Exhibit 10.1

EXECUTION VERSION

STOCK PURCHASE AGREEMENT

among

CUHL HOLDINGS INC.,

COINSTAR E-PAYMENT SERVICES INC.,

COINSTAR, INC.,

COINSTAR UK HOLDINGS LIMITED,

and

SIGUE CORPORATION

Dated as of August 23, 2010

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TABLE OF CONTENTS

 

          

Page

ARTICLE I - PURCHASE AND SALE OF SHARES

   1

1.1

 

Purchase and Sale of Shares

   1

1.2

 

Closing

   1

1.3

 

Purchase Price

   2

1.4

 

Purchase Price Allocation

   2

1.5

 

Working Capital Adjustment

   3

1.6

 

Swingline

   5

ARTICLE II - REPRESENTATIONS AND WARRANTIES OF SELLERS AND THE COMPANIES

   5

2.1

 

Good Title; Capitalization

   6

2.2

 

Authorization

   7

2.3

 

Organization and Authority

   7

2.4

 

No Conflict

   8

2.5

 

Powers of Attorney

   8

2.6

 

Company Subsidiaries and Equity Interest

   8

2.7

 

Financial Statements

   9

2.8

 

Absence of Changes or Events

   10

2.9

 

Undisclosed Liabilities

   12

2.10

 

Taxes

   12

2.11

 

Property

   14

2.12

 

Intellectual Property

   16

2.13

 

Contracts

   18  

2.13.1    Material Contracts

   18  

2.13.2     No Breach of Material Contracts

   20  

2.13.3     Availability of Material Contracts

   20

2.14

 

Litigation

   20

2.15

 

Insurance

   21

2.16

 

Employee Benefit Plans

   22  

2.16.1    Employee Benefit Plan Listing and Documents

   22  

2.16.2    Compliance

   22  

2.16.3    Qualification

   23  

2.16.4    Pension Plans

   23  

2.16.5    Post-Termination Welfare Benefits

   23  

2.16.6    Suits, Claims and Investigations

   24  

2.16.7    Non-UK Foreign Plans

   24  

2.16.8    Effect of Transactions

   24

2.17

 

Compliance With Applicable Laws

   24

2.18

 

Licenses; Permits

   25

2.19

 

Money Transfer Business

   26

2.20

 

Environmental Matters

   26

2.21

 

Employee and Labor Matters

   26

2.22

 

Transactions With Certain Persons

   27

2.23

 

Company Books and Records

   27

 

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Page

2.24

 

No Broker or Finder; No Transaction Bonuses

   28

2.25

 

Receivables

   28

2.26

 

Agents

   28

2.27

 

Disclosure

   29

ARTICLE III - REPRESENTATIONS AND WARRANTIES OF BUYER

   29

3.1

 

Organization and Authority

   29

3.2

 

Authorization

   29

3.3

 

No Conflict

   29

3.4

 

Financing

   30

3.5

 

Accredited Investor; Investment Intent

   30

3.6

 

Litigation; Decrees

   30

3.7

 

Required Consents, Approvals, Notices

   30

ARTICLE IV - COVENANTS

   31

4.1

 

Interim Operations

   31

4.2

 

Access to Information

   32

4.3

 

No Alternative Transactions

   33

4.4

 

Notification of Certain Matters

   33

4.5

 

Press Releases

   34

4.6

 

Tax Matters

   34

4.7

 

Commercially Reasonable Efforts

   38

4.8

 

Post-Closing Cooperation

   39

4.9

 

Names, Signage and Labels

   40

4.10

 

Benefits

   41

4.11

 

Insurance

   41

4.12

 

Delivery of Original Stock Certificates

   42

4.13

 

Director and Officer Indemnification

   42

4.14

 

No Financing Contingency; Covenant of Sellers

   42

4.15

 

Termination of Certain Agreements

   43

4.16

 

Affiliated Transactions

   43

4.17

 

Seller Release

   43

4.18

 

Litigation Support

   43

4.19

 

Accounts Receivable Report

   44

4.20

 

Unclaimed Payments Report

   44

4.21

 

Benefits for M. Davar

   44

ARTICLE V - CONDITIONS TO OBLIGATIONS AT CLOSING

   44

5.1

 

Conditions to Obligations of Buyer

   44  

5.1.1    Accuracy of Representations and Warranties

   45  

5.1.2    Performance of Covenants and Conditions

   45  

5.1.3    Required Consents, Approvals, Notices

   45  

5.1.4    Seller Officers’ Certificate

   47  

5.1.5    Seller Secretaries’ Certificate

   47  

5.1.6    Transition Services Agreement

   47  

5.1.7    Trademark License Agreement

   47  

5.1.8    Credit Agreement

   47

 

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Page

 

5.1.9      Assignment and Assumption Agreement

   47  

5.1.10    FIRPTA Certificate

   47  

5.1.11    Termination of Regulatory Waiting Periods

   47  

5.1.12    Absence of Litigation or Order

   47  

5.1.13    Release of Liens, Security Interests and Guarantees

   48  

5.1.14    Intercreditor Agreement

   48

5.2

 

Conditions to Obligations of the Companies and Sellers

   48  

5.2.1    Accuracy of Representations and Warranties

   48  

5.2.2    Performance of Covenants and Conditions

   48  

5.2.3    Required Consents, Approvals, Notices

   48  

5.2.4    Buyer Officer’s Certificate

   49  

5.2.5    Termination of Regulatory Waiting Periods

   49  

5.2.6    Absence of Litigation or Order

   49  

5.2.7    Closing Payment

   49  

5.2.8    Section 338(h)(10) Election

   49  

5.2.9    Credit Agreements

   50  

5.2.10  Swingline Closing Balance

   50

ARTICLE VI - TERMINATION, AMENDMENT AND WAIVER

   50

6.1

 

Termination

   50

6.2

 

Effect of Termination and Abandonment

   51

6.3

 

Amendment

   52

6.4

 

Waiver; Consents

   52

ARTICLE VII - SURVIVAL AND INDEMNIFICATION

   53

7.1

 

Survival

   53

7.2

 

Indemnification by Sellers

   53

7.3

 

Indemnification by Buyer

   54

7.4

 

Limitations on Liability

   54

7.5

 

Procedure for Indemnification

   55

7.6

 

Tax Treatment of Indemnity Payments

   58

7.7

 

Reduction of Losses

   58

7.8

 

Exclusive Remedy

   58

7.9

 

No Duplication

   59

7.10

 

Mitigation

   59

ARTICLE VIII - MISCELLANEOUS

   59

8.1

 

Notices

   59

8.2

 

Assignment; Benefit and Binding Effect

   61

8.3

 

Further Assurances

   61

8.4

 

Governing Law

   61

8.5

 

Waiver of Jury Trial

   61

8.6

 

Headings

   61

8.7

 

Interpretation

   61

8.8

 

Severability

   62

8.9

 

Entire Agreement

   62

8.10

 

Expenses; Attorneys’ Fees

   62

 

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Page

8.11

 

Specific Performance

   63

8.12

 

Counterparts

   63

ARTICLE IX - DEFINITIONS

   63

9.1

 

Definitions

   63

 

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EXHIBITS TO

STOCK PURCHASE AGREEMENT

 

Exhibit 1.3   Forms of Credit Agreement, Promissory Note, and Guarantee and
Collateral Agreement Exhibit 1.5(b)   Sample Net Working Capital Calculation as
of the Balance Sheet Date Exhibit 2   Disclosure Schedules Exhibit II  
Additional Representations and Warranties Exhibit IIA   Additional Disclosure
Schedules Exhibit 5.1.6   Form of Transition Services Agreement Exhibit 5.1.7  
Form of Trademark License Agreement Exhibit 5.1.9   Form of Assignment and
Assumption Agreement Exhibit 5.1.14   Form of Intercreditor Agreement
Exhibit 5.2.9(a)(i)   Form of Commitment Letter

 

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STOCK PURCHASE AGREEMENT

This STOCK PURCHASE AGREEMENT, dated as of August 23, 2010 (this “Agreement”),
is entered into by and among Coinstar E-Payment Services Inc., a Kansas
corporation (“CEPSI”), Coinstar UK Holdings Limited, a company incorporated in
England and Wales (Company registration number 05815578) (“UK Holdings”) (UK
Holdings and CEPSI, each, a “Company,” and collectively, the “Companies”),
Coinstar, Inc., a Delaware corporation (“Coinstar”), CUHL Holdings Inc., a
Washington corporation (“CUHL”) (Coinstar and CUHL, each, a “Seller,” and
collectively, the “Sellers”) and Sigue Corporation, a Delaware corporation
(“Buyer”).

RECITALS

A. The Companies and the Company Subsidiaries constitute the Money Transfer
Business of Coinstar.

B. CUHL is the wholly owned subsidiary of Coinstar. Coinstar owns 100% of the
issued and outstanding shares of capital stock of CEPSI (the “CEPSI Shares”) and
CUHL owns 100% of the issued share capital of UK Holdings (the “UK Holdings
Shares” and, together with the CEPSI Shares, the “Shares”). Coinstar and CUHL
intend to sell 100% of the Shares to Buyer at the price and on the terms and
subject to the conditions set forth below.

C. The boards of directors of Coinstar, CUHL and Buyer each have determined that
it is advisable that Buyer purchase the Shares from Coinstar and CUHL at the
price and on the terms and subject to the conditions set forth below.

D. Buyer desires and intends to purchase 100% of the Shares from Coinstar and
CUHL, at the price and on the terms and subject to the conditions set forth
below.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements herein contained, and intending to be legally bound hereby, the
Companies, Sellers and Buyer hereby agree as follows:

ARTICLE I - PURCHASE AND SALE OF SHARES

 

1.1 Purchase and Sale of Shares

Subject to the terms and conditions set forth in this Agreement, Coinstar and
CUHL hereby agree to sell, transfer and deliver to Buyer as of the Closing, and
Buyer agrees to purchase as of the Closing, the Shares.

