to vesting as set forth above.
(f) Definition of EBITDA. For purposes of calculating EBITDA of a business or entity for a particular period means the sum of:
Schedule B-2
(1) net income (or loss) of such business or entity for such period; plus
(2) all interest expense of such business or entity (net of interest income) for such period deducted in calculating such net income (loss), plus
(3) all income taxes of such business or entity for such period deducted in calculating such net income (loss), plus
(4) all depreciation expenses of such business or entity for such period deducted in calculating such net income (loss), plus
(5) all amortization expenses of such business or entity for such period deducted in calculating such net income (loss), plus
(6) all fees paid by the Company or any of its Subsidiaries pursuant to the Advisory Services and Monitoring Agreement (as such term is defined in the Stockholders Agreement) for such period deducted in calculating such net income (loss),
in each case determined in accordance with generally accepted accounting principles in the United States of America, consistently applied.
(f) Notice of Vesting. As soon as reasonably practicable following receipt by the Company of audited financial statements of the Company and its Subsidiaries for a Fiscal Year, the Board shall determine the EBITDA for such Fiscal Year and, promptly after such determination, the Company shall notify the Grantee of the amount of EBITDA for such Fiscal Year and the number of the Performance Vesting Shares that vest pursuant to this Schedule B (the date of such notice, the Vesting Date).
Schedule B-3
SCHEDULE C
LIQUIDITY EVENT VESTING TARGETS
The Liquidity Event Vesting Target (the Liquidity Event Vesting Target) is a value per Share equal to the Initial Base Value multiplied by a Multiplier, which Multiplier shall be defined as set forth below:
(i)
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3.0 |
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3.5 |
(ii) To the extent that a Change of Control occurs between anniversaries, the Multiplier and the Liquidity Event Vesting Target resulting therefrom will be determined by the following formula:
Multiplier = X + (Y/365 * 0.5);
where:
X = the Multiplier of the immediately preceding anniversary as set forth in the chart above; and
Y = the number of days since the prior anniversary;
it being understood, that if the applicable per share price threshold is not achieved in connection with such Change of Control, none of the grants subject to vesting upon achievement of the Liquidity Event Vesting Target will vest.
Schedule C-1
Exhibit B
GENERAL RELEASE OF CLAIMS
A general release is required as a condition for receiving the severance benefits described in Section 7(d) of the employment agreement between CheckSmart Financial Company (the Company) and Chad Streff (Executive) dated May 1, 2006, (the Employment Agreement); thus, by executing this general release (General Release), you have advised us that you hold no claims against the Company, CheckSmart Financial Holdings Corp., their predecessors, successors or assigns, affiliates, shareholders or members and each of their respective officers, directors, agents and employees (collectively, the Releasees), and by execution of this General Release you agree to waive and release any such claims, except relating to any compensation, severance pay and benefits described in the Employment Agreement.
You understand and agree that this General Release will extend to all claims, demands, liabilities and causes of action of every kind, nature and description whatsoever, whether known, unknown or suspected to exist, which you ever had or may now have against the Releasees in your capacity as an employee of the Company, including, without limitation, any claims, demands, liabilities and causes of action arising from your employment with the Releasees and the termination of that employment, including any claims for severance or vacation pay, business expenses, and/or pursuant to any federal, state, county, or local employment laws, regulations, executive orders, or other requirements, including, but not limited to, Title VII of the 1964 Civil Rights Act, the 1866 Civil Rights Act, the Age Discrimination in Employment Act as amended by the Older Workers Benefit Protection Act, the Americans with Disabilities Act, the Civil Rights Act of 1991, the Workers Adjustment and Retraining Notification Act and any other local, state or federal fair employment laws, and any contract or tort claims.
It is further understood and agreed that you are waiving any right to initiate an action in state or federal court by you or on your behalf alleging discrimination on the basis of race, sex, religion, national origin, age, disability, marital status, or any other protected status or involving any contract or tort claims based on your termination from the Company. It is also acknowledged that your termination is not in any way related to any work-related injury.
Based on executing this General Release, it is further understood and agreed that you covenant not to sue to challenge the enforceability of this General Release. It also is understood and agreed that the remedy at law for breach of the Employment Agreement and/or General Release shall be inadequate, and the Company shall be entitled to injunctive relief.
The ability to receive compensation and benefits under the terms of the Employment Agreement will remain open for a 21 day period after your Termination Date to give you an opportunity to consider the effect of this General Release. At your option, you may elect to execute this General Release on an earlier date. Additionally, you have seven days after the date you execute this General Release to revoke it. As a result, this General Release will not be effective until eight days after you execute it. We also want to advise you of your right to consult with legal counsel prior to executing a copy of this General Release.
Finally, this is to expressly acknowledge:
· You understand that you are not waiving any claims or rights that may arise after the date you execute this General Release.
· You understand and agree that the compensation and benefits described in the Employment Agreement offer you consideration greater than that to which you would otherwise be entitled.
I hereby state that I have carefully read this General Release and that I am signing this General Release knowingly and voluntarily with the full intent of releasing the Releasees from any and all claims, except as set forth herein. Further, if signed prior to the completion of the 21 day review period, this is to acknowledge that I knowingly and voluntarily signed this General Release on an earlier date.
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Exhibit C
CONFIDENTIALITY, NON-COMPETITION AND INTELLECTUAL PROPERTY (this Non-Competition Agreement), dated as of May 1, 2006 (the Commencement Date), among CheckSmart Financial Company (the Company) and Chad Streff (Executive).
WHEREAS, Executive has been offered employment with the Company, and has entered into an employment agreement dated as of the date hereto with the Company (the Employment Agreement). In such role, Executive will receive specific confidential information relating to the businesses of the Company, which confidential information is necessary to enable Executive to perform Executives duties and to receive future compensation. Executive will play a significant role in the development and management of the businesses of the Company and will be entrusted with the Companys confidential information relating to the Company, the Companys customers, manufacturers, distributors and others.
WHEREAS, Executive acknowledges that during the course of Executives employment with the Company, Executive will be involved in the current and future businesses of the Company, as set forth above.
WHEREAS, it is a condition to the commencement of Executives employment by the Company that Executive execute and deliver this Non-Competition Agreement.
NOW, THEREFORE, it is mutually agreed as follows:
1. Confidentiality.
(a) Executive shall not, during the term of Executives employment with the Company or at any time thereafter, directly or indirectly, divulge, use, furnish, disclose, exploit or make available to any person or entity, whether or not a competitor of the Company, any Unauthorized (as defined herein) disclosure of Confidential Information (as defined herein). In the event that Executive is requested or required (by deposition, interrogatories, requests for information or documents in legal proceedings, subpoenas, civil demand or similar process) to disclose any Confidential Information, Executive will give the Company prompt written notice of such request or requirement so that the Company may seek an appropriate protective order or other remedy and/or waive compliance with the provisions of this Non-Competition Agreement, and Executive will cooperate with the Companys efforts to obtain such protective order. In the event that such protective order or other remedy is not obtained or the Company waives compliance with the relevant provisions of this Non-Competition Agreement, Executive is permitted to furnish that Confidential Information which is legally required to be disclosed and will use his reasonable efforts to obtain assurances that confidential treatment will be accorded to such information.
As used herein, all capitalized terms used without definition shall have the meanings ascribed to them in the Employment Agreement, and the term:
Confidential Information shall mean trade secrets, confidential or proprietary information, and all other information, documents or materials, relating to, owned, developed or possessed by either of the Company, whether in tangible or intangible form. Confidential Information includes, but is not limited to, (i) financial information, (ii) products, (iii) product and service costs, prices, profits and sales, (iv) new business, technical or other ideas, proposals, plans and designs, (v) business strategies, (vi) product and service plans, (vii) marketing plans and studies, (viii) forecasts, (ix) budgets, (x) projections, (xi) computer programs, (xii) data bases and the documentation (and information contained therein), (xiii) computer access codes and similar information, (xiv) source codes, (xv) know-how, technologies,
concepts and designs, including, without limitation, patent applications, (xvi) research projects and all information connected with research and development efforts, (xvii) records, (xviii) business methods and recommendations, (xix) existing or prospective client, customer, vendor and supplier information (including, but not limited to, identities, needs, transaction histories, volumes, characteristics, agreements, prices, identities of individual contacts, and spending, preferences or habits), (xx) training manuals and similar materials used by the Company in conducting its business operations, (xxi) personnel files of employees, directors and independent contractors of the Company, (xxii) competitive analyses, (xxiii) contracts with other parties, (xxiv) product formulations, and (xxv) other confidential or proprietary information that has not been made available to the trade or general public by the Company. Confidential Information shall not include any information that (A) is or becomes generally available to the public or the trade other than as a result of a disclosure by Executive in violation of this Non-Competition Agreement or (B) becomes available to Executive on a non-confidential basis from a source other than the Company which is not prohibited from disclosing such information to Executive by a legal, contractual or fiduciary obligation to the Company or any other person.
Unauthorized shall mean: (i) in contravention of the policies or procedures of the Company; (ii) otherwise inconsistent with any measures taken by the Company to protect its interests in the Confidential Information; (iii) in contravention of any lawful instruction or directive, either written or oral, of the Board, or an officer or employee of the Company empowered to issue such instruction or directive; (iv) in contravention of any duty existing under law or contract; or (v) to the detriment of the Company; but shall not include any disclosure which is customary in the normal course of business in the trade and consistent with the past practice of the Company.
(b) Executive further agrees to take all reasonable measures to prevent unauthorized persons or entities from obtaining or using Confidential Information. Promptly upon termination, for any reason, of Executives employment with the Company, Executive agrees to deliver to the Company all property and materials within Executives possession or control which belong to the Company or which contain Confidential Information.
2. Non-Competition; Non-Solicitation.
(a) For a period of time equal to the Term plus the greater of (i) any period that Executive is entitled to receive Base Salary and Continued Benefits under the Employment Agreement, or (ii) one year commencing as of the Termination Date, unless the Employment Agreement is terminated by the Company without Cause or Executive resigns with Good Reason, in each case, for a period of time equal to the Term plus the period during which the Company continues to pay Executive his Base Salary and Continued Benefits pursuant to Section 7 of the Employment Agreement (in each case, the Non-Compete Period), whenever the same shall occur and for whatever reason, Executive will not, directly or indirectly, engage, anywhere in the Restricted Area (as defined below), whether such engagement be as an individual, officer, director, proprietor, employee, partner, member, investor (other than solely as a holder of less than two percent (2%) of the outstanding capital stock of a corporation whose shares are publicly traded on a national securities exchange or through a national market system or registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended), creditor, consultant, advisor, sales representative, agent or other participant, in a Restricted Business (as defined herein), provided, however, that for the purposes of this Section 2(a) only and not Section 2(b), in the event of termination of the Employment Agreement as a result of a non-renewal of the Term (as defined in the Employment Agreement), the Non-Compete Period shall only be for a period of time equal to the Non-Renewal Tail Period.
(b) During the Non-Compete Period Executive shall not, directly or indirectly, (i) cause, solicit, induce or encourage (each, a Solicitation) any person who is or was, prior to such
Solicitation, an employee of the Company, any Subsidiaries, Holdings, Newco or any of their respective subsidiaries to leave employment with the Company, any Subsidiaries, Holdings, Newco or any of their respective subsidiaries, or hire, employ or otherwise engage any such individual; or (ii) cause, induce or encourage any material actual or prospective client, customer, supplier or licensor of the Company, any Subsidiaries, Holdings, Newco or any of their respective subsidiaries (including any former customer of the Company or the Subsidiaries and any person that becomes a customer of the Company, any Subsidiaries, Holdings, Newco or any of their respective subsidiaries after the Closing) or any other person who has a material business relationship with the Company, any Subsidiaries, Holdings, Newco or any of their respective subsidiaries, to terminate or modify any such actual or prospective relationship.
Restricted Business shall mean any business engaged in a business, directly or indirectly, similar to the business of the Company or any of its subsidiaries as of the Termination Date, any other consumer finance business that may be reasonably construed as competing with the business of the Company or any of its subsidiaries as of the Termination Date, or any future businesses of the Company or any of its subsidiaries as contemplated by any of them as of the Termination Date.
Restricted Area shall be any state in which any of the Subsidiaries (as defined in the Employment Agreement) operate, as of the date hereof or the Termination Date.
3. Intellectual Property. Executive agrees that during the term of Executives employment with the Company, any and all inventions, developments, products, services, discoveries, innovations, writings, domain names, improvements, trade secrets, trade names, designs, drawings, business processes, secret processes and know-how, which Executive may create, conceive, develop or make, either alone or in conjunction with others and related or in any way connected with either of the Company, its strategic plans, products, processes, apparatus or business now or hereafter carried on by either of the Company (collectively, Inventions), shall be fully and promptly disclosed to the Company and shall be the sole and exclusive property of the Company (as they shall determine) as against Executive or any of Executives assignees. Executive further understands that in the course of Executives, Executive may prepare writings, drawings, diagrams, designs, specifications, manuals, instructional and other materials, and computer code and programs (Works of Authorship or Works). Executive agrees that such Works are works made for hire under United States copyright law and the Company will be the owner of my entire right of authorship in such Works. If such Works are deemed by operation of law not to be works made for hire, Executive hereby assigns to the Company Executives entire right of authorship, including copyright ownership in such Works and any and all right, title and interest in and to such Inventions made during the term of Executives employment by either of the Company. Executive further agrees to assist in the preparation and execution, during and subsequent to my employment, of any papers the Company may request to secure patent, copyright or other protection for such Inventions or Works of Authorship.
Whether during or after Executives employment with either of the Company, Executive further agrees to execute and acknowledge all papers and to do, at the Companys expense, any and all other things necessary for or incident to the applying for, obtaining and maintaining of such letters patent, copyrights, trademarks or other intellectual property rights, as the case may be, and to execute, on request, all papers necessary to assign and transfer such Inventions, copyrights, patents, patent applications and other intellectual property rights to the Company, their successors and assigns (as they shall determine). In the event that the Company is unable, after reasonable efforts and, in any event, after thirty (30) business days, to secure Executives signature on a written assignment to the Company, of any application for letters patent, trademark registration or to any common law or statutory copyright or other property right therein to which the Company is entitled to ownership pursuant to this Section 3, whether because of his physical or mental incapacity, or for any other reason whatsoever, Executive irrevocably designates and appoints the Chief Financial Officer of the Company as Executives attorney-in-fact to act
on Executives behalf to execute and file any such applications and to do all lawfully permitted acts to further the prosecution or issuance of such assignments, letters patent, copyright or trademark; provided, however, that the provisions of this sentence shall not apply if Executive disputes in writing the Companys ownership of the intellectual property rights which are the subject of the proposed assignment.
4. No Right to Continued Employment. Nothing in this Non-Competition Agreement shall confer upon Executive any right to continue in the employ of the Company or shall interfere with or restrict in any way the rights of the Company, which, subject to the terms of the Employment Agreement, are hereby reserved, to discharge Executive at any time for any reason whatsoever, with or without cause.
5. No Conflicting Agreements. Executive warrants that Executive is not bound by the terms of a confidentiality agreement, non-competition or other agreement with a third party that would conflict with Executives obligations hereunder.
6. Remedies.
(a) Executive and the Company hereby agree that any controversy or claim arising out of or relating to this Non-Competition Agreement shall be resolved by arbitration in accordance with the provisions of Section 10 of the Employment Agreement; provided, however, that in the event of breach or threatened breach by Executive of any provision hereof, the Company shall be entitled to seek temporary or preliminary injunctive relief or other equitable relief to which either of them may be entitled pending the outcome of any arbitration proceeding, without the posting of any bond or other security.
(b) The period of time during which the restrictions set forth in Section 2(a) hereof will be in effect will be extended by the length of time during which Executive is in breach of the terms of those provisions as finally determined by an arbitrator or any court of competent jurisdiction.
7. Successors and Assigns. This Non-Competition Agreement shall be binding upon Executive and Executives heirs, assigns and representatives and inure to the benefit of the Company and their successors and assigns, including without limitation any entity to which substantially all of the assets or the business of either of the Company are sold or transferred. The obligations of Executive are personal to Executive and shall not be assigned by Executive.
8. Severability. It is expressly agreed that if any restrictions set forth in this Non-Competition Agreement are found by any court having jurisdiction to be unreasonable because they are too broad in any respect, then and in each such case, the remaining provisions herein contained shall, nevertheless, remain effective, and this Non-Competition Agreement, or any portion hereof, shall be considered to be amended, so as to be considered reasonable and enforceable by such court, and the court shall specifically have the right to restrict the time period or the business or geographical scope of such restrictions to any portion of the time period, business or geographic areas to the extent the court deems such restriction to be necessary to cause the covenants to be enforceable and, in such event, the covenants shall be enforced to the extent so permitted and the remaining provisions shall be unaffected thereby. In such event, the parties hereto agree to execute all documents necessary to evidence such amendment so as to eliminate or modify any such unreasonable provision in order to carry out the intent of this Non-Competition Agreement insofar as possible and to render this Non-Competition Agreement enforceable in all respects as so modified. The covenants contained in this Section 8 shall be construed to extend to separate jurisdictions or sub-jurisdictions of the United States in which the Company, during the term of Executives employment, has been or are engaged in business, and to the extent that any such covenant shall be illegal and/or unenforceable with respect to any jurisdiction, said covenant shall not be affected thereby with respect to each other jurisdiction, such covenants with respect to each jurisdiction being
construed as severable and independent. Any covenant on Executives part contained hereinabove, which may not be specifically enforceable, shall nevertheless, if breached, give rise to a cause of action for monetary damages. The restrictive covenant provisions of this Non-Competition Agreement shall govern to the extent there is any conflict between their terms and the terms of any other agreement or understanding with the Company.
9. Notices. Any notice required or permitted to be given under this Non-Competition Agreement shall be in writing and be deemed given when delivered by hand or received by registered or certified mail, postage prepaid, or by nationally reorganized overnight courier service addressed to the party to receive such notice at the following address or any other address substituted therefor by notice pursuant to these provisions:
If to Executive:
Chad Streff
7545 Duncan Glenn Dr
Westerville, OH 43082
with a copy to:
Mark Wishner
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
12010 Sunset Hills Road; Suite 900
Reston, VA 20190
Telephone: (703) 464-4808
Fax: (703) 464-4895
If to the Company:
CheckSmart Financial Company
7001 Post Road, Suite 200
Dublin, Ohio 43016
Telephone: (614) 798-5900
Fax: (614) 760-2601
with a copy to:
Diamond Castle Holdings
280 Park Avenue, 25th floor, East Tower
New York, New York 10017
Attn: Andrew Rush
Fax: (212) 983-1234
10. Amendment. No provision of this Non-Competition Agreement may be modified, amended, waived or discharged in any manner except by a written instrument executed by the Company and Executive.
11. Entire Agreement. This Non-Competition Agreement and the applicable provisions of Section 6.11 of the Purchase Agreement constitute the entire agreement of the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings of the parties hereto, oral or written, with respect to the subject matter hereof, however, if any portion of this Non-Competition
Agreement is determined to be unenforceable by a court of law, then solely the appropriate conflicting provisions of any other agreement binding upon Executive shall control.
12. Waiver, etc. The failure of the Company to enforce at any time any of the provisions of this Non-Competition Agreement shall not be deemed or construed to be a waiver of any such provision, nor in any way affect the validity of this Non-Competition Agreement or any provision hereof or the right of the Company to enforce thereafter each and every provision of this Non-Competition Agreement. No waiver of any breach of any of the provisions of this Non-Competition Agreement by the Company shall be effective unless set forth in a written instrument executed by the Company, and no waiver of any such breach shall be construed or deemed to be a waiver of any other or subsequent breach.
13. All issues and questions concerning the construction, validity, enforcement and interpretation of this Non-Competition Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. In furtherance of the foregoing, the internal law of the State of Delaware shall control the interpretation and construction of this Agreement (and all schedules and exhibits hereto), even though under that jurisdictions choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply.
14. Enforcement. Subject to Section 10 of the Employment Agreement, if any party shall institute legal action to enforce or interpret the terms and conditions of this Non-Competition Agreement or to collect any monies under it, venue for any such action shall be the State of Delaware. Each party irrevocably consents to the jurisdiction of the courts located in the State of Delaware for all suits or actions arising out of this Non-Competition Agreement. Each party hereto waives to the fullest extent possible, the defense of an inconvenient forum, and each agrees that a final judgment in any action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
IN WITNESS WHEREOF, the parties have caused this Non-Competition Agreement to be executed as of the day written above.
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CheckSmart Financial Company | |
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/s/ James H. Frauenberg, Sr. |
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Name: |
James H. Frauenberg, Sr. |
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Chief Executive Officer |
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Chad Streff | |
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/s/ Chad Streff |
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to EMPLOYMENT AGREEMENT, dated as of July 1, 2008 (this Amendment) by and between CheckSmart Financial Company, a Delaware corporation (the Company), and Chad Streff (Executive).
WHEREAS, the Company and Executive are parties to that certain employment agreement dated as of May 1, 2006 (the Employment Agreement);
WHEREAS, the Company and Executive desire to amend certain terms and conditions of the Employment Agreement;
WHEREAS, other than as specifically amended and set forth herein, the terms and conditions of the Employment Agreement shall remain unchanged and in full force and effect; and
WHEREAS, capitalized terms used and not otherwise defined herein shall have the meaning ascribed to them in the Employment Agreement.
NOW THEREFORE, in consideration of the premises and the mutual covenants set forth below, the parties hereby agree as follows:
1. Section 4(b) of the Employment Agreement are hereby deleted and replaced in its entirety with the following:
Compensation and Related Matters.
(b) Annual Bonus. In addition to Base Salary, Executive is eligible to receive an annual bonus as determined by the Board (the Annual Bonus). The Annual Bonus shall be paid as soon as practicable following the end of the fiscal year to which it relates.
2. A Section 4(h) shall be added to the Employment Agreement which shall read as follows:
4(h) Executive shall be entitled to be paid a retention bonus in the aggregate amount of $250,000, which retention bonus shall be paid as follows:
(i) Within 2 Business Days from the date hereof, and so long as Executive is employment by the Company (subject to Section 7(d) below), the Company will pay Executive $50,000; and
(ii) On March 31, 2009, and so long as Executive is employment by the Company (subject to Section 7(d) below), the Company will pay Executive an additional $50,000 (the payments set forth in subsections (i)-(ii) above, collectively the Retention Bonus).
3. Sections 7(b)(i), (c)(i) and (d)(ii) of the Employment Agreement are hereby deleted and replaced in its entirety with the following:
Compensation Upon Termination. Upon the termination of Executives employment and subject to the terms set forth herein, the Company shall provide Executive with the payments and benefits set forth below. Executive acknowledges and agrees that the payments set forth in this Section 7 constitute liquidated damages for termination of his employment during the Term.
(b) Termination upon Executives Disability. If Executives employment is terminated by reason of Disability, then:
(i) Company shall pay to Executive (A) any accrued, but unpaid, Base Salary and vacation pay through the Termination Date, (B) any Annual Bonus that is determined to have otherwise been earned with respect to the fiscal year in which termination occurs (the Termination Year), payable in accordance with the Companys usual bonus payment schedule, (C) continued Base Salary and Continued Benefits (as defined below) for the longer of (i) six months following the Termination Date or (ii) the date on which Executive becomes entitled to long-term disability benefits under the applicable plan or program of the Company, payable in accordance with the usual payroll policies of the Company, and (D) the Retention Bonus, to the extent not already paid in accordance with Section 4(h) above.
(c) Termination upon Executives Death. If Executives employment terminates during the Term due to Executives death, then:
(i) the Company shall pay to Executives beneficiary, (A) any accrued, but unpaid Base Salary and Annual Bonus through the Termination Date, (B) any accrued but unpaid vacation pay through the Termination Date, (C) a pro-rata portion of Executives Annual Bonus for the Termination Year, and (D) the Retention Bonus, to the extent not already paid in accordance with Section 4(h) above; and
(d) Termination by the Company without Cause or Resignation by Executive for Good Reason. If Executives employment is terminated by the Company without Cause or Executive resigns for Good Reason then, subject to Executives execution and effectiveness of a general release of claims in the form attached hereto as Exhibit B (the Release) and his continued compliance with the Non-Competition Agreement:
(ii) In the event that Executive is terminated without Cause or resigns for Good Reason between January 1, 2007 and December 31, 2008, the Company shall pay to Executive (A) any accrued, but unpaid, Base Salary and vacation pay through the Termination Date, payable as soon as practicable following the Termination Date, (B) any Annual Bonus that is determined to have otherwise been earned with respect to the Termination Year, payable in accordance with the Companys usual bonus payment schedule, (C) Base Salary and Continued Benefits for a period of 12 months following the Termination Date, payable, in the case of Base Salary, in accordance with the usual payroll policies of the Company, (D) any Annual Bonus that is determined to have otherwise been earned with respect to the Following Year prorated for the portion of the Following Year between January 1 of the Following Year and the 12 month anniversary of the Termination Date, payable in accordance with the Companys usual bonus payment schedule, and (E) the Retention Bonus, to the extent not already paid in accordance with Section 4(h) above;
4. Arbitration. Except as provided for in the Non-Competition Agreement, if any contest or dispute arises between the parties with respect to this Employment Agreement, such contest or dispute shall be submitted to binding arbitration for resolution in Cleveland, Ohio, in accordance with the rules and procedures of the Employee Dispute Resolution Rules of the American Arbitration Association then in effect. The decision of the arbitrator shall be final and binding on both parties, and any court of competent jurisdiction may enter judgment upon the award.
5. Notice. For the purposes of this Amendment, notices, demands and all other communications provided for in this Amendment shall be as set forth in the Employment Agreement.
6. Miscellaneous. No provisions of this Amendment may be amended, modified, or waived unless such amendment or modification is agreed to in writing signed by Executive and by a duly authorized officer of the Company, and such waiver is set forth in writing and signed by the party to be charged. No waiver by either party hereto at any time of any breach by the other party hereto of any condition or provision of this Amendment to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Amendment, the Employment Agreement or the Purchase Agreement. The respective rights and obligations of the parties hereunder of this Amendment shall survive Executives termination of employment and the termination of this Amendment and the Employment Agreement to the extent necessary for the intended preservation of such rights and obligations. The validity, interpretation, construction and performance of this Amendment and all claims of action (whether in contract or tort) that may be based upon, arise out of or relate to this Amendment or the Employment Agreement, shall be governed by the laws of the State of Delaware without regard to its conflicts of law principles.
7. Validity. The invalidity or unenforceability of any provision or provisions of this Amendment shall not affect the validity or enforceability of any other provision of this Amendment or the Employment Agreement, which shall remain in full force and effect. All other terms and conditions of the Employment Agreement other than as set forth herein shall remain unchanged and in full force and effect.
8. Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
9. Entire Agreement. Except as otherwise provided for herein and any Exhibits hereto, this Amendment, the Employment Agreement and the Purchase Agreement set forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersede all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto in respect of such subject matter. Any prior agreement of the parties hereto, or between Executive and any of the Subsidiaries in respect of the subject matter contained herein is hereby terminated and cancelled. Other than any accrued Base Salary due to Executive as of the date hereof, Executive acknowledges that as of the Commencement Date, he has no claims against the Company or any of its affiliates in respect of any amounts that may be owing to him from any of the Subsidiaries.
10. Withholding. All payments hereunder shall be subject to any required withholding of Federal, state and local taxes pursuant to any applicable law or regulation.
11. Noncontravention. The Company represents that the Company is not prevented from entering into, or performing this Agreement by the terms of any law, order, rule or regulation, its by-laws or declaration of trust, or any agreement to which it is a party, other than which would not have a material adverse effect on the Companys ability to enter into or perform this Amendment.
12. Section 409A Compliance. The parties intend that any severance or other compensation under this Amendment and the Employment Agreement be paid in compliance with Section 409A of the Code such that there are no adverse tax consequences, interest, or penalties as a result of the payments. The parties agree to modify this Amendment and/or the Employment Agreement, as applicable, the timing and/or the amount of the severance to the extent necessary to comply with Section 409A.
[Signature Page to Follow]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the date first above written.
CheckSmart Financial Company |
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Chad Streff | |
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/s/ William E. Saunders, Jr. |
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/s/ Chad Streff |
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Name: |
William E. Saunders, Jr. |
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Title: |
Chief Executive Officer |
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[Signature Page to Chad Streff Employment Agreement Amendment]
THIRD AMENDMENT TO EMPLOYMENT AGREEMENT
This Third Amendment to EMPLOYMENT AGREEMENT, dated as of January 1, 2011 (this Amendment), is by and between CheckSmart Financial Company, a Delaware corporation (the Company), and Chad Streff (Executive).
WHEREAS, the Company and Executive are parties to that certain employment agreement dated as of May 1, 2006, amended as of July 1, 2008 and September 15, 2009 (as amended, the Employment Agreement);
WHEREAS, the Company and Executive desire to further amend certain terms and conditions of the Employment Agreement;
WHEREAS, other than as specifically amended and set forth herein, the terms and conditions of the Employment Agreement shall remain unchanged and in full force and effect; and
WHEREAS, capitalized terms used and not otherwise defined herein shall have the meaning ascribed to them in the Employment Agreement.
NOW THEREFORE, in consideration of the premises and the mutual covenants set forth below, the parties hereby agree as follows:
1. Section 1 of the Employment Agreement is hereby deleted in its entirety and replaced with the following:
Employment. Effective as of the date hereof (the Commencement Date), the Company hereby agrees to employ Executive as the Chief Technology (the CTO) and the Chief Compliance Officer (the CCO), and Executive hereby accepts such employment on the terms and conditions hereinafter set forth.
2. Section 2 of the Employment Agreement is hereby deleted in its entirety and replaced with the following:
Position and Duties. Executive shall serve as CTO and CCO, and shall report directly to the Companys President (the President). Executive shall have those powers and duties normally associated with the position of CTO and CCO of entities comparable to the Company and such other powers and duties as may be prescribed by the Company; provided that, such other powers and duties are consistent with Executives position as CTO and CCO of the Company. Notwithstanding the above, Executive shall be permitted, to the extent such activities do not interfere with the performance by Executive of his duties and responsibilities hereunder, to (i) manage Executives personal, financial and legal affairs and (ii) to serve on civic or charitable boards or committees.
3. Section 4(a) of the Employment Agreement is hereby deleted in its entirety and replaced with the following:
(a) Base Salary. For performance of services under this Employment Agreement, Executive shall receive a base salary of (i) $300,000 for the fiscal years of 2006, 2007, and 2008, (ii) $330,000 for the fiscal years of 2009 and 2010 and (iii) $375,000 for the fiscal year of 2011, to the extent the Terms is renewed in accordance with Section 3 of this Employment Agreement and for any
subsequent fiscal year in the Term (for each applicable fiscal year of the Term, Base Salary). Executives Base Salary shall be paid in approximately equal installments in accordance with the Companys customary payroll practices. The compensation committee of the Board (Committee) shall review Executives Base Salary annually and in a manner consistent with the compensation practices and guidelines of the Company and, in its sole discretion, may increase (but not decrease) such salary during the Term on an annual basis. If Executives Base Salary is increased by the Company, such increased Base Salary shall then constitute the Base Salary for all purposes of this Agreement as of such increase.
4. Section 4(b) of the Employment Agreement is hereby deleted in its entirety and replaced with the following:
(b) Annual Bonus. In addition to Base Salary, Executive shall be eligible to receive an annual bonus (the Annual Bonus) in the amounts and with respect to the fiscal years set forth in Schedule 1 hereto, subject to terms and conditions determined by the CEO and Board, including with respect to the achievement of the Companys financial budget goals for the fiscal year to which it relates as determined by the Board. The Annual Bonus shall be paid in the fiscal year following the end of the applicable fiscal year in which such bonus was earned.
5. Section 4(f) is hereby deleted in its entirety.
6. Section 4(h) is hereby deleted in its entirety and replaced with the following:
4(h) Executive shall be entitled to be paid a retention bonus in the aggregate amounts set forth for each fiscal year in Schedules II-A, II-B and II-C hereto.
7. Section 7(b) is hereby deleted in its entirety and replaced with the following:
7(b)(i)Company shall pay to Executive (A) any accrued, but unpaid, Base Salary and vacation pay through the Termination Date, payable in accordance with the usual payroll practices of the Company, (B) any Annual Bonus that is determined to have otherwise been earned with respect to the fiscal year in which termination occurs (the Termination Year), payable in accordance with the Companys usual bonus payment schedule, (C) continued Base Salary and Continued Benefits (as defined below) until the earlier of (i) six months following the Termination Date or (ii) the date on which Executive becomes entitled to long-term disability benefits under the applicable plan or program of the Company, payable, in the case of Base Salary, in accordance with the usual payroll policies of the Company, and (D) the portion of the Retention Bonus that is earned but unpaid through the Termination Date, to the extent not already paid in accordance with Section 4(f) above, payable within thirty (30) days of the Termination Date.
(ii) Continued Benefits means reimbursement of any premiums for continued group medical, dental and vision coverage for the Executive and/or the Executives eligible dependents under Section 4980B of the Internal Revenue Code of 1986, as amended (COBRA), to the extent such amount exceeds the premium which Executive would have had to pay for coverage under such plan if he had remained an active employee. For the avoidance of doubt, any amounts reimbursed pursuant to this Section 7 shall be treated as compensation.
8. Section 7(d)(iii) is hereby deleted in its entirety and replaced with the following:
7(d)(iii) in the event that Executive is terminated without Cause or resigns for Good Reason at any time after December 31, 2008, the Company shall pay to Executive (A) any accrued, but unpaid, Base Salary and vacation pay through the Termination Date, payable as soon as practicable in accordance with the usual payroll practices of the Company, (B) any Annual Bonus that is determined to have otherwise been earned with respect to the Termination Year, payable in accordance with the Companys usual bonus payment schedule, (C) Base Salary and Continued Benefits for the longer of (i) the Termination Date through December 31 of the Termination Year or (ii) 90 days; payable, in the case of Base Salary, in accordance with the usual payroll policies of the Company, and (D) the accrued but unpaid Retention Bonus through the date of termination, to the extent not already paid in accordance with Section 4(f) above, payable within thirty (30) days of the Termination Date.
7(d)(iv)As a condition precedent to receiving any payments under Section 7(d) (other than those amounts already accrued prior to the Termination Date, which shall be payable on the date of termination), Executive shall have executed, within twenty-one (21) days, or if required for an effective release, forty-five (45) days, the Release, which may be updated by the Company from time to time to reflect changes in law, and the seven (7) day revocation period of such Release shall have expired without revocation. Subject to Section 19 and the execution of the Release pursuant to this Section 7(d)(iv), all payments under Section 7(d) shall be payable as described above; provided, that the first payment shall be made on the sixtieth (60th) day after the Termination Date (or such later date as required by the terms hereof), and such first payment shall include payment of any amounts that would otherwise be due prior thereto.
9. A new Section 7(f) shall be added as follows:
7(f) Except as otherwise specifically set forth herein, any payments due to Executive under this Section 7 shall be paid to Executive as follows: (i) any payment of accrued but unpaid Base Salary and vacation pay shall be paid as soon as practicable in accordance with the usual payroll practices of the Company; (ii) any Annual Bonus shall be payable in accordance with the Companys usual bonus payment schedule; (iii) any continuing payment of Base Salary and Continued Benefits for any period of time following the Termination Date shall be paid in the case of Base Salary, in accordance with the usual payroll policies of the Company; and (iv) any Retention Bonus shall be paid within thirty (30) days of the Termination Date.
10. Section 19 is hereby deleted in its entirety and replaced with the following:
19. Section 409A.
(a) The intent of the parties is that payments and benefit under this Agreement comply with or be exempt from Code Section 409A and the regulations and guidance promulgated thereunder (collectively, Section 409A) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. If the Executive notifies the Company that the Executive has received advice of tax counsel of a national reputation with expertise in Section 409A that any provision of this Agreement (or of any award of compensation, including equity compensation or benefits) would cause the Executive to incur any additional tax or interest under Section 409A (with specificity as to the reason therefor) or the Company independently makes such determination, the Company shall, after consulting with the Executive, reform such provision to try to comply with Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with
Section 409A. To the extent that any provision hereof is modified in order to comply with or be exempt from Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to the Executive and the Company of the applicable provision without violating the provisions of Section 409A.
(b) A termination of employment shall not be deemed to have occurred for purposes of this Agreement providing for the payment of any amounts or benefits that are considered nonqualified deferred compensation under Section 409A upon or following a termination of employment, unless such termination is also a separation from service within the meaning of Section 409A and the payment thereof prior to a separation from service would violate Section 409A. As permitted by Treasury Regulation 1.409A-1(h)(1)(ii), 49% shall be substituted in lieu of 20% for the average level of bona fide services performed during the immediately preceding thirty-six (36) month period in order to constitute a separation from service. For purposes of any such provision of this Agreement relating to any such payments or benefits, references to a termination, termination of employment or like terms shall mean separation from service. If the Executive is deemed on the date of termination to be a specified employee within the meaning of that term under Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered nonqualified deferred compensation under Section 409A payable on account of a separation from service, such payment or benefit shall be made or provided on the first business day following the date which is the earlier of (A) the expiration of the six (6) month period measured from the date of such separation from service of the Executive, and (B) the date of the Executives death (the Delay Period). Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section 19 (whether they would have otherwise been payable in a single lump sum or in installments in the absence of such delay) shall be paid or reimbursed to the Executive in a lump sum with interest at the prime rate as published in the Wall Street Journal on the first business day following the Delay Period, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.
(c) (i) All expenses or other reimbursements as provided herein shall be payable in accordance with the Companys policies in effect from time to time, but in any event shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by the Executive; (ii) no such reimbursement or expenses eligible for reimbursement in any taxable year shall in any way affect the expenses eligible for reimbursement in any other taxable year; provided, that this clause (ii) shall not be violated without regard to expenses reimbursed under any arrangement covered by Code Section 105(b) solely because such expenses are subject to a limit related to the period the arrangement is in effect; and (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchanged for another benefit.
(d) For purposes of Section 409A, the Executives right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments. Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., payment shall be made within thirty (30) days following the date of termination), the actual date of payment within the specified period shall be within the sole discretion of the Company.
11. Notice. For the purposes of this Amendment, notices, demands and all other communications provided for in this Amendment shall be as set forth in the Employment Agreement.
12. Miscellaneous. No provisions of this Amendment may be amended, modified, or waived unless such amendment or modification is agreed to in writing signed by Executive and by a duly authorized officer of the Company (other than Executive), and such waiver is set forth in writing and signed by the party to be charged. No waiver by either party hereto at any time of any breach by the other party hereto of any condition or provision of this Amendment to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Amendment or the Employment Agreement. The respective rights and obligations of the parties hereunder of this Amendment shall survive Executives termination of employment and the termination of this Amendment and the Employment Agreement to the extent necessary for the intended preservation of such rights and obligations. The validity, interpretation, construction and performance of this Amendment and all claims of action (whether in contract or tort) that may be based upon, arise out of or relate to this Amendment or the Employment Agreement, shall be governed by the laws of the State of Delaware without regard to its conflicts of law principles.
13. Validity. The invalidity or unenforceability of any provision or provisions of this Amendment shall not affect the validity or enforceability of any other provision of this Amendment or the Employment Agreement, which shall remain in full force and effect. All other terms and conditions of the Employment Agreement other than as set forth herein shall remain unchanged and in full force and effect.
14. Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
15. Entire Agreement. Except as otherwise provided for herein and any Exhibits hereto, this Amendment and the Employment Agreement set forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersede all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto in respect of such subject matter. Any prior agreement of the parties hereto, or between Executive and any of the Subsidiaries in respect of the subject matter contained herein is hereby terminated and cancelled. Other than any accrued Base Salary due to Executive as of the date hereof, Executive acknowledges that as of the Commencement Date, he has no claims against the Company or any of its affiliates in respect of any amounts that may be owing to him from any of the Subsidiaries.
16. Withholding. All payments hereunder shall be subject to any required withholding of Federal, state and local taxes pursuant to any applicable law or regulation.
17. Section 409A Compliance. The parties intend that any severance or other compensation under this Amendment and the Employment Agreement be paid in compliance with Section 409A of the Code such that there are no adverse tax consequences, interest, or penalties as a result of the payments. The parties agree to modify this Amendment and/or the Employment Agreement, as applicable, the timing and/or the amount of the severance to the extent necessary to comply with Section 409A.
18. Effectiveness of Employment Agreement. Except as modified by this Amendment, all the terms of the Employment Agreement shall remain unchanged and in full force and effect.
[Signature Page to Follow]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the date first above written.
CheckSmart Financial Company |
Chad Streff | ||
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By: |
/s/ William E. Saunders, Jr. |
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/s/ Chad Streff |
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Name: |
William E. Saunders, Jr. |
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Title: |
CEO |
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[Signature Page to Chad Streff Employment Agreement Amendment]
Schedule I
Annual Bonus
Fiscal Year |
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Amount of Annual Bonus |
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2006 |
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$ |
100,000 |
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2007 |
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$ |
100,000 |
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2008 |
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$ |
100,000 |
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2009 |
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$ |
170,000 |
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2010 |
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$ |
175,000 |
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2011 |
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$ |
125,000 |
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Any subsequent fiscal year in the Term, to the extent the Term is renewed in accordance with Section 3 of this Employment Agreement |
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$ |
125,000 |
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Schedule II-A
Retention Bonus from July 1, 2008 to March 31, 2009
The retention bonus equals an aggregate amount of $100,000 from July 1, 2008 to March 31, 2009 (the 2008/2009 Retention Bonus). The 2008/2009 Retention Bonus shall be earned and paid as follows:
(i) Within 2 Business Days from July 1, 2008, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), the Company will pay Executive $50,000; and
(ii) On March 31, 2009, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), the Company will pay Executive an additional $50,000 (it being understood that the payments set forth in subsections (i)-(ii) above, to the extent accrued and payable, comprise the 2008/2009 Retention Bonus).
Schedule II-B
Retention Bonus for the Fiscal Year of 2010
The retention bonus equals an aggregate amount of $120,000 for the fiscal year of 2010 (the 2010 Retention Bonus). The 2010 Retention Bonus shall be earned and paid as follows:
(i) On March 31, 2010, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), (A) the Company will pay Executive $15,000 and (B) Executive will be eligible to receive an additional $15,000 upon the achievement of each of the milestones set forth below;
(ii) On June 30, 2010, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), (A) the Company will pay Executive $15,000 and (B) Executive will be eligible to receive an additional $15,000 upon the achievement of each of the milestones set forth below;
(iii) On September 30, 2010, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), (A) the Company will pay Executive $15,000 and (B) Executive will be eligible to receive an additional $15,000 upon the achievement of each of the milestones set forth below; and
(iv) On December 31, 2010, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), (A) the Company will pay Executive $15,000 and (B) Executive will be eligible to receive an additional $15,000 upon the achievement of each of the milestones set forth below (it being understood that the payments set forth in subsections (i)-(iv) above, to the extent accrued and payable, comprise the 2010 Retention Bonus).
Milestones for the Fiscal Year of 2010
INTEROFFICE MEMORANDUM
TO: |
CHAD STREFF, COO |
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FROM: |
TED SAUNDERS, CEO |
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SUBJECT: |
2010 JOB RESPONSIBILITIES AND PERFORMANCE GOALS |
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DATE: |
2/1/2011 |
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CC: |
H. EUGENE LOCKHART, CHAIRMAN |
Pursuant to the offer to amend and extend your employment contract for the fiscal year 2010, we need to establish, discuss and memorialize my expectations for your role and specific qualitative job duties to be reviewed on an ongoing basis and upon which a portion of your retention compensation will be based.
Job Duties:
As COO of the Company, you are to lead by example in all facets your professional life. Your decision making and behavior should rise above all and set example for every employee. You should motivate and develop all employees, but specifically guide and direct the IT and Collections teams. Excellence in operational performance and compliance with a state and federal laws are the two overarching tenants of success.
Specific 2010 Operational Goals:
· Excellence in execution of new product roll out(s) from an IT and Collections perspective
· Focus and leadership in ITs development and maintenance of
· New application to support Flexline enrollment
· Upgrade of Cashwise to fully integrate with Veritee databases in Indiana, Florida and Michigan
· Compliance of all our IT infrastructure with state and federal laws
· Focus and leadership in Collection Departments development of:
· Policies and procedures to continue to protect the reputation of the Company with respect to how debtors are treated
· Policies and procedures to manage employee complaints within the collections department
· Methods, strategies and process flows to manage, cure and collect our developing array of loan products
· Upgrade of CRS to support operational growth
· Compliance of all our collections efforts with state and federal laws
My success as CEO and the overall success of Checksmart are dependent upon your continued performance as COO. I need you to step and be a leader in 2010. Your knowledge of the company and the industry are excellent and we need all of your talent in 2010.
In my opinion, historically, you were not given the latitude and authority to execute on many good ideas and necessary infrastructure upgrades. I hope you feel as though I have supported you in these regards since the beginning of my tenure, but I am reinforcing my desire to see you continue to take affirmative control of the strategic development of these key departments and personnel.
The success of the Company depends on the infrastructure. The demands on IT and collections have never been greater. Our success is equally dependent on the backbone of the Company being strong enough to support our lofty goals, I am depending on your ensure will are strong as we pursue our new strategic direction.
I look forward to working with you to achieve all our goals in 2010.
Sincerely,
William E. Saunders, Jr., CEO
Schedule II-C
Retention Bonus for the Fiscal Year of 2011 and any Subsequent Fiscal Year in the Term
The retention bonus equals an aggregate amount of $100,000 for the fiscal year of 2011 (the 2011 Retention Bonus) and for any subsequent fiscal year in the Term, to the extent the Term is renewed in accordance with Section 3 of this Employment Agreement. The 2011 Retention Bonus shall be earned and paid as follows:
(i) On March 31, 2011, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), Executive will be eligible to receive $25,000 upon the achievement of each of the milestones set forth below;
(ii) On June 30, 2011, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), Executive will be eligible to receive $25,000 upon the achievement of each of the milestones set forth below;
(iii) On September 30, 2011, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), Executive will be eligible to receive $25,000 upon the achievement of each of the milestones set forth below; and
(iv) On December 31, 2011, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), Executive will be eligible to receive $25,000 upon the achievement of each of the milestones set forth below (it being understood that the payments set forth in subsections (i)-(iv) above, to the extent accrued and payable, comprise the 2011 Retention Bonus).
Milestones for the Fiscal Year of 2011 and any Subsequent Fiscal Year in the Term
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Quarter 1 Priority |
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Quarter 2 Priority |
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Quarter 3 Priority |
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Quarter 4 Priority |
Information Technology: |
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Completion of Store Database Centralization |
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5 |
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Completion of Veritec Integration in MI, KY and VA |
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3 |
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Hardware Redundancy Initiatives |
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1 |
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Server Farm Build Out for Terminal Servers |
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Server Virtualization |
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SQL Server Clustering |
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Create Best in Class Redundancy |
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Disaster Recovery Initiatives |
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Identify and Contract for Off-Site Data Center for Primary Data Site |
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2 |
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Move Data Center to New Site |
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1 |
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Host Failover Site in Current Corporate Data Center |
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2 |
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Identify and Contract for Off-Site Call Center or Hitching Post Site |
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4 |
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Create and Test Disaster Recovery Plan and Procedures for New Sites |
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1 |
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Installation of Integrated T-1s Across the Enterprise |
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1 |
Microsoft Office Client Upgrades |
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6 |
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Retooling of ACH Process for Quicker Posting |
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4 |
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Automation of Returned Items in Cashwise |
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3 |
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POS Print on Demand of Loan Contracts and Supporting Documents |
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5 |
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Documentation of all Software, Infrastructure and Configurations |
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4 |
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Implementation of Project Management |
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2 |
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Formalized IT Policies |
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3 |
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SARBOX |
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Top Down Risk Assessment |
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1 |
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Process and Account Mapping |
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2 |
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Creation of Narrative Flow Charts |
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1 |
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Creation of Risk Control Matrices |
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2 |
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Development of Test Plans |
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1 |
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Design and Test Controls Around Program Development and Change using Visual Studio Team System |
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2 |
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Downstream Testing |
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Computer Operations |
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2 |
Access to Programs and Data |
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3 |
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Compliance |
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SARBOX - Work Directly with Accounting and IT Departments |
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1 |
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Creation of State Specific Audits to Address Compliance Requirements |
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1 |
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Creation of State Specific Testing Integrated in SAS70 Audits |
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1 |
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Biannual Field Visits by Audit Committee Members |
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3 |
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Creation of Online State Specific Training Programs |
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2 |
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Stronger Integration and Testing of Controls with POS and State Databases |
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2 |
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Milestones
I. Information Technology
a. We have begun to centralize our store point-of-sales database for multiple reasons. One is to decrease the amount of field support as well as reducing operating systems and database license costs. It will also allow us better access to a larger amount of data and increase security of the data. As we centralize we are also upgrading to the latest version of the software that allows us to integrate with state databases via a Veritec interface. Completion of database centralization should be finished by the end of second quarter.
b. I anticipate that our integration with the remaining database states will be completed at the end of first quarter. We are currently testing Kentucky and Michigan and have found some minor issues with the interfaces that are holding deployment. We continue to work with Veritec and our point of sales vendor Softwise to resolve these issues. Once we have completed Kentucky and Michigan we will focus on Virginia.
c. We have undertaken several initiatives to bolster hardware redundancy in an effort to prepare for the migration of standalone systems at the stores to a centralized model housed in a state of the art datacenter. We are currently building out a server farm that will allow load balancing between users and multiple databases thus allowing maximum performance. We are also in the process of creating clustered SQL servers. This helps boost SQL Servers uptime should one SQL Server fail in the cluster; another clustered server will automatically take over, keeping downtime to minutes, instead of hours. We also have been retiring older servers and replacing them with more robust servers that allow us to vitalize servers therefore reducing the number of new servers and reducing ownership costs. These initiatives will be completed in first quarter.
d. We have been touring offsite disaster recovery call centers and in the final stages of making a decision on a 100 seat facility which will accommodate collections and customer care in the event of a disaster at the corporate office. We will store images of our workstations at the sight that can be deployed quickly if needed. The site will have the ability to use cloud-dialing technology with our collections system. We will have negotiated and executed a contract for this center in first quarter. We have begun to develop a DR plan for this sight and expect to be ready for failover testing in third quarter. My plan on a go forward basis biannual failover testing.
e. We also have been touring several datacenters and are in the process of negotiating pricing from several providers that offer secured 7/24 manned centers. I believe that this is critical in maintaining system uptime in a centralize model. We expect to be in contract in the first quarter with a datacenter and start migrating to the new center with an estimated completion in the second quarter. The old datacenter at the corporate office will serve as a redundant center to the new facility.
f. We are concurrently pilot testing integrated full T-1 lines across the enterprise with AT&T and Qwest. This is part of our centralization initiative and will also reduce telecom charges for long distance and provide us with more robust connectivity from the stores to corporate. This project will be completed by the end of fourth quarter.
II. Sarbanes Oxley I am looking at a four-phase approach for this project. The phases are Planning Stage; Assess Design Effectiveness, Assess Operating Effectiveness and Ongoing Monitoring. I will address the action steps and deliverables in detail below.
a. In the Planning Phase we will identify, interview, recommend a firm to assist us with the project as well as develop a budget for the project. The compliance committee will act as an internal steering team who will meet with the external auditors and concur on a plan and areas of concentration. Deliverables include establishing the project team and roles along with a detailed project plan that will be given to the audit committee for approval. This phase will occur in the first quarter.
b. In the Assess Design Effectiveness Phase we will use a top down approach to determine which processes and controls are significant for testing. Review existing documentation, policies and procedures along with evaluating the design and effectiveness of existing internal controls. This will allow us to identify design deficiencies that need to be addressed with the guidance from our external auditors. Along with our external auditor we then will identify areas to be tested along with the extent of the testing. Findings will be compiled in an observations memorandum that will be provided to the audit committee. This phase will occur in the second quarter.
c. In the Assess Operating Effectiveness Phase we will evaluate the operating effectiveness using detailed testing of the controls. Assessment testing results and any noted deficiencies will be communicated with the audit committee. Deliverables include documentation of actual testing results along with a detailed list of internal controls that may not be operating effectively. Finally issue a completion report letter to the audit committee that includes recommendations for improvement. This phase will occur in the third quarter.
d. In the Ongoing Monitoring Phase we will establish an ongoing monitoring plan to help ensure compliance along with updating documentation and information previously prepared along with analyzing additional control improvements that may increase the efficiency of the annual compliance process. And finally develop an internal audit plan that allows monitoring on a quarterly and annual basis along with the appropriate reporting to the audit committee, external auditors and appropriate stakeholders. This phase will occur in the fourth quarter.