 

1.2 Closing

Unless this Agreement shall have been terminated and the transactions herein
contemplated shall have been abandoned pursuant to Article VI, the closing of
the purchase and sale of the Shares contemplated by this Agreement (the
“Closing”) shall take place at 10:00 a.m.

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local time at the offices of Perkins Coie LLP, 1201 Third Avenue, Suite 4800,
Seattle, Washington 98101, on the Wednesday immediately following the date on
which all conditions shall have been satisfied or waived as set forth in
Article V (such Wednesday, the “Target Closing Date”), or on such other date and
at such other time and place as the Sellers may determine in their sole
discretion, which date shall not be more than five (5) business days following
the Target Closing Date. The date on which the Closing actually takes place is
herein called the “Closing Date.”

 

1.3 Purchase Price

The purchase price payable by or on behalf of Buyer to Coinstar in exchange for
100% of the Shares shall consist of (a) an amount in cash payable at Closing
equal to SEVENTEEN MILLION DOLLARS ($17,000,000) (the “Closing Cash Payment”),
which shall be payable by wire transfer of immediately available funds to an
account or accounts designated by Coinstar, (b) the application of the cash
deposit in the amount of ONE MILLION DOLLARS ($1,000,000) that has been
previously paid by Buyer to Coinstar, and (c) the delivery at Closing by Buyer
of a promissory note pursuant to the Credit Agreement (defined below), which
promissory note shall be in the principal amount of $23,500,000 plus or minus,
as applicable, the amount arrived at pursuant to the adjustments under
Sections 1.5(b), 1.5(e) and 1.5(f) of this Agreement (items (a), (b) and (c) of
this Section 1.3 collectively, including any adjustments to item (c) as provided
in Section 1.5 of this Agreement, but excluding any adjustment to the promissory
note as provided in Section 1.6 of this Agreement, the “Purchase Price”). The
“Credit Agreement” means that certain credit agreement, promissory note, and
guarantee and collateral agreement in substantially the forms attached hereto as
Exhibit 1.3, including all agreements, exhibits, schedules and attachments
thereto and contemplated thereby.

 

1.4 Purchase Price Allocation

(a) Buyer shall, for United States federal Income Tax purposes, prepare and
deliver to Coinstar for Coinstar’s review and approval, not to be unreasonably
withheld, delayed or conditioned, an allocation of the UK Purchase Price (as
adjusted pursuant to this Agreement, and including any liabilities deemed to be
assumed) within ninety (90) days after the determination of the Final NWC
Amount, which allocation shall be made in accordance with Section 1060 of the
Code (such initial allocation and further allocation, as adjusted pursuant to
this Agreement, the “UK Purchase Price Allocation”).

(b) The parties agree not to take or cause to be taken any position or other
action inconsistent with the UK Purchase Price Allocation for any Tax reporting
purpose, upon examination of any Tax Return, in any refund claim, or in any
litigation, investigation or otherwise, unless otherwise required by a
determination (within the meaning of Section 1313(a) of the Code or any similar
provision of state, local or non-U.S. Law).

(c) SIXTEEN MILLION SIX HUNDRED THOUSAND DOLLARS ($16,600,000) of the Purchase
Price (excluding any adjustments to item (c) of Section 1.3 as provided in
Section 1.5 of this Agreement) shall be allocated to the CEPSI Shares (the “US
Purchase Price”) and TWENTY-FOUR MILLION, NINE HUNDRED THOUSAND DOLLARS
($24,900,000) of the Purchase Price shall be allocated to the UK Holding Shares
(the “UK Purchase Price,”

 

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and together with the US Purchase Price, the “Initial Purchase Price”), with
each of the US Purchase Price and the UK Purchase Price being composed of a pro
rata portion of the amounts of each of items (a), (b) and (c) of Section 1.3.
Any adjustments to item (c) of Section 1.3 as provided in Section 1.5 of this
Agreement shall be allocated to the US Purchase Price and the UK Purchase Price
in accordance with the percentage that the US Purchase Price and UK Purchase
Price, respectively, bears to the Initial Purchase Price.

 

1.5 Working Capital Adjustment

(a) For purposes of this Agreement, “Net Working Capital” means Total Current
Assets less Total Current Liabilities, where:

(i) The amount of “Total Current Assets” is determined in accordance with this
Section 1.5 and means (A) cash and cash equivalents, excluding any amounts that
have been borrowed and are payable to Coinstar in connection with the Swingline,
(B) accounts receivable net of doubtful accounts, (C) intracompany accounts
receivable (within the Companies and Company Subsidiaries), and (D) prepaid
expenses and other current assets. For the avoidance of doubt, Total Current
Assets shall not include (1) any Income Tax receivables or deferred tax assets,
or (2) any intercompany accounts receivable of the Companies or Company
Subsidiaries from the Sellers or Sellers’ Affiliates that have been terminated
in connection with Closing pursuant to Section 4.16 of this Agreement.

(ii) The amount of “Total Current Liabilities” is determined in accordance with
this Section 1.5 and means (A) payables to agent, (B) trade payables,
(C) accrued liabilities and accounts payable, (D) intracompany liabilities
(within the Companies and Company Subsidiaries), (E) Income Tax payables, and
(F) long-term liabilities. For the avoidance of doubt, Total Current Liabilities
shall not include (1) any amounts that have been borrowed and are payable to
Coinstar in connection with the Swingline or (2) any intercompany liabilities of
the Companies and Company Subsidiaries to the Sellers or the Sellers’ Affiliates
that have been terminated in connection with Closing pursuant to Section 4.16 of
this Agreement.

(iii) For any term used in the immediately preceding subsections (a)(i) or
(a)(ii) that is not otherwise defined therein or in this Agreement, such term
shall, to the extent applicable, be determined in accordance with generally
accepted accounting principles in the United States of America (“GAAP”) on a
basis consistent with the Financial Statements and the Agreed Accounting
Policies.

(b) At least two (2) business days prior to the anticipated Closing Date,
Sellers shall prepare in good faith and deliver to Buyer a projected combined
balance sheet for the Companies and the Company Subsidiaries as of the
anticipated Closing Date (the “Closing Balance Sheet”). The Closing Balance
Sheet shall be prepared according to GAAP consistent with the Financial
Statements and the Agreed Accounting Policies and in a manner consistent with
the sample balance sheet and Net Working Capital calculation as of the Balance
Sheet Date attached hereto as Exhibit 1.5(b). In addition to the Closing Balance
Sheet, Sellers shall provide on the Closing Date the Sellers’ written estimate
of the aggregate Net Working Capital of the Companies and Company Subsidiaries
as of the Closing Date, which estimate shall be prepared in good faith, in a
manner consistent with Exhibit 1.5(b) and in accordance with the provisions of
this

 

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Section 1.5 (the “Sellers’ Estimated NWC”). Coinstar shall consult with Buyer
during the preparation of the Closing Balance Sheet and the Sellers’ Estimated
NWC. To the extent that the Sellers’ Estimated NWC exceeds Target Net Working
Capital, the principal amount of the promissory note under the Credit Agreement
shall be increased, effective as of the Closing Date, by an amount equal to the
amount by which the Sellers’ Estimated NWC exceeds Target Net Working Capital.
To the extent that Sellers’ Estimated NWC falls below Target Net Working
Capital, the principal amount of the promissory note under the Credit Agreement
shall be decreased, effective as of the Closing Date, by an amount equal to the
amount by which the Sellers’ Estimated NWC falls below Target Net Working
Capital.

(c) Within sixty (60) days after the Closing, Buyer shall prepare in good faith
and deliver in writing to Sellers (i) a revised combined balance sheet for the
Companies and the Company Subsidiaries as of the Closing Date, prepared in
accordance with GAAP consistent with the Financial Statements and the Agreed
Accounting Policies in a manner consistent with Exhibit 1.5(b) and in accordance
with the provisions of this Section 1.5, and (ii) a calculation of the aggregate
Net Working Capital of the Companies and the Company Subsidiaries as of the
Closing Date, prepared in good faith in a manner consistent with Exhibit 1.5(b)
and in accordance with the provisions of this Section 1.5 ((i) and
(ii) together, the “Buyer Estimated NWC”). Buyer and Sellers and their
respective representatives shall have access to the work papers of the parties
hereto, the Companies and the Company Subsidiaries used in the preparation of
the Buyer Estimated NWC.

(d) If Buyer and Sellers are unable to agree on the Buyer Estimated NWC, and the
amount(s) to be added to or subtracted from the principal amount of the
promissory note under the Credit Agreement in accordance with the Net Working
Capital provisions of this Section 1.5 following delivery of the Buyer Estimated
NWC, then Sellers shall present any objections or comments in writing to Buyer
no later than forty-five (45) days after Sellers’ receipt of the Buyer Estimated
NWC, specifying in reasonable detail any objections thereto (the “NWC Dispute
Notice”). Buyer and Sellers shall be deemed to have agreed upon all other items
and amounts contained in the Buyer Estimated NWC which are not objected to or
commented upon by Sellers. If Buyer receives a timely NWC Dispute Notice, Buyer
and Sellers shall use reasonable efforts to resolve each item specifically
identified on such NWC Dispute Notice (each, an “Item of Dispute”). If within
twenty (20) business days after Buyer’s receipt of the NWC Dispute Notice, Buyer
and Sellers are unable to resolve informally any Items of Dispute that are the
subject of the NWC Dispute Notice and Sellers have not retracted the NWC Dispute
Notice, the parties shall submit the Items of Dispute to the Accounting
Arbitrator for resolution. For purposes of this Agreement, the “Accounting
Arbitrator” means the Los Angeles, California office of Moss Adams, or such
other accounting firm of regional or national standing as may be agreed upon in
writing by Sellers and Buyer. The Accounting Arbitrator will limit its review to
the Items of Dispute, will not undertake any review of any matters other than
Items of Dispute specifically identified by the parties as being in dispute,
will determine matters in accordance with this Section 1.5, and may not assign a
value to any such item greater than the greatest value for such item claimed by
either party or less than the lowest value for such item claimed by either
party. The Accounting Arbitrator shall be directed to make a resolution in
writing within forty-five (45) days of engagement, and such resolution shall be
conclusive and binding on all parties. Buyer, on the one hand, and Sellers, on
the other hand, shall each pay the costs and expenses of their own accountants
and attorneys and shall bear equally the expense of the Accounting Arbitrator.

 

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(e) To the extent that the aggregate Net Working Capital of the Companies and
the Company Subsidiaries as of the Closing Date, as agreed by Sellers and Buyer
or as finally determined in accordance with the provisions set forth above (such
amount, the “Final NWC Amount”) exceeds Sellers’ Estimated NWC (such excess, the
“Final NWC Increase”), then the principal amount of the promissory note under
the Credit Agreement (including the prior adjustment to such principal amount
pursuant to Section 1.5(b) above and Section 1.6 below, if any) shall be deemed
to have been increased, effective as of the Closing Date, by an amount equal to
the Final NWC Increase.

(f) To the extent that the Final NWC Amount falls below the Sellers’ Estimated
NWC (such shortfall, a “Final NWC Decrease”), then the principal amount of the
promissory note under the Credit Agreement (including the prior adjustment to
such principal amount pursuant to Section 1.5(b) above and Section 1.6 below, if
any) shall be deemed to have been decreased, effective as of the Closing Date,
by an amount equal to the Final NWC Decrease.

 

1.6 Swingline

To provide for the settlement of the intercompany indebtedness outstanding under
the Swingline as of Closing, at least two (2) business days prior to the
anticipated Closing Date, Coinstar shall prepare in good faith and deliver to
Buyer a certificate (the “Swingline Certificate”) reflecting the projected
outstanding balance under the Swingline as of the anticipated Closing Date (the
“Swingline Closing Balance”). Coinstar shall consult with Buyer during the
preparation of the Swingline Certificate and shall provide Buyer with such
information and documentation as Buyer may reasonably request to verify the
accuracy of the Swingline Closing Balance contained in the Swingline
Certificate. At Closing, (a) to the extent that the Swingline Closing Balance is
$14,000,000 or less, Buyer shall transfer to Coinstar, by wire transfer of
immediately available funds to an account or accounts designated by Coinstar, an
amount equal to the Swingline Closing Balance, and (b) to the extent that the
Swingline Closing Balance is more than $14,000,000, (i) Buyer shall transfer to
Coinstar, by wire transfer of immediately available funds to an account or
accounts designated by Coinstar, an amount equal to $14,000,000, and (ii) the
principal amount of the promissory note under the Credit Agreement shall be
increased, effective as of the Closing Date, by an amount equal to the amount by
which the Swingline Closing Balance exceeds $14,000,000. Upon Coinstar’s receipt
of the wire transfer and the adjustment, if any, of the promissory note as
provided in the immediately preceding sentence, the Swingline shall be
terminated without any cost to or continuing obligation by any party thereto.

ARTICLE II - REPRESENTATIONS AND WARRANTIES

OF SELLERS AND THE COMPANIES

As a material inducement to Buyer to enter into and perform its obligations
under this Agreement and the other agreements, excluding the Transition Services
Agreement, and certificates that are required to be executed pursuant to this
Agreement (collectively, the “Operative Documents”), the Sellers jointly and
severally hereby represent and warrant to Buyer as of the date of this Agreement
and as of the Closing Date as follows in this Article II and as set forth in
Exhibit II attached hereto, except as is otherwise specified in the
corresponding section or subsection of the Disclosure Schedules attached hereto
as Exhibit 2 and Exhibit IIA (collectively, the “Disclosure Schedules”).

 

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Concurrently with the execution and delivery of this Agreement, on the date
hereof, Sellers have delivered to the Buyer the Disclosure Schedules attached
hereto. The information set forth in each section or subsection of the
Disclosure Schedules shall be deemed to provide the information contemplated by,
or otherwise qualify, the representations and warranties of the Sellers set
forth in the corresponding section or subsection of this Agreement and any other
section or subsection of Article II, but only to the extent that it is apparent
on the face of the disclosure that it applies to such other section or
subsection of Article II.

 

2.1 Good Title; Capitalization

The authorized capital stock of CEPSI consists of 1,000 shares of common stock,
no par value per share, of which 100 shares are validly issued and outstanding,
fully paid and nonassessable. The authorized capital stock of CUHL consists of
1,000 shares, of which 828 shares are validly issued and outstanding, fully paid
and nonassessable (the “CUHL Stock”). The authorized share capital of UK
Holdings is £1,000 divided into 1,000 ordinary shares of £1.00 each, of which
828 £1.00 ordinary shares have been issued and are fully paid. Coinstar owns
100% of the CEPSI Shares and 100% of the CUHL Stock. The UK Holdings Shares are
fully paid and beneficially owned and registered in the name of CUHL. The Shares
and the Equity Interests in the Domestic Subsidiaries, Non-UK Foreign
Subsidiaries and UK Subsidiaries are owned free and clear of any Encumbrance,
adverse claim, restriction on sale, transfer or voting (other than restrictions
imposed by applicable securities Laws), preemptive right, option or other right
to acquire or purchase. Upon the consummation of the sale of the Shares as
contemplated hereby, Buyer will have good and marketable title to such Shares
and the Equity Interests in the Domestic Subsidiaries, Non-UK Foreign
Subsidiaries and UK Subsidiaries, free and clear of any Encumbrance, adverse
claim, restriction on sale, transfer or voting (other than restrictions imposed
by applicable securities Laws), preemptive right, option or other right to
acquire or purchase. No Seller is a party to any other Contract with respect to
any capital stock of the Companies and the Company Subsidiaries (other than this
Agreement). Except as set forth on in Section 2.1 of the Disclosure Schedules,
(a) the Companies and Company Subsidiaries have not violated any Laws in
connection with the offer, sale or issuance of their outstanding capital stock,
(b) there are no outstanding warrants, options, agreements, subscriptions,
convertible or exchangeable securities or other commitments pursuant to which
any of the Sellers, the Companies or the Company Subsidiaries is or may become
obligated to issue, deliver or sell or cause to be issued, delivered or sold any
shares of capital stock or any shares, as applicable, or any other securities
convertible, exchangeable or exercisable for any such shares of capital stock or
shares, and no equity securities of the Companies or the Company Subsidiaries
are reserved for issuance for any purpose, (c) the Companies and the Company
Subsidiaries are not obligated to repurchase or otherwise acquire or retire any
of their capital stock or share capital, as applicable, (d) there are no
shareholder agreements, voting trusts, proxies or other similar agreements or
understandings with respect to the voting or transfer of the capital stock or
share capital, as applicable, of the Companies or the Company Subsidiaries, and
(e) the Equity Interests in the Domestic Subsidiaries and Non-UK Foreign
Subsidiaries are validly issued and outstanding, fully paid and nonassessable.

 

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2.2 Authorization

Each of the Sellers and the Companies has all requisite corporate power and
corporate authority to enter into this Agreement and to perform its respective
obligations hereunder and to consummate the transactions contemplated hereby.
All necessary corporate acts and other proceedings required to be taken by
Sellers and the Companies to authorize the execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated hereby
have been duly and properly taken and no other action on the part of Sellers or
the Companies is necessary to authorize the respective execution and delivery of
this Agreement by Sellers and the Companies, the performance by Sellers and the
Companies of their obligations under this Agreement or the consummation by
Sellers and the Companies of the transactions contemplated by this Agreement.
This Agreement has been duly executed and delivered by Sellers and the Companies
and constitutes the legal, valid and binding obligation of each of Sellers and
the Companies, enforceable against Sellers and the Companies in accordance with
its terms; provided that (a) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar Laws now or hereafter in
effect relating to creditors’ rights and (b) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any Proceeding therefor
may be brought.

 

2.3 Organization and Authority

Coinstar is an entity duly created, formed and organized, validly existing and
in good standing under the laws of the State of Delaware. CEPSI is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Kansas. UK Holdings is a company duly incorporated under the laws of
England and Wales. CUHL is a corporation duly organized and validly existing
under the laws of the State of Washington. Each of the Domestic Subsidiaries and
Non-UK Foreign Subsidiaries is the type of business entity set forth opposite
such Domestic Subsidiary’s and Non-UK Foreign Subsidiary’s respective name in
Section 2.6(a) and 2.6(b) of the Disclosure Schedules and is duly organized,
validly existing and in good standing under the laws of the jurisdiction set
forth opposite such Subsidiary’s name in Section 2.6(a) and 2.6(b) of the
Disclosure Schedules. Each of the Companies and the Domestic Subsidiaries and
the Foreign Subsidiaries has, as applicable, all requisite corporate power and
authority or all requisite limited liability company power and authority to own,
lease or otherwise hold its properties and assets as now owned, leased and used
and to carry on its business as presently conducted. Each of CEPSI and the
Domestic Subsidiaries and the Non-UK Foreign Subsidiaries is duly qualified to
do business in each of the jurisdictions in which the character of the
properties it occupies or leases or the nature of the business it conducts makes
such qualification necessary. Each of the UK Entities is duly qualified to carry
on its business in the United Kingdom. Section 2.3 of the Disclosure Schedules
lists the directors and officers of each of the Companies and the Company
Subsidiaries. Except as set forth on in Section 2.3 of the Disclosure Schedules,
Sellers have delivered to Buyer correct and complete copies of each of the
Companies’ and the Company Subsidiaries’ Charters and Governing Documents, as
amended to date. None of the Companies and/or the Company Subsidiaries is in
Breach of any provision of their respective Charters or Governing Documents.
There is no pending or threatened Action (or basis therefor) for the
dissolution, liquidation, insolvency, or rehabilitation of any Company or
Company Subsidiary.