III. Compliance - Last year we created a compliance committee that I chair which consists of multiple departments working together to improve overall compliance. This years action steps and deliverables include the following:
a. Creation of state-by-state audits and refocuses of our internal audit staff to an 80 percent compliance focus and a 20 percent operations focus. In the past our auditors were more focused on operations. Auditors have the authority to remove noncompliant employees from the work schedule until they have had remedial training and can clearly demonstrate their knowledge in the area of failure.
b. We will be working with our external auditor to create state specific testing for our annual SAS70 audits. When we have finalized the state specific testing I will be forwarding to the new procedures to the audit committee for final approval by third quarter.
c. We are currently creating an online state specific testing that all employees will be undertaking upon hire and on their anniversary date. A passing score of 85 percent or greater will be required. Employees who do not obtain an 85 percent score will be retrained and retested. A certificate of passage will be maintained in the employees permanent file, This will be completed in the second quarter.
d. We have been working with Veritec and the various database state officials requesting permission to obtain data from Veritec on a weekly basis. We have begun to compare this data against our point of sales and collections data to ensure that all three systems are in agreement and that any discrepancies are identified and corrected in a timely manner. To date we have a manual process for three states and are working for a fully automated process to be in place for five database states in the third quarter.
Exhibit 10.7
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of January 1, 2011 (this Employment Agreement) by and between CheckSmart Financial Company, a Delaware corporation (the Company), and Michael Durbin (Executive).
WHEREAS, the Company wishes to employ Executive and Executive wishes to be employed by, and make his services available to, the Company on the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the premises and the mutual covenants set forth below, the parties hereby agree as follows:
1. Employment. Effective as of the date hereof (the Commencement Date), the Company hereby agrees to employ Executive as the Chief Financial Officer (the CFO), and Executive hereby accepts such employment on the terms and conditions hereinafter set forth.
2. Position and Duties. Executive shall serve as CFO, and shall report directly to the Companys Chief Executive Officer (the CEO). Executive shall have those powers and duties normally associated with the position of CFO of entities comparable to the Company and such other powers and duties as may be prescribed by the Company; provided that, such other powers and duties are consistent with Executives position as CFO of the Company. Notwithstanding the above, Executive shall be permitted, to the extent such activities do not interfere with the performance by Executive of his duties and responsibilities hereunder, to (i) manage Executives personal, financial and legal affairs and (ii) to serve on civic or charitable boards or committees.
3. Term. The term of employment of Executive under this Employment Agreement shall commence on the Commencement Date and shall continue in full force and effect until December 31, 2013 unless terminated earlier as provided herein (including any renewals hereunder, the Term); provided, however, that unless the Companys Board of Directors (the Board) or Executive provides the other with written notice of termination of this Employment Agreement at least 90 days prior to any date on which this Employment Agreement would otherwise expire or as otherwise set forth herein, the term of employment hereunder shall be automatically extended for an additional period of one fiscal year from each such date.
4. Compensation and Related Matters.
(a) Base Salary. For performance of services under this Employment Agreement, Executive shall receive a base salary of $375,000 for the fiscal year of 2011 and for any subsequent fiscal year in the Term, to the extent the Term is renewed in accordance with Section 3 of this Employment Agreement (for each applicable fiscal year of the Term, Base Salary). Executives Base Salary shall be paid in approximately equal installments in accordance with the Companys customary payroll practices. The compensation committee of the Board (Committee) shall review Executives Base Salary annually and in a manner consistent with the compensation practices and guidelines of the Company and, in its sole discretion, may increase (but not decrease) such salary during the Term on an annual basis. If Executives Base Salary is increased by the Company, such increased Base Salary shall then constitute the Base Salary for all purposes of this Agreement as of such increase.
(b) Annual Bonus. In addition to Base Salary, Executive shall be eligible to receive an annual bonus (the Annual Bonus) in the amounts and with respect to the fiscal years set forth in Schedule I hereto, subject to terms and conditions determined by the CEO and Board, including with respect to the achievement of the Companys financial budget goals for the fiscal year of 2011 as determined by the Board. The Annual Bonus shall be paid in the fiscal year following the end of the applicable fiscal year in which such bonus was earned.
(c) Option Grant. Simultaneous with the execution and delivery of this Employment Agreement, Executive shall receive, pursuant to the CheckSmart Financial Holdings Corp. 2006 Management Equity Incentive Plan (the Plan), grants of options to purchase shares of CheckSmart Financial Holdings Corp. Class A Common Stock on the terms and subject to the conditions set forth in the CheckSmart Financial Holdings Corp. 2006 Management Equity Incentive Plan Option Grant Award Agreement attached hereto as Exhibit A (the Option Agreement).
(d) Expenses. The Company shall reimburse Executive for all reasonable business expenses upon the presentation of receipts in accordance with the Companys policies and procedures now in force or as such policies and procedures may be modified with respect to all senior executive officers of the Company.
(e) Benefit Plans and Perquisites. Executive shall be entitled to participate in and be covered under all employee benefit plans or programs maintained by the Company from time to time for the benefit of its senior executives including, without limitation, 401(k), vacation and medical.
(f) Retention Bonus. Executive shall be entitled to be paid a retention bonus in the aggregate amounts for each fiscal year set forth in Schedule II hereto.
(g) Change of Control Bonus. Executive shall be entitled to be paid a one-time cash bonus of $500,000 in the event that (i) there is a Change of Control (as defined in the Option Agreement) and (ii) upon the DCP Investor (as defined in the Option Agreement) receiving Aggregate Net Proceeds (as defined in the Option Agreement) that is at least equal to the DCH Investment (as defined in the Option Agreement); it being understood that any such bonus shall be subject to Executives continued employment through the date of the Change in Control and shall be paid promptly (but in any event, within five business days) following the consummation of any such Change of Control.
5. Termination. Executives employment hereunder may be terminated upon the following events:
(a) Death. Executives employment hereunder shall terminate upon his death.
(b) Disability. Executives employment may be terminated if, as a result of Executives incapacity due to physical or mental illness, Executive is unable to perform his duties for 180 consecutive days and, within 30 days after a Notice of Termination (as defined below), which Notice of Termination may not be given until the expiration of such consecutive 180 day period, is given to Executive, Executive has not returned to work (Disability).
(c) Cause. The Company shall have the right to terminate Executives employment for Cause. Cause shall mean:
(i) Executives material breach of this Employment Agreement and Executives failure to cure such breach within 20 days following written notice from the Board or the CEO to Executive of such breach;
(ii) Executives failure or refusal to comply, on a timely basis, with any lawful direction or instruction of the Board or the CEO;
(iii) Executives gross negligence or willful misconduct in the performance of his duties as an employee of the Company;
(iv) Executives commission of fraud, embezzlement, misappropriation of funds, breach of fiduciary duty or act of dishonesty against the Company;
(v) conviction of Executive of a felony or entry by Executive of a plea of nolo contendre or a plea of guilty under an indictment to a felony; or
(vi) the habitual drug addiction or intoxication of Executive.
(d) Good Reason. Executive may resign for Good Reason within 30 days after Executive has actual knowledge of the occurrence, without the written consent of Executive, of one of the following events:
(i) a reduction in Executives Base Salary, or non-timely payment of Base Salary or earned Annual Bonus or benefits or other breach by the Company of this Agreement that is not cured by the Company within 20 days of Executives written notice to the Company of such breach;
(ii) a material diminution in Executives duties or responsibilities not cured by the Company within 20 days after written notice to the Company; or
(iii) a requirement by the Company that Executive be based in an office that is located more than 20 miles from Executives principal place of employment as of the Commencement Date.
(e) Without Cause. The Company shall have the right to terminate Executives employment hereunder without Cause by providing Executive with a Notice of Termination.
6. Termination Procedure.
(a) Notice of Termination. Any termination of Executives employment by the Company or resignation by Executive (other than termination by reason of death) shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 11. For purposes of this Agreement, a Notice of Termination shall mean a notice which shall indicate the specific termination provision in this Employment Agreement relied upon.
(b) Termination Date. Termination Date shall mean (i) if Executives employment is terminated by his death, the date of his death, (ii) if Executives employment is terminated for Disability, 30 days after Notice of Termination, and (iii) if Executives employment is terminated for
any other reason, the date on which a Notice of Termination is given (subject to any cure periods) or any later date (within 30 days after the giving of such notice) set forth in such Notice of Termination.
7. Compensation Upon Termination. Upon the termination of Executives employment and subject to the terms set forth herein, the Company shall provide Executive with the payments and benefits set forth below. Executive acknowledges and agrees that the payments set forth in this Section 7 constitute liquidated damages for termination of his employment during the Term.
(a) Non-Renewal by the Company. If the Company does not renew Executives employment in accordance with Section 3 above, Executive shall be entitled to receive his Base Salary and Continued Benefits (as defined below) for a period of 90 days following the expiration of the Term (such 90-day period, the Non-Renewal Tail Period).
(b) Termination upon Executives Disability. If Executives employment is terminated by reason of Disability, then:
(i) Company shall pay to Executive (A) any accrued, but unpaid, Base Salary and vacation pay through the Termination Date, payable in accordance with the usual payroll practices of the Company, (B) any Annual Bonus that is determined to have otherwise been earned with respect to the fiscal year in which termination occurs (the Termination Year), payable in accordance with the Companys usual bonus payment schedule, (C) continued Base Salary and Continued Benefits (as defined below) until the earlier of (i) six months following the Termination Date or (ii) the date on which Executive becomes entitled to long-term disability benefits under the applicable plan or program of the Company, payable, in the case of Base Salary, in accordance with the usual payroll policies of the Company, and (D) the portion of the Retention Bonus that is earned but unpaid through the Termination Date, to the extent not already paid in accordance with Section 4(f) above, payable within thirty (30) days of the Termination Date.
(ii) Continued Benefits means reimbursement of any premiums for continued group medical, dental and vision coverage for the Executive and/or the Executives eligible dependents under Section 4980B of the Internal Revenue Code of 1986, as amended (COBRA), to the extent such amount exceeds the premium which Executive would have had to pay for coverage under such plan if she had remained an active employee. For the avoidance of doubt, any amounts reimbursed pursuant to this Section 7 shall be treated as compensation.
(c) Termination upon Executives Death. If Executives employment terminates during the Term due to Executives death, then:
(i) the Company shall pay to Executives beneficiary, (A) any accrued, but unpaid Base Salary and Annual Bonus through the Termination Date, payable within ten (10) days of the Termination Date, (B) any accrued but unpaid vacation pay through the Termination Date, (C) a pro-rata portion of Executives Annual Bonus for the Termination Year, payable in accordance with the Companys usual bonus payment schedule, and (D) the portion of the Retention Bonus that is accrued but unpaid through the Termination Date, to the extent not already paid in accordance with Section 4(f) above, payable within thirty (30) days of the Termination Date.
(ii) the Company shall provide Executives spouse and dependents with Continued Benefits for 12 months.
(d) Termination by the Company without Cause or Resignation by Executive for Good Reason.
(i) Subject to Executives execution and effectiveness of a general release of claims in the form attached hereto as Exhibit B (the Release) and his continued compliance with the Non-Competition Agreement, in the event that Executive is terminated without Cause or resigns for Good Reason, the Company shall pay to Executive (A) any accrued, but unpaid, Base Salary and vacation pay through the Termination Date, payable as soon as practicable in accordance with the usual payroll practices of the Company, (B) any Annual Bonus that is determined to have otherwise been earned with respect to the Termination Year, payable in accordance with the Companys usual bonus payment schedule, (C) Base Salary and Continued Benefits for the longer of (i) the Termination Date through December 31 of the Termination Year or (ii) 90 days; payable, in the case of Base Salary, in accordance with the usual payroll policies of the Company, and (D) the accrued but unpaid Retention Bonus through the date of termination, to the extent not already paid in accordance with Section 4(f) above, payable within thirty (30) days of the Termination Date.
(ii) As a condition precedent to receiving any payments under Section 7(d)(i) (other than those amounts already accrued prior to the Termination Date, which shall be payable on the date of termination), Executive shall have executed, within twenty-one (21) days, or if required for an effective release, forty-five (45) days, the Release, which may be updated by the Company from time to time to reflect changes in law, and the seven (7) day revocation period of such Release shall have expired without revocation. Subject to Section 19 and the execution of the Release pursuant to this Section 7(d)(ii), all payments under Section 7(d)(i) shall be payable as described above; provided, that the first payment shall be made on the sixtieth (60th) day after the Termination Date (or such later date as required by the terms hereof), and such first payment shall include payment of any amounts that would otherwise be due prior thereto.
(e) Termination by the Company for Cause or by Executive without Good Reason. If Executives employment is terminated by the Company for Cause or Executive resigns other than for Good Reason then the Company shall pay Executive his accrued, but unpaid Base Salary and Annual Bonus, and any accrued but unpaid vacation pay, through the Termination Date, payable in accordance with the usual payroll policies of the Company as soon as practicable following the Termination Date.
8. Confidentiality, Non-Compete, Non-Solicit/Hire and Intellectual Property Agreement. Simultaneous with the execution and delivery of this Employment Agreement, the Company and Executive shall execute and deliver the non-competition agreement (the Non-Competition Agreement) attached hereto as Exhibit C and incorporated herein by reference. The Non-Competition Agreement shall survive any termination of this Employment Agreement in accordance with the terms of the Non-Competition Agreement.
9. Indemnification. Executive shall be entitled to such indemnification under the terms of the Companys By-Laws, Certificate of Incorporation and such other liability insurance as the Company may purchase for its Board members and senior officers from time to time.
10. Arbitration. Except as provided for in the Non-Competition Agreement, if any contest or dispute arises between the parties with respect to this Employment Agreement, such contest or dispute shall be submitted to binding arbitration for resolution in the city of Cleveland, Ohio in accordance with the rules and procedures of the Employee Dispute Resolution Rules of the American Arbitration Association then in effect. The decision of the arbitrator shall be final and binding on both parties, and any court of competent jurisdiction may enter judgment upon the award.
11. Notice. For the purposes of this Employment Agreement, notices, demands and all other communications provided for in this Employment Agreement shall be in writing and shall be deemed to have been duly given when delivered either personally or by United States certified or registered mail, return receipt requested, postage prepaid, addressed as follows:
If to Executive:
Michael Durbin
[ ]
If to the Company:
CheckSmart Financial Company
7001 Post Road, Suite 200
Dublin , Ohio 43016
Attn: CEO
Telephone: (614) 798-5900
Fax: (614) 760-2601
with a copy to:
Diamond Castle Holdings
280 Park Avenue, 25th floor, East Tower
New York, New York 10017
Attn: Andrew Rush
Fax: (212) 983-1234
or to such other address as any party may have furnished to the others in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
12. Miscellaneous. No provisions of this Employment Agreement may be amended, modified, or waived unless such amendment or modification is agreed to in writing signed by Executive and by a duly authorized officer of the Company (other than Executive), and such waiver is set forth in writing and signed by the party to be charged. No waiver by either party hereto at any time of any breach by the other party hereto of any condition or provision of this Employment Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Employment Agreement. The respective rights and obligations of the parties hereunder of this Employment Agreement shall survive Executives termination of employment and the termination of this Employment Agreement to the extent necessary for the intended preservation of such rights and obligations. The validity, interpretation, construction and performance of this Employment Agreement
and all claims of action (whether in contract or tort) that may be based upon, arise out of or relate to this Employment Agreement, shall be governed by the laws of the State of Delaware without regard to its conflicts of law principles.
13. Validity. The invalidity or unenforceability of any provision or provisions of this Employment Agreement shall not affect the validity or enforceability of any other provision of this Employment Agreement, which shall remain in full force and effect.
14. Counterparts. This Employment Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
15. Entire Agreement. Except as otherwise provided for herein, any Exhibits hereto, this Employment Agreement sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersede all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto in respect of such subject matter. Any prior agreement of the parties hereto, or between Executive and any of the Companys subsidiaries in respect of the subject matter contained herein is hereby terminated and cancelled. Other than any accrued Base Salary due to Executive as of the date hereof, Executive acknowledges that as of the Commencement Date, he has no claims against the Company or any of its affiliates in respect of any amounts that may be owing to him from any of the subsidiaries.
16. Withholding. All payments hereunder shall be subject to any required withholding of Federal, state and local taxes pursuant to any applicable law or regulation.
17. Noncontravention. The Company represents that the Company is not prevented from entering into, or performing this Agreement by the terms of any law, order, rule or regulation, its by-laws or declaration of trust, or any agreement to which it is a party, other than which would not have a material adverse effect on the Companys ability to enter into or perform this Employment Agreement.
18. Section Headings. The section headings in this Employment Agreement are for convenience of reference only, and they form no part of this Employment Agreement and shall not affect its interpretation.
19. Section 409A.
(a) The intent of the parties is that payments and benefit under this Agreement comply with or be exempt from Code Section 409A and the regulations and guidance promulgated thereunder (collectively, Section 409A) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. If the Executive notifies the Company that the Executive has received advice of tax counsel of a national reputation with expertise in Section 409A that any provision of this Agreement (or of any award of compensation, including equity compensation or benefits) would cause the Executive to incur any additional tax or interest under Section 409A (with specificity as to the reason therefor) or the Company independently makes such determination, the Company shall, after consulting with the Executive, reform such provision to try to comply with Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with Section 409A. To the extent that any provision hereof is modified in order to comply with or be exempt from Section 409A, such modification shall be made in good faith and shall, to the maximum extent
reasonably possible, maintain the original intent and economic benefit to the Executive and the Company of the applicable provision without violating the provisions of Section 409A.
(b) A termination of employment shall not be deemed to have occurred for purposes of this Agreement providing for the payment of any amounts or benefits that are considered nonqualified deferred compensation under Section 409A upon or following a termination of employment, unless such termination is also a separation from service within the meaning of Section 409A and the payment thereof prior to a separation from service would violate Section 409A. As permitted by Treasury Regulation 1.409A-1(h)(1)(ii), 49% shall be substituted in lieu of 20% for the average level of bona fide services performed during the immediately preceding 36 month period in order to constitute a separation from service. For purposes of any such provision of this Agreement relating to any such payments or benefits, references to a termination, termination of employment or like terms shall mean separation from service. If the Executive is deemed on the date of termination to be a specified employee within the meaning of that term under Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered nonqualified deferred compensation under Section 409A payable on account of a separation from service, such payment or benefit shall be made or provided on the first business day following the date which is the earlier of (A) the expiration of the six (6) month period measured from the date of such separation from service of the Executive, and (B) the date of the Executives death (the Delay Period). Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section 19 (whether they would have otherwise been payable in a single lump sum or in installments in the absence of such delay) shall be paid or reimbursed to the Executive in a lump sum with interest at the prime rate as published in the Wall Street Journal on the first business day following the Delay Period, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.
(c) (i) All expenses or other reimbursements as provided herein shall be payable in accordance with the Companys policies in effect from time to time, but in any event shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by the Executive; (ii) no such reimbursement or expenses eligible for reimbursement in any taxable year shall in any way affect the expenses eligible for reimbursement in any other taxable year; provided, that this clause (ii) shall not be violated without regard to expenses reimbursed under any arrangement covered by Code Section 105(b) solely because such expenses are subject to a limit related to the period the arrangement is in effect; and (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchanged for another benefit.
(d) For purposes of Section 409A, the Executives right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments. Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., payment shall be made within thirty (30) days following the date of termination), the actual date of payment within the specified period shall be within the sole discretion of the Company.
[Signature Page to Follow]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written.
CheckSmart Financial Company |
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Michael Durbin | |
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By: |
/s/ William E. Saunders, Jr. |
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/s/ Michael Durbin |
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Name: |
William E. Saunders, Jr. |
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Title: |
Chief Executive Officer |
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[Signature Page to Durbin Employment Agreement]
Schedule I
Annual Bonus
Fiscal Year |
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Amount of Annual Bonus |
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2011 |
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$ |
125,000 |
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Any subsequent fiscal year in the Term, to the extent the Term is renewed in accordance with Section 3 of this Employment Agreement |
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$ |
125,000 |
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Schedule II
Retention Bonus for the Fiscal Year of 2011 and any Subsequent Fiscal Year in the Term
The retention bonus equals an aggregate amount of $100,000 for the fiscal year of 2011 (the 2011 Retention Bonus) and for any subsequent fiscal year in the Term, to the extent the Term is renewed in accordance with Section 3 of this Employment Agreement. The 2011 Retention Bonus shall be earned and paid as follows:
(i) On March 31, 2011, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), Executive will be eligible to receive $25,000 upon the achievement of each of the milestones set forth below;
(ii) On June 30, 2011, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), Executive will be eligible to receive $25,000 upon the achievement of each of the milestones set forth below;
(iii) On September 30, 2011, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), Executive will be eligible to receive $25,000 upon the achievement of each of the milestones set forth below; and
(iv) On December 31, 2011, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), Executive will be eligible to receive $25,000 upon the achievement of each of the milestones set forth below (it being understood that the payments set forth in subsections (i)-(iv) above, to the extent accrued and payable, comprise the 2011 Retention Bonus).
Milestones for the Fiscal Year of 2011 and any Subsequent Fiscal Year in the Term
Attached
Durbin Goal Template 2011
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Q1 2011 |
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Q2 2011 |
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Q3 2011 |
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Q4 2011 |
Finance and Accounting |
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Establish and adhere to a monthly and quarterly reporting calendar |
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X |
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X |
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X |
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X |
Understand accounting structure, process flow, work assignments |
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X |
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Document work flow assignments by personnel |
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X |
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X |
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Understand, evaluate, and document internal controls |
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X |
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X |
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X |
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Participate in a store closing |
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X |
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High Level understand of system architecture, data, and work flow |
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X |
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Achieve and maintain adequate staffing in Finance and Account (Add Financial Analyst and Accounting Professional) |
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X |
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X |
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X |
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X |
Manage the budgeting process |
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X |
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X |
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X |
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X |
Provide department heads monthly budget variance analysis |
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X |
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X |
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X |
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X |
Prepare board meeting presentations |
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X |
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X |
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X |
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X |
Provide monthly tracking of performance vs. plan with variance analysis |
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X |
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X |
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X |
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X |
Provide board with accurate quarterly excess cash analysis |
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X |
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X |
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X |
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X |
Refinance Credit Facilities |
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X |
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X |
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Ensure monthly tie out and accuracy financials |
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X |
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X |
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X |
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X |
Leadership & Management |
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Manage Due Diligence process on potential acquisitions |
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X |
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X |
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X |
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X |
Own integration of acquisitions |
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X |
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X |
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X |
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X |
Create SOX roadmap |
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X |
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Manage SOX compliance initiative |
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X |
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X |
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Achieve SOX compliance |
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X |
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X |
Communicate and ensure different departments are tied into corporate initiatives |
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X |
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X |
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X |
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X |
Track department heads performance vs. plan |
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X |
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X |
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X |
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X |
Structure & Strategy |
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Finalize Card structure and documentation |
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X |
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X |
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X |
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X |
Create and monitor card metrics |
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X |
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X |
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X |
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X |
Provide Metrics to assist in operating decisions |
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X |
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Collections |
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Create metrics and reporting to properly measure product set |
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X |
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X |
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X |
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X |
Revamp monthly collections reporting (binder) |
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X |
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X |
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X |
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X |
Manage Department Head |
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X |
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X |
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X |
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X |
Ensure numbers tie out monthly |
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X |
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X |
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X |
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X |
Create and manage by monthly Net Bad Debt goals |
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X |
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X |
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X |
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X |
Create better Net Bad Debt predictive measures |
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X |
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X |
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X |
Assess Agency management process and improve performance |
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X |
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X |
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Assess Title Loan process and improve performance |
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X |
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X |
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External Relations |
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Manage Card Lender relationship(s) |
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X |
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X |
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X |
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X |
Manage Corporate Lender relationships |
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X |
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X |
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X |
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X |
Prepare for public Investor Relations function |
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X |
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X |
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X |
Participate in Community and Business outreach initiatives |
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X |
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X |
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X |
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X |
CHECKSMART FINANCIAL HOLDINGS CORP.
2006 MANAGEMENT EQUITY INCENTIVE PLAN
OPTION GRANT AWARD AGREEMENT
GRANT TO: Michael Durbin
THIS AGREEMENT (the Agreement) is made as of December 31, 2010 (the Grant Date), between CheckSmart Financial Holdings Corp., a Delaware corporation (together with its successors, the Company), and Michael Durbin, who is an employee of the Company or one of its Subsidiaries (the Grantee). Capitalized terms, unless defined in Section 10 or a prior section of this Agreement, shall have the same meanings as in the Plan (as defined below).
WHEREAS, in connection with the Grantees employment with the Company or one of its Subsidiaries, the Company desires to grant to the Grantee an option to purchase a certain number of shares of Class A Common Stock, par value $0.01, of the Company (Options) on the date hereof pursuant to the terms and conditions of this Agreement and the Companys 2006 Management Equity Incentive Plan, as amended (the Plan).
WHEREAS, the Board has determined that it would be to the advantage, and in the best interest, of the Company and its shareholders to grant the Options provided for herein to the Grantee as an incentive for increased efforts during his employment with the Company or one of its Subsidiaries.
NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. GRANT OF OPTIONS AWARD
(a) Grant. Subject to the terms and conditions of the Plan and this Agreement, the Company hereby grants to the Grantee 21,500 Options which will be earned based on achievement of certain targets upon the consummation of a Liquidity Event;
(b) Plan. The foregoing awards are granted under the Plan, which is incorporated herein by this reference and made a part of this Agreement.
(c) No Rights as Stockholder. It shall be understood that none of the terms contained herein grant to the Grantee any rights as a stockholder, and such Grantee shall not have any such rights unless and until such Grantee receives Shares in connection with the exercise of Options.
SECTION 2. RIGHT TO EXERCISE; VESTING
(a) Vesting. Subject to the provisions of this Agreement, the Options shall vest in accordance with the provisions and terms of Schedule A.
(b) Effect of Vesting. For each vested Option the Grantee may exercise such Option for one share of Class A Common Stock of the Company.
SECTION 3. EXERCISE PROCEDURES
(a) Notice of Exercise. The Grantee may exercise its Options prior to its expiration as set forth in Section 6 to the extent it they are vested by giving written notice to the Company in form and substance reasonably satisfactory to the Company (such notice, a Notice of Exercise) specifying the election to exercise such Options, the number of vested Options which are being exercised and the form of payment. The Notice of Exercise shall be signed by the Grantee. The Grantee shall deliver to the Company, at the time of giving the notice, payment in a form permissible under Section 4 for the full amount of the Exercise Price and, if such person is not then party to the Stockholders Agreement, such person shall be required to execute a Joinder Agreement, it being understood, for the purpose of clarity, that the Grantee may not exercise their Option, or any portion thereof, without executing a Joinder Agreement and becoming a party to the Stockholders Agreement as a Management Holder thereunder.
(b) Issuance of Shares. After receiving a properly completed and executed Notice of Exercise and, payment for the full amount of the Exercise Price as required by Section 3(a) and, if applicable, an executed joinder agreement to the Stockholders Agreement, the Company shall cause to be issued a certificate or certificates for the Purchased Shares (as defined below), registered in the name of the Grantee (or in the names of such person and his spouse as community property or as joint tenants with right of survivorship), provided that as a condition to the issuance of Purchased Shares hereunder, the Grantee shall make, as of the time of issuance of such Purchased Shares, representations and warranties in a form satisfactory to the Company and substantially similar to those contained in Exhibit A. In connection with any exercise of this option, the Person exercising this option shall deliver to the Company a duly executed blank share power in the form attached hereto as Exhibit B. The date of the issuance of the Purchased Shares by the Company to the Grantee, the Exercise Date.
(c) Withholding Requirements. The Company may withhold any tax (or other governmental obligation) required to be withheld in connection with the exercise of the Option, and as a condition to the settlement of any or exercise of the Option. Such withholding may be made from any source (including any salary or other compensation payable to the Grantee), and the Grantee shall make arrangements satisfactory to the Company to enable it to satisfy all such withholding requirements as a condition to the exercise of the Option (including by remitting to the Company an amount in cash sufficient to satisfy the withholding obligation). For the avoidance of doubt, the Company will not withhold any amounts greater than the statutory minimum.
SECTION 4. PAYMENT OF EXERCISE PRICE
(a) Cash or Check. In connection with an exercise of the Option, all or part of the Exercise Price may be paid in cash or by check.
(b) Net Exercise. Notwithstanding anything in this Agreement to the contrary, in connection with an exercise of the Option, all or part of the Exercise Price may be paid by reducing the
number of Shares being purchased pursuant to such exercise by the number of such Shares having an Fair Market Value equal to the Exercise Price.
(c) Other Methods of Payment for Shares. At the sole discretion of the Board, all or any part of the Exercise Price and any applicable withholding requirements may be paid by any other method permissible at the time under the terms of the Plan.
SECTION 5. SECURITIES LAW ISSUES, TRANSFER RESTRICTIONS
(a) Grantee Acknowledgements and Representations. The Grantee understands and agrees that: (x) the Options have not been registered under the Securities Act, (y) the Options are restricted securities under the Securities Act and (z) the Options may not be resold or transferred unless they are first registered under the Securities Act or unless an exemption from such registration is available. The Grantee hereby makes the representations and warranties set forth in Exhibit A hereto.
(b) No Registration Rights. The Company may, but shall not be obligated to, register or qualify the issuance of Purchased Shares to the Grantee, or the resale of any such Purchased Shares by the Grantee under the Securities Act or any other applicable law.
(c) Transfers. No Option shall be transferable to any Person for any reason. Any attempt to Transfer any Option shall be null and void and have no force or effect, and the Company shall not, and shall cause any transfer agent not to, give any effect in such entitys share records to such attempted Transfer. Any Purchased Shares shall be subject to the restrictions on Transfer as set forth in Article 3 of the Stockholders Agreement, except with respect to a Transfer by will or by the laws of descent and distribution. Unless otherwise permitted pursuant to the Stockholders Agreement, the Grantee shall not Transfer any Purchased Shares (x) except in compliance with the provisions of Article 3 of the Stockholders Agreement, and (y) unless the transferee shall have agreed in writing to be bound by the terms of this Agreement in a manner acceptable to the Board and otherwise acknowledging that such Purchased Shares are subject to the restrictions set forth in this Agreement. Any attempt to Transfer any Purchased Shares not in compliance with this Agreement shall be null and void and have no force or effect, and the Company shall not, and shall cause any transfer agent not to, give any effect in such entitys share records to such attempted Transfer. The Grantee acknowledges that the transfer restrictions contained in this Agreement are reasonable and in the best interests of the Company.
SECTION 6. TERM OF GRANT.
The Options granted in this Agreement shall expire 10 years from the Closing Date. In the event that the employment of the Grantee terminates, unless a Notice of Exercise has been given to the Company from the Grantee, all vested Options shall expire on the first anniversary after termination of employment, except in the case of (i) termination of the Grantees employment with the Company or any of its Subsidiaries for Cause, or resignation by the Grantee without Good Reason, in which case the vested Options would terminate upon such termination or resignation, or (ii) death or Disability, in which case the vested Options would terminate on the first anniversary of the date of death or Disability. Any Options which are unvested at the date of termination of employment will expire on the date of termination, and shall be forfeited.
Further, any part of an Option that is vested (but not exercised) as of the Termination Date, if the Termination Event was a termination by the Company or any of its Subsidiaries for Cause at any time or a resignation by the Grantee without Good Reason will be forfeited and there shall be no settlement with respect thereto.
SECTION 7. RIGHT OF REPURCHASE UPON TERMINATION OF EMPLOYMENT
(a) Repurchase Rights.
(i) Upon the termination of employment of the Grantee by the Company or any of its Subsidiaries for any reason (the reason for the termination of such employment, the Termination Event and the date of such termination, the Termination Date), subject to the provisions of this Section 7 and the prior approval of the Compensation Committee of the Board (or if there is no such Compensation Committee, the Board), the Company shall have the right (but not the obligation) to purchase, and if such right is exercised, the Grantee shall sell, and shall cause any Permitted Transferees of the Grantee to sell (and such Permitted Transferees shall sell), to the Company, all or any portion (as determined by the Company) of the Purchased Shares (if any) owned by the Grantee or his Permitted Transferees at a price per Settlement Share equal to an amount (the Termination Price) (as determined pursuant to Section 7(b) below); provided, that the parties acknowledge that any unvested Options held by the Grantee as of the Termination Date shall be cancelled pursuant to this Agreement.
(ii) With respect to the Purchased Shares, the Company shall notify the Grantee in writing, within the Call Period whether the Company will exercise its right to purchase the Purchased Shares (the date on which the Grantee is so notified, the Call Notice Date). The Company may assign its right to purchase all or any portion of the Purchased Shares under this Section 7 to the DCP Investor and the DCP Investor may exercise the rights of the Company under this Section 7 in the same manner in which the Company could exercise such rights.
(iii) The closing of the purchase by the Company or the DCP Investor of Purchased Shares pursuant to this Section 7 shall take place at the principal office of the Company, on the date chosen by either the Company or the DCP Investor, as applicable, which date shall, except as may be reasonably necessary to determine the Termination Price, in no event be more than 45 days after the Call Notice Date. At such closing, (i) the Company or the DCP Investor, as applicable, shall pay the Grantee and/or such Grantees Permitted Transferees, as applicable, against delivery of duly endorsed certificates described below representing such Purchased Shares, the aggregate Termination Price by wire transfer of immediately available federal funds and (ii) the Grantee and/or such Grantees Permitted Transferees, as applicable, shall deliver to the Company a certificate or certificates representing the Purchased Shares to be purchased by the Company or the DCP Investor, as applicable, duly endorsed, or with share (or equivalent) powers duly endorsed, for transfer with signature guaranteed, free and
clear of any lien or encumbrance, with any necessary share (or equivalent) transfer tax stamps affixed. The delivery of a certificate or certificates for the Purchased Shares by any Person selling such Purchased Shares pursuant to this Section 7(a)(iii) shall be deemed a representation and warranty by such Person that: (w) such Person has full right, title and interest in and to such Purchased Shares; (x) such Person has all necessary power and authority and has taken all necessary action to sell such Purchased Shares as contemplated; (y) such Purchased Shares are free and clear of any and all liens or encumbrances; and (z) there is no adverse claim with respect to such Purchased Shares.
(b) Termination Pricing. The Termination Price of any Settlement Share shall be determined as follows:
(i) If the Termination Event was a resignation by the Grantee with Good Reason or termination of the employment of the Grantee by the Company or any of its Subsidiaries without Cause, the Termination Price for such Settlement Share shall be the Fair Market Value on the FMV Calculation Date,
(ii) if the Termination Event was as a result of the death or Disability of the Grantee, the Termination Price for such Settlement Share shall be the Fair Market Value on the Termination Date, and
(iii) if the Termination Event was a termination of the employment of the Grantee by the Company or any of its Subsidiaries with Cause, or was a resignation by the Grantee without Good Reason, the Termination Price for such Settlement Share shall be the lower of (i) the Fair Market Value on the FMV Calculation Date or (ii) the Exercise Price per Share.
(c) Payment Terms. In the event that the Company, or the DCP Investor if applicable, exercises a Right of Repurchase pursuant to Section 7 of this Agreement, the Company, or the DCP Investor if applicable, shall pay the Termination Price in cash; provided, however, that if the Company has not assigned its right to purchase any or all of the Purchased Shares to the DCP Investor pursuant to Section 7(a)(ii), and is at the time of the Purchase Closing prohibited from purchasing all or any portion of such Purchased Shares (i) because restrictive covenants or other provisions contained in the documents evidencing such entitys or any of its Affiliates indebtedness for borrowed money do not permit or allow such entity to make such payments in cash in whole or in part; or (ii) pursuant to applicable law, then, the portion of the Termination Price not permitted to be made in cash may be paid by the execution and delivery by the Company of a promissory note or other deferred cash payment arrangement (if applicable, any promissory note to be subordinated to the indebtedness for borrowed money of such company or any of its Affiliates) bearing interest at the prime rate, as published in the Wall Street Journal, Eastern edition, on the first Business Day immediately prior to the day on which such promissory note or other deferred cash payment is issued, with principal and accrued interest payable at such time as is required in the Boards determination to ensure that any payment pursuant to such promissory note or other deferred cash payment arrangement is not prohibited because of any of the matters described in clauses (i) or (ii) of this Section 7(c) above.
SECTION 8. ADJUSTMENT OF SHARES
In the event of a Recapitalization, the terms of this award (including, without limitation, the number and kind of Class A Common Shares subject to this award) shall be adjusted as set forth in Section 13(a) of the Plan.
SECTION 9. MISCELLANEOUS PROVISIONS
(a) No Retention Rights. Nothing in this Agreement or in the Plan shall confer upon the Grantee any right to continue in Service or interfere with or otherwise restrict in any way the rights of the Company or any Subsidiary employing the Grantee, which rights are hereby expressly reserved by the Company and any Subsidiary employing the Grantee, to terminate the Grantees Service at any time and for any reason, with or without Cause.
(b) Notices. All notices, requests and other communications under this Agreement shall be in writing and shall be delivered in person (by courier or otherwise), mailed by certified or registered mail, return receipt requested, or sent by facsimile transmission, as follows:
If to the Company, to:
CheckSmart Financial Holdings Corp.
7001 Post Road, Suite 200
Dublin, OH 43016
Attn: CEO
If to the Grantee, to the address that she most recently provided to the Company,
or, in each case, at such other address or fax number as such party may hereafter specify for the purpose of notices hereunder by written notice to the other party hereto. All notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt. Any notice, request or other written communication sent by facsimile transmission shall be confirmed by certified or registered mail, return receipt requested, posted within one Business Day, or by personal delivery, whether by courier or otherwise, made within two Business Days after the date of such facsimile transmissions; provided that such confirmation mailing or delivery shall not affect the date of receipt, which will be the date that the facsimile successfully transmitted the notice, request or other communication.
(c) Entire Agreement. This Agreement and the Plan, together with the Stockholders Agreement and the other agreements referred to herein and therein and any schedules, exhibits and other documents referred to herein or therein, constitute the entire agreement and understanding among the parties hereto in respect of the subject matter hereof and thereof and supersede all prior and contemporaneous arrangements, agreements and understandings, both oral and written, whether in term sheets, presentations or otherwise, among the parties hereto, or between any of them, with respect to the subject matter hereof and thereof.
(d) Amendment; Waiver. No amendment or modification of any provision of this Agreement shall be effective unless signed in writing by or on behalf of the Company and the Grantee, except that the Company may amend or modify the Agreement without the Grantees consent in accordance with the provisions of the Plan or as otherwise set forth in this Agreement. The failure of the Company in any instance to exercise the Right of Repurchase shall not constitute a waiver of any other repurchase rights that may subsequently arise under the provisions of this Agreement or any other agreement between the Company and the Grantee. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition whether of like or different nature. Any amendment or modification of or to any provision of this Agreement, or any waiver of any provision of this Agreement, shall be effective only in the specific instance and for the specific purpose for which made or given.
(e) Assignment. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by the Grantee except pursuant to a Transfer in accordance with the provisions of this Agreement.
(f) Successors and Assigns; No Third Party Beneficiaries. This Agreement shall inure to the benefit of and be binding upon the Company and the Grantee and their respective heirs, successors, legal representatives and permitted assigns. Nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the Company and the Grantee, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.
(g) Governing Law, Venue. This Agreement and any matters or disputes related to, in connection with, or arising under this Agreement shall be governed by the laws of the State of Delaware, without regard to the conflicts of laws rules of such state. Any legal action or proceeding with respect this Agreement shall be brought in the federal or state court sitting in the State of Delaware, and, by execution and delivery of this Agreement, each party hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the exclusive jurisdiction of such courts. Each party irrevocably waives any objection which it may now or hereafter have to the laying of venue of the aforesaid actions or proceedings arising out of or in connection with this Agreement in the courts referred to in this paragraph and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.
(h) Waiver of Jury Trial. The Grantee hereby irrevocably waives all right of trial by jury in any legal action or proceeding (including counterclaims) relating to or arising out of or in connection with this Agreement or any of the transactions or relationships hereby contemplated or otherwise in connection with the enforcement of any rights or obligations hereunder.
(i) Interpretation. Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation apply:
Headings. The division of this Agreement into Sections and other subdivisions and the insertion of headings are for convenience of reference only and do not alter the meaning of, or affect the construction or interpretation of, this Agreement.
Section References. All references in this Agreement to any Section are to the corresponding Section of this Agreement.
Schedules/Exhibits. Any capitalized terms used in any Schedule or Exhibit to this Agreement but are not otherwise defined therein have the meanings set forth in this Agreement.
(j) Severability. If any provision of this Agreement is invalid, illegal, or incapable of being enforced by any law, all other provisions of this Agreement remain in full force and effect so long as the economic and legal substance of the transactions contemplated hereby are not affected in any manner materially adverse to any party. If any provision of this Agreement is held to be invalid, illegal, or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
(k) Counterparts. The parties may execute this Agreement in one or more counterparts, each of which constitutes an original copy of this Agreement and all of which, collectively constitute only one agreement. The signatures of all the parties need not appear on the same counterpart.
(l) Grantee Undertaking. The Grantee agrees to take whatever additional action and execute whatever additional documents the Company may deem necessary or advisable to carry out or effect one or more of the obligations or restrictions imposed on either the Grantee or upon the Options or any Purchased Shares pursuant to the provisions of this Agreement.
(m) Plan; Stockholders Agreement; Counsel. The Grantee acknowledges and understands that material definitions and provisions concerning the Options or any Purchased Shares and the Grantees rights and obligations with respect thereto are set forth in the Plan and the Stockholders Agreement. The Grantee has had the opportunity to retain counsel, and has read carefully, and understands, the provisions of such documents.
SECTION 10. DEFINITIONS
(a) Affiliate shall mean, with respect to any specified Person, (a) any other Person which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person (for the purposes of this definition, control (including, with correlative meanings, the terms controlling, controlled by and under common control with), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise); provided, however, that neither the Company nor any of its Subsidiaries shall be deemed an Affiliate of any of the Stockholders (and vice versa), and (b) if such specified Person is an
investment fund, any other investment fund the primary investment advisor to which is the primary investment advisor to such specified Person.
(b) Board means the Board of Directors of the Company, as constituted from time to time or, if a Committee has been appointed, such Committee.
(c) Business Day has the meaning ascribed to such term in the Stockholders Agreement.
(d) Call Period shall mean from the Termination Date until:
(i) if the Termination Event is a termination of the employment of the Grantee by the Company or any of its Subsidiaries without Cause, a resignation by the Grantee with Good Reason or a resignation by the Grantee without Good Reason after three years of Service, the later of (A) the date that is 60 days after such Termination Date and (B) the date that is 190 days after the Exercise Date,
(ii) if the Termination Event is a termination of the employment of the Grantee by the Company or any of its Subsidiaries as a result of the death or Disability of the Grantee, the date that is the later of (i) 60 days after the Termination Date or the date which is 60 days after the Exercise Date, or
(iii) if the Termination Event is a termination of the employment of the Grantee by the Company or any of its Subsidiaries for Cause, or a resignation by the Grantee without Good Reason within the first years of Service the date which is 60 days after the Exercise Date.
(e) Cause Unless otherwise defined in any employment agreement that is in effect between the Grantee and the Company (or any affiliate), shall mean:
(i) Grantees failure or refusal to comply, on a timely basis, with any lawful direction or instruction of the Board;
(ii) Grantees gross negligence or willful misconduct in the performance of his duties as an employee of the Company;
(iii) Grantees commission of fraud, embezzlement, misappropriation of funds, breach of fiduciary duty or act of dishonesty against the Company;
(iv) conviction of Grantee of a felony or entry by Grantee of a plea of nolo contendre or a plea of guilty under an indictment to a felony; or
(v) the habitual drug addiction or intoxication of Grantee.
(f) Change of Control shall mean (a) any transaction or series of related transactions, whether or not the Company is a party thereto, in which, after giving effect to such transaction or transactions any person or group (as such terms are used in Section 13(d) of the Exchange Act other than a group of which the DCP Investor is a member, acquires, directly or indirectly, in excess of 50% of the Voting Securities, or (b) a sale, lease or other disposition of all or
substantially all of the assets of the Company and its Subsidiaries on a consolidated basis (including securities of the Companys directly or indirectly owned Subsidiaries) to a Person that is not an Affiliate of the Company.
(g) Class A Common Stock means the voting class A common stock of the Company, and any stock into which such Class A Common Stock may hereafter be converted, changed, reclassified or exchanged.
(h) Closing or Closing Date shall mean May 1, 2006.
(i) Committee means the compensation committee of the Board of Directors of the Company.
(j) DCP Investor means collectively, Diamond Castle Partners IV, L.P., Diamond Castle Partners IV-A, L.P. and Deal Leaders Fund, L.P or any of their Permitted Transferees.
(k) Disability Grantees employment may be terminated if, as a result of Grantees incapacity due to physical or mental illness, Grantee is unable to perform his duties for 180 consecutive days and, within 30 days after a notice of termination, which notice of termination may not be given until the expiration of such consecutive 180 day period, is given to Grantee, Grantee has not returned to work.
(l) Exercise Price means $97.14.
(m) Fair Market Value or FMV with respect to a share of stock of the Company, shall mean, in the event that such shares are listed on an established U.S. exchange or through the NASDAQ National Market or any established over-the-counter trading system, the average of the closing prices of such Group Equity Securities on such exchange if listed or, if not so listed, the average bid and asked price of such shares reported on the NASDAQ National Market or any established over-the-counter trading system on which prices for such shares are quoted, in each case, for a period of twenty trading days prior to such date of determination, or (ii) if such shares are not publicly traded, a good faith determination by the Board through a reasonable application of a reasonable valuation method. Such determination shall be conclusive and binding on all persons.
(n) FMV Calculation Date means:
(i) if the Termination Event is a termination by the Company or any of its Subsidiaries without Cause or a resignation by the Grantee with Good Reason:
(A) if the Exercise Date occurred 180 days or more before the Termination Date, the Termination Date, and
(B) if the Exercise Date occurred 179 days or less before the Termination Date or occurs after the Termination Date, then the Call Notice Date;
(ii) if the Termination Event is as a result of the death or Disability of the Grantee, then the Termination Date; and
(iii) if the Termination Event is a termination by the Company or any of its Subsidiaries with Cause, or a resignation by the Grantee without Good Reason, then the Termination Date.
(o) Good Reason Unless otherwise defined in any employment agreement that is in effect between the Grantee and the Company (or any affiliate), shall mean one of the following events:
(i) a reduction in Grantees base salary, or non-timely payment of base salary or earned annual bonus not cured by the Company within five business days;
(ii) a material diminution in Grantees duties or responsibilities not cured by the Company within 20 days after written notice to the Company; or
(iii) a requirement by the Company that Grantee be based in an office that is located more than 20 miles from Grantees principal place of employment.
(p) Initial Public Offering has the meaning ascribed to such term in the Stockholders Agreement.
(q) Joinder Agreement means an agreement substantially in the form of Exhibit A of the Stockholders Agreement, pursuant to which the Grantee shall become a party to the Stockholders Agreement and subject to all of the rights, restrictions and obligations contained therein.
(r) Liquidity Event shall mean (i) any transaction or series of related transactions resulting in or involving a Change of Control, or (ii) an Initial Public Offering.
(s) Permitted Transferee has the meaning ascribed to such term in the Stockholders Agreement.
(t) Person means an individual, corporation, limited liability company, partnership, association, trust or other entity or organization.
(u) Purchase Shares means any Shares issued pursuant to the exercise of any Option in accordance with the terms of this Agreement.
(v) Right of Repurchase means the Companys right of repurchase described in Section 7 of this Agreement.
(w) Securities Act means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(x) Service means service as an employee.
(y) Share(s) means a share(s) of Class A Common Stock of the Company.
(z) Stockholders Agreement means that certain Stockholders Agreement dated as of May 1, 2006 by and among the Company, the Grantee and the other parties thereto (as the same shall be amended, modified or supplemented from time to time).
(aa) Subsidiary means, with respect to the Company, any other Person in which the Company, directly or indirectly through one or more Affiliates or otherwise, beneficially owns at least 50% of either the ownership interest (determined by equity or economic interests) in, or the voting control of, such other Person.
(bb) Transfer has the meaning ascribed in such term in the Stockholders Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above.
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CHECKSMART FINANCIAL HOLDINGS CORP. | |
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By: |
/s/ William E. Saunders, Jr. |
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Name: William E. Saunders, Jr. |
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Title: Chief Executive Officer |
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/s/ Michael Durbin | |
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Michael Durbin |
SIGNATURE PAGE TO OPTION AWARD
EXHIBIT A
Investment Representations and Warranties
The Grantee hereby represents and warrants to the Company that:
1. The Options and Purchased Shares received by him will be held by him for investment only for his own account, not as a nominee or agent, and not with a view to the sale or distribution of any part thereof in violation of applicable U.S. federal or state or foreign securities laws. The Grantee has no current intention of selling, granting participation in or otherwise distributing the Options or Purchased Shares in violation of applicable U.S. federal or state or foreign securities laws. The Grantee does not have any contract, undertaking, agreement or arrangement with any person or entity to sell, transfer or grant participation to such person or entity, or to any third person or entity, with respect to any of the Options or Purchased Shares, in each case, in violation of applicable U.S. federal or state or foreign securities laws.
2. The Grantee understands that the issuance of the Options and Purchased Shares has not been registered under the Securities Act or any applicable U.S. state or foreign securities laws, and that the Options and Purchased Shares are being issued in reliance on an exemption from registration, which exemption depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Grantees representations as expressed herein.
3. The Grantee has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of his owning the Options and Purchased Shares. The Grantee is a sophisticated investor, has relied upon independent investigations made by the Grantee and, to the extent believed by the Grantee to be appropriate, the Grantees representatives, including the Grantees own professional, tax and other advisors, and is making an independent decision to invest in the Options and Purchased Shares. The Grantee has been furnished with such documents, materials and information that the Grantee deems necessary or appropriate for evaluating an investment in the Company, and the Grantee has read carefully such documents, materials and information and understands and has evaluated the types of risks involved with holding the Options and Purchased Shares. The Grantee has not relied upon any representations or other information (whether oral or written) from the Company or its shareholders, directors, officers or affiliates, or from any other person or entity, in connection with his investment in the Options and Purchased Shares. The Grantee acknowledges that the Company has not given any assurances with respect to the tax consequences of the ownership and disposition of the Options and Purchased Shares.
4. The Grantee has had, prior to his being granted the Options and Purchased Shares, the opportunity to ask questions of, and receive answers from, the Company concerning the terms and conditions of the transactions contemplated by the Agreement and the Grantees holding of the Options and Purchased Shares and to obtain additional information necessary to verify the accuracy of any information furnished to his or to
which he had access. The Grantee confirms that he has satisfied himself with respect to any of the foregoing matters.
5. The Grantee understands that no U.S. federal or state or foreign agency has passed upon the Options or Purchased Shares or upon the Company, or upon the accuracy, validity or completeness of any documentation provided to the Grantee in connection with the transactions contemplated by the Agreement, nor has any such agency made any finding or determination as to holding the Options or Purchased Shares.