 

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2.4 No Conflict

The execution, delivery and performance by Sellers and the Companies of this
Agreement and the other Operative Documents to which such parties are a party
and the consummation by Sellers and the Companies of the transactions
contemplated hereby will not (with or without the giving of notice or the lapse
of time, or both), except as disclosed in Section 2.4 of the Disclosure
Schedules, (a) violate or conflict with the Charters or Governing Documents of
Sellers, the Companies or the Company Subsidiaries, (b) assuming satisfaction of
any requirements imposed by the HSR Act, violate or constitute a default under
any provision of Law, rule or regulation to which Sellers, the Companies or the
Company Subsidiaries are subject or violate, conflict with or constitute a
default under any Order, judgment, injunction or decree applicable to Sellers,
the Companies or the Company Subsidiaries, (c) require any consent, approval or
authorization of, or declaration, filing or registration with, any Person
(except for the filing of any required report under the HSR Act and the
expiration of the applicable waiting period thereunder, and except for consents
and filings that, if not obtained or made, would not, individually or in the
aggregate, be material to the Companies or the Company Subsidiaries),
(d) violate, breach or constitute a default under or give rise to a right of
termination, cancellation or acceleration of any right or obligation of any of
the Companies or the Company Subsidiaries under, or result in the payment of any
fee or penalty or result in the creation of an Encumbrance on any of the
properties or assets of any of the Companies or the Company Subsidiaries
pursuant to, any provision of any agreement, contract, note, bond, mortgage,
deed of trust, indenture, lease or other instrument binding on any of the
Companies or the Company Subsidiaries or any license, franchise, permit or other
similar authorization held by any of the Companies or the Company Subsidiaries,
except in the case of this clause (d), for any such violation, conflict,
default, right or Encumbrance that would not, individually or in the aggregate,
be material to the Companies or the Company Subsidiaries, or (e) (i) result in a
default under, breach of, acceleration or termination of, or the creation in any
party of the right to accelerate, terminate, modify or cancel, any agreement,
lease, note or other restriction, Encumbrance, obligation or liability to which
either Seller is a party or by which it is bound or to which any assets of
either Seller are subject, or (ii) result in the creation of any Encumbrance
upon the Shares, except, in the case of this clause (e), for any such consent,
approval, authorization, declaration, filing or registration that if not made or
obtained would not, individually or in the aggregate, be material to the Company
and the Company Subsidiaries. Section 2.4 of the Disclosure Schedules sets forth
an accurate and complete list of Material Contracts pursuant to which consents
or waivers are required prior to the consummation of the transactions
contemplated by this Agreement (whether or not subject to the exceptions set
forth with respect to clauses (d) and (e)).

 

2.5 Powers of Attorney

Except as set forth on in Section 2.5 of the Disclosure Schedules, there are no
outstanding powers of attorney executed on behalf of any of the Companies or any
Company Subsidiary.

 

2.6 Company Subsidiaries and Equity Interest

(a) Section 2.6(a) of the Disclosure Schedules sets forth an accurate and
complete list of each Subsidiary of the Companies organized under the laws of a
state of the United States

 

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of America (each, a “Domestic Subsidiary” and, collectively, the “Domestic
Subsidiaries”), setting forth for each Domestic Subsidiary the percentage of
such Domestic Subsidiary owned by each of the Companies and whether such
ownership is direct or indirect (and if indirect, the entity through which the
respective Company owns such Domestic Subsidiary).

(b) Section 2.6(b) of the Disclosure Schedules sets forth an accurate and
complete list of each Subsidiary of the Companies organized under the laws of a
jurisdiction outside of the United States of America and outside of the United
Kingdom (each, a “Non-UK Foreign Subsidiary” and, collectively, the “Non-UK
Foreign Subsidiaries”), setting forth for each Non-UK Foreign Subsidiary the
percentage of such Non-UK Foreign Subsidiary owned by each of the Companies and
whether such ownership is direct or indirect (and if indirect, the entity
through which the respective Company owns such Non-UK Foreign Subsidiary).

(c) Section 2.6(c) of the Disclosure Schedules sets forth an accurate and
complete list of each Subsidiary of the Companies incorporated in England and
Wales (each, a “UK Subsidiary” and, collectively, the “UK Subsidiaries”),
setting forth for each UK Subsidiary the percentage of such UK Subsidiary owned
by each of the Companies and whether such ownership is direct or indirect (and
if indirect, the entity through which the respective Company owns such UK
Subsidiary).

(d) Except for the Company Subsidiaries set forth in Sections 2.6(a), 2.6(b) and
2.6(c) of the Disclosure Schedules, the Companies do not have any Subsidiaries
and except as set forth on in Section 2.6(d) of the Disclosure Schedules, do
not, directly or indirectly, own, beneficially or of record, any stock of,
shares in, or any other direct or indirect equity interest in, any other
company, corporation or business entity or any right (contingent or otherwise)
to acquire an equity interest in any other company, corporation or business
entity. Except as set forth in Sections 2.6(a), 2.6(b), 2.6(c) or 2.6(d) of the
Disclosure Schedules, none of the Companies or the Company Subsidiaries is a
member of any partnership or limited liability company, is a participant in any
joint venture or similar arrangement constituting a valid legal entity, or is
required to make an investment in any other Person.

 

2.7 Financial Statements

Section 2.7 of the Disclosure Schedules sets forth the unaudited combined
balance sheet of the Companies and the Company Subsidiaries as of December 31,
2009, and the related unaudited combined statement of operations of the
Companies and the Company Subsidiaries for the year then ended (collectively,
including the applicable footnotes to such financial statements, the “Year End
Financial Statements”). Section 2.7 of the Disclosure Schedules also sets forth
the unaudited combined balance sheet of the Companies and the Company
Subsidiaries as of May 31, 2010 (the “Balance Sheet Date”), and the related
unaudited combined statement of operations of the Companies and the Company
Subsidiaries for the five-month period then ended (collectively, including the
applicable footnotes to such financial statements, the “Interim Financial
Statements” and, together with the Year End Financial Statements, the “Financial
Statements”). The Financial Statements have been prepared solely based upon the
books and records of Coinstar and the financial statements of Coinstar relating
to the Companies and the Company Subsidiaries and in accordance with the
accounting policies and practices set forth on Section 2.7 of the Disclosure
Schedules (the “Agreed Accounting Policies”). The Year End

 

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Financial Statements (i) have been prepared in accordance with GAAP (subject to
the Agreed Accounting Policies) applied on a consistent basis throughout the
period covered thereby, present fairly, in all material respects, the financial
position of the Companies and the Company Subsidiaries as of December 31, 2009
and the results of operations of the Companies and the Company Subsidiaries for
the year then ended, and are consistent with the books and records of Coinstar,
(ii) are accurate and complete (subject to the Agreed Accounting Policies),
(iii) have been based on reasonable assumptions, accruals and allocations in
accordance with GAAP applied on a consistent basis throughout the period covered
thereby (except as set forth in the Agreed Accounting Policies) and (iv) are
derived entirely from the books and records of Coinstar and the financial
statements of Coinstar prepared in accordance with GAAP included in Coinstar’s
filings under the Exchange Act. The Interim Financial Statements (i) have been
prepared in accordance with GAAP (subject to the Agreed Accounting Policies)
applied on a consistent basis throughout the period covered thereby, present
fairly, in all material respects, the financial position of the Companies and
the Company Subsidiaries as of the Balance Sheet Date and the results of
operations of the Companies and the Company Subsidiaries for the five-month
period then ended, and are consistent with the books and records of Coinstar,
and except for (A) normal year-end adjustments (which are not material
individually or in the aggregate), and (B) the omission of note disclosures
required by GAAP, (ii) are accurate and complete (subject to the Agreed
Accounting Policies), (iii) have been based on reasonable assumptions, accruals
and allocations in accordance with GAAP applied on a consistent basis throughout
the period covered thereby (except as set forth in the Agreed Accounting
Policies) and (iv) are derived entirely from the books and records of Coinstar
and the financial statements of Coinstar prepared in accordance with GAAP to be
included in Coinstar’s filings under the Exchange Act. Since the Balance Sheet
Date, none of the Sellers has effected any change in any method of accounting or
accounting practice, except for any such change required because of a concurrent
change in GAAP or to conform any Company Subsidiary’s accounting policies and
practices to those of any Sellers.

 

2.8 Absence of Changes or Events

Except as set forth on Section 2.8 of the Disclosure Schedules, since the
Balance Sheet Date each of the Companies and the Company Subsidiaries has
conducted its respective businesses and operations only in the ordinary course
of business, and there have been no events, series of events or the lack of
occurrence thereof which, individually or in the aggregate, could reasonably be
expected to have a Company Material Adverse Effect. Without limiting the
foregoing, except as expressly provided in this Agreement and the Disclosure
Schedules and Exhibits hereto, since that date, none of the following has
occurred:

(a) Neither the Companies nor any Company Subsidiary has leased, transferred, or
assigned any assets other than for a fair consideration in the ordinary course
of business and sales of assets have not exceeded $100,000 individually or
$250,000 in the aggregate.

(b) Neither the Companies nor any Company Subsidiary has entered into any
Contract (or series of related Contracts) either involving more than $200,000 or
outside the ordinary course of business.

 

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(c) No Encumbrance has been imposed upon any of the assets of the Companies or
the Company Subsidiaries.

(d) Neither the Companies nor any Company Subsidiary has made any capital
expenditure involving more than $250,000 individually, or series of related
capital expenditures involving more than $500,000 in the aggregate, or outside
the ordinary course of business.

(e) Neither the Companies nor any Company Subsidiary has made any capital
investment in, any loan to, or any acquisition of the securities or assets of,
any other Person involving more than $100,000 individually, $250,000 in the
aggregate, or outside the ordinary course of business.

(f) Other than with respect to intercompany loans, neither the Companies nor any
Company Subsidiary has issued any note, bond, or other debt security or created,
incurred, assumed, or guaranteed any Liability for borrowed money or capitalized
lease Contract either involving more than $100,000 individually or $250,000 in
the aggregate.

(g) Neither the Companies nor any Company Subsidiary has delayed or postponed
the payment of accounts payable or other Liabilities either involving more than
$100,000 (individually or in the aggregate) or outside the ordinary course of
business.

(h) Neither the Companies nor any Company Subsidiary has canceled, compromised,
waived, or released any Action (or series of related Actions) either involving
more than $150,000 or outside the ordinary course of business.

(i) Other than pursuant to agent agreements entered into in the ordinary course
of business, neither the Companies nor any Company Subsidiary has granted any
Contracts or any rights under or with respect to any Intellectual Property.

(j) There has been no change made or authorized to be made to the Charters
and/or Governing Documents of either the Companies or the Company Subsidiaries.

(k) Neither the Companies nor any Company Subsidiary has issued, sold, or
otherwise disposed of any of its Equity Interests.

(l) Neither the Companies nor any Company Subsidiary has declared, set aside, or
paid any dividend or made any distribution with respect to its Equity Interests
(whether in cash or in kind) or redeemed, purchased, or otherwise acquired any
of its Equity Interests.

(m) Neither the Companies nor any Company Subsidiary has experienced any damage,
destruction, or loss (whether or not covered by insurance) to its properties in
excess of $150,000 (individually or in the aggregate).

(n) Neither the Companies nor any Company Subsidiary has made any loan to, or
entered into any other transaction with, any of its directors, officers, or
employees.

 

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(o) Neither the Companies nor any Company Subsidiary has entered into any
employment, collective bargaining, or similar Contract or modified the terms of
any such existing Contract providing for annual payments in excess of $100,000.

(p) Neither the Companies nor any Company Subsidiary has committed to pay any
bonus or granted any increase in the base compensation (i) of any director,
officer, or Affiliate of any of the Companies or Company Subsidiaries, or
(ii) outside of the ordinary course of business for any of its other employees.

(q) Neither the Companies nor any Company Subsidiary has adopted, amended,
modified, or terminated any bonus, profit-sharing, incentive, severance, or
similar Contract for the benefit of any of its directors, officers, or employees
(or taken any such action with respect to any other Domestic Employee Benefit
Plan, Disclosed Scheme or Non-UK Foreign Plan).

(r) Neither the Companies nor any Company Subsidiary has made any other change
in employment terms (i) for any director or officer of the Companies or Company
Subsidiaries, or (ii) outside of the ordinary course of business for any of its
other employees.

(s) Neither the Companies nor any Company Subsidiary has made or pledged to make
any charitable contribution either involving more than $1,000 (individually or
in the aggregate) or outside the ordinary course of business.

(t) There has not been any other occurrence, event, incident, action, failure to
act, or transaction with respect to either the Companies or any Company
Subsidiary either involving more than $500,000 (individually or in the
aggregate) or outside the ordinary course of business;

(u) Neither the Companies nor any Company Subsidiary has committed to any of the
foregoing.

(v) Neither the Companies nor any Company Subsidiary has taken any action that
would have required the consent of Buyer pursuant to Section 4.1.

 

2.9 Undisclosed Liabilities

Except as disclosed on Section 2.9 of the Disclosure Schedules, neither of the
Companies nor any of the Company Subsidiaries has any Liabilities other than
(a) Liabilities disclosed, reflected or reserved in the Financial Statements,
(b) Liabilities which have arisen after the Balance Sheet Date in the ordinary
course of business of the Money Transfer Business which are not material and are
of the same character and nature as the Liabilities disclosed, reflected or
reserved in the Financial Statements, and (c) Liabilities incurred in connection
with this Agreement and the transactions contemplated hereby.

 

2.10 Taxes

(a) Except as set forth in Section 2.10(a) of the Disclosure Schedules, each of
the Companies and the Company Subsidiaries has (i) filed or caused to be filed
with the appropriate Governmental Entity all material Tax Returns required to be
filed by it (taking into account all

 

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applicable extensions), and all such Tax Returns were at the time they were
filed correct and complete in all material respects, and (ii) paid or accrued
(in accordance with GAAP) all material Taxes for which it is liable. There are
no liens for Taxes on the assets of any of the Companies or the Company
Subsidiaries, other than Permitted Encumbrances.

(b) Except as set forth in Section 2.10(b) of the Disclosure Schedules, there
are no unexpired written waivers to extend the statute of limitations applicable
to the assessment of any material Taxes for which any of the Companies or the
Company Subsidiaries may be liable. No federal, state, local, or non-U.S. tax
audits or administrative or judicial Tax proceedings are pending or being
conducted with respect to Companies or any of the Company Subsidiaries. Except
as set forth in Section 2.10(b) of the Disclosure Schedules, neither the
Companies nor any of the Company Subsidiaries has received from any federal,
state, local, or non-U.S. taxing authority (including jurisdictions where
Companies or the Company Subsidiaries have not filed Tax Returns) any written
(i) notice indicating an intent to open an audit or other review, (ii) request
for information related to Tax matters, or (iii) notice of deficiency or
proposed adjustment for any amount of Tax proposed, asserted, or assessed by any
taxing authority against the Companies or any of the Company Subsidiaries.
Sellers have delivered or made available to Buyer correct and complete copies of
all federal, state, local, and non-U.S. Income Tax Returns of the Companies and
the Company Subsidiaries (or the portion of Combined Returns that relate to the
Companies or the Company Subsidiaries), examination reports of or with respect
to the Companies and the Company Subsidiaries, and statements of deficiencies
assessed against or agreed to by or with respect to Companies or any of the
Company Subsidiaries filed or received since December 31, 2006.

(c) Except as set forth in Section 2.10(c) of the Disclosure Schedules, none of
the Companies or the Company Subsidiaries (i) is a party to any Tax allocation,
sharing or similar agreement, other than customary agreements with customers,
vendors, lessors and other third parties entered into in the ordinary course of
business, (ii) has been a member of an affiliated group filing consolidated
Income Tax Returns under Section 1501 of the Code or any similar provision of
state, local or non-U.S. Law (other than the group the common parent of which
was Coinstar), or (iii) has any present liability for Taxes of any Person (other
than its own) under Treasury Regulations Section 1.1502-6 or any similar
provision of state, local or non-U.S. Law.

(d) Except as set forth in Section 2.10(d) of the Disclosure Schedules, each of
Companies and the Company Subsidiaries have withheld and paid all Taxes required
to have been withheld and paid in connection with any amounts paid or owing to
any employee, independent contractor, creditor, stockholder, or other third
party.

(e) Neither the Companies nor any of the Company Subsidiaries is a party to any
agreement, contract, arrangement or plan that could result, separately or in the
aggregate, in the payment of any “excess parachute payment” within the meaning
of Code §280G (or any corresponding provision of state, local, or non-U.S. Tax
Law). Neither the Companies nor any of the Company Subsidiaries has been a
United States real property holding corporation within the meaning of Code
§897(c)(2) during the applicable period specified in Code §897(c)(1)(A)(ii).
Each of Companies and the Company Subsidiaries has disclosed on its federal
Income Tax Returns all positions taken therein that could give rise to a
substantial understatement of federal Income Tax within the meaning of Code
§6662.

 

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(f) The unpaid Taxes of Companies and the Company Subsidiaries (A) did not, as
of the Balance Sheet Date, exceed the reserve for Tax Liability (rather than any
reserve for deferred Taxes established to reflect timing differences between
book and Tax income) set forth on the face of the Interim Financial Statements
(rather than in any notes thereto) and (B) do not exceed that reserve as
adjusted for the passage of time through the Closing Date in accordance with the
past custom and practice of Companies and the Company Subsidiaries in filing
their Tax Returns. Since the Balance Sheet Date, neither Companies nor any of
the Company Subsidiaries has incurred any liability for Taxes arising from
extraordinary gains or losses, as that term is used in GAAP, outside the
ordinary course of business consistent with past custom and practice.

(g) Neither Companies nor any of the Company Subsidiaries will be required to
include any item of income in, or exclude any item of deduction from, taxable
income for any taxable period (or portion thereof) ending after the Closing Date
as a result of any:

(A) change in method of accounting for a taxable period ending on or prior to
the Closing Date;

(B) “closing agreement” as described in Code §7121 (or any corresponding or
similar provision of state, local, or non-U.S. Income Tax Law) executed on or
prior to the Closing Date;

(C) intercompany transaction or excess loss account described in Treasury
Regulations under Code §1502 (or any corresponding or similar provision of
state, local, or non-U.S. Income Tax Law);

(D) installment sale or open transaction disposition made on or prior to the
Closing Date; or

(E) prepaid amount received on or prior to the Closing Date.

(h) Except as set forth in Section 2.10(h) of the Disclosure Schedules, each of
the Foreign Subsidiaries of Sellers currently has in effect an election pursuant
to Treasury Regulations Section 301.7701-3(c) to be treated as disregarded as an
entity separate from its owner for U.S. federal tax purposes.

 

2.11 Property

(a) Except as set forth on Section 2.11 of the Disclosure Schedules, the
Companies and the Company Subsidiaries have good and marketable title to, or a
valid, binding and enforceable leasehold interest in, all of their properties
and assets (including valid leasehold interests in the Real Property described
below and those properties and assets reflected on the Financial Statements or
acquired by the Companies or the Company Subsidiaries since the Balance Sheet
Date), except property sold or otherwise disposed of since the Balance Sheet
Date. Except as set forth on Section 2.11 of the Disclosure Schedules, other
than assets

 

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disposed of in the ordinary course of business since the Balance Sheet Date, all
assets shown on the Interim Financial Statements or acquired after the date
thereof are owned by the Company free and clear of all Encumbrances (other than
Encumbrances disclosed in the Interim Financial Statements and Permitted
Encumbrances). Except as set forth on Section 2.11 of the Disclosure Schedules,
all of the assets owned or used by the Companies and the Company Subsidiaries
are in adequate condition and repair (ordinary wear and tear excepted) for the
operation of the Money Transfer Business as currently conducted. For the
avoidance of doubt, this Section 2.11(a) is not intended to and does not apply
to property or assets included within the definition of Intellectual Property.