6. The Grantee understands that there are substantial restrictions on the transferability of the Options and Purchased Shares and that on the date of the Agreement and for an indefinite period thereafter there will be no public market for the Options or Purchased Shares and, accordingly, it may not be possible for the Grantee to liquidate his investment in case of emergency, if at all. In addition, the Grantee understands that the Agreement and Stockholders Agreement contain substantial restrictions on the transferability of the Options and Purchased Shares and provide that, in the event that the conditions relating to the transfer of any Options or Purchased Shares in such document has not been satisfied, the holder shall not transfer any such Options or Purchased Shares, and unless otherwise specified the Company will not recognize the transfer of any such Options or Purchased Shares on its books and records or issue any share certificates representing any such Options or Purchased Shares, and any purported transfer not in accordance with the terms of the Agreement or the Stockholders Agreement shall be void. As such, Grantee understands that: a restrictive legend or legends in a form to be set forth in the Agreement and the Stockholders Agreement will be placed on the certificates representing the Options and Purchased Shares; a notation will be made in the appropriate records of the Company indicating that each of the Options and Purchased Shares are subject to restrictions on transfer and, if the Company should at some time in the future engage the services of a securities transfer agent, appropriate stop-transfer instructions will be issued to such transfer agent with respect to the Options and Purchased Shares; and the Grantee will sell, transfer or otherwise dispose of the Options or Purchased Shares only in a manner consistent with its representations set forth herein and then only in accordance with the Agreement and the Stockholders Agreement.
7. The Grantee understands that (i) the neither the Options nor the Purchased Shares may not be sold, transferred or otherwise disposed of without registration under the Securities Act or an exemption therefrom, (ii) the Options and Purchased Shares have not been registered under the Securities Act; (iii) the Options and Purchased Shares must be held indefinitely and he must continue to bear the economic risk of holding the Options and Purchased Shares unless such Options and Purchased Shares are subsequently registered under the Securities Act or an exemption from such registration is available; (iv) the Grantee is prepared to bear the economic risk of holding the Options and Purchased Shares for an indefinite period of time; (v) it is not anticipated that there will be any public market for the Options or Purchased Shares; (vi) the Options and Purchased Shares are characterized as restricted securities under the U.S. federal securities laws; and (vii) the Options and Purchased Shares may not be sold, transferred or otherwise disposed of except in compliance with federal, state and local law.
8. The Grantee understands that an investment in the Options or Purchased Shares is not recommended for investors who have any need for a current return on this investment or who cannot bear the risk of losing their entire investment. In that regard, the Grantee understands that his holding the Options and Purchased Shares involves a high degree of risk of loss. The Grantee acknowledges that: (i) he has adequate means of providing for his current needs and possible personal contingencies and has no need for liquidity in this investment; (ii) his commitment to investments which are not readily marketable is not disproportionate to his net worth; and (iii) his holding the Options and Purchased Shares will not cause his overall financial commitments to become excessive.
9. The Grantee is an accredited investor, as such term is defined in Rule 501 of the Securities Act.
EXHIBIT B
Share Power
IRREVOCABLE STOCK POWERS
CHECKSMART FINANCIAL HOLDINGS CORP.
FOR VALUE RECEIVED, Michael Durbin does hereby sell, assign and transfer unto Shares of Class A Common Stock of CheckSmart Financial Holdings Corp., par value $0.01, represented by Certificate No. herewith and does hereby irrevocably constitute and appoint attorney to transfer the said stock on the books of the within named corporation with full power of substitution in the premises.
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By: Michael Durbin | |||
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SCHEDULE A
VESTING OF OPTIONS
Subject to the terms set forth in the Agreement and the Plan, the Options shall vest as follows:
(a) Vesting. The Options shall vest only upon the consummation of a Liquidity Event which results the DCP Investors receiving Aggregate Net Proceeds equal or greater to the DCP Investment (each as defined below).
(b) No Appraisal Rights. The Grantee shall not be entitled to appraisal rights in connection with any such Liquidity Event.
For purposes of this Schedule A:
Aggregate Net Proceeds means
(i) all cash proceeds actually received by the DCP Investors with respect to the sale or other disposition of shares of its Common Stock to third parties, net of any unreimbursed Sales Costs (as defined below), plus
(ii) the Fair Market Value of any Marketable Securities actually received by the DCP Investors with respect to the sale or other disposition of shares of its Common Stock to third parties, as determined on the date of the consummation of such sale or other disposition, net of any unreimbursed Sales Costs, plus
(iii) all cash dividends or the fair market value of any property dividends (other than stock dividends) as determined by the Board in good faith actually received by the DCP Investors in respect of its Common Stock;
provided, however, that (a) Aggregate Net Proceeds shall not include any advisory, management, monitoring, transaction or other fees or any expense reimbursement received by the DCP Investors or any of their affiliates, and (b) any cash dividends received by the DCP Investors shall not he counted more than once in any calculation of Aggregate Net Proceeds.
DCH Investment means initially $82,906,798 (namely, the equity investment made by the DCP Investors to purchase Class A Common Stock of the Company at the Closing Date, in connection with the consummation of the transactions contemplated by the Merger Agreement), and shall be adjusted for any cash or other consideration contributed from the DCP Investor to the Company from and after the date hereof and prior to the Liquidity Event.
Marketable Securities means freely tradable equity securities of a company that are listed on an established U.S. securities exchange or through the NASDAQ National Market or any established over-the-counter trading system
Sales Costs means any costs or expenses (including legal or other advisor costs and expenses), fees (including investment banking fees), commissions or discounts payable directly by the DCP investors or any of its affiliates in connection with, arising out of or relating to any sale or other disposition of its Common Stock (including in connection with the negotiation, preparation and execution of any transaction documentation with respect to such sale or other disposition).
Exhibit B
GENERAL RELEASE OF CLAIMS
A general release is required as a condition for receiving the severance benefits described in Section 7(d) of the employment agreement between CheckSmart Financial Company (the Company) and Michael Durbin (Executive) dated January 1, 2011, (the Employment Agreement); thus, by executing this general release (General Release), you have advised us that you hold no claims against the Company, CheckSmart Financial Holdings Corp., their predecessors, successors or assigns, affiliates, shareholders or members and each of their respective officers, directors, agents and employees (collectively, the Releasees), and by execution of this General Release you agree to waive and release any such claims, except relating to any compensation, severance pay and benefits described in the Employment Agreement.
You understand and agree that this General Release will extend to all claims, demands, liabilities and causes of action of every kind, nature and description whatsoever, whether known, unknown or suspected to exist, which you ever had or may now have against the Releasees in your capacity as an employee of the Company, including, without limitation, any claims, demands, liabilities and causes of action arising from your employment with the Releasees and the termination of that employment, including any claims for severance or vacation pay, business expenses, and/or pursuant to any federal, state, county, or local employment laws, regulations, executive orders, or other requirements, including, but not limited to, Title VII of the 1964 Civil Rights Act, the 1866 Civil Rights Act, the Age Discrimination in Employment Act as amended by the Older Workers Benefit Protection Act, the Americans with Disabilities Act, the Civil Rights Act of 1991, the Workers Adjustment and Retraining Notification Act and any other local, state or federal fair employment laws, and any contract or tort claims.
It is further understood and agreed that you are waiving any right to initiate an action in state or federal court by you or on your behalf alleging discrimination on the basis of race, sex, religion, national origin, age, disability, marital status, or any other protected status or involving any contract or tort claims based on your termination from the Company. It is also acknowledged that your termination is not in any way related to any work-related injury.
Based on executing this General Release, it is further understood and agreed that you covenant not to sue to challenge the enforceability of this General Release. It also is understood and agreed that the remedy at law for breach of the Employment Agreement and/or General Release shall be inadequate, and the Company shall be entitled to injunctive relief.
The ability to receive compensation and benefits under the terms of the Employment Agreement will remain open for a 21 day period after your Termination Date to give you an opportunity to consider the effect of this General Release. At your option, you may elect to execute this General Release on an earlier date. Additionally, you have seven days after the date you execute this General Release to revoke it. As a result, this General Release will not be effective until eight days after you execute it. We also hereby advise you of your right to consult with legal counsel prior to executing a copy of this General Release.
Finally, this is to expressly acknowledge:
You understand that you are not waiving any claims or rights that may arise after the date on which you execute this General Release.
You understand and agree that the compensation and benefits described in the Employment Agreement offer you consideration greater than that to which you would otherwise be entitled.
I hereby state that I have carefully read this General Release and that I am signing this General Release knowingly and voluntarily with the full intent of releasing the Releasees from any and all claims, except as set forth herein. Further, if signed prior to the completion of the 21 day review period, this is to acknowledge that I knowingly and voluntarily signed this General Release on an earlier date.
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Michael Durbin |
Exhibit C
CONFIDENTIALITY, NON-COMPETITION AND INTELLECTUAL PROPERTY (this Non-Competition Agreement), dated as of January 1, 2011 (the Commencement Date), among CheckSmart Financial Company (the Company) and Michael Durbin (Executive).
WHEREAS, Executive has been offered employment with the Company, and has entered into an employment agreement dated as of the date hereto with the Company (the Employment Agreement). In such role, Executive will receive specific confidential information relating to the businesses of the Company, which confidential information is necessary to enable Executive to perform Executives duties and to receive future compensation. Executive will play a significant role in the development and management of the businesses of the Company and will be entrusted with the Companys confidential information relating to the Company, the Companys customers, manufacturers, distributors and others.
WHEREAS, Executive acknowledges that during the course of Executives employment with the Company, Executive will be involved in the current and future businesses of the Company, as set forth above.
WHEREAS, it is a condition to the commencement of Executives employment by the Company that Executive execute and deliver this Non-Competition Agreement.
NOW, THEREFORE, it is mutually agreed as follows:
1. Confidentiality.
(a) Executive shall not, during the term of Executives employment with the Company or at any time thereafter, directly or indirectly, divulge, use, furnish, disclose, exploit or make available to any person or entity, whether or not a competitor of the Company, any Unauthorized (as defined herein) disclosure of Confidential Information (as defined herein). In the event that Executive is requested or required (by deposition, interrogatories, requests for information or documents in legal proceedings, subpoenas, civil demand or similar process) to disclose any Confidential Information, Executive will give the Company prompt written notice of such request or requirement so that the Company may seek an appropriate protective order or other remedy and/or waive compliance with the provisions of this Non-Competition Agreement, and Executive will cooperate with the Companys efforts to obtain such protective order. In the event that such protective order or other remedy is not obtained or the Company waives compliance with the relevant provisions of this Non-Competition Agreement, Executive is permitted to furnish that Confidential Information which is legally required to be disclosed and will use his reasonable efforts to obtain assurances that confidential treatment will be accorded to such information.
As used herein, all capitalized terms used without definition shall have the meanings ascribed to them in the Employment Agreement, and the term:
Confidential Information shall mean trade secrets, confidential or proprietary information, and all other information, documents or materials, relating to, owned, developed or possessed by either of the Company, whether in tangible or intangible form. Confidential Information includes, but is not limited to, (i) financial information, (ii) products, (iii) product and service costs, prices, profits and sales, (iv) new business, technical or other ideas, proposals, plans and designs, (v) business strategies, (vi) product and service plans, (vii) marketing plans and studies, (viii) forecasts, (ix) budgets, (x) projections, (xi)
computer programs, (xii) data bases and the documentation (and information contained therein), (xiii) computer access codes and similar information, (xiv) source codes, (xv) know-how, technologies, concepts and designs, including, without limitation, patent applications, (xvi) research projects and all information connected with research and development efforts, (xvii) records, (xviii) business methods and recommendations, (xix) existing or prospective client, customer, vendor and supplier information (including, but not limited to, identities, needs, transaction histories, volumes, characteristics, agreements, prices, identities of individual contacts, and spending, preferences or habits), (xx) training manuals and similar materials used by the Company in conducting its business operations, (xxi) personnel files of employees, directors and independent contractors of the Company, (xxii) competitive analyses, (xxiii) contracts with other parties, (xxiv) product formulations, and (xxv) other confidential or proprietary information that has not been made available to the trade or general public by the Company. Confidential Information shall not include any information that (A) is or becomes generally available to the public or the trade other than as a result of a disclosure by Executive in violation of this Non-Competition Agreement or (B) becomes available to Executive on a non-confidential basis from a source other than the Company which is not prohibited from disclosing such information to Executive by a legal, contractual or fiduciary obligation to the Company or any other person.
Unauthorized shall mean: (i) in contravention of the policies or procedures of the Company; (ii) otherwise inconsistent with any measures taken by the Company to protect its interests in the Confidential Information; (iii) in contravention of any lawful instruction or directive, either written or oral, of the Board, or an officer or employee of the Company empowered to issue such instruction or directive; (iv) in contravention of any duty existing under law or contract; or (v) to the detriment of the Company; but shall not include any disclosure which is customary in the normal course of business in the trade and consistent with the past practice of the Company.
(b) Executive further agrees to take all reasonable measures to prevent unauthorized persons or entities from obtaining or using Confidential Information. Promptly upon termination, for any reason, of Executives employment with the Company, Executive agrees to deliver to the Company all property and materials within Executives possession or control which belong to the Company or which contain Confidential Information.
2. Non-Competition; Non-Solicitation.
(a) For a period of time equal to the Term plus the greater of (i) any period that Executive is entitled to receive Base Salary and Continued Benefits under the Employment Agreement, or (ii) one year commencing as of the Termination Date, unless the Employment Agreement is terminated by the Company without Cause or Executive resigns with Good Reason, in each case, for a period of time equal to the Term plus the period during which the Company continues to pay Executive his Base Salary and Continued Benefits pursuant to Section 7 of the Employment Agreement (in each case, the Non-Compete Period), whenever the same shall occur and for whatever reason, Executive will not, directly or indirectly, engage, anywhere in the Restricted Area (as defined below), whether such engagement be as an individual, officer, director, proprietor, employee, partner, member, investor (other than solely as a holder of less than two percent (2%) of the outstanding capital stock of a corporation whose shares are publicly traded on a national securities exchange or through a national market system or registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended), creditor, consultant, advisor, sales representative, agent or other participant, in a Restricted Business (as defined herein), provided, however, that for the purposes of this Section 2(a) only and not Section 2(b), in the event of termination of the Employment Agreement as a result of a non-renewal of the Term (as defined in the
Employment Agreement), the Non-Compete Period shall only be for a period of time equal to the Non-Renewal Tail Period.
(b) During the Non-Compete Period Executive shall not, directly or indirectly, (i) cause, solicit, induce or encourage (each, a Solicitation) any person who is or was, prior to such Solicitation, an employee of the Company or any of its subsidiaries to leave employment with the Company or any of its subsidiaries, or hire, employ or otherwise engage any such individual; or (ii) cause, induce or encourage any material actual or prospective client, customer, supplier or licensor of the Company or any of its subsidiaries (including any former customer of the Company or its subsidiaries and any person that becomes a customer of the Company or any of its subsidiaries) or any other person who has a material business relationship with the Company or any of its subsidiaries, to terminate or modify any such actual or prospective relationship.
Restricted Business shall mean any business engaged in a business, directly or indirectly, similar to the business of the Company or any of its subsidiaries as of the Termination Date, any other consumer finance business that may be reasonably construed as competing with the business of the Company or any of its subsidiaries as of the Termination Date, or any future businesses of the Company or any of its subsidiaries as contemplated by any of them as of the Termination Date.
Restricted Area shall be any state in which any of the Companys subsidiaries operate, as of the date hereof or the Termination Date.
3. Intellectual Property. Executive agrees that during the term of Executives employment with the Company, any and all inventions, developments, products, services, discoveries, innovations, writings, domain names, improvements, trade secrets, trade names, designs, drawings, business processes, secret processes and know-how, which Executive may create, conceive, develop or make, either alone or in conjunction with others and related or in any way connected with either of the Company, its strategic plans, products, processes, apparatus or business now or hereafter carried on by either of the Company (collectively, Inventions), shall be fully and promptly disclosed to the Company and shall be the sole and exclusive property of the Company (as they shall determine) as against Executive or any of Executives assignees. Executive further understands that in the course of Executives, Executive may prepare writings, drawings, diagrams, designs, specifications, manuals, instructional and other materials, and computer code and programs (Works of Authorship or Works). Executive agrees that such Works are works made for hire under United States copyright law and the Company will be the owner of my entire right of authorship in such Works. If such Works are deemed by operation of law not to be works made for hire, Executive hereby assigns to the Company Executives entire right of authorship, including copyright ownership in such Works and any and all right, title and interest in and to such Inventions made during the term of Executives employment by either of the Company. Executive further agrees to assist in the preparation and execution, during and subsequent to my employment, of any papers the Company may request to secure patent, copyright or other protection for such Inventions or Works of Authorship.
Whether during or after Executives employment with either of the Company, Executive further agrees to execute and acknowledge all papers and to do, at the Companys expense, any and all other things necessary for or incident to the applying for, obtaining and maintaining of such letters patent, copyrights, trademarks or other intellectual property rights, as the case may be, and to execute, on request, all papers necessary to assign and transfer such Inventions, copyrights, patents, patent applications and other intellectual property rights to the Company, their successors and assigns (as they shall determine). In the event that the Company are unable, after reasonable efforts and, in any event, after thirty (30)
business days, to secure Executives signature on a written assignment to the Company, of any application for letters patent, trademark registration or to any common law or statutory copyright or other property right therein to which the Company is entitled to ownership pursuant to this Section 3, whether because of his physical or mental incapacity, or for any other reason whatsoever, Executive irrevocably designates and appoints the Chief Financial Officer of the Company as Executives attorney-in-fact to act on Executives behalf to execute and file any such applications and to do all lawfully permitted acts to further the prosecution or issuance of such assignments, letters patent, copyright or trademark; provided, however, that the provisions of this sentence shall not apply if Executive disputes in writing the Companys ownership of the intellectual property rights which are the subject of the proposed assignment.
4. No Right to Continued Employment. Nothing in this Non-Competition Agreement shall confer upon Executive any right to continue in the employ of the Company or shall interfere with or restrict in any way the rights of the Company, which, subject to the terms of the Employment Agreement, are hereby reserved, to discharge Executive at any time for any reason whatsoever, with or without cause.
5. No Conflicting Agreements. Executive warrants that Executive is not bound by the terms of a confidentiality agreement, non-competition or other agreement with a third party that would conflict with Executives obligations hereunder.
6. Remedies.
(a) Executive and the Company hereby agree that any controversy or claim arising out of or relating to this Non-Competition Agreement shall be resolved by arbitration in accordance with the provisions of Section 10 of the Employment Agreement; provided, however, that in the event of breach or threatened breach by Executive of any provision hereof, the Company shall be entitled to seek temporary or preliminary injunctive relief or other equitable relief to which either of them may be entitled pending the outcome of any arbitration proceeding, without the posting of any bond or other security.
(b) The period of time during which the restrictions set forth in Section 2(a) hereof will be in effect will be extended by the length of time during which Executive is in breach of the terms of those provisions as finally determined by an arbitrator or any court of competent jurisdiction.
7. Successors and Assigns. This Non-Competition Agreement shall be binding upon Executive and Executives heirs, assigns and representatives and inure to the benefit of the Company and their successors and assigns, including without limitation any entity to which substantially all of the assets or the business of either of the Company are sold or transferred. The obligations of Executive are personal to Executive and shall not be assigned by Executive.
8. Severability. It is expressly agreed that if any restrictions set forth in this Non-Competition Agreement are found by any court having jurisdiction to be unreasonable because they are too broad in any respect, then in each such case, the remaining provisions herein contained shall, nevertheless, remain effective, and this Non-Competition Agreement, or any portion hereof, shall be considered to be amended, so as to be considered reasonable and enforceable by such court, and the court shall specifically have the right to restrict the time period or the business or geographical scope of such restrictions to any portion of the time period, business or geographic areas to the extent the court deems such restriction to be necessary to cause the covenants to be enforceable, and, in such event, the covenants shall be enforced to the extent so permitted and the remaining provisions shall be unaffected thereby. In
such event, the parties hereto agree to execute all documents necessary to evidence such amendment so as to eliminate or modify any such unreasonable provision in order to carry out the intent of this Non-Competition Agreement insofar as possible and to render this Non-Competition Agreement enforceable in all respects as so modified. The covenants contained in this Section 8 shall be construed to extend to separate jurisdictions or sub-jurisdictions of the United States in which the Company, during the term of Executives employment, has been or is engaged in business, and to the extent that any such covenant shall be illegal and/or unenforceable with respect to any jurisdiction, said covenant shall not be affected thereby with respect to each other jurisdiction, such covenants with respect to each jurisdiction being construed as severable and independent. Any covenant on Executives part contained hereinabove that may not be specifically enforceable shall nevertheless, if breached, give rise to a cause of action for monetary damages. The restrictive covenant provisions of this Non-Competition Agreement shall govern to the extent there is any conflict between their terms and the terms of any other agreement or understanding with the Company.
9. Notices. Any notice required or permitted to be given under this Non-Competition Agreement shall be in writing and be deemed given when delivered by hand or received by registered or certified mail, postage prepaid, or by nationally reorganized overnight courier service addressed to the party to receive such notice at the following address or any other address substituted therefor by notice pursuant to these provisions:
If to Executive:
Michael Durbin
[ ]
If to the Company:
CheckSmart Financial Company
7001 Post Road, Suite 200
Dublin, Ohio 43016
Attn: CEO
Telephone: (614) 798-5900
Fax: (614) 760-2601
with a copy to:
Diamond Castle Holdings
280 Park Avenue, 25th floor, East Tower
New York, New York 10017
Attn: Andrew Rush
Fax: (212) 983-1234
10. Amendment. No provision of this Non-Competition Agreement may be modified, amended, waived or discharged in any manner except by a written instrument executed by the Company and Executive.
11. Entire Agreement. This Non-Competition Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings of the parties hereto, oral or written, with respect to the subject matter hereof, however, if
any portion of this Non-Competition Agreement is determined to be unenforceable by a court of law, then solely the appropriate conflicting provisions of any other agreement binding upon Executive shall control.
12. Waiver, etc. The failure of the Company to enforce at any time any of the provisions of this Non-Competition Agreement shall not be deemed or construed to be a waiver of any such provision, nor in any way affect the validity of this Non-Competition Agreement or any provision hereof or the right of the Company to enforce thereafter each and every provision of this Non-Competition Agreement. No waiver of any breach of any of the provisions of this Non-Competition Agreement by the Company shall be effective unless set forth in a written instrument executed by the Company, and no waiver of any such breach shall be construed or deemed to be a waiver of any other or subsequent breach.
13. All issues and questions concerning the construction, validity, enforcement and interpretation of this Non-Competition Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. In furtherance of the foregoing, the internal law of the State of Delaware shall control the interpretation and construction of this Agreement (and all schedules and exhibits hereto), even though under that jurisdictions choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply.
14. Enforcement. Subject to Section 10 of the Employment Agreement, if any party shall institute legal action to enforce or interpret the terms and conditions of this Non-Competition Agreement or to collect any monies under it, venue for any such action shall be the State of Delaware. Each party irrevocably consents to the jurisdiction of the courts located in the State of Delaware for all suits or actions arising out of this Non-Competition Agreement. Each party hereto waives, to the fullest extent possible, the defense of an inconvenient forum, and each agrees that a final judgment in any action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
IN WITNESS WHEREOF, the parties have caused this Non-Competition Agreement to be executed as of the day written above.
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CheckSmart Financial Company | |
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By: |
/s/ William E. Saunders, Jr. |
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Name: |
William E. Saunders, Jr. |
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Title: |
Chief Executive Officer |
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Michael Durbin | |
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/s/ Michael Durbin |
Exhibit 10.8
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of April 1, 2011 (this Employment Agreement) by and between Community Choice Financial Inc., an Ohio corporation (the Company), and Bridgette C. Roman (Executive).
WHEREAS, the Company wishes to employ Executive and Executive wishes to be employed by, and make her services available to, the Company on the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the premises and the mutual covenants set forth below, the parties hereby agree as follows:
1. Employment. Effective as of the date hereof (the Commencement Date), the Company hereby agrees to employ Executive as the General Counsel, Chief Legal Officer, Chief Ethics Officer and Secretary, and Executive hereby accepts such employment on the terms and conditions hereinafter set forth.
2. Duties.
(a) As General Counsel and Chief Legal Officer of the Company, Executive shall be responsible for managing and supervising, and shall have responsibility and powers for the day-to-day conduct of, the legal affairs of the Company and its subsidiaries, including, but not limited to, hiring and firing of legal personnel, executing contracts and agreements provided that the dollar value of the contract or agreement does not exceed $50,000, managing and supervising any internal and or external counsel, and shall have all of the powers, authority, duties and responsibilities usually incident to the position and role of General Counsel and Chief Legal Officer in companies that are comparable in size and character to the Company, and shall perform such other reasonable duties consistent with the position of General Counsel, as may lawfully be assigned to her by the Companys Board of Directors (the Board) and the Companys Chief Executive Officer (the CEO).
(b) As Chief Ethics Officer of the Company, Executive shall be responsible for the general administration, oversight and monitoring compliance with the Companys Code of Conduct and Business Ethics (the Code) and other procedures intended to detect and prevent unethical or illegal behavior, operation and effectiveness of the Companys hotline, investigating incidents of suspected non-compliance with the Code, reporting to the Audit and/or Governance Committees of the Board regarding the effectiveness of an adherence to the Code, periodically reviewing and revising Company policies and procedures to achieve compliance with applicable rules, regulations, policies and procedures, and making recommendations to the CEO, Audit and/or Governance Committees of the Board regarding disciplinary or remedial action for non-compliance with the Code.
(c) During the Term, Executive shall report directly to the Companys Chief Compliance Officer (the CCO), serve the Company and its subsidiaries and devote such time, attention, skill and efforts as is necessary for the performance of her duties hereunder; provided however, that, notwithstanding the above, Executive shall be permitted, to the extent such activities do not interfere with the performance by Executive of her duties and responsibilities hereunder, to (i) manage Executives personal, financial and legal affairs, (ii) serve on charitable boards or committees and (iii) engage in community service, charitable activities and professional educational duties.
3. Term. The term of employment of Executive under this Employment Agreement shall commence on the Commencement Date and shall continue in full force and effect until December 31, 2011 unless terminated earlier as provided herein (including any renewals hereunder, the Term); provided, however, that unless the Board or Executive provides the other with written notice of termination of this Employment Agreement at least 90 days prior to any date on which this Employment Agreement would otherwise expire or as otherwise set forth herein, the term of employment hereunder shall be automatically extended for an additional period of one fiscal year from each such date.
4. Compensation and Related Matters.
(a) Base Salary. For performance of services under this Employment Agreement, Executive shall receive a base salary of $275,000 for each fiscal year of the Term (Base Salary). Executives Base Salary shall be paid in approximately equal installments in accordance with the Companys customary payroll practices. The compensation committee of the Board (Committee) shall review Executives Base Salary annually and in a manner consistent with the compensation practices and guidelines of the Company and, in its sole discretion, may increase (but not decrease) such Base Salary during the Term on an annual basis. If Executives Base Salary is increased by the Company, such increased Base Salary shall then constitute the Base Salary for all purposes of this Agreement as of such increase.
(b) Annual Bonus. In addition to Base Salary, Executive shall be eligible to receive an annual bonus (the Annual Bonus) in the amounts and with respect to the fiscal years set forth in Schedule I hereto, subject to terms and conditions determined by the CEO and the Board, including with respect to the achievement of the Companys financial budget goals for the fiscal year of 2011 as determined by the Board. The Annual Bonus shall be paid in the fiscal year following the end of the applicable fiscal year in which such bonus was earned.
(c) Business Expenses. The Company shall reimburse Executive for all reasonable business expenses upon the presentation of receipts in accordance with the Companys policies and procedures now in force or as such policies and procedures may be modified with respect to all senior executive officers of the Company.
(d) Professional Expenses. At the discretion of the CCO, the Company shall pay all reasonable national, state and local bar and legal professional association dues and registration fees and all reasonable professional educational or continuing legal educational expenses incurred by Executive.
(e) Benefit Plans and Perquisites. Executive shall be entitled to participate in and be covered under all employee benefit plans or programs maintained by the Company from time to time for the benefit of its senior executives including, without limitation, 401(k), vacation and medical.
(f) Retention Bonus. Executive shall be entitled to be paid a retention bonus in the aggregate amounts for each fiscal year set forth in Schedule II hereto.
5. Termination. Executives employment hereunder may be terminated upon the following events:
(a) Death. Executives employment hereunder shall terminate upon her death.
(b) Disability. Executives employment may be terminated if, as a result of Executives incapacity due to physical or mental illness, Executive is unable to perform her duties for 180 consecutive days and, within 30 days after a Notice of Termination (as defined below), which Notice of Termination may not be given until the expiration of such consecutive 180 day period, is given to Executive, Executive has not returned to work (Disability).
(c) Cause. The Company shall have the right to terminate Executives employment for Cause. Cause shall mean:
(i) Executives material breach of this Employment Agreement and Executives failure to cure such breach within 20 days following written notice from the Board or the CEO to Executive of such breach;
(ii) Executives failure or refusal to comply, on a timely basis, with any lawful direction or instruction of the Board, the CEO, the Companys President or the CCO;
(iii) Executives gross negligence or willful misconduct in the performance of her duties as an employee of the Company;
(iv) Executives commission of fraud, embezzlement, misappropriation of funds, breach of fiduciary duty or act of dishonesty against the Company;
(v) conviction of Executive of a felony or entry by Executive of a plea of nolo contendre or a plea of guilty under an indictment to a felony; or
(vi) the habitual drug addiction or intoxication of Executive.
(d) Good Reason. Executive may resign for Good Reason within 30 days after Executive has actual knowledge of the occurrence, without the written consent of Executive, of one of the following events:
(i) a reduction in Executives Base Salary, or non-timely payment of Base Salary or earned Annual Bonus or benefits or other breach by the Company of this Agreement that is not cured by the Company within 20 days of Executives written notice to the Company of such breach;
(ii) a material diminution in Executives duties or responsibilities not cured by the Company within 20 days after written notice to the Company; or
(iii) a requirement by the Company that Executive be based in an office that is located more than 20 miles from Executives principal place of employment as of the Commencement Date.
(e) Without Cause. The Company shall have the right to terminate Executives employment hereunder without Cause by providing Executive with a Notice of Termination.
6. Termination Procedure.
(a) Notice of Termination. Any termination of Executives employment by the Company or resignation by Executive (other than termination by reason of death) shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 11. For purposes of this Agreement, a Notice of Termination shall mean a notice which shall indicate the specific termination provision in this Employment Agreement relied upon.
(b) Termination Date. Termination Date shall mean (i) if Executives employment is terminated by her death, the date of her death, (ii) if Executives employment is terminated for Disability, 30 days after Notice of Termination, and (iii) if Executives employment is terminated for any other reason, the date on which a Notice of Termination is given (subject to any cure periods) or any later date (within 30 days after the giving of such notice) set forth in such Notice of Termination.
7. Compensation Upon Termination. Upon the termination of Executives employment and subject to the terms set forth herein, the Company shall provide Executive with the payments and benefits set forth below. Executive acknowledges and agrees that the payments set forth in this Section 7 constitute liquidated damages for termination of her employment during the Term.
(a) Non-Renewal by the Company. If the Company does not renew Executives employment in accordance with Section 3 above, Executive shall be entitled to receive her Base Salary and Continued Benefits (as defined below) for a period of 90 days following the expiration of the Term (such 90-day period, the Non-Renewal Tail Period).
(b) Termination upon Executives Disability. If Executives employment is terminated by reason of Disability, then:
(i) Company shall pay to Executive (A) any accrued, but unpaid, Base Salary and vacation pay through the Termination Date, payable in accordance with the usual payroll practices of the Company, (B) any portion of the Annual Bonus that is determined to have otherwise been earned with respect to the fiscal year in which termination occurs (the Termination Year), payable in accordance with the Companys usual bonus payment schedule, (C) continued Base Salary and Continued Benefits (as defined below) until the earlier of (i) six months following the Termination Date or (ii) the date on which Executive becomes entitled to long-term disability benefits under the applicable plan or program of the Company, payable, in the case of Base Salary, in accordance with the usual payroll policies of the Company, and (D) the portion of the Retention Bonus that is earned but unpaid through the Termination Date, to the extent not already paid in accordance with Section 4(g) above, payable within thirty (30) days of the Termination Date.
(ii) Continued Benefits means reimbursement of any premiums for continued group medical, dental and vision coverage for the Executive and/or the Executives eligible dependents under Section 4980B of the Internal Revenue Code of 1986, as amended (COBRA), to the extent such amount exceeds the premium which Executive would have had to pay for coverage under such plan if she had remained an active employee. For the avoidance of doubt, any amounts reimbursed pursuant to this Section 7 shall be treated as compensation.
(c) Termination upon Executives Death. If Executives employment terminates during the Term due to Executives death, then:
(i) The Company shall pay to Executives beneficiary, (A) any accrued, but unpaid Base Salary and Annual Bonus through the Termination Date, payable within 10 days of the Termination Date, (B) any accrued but unpaid vacation pay through the Termination Date, (C) a pro-rata portion of Executives Annual Bonus for the Termination Year, payable in accordance with the Companys usual bonus payment schedule, and (D) the portion of the Retention Bonus that is accrued but unpaid through the Termination Date, to the extent not already paid in accordance with Section 4(g) above, payable within 30 days of the Termination Date.
(ii) The Company shall provide Executives spouse and dependents with Continued Benefits for 12 months.
(d) Termination by the Company without Cause or Resignation by Executive for Good Reason.
(i) Subject to Executives execution and effectiveness of a general release of claims in the form attached hereto as Exhibit A (the Release) and her continued compliance with the Non-Competition Agreement (as though Extended Benefits Period (as defined below) were substituted for Non-Compete Period throughout the Non-Competition Agreement), in the event that Executive is terminated without Cause or resigns for Good Reason, the Company shall pay to Executive (A) any accrued, but unpaid, Base Salary and vacation pay through the Termination Date, payable as soon as practicable in accordance with the usual payroll practices of the Company, (B) any portion of the Annual Bonus that is determined to have otherwise been earned with respect to the Termination Year, payable in accordance with the Companys usual bonus payment schedule, (C) Base Salary and Continued Benefits for the longer of (i) the Termination Date through December 31 of the Termination Year or (ii) 90 days (the longer of which, plus the Term, the Extended Benefits Period); payable, in the case of Base Salary, in accordance with the usual payroll policies of the Company, and (D) the accrued but unpaid Retention Bonus through the date of termination, to the extent not already paid in accordance with Section 4(g) above, payable within 30 days of the Termination Date.
(ii) As a condition precedent to receiving any payments under Section 7(d)(i) (other than those amounts already accrued prior to the Termination Date, which shall be payable on the date of termination), Executive shall have executed, within 21 days, or if required for an effective release, 45 days, the Release, which may be updated by the Company from time to time to reflect changes in law, and the seven-day revocation period of such Release shall have expired without revocation. Subject to Section 19 and the execution of the Release pursuant to this Section 7(d)(ii), all payments under Section 7(d)(i) shall be payable as described above; provided, that the first payment shall be made on the 60th day after the Termination Date (or such later date as required by the terms hereof), and such first payment shall include payment of any amounts that would otherwise be due prior thereto.
(e) Termination by the Company for Cause or by Executive without Good Reason. If Executives employment is terminated by the Company for Cause or Executive resigns other than for Good Reason then the Company shall pay Executive her accrued, but unpaid Base Salary, any Annual Bonus that is determined to have otherwise been earned with respect to the Termination Year, payable in accordance with the Companys usual bonus payment schedule, and any accrued but unpaid vacation pay, through the Termination Date, payable in accordance with the usual payroll policies of the Company as soon as practicable following the Termination Date.
8. Confidentiality, Non-Compete, Non-Solicit/Hire and Intellectual Property Agreement. Simultaneous with the execution and delivery of this Employment Agreement, the Company and Executive shall execute and deliver the non-competition agreement (the Non-Competition Agreement) attached hereto as Exhibit B and incorporated herein by reference. Provided that such Non-Competition Agreement shall be enforced only to the extent permitted by Rule 5.6 of the Rules of Professional Conduct. If, however, Employee is engaged in any activity that violates the Non-Competition Agreement, Employee waives any right to payments during the Extended Benefits Period as addressed in Section 6(d)(i).
9. Indemnification. Executive shall be entitled to such indemnification under the terms of the Companys Code of Regulations, Articles of Incorporation and such other liability insurance as the Company may purchase for its Board members and senior officers from time to time.
10. Arbitration. Except as provided for in the Non-Competition Agreement, if any contest or dispute arises between the parties with respect to this Employment Agreement, such contest or dispute shall be submitted to binding arbitration for resolution in the city of Columbus, Ohio in accordance with the rules and procedures of the Employee Dispute Resolution Rules of the American Arbitration Association then in effect. The decision of the arbitrator shall be final and binding on both parties, and any court of competent jurisdiction may enter judgment upon the award.
11. Notice. For the purposes of this Employment Agreement, notices, demands and all other communications provided for in this Employment Agreement shall be in writing and shall be deemed to have been duly given when delivered either personally or by United States certified or registered mail, return receipt requested, postage prepaid, addressed as follows:
If to Executive:
Bridgette C. Roman
8825 Dunsinane Drive
Dublin, Ohio 43017
If to the Company:
Community Choice Financial Inc.
7001 Post Road, Suite 200
Dublin, Ohio 43016
Attn: CEO
Telephone: (614) 798-5900
Fax: (614) 760-2601
with a copy to:
Diamond Castle Holdings
280 Park Avenue, 25th floor, East Tower
New York, New York 10017
Attn: Andrew Rush
Fax: (212) 983-1234
or to such other address as any party may have furnished to the others in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
12. Miscellaneous. No provisions of this Employment Agreement may be amended, modified, or waived unless such amendment or modification is agreed to in writing signed by Executive and by a duly authorized officer of the Company (other than Executive), and such waiver is set forth in writing and signed by the party to be charged. No waiver by either party hereto at any time of any breach by the other party hereto of any condition or provision of this Employment Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Employment Agreement. The respective rights and obligations of the parties hereunder of this Employment Agreement shall survive Executives termination of employment and the termination of this Employment Agreement to the extent necessary for the intended preservation of such rights and obligations. The validity, interpretation, construction and performance of this Employment Agreement and all claims of action (whether in contract or tort) that may be based upon, arise out of or relate to this Employment Agreement, shall be governed by the laws of the State of Ohio without regard to its conflicts of law principles.
13. Validity. The invalidity or unenforceability of any provision or provisions of this Employment Agreement shall not affect the validity or enforceability of any other provision of this Employment Agreement, which shall remain in full force and effect.
14. Counterparts. This Employment Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
15. Entire Agreement. Except as otherwise provided for herein, any Exhibits hereto, this Employment Agreement sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersede all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto in respect of such subject matter. Any prior agreement of the parties hereto, or between Executive and any of the Companys subsidiaries in respect of the subject matter contained herein is hereby terminated and cancelled. Other than any accrued Base Salary due to Executive as of the date hereof, Executive acknowledges that as of the Commencement Date, she has no claims against the Company or any of its affiliates in respect of any amounts that may be owing to her from any of the subsidiaries.
16. Withholding. All payments hereunder shall be subject to any required withholding of Federal, state and local taxes pursuant to any applicable law or regulation.
17. Noncontravention. The Company represents that the Company is not prevented from entering into, or performing this Agreement by the terms of any law, order, rule or regulation, its by-laws or declaration of trust, or any agreement to which it is a party, other than which would not have a material adverse effect on the Companys ability to enter into or perform this Employment Agreement.
18. Section Headings. The section headings in this Employment Agreement are for convenience of reference only, and they form no part of this Employment Agreement and shall not affect its interpretation.
19. Section 409A.
(a) The intent of the parties is that payments and benefit under this Agreement comply with or be exempt from Internal Revenue Code Section 409A and the regulations and guidance promulgated thereunder (collectively, Section 409A) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. If the Executive notifies the Company that the Executive has received advice of tax counsel of a national reputation with expertise in Section 409A that any provision of this Agreement (or of any award of compensation, including equity compensation or benefits) would cause the Executive to incur any additional tax or interest under Section 409A (with specificity as to the reason therefor) or the Company independently makes such determination, the Company shall, after consulting with the Executive, reform such provision to try to comply with Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with Section 409A. To the extent that any provision hereof is modified in order to comply with or be exempt from Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to the Executive and the Company of the applicable provision without violating the provisions of Section 409A.
(b) A termination of employment shall not be deemed to have occurred for purposes of this Agreement providing for the payment of any amounts or benefits that are considered nonqualified deferred compensation under Section 409A upon or following a termination of employment, unless such termination is also a separation from service within the meaning of Section 409A and the payment thereof prior to a separation from service would violate Section 409A. As permitted by Treasury Regulation 1.409A-1(h)(1)(ii), 49% shall be substituted in lieu of 20% for the average level of bona fide services performed during the immediately preceding 36-month period in order to constitute a separation from service. For purposes of any such provision of this Agreement relating to any such payments or benefits, references to a termination, termination of employment or like terms shall mean separation from service. If the Executive is deemed on the date of termination to be a specified employee within the meaning of that term under Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered nonqualified deferred compensation under Section 409A payable on account of a separation from service, such payment or benefit shall be made or provided on the first business day following the date which is the earlier of (A) the expiration of the six-month period measured from the date of such separation from service of the Executive, and (B) the date of the Executives death (the Delay Period). Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section 19 (whether they would have otherwise been payable in a single lump sum or in installments in the absence of such delay) shall be paid or reimbursed to the Executive in a lump sum with interest at the prime rate as published in the Wall Street Journal on the first business day following the Delay Period, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.
(c) (i) All expenses or other reimbursements as provided herein shall be payable in accordance with the Companys policies in effect from time to time, but in any event shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by the Executive; (ii) no such reimbursement or expenses eligible for reimbursement in any taxable year shall in any way affect the expenses eligible for reimbursement in any other taxable year; provided, that this clause (ii) shall not be violated without regard to expenses reimbursed under any arrangement covered by Internal Revenue Code Section 105(b) solely because such expenses are subject to a limit related to the period the arrangement is in effect; and (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchanged for another benefit.
(d) For purposes of Section 409A, the Executives right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments. Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., payment shall be made within 30 days following the date of termination), the actual date of payment within the specified period shall be within the sole discretion of the Company.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written.
Community Choice Financial Inc. |
Bridgette C. Roman | ||||
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/s/ William E. Saunders, Jr. |
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/s/ Bridgette C. Roman | ||
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Name: |
William E. Saunders, Jr. |
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[Signature Page to Employment Agreement]
Schedule II
Retention Bonus for the Fiscal Year of 2011 and any Subsequent Fiscal Year in the Term
The retention bonus equals an aggregate amount of $75,000 for the fiscal year of 2011 (the 2011 Retention Bonus) and for any subsequent fiscal year in the Term, to the extent the Term is renewed in accordance with Section 3 of this Employment Agreement. The 2011 Retention Bonus shall be earned and paid as follows:
(i) On the Commencement Date, Executive shall receive $18,750;
(ii) On June 30, 2011, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), Executive will be eligible to receive $18,750 upon the achievement of each of the milestones set forth below;
(iii) On September 30, 2011, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), Executive will be eligible to receive $18,750 upon the achievement of each of the milestones set forth below; and
(iv) On December 31, 2011, but only if Executive is employed by the Company (subject to Section 7(d) of this Employment Agreement), Executive will be eligible to receive $18,750 upon the achievement of each of the milestones set forth below (it being understood that the payments set forth in subsections (i)-(iv) above, to the extent accrued and payable, comprise the 2011 Retention Bonus).
Milestones for the Fiscal Year of 2011 and any Subsequent Fiscal Year in the Term
1. Legal & Compliance:
a. Integrate Rebecca Fox and refocus her responsibilities to be supportive of collections (FDCPA, where applicable, and Rosenthal Act; Bankruptcy resource to collections) and human resources relative to California Wage Order compliance.
b. Oversee process improvements relative to California Wage Order compliance.
c. Develop protocols for handling and monitoring California legal needs
d. Governance: (1) develop system for compliance with shareholder agreement and side letter observer rights and (2) virtual boardroom (web-portal for board members to access information).
2. Record Retention Investigate and make recommendations for program.
3. IPO Preparations
a. Advise board on applicable NASDAQ corporate governance standards
b. Conduct education program for officers relative to code of ethics, trading policies and quiet period restrictions.
4. Community Relations
a. Fall Program in conjunction with State of Ohio on financial education
b. Increase Charitable participation though volunteer hours and board involvement.
5. PAC recommend opportunities to improve participation; maintain records and timely reporting to FEC.
6. Other
a. Manage HR, Compliance and Legal personnel so as to keep performance at a high level of productivity and quality;
b. Streamline contract management process;
c. Work with Compensation Consultant and maintain information relative to competitive equity plans and compensation;
d. Monitor and adapt relative to activities of CFPB and other Dodd Frank implementations.
Exhibit A
GENERAL RELEASE OF CLAIMS
A general release is required as a condition for receiving the severance benefits described in Section 7(d) of the employment agreement between Community Choice Financial Inc. (the Company or us) and Bridgette C. Roman (you) dated April 1, 2011, (the Employment Agreement); thus, by executing this general release (General Release), you have advised us that you hold no claims against the Company, any of its subsidiaries, or any of their predecessors, successors or assigns, affiliates, shareholders or members and each of their respective officers, directors, agents and employees (collectively, the Releasees), and by execution of this General Release you agree to waive and release any such claims, except relating to any compensation, severance pay and benefits described in the Employment Agreement.
You understand and agree that this General Release will extend to all claims, demands, liabilities and causes of action of every kind, nature and description whatsoever, whether known, unknown or suspected to exist, which you ever had or may now have against the Releasees in your capacity as an employee of the Company, including, without limitation, any claims, demands, liabilities and causes of action arising from your employment with the Releasees and the termination of that employment, including any claims for severance or vacation pay, business expenses, and/or pursuant to any federal, state, county, or local employment laws, regulations, executive orders, or other requirements, including, but not limited to, Title VII of the 1964 Civil Rights Act, the 1866 Civil Rights Act, the Age Discrimination in Employment Act as amended by the Older Workers Benefit Protection Act, the Americans with Disabilities Act, the Civil Rights Act of 1991, the Workers Adjustment and Retraining Notification Act and any other local, state or federal fair employment laws, and any contract or tort claims.
It is further understood and agreed that you are waiving any right to initiate an action in state or federal court by you or on your behalf alleging discrimination on the basis of race, sex, religion, national origin, age, disability, marital status, or any other protected status or involving any contract or tort claims based on your termination from the Company. It is also acknowledged that your termination is not in any way related to any work-related injury.
Based on executing this General Release, it is further understood and agreed that you covenant not to sue to challenge the enforceability of this General Release. It also is understood and agreed that the remedy at law for breach of the Employment Agreement and/or General Release shall be inadequate, and the Company shall be entitled to injunctive relief.
The ability to receive compensation and benefits under the terms of the Employment Agreement will remain open for a 21-day period after your Termination Date to give you an opportunity to consider the effect of this General Release. At your option, you may elect to execute this General Release on an earlier date. Additionally, you have seven days after the date on which you execute this General Release to revoke it. As a result, this General Release will not be effective until eight days after you execute it. We also hereby advise you of your right to consult with legal counsel prior to executing a copy of this General Release.
Finally, this is to expressly acknowledge:
You understand that you are not waiving any claims or rights that may arise after the date on which you execute this General Release.
You understand and agree that the compensation and benefits described in the Employment Agreement offer you consideration greater than that to which you would otherwise be entitled.
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I hereby state that I have carefully read this General Release and that I am signing this General Release knowingly and voluntarily with the full intent of releasing the Releasees from any and all claims, except as set forth herein. Further, if signed prior to the completion of the 21-day review period, this is to acknowledge that I knowingly and voluntarily signed this General Release on an earlier date.
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Exhibit B
CONFIDENTIALITY, NON-COMPETITION AND INTELLECTUAL PROPERTY (this Non-Competition Agreement), dated as of April 1, 2011 (the Commencement Date), among Community Choice Financial Inc. (the Company) and Bridgette C. Roman (Executive).
WHEREAS, Executive has been offered employment with the Company, and has entered into an employment agreement dated as of the date hereto with the Company (the Employment Agreement). In such role, Executive will receive specific confidential information relating to the businesses of the Company, which confidential information is necessary to enable Executive to perform Executives duties and to receive future compensation. Executive will play a significant role in the development and management of the businesses of the Company and will be entrusted with the Companys confidential information relating to the Company, the Companys customers, manufacturers, distributors and others.
WHEREAS, Executive acknowledges that during the course of Executives employment with the Company, Executive will be involved in the current and future businesses of the Company, as set forth above.
WHEREAS, it is a condition to the commencement of Executives employment by the Company that Executive execute and deliver this Non-Competition Agreement.
NOW, THEREFORE, it is mutually agreed as follows:
1. Confidentiality.
(a) Executive shall not, during the term of Executives employment with the Company or at any time thereafter, directly or indirectly, divulge, use, furnish, disclose, exploit or make available to any person or entity, whether or not a competitor of the Company, any Unauthorized (as defined herein) disclosure of Confidential Information (as defined herein). In the event that Executive is requested or required (by deposition, interrogatories, requests for information or documents in legal proceedings, subpoenas, civil demand or similar process) to disclose any Confidential Information, Executive will give the Company prompt written notice of such request or requirement so that the Company may seek an appropriate protective order or other remedy and/or waive compliance with the provisions of this Non-Competition Agreement, and Executive will cooperate with the Companys efforts to obtain such protective order. In the event that such protective order or other remedy is not obtained or the Company waives compliance with the relevant provisions of this Non-Competition Agreement, Executive is permitted to furnish that Confidential Information which is legally required to be disclosed and will use her reasonable efforts to obtain assurances that confidential treatment will be accorded to such information.
As used herein, all capitalized terms used without definition shall have the meanings ascribed to them in the Employment Agreement, and the term:
Confidential Information shall mean trade secrets, confidential or proprietary information, and all other information, documents or materials, relating to, owned, developed or possessed by either of the Company, whether in tangible or intangible form. Confidential Information includes, but is not limited to, (i) financial information, (ii) products, (iii) product and service costs, prices, profits and sales, (iv) new business, technical or other ideas, proposals, plans and designs, (v) business strategies, (vi) product and service plans, (vii) marketing plans and studies, (viii) forecasts, (ix) budgets, (x) projections, (xi)
computer programs, (xii) data bases and the documentation (and information contained therein), (xiii) computer access codes and similar information, (xiv) source codes, (xv) know-how, technologies, concepts and designs, including, without limitation, patent applications, (xvi) research projects and all information connected with research and development efforts, (xvii) records, (xviii) business methods and recommendations, (xix) existing or prospective client, customer, vendor and supplier information (including, but not limited to, identities, needs, transaction histories, volumes, characteristics, agreements, prices, identities of individual contacts, and spending, preferences or habits), (xx) training manuals and similar materials used by the Company in conducting its business operations, (xxi) personnel files of employees, directors and independent contractors of the Company, (xxii) competitive analyses, (xxiii) contracts with other parties, (xxiv) product formulations, and (xxv) other confidential or proprietary information that has not been made available to the trade or general public by the Company. Confidential Information shall not include any information that (A) is or becomes generally available to the public or the trade other than as a result of a disclosure by Executive in violation of this Non-Competition Agreement or (B) becomes available to Executive on a non-confidential basis from a source other than the Company which is not prohibited from disclosing such information to Executive by a legal, contractual or fiduciary obligation to the Company or any other person.