(b) Neither CEPSI nor any of the Non-UK Foreign Subsidiaries owns any fee simple
interest in any Real Property. Neither UK Holdings nor any of the UK
Subsidiaries owns any freehold property.

(c) Section 2.11(c) of the Disclosure Schedules sets forth a list of the
addresses of each location at which any furniture, fixtures or equipment of the
Companies or any Company Subsidiaries is located or where the Companies or any
Company Subsidiary has an office or other place of business. Also set forth in
Section 2.11(c) of the Disclosure Schedules is an accurate and complete list of
leases of all Real Property leased or subleased by CEPSI, the Domestic
Subsidiaries and the Non-UK Foreign Subsidiaries as of the date hereof (the
“Non-UK Real Property Leases”), including a list of the lessee and lessor of
each of the Non-UK Real Property Leases. Except as set forth on Section 2.11(c)
of the Disclosure Schedules, the Companies have made available to Buyer or its
counsel accurate and complete copies of all written Non-UK Real Property Leases
and written summaries of the terms of any oral Non-UK Real Property Leases.
Except as set forth on Section 2.11(c) of the Disclosure Schedules, with respect
to each Non-UK Real Property Lease, (i) such lease is valid, binding and
enforceable in accordance with its terms against the parties thereto and, to the
Knowledge of the Sellers and the Companies, against any other Person with an
interest in the Real Property that is the subject of such Non-UK Real Property
Lease and will continue to be enforceable on identical terms following the
consummation of the transactions contemplated hereby, (ii) the respective
Company or Company Subsidiary has performed in all material respects all
obligations imposed on it thereunder, (iii) neither the respective Company or
Company Subsidiary nor, to the Knowledge of the Sellers and the Companies, any
other party thereto is in default thereunder, nor is there any event that with
the giving of notice or lapse of time, or both, would constitute a material
default thereunder by the respective Company or Company Subsidiary or, to the
Knowledge of the Sellers and the Companies, by any other party and (iv) the
Companies and each Company Subsidiary, as applicable, is in peaceful and
undisturbed possession of the Non-UK Real Property Leases and have not leased or
subleased any parcel or any portion of any parcel of any Non-UK Real Property
Leases to any other Person, nor assigned its respective interest under any
Non-UK Real Property Leases to any third party. The offices and other structures
and the personal property of CEPSI and the Non-UK Foreign Subsidiaries are of a
quality consistent with industry standards, are in good operating condition and
repair, normal wear and tear excepted, are adequate for the uses to which they
are being put, and, to the Knowledge of the Sellers and the Companies, comply in
all material respects with applicable safety and other Laws and regulations.

 

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(d) Except as set forth on Section 2.11(d) of the Disclosure Schedules, there
are no eminent domain, condemnation or other similar Proceedings pending or, to
the Knowledge of the Sellers and the Companies, threatened against CEPSI or the
Non-UK Foreign Subsidiaries or otherwise affecting any portion of the Real
Property that is the subject of the Non-UK Real Property Leases, nor have the
Sellers, the Companies or the Company Subsidiaries received any notice of the
same.

 

2.12 Intellectual Property

(a) Section 2.12(a) of the Disclosure Schedules contains a complete list of all
of the following that are owned or used by the Companies and/or any Company
Subsidiary: (i) patented or registered Intellectual Property; (ii) pending
patent applications and applications for other registrations of Intellectual
Property; (iii) material unregistered trademarks, unregistered service marks,
trade dress, logos, product identifiers, slogans, trade names, or corporate
names; (iv) internet domain name registrations; (v) material unregistered
copyrights; (vi) computer software (other than commercially available
off-the-shelf software purchased or licensed for less than a total aggregate
cost of $10,000); (vii) material trade secrets and other confidential business
and technical information; and (viii) any other material Intellectual Property
used in the operation of the Money Transfer Business as presently conducted by
the Companies and the Company Subsidiaries (collectively, “Company Intellectual
Property”).

(b) Except as set forth on Section 2.12(b) of the Disclosure Schedules, (i) the
Companies and the Company Subsidiaries own and possess all right, title and
interest to, or have a valid and enforceable written license or registration to
use, all Company Intellectual Property , free and clear of all Encumbrances
other than Permitted Encumbrances; (ii) the Company Intellectual Property
constitutes all of the Intellectual Property necessary for the operation of the
Money Transfer Business as presently conducted by the Companies and the Company
Subsidiaries; (iii) the Companies and the Company Subsidiaries have the required
number of software licenses on a per computer basis that are required by
off-the-shelf software licensors; (iv) the loss or expiration of any Company
Intellectual Property would not, singly or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect; (v) no loss or expiration of
any Company Intellectual Property is pending or, to the Knowledge of the
Companies or the Company Subsidiaries, threatened or reasonably foreseeable; and
(vi) the Companies and the Company Subsidiaries have taken all reasonable steps
to maintain and protect the Company Intellectual Property.

(c) Except as described in Section 2.12(c) of the Disclosure Schedules, neither
the Companies nor any of the Company Subsidiaries has any obligation to pay any
royalties, license fees or other forms of compensation or consideration to any
Person for the use of any of the Company Intellectual Property. Except as
described in Section 2.12(c) of the Disclosure Schedules, neither the Companies
nor any of the Company Subsidiaries have (i) entered into any agreement limiting
their right to use any of their material Company Intellectual Property or
(ii) granted any license to any Person for the use of any of their material
Company Intellectual Property.

(d) With respect to each trademark comprising the Company Intellectual Property
that is registered or the subject of a pending application for registration by
any of the

 

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Companies or the Company Subsidiaries, all necessary filings, payments and other
actions required to be made or taken to maintain such registration or
application have been made by the applicable deadline. Section 2.12(d) of the
Disclosure Schedules contains a complete and accurate description of each
action, filing and payment that must be taken or made on or before the date that
is 120 days after the Closing Date in order to maintain such registration or
application in full force and effect.

(e) Other than inbound commercially available off-the-shelf software purchased
or licensed for less than a total aggregate cost of $10,000, Section 2.12(e) of
the Disclosure Schedules lists all licenses to which any of the Companies or the
Company Subsidiaries is a party with respect to any third party Intellectual
Property. Except as described in Section 2.12(e) of the Disclosure Schedules,
(i) all such licenses are in full force and effect, and none of the Companies or
the Company Subsidiaries is in breach of, nor has any Company or any Company
Subsidiary failed to perform under, any of the foregoing licenses, except for
such breach or failure to perform that would not, individually or in the
aggregate, have a Company Material Adverse Effect; and (ii) neither the
execution, delivery or performance of this Agreement, nor the consummation of
the transactions contemplated hereby, will alter, impair or require the consent
of any other Person in respect of, or give rise to or cause a right of
termination under, or breach of, any such licenses relating to any Company
Intellectual Property.

(f) Except as set forth on Section 2.12(f) of the Disclosure Schedules, (i) all
of the Company Intellectual Property is valid and subsisting and enforceable;
(ii) no claim by any third party has been made, is currently outstanding or to
the Knowledge of the Companies or the Company Subsidiaries, is threatened,
contesting the validity, enforceability, use or ownership, or asserting misuse,
of any of the Company Intellectual Property; (iii) the Companies and the Company
Subsidiaries have not infringed or misappropriated, violated or otherwise
conflicted with, any Intellectual Property of other Persons or given rise to
unfair competition; (iv) to the Knowledge of the Companies and the Company
Subsidiaries, there are no facts which indicate a likelihood of any of the
foregoing and the Companies and the Company Subsidiaries have not received any
notices regarding any of the foregoing (including, without limitation, any
demands to license any Intellectual Property from any third party); (v) the
Companies and the Company Subsidiaries are not in breach of, or in default under
any license of Intellectual Property; (vi) the Companies and the Company
Subsidiaries have not entered into any contract, agreement or arrangement, or
are subject to any order or decree, which limits their rights in or to any of
the Company Intellectual Property; and (vii) to the Knowledge of the Companies
and the Company Subsidiaries, the Company Intellectual Property has not been
infringed, misappropriated, violated or otherwise conflicted by other Persons
and no Person is currently infringing, misappropriating, violating or otherwise
conflicting with any Company Intellectual Property.

(g) The Companies and the Company Subsidiaries have taken all commercially
reasonable steps to protect the Company’s confidential information and other
confidential information and trade secrets provided by any other Person to such
parties subject to a duty of confidentiality.

 

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(h) To the Knowledge of the Companies and the Company Subsidiaries, none of the
software constituting the Company Intellectual Property (i) contains any bug,
defect, or error (including, without limitation, any bug, defect, or error
relating to or resulting from the display, manipulation, processing, storage,
transmission, or use of date data) that has a material adverse effect on the
use, functionality, or performance of such software or any product, service or
system containing or used in conjunction with such software; (ii) fails to
materially comply with any applicable warranty or other contractual commitment
relating to the use, functionality, or performance of such software; or
(iii) contains any “back door,” “drop dead device,” “time bomb,” “Trojan horse,”
“virus,” or “worm” (as such terms are commonly understood in the software
industry) or any other software routines designed to permit unauthorized access
or to disrupt, disable, erase, damage, harm, or otherwise impede in any manner
any software, hardware, system, network or data without the consent of the user
that has a material adverse effect on the use, functionality or performance of
such software.