Unauthorized shall mean: (i) in contravention of the policies or procedures of the Company; (ii) otherwise inconsistent with any measures taken by the Company to protect its interests in the Confidential Information; (iii) in contravention of any lawful instruction or directive, either written or oral, of the Board, or an officer or employee of the Company empowered to issue such instruction or directive; (iv) in contravention of any duty existing under law or contract; or (v) to the detriment of the Company; but shall not include any disclosure which is customary in the normal course of business in the trade and consistent with the past practice of the Company.
(b) Executive further agrees to take all reasonable measures to prevent unauthorized persons or entities from obtaining or using Confidential Information. Promptly upon termination, for any reason, of Executives employment with the Company, Executive agrees to deliver to the Company all property and materials within Executives possession or control which belong to the Company or which contain Confidential Information.
2. Non-Competition; Non-Solicitation.
(a) During the Term (the Non-Compete Period), Executive will not, directly or indirectly, engage, anywhere in the Restricted Area (as defined below), whether such engagement be as an individual, officer, director, proprietor, employee, partner, member, investor (other than solely as a holder of less than two percent (2%) of the outstanding capital stock of a corporation whose shares are publicly traded on a national securities exchange or through a national market system or registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended), creditor, consultant, advisor, sales representative, agent or other participant, in a Restricted Business (as defined herein).
(b) For a period of time equal to the Non-Compete Period plus the greater of (i) any period that Executive is entitled to receive Base Salary and Continued Benefits under the Employment Agreement, or (ii) one year commencing as of the Termination Date, unless the Employment Agreement is terminated by the Company without Cause or Executive resigns with Good Reason, in each case, for a period of time equal to the Term plus the period during which the Company continues to pay Executive her Base Salary and Continued Benefits pursuant to Section 7 of the Employment Agreement, whenever the same shall occur and for whatever reason, Executive shall not, directly or indirectly, (i) cause, solicit,
induce or encourage (each, a Solicitation) any person who is or was, prior to such Solicitation, an employee of the Company or any of its subsidiaries to leave employment with the Company or any of its subsidiaries, or hire, employ or otherwise engage any such individual; or (ii) cause, induce or encourage any material actual or prospective client, customer, supplier or licensor of the Company or any of its subsidiaries (including any former customer of the Company or its subsidiaries and any person that becomes a customer of the Company or any of its subsidiaries) or any other person who has a material business relationship with the Company or any of its subsidiaries, to terminate or modify any such actual or prospective relationship.
Restricted Business shall mean any business engaged in a business, directly or indirectly, similar to the business of the Company or any of its subsidiaries as of the Termination Date, any other consumer finance business that may be reasonably construed as competing with the business of the Company or any of its subsidiaries as of the Termination Date, or any future businesses of the Company or any of its subsidiaries as contemplated by any of them as of the Termination Date.
Restricted Area shall be any state in which any of the Companys subsidiaries operate, as of the date hereof or the Termination Date.
3. Intellectual Property. Executive agrees that during the term of Executives employment with the Company, any and all inventions, developments, products, services, discoveries, innovations, writings, domain names, improvements, trade secrets, trade names, designs, drawings, business processes, secret processes and know-how, which Executive may create, conceive, develop or make, either alone or in conjunction with others and related or in any way connected with either of the Company, its strategic plans, products, processes, apparatus or business now or hereafter carried on by either of the Company (collectively, Inventions), shall be fully and promptly disclosed to the Company and shall be the sole and exclusive property of the Company (as they shall determine) as against Executive or any of Executives assignees. Executive further understands that in the course of Executives employment with the Company, Executive may prepare writings, drawings, diagrams, designs, specifications, manuals, instructional and other materials, and computer code and programs (Works of Authorship or Works). Executive agrees that such Works are works made for hire under United States copyright law and the Company will be the owner of Executives entire right of authorship in such Works. If such Works are deemed by operation of law not to be works made for hire, Executive hereby assigns to the Company Executives entire right of authorship, including copyright ownership in such Works and any and all right, title and interest in and to such Inventions made during the term of Executives employment by the Company. Executive further agrees to assist in the preparation and execution, during and subsequent to Executives employment, of any papers the Company may request to secure patent, copyright or other protection for such Inventions or Works of Authorship.
Whether during or after Executives employment with the Company, Executive further agrees to execute and acknowledge all papers and to do, at the Companys expense, any and all other things necessary for or incident to the applying for, obtaining and maintaining of such letters patent, copyrights, trademarks or other intellectual property rights, as the case may be, and to execute, on request, all papers necessary to assign and transfer such Inventions, copyrights, patents, patent applications and other intellectual property rights to the Company, their successors and assigns (as they shall determine). In the event that the Company is unable, after reasonable efforts and, in any event, after 30 business days, to secure Executives signature on a written assignment to the Company, of any application for letters patent, trademark registration or to any common law or statutory copyright or other property right therein to which the Company is entitled to ownership pursuant to this Section 3, whether because of her physical or mental incapacity, or for any other reason whatsoever, Executive irrevocably designates and appoints
the Chief Executive Officer and/or Treasurer of the Company as Executives attorney-in-fact to act on Executives behalf to execute and file any such applications and to do all lawfully permitted acts to further the prosecution or issuance of such assignments, letters patent, copyright or trademark; provided, however, that the provisions of this sentence shall not apply if Executive disputes in writing the Companys ownership of the intellectual property rights which are the subject of the proposed assignment.
4. No Right to Continued Employment. Nothing in this Non-Competition Agreement shall confer upon Executive any right to continue in the employ of the Company or shall interfere with or restrict in any way the rights of the Company, which, subject to the terms of the Employment Agreement, are hereby reserved, to discharge Executive at any time for any reason whatsoever, with or without cause.
5. No Conflicting Agreements. Executive warrants that Executive is not bound by the terms of a confidentiality agreement, non-competition or other agreement with a third party that would conflict with Executives obligations hereunder.
6. Remedies.
(a) Executive and the Company hereby agree that any controversy or claim arising out of or relating to this Non-Competition Agreement shall be resolved by arbitration in accordance with the provisions of Section 10 of the Employment Agreement; provided, however, that in the event of breach or threatened breach by Executive of any provision hereof, the Company shall be entitled to seek temporary or preliminary injunctive relief or other equitable relief to which either of them may be entitled pending the outcome of any arbitration proceeding, without the posting of any bond or other security.
(b) The period of time during which the restrictions set forth in Section 2(a) hereof will be in effect will be extended by the length of time during which Executive is in breach of the terms of those provisions as finally determined by an arbitrator or any court of competent jurisdiction.
7. Successors and Assigns. This Non-Competition Agreement shall be binding upon Executive and Executives heirs, assigns and representatives and inure to the benefit of the Company and its successors and assigns, including without limitation any entity to which substantially all of the assets or the business of the Company are sold or transferred. The obligations of Executive are personal to Executive and shall not be assigned by Executive.
8. Severability. It is expressly agreed that if any restrictions set forth in this Non-Competition Agreement are found by any court having jurisdiction to be unreasonable because they are too broad in any respect, then in each such case, (a) the remaining provisions herein contained shall nevertheless remain effective, (b) this Non-Competition Agreement, or any portion hereof, shall be considered to be amended, so as to be considered reasonable and enforceable by such court, and (c) the court shall specifically have the right to restrict the time period or the business or geographical scope of such restrictions to any portion of the time period, business or geographic areas to the extent the court deems such restriction to be necessary to cause the covenants to be enforceable, and, in such event, the covenants shall be enforced to the extent so permitted and the remaining provisions shall be unaffected thereby. In such event, the parties hereto agree to execute all documents necessary to evidence such amendment so as to eliminate or modify any such unreasonable provision in order to carry out the intent of this Non-Competition Agreement insofar as possible and to render this Non-Competition Agreement enforceable in all respects as so modified. The covenants contained in this Section 8 shall be construed to
extend to separate jurisdictions or sub-jurisdictions of the United States in which the Company, during the term of Executives employment, has been or is engaged in business, and to the extent that any such covenant shall be illegal and/or unenforceable with respect to any jurisdiction, said covenant shall not be affected thereby with respect to each other jurisdiction, such covenants with respect to each jurisdiction being construed as severable and independent. Any covenant on Executives part contained hereinabove that may not be specifically enforceable shall nevertheless, if breached, give rise to a cause of action for monetary damages. The restrictive covenant provisions of this Non-Competition Agreement shall govern to the extent there is any conflict between their terms and the terms of any other agreement or understanding with the Company.
9. Notices. Any notice required or permitted to be given under this Non-Competition Agreement shall be in writing and be deemed given when delivered by hand or received by registered or certified mail, postage prepaid, or by nationally reorganized overnight courier service addressed to the party to receive such notice at the following address or any other address substituted therefor by notice pursuant to these provisions:
If to Executive:
Bridgette C. Roman
8825 Dunsinane Drive
Dublin, Ohio 43017
If to the Company:
Community Choice Financial Inc.
7001 Post Road, Suite 200
Dublin, Ohio 43016
Attn: CEO
Telephone: (614) 798-5900
Fax: (614) 760-2601
with a copy to:
Diamond Castle Holdings
280 Park Avenue, 25th floor, East Tower
New York, New York 10017
Attn: Andrew Rush
Fax: (212) 983-1234
10. Amendment. No provision of this Non-Competition Agreement may be modified, amended, waived or discharged in any manner except by a written instrument executed by the Company and Executive.
11. Entire Agreement. This Non-Competition Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings of the parties hereto, oral or written, with respect to the subject matter hereof, however, if any portion of this Non-Competition Agreement is determined to be unenforceable by a court of law, then solely the appropriate conflicting provisions of any other agreement binding upon Executive shall control.
12. Waiver, etc. The failure of the Company to enforce at any time any of the provisions of this Non-Competition Agreement shall not be deemed or construed to be a waiver of any such provision, nor in any way affect the validity of this Non-Competition Agreement or any provision hereof or the right of the Company to enforce thereafter each and every provision of this Non-Competition Agreement. No waiver of any breach of any of the provisions of this Non-Competition Agreement by the Company shall be effective unless set forth in a written instrument executed by the Company, and no waiver of any such breach shall be construed or deemed to be a waiver of any other or subsequent breach.
13. Governing Law. All issues and questions concerning the construction, validity, enforcement and interpretation of this Non-Competition Agreement shall be governed by, and construed in accordance with, the laws of the State of Ohio and the Rules of Professional conduct applicable to members of the Ohio bar, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Ohio or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Ohio. In furtherance of the foregoing, the internal law of the State of Ohio shall control the interpretation and construction of this Agreement (and all schedules and exhibits hereto), even though under that jurisdictions choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply. Should the application of Rule 5.6 of the Rules of Professional Conduct result in the invalidity of the non-competition provisions of Section 2, Employee waives any right to payments during the Extended Benefits Period as defined by Section 6(d)(i) of her Employment Agreement.
14. Enforcement. Subject to Section 10 of the Employment Agreement, if any party shall institute legal action to enforce or interpret the terms and conditions of this Non-Competition Agreement or to collect any monies under it, venue for any such action shall be the State of Ohio. Each party irrevocably consents to the jurisdiction of the courts located in the State of Ohio for all suits or actions arising out of this Non-Competition Agreement. Each party hereto waives, to the fullest extent possible, the defense of an inconvenient forum, and each agrees that a final judgment in any action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
[Signature Page to Follow]
IN WITNESS WHEREOF, the parties have caused this Non-Competition Agreement to be executed as of the day written above.
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Community Choice Financial Inc. | |||
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William E. Saunders, Jr. | ||
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Chief Executive Officer | ||
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Bridgette C. Roman | |||
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/s/ Bridgette C. Roman | |||
Exhibit 10.9
CHECKSMART FINANCIAL HOLDINGS CORP.
2006 MANAGEMENT EQUITY INCENTIVE PLAN
OPTION GRANT AWARD AGREEMENT
GRANT TO: Kyle Hanson
THIS AGREEMENT (the Agreement) is made as of June 4, 2007 (the Grant Date), between CheckSmart Financial Holdings Corp., a Delaware corporation (together with its successors, the Company), and Kyle Hanson, who is an employee of the Company or one of its Subsidiaries (the Grantee). Capitalized terms, unless defined in Section 10 or a prior section of this Agreement, shall have the same meanings as in the Plan (as defined below).
WHEREAS, in connection with the Grantees employment with the Company or one of its Subsidiaries, the Company desires to grant to the Grantee an option to purchase a certain number of shares of Class A Common Stock, par value $0.01, of the Company (Options) on the date hereof pursuant to the terms and conditions of this Agreement and the Companys 2006 Management Equity Incentive Plan (the Plan).
WHEREAS, the Board has determined that it would be to the advantage, and in the best interest, of the Company and its shareholders to grant the Options provided for herein to the Grantee as an incentive for increased efforts during his employment with the Company or one of its Subsidiaries.
NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. GRANT OF OPTIONS AWARD
(a) Grant. Subject to the terms and conditions of the Plan and this Agreement, the Company hereby grants to the Grantee the following:
(i) 1,453 Options, which will be earned based on time (the Time Options); and
(ii) 1,453 Options which will be earned based on achievement of annual EBITDA Targets (the EBITDA Options);
(b) Plan. The foregoing awards are granted under the Plan, which is incorporated herein by this reference and made a part of this Agreement.
(c) No Rights as Stockholder. It shall be understood that none of the terms contained herein grant to the Grantee any rights as a stockholder, and such Grantee shall not have any such rights unless and until such Grantee receives Shares in connection with the exercise of Options.
SECTION 2. RIGHT TO EXERCISE; VESTING
(a) Vesting. Subject to the provisions of this Agreement, the following Options shall vest as follows:
(i) the Time Options shall vest in accordance with the provisions and terms of Schedule A; and
(ii) the EBITDA Options shall vest in accordance with the provisions and terms of Schedule B.
(b) Effect of Vesting. For each vested Option the Grantee may exercise such Option for one share of Class A Holdings Common Stock.
SECTION 3. EXERCISE PROCEDURES
(a) Notice of Exercise. The Grantee may exercise its Options prior to its expiration as set forth in Section 6 to the extent it they are vested by giving written notice to the Company in form and substance reasonably satisfactory to the Company (such notice, a Notice of Exercise) specifying the election to exercise such Options, the number of vested Options which are being exercised and the form of payment. The Notice of Exercise shall be signed by the Grantee. The Grantee shall deliver to the Company, at the time of giving the notice, payment in a form permissible under Section 4 for the full amount of the Exercise Price and, if such person is not then party to the Stockholders Agreement, such person shall be required to execute a Joinder Agreement.
(b) Issuance of Shares. After receiving a properly completed and executed Notice of Exercise and, payment for the full amount of the Exercise Price as required by Section 3(a) and, if applicable, an executed joinder agreement to the Stockholders Agreement, the Company shall cause to be issued a certificate or certificates for the Purchased Shares (as defined below), registered in the name of the Grantee (or in the names of such person and his spouse as community property or as joint tenants with right of survivorship), provided that as a condition to the issuance of Purchased Shares hereunder, the Grantee shall make, as of the time of issuance of such Purchased Shares, representations and warranties in a form satisfactory to the Company and substantially similar to those contained in Exhibit A. In connection with any exercise of this option, the Person exercising this option shall deliver to the Company a duly executed blank share power in the form attached hereto as Exhibit B. The date of the issuance of the Purchased Shares by the Company to the Grantee, the Exercise Date.
(c) Withholding Requirements. The Company may withhold any tax (or other governmental obligation) required to be withheld in connection with the exercise of the Option, and as a condition to the settlement of any or exercise of the Option. Such withholding may be made from any source (including any salary or other compensation payable to the Grantee), and the Grantee shall make arrangements satisfactory to the Company to enable it to satisfy all such withholding requirements as a condition to the exercise of the Option (including by remitting to the Company an amount in cash sufficient to satisfy the withholding obligation). For the avoidance of doubt, the Company will not withhold any amounts greater than the statutory minimum.
SECTION 4. PAYMENT OF EXERCISE PRICE
(a) Cash or Check. In connection with an exercise of the Option, all or part of the Exercise Price may be paid in cash or by check.
(b) Net Exercise. Notwithstanding anything in this Agreement to the contrary, in connection with an exercise of the Option, all or part of the Exercise Price may be paid by reducing the number of Shares being purchased pursuant to such exercise by the number of such Shares having an Fair Market Value equal to the Exercise Price.
(c) Other Methods of Payment for Shares. At the sole discretion of the Board, all or any part of the Exercise Price and any applicable withholding requirements may be paid by any other method permissible at the time under the terms of the Plan.
SECTION 5. SECURITIES LAW ISSUES, TRANSFER RESTRICTIONS
(a) Grantee Acknowledgements and Representations. The Grantee understands and agrees that: (x) the Options have not been registered under the Securities Act, (y) the Options are restricted securities under the Securities Act and (z) the Options may not be resold or transferred unless they are first registered under the Securities Act or unless an exemption from such registration is available. The Grantee hereby makes the representations and warranties set forth in Exhibit A hereto.
(b) No Registration Rights. The Company may, but shall not be obligated to, register or qualify the issuance of Purchased Shares to the Grantee, or the resale of any such Purchased Shares by the Grantee under the Securities Act or any other applicable law.
(c) Transfers. No Option shall be transferable to any Person for any reason. Any attempt to Transfer any Option shall be null and void and have no force or effect, and the Company shall not, and shall cause any transfer agent not to, give any effect in such entitys share records to such attempted Transfer. Any Purchased Shares shall be subject to the restrictions on Transfer as set forth in Article 3 of the Stockholders Agreement, except with respect to a Transfer by will or by the laws of descent and distribution. Unless otherwise permitted pursuant to the Stockholders Agreement, the Grantee shall not Transfer any Purchased Shares (x) except in compliance with the provisions of Article 3 of the Stockholders Agreement, and (y) unless the transferee shall have agreed in writing to be bound by the terms of this Agreement in a manner acceptable to the Board and otherwise acknowledging that such Purchased Shares are subject to the restrictions set forth in this Agreement. Any attempt to Transfer any Purchased Shares not in compliance with this Agreement shall be null and void and have no force or effect, and the Company shall not, and shall cause any transfer agent not to, give any effect in such entitys share records to such attempted Transfer. The Grantee acknowledges that the transfer restrictions contained in this Agreement are reasonable and in the best interests of the Company.
SECTION 6. TERM OF GRANT.
The Options granted in this Agreement shall expire 10 years from the Closing Date. In the event that the employment of the Grantee terminates, unless a Notice of Exercise has been given to the Company from the Grantee, all vested Options shall expire on the 60th day after termination of
employment, except in the case of (i) termination of the Grantees employment with the Company or any of its Subsidiaries for Cause, or resignation by the Grantee without Good Reason within the first three years after Closing, in which case the vested Options would terminate upon such termination or resignation, or (ii) death or Disability, in which case the vested Options would terminate on the first anniversary of the date of death or Disability. Any Options which are unvested at the date of termination of employment will expire on the date of termination, and shall be forfeited. Further, any part of an Option Award that is vested (but not exercised) as of the Termination Date, if the Termination Event was a termination by the Company or any of its Subsidiaries for Cause at any time or a resignation by the Grantee without Good Reason within the first three years of Service, will be forfeited and there shall be no settlement with respect thereto.
SECTION 7. RIGHT OF REPURCHASE UPON TERMINATION OF EMPLOYMENT
(a) Repurchase Rights.
(i) Upon the termination of employment of the Grantee by the Company or any of its Subsidiaries for any reason (the reason for the termination of such employment, the Termination Event and the date of such termination, the Termination Date), subject to the provisions of this Section 7 and the prior approval of the Compensation Committee of the Board (or if there is no such Compensation Committee, the Board), the Company shall have the right (but not the obligation) to purchase, and if such right is exercised, the Grantee shall sell, and shall cause any Permitted Transferees of the Grantee to sell (and such Permitted Transferees shall sell), to the Company, all or any portion (as determined by the Company) of the Purchased Shares (if any) owned by the Grantee or his Permitted Transferees at a price per Settlement Share equal to an amount (the Termination Price) (as determined pursuant to Section 7(b) below); provided, that the parties acknowledge that any unvested Options held by the Grantee as of the Termination Date shall be cancelled pursuant to this Agreement.
(ii) With respect to the Purchased Shares, the Company shall notify the Grantee in writing, within the Call Period whether the Company will exercise its right to purchase the Purchased Shares (the date on which the Grantee is so notified, the Call Notice Date). The Company may assign its right to purchase all or any portion of the Purchased Shares under this Section 7 to the DCP Investor and the DCP Investor may exercise the rights of the Company under this Section 7 in the same manner in which the Company could exercise such rights.
(iii) The closing of the purchase by the Company or the DCP Investor of Purchased Shares pursuant to this Section 7 shall take place at the principal office of the Company, on the date chosen by either the Company or the DCP Investor, as applicable, which date shall, except as may be reasonably necessary to determine the Termination Price, in no event be more than 45 days after the Call Notice Date. At such closing, (i) the Company or the DCP Investor, as applicable, shall pay the Grantee and/or such Grantees Permitted Transferees, as
applicable, against delivery of duly endorsed certificates described below representing such Purchased Shares, the aggregate Termination Price by wire transfer of immediately available federal funds and (ii) the Grantee and/or such Grantees Permitted Transferees, as applicable, shall deliver to the Company a certificate or certificates representing the Purchased Shares to be purchased by the Company or the DCP Investor, as applicable, duly endorsed, or with share (or equivalent) powers duly endorsed, for transfer with signature guaranteed, free and clear of any lien or encumbrance, with any necessary share (or equivalent) transfer tax stamps affixed. The delivery of a certificate or certificates for the Purchased Shares by any Person selling such Purchased Shares pursuant to this Section 7(a)(iii) shall be deemed a representation and warranty by such Person that: (w) such Person has full right, title and interest in and to such Purchased Shares; (x) such Person has all necessary power and authority and has taken all necessary action to sell such Purchased Shares as contemplated; (y) such Purchased Shares are free and clear of any and all liens or encumbrances; and (z) there is no adverse claim with respect to such Purchased Shares.
(b) Termination Pricing. The Termination Price of any Settlement Share shall be determined as follows:
(i) If the Termination Event was a resignation by the Grantee with Good Reason, or resignation by the Grantee without Good Reason after the first three years of Service, or termination of the employment of the Grantee by the Company or any of its Subsidiaries without Cause, the Termination Price for such Settlement Share shall be the Fair Market Value on the FMV Calculation Date,
(ii) if the Termination Event was as a result of the death or Disability of the Grantee, the Termination Price for such Settlement Share shall be the Fair Market Value on the Termination Date, and
(iii) if the Termination Event was a termination of the employment of the Grantee by the Company or any of its Subsidiaries with Cause, or was a resignation by the Grantee without Good Reason in the first three years of Service, the Termination Price for such Settlement Share shall be the lower of (i) the Fair Market Value on the FMV Calculation Date or (ii) the Exercise Price per Share.
(c) Payment Terms. In the event that the Company, or the DCP Investor if applicable, exercises a Right of Repurchase pursuant to Section 7 of this Agreement, the Company, or the DCP Investor if applicable, shall pay the Termination Price in cash; provided, however, that if the Company has not assigned its right to purchase any or all of the Purchased Shares to the DCP Investor pursuant to Section 7(a)(ii), and is at the time of the Purchase Closing prohibited from purchasing all or any portion of such Purchased Shares (i) because restrictive covenants or other provisions contained in the documents evidencing such entitys or any of its Affiliates indebtedness for borrowed money do not permit or allow such entity to make such payments in cash in whole or in part; or (ii) pursuant to applicable law, then, the portion of the Termination Price not permitted to be made in cash may be paid by the execution and delivery by the
Company of a promissory note or other deferred cash payment arrangement (if applicable, any promissory note to be subordinated to the indebtedness for borrowed money of such company or any of its Affiliates) bearing interest at the prime rate, as published in the Wall Street Journal, Eastern edition, on the first Business Day immediately prior to the day on which such promissory note or other deferred cash payment is issued, with principal and accrued interest payable at such time as is required in the Boards determination to ensure that any payment pursuant to such promissory note or other deferred cash payment arrangement is not prohibited because of any of the matters described in clauses (i) or (ii) of this Section 7(c) above.
SECTION 8. ADJUSTMENT OF SHARES
In the event of a Recapitalization, the terms of this award (including, without limitation, the number and kind of Class A Common Shares subject to this award) shall be adjusted as set forth in Section 11(a) of the Plan. In the event that the Company is a party to a merger or consolidation, this award shall be subject to the vesting schedule set forth on Schedule C attached hereto and Section 11(b) of the Plan.
SECTION 9. MISCELLANEOUS PROVISIONS
(a) No Retention Rights. Nothing in this Agreement or in the Plan shall confer upon the Grantee any right to continue in Service or interfere with or otherwise restrict in any way the rights of the Company or any Subsidiary employing the Grantee, which rights are hereby expressly reserved by the Company and any Subsidiary employing the Grantee, to terminate the Grantees Service at any time and for any reason, with or without Cause.
(b) Notices. All notices, requests and other communications under this Agreement shall be in writing and shall be delivered in person (by courier or otherwise), mailed by certified or registered mail, return receipt requested, or sent by facsimile transmission, as follows:
If to the Company, to:
CheckSmart Financial Holdings Corp.
7001 Post Road, Suite 200
Dublin, OH 43016
If to the Grantee, to the address that he most recently provided to the Company,
or, in each case, at such other address or fax number as such party may hereafter specify for the purpose of notices hereunder by written notice to the other party hereto. All notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt. Any notice, request or other written communication sent by facsimile transmission shall be confirmed by certified or registered mail, return receipt requested, posted within one Business Day, or by personal delivery, whether by courier or otherwise, made within two Business Days after the date of such facsimile transmissions; provided that such confirmation mailing or delivery shall not
affect the date of receipt, which will be the date that the facsimile successfully transmitted the notice, request or other communication.
(c) Entire Agreement. This Agreement and the Plan, together with the Stockholders Agreement, the Grantees employment agreement and the other agreements referred to herein and therein and any schedules, exhibits and other documents referred to herein or therein, constitute the entire agreement and understanding among the parties hereto in respect of the subject matter hereof and thereof and supersede all prior and contemporaneous arrangements, agreements and understandings, both oral and written, whether in term sheets, presentations or otherwise, among the parties hereto, or between any of them, with respect to the subject matter hereof and thereof.
(d) Amendment; Waiver. No amendment or modification of any provision of this Agreement shall be effective unless signed in writing by or on behalf of the Company and the Grantee, except that the Company may amend or modify the Agreement without the Grantees consent in accordance with the provisions of the Plan or as otherwise set forth in this Agreement. The failure of the Company in any instance to exercise the Right of Repurchase shall not constitute a waiver of any other repurchase rights that may subsequently arise under the provisions of this Agreement or any other agreement between the Company and the Grantee. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition whether of like or different nature. Any amendment or modification of or to any provision of this Agreement, or any waiver of any provision of this Agreement, shall be effective only in the specific instance and for the specific purpose for which made or given.
(e) Assignment. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by the Grantee except pursuant to a Transfer in accordance with the provisions of this Agreement.
(f) Successors and Assigns; No Third Party Beneficiaries. This Agreement shall inure to the benefit of and be binding upon the Company and the Grantee and their respective heirs, successors, legal representatives and permitted assigns. Nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the Company and the Grantee, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.
(g) Governing Law, Venue. This Agreement and any matters or disputes related to, in connection with, or arising under this Agreement shall be governed by the laws of the State of Delaware, without regard to the conflicts of laws rules of such state. Any legal action or proceeding with respect this Agreement shall be brought in the federal or state court sitting in the State of Delaware, and, by execution and delivery of this Agreement, each party hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the exclusive jurisdiction of such courts. Each party irrevocably waives any objection which it may now or hereafter have to the laying of venue of the aforesaid actions or proceedings arising out of or in connection with this Agreement in the courts referred to in this paragraph and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.
(h) Waiver of Jury Trial. The Grantee hereby irrevocably waives all right of trial by jury in any legal action or proceeding (including counterclaims) relating to or arising out of or in connection with this Agreement or any of the transactions or relationships hereby contemplated or otherwise in connection with the enforcement of any rights or obligations hereunder.
(i) Interpretation. Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation apply:
Headings. The division of this Agreement into Sections and other subdivisions and the insertion of headings are for convenience of reference only and do not alter the meaning of, or affect the construction or interpretation of, this Agreement.
Section References. All references in this Agreement to any Section are to the corresponding Section of this Agreement.
Schedules/Exhibits. Any capitalized terms used in any Schedule or Exhibit to this Agreement but are not otherwise defined therein have the meanings set forth in this Agreement.
(j) Severability. If any provision of this Agreement is invalid, illegal, or incapable of being enforced by any law, all other provisions of this Agreement remain in full force and effect so long as the economic and legal substance of the transactions contemplated hereby are not affected in any manner materially adverse to any party. If any provision of this Agreement is held to be invalid, illegal, or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
(k) Counterparts. The parties may execute this Agreement in one or more counterparts, each of which constitutes an original copy of this Agreement and all of which, collectively constitute only one agreement. The signatures of all the parties need not appear on the same counterpart.
(l) Grantee Undertaking. The Grantee agrees to take whatever additional action and execute whatever additional documents the Company may deem necessary or advisable to carry out or effect one or more of the obligations or restrictions imposed on either the Grantee or upon the Options or any Purchased Shares pursuant to the provisions of this Agreement.
(m) Plan; Stockholders Agreement; Counsel. The Grantee acknowledges and understands that material definitions and provisions concerning the Options or any Purchased Shares and the Grantees rights and obligations with respect thereto are set forth in the Plan and the Stockholders Agreement. The Grantee has had the opportunity to retain counsel, and has read carefully, and understands, the provisions of such documents.
SECTION 10. DEFINITIONS
(a) Affiliate shall mean, with respect to any specified Person, (a) any other Person which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person (for the purposes of this definition, control (including, with correlative meanings, the terms controlling, controlled by and under common control with), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise); provided, however, that neither the Company nor any of its Subsidiaries shall be deemed an Affiliate of any of the Stockholders (and vice versa), and (b) if such specified Person is an investment fund, any other investment fund the primary investment advisor to which is the primary investment advisor to such specified Person.
(b) Board means the Board of Directors of the Company, as constituted from time to time or, if a Committee has been appointed, such Committee.
(c) Business Day has the meaning ascribed to such term in the Stockholders Agreement.
(d) Call Period shall mean from the Termination Date until:
(i) if the Termination Event is a termination of the employment of the Grantee by the Company or any of its Subsidiaries without Cause, a resignation by the Grantee with Good Reason or a resignation by the Grantee without Good Reason after three years of Service, the later of (A) the date that is 60 days after such Termination Date and (B) the date that is 190 days after the Exercise Date,
(ii) if the Termination Event is a termination of the employment of the Grantee by the Company or any of its Subsidiaries as a result of the death or Disability of the Grantee, the date that is the later of (i) 60 days after the Termination Date or the date which is 60 days after the Exercise Date, or
(iii) if the Termination Event is a termination of the employment of the Grantee by the Company or any of its Subsidiaries for Cause, or a resignation by the Grantee without Good Reason within the first years of Service the date which is 60 days after the Exercise Date.
(e) Cause has the meaning ascribed to such term in the Grantees Employment Agreement.
(f) Change of Control shall mean (a) any transaction or series of related transactions, whether or not the Company is a party thereto, in which, after giving effect to such transaction or transactions any person or group (as such terms are used in Section 13(d) of the Exchange Act other than a group of which the DCP Investor is a member, acquires, directly or indirectly, in excess of 50% of the Voting Securities, or (b) a sale, lease or other disposition of all or substantially all of the assets of the Company and its Subsidiaries on a consolidated basis (including securities of the Companys directly or indirectly owned Subsidiaries) to a Person that is not an Affiliate of the Company.
(g) Class A Common Stock means the voting class A common stock of the Company, and any stock into which such Class A Common Stock may hereafter be converted, changed, reclassified or exchanged.
(h) Closing or Closing Date shall mean May 1, 2006.
(i) Code means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated thereunder.
(j) Committee means the compensation committee of the Board of Directors of the Company.
(k) DCP Investor means collectively, Diamond Castle Partners IV, L.P., Diamond Castle Partners IV-A, L.P. and Deal Leaders Fund, L.P or any of their Permitted Transferees.
(l) Disability has the meaning ascribed to such term in the Grantees Employment Agreement.
(m) Employee means any individual who is a common-law employee of the Company or a Subsidiary thereof.
(n) Employment Agreement means the employment agreement between the Grantee and CheckSmart Financial Company, dated as of May 9, 2006.
(o) Exercise Price means $123.71.
(p) Fair Market Value or FMV with respect to a share of stock of the Company, shall mean, in the event that such shares are listed on an established U.S. exchange or through the NASDAQ National Market or any established over-the-counter trading system, the average of the closing prices of such Group Equity Securities on such exchange if listed or, if not so listed, the average bid and asked price of such shares reported on the NASDAQ National Market or any established over-the-counter trading system on which prices for such shares are quoted, in each case, for a period of twenty trading days prior to such date of determination, or (ii) if such shares are not publicly traded, a good faith determination by the Board through a reasonable application of a reasonable valuation method. Such determination shall be conclusive and binding on all persons.
(q) FMV Calculation Date means:
(i) if the Termination Event is a termination by the Company or any of its Subsidiaries without Cause, a resignation by the Grantee with Good Reason or a resignation by the Grantee without Good Reason after three years of Service:
(A) if the Exercise Date occurred 180 days or more before the Termination Date, the Termination Date, and
(B) if the Exercise Date occurred 179 days or less before the Termination Date or occurs after the Termination Date, then the Call Notice Date;
(ii) if the Termination Event is as a result of the death or Disability of the Grantee, then the Termination Date; and
(iii) if the Termination Event is a termination by the Company or any of its Subsidiaries with Cause, or a resignation by the Grantee without Good Reason during the Grantees first three years of Service, then the Termination Date.
(r) Good Reason has the meaning ascribed to such term in the Grantees Employment Agreement.
(s) Initial Public Offering has the meaning ascribed to such term in the Stockholders Agreement.
(t) Joinder Agreement means an agreement substantially in the form of Exhibit A of the Stockholders Agreement, pursuant to which the Grantee shall become a party to the Stockholders Agreement and subject to all of the rights, restrictions and obligations contained therein.
(u) Permitted Transferee has the meaning ascribed to such term in the Stockholders Agreement.
(v) Person means an individual, corporation, limited liability company, partnership, association, trust or other entity or organization.
(w) Purchase Shares means any Shares issued pursuant to the exercise of any Option in accordance with the terms of this Agreement.
(x) Right of Repurchase means the Companys right of repurchase described in Section 7 of this Agreement.
(y) Securities Act means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(z) Service means service as an employee.
(aa) Share(s) means a share(s) of Class A Common Stock of the Company.
(bb) Stockholders Agreement means that certain Stockholders Agreement dated as of May 1, 2006 by and among the Company, the Grantee and the other parties thereto (as the same shall be amended, modified or supplemented from time to time).
(cc) Subsidiary means, with respect to the Company, any other Person in which the Company, directly or indirectly through one or more Affiliates or otherwise, beneficially owns at
least 50% of either the ownership interest (determined by equity or economic interests) in, or the voting control of, such other Person.
(dd) Transfer has the meaning ascribed in such term in the Stockholders Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above.
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CHECKSMART FINANCIAL HOLDINGS CORP. | |
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By: |
/s/ William E. Saunders, Jr. |
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Name: William E. Saunders, Jr. |
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Title: CFO |
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/s/ Kyle Hanson | |
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Kyle Hanson |
SIGNATURE PAGE TO OPTION AWARD
EXHIBIT A
Investment Representations and Warranties
The Grantee hereby represents and warrants to the Company that:
1. The Options and Purchased Shares received by him will be held by him for investment only for his own account, not as a nominee or agent, and not with a view to the sale or distribution of any part thereof in violation of applicable U.S. federal or state or foreign securities laws. The Grantee has no current intention of selling, granting participation in or otherwise distributing the Options or Purchased Shares in violation of applicable U.S. federal or state or foreign securities laws. The Grantee does not have any contract, undertaking, agreement or arrangement with any person or entity to sell, transfer or grant participation to such person or entity, or to any third person or entity, with respect to any of the Options or Purchased Shares, in each case, in violation of applicable U.S. federal or state or foreign securities laws.
2. The Grantee understands that the issuance of the Options and Purchased Shares has not been registered under the Securities Act or any applicable U.S. state or foreign securities laws, and that the Options and Purchased Shares are being issued in reliance on an exemption from registration, which exemption depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Grantees representations as expressed herein.
3. The Grantee has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of his owning the Options and Purchased Shares. The Grantee is a sophisticated investor, has relied upon independent investigations made by the Grantee and, to the extent believed by the Grantee to be appropriate, the Grantees representatives, including the Grantees own professional, tax and other advisors, and is making an independent decision to invest in the Options and Purchased Shares. The Grantee has been furnished with such documents, materials and information that the Grantee deems necessary or appropriate for evaluating an investment in the Company, and the Grantee has read carefully such documents, materials and information and understands and has evaluated the types of risks involved with holding the Options and Purchased Shares. The Grantee has not relied upon any representations or other information (whether oral or written) from the Company or its shareholders, directors, officers or affiliates, or from any other person or entity, in connection with his investment in the Options and Purchased Shares. The Grantee acknowledges that the Company has not given any assurances with respect to the tax consequences of the ownership and disposition of the Options and Purchased Shares.
4. The Grantee has had, prior to his being granted the Options and Purchased Shares, the opportunity to ask questions of, and receive answers from, the Company concerning the terms and conditions of the transactions contemplated by the Agreement and the Grantees holding of the Options and Purchased Shares and to obtain additional information necessary to verify the accuracy of any information furnished to his or to
which he had access. The Grantee confirms that he has satisfied himself with respect to any of the foregoing matters.
5. The Grantee understands that no U.S. federal or state or foreign agency has passed upon the Options or Purchased Shares or upon the Company, or upon the accuracy, validity or completeness of any documentation provided to the Grantee in connection with the transactions contemplated by the Agreement, nor has any such agency made any finding or determination as to holding the Options or Purchased Shares.
6. The Grantee understands that there are substantial restrictions on the transferability of the Options and Purchased Shares and that on the date of the Agreement and for an indefinite period thereafter there will be no public market for the Options or Purchased Shares and, accordingly, it may not be possible for the Grantee to liquidate his investment in case of emergency, if at all. In addition, the Grantee understands that the Agreement and Stockholders Agreement contain substantial restrictions on the transferability of the Options and Purchased Shares and provide that, in the event that the conditions relating to the transfer of any Options or Purchased Shares in such document has not been satisfied, the holder shall not transfer any such Options or Purchased Shares, and unless otherwise specified the Company will not recognize the transfer of any such Options or Purchased Shares on its books and records or issue any share certificates representing any such Options or Purchased Shares, and any purported transfer not in accordance with the terms of the Agreement or the Stockholders Agreement shall be void. As such, Grantee understands that: a restrictive legend or legends in a form to be set forth in the Agreement and the Stockholders Agreement will be placed on the certificates representing the Options and Purchased Shares; a notation will be made in the appropriate records of the Company indicating that each of the Options and Purchased Shares are subject to restrictions on transfer and, if the Company should at some time in the future engage the services of a securities transfer agent, appropriate stop-transfer instructions will be issued to such transfer agent with respect to the Options and Purchased Shares; and the Grantee will sell, transfer or otherwise dispose of the Options or Purchased Shares only in a manner consistent with its representations set forth herein and then only in accordance with the Agreement and the Stockholders Agreement.
7. The Grantee understands that (i) the neither the Options nor the Purchased Shares may not be sold, transferred or otherwise disposed of without registration under the Securities Act or an exemption therefrom, (ii) the Options and Purchased Shares have not been registered under the Securities Act; (iii) the Options and Purchased Shares must be held indefinitely and he must continue to bear the economic risk of holding the Options and Purchased Shares unless such Options and Purchased Shares are subsequently registered under the Securities Act or an exemption from such registration is available; (iv) the Grantee is prepared to bear the economic risk of holding the Options and Purchased Shares for an indefinite period of time; (v) it is not anticipated that there will be any public market for the Options or Purchased Shares; (vi) the Options and Purchased Shares are characterized as restricted securities under the U.S. federal securities laws; and (vii) the Options and Purchased Shares may not be sold, transferred or otherwise disposed of except in compliance with federal, state and local law.
8. The Grantee understands that an investment in the Options or Purchased Shares is not recommended for investors who have any need for a current return on this investment or who cannot bear the risk of losing their entire investment. In that regard, the Grantee understands that his holding the Options and Purchased Shares involves a high degree of risk of loss. The Grantee acknowledges that: (i) he has adequate means of providing for his current needs and possible personal contingencies and has no need for liquidity in this investment; (ii) his commitment to investments which are not readily marketable is not disproportionate to his net worth; and (iii) his holding the Options and Purchased Shares will not cause his overall financial commitments to become excessive.
9. The Grantee is an accredited investor, as such term is defined in Rule 501 of the Securities Act.
EXHIBIT B
Share Power
IRREVOCABLE STOCK POWERS
CHECKSMART FINANCIAL HOLDINGS CORP.
FOR VALUE RECEIVED, Kyle Hanson does hereby sell, assign and transfer unto Shares of Class A Common Stock of CheckSmart Financial Holdings Corp., par value $0.01, represented by Certificate No. herewith and does hereby irrevocably constitute and appoint attorney to transfer the said stock on the books of the within named corporation with full power of substitution in the premises.
Dated: |
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By: |
Kyle Hanson | ||
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SCHEDULE A
VESTING OF TIME OPTIONS
Subject to the terms set forth in the Agreement and the Plan, the Time Options vest as follows:
(a) Vesting.
· 40% of the Time Options shall vest on May 1, 2008;
· 20% of the Time Options shall vest on May 1, 2009;
· 20% of the Time Options shall vest on May 1, 2010;
· 20% of the Time Options shall vest on May 1, 2011 (May 1 of each of 2008, 2009, 2010 and 2011, a Vesting Date).
(b) Change of Control. In connection with a Change of Control, any unvested Time Options (unless previously terminated in accordance with the terms of the Plan or this Award) shall fully vest immediately prior to the consummation of the Change of Control.
(c) Initial Public Offering. In connection with an Initial Public Offering, any unvested Time Options (unless previously terminated in accordance with the terms of the Plan or this Award) will continue to be subject to vesting in accordance with this schedule after such Initial Public Offering.
SCHEDULE B
VESTING OF EBITDA OPTIONS
Subject to the terms set forth in the Agreement and in the Plan, the EBITDA Options vest, as set forth below, based on the extent to which the annual EBITDA-based targets set forth below are achieved by the Company and its subsidiaries, and the Grantee remains employed.
(a) 20% of the EBITDA Options shall be fully vested as of the date hereof.
(b) Establishment of EBITDA Option Performance Targets.
Year |
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EBITDA Option Performance Target ($ in millions) |
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2007 |
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46.4 |
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2008 |
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54.9 |
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2009 |
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62.8 |
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2010 |
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69.1 |
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(c) Amendment to EBITDA Targets. The Board reserves the right to make adjustments to the EBITDA Option Performance Targets, as the Board and the Chief Executive Officer of the Company mutually determine in good faith are appropriate to take into account the effect of: (A) any material transactions or events during the relevant period, including significant changes to capital expenditure plans and (B) any events during the relevant period outside of the ordinary course. Any adjustments to the EBITDA Option Performance Targets will be made by the Board or Compensation Committee, with the intention to maintain the same fair value of the grants pre- and post-acquisition.
(d) 2007 Vesting. In 2007, all the EBITDA Options available for vesting in such year (i.e., 20% of the total EBITDA Options subject to a particular grant) will vest if 100% of the applicable EBITDA Option Performance Target is reached and the Grantee remains so employed, and none of the EBITDA Options available for vesting for such year will vest if the applicable EBITDA Option Performance Target is not met.
(e) 2008-2010 Vesting. In each of years 2008 through 2010, a maximum of 20% of the total EBITDA Options shall be eligible for vesting in any given year pursuant to the following terms:
· none of the EBITDA Options available for vesting for such year will vest if the Company and its Subsidiaries do not achieve at least 97.5% of the EBITDA Option Performance Target for such year;
· 35% of the EBITDA Options available for vesting for such year will vest if the Company and its Subsidiaries achieve 97.5% of the EBITDA Option Performance Target for such year;
· vesting of the EBITDA Options available for vesting for such year will increase proportionately between 35% and 100% to the extent that the Company and its Subsidiaries achieve more than 97.5% but less than 100% of the EBITDA Option Performance Target for such year;
· all of the EBITDA Options available for vesting for such year will vest if the Company and its Subsidiaries achieve the EBITDA Option Performance Target for such year; and
· to the extent that the Company and its Subsidiaries exceed the EBITDA Option Performance Target for such year (other than 2010), the percentage of EBITDA Option available for vesting that will vest for such year will vary proportionately between 100% and 125% (with a maximum of 125% if the Company and its Subsidiaries achieve 110% or more of the EBITDA Option Performance Target for such year).To the extent that the vesting percentage for any of the years 2007 through 2009 exceeds 100%, the number of EBITDA Options available for vesting in 2010 will decrease by the same number, and in no event will the number of EBITDA Options that vest exceed the number of EBITDA Options subject to the original grant.
(f) Change of Control. Upon a Change of Control, EBITDA Options that are otherwise unvested (from prior or future periods), unless previously terminated in accordance with the terms of the Plan or this Award, shall vest only if, the value per Share in connection with the Change of Control is greater than or equal to the Liquidity Event Vesting Targets set forth on Schedule C. Upon an Initial Public Offering, unvested EBITDA Options will continue to be subject to vesting as set forth above.
(g) Definition of EBITDA. For purposes of calculating EBITDA of a business or entity for a particular period means the sum of:
(1) net income (or loss) of such business or entity for such period; plus
(2) all interest expense of such business or entity (net of interest income) for such period deducted in calculating such net income (loss), plus
(3) all income taxes of such business or entity for such period deducted in calculating such net income (loss), plus
(4) all depreciation expenses of such business or entity for such period deducted in calculating such net income (loss), plus
(5) all amortization expenses of such business or entity for such period deducted in calculating such net income (loss), plus
(6) all fees paid by the Company or any of its Subsidiaries pursuant to the Advisory Services and Monitoring Agreement (as such term is defined in the Stockholders Agreement) for such period deducted in calculating such net income (loss),
in each case determined in accordance with generally accepted accounting principles in the United States of America, consistently applied.
(h) Notice of Vesting. As soon as reasonably practicable following receipt by the Company of audited financial statements of the Company and its Subsidiaries for a Fiscal Year, the Board shall determine the EBITDA for such Fiscal Year and, promptly after such determination, the Company shall notify the Grantee of the amount of EBITDA for such Fiscal Year and the number of the Performance Vesting Shares that vest pursuant to this Schedule B (the date of such notice, the Vesting Date).
SCHEDULE C
LIQUIDITY EVENT VESTING TARGETS
The Liquidity Event Vesting Target (the Liquidity Event Vesting Target) is a value per Share equal to the Exercise Price multiplied by a Multiplier, which Multiplier shall be defined as set forth below:
(i)
Anniversary of Closing |
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Multiplier |
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3rd |
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2.5 |
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4th |
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3.0 |
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5th |
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3.5 |
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(ii) To the extent that a Change of Control occurs between anniversaries, the Multiplier and the Liquidity Event Vesting Target resulting therefrom will be determined by the following formula:
Multiplier = X + (Y/365 * 0.5);
where:
X = the Multiplier of the immediately preceding anniversary as set forth in the chart above; and
Y = the number of days since the prior anniversary;
it being understood, that if the applicable per share price threshold is not achieved in connection with such Change of Control, none of the grants subject to vesting upon achievement of the Liquidity Event Vesting Target will vest.
Exhibit 10.10
CHECKSMART FINANCIAL HOLDINGS CORP.
2006 MANAGEMENT EQUITY INCENTIVE PLAN
OPTION GRANT AWARD AGREEMENT
GRANT TO:
THIS AGREEMENT (the Agreement) is made as of December 31, 2008 (the Grant Date), between CheckSmart Financial Holdings Corp., a Delaware corporation (together with its successors, the Company), and , who is an employee of the Company or one of its Subsidiaries (the Grantee). Capitalized terms, unless defined in Section 10 or a prior section of this Agreement, shall have the same meanings as in the Plan (as defined below).
WHEREAS, in connection with the Grantees employment with the Company or one of its Subsidiaries, the Company desires to grant to the Grantee an option to purchase a certain number of shares of Class A Common Stock, par value $0.01, of the Company (Options) on the date hereof pursuant to the terms and conditions of this Agreement and the Companys 2006 Management Equity Incentive Plan, as amended (the Plan).
WHEREAS, the Board has determined that it would be to the advantage, and in the best interest, of the Company and its shareholders to grant the Options provided for herein to the Grantee as an incentive for increased efforts during his employment with the Company or one of its Subsidiaries.
NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. GRANT OF OPTIONS AWARD
(a) Grant. Subject to the terms and conditions of the Plan and this Agreement, the Company hereby grants to the Grantee the following:
(i) Options, which will be earned based on time (the Time Options); and
(ii) Options which will be earned based on achievement of certain targets upon the consummation of a Liquidity Event (the Performance Options);
(b) Plan. The foregoing awards are granted under the Plan, which is incorporated herein by this reference and made a part of this Agreement.
(c) No Rights as Stockholder. It shall be understood that none of the terms contained herein grant to the Grantee any rights as a stockholder, and such Grantee shall not have any such rights unless and until such Grantee receives Shares in connection with the exercise of Options.
SECTION 2. RIGHT TO EXERCISE; VESTING
(a) Vesting. Subject to the provisions of this Agreement, the following Options shall vest as follows:
(i) the Time Options shall vest in accordance with the provisions and terms of Schedule A; and
(ii) the Performance Options shall vest in accordance with the provisions and terms of Schedule B.
(b) Effect of Vesting. For each vested Option the Grantee may exercise such Option for one share of Class A Common Stock of the Company.
SECTION 3. EXERCISE PROCEDURES
(a) Notice of Exercise. The Grantee may exercise its Options prior to its expiration as set forth in Section 6 to the extent it they are vested by giving written notice to the Company in form and substance reasonably satisfactory to the Company (such notice, a Notice of Exercise) specifying the election to exercise such Options, the number of vested Options which are being exercised and the form of payment. The Notice of Exercise shall be signed by the Grantee. The Grantee shall deliver to the Company, at the time of giving the notice, payment in a form permissible under Section 4 for the full amount of the Exercise Price and, if such person is not then party to the Stockholders Agreement, such person shall be required to execute a Joinder Agreement.
(b) Issuance of Shares. After receiving a properly completed and executed Notice of Exercise and, payment for the full amount of the Exercise Price as required by Section 3(a) and, if applicable, an executed joinder agreement to the Stockholders Agreement, the Company shall cause to be issued a certificate or certificates for the Purchased Shares (as defined below), registered in the name of the Grantee (or in the names of such person and his spouse as community property or as joint tenants with right of survivorship), provided that as a condition to the issuance of Purchased Shares hereunder, the Grantee shall make, as of the time of issuance of such Purchased Shares, representations and warranties in a form satisfactory to the Company and substantially similar to those contained in Exhibit A. In connection with any exercise of this option, the Person exercising this option shall deliver to the Company a duly executed blank share power in the form attached hereto as Exhibit B. The date of the issuance of the Purchased Shares by the Company to the Grantee, the Exercise Date.
(c) Withholding Requirements. The Company may withhold any tax (or other governmental obligation) required to be withheld in connection with the exercise of the Option, and as a condition to the settlement of any or exercise of the Option. Such withholding may be made from any source (including any salary or other compensation payable to the Grantee), and the Grantee shall make arrangements satisfactory to the Company to enable it to satisfy all such withholding requirements as a condition to the exercise of the Option (including by remitting to the Company an amount in cash sufficient to satisfy the withholding obligation). For the avoidance of doubt, the Company will not withhold any amounts greater than the statutory minimum.
SECTION 4. PAYMENT OF EXERCISE PRICE
(a) Cash or Check. In connection with an exercise of the Option, all or part of the Exercise Price may be paid in cash or by check.
(b) Net Exercise. Notwithstanding anything in this Agreement to the contrary, in connection with an exercise of the Option, all or part of the Exercise Price may be paid by reducing the number of Shares being purchased pursuant to such exercise by the number of such Shares having an Fair Market Value equal to the Exercise Price.
(c) Other Methods of Payment for Shares. At the sole discretion of the Board, all or any part of the Exercise Price and any applicable withholding requirements may be paid by any other method permissible at the time under the terms of the Plan.
SECTION 5. SECURITIES LAW ISSUES, TRANSFER RESTRICTIONS
(a) Grantee Acknowledgements and Representations. The Grantee understands and agrees that: (x) the Options have not been registered under the Securities Act, (y) the Options are restricted securities under the Securities Act and (z) the Options may not be resold or transferred unless they are first registered under the Securities Act or unless an exemption from such registration is available. The Grantee hereby makes the representations and warranties set forth in Exhibit A hereto.
(b) No Registration Rights. The Company may, but shall not be obligated to, register or qualify the issuance of Purchased Shares to the Grantee, or the resale of any such Purchased Shares by the Grantee under the Securities Act or any other applicable law.
(c) Transfers. No Option shall be transferable to any Person for any reason. Any attempt to Transfer any Option shall be null and void and have no force or effect, and the Company shall not, and shall cause any transfer agent not to, give any effect in such entitys share records to such attempted Transfer. Any Purchased Shares shall be subject to the restrictions on Transfer as set forth in Article 3 of the Stockholders Agreement, except with respect to a Transfer by will or by the laws of descent and distribution. Unless otherwise permitted pursuant to the Stockholders Agreement, the Grantee shall not Transfer any Purchased Shares (x) except in compliance with the provisions of Article 3 of the Stockholders Agreement, and (y) unless the transferee shall have agreed in writing to be bound by the terms of this Agreement in a manner acceptable to the Board and otherwise acknowledging that such Purchased Shares are subject to the restrictions set forth in this Agreement. Any attempt to Transfer any Purchased Shares not in compliance with this Agreement shall be null and void and have no force or effect, and the Company shall not, and shall cause any transfer agent not to, give any effect in such entitys share records to such attempted Transfer. The Grantee acknowledges that the transfer restrictions contained in this Agreement are reasonable and in the best interests of the Company.
SECTION 6. TERM OF GRANT.
The Options granted in this Agreement shall expire 10 years from the Closing Date. In the event that the employment of the Grantee terminates, unless a Notice of Exercise has been given to the Company from the Grantee, all vested Options shall expire on the first anniversary after
termination of employment, except in the case of (i) termination of the Grantees employment with the Company or any of its Subsidiaries for Cause, or resignation by the Grantee without Good Reason, in which case the vested Options would terminate upon such termination or resignation, or (ii) death or Disability, in which case the vested Options would terminate on the first anniversary of the date of death or Disability. Any Options which are unvested at the date of termination of employment will expire on the date of termination, and shall be forfeited. Further, any part of an Option that is vested (but not exercised) as of the Termination Date, if the Termination Event was a termination by the Company or any of its Subsidiaries for Cause at any time or a resignation by the Grantee without Good Reason will be forfeited and there shall be no settlement with respect thereto.
SECTION 7. RIGHT OF REPURCHASE UPON TERMINATION OF EMPLOYMENT
(a) Repurchase Rights.
(i) Upon the termination of employment of the Grantee by the Company or any of its Subsidiaries for any reason (the reason for the termination of such employment, the Termination Event and the date of such termination, the Termination Date), subject to the provisions of this Section 7 and the prior approval of the Compensation Committee of the Board (or if there is no such Compensation Committee, the Board), the Company shall have the right (but not the obligation) to purchase, and if such right is exercised, the Grantee shall sell, and shall cause any Permitted Transferees of the Grantee to sell (and such Permitted Transferees shall sell), to the Company, all or any portion (as determined by the Company) of the Purchased Shares (if any) owned by the Grantee or his Permitted Transferees at a price per Settlement Share equal to an amount (the Termination Price) (as determined pursuant to Section 7(b) below); provided, that the parties acknowledge that any unvested Options held by the Grantee as of the Termination Date shall be cancelled pursuant to this Agreement.
(ii) With respect to the Purchased Shares, the Company shall notify the Grantee in writing, within the Call Period whether the Company will exercise its right to purchase the Purchased Shares (the date on which the Grantee is so notified, the Call Notice Date). The Company may assign its right to purchase all or any portion of the Purchased Shares under this Section 7 to the DCP Investor and the DCP Investor may exercise the rights of the Company under this Section 7 in the same manner in which the Company could exercise such rights.
(iii) The closing of the purchase by the Company or the DCP Investor of Purchased Shares pursuant to this Section 7 shall take place at the principal office of the Company, on the date chosen by either the Company or the DCP Investor, as applicable, which date shall, except as may be reasonably necessary to determine the Termination Price, in no event be more than 45 days after the Call Notice Date. At such closing, (i) the Company or the DCP Investor, as applicable, shall pay the Grantee and/or such Grantees Permitted Transferees, as applicable, against delivery of duly endorsed certificates described below
representing such Purchased Shares, the aggregate Termination Price by wire transfer of immediately available federal funds and (ii) the Grantee and/or such Grantees Permitted Transferees, as applicable, shall deliver to the Company a certificate or certificates representing the Purchased Shares to be purchased by the Company or the DCP Investor, as applicable, duly endorsed, or with share (or equivalent) powers duly endorsed, for transfer with signature guaranteed, free and clear of any lien or encumbrance, with any necessary share (or equivalent) transfer tax stamps affixed. The delivery of a certificate or certificates for the Purchased Shares by any Person selling such Purchased Shares pursuant to this Section 7(a)(iii) shall be deemed a representation and warranty by such Person that: (w) such Person has full right, title and interest in and to such Purchased Shares; (x) such Person has all necessary power and authority and has taken all necessary action to sell such Purchased Shares as contemplated; (y) such Purchased Shares are free and clear of any and all liens or encumbrances; and (z) there is no adverse claim with respect to such Purchased Shares.
(b) Termination Pricing. The Termination Price of any Settlement Share shall be determined as follows:
(i) If the Termination Event was a resignation by the Grantee with Good Reason or termination of the employment of the Grantee by the Company or any of its Subsidiaries without Cause, the Termination Price for such Settlement Share shall be the Fair Market Value on the FMV Calculation Date,
(ii) if the Termination Event was as a result of the death or Disability of the Grantee, the Termination Price for such Settlement Share shall be the Fair Market Value on the Termination Date, and
(iii) if the Termination Event was a termination of the employment of the Grantee by the Company or any of its Subsidiaries with Cause, or was a resignation by the Grantee without Good Reason, the Termination Price for such Settlement Share shall be the lower of (i) the Fair Market Value on the FMV Calculation Date or (ii) the Exercise Price per Share.
(c) Payment Terms. In the event that the Company, or the DCP Investor if applicable, exercises a Right of Repurchase pursuant to Section 7 of this Agreement, the Company, or the DCP Investor if applicable, shall pay the Termination Price in cash; provided, however, that if the Company has not assigned its right to purchase any or all of the Purchased Shares to the DCP Investor pursuant to Section 7(a)(ii), and is at the time of the Purchase Closing prohibited from purchasing all or any portion of such Purchased Shares (i) because restrictive covenants or other provisions contained in the documents evidencing such entitys or any of its Affiliates indebtedness for borrowed money do not permit or allow such entity to make such payments in cash in whole or in part; or (ii) pursuant to applicable law, then, the portion of the Termination Price not permitted to be made in cash may be paid by the execution and delivery by the Company of a promissory note or other deferred cash payment arrangement (if applicable, any promissory note to be subordinated to the indebtedness for borrowed money of such company or any of its Affiliates) bearing interest at the prime rate, as published in the Wall Street Journal,
Eastern edition, on the first Business Day immediately prior to the day on which such promissory note or other deferred cash payment is issued, with principal and accrued interest payable at such time as is required in the Boards determination to ensure that any payment pursuant to such promissory note or other deferred cash payment arrangement is not prohibited because of any of the matters described in clauses (i) or (ii) of this Section 7(c) above.
SECTION 8. ADJUSTMENT OF SHARES
In the event of a Recapitalization, the terms of this award (including, without limitation, the number and kind of Class A Common Shares subject to this award) shall be adjusted as set forth in Section 13(a) of the Plan.
SECTION 9. MISCELLANEOUS PROVISIONS
(a) No Retention Rights. Nothing in this Agreement or in the Plan shall confer upon the Grantee any right to continue in Service or interfere with or otherwise restrict in any way the rights of the Company or any Subsidiary employing the Grantee, which rights are hereby expressly reserved by the Company and any Subsidiary employing the Grantee, to terminate the Grantees Service at any time and for any reason, with or without Cause.
(b) Notices. All notices, requests and other communications under this Agreement shall be in writing and shall be delivered in person (by courier or otherwise), mailed by certified or registered mail, return receipt requested, or sent by facsimile transmission, as follows:
If to the Company, to:
CheckSmart Financial Holdings Corp.
7001 Post Road, Suite 200
Dublin, OH 43016
If to the Grantee, to the address that he most recently provided to the Company,
or, in each case, at such other address or fax number as such party may hereafter specify for the purpose of notices hereunder by written notice to the other party hereto. All notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt. Any notice, request or other written communication sent by facsimile transmission shall be confirmed by certified or registered mail, return receipt requested, posted within one Business Day, or by personal delivery, whether by courier or otherwise, made within two Business Days after the date of such facsimile transmissions; provided that such confirmation mailing or delivery shall not affect the date of receipt, which will be the date that the facsimile successfully transmitted the notice, request or other communication.
(c) Entire Agreement. This Agreement and the Plan, together with the Stockholders Agreement and the other agreements referred to herein and therein and any schedules, exhibits and other documents referred to herein or therein, constitute the entire agreement and
understanding among the parties hereto in respect of the subject matter hereof and thereof and supersede all prior and contemporaneous arrangements, agreements and understandings, both oral and written, whether in term sheets, presentations or otherwise, among the parties hereto, or between any of them, with respect to the subject matter hereof and thereof.
(d) Amendment; Waiver. No amendment or modification of any provision of this Agreement shall be effective unless signed in writing by or on behalf of the Company and the Grantee, except that the Company may amend or modify the Agreement without the Grantees consent in accordance with the provisions of the Plan or as otherwise set forth in this Agreement. The failure of the Company in any instance to exercise the Right of Repurchase shall not constitute a waiver of any other repurchase rights that may subsequently arise under the provisions of this Agreement or any other agreement between the Company and the Grantee. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition whether of like or different nature. Any amendment or modification of or to any provision of this Agreement, or any waiver of any provision of this Agreement, shall be effective only in the specific instance and for the specific purpose for which made or given.
(e) Assignment. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by the Grantee except pursuant to a Transfer in accordance with the provisions of this Agreement.
(f) Successors and Assigns; No Third Party Beneficiaries. This Agreement shall inure to the benefit of and be binding upon the Company and the Grantee and their respective heirs, successors, legal representatives and permitted assigns. Nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the Company and the Grantee, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.
(g) Governing Law, Venue. This Agreement and any matters or disputes related to, in connection with, or arising under this Agreement shall be governed by the laws of the State of Delaware, without regard to the conflicts of laws rules of such state. Any legal action or proceeding with respect this Agreement shall be brought in the federal or state court sitting in the State of Delaware, and, by execution and delivery of this Agreement, each party hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the exclusive jurisdiction of such courts. Each party irrevocably waives any objection which it may now or hereafter have to the laying of venue of the aforesaid actions or proceedings arising out of or in connection with this Agreement in the courts referred to in this paragraph and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.
(h) Waiver of Jury Trial. The Grantee hereby irrevocably waives all right of trial by jury in any legal action or proceeding (including counterclaims) relating to or arising out of or in connection with this Agreement or any of the transactions or relationships hereby contemplated or otherwise in connection with the enforcement of any rights or obligations hereunder.
(i) Interpretation. Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation apply:
Headings. The division of this Agreement into Sections and other subdivisions and the insertion of headings are for convenience of reference only and do not alter the meaning of, or affect the construction or interpretation of, this Agreement.
Section References. All references in this Agreement to any Section are to the corresponding Section of this Agreement.
Schedules/Exhibits. Any capitalized terms used in any Schedule or Exhibit to this Agreement but are not otherwise defined therein have the meanings set forth in this Agreement.
(j) Severability. If any provision of this Agreement is invalid, illegal, or incapable of being enforced by any law, all other provisions of this Agreement remain in full force and effect so long as the economic and legal substance of the transactions contemplated hereby are not affected in any manner materially adverse to any party. If any provision of this Agreement is held to be invalid, illegal, or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
(k) Counterparts. The parties may execute this Agreement in one or more counterparts, each of which constitutes an original copy of this Agreement and all of which, collectively constitute only one agreement. The signatures of all the parties need not appear on the same counterpart.
(l) Grantee Undertaking. The Grantee agrees to take whatever additional action and execute whatever additional documents the Company may deem necessary or advisable to carry out or effect one or more of the obligations or restrictions imposed on either the Grantee or upon the Options or any Purchased Shares pursuant to the provisions of this Agreement.
(m) Plan; Stockholders Agreement; Counsel. The Grantee acknowledges and understands that material definitions and provisions concerning the Options or any Purchased Shares and the Grantees rights and obligations with respect thereto are set forth in the Plan and the Stockholders Agreement. The Grantee has had the opportunity to retain counsel, and has read carefully, and understands, the provisions of such documents.
SECTION 10. DEFINITIONS
(a) Affiliate shall mean, with respect to any specified Person, (a) any other Person which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person (for the purposes of this definition, control (including, with correlative meanings, the terms controlling, controlled by and under common control with), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise);
provided, however, that neither the Company nor any of its Subsidiaries shall be deemed an Affiliate of any of the Stockholders (and vice versa), and (b) if such specified Person is an investment fund, any other investment fund the primary investment advisor to which is the primary investment advisor to such specified Person.
(b) Board means the Board of Directors of the Company, as constituted from time to time or, if a Committee has been appointed, such Committee.
(c) Business Day has the meaning ascribed to such term in the Stockholders Agreement.
(d) Call Period shall mean from the Termination Date until:
(i) if the Termination Event is a termination of the employment of the Grantee by the Company or any of its Subsidiaries without Cause, a resignation by the Grantee with Good Reason or a resignation by the Grantee without Good Reason after three years of Service, the later of (A) the date that is 60 days after such Termination Date and (B) the date that is 190 days after the Exercise Date,
(ii) if the Termination Event is a termination of the employment of the Grantee by the Company or any of its Subsidiaries as a result of the death or Disability of the Grantee, the date that is the later of (i) 60 days after the Termination Date or the date which is 60 days after the Exercise Date, or
(iii) if the Termination Event is a termination of the employment of the Grantee by the Company or any of its Subsidiaries for Cause, or a resignation by the Grantee without Good Reason within the first years of Service the date which is 60 days after the Exercise Date.
(e) Cause The Company shall have the right to terminate Grantees employment for Cause. Cause shall mean:
(i) Grantees failure or refusal to comply, on a timely basis, with any lawful direction or instruction of the Board;
(ii) Grantees gross negligence or willful misconduct in the performance of his duties as an employee of the Company;
(iii) Grantees commission of fraud, embezzlement, misappropriation of funds, breach of fiduciary duty or act of dishonesty against the Company;
(iv) conviction of Grantee of a felony or entry by Grantee of a plea of nolo contendre or a plea of guilty under an indictment to a felony; or
(v) the habitual drug addiction or intoxication of Grantee.
(f) Change of Control shall mean (a) any transaction or series of related transactions, whether or not the Company is a party thereto, in which, after giving effect to such transaction or transactions any person or group (as such terms are used in Section 13(d) of the Exchange
Act other than a group of which the DCP Investor is a member, acquires, directly or indirectly, in excess of 50% of the Voting Securities, or (b) a sale, lease or other disposition of all or substantially all of the assets of the Company and its Subsidiaries on a consolidated basis (including securities of the Companys directly or indirectly owned Subsidiaries) to a Person that is not an Affiliate of the Company.
(g) Class A Common Stock means the voting class A common stock of the Company, and any stock into which such Class A Common Stock may hereafter be converted, changed, reclassified or exchanged.
(h) Closing or Closing Date shall mean May 1, 2006.
(i) Committee means the compensation committee of the Board of Directors of the Company.
(j) DCP Investor means collectively, Diamond Castle Partners IV, L.P., Diamond Castle Partners IV-A, L.P. and Deal Leaders Fund, L.P or any of their Permitted Transferees.
(k) Disability Grantees employment may be terminated if, as a result of Grantees incapacity due to physical or mental illness, Grantee is unable to perform his duties for 180 consecutive days and, within 30 days after a notice of termination, which notice of termination may not be given until the expiration of such consecutive 180 day period, is given to Grantee, Grantee has not returned to work.
(l) Exercise Price means $36.00.
(m) Fair Market Value or FMV with respect to a share of stock of the Company, shall mean, in the event that such shares are listed on an established U.S. exchange or through the NASDAQ National Market or any established over-the-counter trading system, the average of the closing prices of such Group Equity Securities on such exchange if listed or, if not so listed, the average bid and asked price of such shares reported on the NASDAQ National Market or any established over-the-counter trading system on which prices for such shares are quoted, in each case, for a period of twenty trading days prior to such date of determination, or (ii) if such shares are not publicly traded, a good faith determination by the Board through a reasonable application of a reasonable valuation method. Such determination shall be conclusive and binding on all persons.
(n) FMV Calculation Date means:
(i) if the Termination Event is a termination by the Company or any of its Subsidiaries without Cause or a resignation by the Grantee with Good Reason:
(A) if the Exercise Date occurred 180 days or more before the Termination Date, the Termination Date, and
(ii) if the Termination Event is as a result of the death or Disability of the Grantee, then the Termination Date; and
(iii) if the Termination Event is a termination by the Company or any of its Subsidiaries with Cause, then the Termination Date.
(o) Good Reason Grantee may resign for Good Reason within 30 days after Grantee has actual knowledge of the occurrence, without the written consent of Grantee, of one of the following events:
(i) a reduction in Grantees base salary, or non-timely payment of base salary or earned annual bonus not cured by the Company within five business days;
(ii) a material diminution in Grantees duties or responsibilities not cured by the Company within 20 days after written notice to the Company; or
(iii) a requirement by the Company that Grantee be based in an office that is located more than 20 miles from Grantees principal place of employment.
(p) Initial Public Offering has the meaning ascribed to such term in the Stockholders Agreement.
(q) Joinder Agreement means an agreement substantially in the form of Exhibit A of the Stockholders Agreement, pursuant to which the Grantee shall become a party to the Stockholders Agreement and subject to all of the rights, restrictions and obligations contained therein.
(r) Liquidity Event shall mean (i) any transaction or series of related transactions resulting in or involving a Change of Control, or (ii) an Initial Public Offering.
(s) Permitted Transferee has the meaning ascribed to such term in the Stockholders Agreement.
(t) Person means an individual, corporation, limited liability company, partnership, association, trust or other entity or organization.
(u) Purchased Shares means any Shares issued pursuant to the exercise of any Option in accordance with the terms of this Agreement.
(v) Right of Repurchase means the Companys right of repurchase described in Section 7 of this Agreement.
(w) Securities Act means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(x) Service means service as an employee.
(y) Share(s) means a share(s) of Class A Common Stock of the Company.
(z) Stockholders Agreement means that certain Stockholders Agreement dated as of May 1, 2006 by and among the Company, the Grantee and the other parties thereto (as the same shall be amended, modified or supplemented from time to time).
(aa) Subsidiary means, with respect to the Company, any other Person in which the Company, directly or indirectly through one or more Affiliates or otherwise, beneficially owns at least 50% of either the ownership interest (determined by equity or economic interests) in, or the voting control of, such other Person.
(bb) Transfer has the meaning ascribed in such term in the Stockholders Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above.
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/s/ H. Eugene Lockhart |
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Name: H. Eugene Lockhart |
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Title: Chairman |
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[NAME] |
SIGNATURE PAGE TO OPTION AWARD
EXHIBIT A
Investment Representations and Warranties
The Grantee hereby represents and warrants to the Company that:
1. The Options and Purchased Shares received by her will be held by her for investment only for her own account, not as a nominee or agent, and not with a view to the sale or distribution of any part thereof in violation of applicable U.S. federal or state or foreign securities laws. The Grantee has no current intention of selling, granting participation in or otherwise distributing the Options or Purchased Shares in violation of applicable U.S. federal or state or foreign securities laws. The Grantee does not have any contract, undertaking, agreement or arrangement with any person or entity to sell, transfer or grant participation to such person or entity, or to any third person or entity, with respect to any of the Options or Purchased Shares, in each case, in violation of applicable U.S. federal or state or foreign securities laws.
2. The Grantee understands that the issuance of the Options and Purchased Shares has not been registered under the Securities Act or any applicable U.S. state or foreign securities laws, and that the Options and Purchased Shares are being issued in reliance on an exemption from registration, which exemption depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Grantees representations as expressed herein.
3. The Grantee has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of her owning the Options and Purchased Shares. The Grantee is a sophisticated investor, has relied upon independent investigations made by the Grantee and, to the extent believed by the Grantee to be appropriate, the Grantees representatives, including the Grantees own professional, tax and other advisors, and is making an independent decision to invest in the Options and Purchased Shares. The Grantee has been furnished with such documents, materials and information that the Grantee deems necessary or appropriate for evaluating an investment in the Company, and the Grantee has read carefully such documents, materials and information and understands and has evaluated the types of risks involved with holding the Options and Purchased Shares. The Grantee has not relied upon any representations or other information (whether oral or written) from the Company or its shareholders, directors, officers or affiliates, or from any other person or entity, in connection with her investment in the Options and Purchased Shares. The Grantee acknowledges that the Company has not given any assurances with respect to the tax consequences of the ownership and disposition of the Options and Purchased Shares.
4. The Grantee has had, prior to her being granted the Options and Purchased Shares, the opportunity to ask questions of, and receive answers from, the Company concerning the terms and conditions of the transactions contemplated by the Agreement and the Grantees holding of the Options and Purchased Shares and to obtain additional information necessary to verify the accuracy of any information furnished to her or to
which she had access. The Grantee confirms that she has satisfied herself with respect to any of the foregoing matters.
5. The Grantee understands that no U.S. federal or state or foreign agency has passed upon the Options or Purchased Shares or upon the Company, or upon the accuracy, validity or completeness of any documentation provided to the Grantee in connection with the transactions contemplated by the Agreement, nor has any such agency made any finding or determination as to holding the Options or Purchased Shares.
6. The Grantee understands that there are substantial restrictions on the transferability of the Options and Purchased Shares and that on the date of the Agreement and for an indefinite period thereafter there will be no public market for the Options or Purchased Shares and, accordingly, it may not be possible for the Grantee to liquidate her investment in case of emergency, if at all. In addition, the Grantee understands that the Agreement and Stockholders Agreement contain substantial restrictions on the transferability of the Options and Purchased Shares and provide that, in the event that the conditions relating to the transfer of any Options or Purchased Shares in such document has not been satisfied, the holder shall not transfer any such Options or Purchased Shares, and unless otherwise specified the Company will not recognize the transfer of any such Options or Purchased Shares on its books and records or issue any share certificates representing any such Options or Purchased Shares, and any purported transfer not in accordance with the terms of the Agreement or the Stockholders Agreement shall be void. As such, Grantee understands that: a restrictive legend or legends in a form to be set forth in the Agreement and the Stockholders Agreement will be placed on the certificates representing the Options and Purchased Shares; a notation will be made in the appropriate records of the Company indicating that each of the Options and Purchased Shares are subject to restrictions on transfer and, if the Company should at some time in the future engage the services of a securities transfer agent, appropriate stop-transfer instructions will be issued to such transfer agent with respect to the Options and Purchased Shares; and the Grantee will sell, transfer or otherwise dispose of the Options or Purchased Shares only in a manner consistent with its representations set forth herein and then only in accordance with the Agreement and the Stockholders Agreement.
7. The Grantee understands that (i) the neither the Options nor the Purchased Shares may not be sold, transferred or otherwise disposed of without registration under the Securities Act or an exemption therefrom, (ii) the Options and Purchased Shares have not been registered under the Securities Act; (iii) the Options and Purchased Shares must be held indefinitely and she must continue to bear the economic risk of holding the Options and Purchased Shares unless such Options and Purchased Shares are subsequently registered under the Securities Act or an exemption from such registration is available; (iv) the Grantee is prepared to bear the economic risk of holding the Options and Purchased Shares for an indefinite period of time; (v) it is not anticipated that there will be any public market for the Options or Purchased Shares; (vi) the Options and Purchased Shares are characterized as restricted securities under the U.S. federal securities laws; and (vii) the Options and Purchased Shares may not be sold, transferred or otherwise disposed of except in compliance with federal, state and local law.
8. The Grantee understands that an investment in the Options or Purchased Shares is not recommended for investors who have any need for a current return on this investment or who cannot bear the risk of losing their entire investment. In that regard, the Grantee understands that her holding the Options and Purchased Shares involves a high degree of risk of loss. The Grantee acknowledges that: (i) she has adequate means of providing for her current needs and possible personal contingencies and has no need for liquidity in this investment; (ii) her commitment to investments which are not readily marketable is not disproportionate to her net worth; and (iii) her holding the Options and Purchased Shares will not cause her overall financial commitments to become excessive.
9. The Grantee is an accredited investor, as such term is defined in Rule 501 of the Securities Act.
EXHIBIT B
Share Power
IRREVOCABLE STOCK POWERS
CHECKSMART FINANCIAL HOLDINGS CORP.
FOR VALUE RECEIVED, does hereby sell, assign and transfer unto Shares of Class A Common Stock of CheckSmart Financial Holdings Corp., par value $0.01, represented by Certificate No. herewith and does hereby irrevocably constitute and appoint attorney to transfer the said stock on the books of the within named corporation with full power of substitution in the premises.
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SCHEDULE A
VESTING OF TIME OPTIONS
Subject to the terms set forth in the Agreement and the Plan, the Time Options vest as follows:
(a) Vesting. 100% of the Time Options shall vest upon the consummation of a Liquidity Event.
(b) No Appraisal Rights. The Grantee shall not be entitled to any appraisal rights in connection with any such Liquidity Event.
SCHEDULE B
VESTING OF PERFORMANCE OPTIONS
Subject to the terms set forth in the Agreement and in the Plan, the Performance Options shall vest as follows:
(a) Vesting. The Performance Options shall vest only upon the consummation of a Liquidity Event which results the DCP Investors receiving Aggregate Net Proceeds equal or greater to the DCP Investment (each as defined below).
(b) No Appraisal Rights. The Grantee shall not be entitled to appraisal rights in connection with any such Liquidity Event.
For purposes of this Schedule B:
Aggregate Net Proceeds means
(i) all cash proceeds actually received by the DCP Investors with respect to the sale or other disposition of shares of its Common Stock to third parties, net of any unreimbursed Sales Costs (as defined below), plus
(ii) the Fair Market Value of any Marketable Securities actually received by the DCP Investors with respect to the sale or other disposition of shares of its Common Stock to third parties, as determined on the date of the consummation of such sale or other disposition, net of any unreimbursed Sales Costs, plus
(iii) all cash dividends or the fair market value of any property dividends (other than stock dividends) as determined by the Board in good faith actually received by the DCP Investors in respect of its Common Stock;
provided, however, that (a) Aggregate Net Proceeds shall not include any advisory, management, monitoring, transaction or other fees or any expense reimbursement received by the DCP Investors or any of their affiliates, and (b) any cash dividends received by the DCP Investors shall not be counted more than once in any calculation of Aggregate Net Proceeds.
DCH Investment means initially $82,906,798 (namely, the equity investment made by the DCP Investors to purchase Class A Common Stock of the Company at the Closing Date, in connection with the consummation of the transactions contemplated by the Merger Agreement), and shall be adjusted for any cash or other consideration contributed from the DCP Investor to the Company from and after the date hereof and prior to the Liquidity Event.
Marketable Securities means freely tradable equity securities of a company that are listed on an established U.S. securities exchange or through the NASDAQ National Market or any established over-the-counter trading system
Sales Costs means any costs or expenses (including legal or other advisor costs and expenses), fees (including investment banking fees), commissions or discounts payable directly by the DCP Investors or any of its affiliates in connection with, arising out of or relating to any sale or other disposition of its Common Stock (including in connection with the negotiation, preparation and execution of any transaction documentation with respect to such sale or other disposition).
Exhibit 10.11
CHECKSMART FINANCIAL HOLDINGS CORP.
2006 MANAGEMENT EQUITY INCENTIVE PLAN
OPTION GRANT AWARD AGREEMENT
GRANT TO: Bridgette Roman
THIS AGREEMENT (the Agreement) is made as of December 31, 2008 (the Grant Date), between CheckSmart Financial Holdings Corp., a Delaware corporation (together with its successors, the Company), and Bridgette Roman, who is an employee of the Company or one of its Subsidiaries (the Grantee). Capitalized terms, unless defined in Section 10 or a prior section of this Agreement, shall have the same meanings as in the Plan (as defined below).
WHEREAS, in connection with the Grantees employment with the Company or one of its Subsidiaries, the Company desires to grant to the Grantee an option to purchase a certain number of shares of Class A Common Stock, par value $0.01, of the Company (Options) on the date hereof pursuant to the terms and conditions of this Agreement and the Companys 2006 Management Equity Incentive Plan, as amended (the Plan).
WHEREAS, the Board has determined that it would be to the advantage, and in the best interest, of the Company and its shareholders to grant the Options provided for herein to the Grantee as an incentive for increased efforts during her employment with the Company or one of its Subsidiaries.
NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. GRANT OF OPTIONS AWARD
(a) Grant. Subject to the terms and conditions of the Plan and this Agreement, the Company hereby grants to the Grantee 2,000 Options, which will be earned based on time (the Time Options).
(b) Plan. The foregoing awards are granted under the Plan, which is incorporated herein by this reference and made a part of this Agreement.
(c) No Rights as Stockholder. It shall be understood that none of the terms contained herein grant to the Grantee any rights as a stockholder, and such Grantee shall not have any such rights unless and until such Grantee receives Shares in connection with the exercise of Options.
SECTION 2. RIGHT TO EXERCISE; VESTING
(a) Vesting. Subject to the provisions of this Agreement, the Time Options shall vest in accordance with the provisions and terms of Schedule A.
(b) Effect of Vesting. For each vested Option the Grantee may exercise such Option for one share of Class A Common Stock of the Company.
SECTION 3. EXERCISE PROCEDURES
(a) Notice of Exercise. The Grantee may exercise its Options prior to its expiration as set forth in Section 6 to the extent it they are vested by giving written notice to the Company in form and substance reasonably satisfactory to the Company (such notice, a Notice of Exercise) specifying the election to exercise such Options, the number of vested Options which are being exercised and the form of payment. The Notice of Exercise shall be signed by the Grantee. The Grantee shall deliver to the Company, at the time of giving the notice, payment in a form permissible under Section 4 for the full amount of the Exercise Price and, if such person is not then party to the Stockholders Agreement, such person shall be required to execute a Joinder Agreement.
(b) Issuance of Shares. After receiving a properly completed and executed Notice of Exercise and, payment for the full amount of the Exercise Price as required by Section 3(a) and, if applicable, an executed joinder agreement to the Stockholders Agreement, the Company shall cause to be issued a certificate or certificates for the Purchased Shares (as defined below), registered in the name of the Grantee (or in the names of such person and her spouse as community property or as joint tenants with right of survivorship), provided that as a condition to the issuance of Purchased Shares hereunder, the Grantee shall make, as of the time of issuance of such Purchased Shares, representations and warranties in a form satisfactory to the Company and substantially similar to those contained in Exhibit A. In connection with any exercise of this option, the Person exercising this option shall deliver to the Company a duly executed blank share power in the form attached hereto as Exhibit B. The date of the issuance of the Purchased Shares by the Company to the Grantee, the Exercise Date.
(c) Withholding Requirements. The Company may withhold any tax (or other governmental obligation) required to be withheld in connection with the exercise of the Option, and as a condition to the settlement of any or exercise of the Option. Such withholding may be made from any source (including any salary or other compensation payable to the Grantee), and the Grantee shall make arrangements satisfactory to the Company to enable it to satisfy all such withholding requirements as a condition to the exercise of the Option (including by remitting to the Company an amount in cash sufficient to satisfy the withholding obligation). For the avoidance of doubt, the Company will not withhold any amounts greater than the statutory minimum.
SECTION 4. PAYMENT OF EXERCISE PRICE
(a) Cash or Check. In connection with an exercise of the Option, all or part of the Exercise Price may be paid in cash or by check.
(b) Net Exercise. Notwithstanding anything in this Agreement to the contrary, in connection with an exercise of the Option, all or part of the Exercise Price may be paid by reducing the number of Shares being purchased pursuant to such exercise by the number of such Shares having an Fair Market Value equal to the Exercise Price.
(c) Other Methods of Payment for Shares. At the sole discretion of the Board, all or any part of the Exercise Price and any applicable withholding requirements may be paid by any other method permissible at the time under the terms of the Plan.
SECTION 5. SECURITIES LAW ISSUES, TRANSFER RESTRICTIONS
(a) Grantee Acknowledgements and Representations. The Grantee understands and agrees that: (x) the Options have not been registered under the Securities Act, (y) the Options are restricted securities under the Securities Act and (z) the Options may not be resold or transferred unless they are first registered under the Securities Act or unless an exemption from such registration is available. The Grantee hereby makes the representations and warranties set forth in Exhibit A hereto.
(b) No Registration Rights. The Company may, but shall not be obligated to, register or qualify the issuance of Purchased Shares to the Grantee, or the resale of any such Purchased Shares by the Grantee under the Securities Act or any other applicable law.
(c) Transfers. No Option shall be transferable to any Person for any reason. Any attempt to Transfer any Option shall be null and void and have no force or effect, and the Company shall not, and shall cause any transfer agent not to, give any effect in such entitys share records to such attempted Transfer. Any Purchased Shares shall be subject to the restrictions on Transfer as set forth in Article 3 of the Stockholders Agreement, except with respect to a Transfer by will or by the laws of descent and distribution. Unless otherwise permitted pursuant to the Stockholders Agreement, the Grantee shall not Transfer any Purchased Shares (x) except in compliance with the provisions of Article 3 of the Stockholders Agreement, and (y) unless the transferee shall have agreed in writing to be bound by the terms of this Agreement in a manner acceptable to the Board and otherwise acknowledging that such Purchased Shares are subject to the restrictions set forth in this Agreement. Any attempt to Transfer any Purchased Shares not in compliance with this Agreement shall be null and void and have no force or effect, and the Company shall not, and shall cause any transfer agent not to, give any effect in such entitys share records to such attempted Transfer. The Grantee acknowledges that the transfer restrictions contained in this Agreement are reasonable and in the best interests of the Company.
SECTION 6. TERM OF GRANT.
The Time Options granted pursuant to this Agreement shall terminate on the earlier of (1) ten years from the Grant Date or (2):
(i) if the Grantees Service terminates due to the Grantees resignation for any Good Reason or termination by the Company or any of its Subsidiaries without Cause, the date that is the 60th day after the Grantees Service terminated;
(ii) if the Grantees Service terminates due to the Grantees death or Disability, the date that is the first anniversary of the date that the Grantees Service terminated; and
(iii) if the Grantees Service terminates due to the Grantees resignation without Good Reason or a termination by the Company or any of its Subsidiaries for Cause, the date of such resignation or termination.
Any Options which are unvested at the date of termination of employment will expire on the date of termination, and shall be forfeited. Further, any part of an Option that is vested (but not exercised) as of the Termination Date, if the Termination Event was a termination by the Company or any of its Subsidiaries for Cause at any time or a resignation by the Grantee without Good Reason will be forfeited and there shall be no settlement with respect thereto.
SECTION 7. RIGHT OF REPURCHASE UPON TERMINATION OF EMPLOYMENT
(a) Repurchase Rights.
(i) Upon the termination of employment of the Grantee by the Company or any of its Subsidiaries for any reason (the reason for the termination of such employment, the Termination Event and the date of such termination, the Termination Date), subject to the provisions of this Section 7 and the prior approval of the Compensation Committee of the Board (or if there is no such Compensation Committee, the Board), the Company shall have the right (but not the obligation) to purchase, and if such right is exercised, the Grantee shall sell, and shall cause any Permitted Transferees of the Grantee to sell (and such Permitted Transferees shall sell), to the Company, all or any portion (as determined by the Company) of the Purchased Shares (if any) owned by the Grantee or her Permitted Transferees at a price per Settlement Share equal to an amount (the Termination Price) (as determined pursuant to Section 7(b) below); provided, that the parties acknowledge that any unvested Options held by the Grantee as of the Termination Date shall be cancelled pursuant to this Agreement.
(ii) With respect to the Purchased Shares, the Company shall notify the Grantee in writing, within the Call Period whether the Company will exercise its right to purchase the Purchased Shares (the date on which the Grantee is so notified, the Call Notice Date). The Company may assign its right to purchase all or any portion of the Purchased Shares under this Section 7 to the DCP Investor and the DCP Investor may exercise the rights of the Company under this Section 7 in the same manner in which the Company could exercise such rights.
(iii) The closing of the purchase by the Company or the DCP Investor of Purchased Shares pursuant to this Section 7 shall take place at the principal office of the Company, on the date chosen by either the Company or the DCP Investor, as applicable, which date shall, except as may be reasonably necessary to determine the Termination Price, in no event be more than 45 days after the Call Notice Date. At such closing, (i) the Company or the DCP Investor, as applicable, shall pay the Grantee and/or such Grantees Permitted Transferees, as applicable, against delivery of duly endorsed certificates described below representing such Purchased Shares, the aggregate Termination Price by wire transfer of immediately available federal funds and (ii) the Grantee and/or such Grantees Permitted Transferees, as applicable, shall deliver to the Company a certificate or certificates representing the Purchased Shares to be purchased by the Company or the DCP Investor, as applicable, duly endorsed, or with share (or
equivalent) powers duly endorsed, for transfer with signature guaranteed, free and clear of any lien or encumbrance, with any necessary share (or equivalent) transfer tax stamps affixed. The delivery of a certificate or certificates for the Purchased Shares by any Person selling such Purchased Shares pursuant to this Section 7(a)(iii) shall be deemed a representation and warranty by such Person that: (w) such Person has full right, title and interest in and to such Purchased Shares; (x) such Person has all necessary power and authority and has taken all necessary action to sell such Purchased Shares as contemplated; (y) such Purchased Shares are free and clear of any and all liens or encumbrances; and (z) there is no adverse claim with respect to such Purchased Shares.
(b) Termination Pricing. The Termination Price of any Settlement Share shall be determined as follows:
(i) If the Termination Event was a resignation by the Grantee with Good Reason or termination of the employment of the Grantee by the Company or any of its Subsidiaries without Cause, the Termination Price for such Settlement Share shall be the Fair Market Value on the FMV Calculation Date,
(ii) if the Termination Event was as a result of the death or Disability of the Grantee, the Termination Price for such Settlement Share shall be the Fair Market Value on the Termination Date, and
(iii) if the Termination Event was a termination of the employment of the Grantee by the Company or any of its Subsidiaries with Cause, or was a resignation by the Grantee without Good Reason, the Termination Price for such Settlement Share shall be the lower of (i) the Fair Market Value on the FMV Calculation Date or (ii) the Exercise Price per Share.
(c) Payment Terms. In the event that the Company, or the DCP Investor if applicable, exercises a Right of Repurchase pursuant to Section 7 of this Agreement, the Company, or the DCP Investor if applicable, shall pay the Termination Price in cash; provided, however, that if the Company has not assigned its right to purchase any or all of the Purchased Shares to the DCP Investor pursuant to Section 7(a)(ii), and is at the time of the Purchase Closing prohibited from purchasing all or any portion of such Purchased Shares (i) because restrictive covenants or other provisions contained in the documents evidencing such entitys or any of its Affiliates indebtedness for borrowed money do not permit or allow such entity to make such payments in cash in whole or in part; or (ii) pursuant to applicable law, then, the portion of the Termination Price not permitted to be made in cash may be paid by the execution and delivery by the Company of a promissory note or other deferred cash payment arrangement (if applicable, any promissory note to be subordinated to the indebtedness for borrowed money of such company or any of its Affiliates) bearing interest at the prime rate, as published in the Wall Street Journal, Eastern edition, on the first Business Day immediately prior to the day on which such promissory note or other deferred cash payment is issued, with principal and accrued interest payable at such time as is required in the Boards determination to ensure that any payment pursuant to such promissory note or other deferred cash payment arrangement is not prohibited because of any of the matters described in clauses (i) or (ii) of this Section 7(c) above.
SECTION 8. ADJUSTMENT OF SHARES
In the event of a Recapitalization, the terms of this award (including, without limitation, the number and kind of Class A Common Shares subject to this award) shall be adjusted as set forth in Section 13(a) of the Plan.
SECTION 9. MISCELLANEOUS PROVISIONS
(a) No Retention Rights. Nothing in this Agreement or in the Plan shall confer upon the Grantee any right to continue in Service or interfere with or otherwise restrict in any way the rights of the Company or any Subsidiary employing the Grantee, which rights are hereby expressly reserved by the Company and any Subsidiary employing the Grantee, to terminate the Grantees Service at any time and for any reason, with or without Cause.
(b) Notices. All notices, requests and other communications under this Agreement shall be in writing and shall be delivered in person (by courier or otherwise), mailed by certified or registered mail, return receipt requested, or sent by facsimile transmission, as follows:
If to the Company, to:
CheckSmart Financial Holdings Corp.
7001 Post Road, Suite 200
Dublin, OH 43016
If to the Grantee, to the address that the Grantee most recently provided to the Company,
or, in each case, at such other address or fax number as such party may hereafter specify for the purpose of notices hereunder by written notice to the other party hereto. All notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt. Any notice, request or other written communication sent by facsimile transmission shall be confirmed by certified or registered mail, return receipt requested, posted within one Business Day, or by personal delivery, whether by courier or otherwise, made within two Business Days after the date of such facsimile transmissions; provided that such confirmation mailing or delivery shall not affect the date of receipt, which will be the date that the facsimile successfully transmitted the notice, request or other communication.
(c) Entire Agreement. This Agreement and the Plan, together with the Stockholders Agreement and the other agreements referred to herein and therein and any schedules, exhibits and other documents referred to herein or therein, constitute the entire agreement and understanding among the parties hereto in respect of the subject matter hereof and thereof and supersede all prior and contemporaneous arrangements, agreements and understandings, both oral and written, whether in term sheets, presentations or otherwise, among the parties hereto, or between any of them, with respect to the subject matter hereof and thereof.
(d) Amendment; Waiver. No amendment or modification of any provision of this Agreement shall be effective unless signed in writing by or on behalf of the Company and the Grantee, except that the Company may amend or modify the Agreement without the Grantees consent in accordance with the provisions of the Plan or as otherwise set forth in this Agreement. The failure of the Company in any instance to exercise the Right of Repurchase shall not constitute a waiver of any other repurchase rights that may subsequently arise under the provisions of this Agreement or any other agreement between the Company and the Grantee. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition whether of like or different nature. Any amendment or modification of or to any provision of this Agreement, or any waiver of any provision of this Agreement, shall be effective only in the specific instance and for the specific purpose for which made or given.
(e) Assignment. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by the Grantee except pursuant to a Transfer in accordance with the provisions of this Agreement.
(f) Successors and Assigns; No Third Party Beneficiaries. This Agreement shall inure to the benefit of and be binding upon the Company and the Grantee and their respective heirs, successors, legal representatives and permitted assigns. Nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the Company and the Grantee, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.
(g) Governing Law, Venue. This Agreement and any matters or disputes related to, in connection with, or arising under this Agreement shall be governed by the laws of the State of Delaware, without regard to the conflicts of laws rules of such state. Any legal action or proceeding with respect this Agreement shall be brought in the federal or state court sitting in the State of Delaware, and, by execution and delivery of this Agreement, each party hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the exclusive jurisdiction of such courts. Each party irrevocably waives any objection which it may now or hereafter have to the laying of venue of the aforesaid actions or proceedings arising out of or in connection with this Agreement in the courts referred to in this paragraph and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.
(h) Waiver of Jury Trial. The Grantee hereby irrevocably waives all right of trial by jury in any legal action or proceeding (including counterclaims) relating to or arising out of or in connection with this Agreement or any of the transactions or relationships hereby contemplated or otherwise in connection with the enforcement of any rights or obligations hereunder.
(i) Interpretation. Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation apply:
Headings. The division of this Agreement into Sections and other subdivisions and the insertion of headings are for convenience of reference only and do not alter the meaning of, or affect the construction or interpretation of, this Agreement.
Section References. All references in this Agreement to any Section are to the corresponding Section of this Agreement.
Schedules/Exhibits. Any capitalized terms used in any Schedule or Exhibit to this Agreement but are not otherwise defined therein have the meanings set forth in this Agreement.
(j) Severability. If any provision of this Agreement is invalid, illegal, or incapable of being enforced by any law, all other provisions of this Agreement remain in full force and effect so long as the economic and legal substance of the transactions contemplated hereby are not affected in any manner materially adverse to any party. If any provision of this Agreement is held to be invalid, illegal, or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
(k) Counterparts. The parties may execute this Agreement in one or more counterparts, each of which constitutes an original copy of this Agreement and all of which, collectively constitute only one agreement. The signatures of all the parties need not appear on the same counterpart.
(l) Grantee Undertaking. The Grantee agrees to take whatever additional action and execute whatever additional documents the Company may deem necessary or advisable to carry out or effect one or more of the obligations or restrictions imposed on either the Grantee or upon the Options or any Purchased Shares pursuant to the provisions of this Agreement.
(m) Plan; Stockholders Agreement; Counsel. The Grantee acknowledges and understands that material definitions and provisions concerning the Options or any Purchased Shares and the Grantees rights and obligations with respect thereto are set forth in the Plan and the Stockholders Agreement. The Grantee has had the opportunity to retain counsel, and has read carefully, and understands, the provisions of such documents.
SECTION 10. DEFINITIONS
(a) Affiliate shall mean, with respect to any specified Person, (a) any other Person which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person (for the purposes of this definition, control (including, with correlative meanings, the terms controlling, controlled by and under common control with), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise); provided, however, that neither the Company nor any of its Subsidiaries shall be deemed an Affiliate of any of the Stockholders (and vice versa), and (b) if such specified Person is an
investment fund, any other investment fund the primary investment advisor to which is the primary investment advisor to such specified Person.
(b) Board means the Board of Directors of the Company, as constituted from time to time or, if a Committee has been appointed, such Committee.
(c) Business Day has the meaning ascribed to such term in the Stockholders Agreement.
(d) Call Period shall mean from the Termination Date until:
(i) if the Termination Event is a termination of the employment of the Grantee by the Company or any of its Subsidiaries without Cause, a resignation by the Grantee with Good Reason or a resignation by the Grantee without Good Reason after three years of Service, the later of (A) the date that is 60 days after such Termination Date and (B) the date that is 190 days after the Exercise Date,
(ii) if the Termination Event is a termination of the employment of the Grantee by the Company or any of its Subsidiaries as a result of the death or Disability of the Grantee, the date that is the later of (1) 60 days after the Termination Date or the date which is 60 days after the Exercise Date, or
(iii) if the Termination Event is a termination of the employment of the Grantee by the Company or any of its Subsidiaries for Cause, or a resignation by the Grantee without Good Reason within the first years of Service the date which is 60 days after the Exercise Date.
(e) Cause The Company shall have the right to terminate Grantees employment for Cause. Cause shall mean:
(i) Grantees failure or refusal to comply, on a timely basis, with any lawful direction or instruction of the Board;
(ii) Grantees gross negligence or willful misconduct in the performance of her duties as an employee of the Company;
(iii) Grantees commission of fraud, embezzlement, misappropriation of funds, breach of fiduciary duty or act of dishonesty against the Company;
(iv) conviction of Grantee of a felony or entry by Grantee of a plea of nolo contendre or a plea of guilty under an indictment to a felony; or
(v) the habitual drug addiction or intoxication of Grantee.
(f) Change of Control shall mean (a) any transaction or series of related transactions, whether or not the Company is a party thereto, in which, after giving effect to such transaction or transactions any person or group (as such terms are used in Section 13(d) of the Exchange Act other than a group of which the DCP Investor is a member, acquires, directly or indirectly, in excess of 50% of the Voting Securities, or (b) a sale, lease or other disposition of all or
substantially all of the assets of the Company and its Subsidiaries on a consolidated basis (including securities of the Companys directly or indirectly owned Subsidiaries) to a Person that is not an Affiliate of the Company.
(g) Class A Common Stock means the voting class A common stock of the Company, and any stock into which such Class A Common Stock may hereafter be converted, changed, reclassified or exchanged.
(h) Closing or Closing Date shall mean May 1, 2006.
(i) Committee means the compensation committee of the Board of Directors of the Company.
(j) DCP Investor means collectively, Diamond Castle Partners IV, L.P., Diamond Castle Partners IV-A, L.P. and Deal Leaders Fund, L.P or any of their Permitted Transferees.
(k) Disability Grantees employment may be terminated if, as a result of Grantees incapacity due to physical or mental illness, Grantee is unable to perform her duties for 180 consecutive days and, within 30 days after a notice of termination, which notice of termination may not be given until the expiration of such consecutive 180 day period, is given to Grantee, Grantee has not returned to work.
(l) Exercise Price means $36.00.
(m) Fair Market Value or FMV with respect to a share of stock of the Company, shall mean, in the event that such shares are listed on an established U.S. exchange or through the NASDAQ National Market or any established over-the-counter trading system, the average of the closing prices of such Group Equity Securities on such exchange if listed or, if not so listed, the average bid and asked price of such shares reported on the NASDAQ National Market or any established over-the-counter trading system on which prices for such shares are quoted, in each case, for a period of twenty trading days prior to such date of determination, or (ii) if such shares are not publicly traded, a good faith determination by the Board through a reasonable application of a reasonable valuation method. Such determination shall be conclusive and binding on all persons.
(n) FMV Calculation Date means:
(i) if the Termination Event is a termination by the Company or any of its Subsidiaries without Cause, a resignation by the Grantee with Good Reason:
(A) if the Exercise Date occurred 180 days or more before the Termination Date, the Termination Date, and
(B) if the Exercise Date occurred 179 days or less before the Termination Date or occurs after the Termination Date, then the Call Notice Date;
(ii) if the Termination Event is as a result of the death or Disability of the Grantee, then the Termination Date; and
(iii) if the Termination Event is a termination by the Company or any of its Subsidiaries with Cause, then the Termination Date.
(o) Good Reason Grantee may resign for Good Reason within 30 days after Grantee has actual knowledge of the occurrence, without the written consent of Grantee, of one of the following events:
(i) a reduction in Grantees base salary, or non-timely payment of base salary or earned annual bonus not cured by the Company within five business days;
(ii) a material diminution in Grantees duties or responsibilities not cured by the Company within 20 days after written notice to the Company; or
(iii) a requirement by the Company that Grantee be based in an office that is located more than 20 miles from Grantees principal place of employment.
(p) Initial Public Offering has the meaning ascribed to such term in the Stockholders Agreement.
(q) Joinder Agreement means an agreement substantially in the form of Exhibit A of the Stockholders Agreement, pursuant to which the Grantee shall become a party to the Stockholders Agreement and subject to all of the rights, restrictions and obligations contained therein.
(r) Liquidity Event shall mean (i) any transaction or series of related transactions resulting in or involving a Change of Control, or (ii) an Initial Public Offering.