(i) Except as set forth on Section 2.12(i) of the Disclosure Schedules, no
Company Intellectual Property owned by the Companies or any of the Company
Subsidiaries, including any software, is, in whole or in part, subject to the
provisions of any open source, quasi-open source or other source code license
agreement that imposes or could impose any material limitation, restriction or
condition on the right or ability of the Companies or any of the Company
Subsidiaries to use or distribute such Company Intellectual Property.

 

2.13 Contracts

 

  2.13.1 Material Contracts

Section 2.13.1 of the Disclosure Schedules contains an accurate and complete
list of, every agreement, written or oral, in each of the following categories
to which any of the Companies or the Company Subsidiaries is a party to or bound
by (each, a “Material Contract”):

(a) employment or consulting agreements (excluding any such contracts or
arrangements for which the total compensation for the following year is expected
to be less than $100,000 per person) or any severance agreements or “change of
control,” “golden parachute,” or bonus or incentive compensation agreements
(including any profit sharing, stock option, stock purchase, stock appreciation,
deferred compensation or other similar agreements) with, or for the benefit of,
its current or former employees, officers or directors or managers (as
applicable) of the Companies and the Company Subsidiaries;

(b) employee collective bargaining agreements or other contracts with any labor
union;

(c) leases, rentals, occupancy, installment and conditional sale agreements or
similar agreements not made in the ordinary course of business under which a
Company or a Company Subsidiary is a lessee of, or holds or uses, any machinery,
equipment, vehicle or other tangible personal property owned by a third party at
an annual payment in excess of $100,000 or which are not terminable by a Company
or Company Subsidiary on ninety (90) days’ notice without penalty or premium;

 

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(d) Contracts that involve the obligation of a Company or a Company Subsidiary
to purchase materials, supplies, equipment or services from others for payment
of more than $100,000 or which are not terminable by a Company or Company
Subsidiary on ninety (90) days’ notice without penalty or premium, or which may
result in a material loss to the Companies and/or a Company Subsidiary;

(e) Contracts (excluding purchase orders, sales orders or invoices) that involve
the sale of assets or properties of a Company or a Company Subsidiary for more
than $100,000 or the obligation of a Company or Company Subsidiary to deliver
products or services to third parties for annual payment of more than $100,000
or which are not terminable by a Company or Company Subsidiary on ninety
(90) days’ notice without penalty or premium;

(f) Contracts pursuant to which a Company or a Company Subsidiary has acquired
or agreed to acquire an equity interest in or all or substantially all of the
assets or business of any other entity or Person;

(g) excluding the Swingline and any intercompany loans among the Sellers,
Companies and/or Company Subsidiaries which will be terminated pursuant to
Section 4.16 of this Agreement, agreements, credit or financing instruments or
contracts under which a Company or a Company Subsidiary has borrowed any money
or issued any note, bond, indenture or other similar evidence of indebtedness or
guaranteed indebtedness, liabilities or obligations of others, in each case for
an amount in excess of $100,000 (other than endorsements for the purpose of
collection in the ordinary course of business);

(h) mortgages, pledges, security agreements, deeds of trust or other documents,
in each case granting a lien (including liens upon properties acquired under
conditional sales, capital leases or other title retention or security devices)
securing obligations in excess of $100,000;

(i) agreements that contain express restrictions that materially limit the
ability of a Company or a Company Subsidiary to conduct its business in the
ordinary course and which are not terminable by a Company or Company Subsidiary
on ninety (90) days’ notice without penalty or premium;

(j) agreements between a Company or a Company Subsidiary and any officer or
director or manager (as applicable) of a Company or a Company Subsidiary or any
Affiliate of any such officer or director or manager (as applicable), except for
employment arrangements in the ordinary course of business;

(k) any Contracts concerning any partnerships, joint ventures, limited liability
companies or similar arrangements;

(l) Contracts that require individual capital expenditures after the date hereof
in an amount in excess of $100,000 (or $250,000 in the aggregate) and which are
not terminable by a Company or Company Subsidiary on ninety (90) days’ notice
without penalty or premium;

 

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(m) any Contracts pursuant to which funds have been advanced or loaned, or
invested in, any other Person in amounts exceeding $100,000 in the aggregate
outside the ordinary course;

(n) other Contracts, including customer and agent contracts, that involve
aggregate annual payments, including any amounts retained by agents, of more
than $100,000;

(o) Other Contracts, excluding agent contracts, that obligate a Company to make
aggregate payments of more than $250,000; and

(p) any agreements or Contracts with any Governmental Entity.

 

  2.13.2 No Breach of Material Contracts

Except as set forth on Section 2.13.2 of the Disclosure Schedules, all Material
Contracts are valid, binding and enforceable against each of the parties
thereto, in accordance with their respective terms and are in full force and
effect and will continue to be enforceable on identical terms following the
consummation of the transactions contemplated hereby. Except as set forth on
Section 2.13.2 of the Disclosure Schedules, (i) the Companies and the Company
Subsidiaries have performed all obligations required to be performed by them and
they are not in default under or in breach of nor in receipt of any claim of
default or breach under any Material Contract; (ii) no event has occurred which
with the passage of time or the giving of notice or both would result in such a
default, breach or event of noncompliance by the Companies or any Company
Subsidiaries under any such Material Contract; and (iii) to the Knowledge of the
Sellers and the Companies (A) no such Material Contract is currently subject to
or is expected to be subject to, cancellation, termination or any other material
modification or repudiation by the other party thereto or is subject to, or is
expected to be subject to, any penalty, right of set off or other charge by the
other party thereto for late performance or delivery, and (B) there is no breach
or anticipated breach by the other parties to any such Material Contract.

 

  2.13.3 Availability of Material Contracts

Buyer has been supplied with a true and correct copy of each of the written
agreements that are referred to in Section 2.13.1, together with all written
amendments, waivers or other changes thereto as well as a written summary
setting forth the terms and conditions of each oral Contract referred to in
Section 2.13.1.

 

2.14 Litigation

Section 2.14 of the Disclosure Schedules sets forth an accurate and complete
list of each lawsuit, Claim, Proceeding or investigation instituted and served
upon any of the Companies and the Company Subsidiaries or filed, pending or, to
the Knowledge of the Sellers, threatened against any of the Companies or the
Company Subsidiaries or any of their properties, assets, operations or
businesses (including any of their respective shareholders, directors, officers,
or employees with respect to the business of the Companies and the Company
Subsidiaries) in the last three (3) years in which the damages claimed against
the respective Company, Company Subsidiary or other party related thereto exceed
$50,000, other than ordinary course workers’ compensation Proceedings, or which
challenge or seek to enjoin or delay this Agreement or any

 

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action to be taken in connection herewith or that would materially and adversely
affect the Companies or the Company Subsidiaries, including their ability to
perform their obligations under this Agreement or to consummate the transactions
contemplated hereby. To the Knowledge of the Sellers, there is no reasonable
basis for any of the foregoing. Section 2.14 of the Disclosure Schedules sets
forth an accurate and complete list of each lawsuit, Claim, Proceeding or
investigation instituted and served by the Companies or any Company Subsidiary
against any Person during the last three (3) years, excluding Claims relating to
collection and settlement of accounts filed in the ordinary course of business
of the Companies and Company Subsidiaries. Except as disclosed in Section 2.14
of the Disclosure Schedules, there are no judgments, Orders, decrees or
injunctions of any Governmental Entity against or affecting any of the Companies
or the Company Subsidiaries or any of their respective properties, assets,
operations or businesses that expose any of the Companies or Company
Subsidiaries to, and neither the Companies nor any Company Subsidiary has
received any written opinion or memorandum from legal counsel to the effect that
it is exposed from a legal standpoint to, any material Liabilities. None of the
Companies or the Company Subsidiaries is in default under any judgment, Order or
decree. Also set forth on Section 2.14 of the Disclosure Schedules is a brief
description of any lawsuit, Claim or Proceeding instituted against the Companies
or any Company Subsidiary that has been settled, dismissed or resolved since
January 1, 2005, including amounts paid to the other party to settle, dismiss or
resolve such actions, except for any (a) collection and settlement of accounts
lawsuits, Claims or Proceedings filed in the ordinary course of business of the
Companies and Company Subsidiaries, and (b) ordinary course workers’
compensation lawsuits, Claims or Proceedings.

 

2.15 Insurance

Set forth in Section 2.15 of the Disclosure Schedules is an accurate and
complete list of all policies of insurance held by, or the premiums on which are
paid (in whole or in part) by, any of the Companies and the Company Subsidiaries
(setting forth the type of coverage, the annual premiums, deductibles, insurance
carrier, policy number, policy period and coverage amounts therefor and an
indication whether such policy is on a “claims made” or “occurrence” basis).
Except as specified in Section 2.15 of the Disclosure Schedules, (i) all such
policies are in full force and effect and will continue to be in full force and
effect following the transactions contemplated hereby, and none of the limits
contained in any such policy has been exhausted or materially reduced, and
(ii) all premiums due and payable by the Companies or the Company Subsidiaries
thereon have been paid in full or accrued on the Financial Statements and the
respective Company or Company Subsidiary has not received any written notice of
cancellation, amendment or dispute as to coverage with respect to any such
policies. Section 2.15 of the Disclosure Schedules sets forth a list of
(i) claims asserted since April 30, 2006, that were reported to insurance
carriers or the subject of self insurance with respect to (1) CUHL and its
subsidiaries and/or (2) Coinstar Money Transfer SAS (together, the “European
Operations Subsidiaries”) and (ii) claims asserted since January 1, 2008 that
were reported to insurance carriers or the subject of self insurance with
respect to the Company and/or the Company Subsidiaries other than the European
Operations Subsidiaries. The Companies and the Company Subsidiaries are not in
default with respect to their obligations under any insurance policy maintained
by them and, no premiums will be due after the Closing under any such policy for
coverage for periods prior to the Closing with respect to which no accrual is
made or reflected in the Financial Statements. The insurance coverage of the
Companies and the Company

 

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Subsidiaries is of a kind and type routinely carried by firms of similar size
engaged in similar lines of business and is sufficient to comply with the
insurance obligations of the Companies and the Company Subsidiaries in each of
their contracts and agreements. There are no gaps in historical coverage under
any such policy; the Companies and the Company Subsidiaries and their assets and
properties are insured in amounts no less than is required by applicable Law or
any contract or agreement or lease to which the Companies and/or the Company
Subsidiaries are a party; all premiums due and payable under such policies and
bonds have been paid in all material respects by the Companies and the Company
Subsidiaries; all claims, litigation and circumstances and occurrences that
could give rise to a claim that would be covered by such policies have been
properly reported to and accepted by the applicable insurer; there is no claim
pending under any such policy that has been denied or rejected, questioned or
disputed by any insurer or as to which any insurer has made any reservation of
rights or refused to cover all or any portion of such claims; and the Companies
and the Company Subsidiaries have no Knowledge of a threatened termination of,
or material premium increase with respect to, any of such policies.