(s) Permitted Transferee has the meaning ascribed to such term in the Stockholders Agreement.
(t) Person means an individual, corporation, limited liability company, partnership, association, trust or other entity or organization.
(u) Purchased Shares means any Shares issued pursuant to the exercise of any Option in accordance with the terms of this Agreement.
(v) Right of Repurchase means the Companys right of repurchase described in Section 7 of this Agreement.
(w) Securities Act means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(x) Service means service as an employee.
(y) Share(s) means a share(s) of Class A Common Stock of the Company.
(z) Stockholders Agreement means that certain Stockholders Agreement dated as of May 1, 2006 by and among the Company, the Grantee and the other parties thereto (as the same shall be amended, modified or supplemented from time to time).
(aa) Subsidiary means, with respect to the Company, any other Person in which the Company, directly or indirectly through one or more Affiliates or otherwise, beneficially owns at least 50% of either the ownership interest (determined by equity or economic interests) in, or the voting control of, such other Person.
(bb) Transfer has the meaning ascribed in such term in the Stockholders Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above.
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CHECKSMART FINANCIAL HOLDINGS CORP. | |
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By: |
/s/ H. Eugene Lockhart |
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Name: H. Eugene Lockhart |
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Title: Chairman |
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/s/ Bridgette Roman |
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Bridgette Roman |
SIGNATURE PAGE TO OPTION AWARD
EXHIBIT A
Investment Representations and Warranties
The Grantee hereby represents and warrants to the Company that:
1. The Options and Purchased Shares received by her will be held by her for investment only for her own account, not as a nominee or agent, and not with a view to the sale or distribution of any part thereof in violation of applicable U.S. federal or state or foreign securities laws. The Grantee has no current intention of selling, granting participation in or otherwise distributing the Options or Purchased Shares in violation of applicable U.S. federal or state or foreign securities laws. The Grantee does not have any contract, undertaking, agreement or arrangement with any person or entity to sell, transfer or grant participation to such person or entity, or to any third person or entity, with respect to any of the Options or Purchased Shares, in each case, in violation of applicable U.S. federal or state or foreign securities laws.
2. The Grantee understands that the issuance of the Options and Purchased Shares has not been registered under the Securities Act or any applicable U.S. state or foreign securities laws, and that the Options and Purchased Shares are being issued in reliance on an exemption from registration, which exemption depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Grantees representations as expressed herein.
3. The Grantee has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of her owning the Options and Purchased Shares. The Grantee is a sophisticated investor, has relied upon independent investigations made by the Grantee and, to the extent believed by the Grantee to be appropriate, the Grantees representatives, including the Grantees own professional, tax and other advisors, and is making an independent decision to invest in the Options and Purchased Shares. The Grantee has been furnished with such documents, materials and information that the Grantee deems necessary or appropriate for evaluating an investment in the Company, and the Grantee has read carefully such documents, materials and information and understands and has evaluated the types of risks involved with holding the Options and Purchased Shares. The Grantee has not relied upon any representations or other information (whether oral or written) from the Company or its shareholders, directors, officers or affiliates, or from any other person or entity, in connection with her investment in the Options and Purchased Shares. The Grantee acknowledges that the Company has not given any assurances with respect to the tax consequences of the ownership and disposition of the Options and Purchased Shares.
4. The Grantee has had, prior to her being granted the Options and Purchased Shares, the opportunity to ask questions of, and receive answers from, the Company concerning the terms and conditions of the transactions contemplated by the Agreement and the Grantees holding of the Options and Purchased Shares and to obtain additional information necessary to verify the accuracy of any information furnished to her or to
which she had access. The Grantee confirms that she has satisfied herself with respect to any of the foregoing matters.
5. The Grantee understands that no U.S. federal or state or foreign agency has passed upon the Options or Purchased Shares or upon the Company, or upon the accuracy, validity or completeness of any documentation provided to the Grantee in connection with the transactions contemplated by the Agreement, nor has any such agency made any finding or determination as to holding the Options or Purchased Shares.
6. The Grantee understands that there are substantial restrictions on the transferability of the Options and Purchased Shares and that on the date of the Agreement and for an indefinite period thereafter there will be no public market for the Options or Purchased Shares and, accordingly, it may not be possible for the Grantee to liquidate her investment in case of emergency, if at all. In addition, the Grantee understands that the Agreement and Stockholders Agreement contain substantial restrictions on the transferability of the Options and Purchased Shares and provide that, in the event that the conditions relating to the transfer of any Options or Purchased Shares in such document has not been satisfied, the holder shall not transfer any such Options or Purchased Shares, and unless otherwise specified the Company will not recognize the transfer of any such Options or Purchased Shares on its books and records or issue any share certificates representing any such Options or Purchased Shares, and any purported transfer not in accordance with the terms of the Agreement or the Stockholders Agreement shall be void. As such, Grantee understands that: a restrictive legend or legends in a form to be set forth in the Agreement and the Stockholders Agreement will be placed on the certificates representing the Options and Purchased Shares; a notation will be made in the appropriate records of the Company indicating that each of the Options and Purchased Shares are subject to restrictions on transfer and, if the Company should at some time in the future engage the services of a securities transfer agent, appropriate stop-transfer instructions will be issued to such transfer agent with respect to the Options and Purchased Shares; and the Grantee will sell, transfer or otherwise dispose of the Options or Purchased Shares only in a manner consistent with its representations set forth herein and then only in accordance with the Agreement and the Stockholders Agreement.
7. The Grantee understands that (i) the neither the Options nor the Purchased Shares may not be sold, transferred or otherwise disposed of without registration under the Securities Act or an exemption therefrom, (ii) the Options and Purchased Shares have not been registered under the Securities Act; (iii) the Options and Purchased Shares must be held indefinitely and she must continue to bear the economic risk of holding the Options and Purchased Shares unless such Options and Purchased Shares are subsequently registered under the Securities Act or an exemption from such registration is available; (iv) the Grantee is prepared to bear the economic risk of holding the Options and Purchased Shares for an indefinite period of time; (v) it is not anticipated that there will be any public market for the Options or Purchased Shares; (vi) the Options and Purchased Shares are characterized as restricted securities under the U.S. federal securities laws; and (vii) the Options and Purchased Shares may not be sold, transferred or otherwise disposed of except in compliance with federal, state and local law.
8. The Grantee understands that an investment in the Options or Purchased Shares is not recommended for investors who have any need for a current return on this investment or who cannot bear the risk of losing their entire investment. In that regard, the Grantee understands that her holding the Options and Purchased Shares involves a high degree of risk of loss. The Grantee acknowledges that: (i) she has adequate means of providing for her current needs and possible personal contingencies and has no need for liquidity in this investment; (ii) her commitment to investments which are not readily marketable is not disproportionate to her net worth; and (iii) her holding the Options and Purchased Shares will not cause her overall financial commitments to become excessive.
9. The Grantee is an accredited investor, as such term is defined in Rule 501 of the Securities Act.
EXHIBIT B
Share Power
IRREVOCABLE STOCK POWERS
CHECKSMART FINANCIAL HOLDINGS CORP.
FOR VALUE RECEIVED, Bridgette Roman does hereby sell, assign and transfer unto Shares of Class A Common Stock of CheckSmart Financial Holdings Corp., par value $0.01, represented by Certificate No. herewith and does hereby irrevocably constitute and appoint attorney to transfer the said stock on the books of the within named corporation with full power of substitution in the premises.
Dated: |
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Bridgette Roman |
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SCHEDULE A
VESTING OF TIME OPTIONS
Subject to the terms set forth in the Agreement and the Plan, the Time Options vest as follows:
(a) Vesting. 100% of the Time Options shall vest upon the consummation of a Liquidity Event.
(b) No Appraisal Rights. The Grantee shall not be entitled to any appraisal rights in connection with any such Liquidity Event.
Exhibit 10.12
CHECKSMART FINANCIAL HOLDINGS CORP.
2006 MANAGEMENT EQUITY INCENTIVE PLAN
STOCK APPRECIATION RIGHT AWARD AGREEMENT
GRANTS TO: Chad M. Streff
THIS AGREEMENT (this Agreement) is made effective as of December 31, 2008 (the Grant Date), between CheckSmart Financial Holdings Corp., a Delaware corporation (together with its successors, the Company), and Chad M. Streff, who is an employee of the Company or one of its Subsidiaries (the Grantee). Capitalized terms, unless defined in Section 9 or a prior section of this Agreement, shall have the same meanings as in the Plan (as defined below).
WHEREAS, in connection with the Grantees employment with the Company or one of its Subsidiaries, the Company desires to grant to the Grantee a certain number of stock appreciation rights with respect to the Class A Common Stock, par value $0.01, of the Company (SARs) on the date hereof pursuant to the terms and conditions of this Agreement and the Companys 2006 Management Equity Incentive Plan, as amended (the Plan).
WHEREAS, the Board has determined that it would be to the advantage, and in the best interest, of the Company and its shareholders to grant the SARs provided for herein to the Grantee as an incentive for increased efforts during his employment with the Company or one of its Subsidiaries.
NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. GRANT OF SAR AWARDS
(a) Grant. Subject to the terms and conditions of the Plan and this Agreement, the Company hereby grants to the Grantee the following:
(i) 10,750 SARs, which will be earned based on time (the Time SARs); and
(ii) 10,750 SARs which will be earned based on achievement of certain targets upon the consummation of a Liquidity Event (the Performance SARs).
(b) Plan. The foregoing awards are granted under the Plan, which is incorporated herein by this reference and made a part of this Agreement.
(c) No Rights as Stockholder. It shall be understood that none of the terms contained herein grant to the Grantee any rights as a stockholder, and such Grantee shall not have any such rights unless and until such Grantee receives Shares in settlement of an Award.
SECTION 2. VESTING OF SARS
(a) Vesting. Subject to the provisions of this Agreement, the following SARs shall vest as follows:
(i) the Time SARs shall vest in accordance with the provisions and terms of Schedule A; and
(ii) the Performance SARs shall vest in accordance with the provisions and terms of Schedule B.
(b) Effect of Vesting. For each vested SAR the Grantee is entitled to receive from the Company an amount equal to the excess of (x) the Fair Market Value (as defined below) of one Share on the date of the Notice of Exercise (as defined below) over (y) the Initial Base Value per Share. In the event that vested SARs are exercised by the Grantee subsequent to a Termination Event, the Grantee shall be entitled to receive from the Company an amount equal to the excess of (x) the Fair Market Value of one Share on the Termination Date over (y) the Initial Base Value per Share.
SECTION 3. EXERCISE PROCEDURES
(a) Notice of Exercise. The Grantee may request that any of his vested SARs be exercised prior to their termination as set forth in Section 5 by giving written notice to the Company in the form attached hereto as Exhibit A (such form, a Notice of Exercise), specifying the number of vested SARs which the Grantee requests to be exercised.
(b) Settlement of SARs. The Company at its election and in its sole discretion, may settle any SARs requested to be exercised pursuant to Section 3(a) in Shares (based on their value as of the Settlement Date (as defined below)) or cash, all in accordance with the terms and conditions of the Plan.
(c) Issuance of Shares. After receiving a properly completed and executed Notice of Exercise, if the Company elects to settle the SARs subject to such notice in Shares, the Company shall cause to be issued a certificate or certificates for the number of Shares the Grantee is entitled to receive pursuant to Section 2(b), registered in the name of the Grantee (or in the names of such person and his spouse as community property or as joint tenants with right of survivorship), with any legend required pursuant to the Stockholders Agreement or otherwise required under the securities laws, such Shares the Settlement Shares. In connection with any such settlement of vested SARs, the Person settling such SARs shall deliver to the Company a duly executed blank share power in the form attached hereto as Exhibit B and a fully executed Joinder Agreement. The date of the issuance of the Settlement Shares shall be the Settlement Date.
(d) Withholding Requirements. The Company may withhold any tax (or other governmental obligation) required to be withheld in connection with the settlement of any exercised vested SARs, and as a condition to the settlement of any such SARs. Such
withholding may be made from any source (including any consideration issued in settlement of the SARs and any salary or other compensation payable to the Grantee), and the Grantee shall make arrangements satisfactory to the Company to enable it to satisfy all such withholding requirements as a condition to the settlement of any SARs (including by remitting to the Company an amount in cash sufficient to satisfy the withholding obligation). For the avoidance of doubt, the Company will not withhold any amounts greater than the statutory minimum.
SECTION 4. SECURITIES LAW ISSUES, TRANSFER RESTRICTIONS
(a) Grantee Acknowledgements and Representations. The Grantee understands and agrees that: (x) the SARs have not been and any Settlement Shares will not be registered under the Securities Act, (y) the SARs are and any Settlement Shares will be restricted securities under the Securities Act and (z) neither the SARs nor any Settlement Shares may be resold or transferred unless they are first registered under the Securities Act or unless an exemption from such registration is available. The Grantee hereby makes to the Company the representations and warranties set forth in Exhibit C hereto with respect to the SARs and any Settlement Shares.
(b) No Registration Rights. Except as otherwise set forth in the Stockholders Agreement with respect to any Settlement Shares, the Company may, but shall not be obligated to, register or qualify the issuance of Settlement Shares to, or the resale of any such Settlement Shares by, the Grantee under the Securities Act or any other applicable law.
(c) Transfers. No SARs shall be transferable to any Person for any reason. Any attempt to Transfer any SARs shall be null and void and have no force or effect, and the Company shall not, and shall cause any transfer agent not to, give any effect in such entitys share records to such attempted Transfer. Any Settlement Shares shall be subject to the restrictions on Transfer as set forth in Article 3 of the Stockholders Agreement, except with respect to a Transfer by will or by the laws of descent and distribution. Unless otherwise permitted pursuant to the Stockholders Agreement, the Grantee shall not Transfer any Settlement Shares (x) except in compliance with the provisions of Article 3 of the Stockholders Agreement, and (y) unless the transferee shall have agreed in writing to be bound by the terms of this Agreement in a manner acceptable to the Board and otherwise acknowledging that such Settlement Shares are subject to the restrictions set forth in this Agreement. Any attempt to Transfer any Settlement Shares not in compliance with this Agreement shall be null and void and have no force or effect, and the Company shall not, and shall cause any transfer agent not to, give any effect in such entitys share records to such attempted Transfer. The Grantee acknowledges that the transfer restrictions contained in this Agreement are reasonable and in the best interests of the Company.
SECTION 5. TERM OF GRANT.
(a) The SARs granted in this Agreement shall expire 10 years from the date hereof. In the event that the employment of the Grantee terminates, unless a Notice of Exercise has been given to the Company from the Grantee, all vested SARs shall expire on the first anniversary after termination of employment, except in the case of (i) termination of the Grantees employment with the Company or any of its Subsidiaries for Cause, or resignation by the Grantee without Good Reason, in which case the SARs would terminate upon such termination or resignation, or (ii) death or Disability, in which case the SARs would terminate on the first anniversary of the
date of death or Disability. Any SARs which are unvested at the date of termination of employment will expire on the date of termination, and shall be forfeited. Further, any part of a SAR Award that is vested (but not exercised) as of the Termination Date, if the Termination Event was a termination by the Company or any of its Subsidiaries for Cause at any time or a resignation by the Grantee without Good Reason, will be forfeited and there shall be no settlement with respect thereto.
SECTION 6. RIGHT OF REPURCHASE UPON TERMINATION OF EMPLOYMENT
(a) Repurchase Rights.
(i) Upon the termination of employment of the Grantee by the Company or any of its Subsidiaries for any reason (the reason for the termination of such employment, the Termination Event and the date of such termination, the Termination Date), subject to the provisions of this Section 6 and the prior approval of the Compensation Committee of the Board (or if there is no such Compensation Committee, the Board), the Company shall have the right (but not the obligation) to purchase, and if such right is exercised, the Grantee shall sell, and shall cause any Permitted Transferees of the Grantee to sell (and such Permitted Transferees shall sell), to the Company, all or any portion (as determined by the Company) of the Settlement Shares (if any) owned by the Grantee or his Permitted Transferees at a price per Settlement Share equal to an amount (the Termination Price) (as determined pursuant to Section 6(b) below); provided, that the parties acknowledge that any unvested SARs held by the Grantee as of the Termination Date shall be cancelled pursuant to this Agreement.
(ii) With respect to the Settlement Shares, the Company shall notify the Grantee in writing, within the Call Period whether the Company will exercise its right to purchase the Settlement Shares (the date on which the Grantee is so notified, the Call Notice Date). The Company may assign its right to purchase all or any portion of the Settlement Shares under this Section 6 to the DCP Investor and the DCP Investor may exercise the rights of the Company under this Section 6 in the same manner in which the Company could exercise such rights.
(iii) The closing of the purchase by the Company or the DCP Investor of Settlement Shares pursuant to this Section 6 shall take place at the principal office of the Company, on the date chosen by either the Company or the DCP Investor, as applicable, which date shall, except as may be reasonably necessary to determine the Termination Price, in no event be more than 45 days after the Call Notice Date. At such closing, (i) the Company or the DCP Investor, as applicable, shall pay the Grantee and/or such Grantees Permitted Transferees, as applicable, against delivery of duly endorsed certificates described below representing such Settlement Shares, the aggregate Termination Price by wire transfer of immediately available federal funds and (ii) the Grantee and/or such Grantees Permitted Transferees, as applicable, shall deliver to the Company a certificate or certificates representing the Settlement Shares to be purchased by
the Company or the DCP Investor, as applicable, duly endorsed, or with share (or equivalent) powers duly endorsed, for transfer with signature guaranteed, free and clear of any lien or encumbrance, with any necessary share (or equivalent) transfer tax stamps affixed. The delivery of a certificate or certificates for the Settlement Shares by any Person selling such Settlement Shares pursuant to this Section 6(a)(iii) shall be deemed a representation and warranty by such Person that: (w) such Person has full right, title and interest in and to such Settlement Shares; (x) such Person has all necessary power and authority and has taken all necessary action to sell such Settlement Shares as contemplated; (y) such Settlement Shares are free and clear of any and all liens or encumbrances and (z) there is no adverse claim with respect to such Settlement Shares.
(b) Termination Pricing. The Termination Price of any Settlement Share shall be determined as follows:
(i) If the Termination Event was a resignation by the Grantee with Good Reason, or termination of the employment of the Grantee by the Company or any of its Subsidiaries without Cause, the Termination Price for such Settlement Share shall be the Fair Market Value on the FMV Calculation Date,
(ii) if the Termination Event was as a result of the death or Disability of the Grantee, the Termination Price for such Settlement Share shall be the Fair Market Value on the Termination Date, and
(iii) if the Termination Event was a termination of the employment of the Grantee by the Company or any of its Subsidiaries with Cause, or was a resignation by the Grantee without Good Reason, the Termination Price for such Settlement Share shall be the lower of (i) the Fair Market Value on the FMV Calculation Date or (ii) the Initial Base Value per Share.
(c) Payment Terms. In the event that the Company, or the DCP Investor if applicable, exercises a Right of Repurchase pursuant to Section 6 of this Agreement, the Company, or the DCP Investor if applicable, shall pay the Termination Price in cash; provided, however, that if the Company has not assigned its right to purchase any or all of the Settlement Shares to the DCP Investor pursuant to Section 6(a)(ii), and is at the time of the Purchase Closing prohibited from purchasing all or any portion of such Settlement Shares (i) because restrictive covenants or other provisions contained in the documents evidencing such entitys or any of its Affiliates indebtedness for borrowed money do not permit or allow such entity to make such payments in cash in whole or in part; or (ii) pursuant to applicable law, then, the portion of the Termination Price not permitted to be made in cash may be paid by the execution and delivery by the Company of a promissory note or other deferred cash payment arrangement (if applicable, any promissory note to be subordinated to the indebtedness for borrowed money of such company or any of its Affiliates) bearing interest at the prime rate, as published in the Wall Street Journal, Eastern edition, on the first Business Day immediately prior to the day on which such promissory note or other deferred cash payment is issued, with principal and accrued interest payable at such time as is required in the Boards determination to ensure that any payment pursuant to such
promissory note or other deferred cash payment arrangement is not prohibited because of any of the matters described in clauses (i) or (ii) of this Section 6(c) above.
SECTION 7. ADJUSTMENT OF SHARES
In the event of a recapitalization, the terms of this award (including, without limitation, the number and kind of Class A Common Shares subject to this award) shall be adjusted as set forth in Section 13(a) of the Plan.
SECTION 8. MISCELLANEOUS PROVISIONS
(a) No Retention Rights. Nothing in this Agreement or in the Plan shall confer upon the Grantee any right to continue in Service or interfere with or otherwise restrict in any way the rights of the Company or any Subsidiary employing the Grantee, which rights are hereby expressly reserved by the Company and any Subsidiary employing the Grantee, to terminate the Grantees Service at any time and for any reason, with or without Cause.
(b) Notices. All notices, requests and other communications under this Agreement shall be in writing and shall be delivered in person (by courier or otherwise), mailed by certified or registered mail, return receipt requested, or sent by facsimile transmission, as follows:
If to the Company, to:
CheckSmart Financial Holdings Corp.
7001 Post Road, Suite 200
Dublin, OH 43016
If to the Grantee, to the address that he most recently provided to the Company,
or, in each case, at such other address or fax number as such party may hereafter specify for the purpose of notices hereunder by written notice to the other party hereto. All notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt. Any notice, request or other written communication sent by facsimile transmission shall be confirmed by certified or registered mail, return receipt requested, posted within one Business Day, or by personal delivery, whether by courier or otherwise, made within two Business Days after the date of such facsimile transmissions; provided that such confirmation mailing or delivery shall not affect the date of receipt, which will be the date that the facsimile successfully transmitted the notice, request or other communication.
(c) Entire Agreement. This Agreement and the Plan, together with the Stockholders Agreement, and the other agreements referred to herein and therein and any schedules, exhibits and other documents referred to herein or therein, constitute the entire agreement and understanding among the parties hereto in respect of the subject matter hereof and thereof and supersede all prior and contemporaneous arrangements, agreements and understandings, both
oral and written, whether in term sheets, presentations or otherwise, among the parties hereto, or between any of them, with respect to the subject matter hereof and thereof.
(d) Amendment; Waiver. No amendment or modification of any provision of this Agreement shall be effective unless signed in writing by or on behalf of the Company and the Grantee, except that the Company may amend or modify the Agreement without the Grantees consent in accordance with the provisions of the Plan or as otherwise set forth in this Agreement. The failure of the Company in any instance to exercise the Right of Repurchase shall not constitute a waiver of any other repurchase rights that may subsequently arise under the provisions of this Agreement or any other agreement between the Company and the Grantee. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition whether of like or different nature. Any amendment or modification of or to any provision of this Agreement, or any waiver of any provision of this Agreement, shall be effective only in the specific instance and for the specific purpose for which made or given.
(e) Assignment. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by the Grantee except pursuant to a Transfer in accordance with the provisions of this Agreement.
(f) Successors and Assigns; No Third Party Beneficiaries. This Agreement shall inure to the benefit of and be binding upon the Company and the Grantee and their respective heirs, successors, legal representatives and permitted assigns. Nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the Company and the Grantee, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.
(g) Governing Law, Venue. This Agreement and any matters or disputes related to, in connection with, or arising under this Agreement shall be governed by the laws of the State of Delaware, without regard to the conflicts of laws rules of such state. Any legal action or proceeding with respect this Agreement shall be brought in the federal or state court sitting in the State of Delaware, and, by execution and delivery of this Agreement, each party hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the exclusive jurisdiction of such courts. Each party irrevocably waives any objection which it may now or hereafter have to the laying of venue of the aforesaid actions or proceedings arising out of or in connection with this Agreement in the courts referred to in this paragraph and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.
(h) Waiver of Jury Trial. The Grantee hereby irrevocably waives all right of trial by jury in any legal action or proceeding (including counterclaims) relating to or arising out of or in connection with this Agreement or any of the transactions or relationships hereby contemplated or otherwise in connection with the enforcement of any rights or obligations hereunder.
(i) Interpretation. Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation apply:
Headings. The division of this Agreement into Sections and other subdivisions and the insertion of headings are for convenience of reference only and do not alter the meaning of, or affect the construction or interpretation of, this Agreement.
Section References. All references in this Agreement to any Section are to the corresponding Section of this Agreement.
Schedules/Exhibits. Any capitalized terms used in any Schedule or Exhibit to this Agreement but are not otherwise defined therein have the meanings set forth in this Agreement.
(j) Severability. If any provision of this Agreement is invalid, illegal, or incapable of being enforced by any law, all other provisions of this Agreement remain in full force and effect so long as the economic and legal substance of the transactions contemplated hereby are not affected in any manner materially adverse to any party. If any provision of this Agreement is held to be invalid, illegal, or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
(k) Counterparts. The parties may execute this Agreement in one or more counterparts, each of which constitutes an original copy of this Agreement and all of which, collectively constitute only one agreement. The signatures of all the parties need not appear on the same counterpart.
(l) Grantee Undertaking. The Grantee agrees to take whatever additional action and execute whatever additional documents the Company may deem necessary or advisable to carry out or effect one or more of the obligations or restrictions imposed on either the Grantee or upon the SARs or any Settlement Shares pursuant to the provisions of this Agreement.
(m) Plan; Stockholders Agreement; Counsel. The Grantee acknowledges and understands that material definitions and provisions concerning the SARs or any Settlement Shares and the Grantees rights and obligations with respect thereto are set forth in the Plan and the Stockholders Agreement. The Grantee has had the opportunity to retain counsel, and has read carefully, and understands, the provisions of such documents.
SECTION 9. DEFINITIONS
(a) Affiliate shall mean, with respect to any specified Person, (a) any other Person which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person (for the purposes of this definition, control (including, with correlative meanings, the terms controlling, controlled by and under common control with), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise); provided, however, that neither the Company nor any of its Subsidiaries shall be deemed an Affiliate of any of the Stockholders (and vice versa), and (b) if such specified Person is an
investment fund, any other investment fund the primary investment advisor to which is the primary investment advisor to such specified Person.
(b) Board means the Board of Directors of the Company, as constituted from time to time or, if a Committee has been appointed, such Committee.
(c) Business Day has the meaning ascribed to such term in the Stockholders Agreement.
(d) Call Period shall mean from the Termination Date until:
(i) if the Termination Event is a termination of the employment of the Grantee by the Company or any of its Subsidiaries without Cause, a resignation by the Grantee with Good Reason or a resignation by the Grantee without Good Reason, the later of (A) the date that is 60 days after such Termination Date and (B) the date that is 190 days after the Settlement Date,
(ii) if the Termination Event is a termination of the employment of the Grantee by the Company or any of its Subsidiaries as a result of the death or Disability of the Grantee, the date that is the later of (i) 60 days after the Termination Date or the date which is 60 days after the Settlement Date, or
(iii) if the Termination Event is a termination of the employment of the Grantee by the Company or any of its Subsidiaries for Cause, or a resignation by the Grantee without Good Reason the date which is 60 days after the Settlement Date.
(e) Cause: The Company shall have the right to terminate Grantees employment for Cause. Cause shall mean:
(i) Grantees failure or refusal to comply, on a timely basis, with any lawful direction or instruction of the Board;
(ii) Grantees gross negligence or willful misconduct in the performance of his duties as an employee of the Company;
(iii) Grantees commission of fraud, embezzlement, misappropriation of funds, breach of fiduciary duty or act of dishonesty against the Company;
(iv) conviction of Grantee of a felony or entry by Grantee of a plea of nolo contendre or a plea of guilty under an indictment to a felony; or
(v) the habitual drug addiction or intoxication of Grantee.
(f) Change of Control shall mean (a) any transaction or series of related transactions, whether or not the Company is a party thereto, in which, after giving effect to such transaction or transactions any person or group (as such terms are used in Section 13(d) of the Exchange Act other than a group of which the DCP Investor is a member, acquires, directly or indirectly, in excess of 50% of the Voting Securities, or (b) a sale, lease or other disposition of all or
substantially all of the assets of the Company and its Subsidiaries on a consolidated basis (including securities of the Companys directly or indirectly owned Subsidiaries) to a Person that is not an Affiliate of the Company.
(g) Class A Common Stock means the voting class A common stock of the Company, and any stock into which such Class A Common Stock may hereafter be converted, changed, reclassified or exchanged.
(h) Closing or Closing Date shall mean May 1, 2006
(i) Committee means the compensation committee of the Board of Directors of the Company.
(j) DCP Investor means collectively, Diamond Castle Partners IV, L.P., Diamond Castle Partners IV-A, L.P. and Deal Leaders Fund, L.P or any of their Permitted Transferees.
(k) Disability: Grantees employment may be terminated, if, as a result of Grantees incapacity due to physical or mental illness, Grantee is unable to perform his duties for 180 consecutive days and, within 30 days after a notice of termination, which notice of termination may not be given until the expiration of such consecutive 180 day period, is given to Grantee, Grantee has not returned to work.
(l) Fair Market Value or FMV with respect to a share of stock of the Company, shall mean, in the event that such shares are listed on an established U.S. exchange or through the NASDAQ National Market or any established over-the-counter trading system, the average of the closing prices of such Group Equity Securities on such exchange if listed or, if not so listed, the average bid and asked price of such shares reported on the NASDAQ National Market or any established over-the-counter trading system on which prices for such shares are quoted, in each case, for a period of twenty trading days prior to such date of determination, or (ii) if such shares are not publicly traded, a good faith determination by the Board through a reasonable application of a reasonable valuation method. Such determination shall be conclusive and binding on all persons.
(m) FMV Calculation Date means:
(i) if the Termination Event is a termination by the Company or any of its Subsidiaries without Cause or a resignation by the Grantee with Good Reason:
(A) if the Settlement Date occurred 180 days or more before the Termination Date, the Termination Date, and
(B) if the Settlement Date occurred 179 days or less before the Termination Date or occurs after the Termination Date, then the Call Notice Date,
(ii) if the Termination Event is as a result of the death or Disability of the Grantee, then the Termination Date; and
(iii) if the Termination Event is a termination by the Company or any of its Subsidiaries with Cause, or a resignation by the Grantee without Good Reason, then the Termination Date.
(n) Good Reason: Grantee may resign for Good Reason within 30 days after Grantee has actual knowledge of the occurrence, without the written consent of Grantee, of one of the following events:
(i) a reduction in Grantees base salary, or non-timely payment of base salary or earned annual bonus not cured by the Company within five business days;
(ii) a material diminution in Grantees duties or responsibilities not cured by the Company within 20 days after written notice to the Company; or
(iii) a requirement by the Company that Grantee be based in an office that is located more than 20 miles from Grantees principal place of employment.
(o) Initial Base Value means $36.00.
(p) Initial Public Offering has the meaning ascribed to such term in the Stockholders Agreement.
(q) Joinder Agreement means an agreement substantially in the form of Exhibit A of the Stockholders Agreement, pursuant to which the Grantee shall become a party to the Stockholders Agreement and subject to all of the rights, restrictions and obligations contained therein.
(r) Liquidity Event shall mean (i) any transaction or series of related transactions resulting in or involving a Change of Control, or (ii) an Initial Public Offering.
(s) Permitted Transferee has the meaning ascribed to such term in the Stockholders Agreement.
(t) Person means an individual, corporation, limited liability company, partnership, association, trust or other entity or organization.
(u) Right of Repurchase means the Companys right of repurchase described in Section 5 of this Agreement.
(v) Securities Act means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(w) Service means service as an employee.
(x) Share(s) means a share(s) of Class A Common Stock of the Company.
(y) Stockholders Agreement means that certain Stockholders Agreement dated as of May 1, 2006 by and among the Company, the Grantee and the other parties thereto (as the same shall be amended, modified or supplemented from time to time).
(z) Subsidiary means, with respect to the Company, any other Person in which the Company, directly or indirectly through one or more Affiliates or otherwise, beneficially owns at least 50% of either the ownership interest (determined by equity or economic interests) in, or the voting control of, such other Person.
(aa) Transfer has the meaning ascribed in such term in the Stockholders Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above.
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/s/ H. Eugene Lockhart | |
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H. Eugene Lockhart |
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Chairman |
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/s/ Chad M. Streff | |
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Chad M. Streff |
EXHIBIT A
Notice of Exercise
(To be signed only upon an exercise of the vested SAR)
To CheckSmart Financial Holdings Corp.:
The undersigned, the Holder of the Stock Appreciation Right, dated as of , 200 , of CheckSmart Financial Holdings Corp. (the SAR), hereby irrevocably elects to exercise SARs for:
shares of Class A Common Stock of CheckSmart Financial Holdings Corp., at a value of $ per share; or
$ in cash.
The undersigned represents that (i) it is entitled to exercise the number of SARs indicated, and (ii) if he is exercising the SARs to be settled in shares of Class A Common Stock of CheckSmart Financial Holdings Corp. (Award Shares), he is acquiring such Award Shares for his own account for investment and not with a view to or for sale in connection with any distribution thereof (subject, however, to any requirement of law that the disposition thereof shall at all times be within its control).
DATED: , 20
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CHAD M. STREFF |
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EXHIBIT B
Share Power
IRREVOCABLE STOCK POWERS
CHECKSMART FINANCIAL HOLDINGS CORP.
FOR VALUE RECEIVED, Chad M. Streff does hereby sell, assign and transfer unto Shares of Class A Common Stock of CheckSmart Financial Holdings Corp., par value $0.01, represented by Certificate No. herewith and does hereby irrevocably constitute and appoint attorney to transfer the said stock on the books of the within named corporation with full power of substitution in the premises.
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EXHIBIT C
Investment Representations and Warranties
The Grantee hereby represents and warrants to the Company that:
1. The SARs and Settlement Shares (either or both, the Securities) received by him will be held by him for investment only for his own account, not as a nominee or agent, and not with a view to the sale or distribution of any part thereof in violation of applicable U.S. federal or state or foreign securities laws. The Grantee has no current intention of selling, granting participation in or otherwise distributing the Securities in violation of applicable U.S. federal or state or foreign securities laws. The Grantee does not have any contract, undertaking, agreement or arrangement with any person or entity to sell, transfer or grant participation to such person or entity, or to any third person or entity, with respect to any of the Securities, in each case, in violation of applicable U.S. federal or state or foreign securities laws.
2. The Grantee understands that the issuance of the Securities has not been registered under the Securities Act or any applicable U.S. federal, state or foreign securities laws, and that the Securities are being issued in reliance on an exemption from registration, which exemption depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Grantees representations as expressed herein.
3. The Grantee has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of his owning the Securities. The Grantee is a sophisticated investor, has relied upon independent investigations made by the Grantee and, to the extent believed by the Grantee to be appropriate, the Grantees representatives, including the Grantees own professional, tax and other advisors, and is making an independent decision to invest in the Securities. The Grantee has been furnished with such documents, materials and information that the Grantee deems necessary or appropriate for evaluating an investment in the Company, and the Grantee has read carefully such documents, materials and information and understands and has evaluated the types of risks involved with holding the Securities. The Grantee has not relied upon any representations or other information (whether oral or written) from the Company or its shareholders, directors, officers or affiliates, or from any other person or entity, in connection with his investment in the Securities. The Grantee acknowledges that the Company has not given any assurances with respect to the tax consequences of the ownership and disposition of the Securities.
4. The Grantee has had, prior to his being granted the Securities, the opportunity to ask questions of, and receive answers from, the Company concerning the terms and conditions of the transactions contemplated by the Agreement and the Grantees holding of the Securities and to obtain additional information necessary to verify the accuracy of any information furnished to his or to which he had access. The Grantee confirms that he has satisfied himself with respect to any of the foregoing matters.
5. The Grantee understands that no U.S. federal or state or foreign agency has passed upon the Securities or upon the Company, or upon the accuracy, validity or completeness of any documentation provided to the Grantee in connection with the transactions contemplated by the Agreement, nor has any such agency made any finding or determination as to holding the Securities.
6. The Grantee understands that there are substantial restrictions on the transferability of the Securities and that on the date of the Agreement and for an indefinite period thereafter there will be no public market for the Securities and, accordingly, it may not be possible for the Grantee to liquidate his investment in case of emergency, if at all. In addition, the Grantee understands that the Agreement and Stockholders Agreement contain substantial restrictions on the transferability of the Securities and provide that, in the event that the conditions relating to the transfer of any Securities in such document has not been satisfied, the holder shall not transfer any such Securities, and unless otherwise specified the Company will not recognize the transfer of any such Securities on its books and records or issue any share certificates representing any such Securities, and any purported transfer not in accordance with the terms of the Agreement or the Stockholders Agreement shall be void. As such, Grantee understands that: a restrictive legend or legends in a form to be set forth in the Agreement and the Stockholders Agreement will be placed on the certificates representing the Securities; a notation will be made in the appropriate records of the Company indicating that each of the Securities are subject to restrictions on transfer and, if the Company should at some time in the future engage the services of a securities transfer agent, appropriate stop-transfer instructions will be issued to such transfer agent with respect to the Securities; and the Grantee will sell, transfer or otherwise dispose of the Securities only in a manner consistent with its representations set forth herein and then only in accordance with the Agreement and the Stockholders Agreement.
7. The Grantee understands that (i) the Securities may not be sold, transferred or otherwise disposed of without registration under the Securities Act or an exemption therefrom, (ii) the Securities have not been registered under the Securities Act; (iii) the Securities must be held indefinitely and he must continue to bear the economic risk of holding the Securities unless such Securities are subsequently registered under the Securities Act or an exemption from such registration is available; (iv) the Grantee is prepared to bear the economic risk of holding the Securities for an indefinite period of time; (v) it is not anticipated that there will be any public market for the Securities; (vi) the Securities are characterized as restricted securities under the U.S. federal securities laws; and (vii) the Securities may not be sold, transferred or otherwise disposed of except in compliance with federal, state and local law.
8. The Grantee understands that an investment in the Securities is not recommended for investors who have any need for a current return on this investment or who cannot bear the risk of losing their entire investment. In that regard, the Grantee understands that his holding the Securities involves a high degree of risk of loss. The Grantee acknowledges that: (i) he has adequate means of providing for his current needs and possible personal contingencies and has no need for liquidity in this investment; (ii) his commitment to investments which are not readily marketable is not disproportionate to his net worth; and
(iii) his holding the Securities will not cause his overall financial commitments to become excessive.
9. The Grantee is an accredited investor, as such term is defined in Rule 501 of the Securities Act.
SCHEDULE A
VESTING OF TIME SARS
Subject to the terms set forth in the Agreement and the Plan, the Time SARs vest as follows:
(a) Vesting. 100% of the Time SARs shall vest upon the earlier of (i) December 31, 2009 or (ii) the consummation of a Liquidity Event.
(b) No Appraisal Rights. To the extent the Time SARs vest on the consummation of a Liquidity Event, the Grantee shall not be entitled to any appraisal rights in connection with any such Liquidity Event.
SCHEDULE B
VESTING OF PERFORMANCE SARS
Subject to the terms set forth in the Agreement and in the Plan, the Performance SARs shall vest as follows:
(a) Vesting. The Performance SARs shall vest only upon the consummation of a Liquidity Event which results the DCP Investors receiving Aggregate Net Proceeds equal or greater to the DCP Investment (each as defined below).
(b) No Appraisal Rights. The Grantee shall not be entitled to appraisal rights in connection with any such Liquidity Event.
For purposes of this Schedule B:
Aggregate Net Proceeds means
(i) all cash proceeds actually received by the DCP Investors with respect to the sale or other disposition of shares of its Common Stock to third parties, net of any unreimbursed Sales Costs (as defined below), plus
(ii) the Fair Market Value of any Marketable Securities actually received by the DCP Investors with respect to the sale or other disposition of shares of its Common Stock to third parties, as determined on the date of the consummation of such sale or other disposition, net of any unreimbursed Sales Costs, plus
(iii) all cash dividends or the fair market value of any property dividends (other than stock dividends) as determined by the Board in good faith actually received by the DCP Investors in respect of its Common Stock;
provided, however, that (a) Aggregate Net Proceeds shall not include any advisory, management, monitoring, transaction or other fees or any expense reimbursement received by the DCP Investors or any of their affiliates, and (b) any cash dividends received by the DCP Investors shall not be counted more than once in any calculation of Aggregate Net Proceeds.
DCH Investment means initially $82,906,798 (namely, the equity investment made by the DCP Investors to purchase Class A Common Stock of the Company at the Closing Date, in connection with the consummation of the transactions contemplated by the Merger Agreement), and shall be adjusted for any cash or other consideration contributed from the DCP Investor to the Company from and after the date hereof and prior to the Liquidity Event.
Marketable Securities means freely tradable equity securities of a company that are listed on an established U.S. securities exchange or through the NASDAQ National Market or any established over-the-counter trading system
Sales Costs means any costs or expenses (including legal or other advisor costs and expenses), fees (including investment banking fees), commissions or discounts payable directly by the DCP Investors or any of its affiliates in connection with, arising out of or relating to any sale or other disposition of its Common Stock (including in connection with the negotiation, preparation and execution of any transaction documentation with respect to such sale or other disposition).
Exhibit 10.13
Acknowledgement of Receipt of
2012 Executive Compensation, Benefit and
Severance Program
and Release of Claims for Severance
under 2011 Employment Agreement
This general release is required as a condition for receiving the compensation, benefits and severance described in the 2012 Executive Compensation, Benefit and Severance Program attached hereto. By executing this general release (General Release), you have advised us that you hold no claims for severance arising under any Employment Agreement (Severance Provision) between you and Community Choice Financial Inc. (the Company), any of its subsidiaries, direct or indirect, or any of their predecessors, successors or assigns, affiliates, shareholders or members and each of their respective officers, directors, agents and employees (collectively, the Releasees), and by execution of this General Release you agree to waive and release any such claims.
You understand and agree that this General Release will extend to all claims, demands, liabilities and causes of action of every kind, nature and description whatsoever, whether known, unknown or suspected to exist, which you ever had or may now have against the Releasees arising from the Severance Provision.
Based on executing this General Release, it is further understood and agreed that you covenant not to sue to challenge the enforceability of this General Release or the Severance Provision.
We also hereby advise you of your right to consult with legal counsel prior to executing a copy of this General Release.
Finally, this is to expressly acknowledge: You understand that you are not waiving any claims or rights that may arise after the date on which you execute this General Release.
I hereby state that I have carefully read this General Release and that I am signing this General Release knowingly and voluntarily with the full intent of releasing the Releasees from those claims set forth herein.
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2012 Executive Compensation, Benefit and Severance Program
1. Eligible Executives: This Program covers the Chief Executive Officer, President, Chief Compliance/Technical Officer, General Counsel and Chief Financial Officer (each an Executive) of Community Choice Financial Inc. (Company) provided that each has signed a waiver of and a release of all claims arising from or related to the severance provisions of any employment agreements entered into by any of them prior to December 31, 2011.
2. Duties: Each Executives duties shall be determined by the Chief Executive Officer and shall be in accordance with those duties that are normal, customary and consistent with the Executives title. Each Executive shall be permitted, to the extent such activities do not interfere with the performance by Executive of his/her duties and responsibilities hereunder, to (a) manage Executives personal, financial and legal affairs, (b) serve on charitable boards or committees, and (c) engage in community service, charitable activities and professional educational programs.
3. Base Salary: Each Executives annual base salary (Base Salary) shall be determined by the Compensation Committee of Community Choice Financial Inc.s Board of Directors (Committee) and reflected in the Committees minutes.
4. Bonus: Each Executive shall be eligible for bonus payments equal to the following percentage of his/her respective Base Salary, payable annually (Bonus), upon meeting the bonus requirements set forth below:
Chief Executive Officer: |
|
100 |
% |
President: |
|
61 |
% |
Chief Compliance/Technology Officer: |
|
60 |
% |
Chief Financial Officer: |
|
60 |
% |
General Counsel: |
|
55 |
% |
Bonus Requirements: Each Executive shall have established goals and objectives applicable to his/her areas of responsibility, which, in the case of the CEO, shall be documented by the Chairman of the Compensation Committee and in the case of all other Executives shall be documented by the CEO. Payment of the Executives Bonus shall be contingent on the Executive meeting these goals and objectives.
5. Business & Professional Expenses. Each Executive shall be reimbursed for all normal and customary business, professional, licensing and continuing education expenses upon the presentation of appropriate documentation of same.
6. Benefit Plans and Perquisites. Each Executive shall be entitled to participate in and be covered under all employee benefit plans or programs for which he/she is eligible and which he/she elects including, without limitation, 401(k), vacation and medical, dental and life insurance. In addition, Executive may receive such other and further perquisites as the Committee might approve in its discretion. Such approved perquisites include: participation under the Companys Aircraft Use Policy; payment of certain personal training expenses; allowance of an election to be paid out for, to defer payment into a health savings account and/or to roll over to subsequent years accrued and unused vacation time beyond what is permitted in the Companys employee handbook; an automobile allowance, and, in the case of the President, payment of certain life insurance premiums.
7. Termination. An Executives employment may be terminated upon the following events:
a. Death. Executives employment shall terminate upon his/her death.
b. Disability. If, as a result of Executives incapacity due to physical or mental illness, Executive is unable to perform his/her duties for 180 consecutive days and, within 30 days after a Notice of Termination (as defined below), which Notice of Termination may not be given until the
expiration of such consecutive 180 day period, is given to Executive, Executive has not returned to work (Disability).
c. Cause. The Company shall have the right to terminate Executives employment for Cause. Cause shall mean:
i. Executives material failure to meet the duties and responsibilities reasonably assigned to the Executive and Executives failure to cure such breach within 20 days following written notice from the Board or the CEO to Executive of such failure;
ii. Executives failure or refusal to comply, on a timely basis, with any lawful direction or instruction of the Board or the CEO;
iii. Executives gross negligence or willful misconduct in the performance of his/her duties as an employee of the Company;
iv. Executives commission of fraud, embezzlement, misappropriation of funds, breach of fiduciary duty or act of dishonesty against the Company;
v. Executives conviction of a felony or entry by Executive of a plea of nolo contendre or a plea of guilty under an indictment to a felony; or
vi. Executives habitual drug addiction or intoxication.
d. Without Cause. The Company shall have the right to terminate Executives employment without Cause by providing Executive with a Notice of Termination.
e. Good Reason. Any Executive may resign for Good Reason within 30 days after Executive has actual knowledge of the occurrence, without the written consent of Executive, of one of the following events:
i. a reduction in Executives Base Salary, or non-timely payment of Base Salary or Bonus or benefits or other breach by the Company of the provisions of this Program that is not cured by the Company within 20 days of Executives written notice to the Company of such breach; or
ii. a material diminution in Executives duties or responsibilities not cured by the Company within 20 days after written notice to the Company. For the purposes of this section, a material diminution in Executives duties or responsibilities shall not include a realignment or reorganization of executive responsibilities as the result of Company growth or contraction or the growth or contraction of the Companys management team, but shall include the removal or withdrawal of substantially all of the Executives duties or responsibilities.
8. Termination Procedure.
a. Notice of Termination. Any termination of Executives employment by the Company or resignation by Executive (other than termination by reason of death) shall be communicated by written Notice of Termination by one party to the other in writing at Executives home address on file with the Company or at Companys principal office, and addressed to the Committee or the CEO. Notice of Termination shall mean a notice which shall indicate the specific termination provision in this Policy relied upon.
b. Termination Date. Termination Date shall mean (i) if Executives employment is terminated by his/her death, the date of her death, (ii) if Executives employment is terminated for Disability, 30 days after Notice of Termination, and (iii) if Executives employment is terminated for any other reason, the date on which a Notice of Termination is given (subject to any cure periods) or any later date (within 30 days after the giving of such notice) set forth in such Notice of Termination.
9. Compensation on Termination. Upon the termination of Executives employment and subject to Executive executing a full release and a covenant not to sue for the benefit of the Company and all of its subsidiaries, officers, and directors, the Company shall provide Executive with the payments and benefits set forth below. Executive acknowledges and agrees that the payments set forth in this Policy constitute liquidated damages for termination of his/her employment.
a. Termination upon Executives Disability. If Executives employment is terminated by reason of Disability, then:
i. Company shall pay to Executive (A) any accrued, but unpaid, Base Salary and vacation pay through the Termination Date, payable in accordance with the usual payroll practices of the Company, (B) any portion of the Executives Bonus that is determined to have otherwise been earned with respect to the fiscal year in which the Termination Date occurs (the Termination Year), payable in accordance with the Companys usual bonus payment schedule, and (C) continued Base Salary and Continued Benefits (as defined below) until the earlier of (i) six months following the Termination Date or (ii) the date on which Executive becomes entitled to long-term disability benefits under the applicable plan or program of the Company, payable, in the case of Base Salary, in accordance with the usual payroll policies of the Company.
ii. Continued Benefits means reimbursement of any premiums for continued group medical, dental and vision coverage for the Executive and/or the Executives eligible dependents under Section 4980B of the Internal Revenue Code of 1986, as amended (COBRA), to the extent such amount exceeds the premium which Executive would have had to pay for coverage under such plan if he/she had remained an active employee. For the avoidance of doubt, any amounts reimbursed pursuant to this provision shall be treated as compensation.
b. Termination upon Executives Death. If Executives employment terminates due to Executives death, then:
i. The Company shall pay to Executives beneficiary, (A) any accrued, but unpaid Base Salary and Bonus through the Termination Date, payable within 10 days of the Termination Date, and (B) any accrued but unpaid vacation pay through the Termination Date, payable within 30 days of the Termination Date.
ii. The Company shall provide Executives spouse and dependents with Continued Benefits for 12 months.
c. Termination by the Company without Cause or Resignation by Executive for Good Reason. Subject to Executives execution, within 60 days of his or her termination of employment, and effectiveness of a general release of all claims (the Release) and the expiration of any applicable revocation period during such 60 day period without revocation of the Release and Executives execution, within 60 days of his or her termination of employment, of a Non-Competition Agreement effective for the period of time that Executive will receive the Severance Payments set forth herein in the event that Executive is terminated without Cause or resigns for Good Reason, the Company shall pay to Executive (A) any accrued, but unpaid, Base Salary and vacation pay through the Termination Date, payable as soon as practicable in accordance with the usual payroll practices of the Company, (B) any portion of the Executives Bonus that is determined to have otherwise been earned with respect to the Termination Year, payable in accordance with the Companys usual bonus payment schedule, (C) Base Salary and Continued Benefits, in accordance with the Companys usual payroll practices, as follows:
i. For the Chief Executive Officer: two times his annual Base Salary payable over a two year period;
ii. For the President: one and one-half times his annual Base Salary payable over a one and one-half year period; and
iii. For the Chief Compliance/Technology Officer, Chief Financial Officer and General Counsel: one times Base Salary payable over a one year period.
d. Termination by the Company without Cause or Resignation by the Executive for Good Reason Coupled with a Change in Control.
i. A Change in Control for the purposes of this Policy shall mean: (i) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, to any person or entity that Person other than its current shareholders, their affiliates and/or the Companys current management or (ii) the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), in a single transaction or in a related series of transactions, by way of merger, amalgamation, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), directly or indirectly, of 50% or more of the total voting stock of the Company or any parent of the Company, unless same is incident to an initial public offering of the Companys or any affiliates stock.
ii. Subject to Executives execution, within 60 days of his or her termination of employment, and effectiveness of the Release and the expiration of any applicable revocation period during such 60 day period without revocation of the Release and his/her execution, within 60 days of his or her termination of employment, of a Non-Competition Agreement effective for the period of time that Executive will receive the Enhanced Severance Payments set forth herein, in the event that Executive is terminated without Cause within 180-days before or two-years after a Change in Control or if Executive resigns for Good Reason within 180-days before or two-years after a Change in Control, the Company shall pay to Executive (A) any accrued, but unpaid, Base Salary and vacation pay through the Termination Date, payable as soon as practicable in accordance with the usual payroll practices of the Company, (B) a pro rata payment of the Executives Bonus for the Termination Year, payable in accordance with the Companys usual bonus payment schedule, (C) Base Salary and Continued Benefits, in accordance with the Companys usual payroll practices, as follows:
1. For the Chief Executive Officer: three times his annual Base Salary payable over a three year period;
2. For the President: three times his annual Base Salary payable over a three year period; and
3. For the Chief Compliance/Technology Officer, Chief Financial Officer and General Counsel: two times Base Salary payable over a two year period.
e. Release and Non-Competition Agreement and Payment Timing. The payments owed to an Executive under Section 9.c or 9.d will commence on the first payroll date following the date on which the Executive has executed an effective Release and Non-Compete Agreement and any revocation period has expired without Executive revoking the Release in accordance with Sections 9.c and 9.d; provided that if the 60-day period during which Executive must sign the Release and Non-Competition Agreement commences in one calendar year and ends in another, any payments owed to Executive pursuant to Section 9.c. or 9.d will commence in the second calendar year. If any payments are not made under Section 9.c or 9.d because the Release and Non-Compete Agreement have not been signed and any applicable revocation period has not expired or because of the delay required by the preceding sentence, the first
payment of the amounts owed under Section 9.c or 9.d will include all amounts that would have been paid by the payroll date for that first payment if the payments had begun effective immediately following the Termination Date.
f. Termination by the Company for Cause or upon Resignation without Good Reason by Executive. If Executives employment is terminated by the Company for Cause or Executive resigns without Good Reason then the Company shall pay Executive his/her accrued, but unpaid Base Salary and any accrued but unpaid vacation pay, through the Termination Date, payable in accordance with the usual payroll policies of the Company as soon as practicable following the Termination Date.
10. Indemnification. Executive shall be entitled to such indemnification under the terms of the Companys Articles and/or Code of Regulations and such other liability insurance as the Company may purchase for its directors and officers from time-to-time.
11. Compliance with Section 409A.
a. Any amounts payable under this Program and the Companys exercise of authority or discretion hereunder are intended to either comply with or be exempt from the provisions of Section 409A of the Internal Revenue Code (Section 409A) so as not to subject Executive to the payment of the additional tax, interest and any tax penalty which may be imposed under Section 409A. Each payment under this Program is intended to be a separate payment and not of a series of payments for purposes of Section 409A. Notwithstanding the anything to the contrary, no particular tax result for Executive with respect to any income recognized by Executive in connection with this Program is guaranteed.
b. Notwithstanding any provisions of this Program to the contrary, if an Executive is a specified employee (within the meaning of Section 409A and determined pursuant to policies adopted by the Company) at the time of Executives separation from service (within the meaning of Section 409A) and if any portion of the payments or benefits to be received by the Executive upon his or her separation from service would be considered deferred compensation under Section 409A, then, to the extent required to avoid accelerated taxation and/or tax penalties under Section 409A, amounts or benefits that would otherwise be payable or provided pursuant to this Program during the six-month period immediately following the Executives separation from service will instead be paid or made available on the earlier of (i) the first day of the seventh month following the date of the Executives separation from service and (ii) the Executives death.
c. To the extent any reimbursement or in-kind benefit provided under the Program is nonqualified deferred compensation within the meaning of Section 409A (i) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year; (ii) the reimbursement of an eligible expense must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred; and (iii) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.
d. A termination of employment (including a resignation) shall not be deemed to have occurred for purposes of any provision of this Program providing for the payment of any amounts or benefits subject to Section 409A upon or following a termination of employment unless such termination is also a separation from service (within the meaning of Section 409A).
Exhibit 10.14
Community Choice Financial Inc.
2011 MANAGEMENT EQUITY INCENTIVE PLAN
OPTION AWARD AGREEMENT
GRANT TO:
THIS AGREEMENT (the Agreement) is made as of , between Community Choice Financial Inc., an Ohio corporation (together with its successors, the Company), and , who is an employee of the Company or one of its Subsidiaries (the Grantee). Capitalized terms, unless defined in this Agreement, shall have the same meanings as in the Plan (as defined below).
WHEREAS, in connection with the Grantees employment with the Company or one of its Subsidiaries, the Company granted to the Grantee as of (the Grant Date) an option to purchase common shares, par value $0.01, of the Company (Options) pursuant to the terms and conditions of this Agreement and the Companys 2011 Management Equity Incentive Plan (the Plan).
WHEREAS, the Board or its duly authorized designee has determined that it would be to the advantage, and in the best interest, of the Company and its shareholders to grant the Options provided for herein to the Grantee as an incentive for increased efforts during employment with the Company or one of its Subsidiaries.
NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. GRANT OF OPTIONS AWARD
(a) Grant. Subject to the terms and conditions of the Plan and this Agreement, the Company has granted to the Grantee Options for shares, which will be earned based on the vesting provision of Section 2(a).
(b) Plan. The foregoing award was granted under the Plan, which is incorporated herein by this reference and made a part of this Agreement.
(c) No Rights as Stockholder. It shall be understood that none of the terms contained herein grant to the Grantee any rights as a stockholder, and such Grantee shall not have any such rights unless and until such Grantee receives Shares in connection with the exercise of Options.
SECTION 2. RIGHT TO EXERCISE; VESTING
(a) Vesting. Subject to the provisions of this Agreement, the Options granted hereunder shall vest[: (i)] ratably in annual increments on each of the first anniversaries of the Grant Date [or (ii) fully and completely upon the occurrence of a Change of Control coupled with a Termination Event without Cause or a resignation for Good Reason that occurs six months prior to or 24-months after the Change of Control].
(b) Effect of Vesting. For each vested Option the Grantee may exercise such Option for one share.
SECTION 3. EXERCISE PROCEDURES
(a) Notice of Exercise. The Grantee may exercise its Options prior to their expiration as set forth in Section 6 to the extent they are vested by giving written notice to the Company in form and substance reasonably satisfactory to the Company (such notice, a Notice of Exercise) specifying the election to exercise such Options, the number of vested Options which are being exercised and the
form of payment. The Notice of Exercise shall be signed by the Grantee. The Grantee shall deliver to the Company, at the time of giving the notice, payment in a form permissible under Section 4 for the full amount of the Exercise Price and, if such person is not then party to the Stockholders Agreement, such person shall be required to execute a Joinder Agreement.
(b) Issuance of Shares. After receiving a properly completed and executed Notice of Exercise and payment for the full amount of the Exercise Price as required by Section 3(a) and, if applicable, an executed Joinder Agreement, the Company shall cause to be issued a certificate or certificates for the Purchased Shares (as defined below), registered in the name of the Grantee (or in the names of such person and his spouse as community property or as joint tenants with right of survivorship), provided that as a condition to the issuance of Purchased Shares hereunder, the Grantee shall make, as of the time of issuance of such Purchased Shares, representations and warranties in a form satisfactory to the Company and substantially similar to those contained in Exhibit A. In connection with any exercise of these Options, the Person exercising these Options shall deliver to the Company a duly executed blank share power in the form attached hereto as Exhibit B. The date of the issuance of the Purchased Shares by the Company to the Grantee, the Exercise Date.
(c) Withholding Requirements. The Company may withhold any tax (or other governmental obligation) required to be withheld in connection with the exercise of the Options, and as a condition to the settlement of any exercise of the Options. Such withholding may be made from any source (including any salary or other compensation payable to the Grantee), and the Grantee shall make arrangements satisfactory to the Company to enable it to satisfy all such withholding requirements as a condition to the exercise of the Options (including by remitting to the Company an amount in cash sufficient to satisfy the withholding obligation). For the avoidance of doubt, the Company will not withhold any amounts greater than the statutory minimum.
SECTION 4. PAYMENT OF EXERCISE PRICE
(a) Cash or Check. In connection with an exercise of the Options, all or part of the Exercise Price may be paid in cash or by check.
(b) Net Exercise. Notwithstanding anything in this Agreement to the contrary, in connection with an exercise of the Options, all or part of the Exercise Price may be paid by reducing the number of Shares being purchased pursuant to such exercise by the number of such Shares having a Fair Market Value equal to the Exercise Price.
(c) Other Methods of Payment for Shares. At the sole discretion of the Board, and subject to applicable law, all or any part of the Exercise Price and any applicable withholding requirements may be paid by any other method permissible at the time under the terms of the Plan.
SECTION 5. SECURITIES LAW ISSUES, TRANSFER RESTRICTIONS
(a) Grantee Acknowledgements and Representations. The Grantee understands and agrees that: (i) the Options have not been registered under the Securities Act, (ii) the Options are restricted securities under the Securities Act and (iii) the Options may not be resold or transferred unless they are first registered under the Securities Act or unless an exemption from such registration is available. The Grantee hereby makes the representations and warranties set forth in Exhibit A hereto.
(b) No Registration Rights. The Company may, but shall not be obligated to, register or qualify the issuance of Purchased Shares to the Grantee, or the resale of any such Purchased Shares by the Grantee under the Securities Act or any other applicable law.
(c) Transfers. No Option shall be transferable to any Person for any reason. Any attempt to Transfer any Option shall be null and void and have no force or effect, and the Company shall not, and shall cause any transfer agent not to, give any effect in such entitys share records to such attempted
Transfer. Any Purchased Shares shall be subject to the restrictions on Transfer as set forth in Article 3 of the Stockholders Agreement, except with respect to a Transfer by will or by the laws of descent and distribution. Unless otherwise permitted pursuant to the Stockholders Agreement, the Grantee shall not Transfer any Purchased Shares (i) except in compliance with the provisions of Article 3 of the Stockholders Agreement, and (ii) unless the transferee shall have agreed in writing to be bound by the terms of this Agreement in a manner acceptable to the Board and otherwise acknowledging that such Purchased Shares are subject to the restrictions set forth in this Agreement. Any attempt to Transfer any Purchased Shares not in compliance with this Agreement shall be null and void and have no force or effect, and the Company shall not, and shall cause any transfer agent not to, give any effect in such entitys share records to such attempted Transfer. The Grantee acknowledges that the transfer restrictions contained in this Agreement are reasonable and in the best interests of the Company.
SECTION 6. TERM OF GRANT.
The Options subject to in this Agreement shall expire 10 years from the Grant Date. In the event that the employment of the Grantee terminates, unless a Notice of Exercise has been given to the Company from the Grantee, all vested Options shall expire on the 30th day after termination of employment, except in the case of death or Disability, in which case the vested Options would terminate on the first anniversary of the date of death or Disability. Any Options which are unvested at the date of termination of employment will expire on the date of termination, and shall be forfeited.
SECTION 7. RIGHT OF REPURCHASE UPON TERMINATION OF EMPLOYMENT
(a) Repurchase Rights.
(i) Upon the termination of employment of the Grantee by the Company or any of its Subsidiaries for any reason (the reason for the termination of such employment, the Termination Event and the date of such termination, the Termination Date), subject to the provisions of this Section 7 and the prior approval of the Compensation Committee of the Board (or if there is no such Compensation Committee, the Board), the Company shall have the right (but not the obligation) to purchase, and if such right is exercised, the Grantee shall sell, and shall cause any Permitted Transferees of the Grantee to sell (and such Permitted Transferees shall sell), to the Company, all or any portion (as determined by the Company) of the Purchased Shares (if any) owned by the Grantee or his Permitted Transferees at a price per Settlement Share equal to an amount (the Termination Price) (as determined pursuant to Section 7(b) below); provided, that the parties acknowledge that any unvested Options held by the Grantee as of the Termination Date shall be cancelled pursuant to this Agreement.
(ii) With respect to the Purchased Shares, the Company shall notify the Grantee in writing, within the Call Period whether the Company will exercise its right to purchase the Purchased Shares (the date on which the Grantee is so notified, the Call Notice Date).
(iii) The closing of the purchase by the Company of Purchased Shares pursuant to this Section 7 shall take place at the principal office of the Company, on the date chosen by the Company, which date shall, except as may be reasonably necessary to determine the Termination Price, in no event be more than 45 days after the Call Notice Date. At such closing, (A) the Company shall pay the Grantee and/or such Grantees Permitted Transferees, as applicable, against delivery of duly endorsed certificates described below representing such Purchased Shares, the aggregate Termination Price by wire transfer of immediately available federal funds and (B) the Grantee and/or such Grantees Permitted Transferees, as applicable, shall deliver to the Company a certificate or certificates representing the Purchased Shares to be purchased by the Company, duly endorsed, or with share (or equivalent) powers duly endorsed, for transfer with signature guaranteed, free and clear of any lien or encumbrance, with any necessary share (or equivalent)
transfer tax stamps affixed. The delivery of a certificate or certificates for the Purchased Shares by any Person selling such Purchased Shares pursuant to this Section 7(a)(iii) shall be deemed a representation and warranty by such Person that: (w) such Person has full right, title and interest in and to such Purchased Shares; (x) such Person has all necessary power and authority and has taken all necessary action to sell such Purchased Shares as contemplated; (y) such Purchased Shares are free and clear of any and all liens or encumbrances; and (z) there is no adverse claim with respect to such Purchased Shares.
(b) Termination Pricing. The Termination Price of any Settlement Share shall be determined as follows:
(i) If the Termination Event was a resignation by the Grantee with Good Reason, or resignation by the Grantee without Good Reason, or termination of the employment of the Grantee by the Company or any of its Subsidiaries without Cause, the Termination Price for such Settlement Share shall be the Fair Market Value on the FMV Calculation Date,
(ii) if the Termination Event was as a result of the death or Disability of the Grantee, the Termination Price for such Settlement Share shall be the Fair Market Value on the Termination Date, and
(iii) if the Termination Event was a termination of the employment of the Grantee by the Company or any of its Subsidiaries with Cause, or was a resignation by the Grantee without Good Reason [in the first three years of Service], the Termination Price for such Settlement Share shall be the lower of (A) the Fair Market Value on the FMV Calculation Date or (B) the Exercise Price per Share.
(c) Payment Terms. In the event that the Company exercises a Right of Repurchase pursuant to Section 7 of this Agreement, the Company shall pay the Termination Price in cash; provided, however, that if the Company is at the time of the Purchase Closing prohibited from purchasing all or any portion of such Purchased Shares (i) because restrictive covenants or other provisions contained in the documents evidencing such entitys or any of its Affiliates indebtedness for borrowed money do not permit or allow such entity to make such payments in cash in whole or in part; or (ii) pursuant to applicable law, then, the portion of the Termination Price not permitted to be made in cash may be paid by the execution and delivery by the Company of a promissory note or other deferred cash payment arrangement (if applicable, any promissory note to be subordinated to the indebtedness for borrowed money of such company or any of its Affiliates) bearing interest at the prime rate, as published in the Wall Street Journal, Eastern edition, on the first Business Day immediately prior to the day on which such promissory note or other deferred cash payment is issued, with principal and accrued interest payable at such time as is required in the Boards determination to ensure that any payment pursuant to such promissory note or other deferred cash payment arrangement is not prohibited because of any of the matters described in clauses (i) or (ii) of this Section 7(c) above.
SECTION 8. ADJUSTMENT OF SHARES
In the event of a Recapitalization, the terms of this Award (including, without limitation, the number and kind of Shares subject to this Award) shall be adjusted as set forth in Section 13 (a) of the Plan. In the event that the Company is a party to a merger or consolidation, this Award shall be subject to Section 13(b) of the Plan.
SECTION 9. MISCELLANEOUS PROVISIONS
(a) No Retention Rights. Nothing in this Agreement or in the Plan shall confer upon the Grantee any right to continue in Service or interfere with or otherwise restrict in any way the rights of the Company or any Subsidiary employing the Grantee, which rights are hereby expressly reserved by
the Company and any Subsidiary employing the Grantee, to terminate the Grantees Service at any time and for any reason, with or without Cause.
(b) Notices. All notices, requests and other communications under this Agreement shall be in writing and shall be delivered in person (by courier or otherwise), mailed by certified or registered mail, return receipt requested, or sent by facsimile transmission, as follows:
If to the Company, to:
Community Choice Financial Inc.
7001 Post Road, Suite 200
Dublin, OH 43016
Attention: Stock Option Administrator
If to the Grantee, to the address that he/she most recently provided to the Company,
or, in each case, at such other address or fax number as such party may hereafter specify for the purpose of notices hereunder by written notice to the other party hereto. All notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt. Any notice, request or other written communication sent by facsimile transmission shall be confirmed by certified or registered mail, return receipt requested, posted within one Business Day, or by personal delivery, whether by courier or otherwise, made within two Business Days after the date of such facsimile transmissions; provided that such confirmation mailing or delivery shall not affect the date of receipt, which will be the date that the facsimile successfully transmitted the notice, request or other communication.
(c) Entire Agreement. This Agreement and the Plan, together with the Stockholders Agreement and the other agreements referred to herein and therein and any schedules, exhibits and other documents referred to herein or therein, constitute the entire agreement and understanding among the parties hereto in respect of the subject matter hereof and thereof and supersede all prior and contemporaneous arrangements, agreements and understandings, both oral and written, whether in term sheets, presentations or otherwise, among the parties hereto, or between any of them, with respect to the subject matter hereof and thereof.
(d) Amendment; Waiver. No amendment or modification of any provision of this Agreement shall be effective unless signed in writing by or on behalf of the Company and the Grantee, except that the Company may amend or modify the Agreement without the Grantees consent in accordance with the provisions of the Plan or as otherwise set forth in this Agreement. The failure of the Company in any instance to exercise the Right of Repurchase shall not constitute a waiver of any other repurchase rights that may subsequently arise under the provisions of this Agreement or any other agreement between the Company and the Grantee. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition whether of like or different nature. Any amendment or modification of or to any provision of this Agreement, or any waiver of any provision of this Agreement, shall be effective only in the specific instance and for the specific purpose for which made or given.
(e) Assignment. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by the Grantee except pursuant to a Transfer in accordance with the provisions of this Agreement.
(f) Successors and Assigns; No Third Party Beneficiaries. This Agreement shall inure to the benefit of and be binding upon the Company and the Grantee and their respective heirs, successors, legal representatives and permitted assigns. Nothing in this Agreement, expressed or implied, is
intended to confer on any Person other than the Company and the Grantee, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.
(g) Governing Law, Venue. This Agreement and any matters or disputes related to, in connection with, or arising under this Agreement shall be governed by the laws of the State of , without regard to the conflicts of laws rules of such state. Any legal action or proceeding with respect this Agreement shall be brought in the federal or state court sitting in the State of , and, by execution and delivery of this Agreement, each party hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the exclusive jurisdiction of such courts. Each party irrevocably waives any objection which it may now or hereafter have to the laying of venue of the aforesaid actions or proceedings arising out of or in connection with this Agreement in the courts referred to in this paragraph and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.
(h) Waiver of Jury Trial. The Grantee hereby irrevocably waives all right of trial by jury in any legal action or proceeding (including counterclaims) relating to or arising out of or in connection with this Agreement or any of the transactions or relationships hereby contemplated or otherwise in connection with the enforcement of any rights or obligations hereunder.
(i) Interpretation. Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation apply:
Headings. The division of this Agreement into Sections and other subdivisions and the insertion of headings are for convenience of reference only and do not alter the meaning of, or affect the construction or interpretation of, this Agreement.
Section References. All references in this Agreement to any Section are to the corresponding Section of this Agreement.
Schedules/Exhibits. Any capitalized terms used in any Schedule or Exhibit to this Agreement but are not otherwise defined therein have the meanings set forth in this Agreement.
(j) Severability. If any provision of this Agreement is invalid, illegal, or incapable of being enforced by any law, all other provisions of this Agreement remain in full force and effect so long as the economic and legal substance of the transactions contemplated hereby are not affected in any manner materially adverse to any party. If any provision of this Agreement is held to be invalid, illegal, or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
(k) Counterparts. The parties may execute this Agreement in one or more counterparts, each of which constitutes an original copy of this Agreement and all of which, collectively constitute only one agreement. The signatures of all the parties need not appear on the same counterpart.
(l) Grantee Undertaking. The Grantee agrees to take whatever additional action and execute whatever additional documents the Company may deem necessary or advisable to carry out or effect one or more of the obligations or restrictions imposed on either the Grantee or upon the Options or any Purchased Shares pursuant to the provisions of this Agreement.
(m) Plan; Stockholders Agreement; Counsel. The Grantee acknowledges and understands that material definitions and provisions concerning the Options or any Purchased Shares and the Grantees rights and obligations with respect thereto are set forth in the Plan and the Stockholders Agreement.
The Grantee has had the opportunity to retain counsel, and has read carefully, and understands, the provisions of such documents.
SECTION 10. DEFINITIONS
(a) Affiliate shall mean, with respect to any specified Person, (i) any other Person which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person (for the purposes of this definition, control (including, with correlative meanings, the terms controlling, controlled by and under common control with), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise); provided, however, that neither the Company nor any of its Subsidiaries shall be deemed an Affiliate of any of the Stockholders (and vice versa), and (ii) if such specified Person is an investment fund, any other investment fund the primary investment advisor to which is the primary investment advisor to such specified Person.
(b) Board means the Board of Directors of the Company, as constituted from time to time or, if a Committee has been appointed, such Committee.
(c) Business Day has the meaning ascribed to such term in the Stockholders Agreement.
(d) Call Period shall mean from the Termination Date until:
(i) if the Termination Event is a termination of the employment of the Grantee by the Company or any of its Subsidiaries without Cause, a resignation by the Grantee with Good Reason or a resignation by the Grantee without Good Reason [after three years of Service], the later of (A) the date that is 60 days after such Termination Date and (B) the date that is 190 days after the Exercise Date,
(ii) if the Termination Event is a termination of the employment of the Grantee by the Company or any of its Subsidiaries as a result of the death or Disability of the Grantee, the date that is the later of (A) 60 days after the Termination Date or (B) the date which is 60 days after the Exercise Date, or
(iii) if the Termination Event is a termination of the employment of the Grantee by the Company or any of its Subsidiaries for Cause, or a resignation by the Grantee without Good Reason [within the first three years of Service] the date which is 60 days after the Exercise Date.
(e) Cause The Company shall have the right to terminate Grantees employment for Cause. Cause shall mean:
(i) Granteess failure or refusal to comply, on a timely basis, with any lawful direction or instruction of the Board;
(ii) Grantees gross negligence or willful misconduct in the performance of his/her duties as an employee of the Company;
(iii) Grantees commission of fraud, embezzlement, misappropriation of funds, breach of fiduciary duty or act of dishonesty against the Company;
(iv) Conviction of Grantee of a felony or entry by Grantee of a plea of nolo contendre or a plea of guilty under an indictment to a felony; or
(v) Grantees habitual drug addiction or intoxication.
(f) Change of Control means: (i) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, to any person or entity that Person other than its current shareholders, their affiliates and/or the
Companys current management or (ii) the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act of 1934 (Exchange Act), or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), in a single transaction or in a related series of transactions, by way of merger, amalgamation, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), directly or indirectly, of 50% or more of the total voting stock of the Company or any parent of the Company, unless same is incident to an initial public offering of the Companys or any Affiliates stock
(g) Code means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated thereunder.
(h) Committee means the compensation committee of the Board of Directors of the Company.
(i) Disability means Grantees incapacity due to physical or mental illness such that Grantee is unable to perform his/her duties for 180 consecutive days and, within 30 days after a notice of termination, which notice of termination may not be given until the expiration of such consecutive 180 day period, is given to Grantee, Grantee has not returned to work.
(j) Exercise Price means $ .
(k) Fair Market Value or FMV with respect to a share of stock of the Company, shall mean (i) in the event that such shares are listed on an established U.S. exchange or through the NASDAQ National Market or any established over-the-counter trading system, the average of the closing prices of such Group Equity Securities on such exchange if listed or, if not so listed, the average bid and asked price of such shares reported on the NASDAQ National Market or any established over-the-counter trading system on which prices for such shares are quoted, in each case, for a period of twenty trading days prior to such date of determination, or (ii) if such shares are not publicly traded, a good faith determination by the Board through a reasonable application of a reasonable valuation method. Such determination shall be conclusive and binding on all persons.
(l) FMV Calculation Date means:
(i) if the Termination Event is a termination by the Company or any of its Subsidiaries without Cause, a resignation by the Grantee with Good Reason or a resignation by the Grantee without Good Reason [after three years of Service]:
(A) if the Exercise Date occurred 180 days or more before the Termination Date, the Termination Date, and
(B) if the Exercise Date occurred 179 days or less before the Termination Date or occurs after the Termination Date, then the Call Notice Date;
(ii) if the Termination Event is as a result of the death or Disability of the Grantee, then the Termination Date; and
(iii) if the Termination Event is a termination by the Company or any of its Subsidiaries with Cause, or a resignation by the Grantee without Good Reason during the Grantees [first three years of Service], then the Termination Date.
(m) Good Reason Grantee may resign for Good Reason within 30 days after Grantee has actual knowledge of the occurrence, without the written consent of Grantee, of one of the following events:
(i) a reduction in Grantees base salary, or non-timely payment of base salary or earned annual bonus not cured by the Company within five business days; or
(ii) a material diminution in Grantees duties or responsibilities not cured by the Company within 20 days after written notice to the Company. For the purposes of this section, a material diminution in Grantees duties or responsibilities shall not include a realignment or reorganization of executive responsibilities as the result of Company growth or contraction or the growth or contraction of the Companys management team, but shall include the removal or withdrawal of substantially all of the Executives duties or responsibilities.
(n) Joinder Agreement means an agreement substantially in the form of Exhibit A of the Stockholders Agreement, pursuant to which the Grantee shall become a party to the Stockholders Agreement and subject to all of the rights, restrictions and obligations contained therein.
(o) Permitted Transferee has the meaning ascribed to such term in the Stockholders Agreement.
(p) Person means an individual, corporation, limited liability company, partnership, association, trust or other entity or organization.
(q) Purchased Shares means any Shares issued pursuant to the exercise of any Option in accordance with the terms of this Agreement.
(r) Right of Repurchase means the Companys right of repurchase described in Section 7 of this Agreement.
(s) Securities Act means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(t) Service means service as an employee.
(u) Share(s) means common share(s) of the Company.
(v) Stockholders Agreement means that certain Stockholders Agreement dated as of April 28, 2011, by and among the Company, the Grantee and the other parties thereto (as the same shall be amended, modified or supplemented from time to time).
(w) Subsidiary means, with respect to the Company, any other Person in which the Company, directly or indirectly through one or more Affiliates or otherwise, beneficially owns at least 50% of either the ownership interest (determined by equity or economic interests) in, or the voting control of, such other Person.
(x) Transfer has the meaning ascribed in such term in the Stockholders Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above.
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SIGNATURE PAGE TO OPTION AWARD AGREEMENT
EXHIBIT A
Investment Representations and Warranties
The Grantee hereby represents and warrants to the Company that:
1. The Options and Purchased Shares received by [him/her] will be held by [him/her] for investment only for [his/her] own account, not as a nominee or agent, and not with a view to the sale or distribution of any part thereof in violation of applicable U.S. federal or state or foreign securities laws. The Grantee has no current intention of selling, granting participation in or otherwise distributing the Options or Purchased Shares in violation of applicable U.S. federal or state or foreign securities laws. The Grantee does not have any contract, undertaking, agreement or arrangement with any person or entity to sell, transfer or grant participation to such person or entity, or to any third person or entity, with respect to any of the Options or Purchased Shares, in each case, in violation of applicable U.S. federal or state or foreign securities laws.
2. The Grantee understands that although the Company has a pending S-1 Registration Statement with the U.S. Securities and Exchange Commission that as of the date of this grant, the issuance of the Options and Purchased Shares have not been registered under the Securities Act or any applicable U.S. state or foreign securities laws, and that the Options and Purchased Shares are being issued in reliance on an exemption from registration, which exemption depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Grantees representations as expressed herein.
3. The Grantee has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of [his/her] owning the Options and Purchased Shares. The Grantee is a sophisticated investor, has relied upon independent investigations made by the Grantee and, to the extent believed by the Grantee to be appropriate, the Grantees representatives, including the Grantees own professional, tax and other advisors, and is making an independent decision to invest in the Options and Purchased Shares. The Grantee has been furnished with such documents, materials and information that the Grantee deems necessary or appropriate for evaluating an investment in the Company, and the Grantee has read carefully such documents, materials and information and understands and has evaluated the types of risks involved with holding the Options and Purchased Shares. The Grantee has not relied upon any representations or other information (whether oral or written) from the Company or its shareholders, directors, officers or affiliates, or from any other person or entity, in connection with his investment in the Options and Purchased Shares. The Grantee acknowledges that the Company has not given any assurances with respect to the tax consequences of the ownership and disposition of the Options and Purchased Shares.
4. The Grantee has had, prior to [his/her] being granted the Options and Purchased Shares, the opportunity to ask questions of, and receive answers from, the Company concerning the terms and conditions of the transactions contemplated by the Agreement and the Grantees holding of the Options and Purchased Shares and to obtain additional information necessary to verify the accuracy of any information furnished to [his/her] or to which [he/she] had access. The Grantee confirms that [he/she] has satisfied [himself/herself] with respect to any of the foregoing matters.
5. The Grantee understands that no U.S. federal or state or foreign agency has passed upon the Options or Purchased Shares or upon the Company, or upon the accuracy, validity or completeness of any documentation provided to the Grantee in connection with the transactions contemplated by the Agreement, nor has any such agency made any finding or determination as to holding the Options or Purchased Shares.
6. The Grantee understands that there are substantial restrictions on the transferability of the Options and Purchased Shares and that on the date of the Agreement and for an indefinite period thereafter there will be no public market for the Options or Purchased Shares and, accordingly, it may not be possible for the Grantee to liquidate [his/her] investment in case of emergency, if at all. In addition, the Grantee understands that the Agreement and Stockholders Agreement contain substantial restrictions on the transferability of the Options and Purchased Shares and provide that, in the event that the conditions relating to the transfer of any Options or Purchased Shares in such document has not been satisfied, the holder shall not transfer any such Options or Purchased Shares, and unless otherwise specified the Company will not recognize the transfer of any such Options or Purchased Shares on its books and records or issue any share certificates representing any such Options or Purchased Shares, and any purported transfer not in accordance with the terms of the Agreement or the Stockholders Agreement shall be void. As such, Grantee understands that: a restrictive legend or legends in a form to be set forth in the Agreement and the Stockholders Agreement will be placed on the certificates representing the Options and Purchased Shares; a notation will be made in the appropriate records of the Company indicating that each of the Options and Purchased Shares are subject to restrictions on transfer and, if the Company should at some time in the future engage the services of a securities transfer agent, appropriate stop-transfer instructions will be issued to such transfer agent with respect to the Options and Purchased Shares; and the Grantee will sell, transfer or otherwise dispose of the Options or Purchased Shares only in a manner consistent with its representations set forth herein and then only in accordance with the Agreement and the Stockholders Agreement.
7. The Grantee understands that (i) the neither the Options nor the Purchased Shares may be sold, transferred or otherwise disposed of without registration under the Securities Act or an exemption therefrom, (ii) the Options and Purchased Shares have not been registered under the Securities Act; (iii) the Options and Purchased Shares must be held indefinitely and [he/she] must continue to bear the economic risk of holding the Options and Purchased Shares unless such Options and Purchased Shares are subsequently registered under the Securities Act or an exemption from such registration is available; (iv) the Grantee is prepared to bear the economic risk of holding the Options and Purchased Shares for an indefinite period of time; (v) it is not anticipated that there will be any public market for the Options or Purchased Shares; (vi) the Options and Purchased Shares are characterized as restricted securities under the U.S. federal securities laws; and (vii) the Options and Purchased Shares may not be sold, transferred or otherwise disposed of except in compliance with federal, state and local law.
8. The Grantee understands that an investment in the Options or Purchased Shares is not recommended for investors who have any need for a current return on this investment or who cannot bear the risk of losing their entire investment. In that regard, the Grantee understands that [his/her] holding the Options and Purchased Shares involves a high degree of risk of loss. The Grantee acknowledges that: (i) [he/she] has adequate means of providing for [his/her] current needs and possible personal contingencies and has no need for liquidity in this investment; (ii) [his/her] commitment to investments which are not readily marketable is not disproportionate to [his/her] net worth; and (iii) [his/her] holding the Options and Purchased Shares will not cause [his/her] overall financial commitments to become excessive.
EXHIBIT B
Share Power
IRREVOCABLE STOCK POWERS
COMMUNITY CHOICE FINANCIAL INC.
FOR VALUE RECEIVED, does hereby sell, assign and transfer unto Common Shares of Community Choice Financial Inc., par value $0.01, represented by Certificate No. herewith and does hereby irrevocably constitute and appoint attorney to transfer the said stock on the books of the within named corporation with full power of substitution in the premises.
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Exhibit 10.15
Community Choice Financial Inc.
2011 MANAGEMENT EQUITY INCENTIVE PLAN
RESTRICTED STOCK UNIT AGREEMENT
GRANTS TO:
THIS AGREEMENT (this Agreement) is made effective as of , between Community Choice Financial Inc., an Ohio corporation (the Company), and , who is an employee of the Company or one of its Subsidiaries (the Grantee). Capitalized terms, unless defined in this Agreement, shall have the same meanings as in the Plan (as defined below).
WHEREAS, in connection with the Grantees employment with the Company or one of its Subsidiaries, the Company has granted to the Grantee as of (the Grant Date) Restricted Stock Units where each Restricted Stock Unit has a value equivalent to one Share pursuant to the terms and conditions of this Agreement and the Companys 2011 Management Equity Incentive Plan (the Plan).
WHEREAS, the Board has determined that it would be to the advantage, and in the best interest, of the Company and its shareholders to grant the Restricted Stock Units provided for herein to the Grantee as an incentive for increased efforts during the Grantees employment with the Company or one of its Subsidiaries.
NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. GRANT OF RSUs
(a) Grant. Subject to the terms and conditions of the Plan and this Agreement, the Company hereby grants to the Grantee Restricted Stock Units, where each Restricted Stock Unit has a value equivalent to one Share (the RSUs).
(b) Plan. The RSUs are granted under the Plan, which is incorporated herein by this reference and made a part of this Agreement.
(c) No Rights as Shareholder or Dividend Equivalents. It shall be understood that none of the terms contained herein grant to the Grantee any rights as a shareholder, and such Grantee shall not have any such rights unless and until such Grantee receives Shares pursuant to the RSUs. No dividend equivalents will accrue, be credited or be paid or payable with respect to the RSUs.
SECTION 2. PAYMENT OF RSUs
If the RSUs under this Agreement become nonforfeitable (Vest, Vesting, or Vested) in accordance with Section 3, the Grantee will be entitled to payment of the Vested RSUs at the time specified in Section 4.
SECTION 3. VESTING OF RSUs
(a) Normal Vesting. The RSUs granted to the Grantee pursuant to this Agreement shall Vest ratably in annual one-third (1/3) increments on each of the first three anniversaries of the Grant Date.
(b) Forfeiture upon Cessation of Employment. In the event the Grantee ceases to be employed by the Company or any of its Subsidiaries prior to Vesting, the Grantee shall forfeit to the Company, without compensation or any other consideration, all RSUs that are granted pursuant to this Agreement.
SECTION 4. TIME AND FORM OF SETTLEMENT OF VESTED RSUs
(a) General. Payment for the RSUs that have become Vested in accordance with Section 3(a) shall be made in Shares and shall be paid between January 1, and March 15, of the year following that in which they Vest.
SECTION 5. CONDITIONS TO ISSUANCE OF SHARES.
(a) Issuance of Shares. As a condition to the payment of the RSUs, the Grantee shall, prior to the payment date of the RSUs pursuant to Section 4, deliver to the Company an executed Joinder Agreement to the Shareholders Agreement. The Shares issued to Grantee in accordance with this Agreement (the Award Shares) will be registered in the name of the Grantee (or in the names of such person and his spouse as community property or as joint tenants with right of survivorship), with any legend required pursuant to the Shareholders Agreement or otherwise required under the securities laws; provided that the Grantee, as a condition to the issuance of Award Shares hereunder, makes, as of the time of issuance of such Award Shares, representations and warranties in a form satisfactory to the Company and substantially similar to those contained in Exhibit A.
(b) Withholding Requirements. If the Company or any Subsidiary shall be required to withhold any federal, state, local or foreign tax in connection with any vesting or payment of the RSUs, pursuant to this Agreement, the Grantee (or the Grantees representative) will pay to the Company (or Subsidiary if applicable), or make arrangements satisfactory to the Board regarding payment of, any federal, state, local or foreign taxes of any kind required by law to be paid and/or withheld with respect to such RSUs.
SECTION 6. SECURITIES LAW ISSUES; TRANSFER RESTRICTIONS
(a) Grantee Acknowledgements and Representations. The Grantee understands and agrees that: (i) the RSUs and any Award Shares will not be registered under the Securities Act, (ii) the RSUs and any Award Shares will be restricted securities under the Securities Act and (iii) neither the RSUs nor any Award Shares may be resold or transferred unless they are first registered under the Securities Act or unless an exemption from such registration is available. The Grantee hereby makes to the Company the representations and warranties set forth in Exhibit A hereto with respect to the RSUs and any Award Shares.
(b) No Registration Rights. Except as otherwise set forth in the Shareholders Agreement with respect to any Award Shares, the Company may, but shall not be obligated to, register or qualify the issuance of such Shares to, or the resale of any such Shares by, the Grantee under the Securities Act or any other applicable law.
(c) Transfers.
(i) RSUs Not Transferable. The RSUs shall not be transferable to any Person for any reason. Any attempt to transfer the RSUs shall be null and void and have no force or effect, and the Company shall not, and shall cause any transfer agent not to, give any effect in such entitys share records to such attempted transfer.
(ii) Award Shares Subject to Shareholders Agreement. The Award Shares shall be subject to the restrictions on transfer as set forth in Article 3 of the Shareholders Agreement, except with respect to a transfer by will or by the laws of descent and distribution. Unless otherwise permitted
pursuant to the Shareholders Agreement, the Grantee shall not transfer any Award Shares (A) except in compliance with the provisions of Article 3 of the Shareholders Agreement, and (B) unless the transferee shall have agreed in writing to be bound by the terms of this Agreement and the Shareholders Agreement in a manner acceptable to the Board and otherwise acknowledging that such Award Shares are subject to the restrictions set forth in this Agreement and the Shareholders Agreement. Any attempt to transfer any Award Shares which is not in compliance with this Agreement shall be null and void and have no force or effect, and the Company shall not, and shall cause any transfer agent not to, give any effect in such entitys share records to such attempted transfer. The Grantee acknowledges that the transfer restrictions contained in this Agreement are reasonable and in the best interests of the Company.
SECTION 7. ADJUSTMENT OF SHARES
In the event of a Recapitalization or merger or consolidation, the terms of the RSUs (including, without limitation, the number of RSUs and kind of Shares payable pursuant to the RSUs) may be adjusted as set forth in Section 13 of the Plan. In the event of a Change of Control, the Board may provide in substitution for the RSUs such alternative consideration (including cash) as it may in good faith determine to be equitable under the circumstances and may require in connection therewith the surrender of the RSUs so replaced. Any action taken by the Board pursuant to this Section 7 will only be taken to the extent it does not result in the RSUs failing to comply with or ceasing to be exempt from Section 409A of the Code.
SECTION 8. MISCELLANEOUS PROVISIONS
(a) No Retention Rights. Nothing in this Agreement or in the Plan shall confer upon the Grantee any right to continue in service or interfere with or otherwise restrict in any way the rights of the Company or any Subsidiary employing the Grantee, which rights are hereby expressly reserved by the Company and any Subsidiary employing the Grantee, to terminate the Grantees service at any time and for any reason.
(b) Notices. All notices, requests and other communications under this Agreement shall be in writing and shall be delivered in person (by courier or otherwise), mailed by certified or registered mail, return receipt requested, or sent by facsimile transmission, as follows:
If to the Company, to:
c/o Community Choice Financial Inc.
7001 Post Road, Suite 200
Dublin, OH 43016
Attn: General Counsel
If to the Grantee, to the address set forth on the Companys payroll records,
or, in each case, at such other address or fax number as such party may hereafter specify for the purpose of notices hereunder by written notice to the other party hereto. All notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt. Any notice, request or other written communication sent by facsimile transmission shall be confirmed by certified or registered mail, return receipt requested, posted within one Business Day, or by personal delivery, whether by courier or otherwise, made within two Business Days after the date of such facsimile transmissions; provided that such confirmation mailing or delivery shall not affect the date of receipt, which will be the date that the facsimile successfully transmitted the notice, request or other communication.
(c) Entire Agreement. This Agreement and the Plan, together with the Shareholders Agreement, and the other agreements referred to herein and therein and any schedules or exhibits referred to herein or therein, constitute the entire agreement and understanding among the parties hereto in
respect of the subject matter hereof and supersede all prior and contemporaneous arrangements, agreements and understandings, both oral and written, whether in term sheets, presentations or otherwise, among the parties hereto, or between any of them, with respect to the subject matter hereof.
(d) Amendment; Waiver. No amendment or modification of any provision of this Agreement shall be effective unless signed in writing by or on behalf of the Company and the Grantee, except that the Company may amend or modify the Agreement without the Grantees consent in accordance with the provisions of the Plan or as otherwise set forth in this Agreement. The failure of the Company in any instance to exercise any repurchase rights shall not constitute a waiver of any other repurchase rights that may subsequently arise under the provisions of this Agreement or any other agreement between the Company and the Grantee. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition whether of like or different nature. Any amendment or modification of or to any provision of this Agreement, or any waiver of any provision of this Agreement, shall be effective only in the specific instance and for the specific purpose for which made or given.
(e) Assignment. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by the Grantee except pursuant to a transfer in accordance with the provisions of this Agreement.
(f) Successors and Assigns; No Third Party Beneficiaries. This Agreement shall inure to the benefit of and be binding upon the Company and the Grantee and their respective heirs, successors, legal representatives and permitted assigns. Nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the Company and the Grantee, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.
(g) Governing Law, Venue. This Agreement and any matters or disputes related to, in connection with, or arising under this Agreement shall be governed by the laws of the State of , without regard to the conflicts of laws rules of such state.
(h) Interpretation. Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation apply:
Headings. The division of this Agreement into Sections and other subdivisions and the insertion of headings are for convenience of reference only and do not alter the meaning of, or affect the construction or interpretation of, this Agreement.
Section References. All references in this Agreement to any Section are to the corresponding Section of this Agreement unless otherwise provided.
Schedules/Exhibits. Any capitalized terms used in any Schedule or Exhibit to this Agreement but are not otherwise defined therein have the meanings set forth in this Agreement.
(i) Severability. If any provision of this Agreement is invalid or incapable of being enforced by any law, all other provisions of this Agreement remain in full force and effect so long as the economic and legal substance of the transactions contemplated hereby are not affected in any manner materially adverse to any party. If any provision of this Agreement is held to be invalid or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
(j) Counterparts. The parties may execute this Agreement in one or more counterparts, each of which constitutes an original copy of this Agreement and all of which, collectively constitute only one agreement. The signatures of all the parties need not appear on the same counterpart.
(k) Grantee Undertaking. The Grantee agrees to take whatever additional action and execute whatever additional documents the Company may deem necessary or advisable to carry out or effect
one or more of the obligations or restrictions imposed on either the Grantee or upon the RSUs or any Award Shares pursuant to the provisions of this Agreement.
(l) Plan; Shareholders Agreement; Counsel. The Grantee acknowledges and understands that material definitions and provisions concerning the RSUs or any Award Shares and the Grantees rights and obligations with respect thereto are set forth in the Plan and the Shareholders Agreement. The Grantee has had the opportunity to retain legal counsel, and has read carefully, and understands, the provisions of such documents.
SECTION 9. DEFINITIONS
(a) Business Day has the meaning ascribed to such term in the Shareholders Agreement.
(b) Change of Control shall have the meaning ascribed to it in the Shareholders Agreement.
(c) Joinder Agreement means an agreement substantially in the form of Exhibit A of the Shareholders Agreement, pursuant to which the Grantee shall become a party to the Shareholders Agreement and subject to all of the rights, restrictions and obligations contained therein.
(d) Person means any individual, partnership, corporation, company, association, trust, joint venture, limited liability company, unincorporated organization, entity or division, or any government, governmental department or agency or political subdivision thereof.
IN WITNESS WHEREOF, the parties have executed this Restricted Stock Unit Agreement as of the day and year first written above.
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EXHIBIT A
Investment Representations and Warranties
The Grantee hereby represents and warrants to the Company that:
1. The RSUs and Award Shares (either or both, the Securities) received by [him/her] will be held by [him/her] for investment only for [his/her] own account, not as a nominee or agent, and not with a view to the sale or distribution of any part thereof in violation of applicable U.S. federal or state or foreign securities laws. The Grantee has no current intention of selling, granting participation in or otherwise distributing the Securities in violation of applicable U.S. federal or state or foreign securities laws. The Grantee does not have any contract, undertaking, agreement or arrangement with any person or entity to sell, transfer or grant participation to such person or entity, or to any third person or entity, with respect to any of the Securities, in each case, in violation of applicable U.S. federal or state or foreign securities laws.
2. The Grantee understands that the issuance of the Securities has not been registered under the Securities Act or any applicable U.S. federal, state or foreign securities laws, and that the Securities are being issued in reliance on an exemption from registration, which exemption depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Grantees representations as expressed herein.
3. The Grantee has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of [his/her] owning the Securities. The Grantee is a sophisticated investor, has relied upon independent investigations made by the Grantee and, to the extent believed by the Grantee to be appropriate, the Grantees representatives, including the Grantees own professional, tax and other advisors, and is making an independent decision to invest in the Securities. The Grantee has been furnished with such documents, materials and information that the Grantee deems necessary or appropriate for evaluating an investment in the Company, and the Grantee has read carefully such documents, materials and information and understands and has evaluated the types of risks involved with holding the Securities. The Grantee has not relied upon any representations or other information (whether oral or written) from the Company or its shareholders, directors, officers or affiliates, or from any other person or entity, in connection with [his/her] investment in the Securities. The Grantee acknowledges that the Company has not given any assurances with respect to the tax consequences of the ownership and disposition of the Securities.
4. The Grantee has had, prior to [his/her] being granted the Securities, the opportunity to ask questions of, and receive answers from, the Company concerning the terms and conditions of the transactions contemplated by the Agreement and the Grantees holding of the Securities and to obtain additional information necessary to verify the accuracy of any information furnished to [him/her] or to which [he/she] had access. The Grantee confirms that [he/she] has satisfied [himself/herself] with respect to any of the foregoing matters.
5. The Grantee acknowledges that [he/she] has had the opportunity to seek legal advice from; and has received legal advice on the Agreement, the transactions contemplated therein and all documents, materials and information that [he/she] has requested or read relating to holding the Securities and confirms that [he/she] has satisfied [himself/herself] with respect to any of the foregoing matters.
6. The Grantee understands that no U.S. federal or state or foreign agency has passed upon the Securities or upon the Company, or upon the accuracy, validity or completeness of any documentation provided to the Grantee in connection with the transactions contemplated by the Agreement, nor has any such agency made any finding or determination as to holding the Securities.
7. The Grantee understands that there are substantial restrictions on the transferability of the Securities and that on the date of the Agreement and for an indefinite period thereafter there will be no public market for the Securities and, accordingly, it may not be possible for the Grantee to liquidate [his/her] investment in case of emergency, if at all. In addition, the Grantee understands that the Agreement and Shareholders Agreement contain substantial restrictions on the transferability of the Securities and provide that, in the event that the conditions relating to the transfer of any Securities in such document has not been satisfied, the holder shall not transfer any such Securities, and unless otherwise specified the Company will not recognize the transfer of any such Securities on its books and records or issue any share certificates representing any such Securities, and any purported transfer not in accordance with the terms of the Agreement or the Shareholders Agreement shall be void. As such, Grantee understands that: a restrictive legend or legends in a form to be set forth in the Agreement and the Shareholders Agreement will be placed on the certificates representing the Securities; a notation will be made in the appropriate records of the Company indicating that each of the Securities are subject to restrictions on transfer and, if the Company should at some time in the future engage the services of a securities transfer agent, appropriate stop-transfer instructions will be issued to such transfer agent with respect to the Securities; and the Grantee will sell, transfer or otherwise dispose of the Securities only in a manner consistent with its representations set forth herein and then only in accordance with the Agreement and the Shareholders Agreement.
8. The Grantee understands that (i) the Securities may not be sold, transferred or otherwise disposed of without registration under the Securities Act or an exemption therefrom, (ii) the Securities have not been registered under the Securities Act; (iii) the Securities must be held indefinitely and [he/she] must continue to bear the economic risk of holding the Securities unless such Securities are subsequently registered under the Securities Act or an exemption from such registration is available; (iv) the Grantee is prepared to bear the economic risk of holding the Securities for an indefinite period of time; (v) it is not anticipated that there will be any public market for the Securities; (vi) the Securities are characterized as restricted securities under the U.S. federal securities laws; and (vii) the Securities may not be sold, transferred or otherwise disposed of except in compliance with federal, state and local law.
9. The Grantee understands that an investment in the Securities is not recommended for investors who have any need for a current return on this investment or who cannot bear the risk of losing their entire investment. In that regard, the Grantee understands that [his/her] holding the Securities involves a high degree of risk of loss. The Grantee acknowledges that: (i) [he/she] has adequate means of providing for [his/her] current needs and possible personal contingencies and has no need for liquidity in this investment; (ii) [his/her] commitment to investments which are not readily marketable is not disproportionate to [his/her] net worth; and (iii) [his/her] holding the Securities will not cause [his/her] overall financial commitments to become excessive.
10. The Grantee is an accredited investor, as such term is defined in Rule 501 of the Securities Act.
Exhibit 10.16
AMENDMENT NO. 1 TO SHAREHOLDERS AGREEMENT
This Amendment No. 1 (this Amendment) to that certain Shareholders Agreement, dated as of April 29, 2011 (the Agreement) is made as of April 20, 2012, by and among Community Choice Financial Inc., an Ohio corporation (the Company), Diamond Castle Partners IV, L.P. (DCP IV), Diamond Castle Partners IV-A, L.P. (DCP IV-A), Deal Leaders Fund, L.P. (DCP Leaders and, together with DCP IV and DCP IV-A, the DCP Investor), each Person listed as a 2006 Rollover Holder on Schedule A to the Agreement or executing a Joinder Agreement as a 2006 Rollover Holder (each, a 2006 Rollover Holder and, collectively, the 2006 Rollover Holders), each Person listed as a 2011 Rollover Holder on Schedule A to the Agreement or executing a Joinder Agreement as a 2011 Rollover Holder (each, a 2011 Rollover Holder and, collectively, the 2011 Rollover Holders and, together with the 2006 Rollover Holders, the Rollover Holders), and each Person listed as a Management Holder on Schedule A to the Agreement or executing a Joinder Agreement as a Management Holder (each, a Management Holder and, collectively, the Management Holders and, together with the Rollover Holders, the Minority Holders).
WHEREAS, the parties hereto previously entered into the Agreement;
WHEREAS, the Company is preparing for an Initial Public Offering and the parties hereto agree that this Amendment is in the best interests of the Company in connection with such Initial Public Offering; and
WHEREAS, the parties to the Agreement wish to amend the Agreement such that Sections 2.1, 2.2, 2.3, 2.8, 3.1(b)(iii) and (iv) and 6.2 of the Agreement terminate upon the occurrence of an Initial Public Offering.
NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. Defined Terms. Capitalized terms not otherwise defined in this Amendment shall have the meanings specified in the Agreement.
2. Amendment of Section 8.4(c). Section 8.4(c) of the Agreement is amended and restated in its entirety to read as follows:
This Agreement shall terminate upon the earlier to occur of (i) an Initial Public Offering; provided, however, that, notwithstanding anything to the contrary contained in this Agreement, the provisions of (x) Sections 3.2, 3.3 and 6.1 and Articles 5 (other than Section 5.13, which shall terminate upon an Initial Public Offering), 7 and 8 shall survive the Initial Public Offering in accordance with their respective terms, and (y) Article 2 (other than Sections 2.1, 2.2, 2.3 and 2.8, which shall terminate upon an Initial Public Offering) shall survive the Initial Public Offering in accordance with its terms unless and until the DCP Investor
sells a majority of its Initial Shares to one or more independent third parties (that are not its Affiliates) in a bona fide, arms-length transaction; (ii) a Change of Control; provided, however, the provisions of Articles 5 (other than Section 5.13, which shall terminate upon a Change of Control), 6, 7 and 8 shall survive a Change of Control; or (iii) the bankruptcy, liquidation or dissolution of the Company.
3. Effect of this Amendment; Modification. Except as amended hereby, the Agreement shall remain unmodified and in full force and effect.
4. Entire Agreement. The Agreement and this Amendment contain the entire agreement among the parties with respect to the subject matter hereof and supersede all prior arrangements or understandings respect hereto.
5. Counterparts. This Amendment may be executed in any number of counterparts, and each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement.
6. Governing Law. The corporate laws of the State of Ohio (without regard to the conflicts of laws rules of such state) shall govern all issues concerning the relative rights of the Company and the Shareholders and the duties and obligations of the Companys directors to the Company and the Shareholders. All other issues concerning the construction, validity and interpretation of this Amendment, and the obligations, rights and remedies of the parties hereunder, shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts made and performed entirely within such state, without regard to the conflicts of laws rules of such state.
* * * * *
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, each of the undersigned has duly executed this Amendment (or caused this Amendment to be executed on its behalf by its officer or representative thereunto duly authorized) as of the date first above written.
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COMMUNITY CHOICE FINANCIAL INC. | ||
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By: |
/s/ Bridgette Roman | |
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Name: |
Bridgette Roman |
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Title: |
Secretary |
[SIGNATURE PAGE TO AMENDMENT NO. 1 TO SHAREHOLDERS AGREEMENT]
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DIAMOND CASTLE PARTNERS IV, L.P. | |
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By: DCP IV GP, L.P., its general partner | |
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By: DCP IV GP-GP, L.P., its general partner | |
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By: |
/s/ Andrew Rush |
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Name: |
Andrew Rush |
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Title: |
Senior Managing Director |
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DIAMOND CASTLE PARTNERS IV-A, L.P. | |
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By: DCP IV GP, L.P., its general partner | |
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By: DCP IV GP-GP, L.P., its general partner | |
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By: |
/s/ Andrew Rush |
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Name: |
Andrew Rush |
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Title: |
Senior Managing Director |
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DEAL LEADERS FUND, L.P. | |
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By: DCP IV GP, L.P., its general partner | |
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By: DCP IV GP-GP, L.P., its general partner | |
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By: |
/s/ Andrew Rush |
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Name: |
Andrew Rush |
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Title: |
Senior Managing Director |
[SIGNATURE PAGE TO AMENDMENT NO. 1 TO SHAREHOLDERS AGREEMENT]
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2006 ROLLOVER HOLDERS | |||
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JAMES H. FRAUENBERG 1998 TRUST | ||
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By: |
/s/ James H. Frauenberg | |
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Name: |
James H. Frauenberg |
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Title: |
Trustee |
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JAMES H. FRAUENBERG 1998 DESCENDANTS TRUST | ||
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By: |
/s/ James H. Frauenberg | |
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Name: |
James H. Frauenberg |
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Title: |
Trustee |
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MICHAEL W. LENHART 1998 TRUST | ||
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By: |
/s/ Michael W. Lenhart | |
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Name: |
Michael W. Lenhart |
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Title: |
Trustee |
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MICHAEL W. LENHART 1998 DESCENDANTS TRUST | ||
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By: |
/s/ Irene S. Lenhart | |
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Name: |
Irene S. Lenhart |
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Title: |
Trustee |
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/s/ Chad M. Streff | ||
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CHAD M. STREFF |
[SIGNATURE PAGE TO AMENDMENT NO. 1 TO SHAREHOLDERS AGREEMENT]
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2011 ROLLOVER HOLDERS | |||||
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GOLDEN GATE CAPITAL INVESTMENT FUND II, L.P. | ||||
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GOLDEN GATE CAPITAL INVESTMENT FUND II, L.P. | ||||
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GOLDEN GATE CAPITAL INVESTMENT FUND II A, L.P. | ||||
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GOLDEN GATE CAPITAL INVESTMENT FUND II (AI), L.P. | ||||
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GOLDEN GATE CAPITAL INVESTMENT FUND II A (AI), L.P. | ||||
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GOLDEN GATE CAPITAL ASSOCIATES II QP, L.L.C. | ||||
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GOLDEN GATE CAPITAL ASSOCIATES II AI, L.L.C. | ||||
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By: |
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Golden Gate Capital Management II, L.L.C. | ||
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Its: |
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Authorized Representative | ||
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/s/ David Dominik | ||||
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By: |
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David Dominik | ||
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Its: |
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Managing Director | ||
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CCG AV, L.L.C. |
SERIES A | |||
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CCG AV, L.L.C. |
SERIES C | |||
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CCG AV, L.L.C. |
SERIES G | |||
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CCG AV, L.L.C. |
SERIES I | |||
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By: |
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Golden Gate Capital Management, L.L.C. | ||
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Its: |
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Authorized Representative | ||
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/s/ David Dominik | ||||
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By: |
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David Dominik | ||
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Its: |
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Managing Director | ||
[SIGNATURE PAGE TO AMENDMENT NO. 1 TO SHAREHOLDERS AGREEMENT]
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CALIFORNIA CHECK CASHING STORES, INC. | ||
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By: |
/s/ Jonathan B. Eager | |
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Name: |
Jonathan B. Eager |
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Title: |
President |
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CALIFORNIA CHECK CASHING STORES II, INC. | ||
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By: |
/s/ Mark Tavill | |
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Name: |
Mark Tavill |
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Title: |
President |
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CALIFORNIA CHECK CASHING STORES IV, INC. | ||
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By: |
/s/ Richard Lake | |
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Name: |
Richard Lake |
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Title: |
President |
[SIGNATURE PAGE TO AMENDMENT NO. 1 TO SHAREHOLDERS AGREEMENT]
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MANAGEMENT HOLDERS: | ||
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/s/ William E. Saunders, Jr. | |
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WILLIAM E. SAUNDERS, JR. |
[SIGNATURE PAGE TO AMENDMENT NO. 1 TO SHAREHOLDERS AGREEMENT]
Exhibit 12.1
COMMUNITY CHOICE FINANCIAL INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in Thousands)
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Year Ended December 31, |
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Three |
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2011 |
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2010 |
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2009 |
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2008 |
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2007 |
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2012 |
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(unaudited) |
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Earnings: |
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Income (loss) before provision (benefit) for income taxes, discontinued operations, and extraordinary item |
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$ |
30,406 |
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$ |
53,226 |
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$ |
38,311 |
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$ |
(29,614 |
) |
$ |
17,919 |
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$ |
12,3939 |
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Equity investment (income) loss |
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415 |
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(21 |
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Total earnings, as adjusted |
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$ |
30,821 |
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$ |
53,226 |
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$ |
38,311 |
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$ |
(29,614 |
) |
$ |
17,919 |
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$ |
12,3939 |
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Fixed Charges: |
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Interest Expense |
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$ |
32,775 |
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$ |
8,423 |
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$ |
11,379 |
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$ |
16,113 |
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$ |
18,277 |
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$ |
10,835 |
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Amortization of deferred financing costs |
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1,559 |
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78 |
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153 |
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78 |
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144 |
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515 |
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Total fixed charges |
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$ |
34,334 |
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$ |
8,501 |
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$ |
11,532 |
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$ |
16,191 |
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$ |
18,421 |
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$ |
11,350 |
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Ratio of earnings to fixed charges |
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0.9 |
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6.3 |
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3.3 |
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1.0 |
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1.1 |
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For the periods ended December 31, 2011, 2008 and 2007, the deficiency was $6,946, $47,424 and $2,344, respectively.
Exhibit 21.1
List of Subsidiaries
Subsidiary |
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State of Organization |
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ARH-Arizona, LLC |
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Delaware |
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BCCI CA, LLC |
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Delaware |
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BCCI Management Company |
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Ohio |
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Buckeye Check Cashing, Inc. |
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Ohio |
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Buckeye Check Cashing II, Inc. |
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Ohio |
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Buckeye Check Cashing of Arizona, Inc. |
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Ohio |
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Buckeye Check Cashing of California, LLC |
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Delaware |
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Buckeye Check Cashing of Florida, Inc. |
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Ohio |
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Buckeye Check Cashing of Illinois, LLC |
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Delaware |
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Buckeye Check Cashing of Kansas, LLC |
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Delaware |
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Buckeye Check Cashing of Kentucky, Inc. |
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Ohio |
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Buckeye Check Cashing of Michigan, Inc. |
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Delaware |
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Buckeye Check Cashing of Missouri, LLC |
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Delaware |
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Buckeye Check Cashing of Nevada, LLC |
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Delaware |
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Buckeye Check Cashing of Virginia, Inc. |
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Ohio |
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Buckeye Check Cashing of Texas, LLC |
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Delaware |
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Buckeye Check Cashing of Utah, Inc. |
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Ohio |
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Buckeye Commercial Check Cashing of Florida, LLC |
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Delaware |
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Buckeye Credit Solutions, LLC |
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Delaware |
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Buckeye Lending Solutions, LLC |
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Delaware |
Buckeye Lending Solutions of Arizona, LLC |
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Delaware |
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Buckeye Small Loans, LLC |
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Delaware |
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Buckeye Title Loans, Inc. |
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Ohio |
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Buckeye Title Loans of California, LLC |
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Delaware |
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Buckeye Title Loans of Kansas, LLC |
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Delaware |
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Buckeye Title Loans of Missouri, LLC |
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Delaware |
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Buckeye Title Loans of Utah, LLC |
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Delaware |
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Buckeye Title Loans of Virginia, LLC |
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Delaware |
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CCCS Corporate Holdings, Inc. |
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Delaware |
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CCCS Holdings, LLC |
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Delaware |
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CCCIS, Inc. |
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California |
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California Check Cashing Stores, LLC |
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Delaware |
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Cash Central of UK Limited |
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England and Wales |
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Cash Central of Alabama, LLC |
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Alabama |
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Cash Central of Alaska, LLC |
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Alaska |
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Cash Central of California, LLC |
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California |
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Cash Central of Delaware, LLC |
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Delaware |
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Cash Central of Hawaii, LLC |
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Hawaii |
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Cash Central of Idaho, LLC |
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Idaho |
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Cash Central of Kansas, LLC |
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Kansas |
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Cash Central of Minnesota, LLC |
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Minnesota |
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Cash Central of Missouri, LLC |
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Missouri |
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Cash Central of Nevada, LLC |
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Nevada |
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Cash Central of North Dakota, LLC |
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North Dakota |
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Cash Central of South Dakota, LLC |
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South Dakota |
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Cash Central of Texas, LLC |
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Texas |
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Cash Central of Utah, LLC |
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Utah |
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Cash Central of Washington, LLC |
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Washington |
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Cash Central of Wyoming, LLC |
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Wyoming |
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Cash Central of Wisconsin, LLC |
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Wisconsin |
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Checksmart Financial Company |
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Delaware |
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Checksmart Financial Holdings Corp. |
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Delaware |
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Checksmart Financial, LLC |
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Delaware |
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Checksmart Money Order Services, Inc. |
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Delaware |
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Community Choice Family Insurance Agency LLC |
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Delaware |
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CS-Arizona, LLC |
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Delaware |
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DFS Direct Financial Solutions of Canada, Inc. |
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British Columbia |
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Direct Financial Solutions, LLC |
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Delaware |
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Direct Financial Solutions of UK Limited |
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England and Wales |
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Express Payroll Advance of Ohio, Inc. |
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Ohio |
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Fast Cash, Inc. |
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California |
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First Virginia Credit Solutions, LLC |
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Delaware |
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First Virginia Financial Services, LLC |
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Delaware |
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|
|
Hoosier Check Cashing of Ohio, Ltd |
|
Ohio |
Insight Capital, LLC |
|
Alabama |
|
|
|
National Tax Lending, LLC |
|
Delaware |
|
|
|
Reliant Software, Inc. |
|
Utah |
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the use in this Registration Statement on Form S-4 (No. 333- ) of Community Choice Financial Inc. and Subsidiaries of our report dated March 29, 2012, except for Note 22 and 23 as to which the date is June 22, 2012, relating to our audits of the consolidated financial statements of Community Choice Financial Inc. and Subsidiaries, appearing in the Prospectus, which is part of this Registration Statement.
We also consent to the reference to our firm under the caption Experts in such Prospectus.
/s/ McGladrey LLP |
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Raleigh, North Carolina |
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June 22, 2012 |
|
Exhibit 23.2
Consent of Independent Auditor
We consent to the use in this Registration Statement on Form S-4 (No. 333- ) of Community Choice Financial Inc. and Subsidiaries of our report dated August 22, 2011, relating to our audits of the consolidated financial statements of CCCS Corporate Holdings, Inc. and Subsidiaries, appearing in the Prospectus, which is part of this Registration Statement.
We also consent to the reference to our firm under the caption Experts in such Prospectus.
/s/ McGladrey LLP |
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|
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Chicago, Illinois |
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June 22, 2012 |
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Exhibit 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER
THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility of
a Trustee Pursuant to Section 305(b)(2) o
U.S. BANK NATIONAL ASSOCIATION
(Exact name of Trustee as specified in its charter)
31-0841368
I.R.S. Employer Identification No.
800 Nicollet Mall |
|
|
Minneapolis, Minnesota |
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55402 |
(Address of principal executive offices) |
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(Zip Code) |
David A. Schlabach
U.S. Bank National Association
1350 Euclid Avenue
Cleveland, OH 44115
(216) 623-5987
(Name, address and telephone number of agent for service)
Community Choice Financial Inc.
(Issuer with respect to the Securities)
Ohio |
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45-1536453 |
(State or other jurisdiction of incorporation or organization) |
|
(I.R.S. Employer Identification No.) |
7001 Post Road, Suite 200 |
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|
Dublin, Ohio |
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43016 |
(Address of Principal Executive Offices) |
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(Zip Code) |
10.75% Senior Secured Notes Due 2019
(Title of the Indenture Securities)
FORM T-1
Item 1. GENERAL INFORMATION. Furnish the following information as to the Trustee.
a) Name and address of each examining or supervising authority to which it is subject.
Comptroller of the Currency
Washington, D.C.
b) Whether it is authorized to exercise corporate trust powers.
Yes
Item 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the Trustee, describe each such affiliation.
None
Items 3-15 Items 3-15 are not applicable because to the best of the Trustees knowledge, the obligor is not in default under any Indenture for which the Trustee acts as Trustee.
Item 16. LIST OF EXHIBITS: List below all exhibits filed as a part of this statement of eligibility and qualification.
1. A copy of the Articles of Association of the Trustee.*
2. A copy of the certificate of authority of the Trustee to commence business, attached as Exhibit 2.
3. A copy of the certificate of authority of the Trustee to exercise corporate trust powers, attached as Exhibit 3.
4. A copy of the existing bylaws of the Trustee.**
5. A copy of each Indenture referred to in Item 4. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Trust Indenture Act of 1939, attached as Exhibit 6.
7. Report of Condition of the Trustee as of December 31, 2011 published pursuant to law or the requirements of its supervising or examining authority, attached as Exhibit 7.
* Incorporated by reference to Exhibit 25.1 to Amendment No. 2 to registration statement on S-4, Registration Number 333-128217 filed on November 15, 2005.
** Incorporated by reference to Exhibit 25.1 to registration statement on S-4, Registration Number 333-166527 filed on May 5, 2010.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the Trustee, U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Cleveland, State of Ohio on the 19th of June, 2012.
|
By: |
/s/ David A. Schlabach |
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David A. Schlabach | |
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Vice President |
Exhibit 2 [LOGO] Comptroller of the Currency Administrator of National Banks Washington, DC 20219 CERTIFICATE OF FIDUCIARY POWERS I, John Walsh, Acting Comptroller of the Currency, do hereby certify that: 1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et seq., as amended, 12 U.S.C. I, et seq., as amended, has possession, custody and control of all records pertaining to the chartering, regulation and supervision of all National Banking Associations. 2. U.S. Bank National Association, Cincinnati, Ohio, (Charter No. 24), was granted, under the hand and seal of the Comptroller, the right to act in all fiduciary capacities authorized under the provisions of the Act of Congress approved September 28, l962, 76 Stat.668, 12 U.S.C. 92 a, and that the authority so granted remains in full force and effect on the date of this Certificate. IN TESTIMONY WHERE OF, I have hereunto subscribed my name and caused my seal of office to be affixed to these presents at the Treasury Department, in the City of Washington and District of Columbia, this September 9, 2010. Acting Comptroller of the Currency |
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Exhibit 3 [LOGO] Comptroller of the Currency Administrator of National Banks Washington, DC 20219 CERTIFICATE OF FIDUCIARY POWERS I, John Walsh, Acting Comptroller of the Currency, do hereby certify that: 1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et seq., as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody and control of all records pertaining to the chartering, regulation and supervision of all National Banking Associations. 2. U.S. Bank National Association, Cincinnati, Ohio, (Charter No. 24), was granted, under the hand and seal of the Comptroller, the right to act in all fiduciary capacities authorized under the provisions of the Act of Congress approved September 28, l962, 76 Stat.668, 12 U.S.C. 92 a, and that the authority so granted remains in full force and effect on the date of this Certificate. IN TESTIMONY WHERE OF, I have hereunto subscribed my name and caused my seal of office to be affixed to these presents at the Treasury Department, in the City of Washington and District of Columbia, this September 9, 2010. Acting Comptroller of the Currency |
Exhibit 6
CONSENT
In accordance with Section 321(b) of the Trust Indenture Act of 1939, the undersigned, U.S. BANK NATIONAL ASSOCIATION hereby consents that reports of examination of the undersigned by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor.
Dated: June 19, 2012 |
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| |
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By: |
/s/ David A. Schlabach |
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David A. Schlabach | |
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Vice President | |
Exhibit 7
U.S. Bank National Association
Statement of Financial Condition
As of 3/31/2012
($000s)
|
|
3/31/2012 |
| |
|
|
|
| |
Assets |
|
|
| |
Cash and Balances Due From Depository Institutions |
|
$ |
9,560,436 |
|
Securities |
|
72,930,403 |
| |
Federal Funds |
|
33,777 |
| |
Loans & Lease Financing Receivables |
|
204,146,986 |
| |
Fixed Assets |
|
5,372,613 |
| |
Intangible Assets |
|
12,620,805 |
| |
Other Assets |
|
25,562,406 |
| |
Total Assets |
|
$ |
330,227,426 |
|
|
|
|
| |
Liabilities |
|
|
| |
Deposits |
|
$ |
238,678,346 |
|
Fed Funds |
|
6,937,931 |
| |
Treasury Demand Notes |
|
0 |
| |
Trading Liabilities |
|
349,463 |
| |
Other Borrowed Money |
|
31,722,312 |
| |
Acceptances |
|
0 |
| |
Subordinated Notes and Debentures |
|
5,929,362 |
| |
Other Liabilities |
|
10,661,152 |
| |
Total Liabilities |
|
$ |
294,278,566 |
|
|
|
|
| |
Equity |
|
|
| |
Minority Interest in Subsidiaries |
|
$ |
1,947,357 |
|
Common and Preferred Stock |
|
18,200 |
| |
Surplus |
|
14,133,323 |
| |
Undivided Profits |
|
18,849,980 |
| |
Total Equity Capital |
|
$ |
35,948,860 |
|
|
|
|
| |
Total Liabilities and Equity Capital |
|
$ |
330,227,426 |
|
Exhibit 99.1
COMMUNITY CHOICE FINANCIAL INC.
7001 Post Road, Suite 200
Dublin, Ohio 43016
LETTER OF TRANSMITTAL
FOR 10.75% SENIOR SECURED NOTES DUE 2019
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2012, UNLESS EXTENDED (THE EXPIRATION DATE). TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE
Exchange Agent:
U.S. BANK NATIONAL ASSOCIATION
By registered mail, overnight mail, overnight courier or hand delivery:
U.S. Bank National Association
U.S. Bank West Side Flats Operations Center
60 Livingston Ave.
St. Paul, MN 55107
Attn: Specialized Finance
Reference: Community Choice Financial Inc.
By facsimile (for eligible institutions only):
(651) 466-7372
Reference: Community Choice Financial Inc.
For information or confirmation by telephone:
Specialized Finance
(800) 934-6802
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
The undersigned acknowledges receipt of the Prospectus dated , 2012 (the Prospectus) of Community Choice Financial Inc., an Ohio corporation (Company), and this Letter of Transmittal for 10.75% Senior Secured Notes due 2019 which may be amended from time to time (this Letter), which together constitute the Companys offer (the Exchange Offer) to exchange, for each $2,000 and integral multiples of $1,000 in principal amount of its outstanding 10.75% Senior Secured Notes due 2019 (the Original Notes) issued and sold in a transaction exempt from registration under the Securities Act of 1933, as amended (the Securities Act), $2,000 and integral multiples of $1,000 in principal amount of 10.75% Senior Secured Notes due 2019 (the Exchange Notes), which have been registered under the Securities Act.
The undersigned has completed, executed and delivered this Letter to indicate the action he, she or it desires to take with respect to the Exchange Offer.
All holders of Original Notes who wish to tender their Original Notes must, prior to the Expiration Date: (1) complete, sign, date and mail or otherwise deliver this Letter to the Exchange Agent, in person or to the address set forth above; and (2) tender his or her Original Notes or, if a tender of Original Notes is to be made by book-entry transfer to the account maintained by the Exchange Agent at The Depository Trust Company (the Book-Entry Transfer Facility), confirm such book-entry transfer (a Book-Entry Confirmation), in each case in accordance with the procedures for tendering described in the Instructions to this Letter. Holders of Original Notes whose certificates are not immediately available, or who are unable to deliver their certificates or Book-Entry Confirmation and all other documents required by this Letter to be delivered to the Exchange Agent on or prior to the Expiration Date, must tender their Original Notes according to the guaranteed delivery procedures set forth under the caption The Exchange OfferHow to Tender in the Prospectus. (See Instruction 1).
The Instructions included with this Letter must be followed in their entirety. Questions and requests for assistance or for additional copies of the Prospectus or this Letter may be directed to the Exchange Agent, at the address listed above.
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL, INCLUDING
THE INSTRUCTIONS TO THIS LETTER OF TRANSMITTAL, CAREFULLY
BEFORE CHECKING ANY BOX BELOW
Capitalized terms used in this Letter and not defined herein shall have the respective meanings ascribed to them in the Prospectus.
List in Box 1 below the Original Notes of which you are the holder. If the space provided in Box 1 is inadequate, list the certificate numbers and principal amount of Original Notes on a separate SIGNED schedule and affix that schedule to this Letter.
BOX 1 TO BE COMPLETED BY ALL TENDERING HOLDERS
NAME(S) AND ADDRESS(ES) |
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CERTIFICATE |
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PRINCIPAL |
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PRINCIPAL |
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TOTALS: |
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(1) Need not be completed if Original Notes are being tendered by book-entry transfer.
(2) Unless otherwise indicated, the entire principal amount of Original Notes represented by a certificate or Book-Entry Confirmation delivered to the Exchange Agent will be deemed to have been tendered.
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the undersigned tenders to Company the principal amount of Original Notes indicated above. Subject to, and effective upon, the acceptance for exchange of the Original Notes tendered with this Letter, the undersigned exchanges, assigns and transfers to, or upon the order of, Company all right, title and interest in and to the Original Notes tendered.
The undersigned constitutes and appoints the Exchange Agent as his, her or its agent and attorney-in-fact (with full knowledge that the Exchange Agent also acts as Companys agent) with respect to the tendered Original Notes, with full power of substitution, to: (a) deliver certificates for such Original Notes; (b) deliver Original Notes and all accompanying evidence of transfer and authenticity to or upon Companys order upon receipt by the Exchange Agent, as the undersigneds agent, of the Exchange Notes to which the undersigned is entitled upon Companys acceptance of the Original Notes tendered under the Exchange Offer; and (c) receive all benefits and otherwise exercise all rights of beneficial ownership of the Original Notes, all in accordance with the terms of the Exchange Offer. The power of attorney granted in this paragraph shall be deemed irrevocable and coupled with an interest.
The undersigned hereby represents and warrants that he, she or it has full power and authority to tender, exchange, assign and transfer the Original Notes tendered hereby and that Company will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim. The undersigned will, upon request, execute and deliver any additional documents Company deems necessary or desirable to complete the assignment and transfer of the Original Notes tendered.
The undersigned agrees that Companys acceptance of any tendered Original Notes and the issuance of Exchange Notes in exchange therefor shall constitute Companys performance in full of its obligations under the registration rights agreement (as described in the Prospectus) and that, upon the issuance of the Exchange Notes, Company will have no further obligations or liabilities thereunder (except in certain limited circumstances set forth therein). By tendering Original Notes, the undersigned certifies that (i) any Exchange Notes received by the undersigned will be acquired in the ordinary course of its business, (ii) at the time of commencement of the Exchange Offer, the undersigned had no arrangements or understanding with any person to participate in the distribution of the Original Notes or the Exchange Notes within the meaning of the Securities Act, (iii) the undersigned is not an affiliate, as defined in Rule 405 of the Securities Act, of Company or if it is an affiliate, the undersigned will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable, (iv) if the undersigned is not a broker-dealer, it is not engaged in, and does not intend to engage in, the distribution of the Exchange Notes, and (v) if the undersigned is a broker-dealer, it will receive Exchange Notes for its own account in exchange for Original Notes that were acquired as a result of market-making activities or other trading activities and it will deliver a prospectus in connection with any resale of such Exchange
Securities; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an underwriter within the meaning of the Securities Act.
o CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE ORIGINAL NOTES FOR YOUR OWN ACCOUNT AS A RESULT OF MARKET MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.
o CHECK HERE IF YOU ARE NOT SUCH A BROKER-DEALER BUT ARE A QUALIFIED INSTITUTIONAL BUYER OR OTHERWISE RECEIVED THE INITIAL SECURITIES IN A TRANSACTION OR SERIES OF TRANSACTIONS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.
Name: |
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Address: |
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The undersigned understands that Company may accept the undersigneds tender by delivering written notice of acceptance to the Exchange Agent, at which time the undersigneds right to withdraw such tender will terminate.
All authority conferred or agreed to be conferred by this Letter shall survive the death or incapacity of the undersigned, and every obligation of the undersigned under this Letter shall be binding upon the undersigneds heirs, personal representatives, successors and assigns. Tenders may be withdrawn only in accordance with the procedures set forth in the Instructions contained in this Letter.
Unless otherwise indicated under Special Delivery Instructions below, the Exchange Agent will deliver Exchange Notes (and, if applicable, a certificate for any Original Notes not tendered but represented by a certificate also encompassing Original Notes which are tendered) to the undersigned at the address set forth in Box 1.
The undersigned acknowledges that the Exchange Offer is subject to the more detailed terms set forth in the Prospectus and, in case of any conflict between the terms of the Prospectus and this Letter, the Prospectus shall prevail.
o CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution: |
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Account Number: |
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Transaction Code Number: |
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o CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:
Name(s) of Registered Owner(s): |
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Date of Execution of Notice of Guaranteed Delivery: |
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Window Ticket Number (if available): |
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Name of Institution which Guaranteed Delivery: |
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PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
BOX 2
PLEASE SIGN HERE
WHETHER OR NOT ORIGINAL NOTES ARE BEING
PHYSICALLY TENDERED HEREBY
X |
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X |
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(SIGNATURE(S) OF OWNER(S) |
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(DATE) |
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OR AUTHORIZED SIGNATORY) |
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Area Code and Telephone Number: |
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This box must be signed by registered holder(s) of Original Notes as their name(s) appear(s) on certificate(s) for Original Notes, or by person(s) authorized to become registered holder(s) by endorsement and documents transmitted with this Letter. If signature is by a trustee, executor, administrator, guardian, officer or other person acting in a fiduciary or representative capacity, such person must set forth his or her full title below. (See Instruction 3)
Name(s): |
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(PLEASE PRINT) |
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Capacity: |
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Address: |
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(INCLUDE ZIP CODE) |
Signature(s) Guaranteed by an Eligible Institution: (If required by Instruction 3) |
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(AUTHORIZED SIGNATURE) |
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(TITLE) | |
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(NAME OF FIRM) |
BOX 3
PAYORS NAME: U.S. Bank National Association
SUBSTITUTE |
PAYEE INFORMATION (please print or type) |
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FORM W-9 |
Individual or business name: |
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REQUEST FOR |
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TAXPAYER |
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IDENTIFICATION |
Check appropriate box: | |||||
NUMBER AND |
o Individual/Sole Proprietor |
o Corporation |
o Partnership | |||
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CERTIFICATION |
o Other |
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Check if exempt: |
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o Exempt from backup withholding |
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DEPARTMENT OF THE TREASURY INTERNAL REVENUE SERVICE |
Address (number, street and apt. or suite no.): | |
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City, state and ZIP code: |
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PART I: TAXPAYER IDENTIFICATION NUMBER (TIN) |
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Enter your TIN below. For individuals, your TIN is your social security number. Sole proprietors may enter either their social security number or their employer identification number. If you are a limited liability company that is disregarded as an entity separate from your owner, enter your owners social security number or employer identification number, as applicable. For other entities, your TIN is your employer identification number. |
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Social security number: |
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o o o - o o - o o o |
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OR |
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Employer identification number: |
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o o - o o o o o o o |
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o Applied For |
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PART II: CERTIFICATION |
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Certification Instructions: You must cross out item 2 below if you have been notified by the Internal Revenue Service (the IRS) that you are currently subject to backup withholding because of underreporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out item 2. |
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Under penalties of perjury, I certify that: |
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1. The number shown on this form is my correct TIN or a TIN has not been issued to me and either (a) I have mailed or delivered an application to receive a TIN to the appropriate IRS Center or Social Security Administration Office, or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide my TIN to the payor, a portion of all reportable payments made to me by the payor will be withheld until I provide my TIN to the payor and that, if I do not provide my TIN to the payor within 60 days of submitting this Substitute Form W-9, such retained amounts shall be remitted to the IRS as backup withholding, and |
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2. I am not subject to backup withholding because: (a) I am exempt from backup withholding, (b) I have not been notified by the IRS that I am subject to backup withholding as a result of a failure to report all interest or dividends or (c) the IRS has notified me that I am no longer subject to backup withholding, and |
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3. I am a U.S. citizen or other U.S. person (including a U.S. resident alien). |
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THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING. |
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Signature: |
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Date: |
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BOX 4 | |||
To be completed ONLY if certificates for Original Notes in a principal amount not exchanged, or Exchange Notes, are to be issued in the name of someone other than the person whose signature appears in Box 2, or if Original Notes delivered by book-entry transfer which are not accepted for exchange are to be returned by credit to an account maintained at the Book-Entry Transfer Facility other than the account indicated above. | |||
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Issue and deliver: ) |
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(check appropriate boxes |
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o |
Original Notes not tendered |
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o |
Exchange Notes, to: | ||
Name(s): |
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(PLEASE PRINT) | ||
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Address: |
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Please complete the Substitute Form W-9 at Box 3 | |||
Tax I.D. or Social Security Number: |
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BOX 5 | |||
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To be completed ONLY if certificates for Original Notes in a principal amount not exchanged, or Exchange Notes, are to be sent to someone other than the person whose signature appears in Box 2 or to an address other than shown in Box 1. | |||
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Deliver: |
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(check appropriate boxes) |
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o |
Original Notes not tendered |
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o |
Exchange Notes, to: | ||
Name: |
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(PLEASE PRINT) | |||
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Address: |
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INSTRUCTIONS
Forming Part of the Terms and
Conditions of the Exchange Offer
1. Delivery of this Letter and Certificates. Certificates for Original Notes or a Book-Entry Confirmation, as the case may be, as well as a properly completed and duly executed copy of this Letter and any other documents required by this Letter, must be received by the Exchange Agent at one of its addresses set forth herein on or before the expiration of the Exchange Offer on the Expiration Date. The method of delivery of this Letter, certificates for Original Notes or a Book-Entry Confirmation, as the case may be, and any other required documents is at the election and risk of the tendering holder, but except as otherwise provided below, the delivery will be deemed made when actually received by the Exchange Agent. If delivery is by mail, the use of registered mail with return receipt requested, properly insured, is suggested.
Holders whose Original Notes are not immediately available or who cannot deliver their Original Notes or a Book-Entry Confirmation, as the case may be, and all other required documents to the Exchange Agent on or before the Expiration Date may tender their Original Notes pursuant to the guaranteed delivery procedures set forth in the Prospectus. Pursuant to such procedure: (i) tender must be made by or through an Eligible Institution (as defined in the Prospectus under the caption The Exchange OfferHow to Tender); (ii) prior to the expiration of the Exchange Offer on the Expiration Date, the Exchange Agent must have received from the Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery) (x) setting forth the name and address of the holder, the description of the Original Notes and the principal amount of Original Notes tendered, (y) stating that the tender is being made thereby and (z) guaranteeing that, within three business days after the date of execution of such Notice of Guaranteed Delivery, this Letter together with the certificates representing the Original Notes or a Book-Entry Confirmation, as the case may be, and any other documents required by this Letter will be deposited by the Eligible Institution with the Exchange Agent; and (iii) this Letter, the certificates for all tendered Original Notes or a Book-Entry Confirmation, as the case may be, as well as all other documents required by this Letter, must be received by the Exchange Agent within three business days after the date of execution of such Notice of Guaranteed Delivery, all as provided in the Prospectus under the caption The Exchange OfferHow to Tender.
All questions as to the validity, form, eligibility (including time of receipt), acceptance and withdrawal of tendered Original Notes will be determined by Company, whose determination will be final and binding. Company reserves the absolute right to reject any or all tenders that are not in proper form or the acceptance of which, in the opinion of Companys counsel, would be unlawful. Company also reserves the right to waive any irregularities or defects or conditions of tender as to particular Original Notes. All tendering holders, by execution of this Letter, waive any right to receive notice of acceptance of their Original Notes.
Neither Company, the Exchange Agent nor any other person shall be obligated to give notice of defects or irregularities in any tender, nor shall any of them incur any liability for failure to give any such notice.
2. Partial Tenders; Withdrawals. If less than the entire principal amount of any Original Note evidenced by a submitted certificate or by a Book-Entry Confirmation is tendered, the tendering holder must fill in the principal amount tendered in the fourth column of Box 1 above. All of the Original Notes represented by a certificate or by a Book-Entry Confirmation delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. A certificate for Original Notes not tendered will be sent to the holder, unless otherwise provided in Box 5, as soon as practicable after the Expiration Date, in the event that less than the entire principal amount of Original Notes represented by a submitted certificate is tendered (or, in the case of Original Notes tendered by book-entry transfer, such non-exchanged Original Notes will be credited to an account maintained by the holder with the Book-Entry Transfer Facility).
If not yet accepted, a tender pursuant to the Exchange Offer may be withdrawn prior to the Expiration Date. To be effective with respect to the tender of Original Notes, a written or facsimile transmission of notice of withdrawal must: (i) be received by the Exchange Agent at the address indicated above before Company notifies the Exchange Agent that it has accepted the tender of Original Notes pursuant to the Exchange Offer; (ii) specify the name of the person named in this Letter as having tendered the Original Notes; (iii) contain a description of the Original Notes to be withdrawn, the certificate numbers shown on the particular certificates evidencing such Original Notes and the principal amount (which must be an authorized denomination) of Original Notes represented by such certificates; (iv) a statement that such holder is withdrawing his, her or its election to have such Original Notes exchanged; (v) the name of the registered holder of such Original Notes; and (vi) be signed by the holder in the same manner as the original signature on this Letter (including any required signature guarantee) or be accompanied by evidence satisfactory to the Company that the person withdrawing the tender has succeeded to the beneficial ownership of the Original Notes being withdrawn.
3. Signatures on this Letter; Assignments; Guarantee of Signatures. If this Letter is signed by the holder(s) of Original Notes tendered hereby, the signature must correspond with the name(s) as written on the face of the certificate(s) for such Original Notes, without alteration, enlargement or any change whatsoever.
If any of the Original Notes tendered hereby are owned by two or more joint owners, all owners must sign this Letter. If any tendered Original Notes are held in different names on several certificates, it will be necessary to complete, sign and submit as many separate copies of this Letter as there are names in which certificates are held.
If this Letter is signed by the holder of record and (i) the entire principal amount of the holders Original Notes are tendered and/or (ii) untendered Original Notes, if any, are to be issued to the holder of record, then the holder of record need not endorse any certificates for tendered Original Notes, nor provide a separate bond power. If any other case, the holder of record must transmit a separate bond power with this Letter.
If this Letter or any certificate or assignment is signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing and proper evidence satisfactory to Company of their authority to so act must be submitted, unless waived by Company.
Signatures on this Letter must be guaranteed by an Eligible Institution, unless Original Notes are tendered: (i) by a holder who has not completed the Box entitled Special Issuance Instructions or Special Delivery Instructions on this Letter; or (ii) for the account of an Eligible Institution. In the event that the signatures in this Letter or a notice of withdrawal, as the case may be, are required to be guaranteed, such guarantees must be by an eligible guarantor institution which is a member of The Securities Transfer Agents Medallion Program (STAMP), The New York Stock Exchanges Medallion Signature Program (MSP) or The Stock Exchanges Medallion Program (SEMP) (collectively, Eligible Institutions). If Original Notes are registered in the name of a person other than the signer of this Letter, the Original Notes surrendered for exchange must be endorsed by, or be accompanied by a written instrument or instruments of transfer or exchange, in satisfactory form as determined by the Company, in its sole discretion, duly executed by the registered holder with the signature thereon guaranteed by an Eligible Institution.
4. Special Issuance and Delivery Instructions. Tendering holders should indicate, in Box 4 or 5, as applicable, the name and address to which the Exchange Notes or certificates for Original Notes not exchanged are to be issued or sent, if different from the name and address of the person signing this Letter. In the case of issuance in a different name, the taxpayer identification number of the person named must also be indicated. Holders tendering Original Notes by book-entry transfer may request that Original Notes not exchanged be credited to such account maintained at the Book-Entry Transfer Facility as such holder may designate.
5. Backup Withholding; Substitute Form W-9; Form W-8. Under U.S. federal income tax laws, payments made by Company on account of Exchange Notes issued pursuant to the Exchange Offer may be subject to back-up withholding. In order to prevent back-up withholding, each tendering holder must provide the Exchange Agent with his or her correct taxpayer identification number (TIN), which, in the case of a holder who is an individual, is his or her social security number. In addition, each tendering holder must complete the Substitute Form W-9 in Box 3 certifying that the TIN provided is correct (or that the holder is awaiting a TIN) and that: (i) such holder is exempt from back-up withholding; (ii) the holder has not been notified by the Internal Revenue Service that he or she is subject to back-up withholding as a result of failure to report all interest or dividends; or (iii) the Internal Revenue Service (IRS) has notified the holder that he or she is no longer subject to back-up withholding. If the Exchange Agent is not provided with the required information on the Substitute Form W-9, the holder may be subject to 28% backup withholding on certain payments made to holders of the Exchange Notes.
Certain holders (including, among others, all corporations and certain foreign individuals) are exempt from these backup withholding and reporting requirements. To prevent possible erroneous back-up withholding, an exempt U.S. holder must check the appropriate box under Payee Information, enter its correct TIN in Part I of the Substitute Form W-9, and sign and date the form. See the Substitute Form W-9 in Box 3 for additional instructions. In order for a nonresident alien or foreign entity to qualify as exempt, such person must submit a completed IRS Form W-8BEN (or other applicable IRS form), signed under penalties of perjury, attesting to such exempt status. Such forms may be obtained from the Exchange Agent. Failure to comply truthfully with the backup withholding requirements may result in the imposition of criminal and/or civil fine and penalties.
If the holder does not have a TIN, he or she must check the box Applied For in Part I of the Substitute Form W-9 and sign and date the form. If the holder does not provide his or her TIN to the payor within 60 days, back-up withholding will begin and continue until the holder furnishes his or her TIN to the payor. Note: Checking the Applied For box in Part I of the Substitute Form W-9 indicates that the holder has already applied for a TIN or that the holder intends to apply for one in the near future.
Backup withholding is not an additional U.S. federal income tax, but instead will be allowed as a credit against a holders U.S. federal income tax liability and may entitle the holder to a refund if the holder timely furnishes the required information to the IRS.
If a holder has any questions concerning the Substitute Form W-9 or any information required therein, the holder may contact the Exchange Agent, as payor.
TO COMPLY WITH IRS CIRCULAR 230, HOLDERS ARE HEREBY NOTIFIED THAT: (A) ANY DISCUSSION OF FEDERAL TAX ISSUES CONTAINED OR REFERRED TO HEREIN IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSES OF AVOIDING PENALTIES THAT MAYBE IMPOSED ON A HOLDER UNDER THE CODE; (B) SUCH DISCUSSION IS WRITTEN IN CONNECTION WITH THE PROMOTION OR MARKETING OF THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN; AND (C) HOLDERS SHOULD SEEK ADVICE BASED ON HIS OR HER PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.
6. Transfer Taxes. Company will pay all transfer taxes, if any, applicable to the transfer of Original Notes to it or its order pursuant to the Exchange Offer. If, however, the Exchange Notes or certificates for Original Notes not exchanged are to be delivered to, or are to be issued in the name of, any person other than the record holder, or if tendered certificates are recorded in the name of any person other than the person signing this Letter, or if a transfer tax is imposed by any reason other than the transfer of Original Notes to Company or its order pursuant to the Exchange Offer, then the amount of such transfer taxes (whether imposed on the record holder or any other person) will be payable by the tendering holder. If satisfactory evidence of payment of taxes or exemption from taxes is not submitted with this Letter, the amount of transfer taxes will be billed directly to the tendering holder.
Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the certificates listed in this Letter.
7. Waiver of Conditions. Company reserves the absolute right to amend or waive any of the specified conditions in the Exchange Offer in the case of any Original Notes tendered.
8. Mutilated, Lost, Stolen or Destroyed Certificates. Any holder whose certificates for Original Notes have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated above, for further instructions.
9. Requests for Assistance or Additional Copies. Questions relating to the procedure for tendering, as well as requests for additional copies of the Prospectus or this Letter, may be directed to the Exchange Agent.
Important: This Letter (together with certificates representing tendered Original Notes or a Book-Entry Confirmation and all other required documents) must be received by the Exchange Agent, or the guaranteed delivery procedures must be complied with, on or before the Expiration Date (as defined in the Prospectus).
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL, INCLUDING THE INSTRUCTIONS TO
THIS LETTER OF TRANSMITTAL, CAREFULLY BEFORE CHECKING ANY BOX BELOW
BOX 1 TO BE COMPLETED BY ALL TENDERING HOLDERS
Exhibit 99.2
COMMUNITY CHOICE FINANCIAL INC.
EXCHANGE OFFER
TO HOLDERS OF ITS
10.75% SENIOR SECURED NOTES DUE 2019
NOTICE OF GUARANTEED DELIVERY
As set forth in the Prospectus dated , 2012 (the Prospectus) of Community Choice Financial Inc. (Company) under the heading The Exchange OfferHow to Tender and in the Letter of Transmittal (the Letter of Transmittal) relating to the offer (the Exchange Offer) by Company to exchange up to $395,000,000 in principal amount of its 10.75% Senior Secured Notes due 2019 (the Exchange Notes) for all of its outstanding 10.75% Senior Secured Notes due 2019, issued and sold in a transaction exempt from registration under the Securities Act of 1933, as amended (the Original Notes), this form or one substantially equivalent hereto must be used to accept the Exchange Offer of Company if: (i) certificates for the Original Notes are not immediately available; or (ii) time will not permit all required documents to reach the Exchange Agent (as defined below) on or prior to the Expiration Date (as defined in the Prospectus) of the Exchange Offer. Such form may be delivered by hand or transmitted by facsimile transmission, letter or courier to the Exchange Agent as follows:
Exchange Agent:
U.S.BANK NATIONAL ASSOCIATION
By registered mail, overnight mail, overnight courier or hand delivery:
U.S. Bank National Association
U.S. Bank West Side Flats Operations Center
60 Livingston Ave.
St. Paul, MN 55107
Attn: Specialized Finance
Reference: Community Choice Financial Inc.
By facsimile (for eligible institutions only):
(651) 495-8158
Reference: Community Choice Financial Inc.
For information or confirmation by telephone:
Specialized Finance
(800) 934-6802
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMITTAL OF THIS INSTRUMENT TO A FACSIMILE NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
Ladies and Gentlemen:
The undersigned hereby tenders to Company, upon the terms and conditions set forth in the Prospectus and the Letter of Transmittal (which together constitute the Exchange Offer), receipt of which are hereby acknowledged, the principal amount of Original Notes set forth below pursuant to the guaranteed delivery procedure described in the Prospectus and the Letter of Transmittal.
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GUARANTEE
The undersigned, a member of a recognized signature guarantee medallion program within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, hereby guarantees that delivery to the Exchange Agent of certificates tendered hereby, in proper form for transfer, or delivery of such certificates pursuant to the procedure for book-entry transfer, in either case with delivery of a properly completed and duly executed Letter of Transmittal (or facsimile thereof) and any other required documents, is being made within three business days after the date of execution of a Notice of Guaranteed Delivery of the above-named person.
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Exhibit 99.3
COMMUNITY CHOICE FINANCIAL INC.
OFFER TO EXCHANGE
UP TO $395,000,000 IN PRINCIPAL AMOUNT OF
10.75% SENIOR SECURED NOTES DUE 2019
FOR
ALL OF ITS OUTSTANDING
10.75% SENIOR SECURED NOTES DUE 2019 AND
SOLD IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED
To Our Clients:
Enclosed for your consideration is a Prospectus dated , 2012 (as the same may be amended or supplemented from time to time, the Prospectus) and a form of Letter of Transmittal (the Letter of Transmittal) relating to the offer (the Exchange Offer) by Community Choice Financial Inc. (Company) to exchange up to $395,000,000 in principal amount of its 10.75% Senior Secured Notes due 2019 (the Exchange Notes) for all of its outstanding 10.75% Senior Secured Notes due 2019, issued and sold in a transaction exempt from registration under the Securities Act of 1933, as amended (the Original Notes).
The material is being forwarded to you as the beneficial owner of Original Notes carried by us for your account or benefit but not registered in your name. A tender of any Original Notes may be made only by us as the registered holder and pursuant to your instructions. The accompanying Letter of Transmittal is furnished to you for informational purposes only and may not be used by you to exchange the Original Notes held by us and registered in our name for your account or benefit. Therefore, Company urges beneficial owners of Original Notes registered in the name of a broker, dealer, commercial bank, trust company or other nominee to contact such registered holder promptly if they wish to tender Original Notes in the Exchange Offer.
Accordingly, we request instructions as to whether you wish us to tender any or all of your Original Notes, pursuant to the terms and conditions set forth in the Prospectus and Letter of Transmittal. We urge you to read carefully the Prospectus and Letter of Transmittal before instructing us to tender your Original Notes.
YOUR INSTRUCTIONS TO US SHOULD BE FORWARDED AS PROMPTLY AS POSSIBLE IN ORDER TO PERMIT US TO TENDER ORIGINAL NOTES ON YOUR BEHALF IN ACCORDANCE WITH THE PROVISIONS OF THE EXCHANGE OFFER. The Exchange Offer will expire at 5:00 p.m., New York City time, on , 2012, unless extended (the Expiration Date). Original Notes tendered pursuant to the Exchange Offer may be withdrawn, subject to the procedures described in the Prospectus, at any time prior to the Expiration Date.
If you wish to have us tender any or all of your Original Notes held by us for your account or benefit, please so instruct us by completing, executing and returning to us the instruction form that appears below. Please note that the accompanying Letter of Transmittal is furnished to you for informational purposes only and may not be used by you to tender Original Notes held by us and registered in our name for your account or benefit.
INSTRUCTIONS
The undersigned acknowledge(s) receipt of your letter and the enclosed material referred to therein relating to the Exchange Offer of Community Choice Financial Inc.
THIS WILL INSTRUCT YOU TO TENDER THE PRINCIPAL AMOUNT OF ORIGINAL NOTES INDICATED BELOW HELD BY YOU FOR THE ACCOUNT OR BENEFIT OF THE UNDERSIGNED, PURSUANT TO THE TERMS OF AND CONDITIONS SET FORTH IN THE PROSPECTUS AND THE LETTER OF TRANSMITTAL.
Box 1 o |
Please tender my Original Notes held by you for my account or benefit. I have identified on a signed schedule attached hereto the principal amount of Original Notes to be tendered if I wish to tender less than all of my Original Notes. | ||
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Please do not tender any Original Notes held by you for my account or benefit. | ||
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Unless a specific contrary instruction is given in a signed Schedule attached hereto, your signature(s) hereon shall constitute an instruction to us to tender all of your Original Notes.
Exhibit 99.4
COMMUNITY CHOICE FINANCIAL INC.
OFFER TO EXCHANGE
UP TO $395,000,000 IN PRINCIPAL AMOUNT OF
10.75% SENIOR SECURED NOTES DUE 2019
FOR
ALL OF ITS OUTSTANDING
10.75% SENIOR SECURED NOTES DUE 2019 ISSUED AND
SOLD IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED
To Securities Dealers, Commercial Banks
Trust Companies And Other Nominees:
Enclosed for your consideration is a Prospectus dated , 2012 (as the same may be amended or supplemented from time to time, the Prospectus) and a form of Letter of Transmittal (the Letter of Transmittal) relating to the offer (the Exchange Offer) by Community Choice Financial Inc. (Company) to exchange up to $395,000,000 in principal amount of its 10.75% Senior Secured Notes due 2019 (the Exchange Notes) for all of its outstanding 10.75% Senior Secured Notes due 2019, issued and sold in a transaction exempt from registration under the Securities Act of 1933, as amended (the Original Notes).
We are asking you to contact your clients for whom you hold Original Notes registered in your name or in the name of your nominee. In addition, we ask you to contact your clients who, to your knowledge, hold Original Notes registered in their own name. Company will not pay any fees or commissions to any broker, dealer or other person in connection with the solicitation of tenders pursuant to the Exchange Offer. You will, however, be reimbursed by Company for customary mailing and handling expenses incurred by you in forwarding any of the enclosed materials to your clients. Company will pay all transfer taxes, if any, applicable to the tender of Original Notes to it or its order, except as otherwise provided in the Prospectus and the Letter of Transmittal.
Enclosed are copies of the following documents:
1. The Prospectus;
2. A Letter of Transmittal for your use in connection with the tender of Original Notes and for the information of your clients;
3. A form of letter that may be sent to your clients for whose accounts you hold Original Notes registered in your name or the name of your nominee, with space provided for obtaining the clients instructions with regard to the Exchange Offer; and
4. A form of Notice of Guaranteed Delivery.
Your prompt action is requested. The Exchange Offer will expire at 5:00 p.m., New York City time, on , 2012, unless extended (the Expiration Date). Original Notes tendered pursuant to the Exchange Offer may be withdrawn, subject to the procedures described in the Prospectus, at any time prior to the Expiration Date.
To tender Original Notes, certificates for Original Notes or a Book-Entry Confirmation, a duly executed and properly completed Letter of Transmittal or a facsimile thereof, and any other required documents, must be received by the Exchange Agent as provided in the Prospectus and the Letter of Transmittal.
Additional copies of the enclosed material may be obtained from U.S. National Bank Association, by calling [·].
Very truly yours,
Community Choice Financial Inc.
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY PERSON AS AN AGENT OF COMPANY OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENTS ON BEHALF OF EITHER OF THEM WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN THE PROSPECTUS AND THE LETTER OF TRANSMITTAL.
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