 

2.16 Employee Benefit Plans

 

  2.16.1 Employee Benefit Plan Listing and Documents

Section 2.16.1 of the Disclosure Schedules contains a complete and accurate list
of all Employee Benefit Plans sponsored or contributed to by CEPSI or any of the
Domestic Subsidiaries for the benefit of any current or former employee of CEPSI
or any of the Domestic Subsidiaries or with respect to which CEPSI or any of the
Domestic Subsidiaries has any material liability (each, a “Domestic Employee
Benefit Plan” and, collectively, the “Domestic Employee Benefit Plans”). CEPSI
has delivered or made available to Buyer, with respect to each Domestic Employee
Benefit Plan (to the extent applicable thereto), true, correct and complete
copies of (i) the plan document, as currently in effect, or, if such Domestic
Employee Benefit Plan is not in writing, a written description of such Domestic
Employee Benefit Plan; (ii) the three most recent annual reports (Form 5500
series and all schedules thereto) filed with respect to such Domestic Employee
Benefit Plan; (iii) the most recent summary plan description, and all summaries
of material modifications related thereto, distributed with respect to such
Domestic Employee Benefit Plan; (iv) the most recent determination letter issued
by the IRS with respect to such Domestic Employee Benefit Plan; and (v) any
trust, insurance contract or other material document related to any Domestic
Employee Benefit Plan (other than the Coinstar, Inc. 401(k) Retirement Savings
Plan).

 

  2.16.2 Compliance

Each Domestic Employee Benefit Plan has been maintained, funded and administered
in all material respects in accordance with its terms and in compliance with
applicable Law, including, without limitation, the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), and the Code. None of the Sellers,
CEPSI, the Domestic Subsidiaries, or the employees of any of the foregoing or,
to the Knowledge of the Sellers and the Companies, any other Person (a) has
engaged in a prohibited transaction, within the meaning of Section 406 of ERISA
or Section 4975 of the Code, with respect to which CEPSI and the Domestic
Subsidiaries would incur a material liability or penalty under Section 4975 of
the Code or

 

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Section 502(i) of ERISA or (b) has breached its fiduciary duties under ERISA
with respect to any Domestic Employee Benefit Plan in such a way as would result
in a material liability to CEPSI and the Domestic Subsidiaries. All
contributions and premium payments required to be made by CEPSI and the Domestic
Subsidiaries to the Domestic Employee Benefit Plans have been timely made or
properly accrued in accordance with applicable law and past practice, except as
would not result in a material liability to CEPSI and the Domestic Subsidiaries.
CEPSI, the Domestic Subsidiaries and each ERISA Affiliate has complied in all
material respects with the applicable requirements of Section 4980B of the Code
and Part 6 of Subtitle B of Title I of ERISA and any similar state Law.

 

  2.16.3 Qualification

Each Domestic Employee Benefit Plan that is intended to be qualified under
Section 401(a) of the Code (i) is the subject of an unrevoked favorable
determination letter from the IRS, (ii) has remaining a period of time under the
Code or applicable Treasury Regulations or IRS pronouncements in which to
request, and make any amendments necessary to obtain, such a letter from the
IRS, or (iii) is a prototype plan or volume submitter plan entitled, under
applicable IRS guidance, to rely on the favorable opinion or advisory letter
issued by the IRS to the sponsor of such prototype or volume submitter plan. To
the Knowledge of the Sellers and the Companies, nothing has occurred that would
reasonably be expected to adversely affect the tax-qualified status of any such
Domestic Employee Benefit Plan.

 

  2.16.4 Pension Plans

None of CEPSI, the Domestic Subsidiaries or ERISA Affiliates sponsors or
contributes to or, at any time during the last six (6) years, has sponsored or
contributed to (or had any liability with respect to) any employee benefit plan
that is subject to Section 302 of ERISA, Title IV of ERISA or Section 412 of the
Code (including, without limitation, any “multiemployer plan,” as defined in
Section 4001(a)(3) of ERISA).

 

  2.16.5 Post-Termination Welfare Benefits

Except as disclosed on Section 2.16.5 of the Disclosure Schedules, none of the
Domestic Employee Benefit Plans provides life insurance, medical or other
welfare benefits (within the meaning of Section 3(1) of ERISA) to any employee
or former employee of CEPSI or the Domestic Subsidiaries after his or her
retirement or other termination of employment, and CEPSI and the Domestic
Subsidiaries have never represented, promised or contracted to any employee or
former employee that such benefits would be provided, except (i) to the extent
required by applicable Law, including, without limitation, Section 4980B of the
Code and Part 6 of Subtitle B of Title I of ERISA, and (ii) conversion rights.

 

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  2.16.6 Suits, Claims and Investigations

There are no actions, suits or Claims (other than routine claims for benefits)
pending or, to the Knowledge of the Sellers and the Companies, threatened with
respect to (or against the assets of) any Domestic Employee Benefit Plan or
Non-UK Foreign Plan. No Domestic Employee Benefit Plan or Non-UK Foreign Plan is
currently under investigation, audit or review, directly or indirectly, by any
Governmental Entity and, to the Knowledge of the Sellers and the Companies, no
such action is contemplated or under consideration by any Governmental Entity.

 

  2.16.7 Non-UK Foreign Plans

Each material employee benefit plan, policy and arrangement sponsored or
contributed to by any of the Non-UK Foreign Subsidiaries that is mandated by a
Governmental Entity, or is subject to the laws of a jurisdiction, outside of the
United States and the United Kingdom (each, a “Non-UK Foreign Plan” and,
collectively, the “Non-UK Foreign Plans”) that is intended to qualify for
special tax treatment meets all of the requirements for such treatment and has
obtained all necessary approvals of all relevant Governmental Entities. No
Non-UK Foreign Plan has any material unfunded liabilities, determined in
accordance with GAAP, that have not been fully accrued on the Financial
Statements or that will not be fully offset by insurance. All Non-UK Foreign
Plans are registered where required by, and are in compliance under, all
applicable Laws, except for failures that would not result in a material
liability to CEPSI, the Domestic Subsidiaries or the Non-UK Foreign
Subsidiaries.

 

  2.16.8 Effect of Transactions

Except to the extent required by Law, the transactions contemplated by this
Agreement shall not result in the acceleration or vesting of any benefit or
payment due under any Domestic Employee Benefit Plan or any material Contract or
trigger any severance or change of control obligations or payments to any
current or former employee or director of the CEPSI, the Domestic Subsidiaries
or the Non-UK Foreign Subsidiaries.

 

2.17 Compliance With Applicable Laws

(a) Except as set forth in Section 2.17(a) of the Disclosure Schedules, the
Companies, the Company Subsidiaries, and their properties and assets are in
compliance with all applicable Laws, except for any Immaterial Non-Compliance.
None of the Companies or the Company Subsidiaries has received any written
communication from any Governmental Entity that alleges that any of the
Companies, the Company Subsidiaries, or to the Knowledge of the Companies and
Company Subsidiaries, their respective agents, is in violation of any applicable
Law, the substance of which communication has not been resolved. To the
Knowledge of the Sellers, the Companies and the Company Subsidiaries, excluding
routine Title 31 or state money transmission audits, (i) there is no threatened
investigation, inquiry or Action (and to the Knowledge of the Companies and
Company Subsidiaries, there is no basis therefor) against the Sellers, the
Companies, the Company Subsidiaries or their respective agents alleging any
failure to so comply with any applicable Law, and (ii) there are no pending
audits, inquiries, investigations, claims, notices or demands for duties, fines,
penalties, seizures, forfeitures,

 

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removal of personnel or liquidated damages by any Governmental Entity alleging
the failure to comply with applicable Law by the Companies, the Company
Subsidiaries or their respective agents. To the Knowledge of the Sellers, the
Companies and the Company Subsidiaries, (i) none of the Companies, the Company
Subsidiaries or their respective agents has committed any acts or omissions that
could reasonably give rise to any such inquiry, investigation, claim, notice or
demand and (ii) no inquiry, investigation, claim, notice or demand has been
threatened.

(b) Without limiting the generality of the immediately preceding subsection (a),
except as set forth in Section 2.17(b) of the Disclosure Schedules, the
Companies and the Company Subsidiaries have acted in conformity with all
applicable Laws, including, but not limited to, all applicable Laws pertaining
to export controls, economic sanctions, national security controls, and similar
regulations of international commerce, including the U.S. Export Administration
Regulations, 15 C.F.R. pt. 730 et seq., the U.S. antiboycott rules, 15 C.F.R.
pt. 760 et seq. and 26 U.S.C. § 908 and 999, the Office of Foreign Assets
Control regulations, 31 C.F.R. pt. 500 et seq., and all applicable non-U.S.
counterparts or equivalents of the foregoing. Also, without limiting the
generality of the immediately preceding subsection (a), the Companies and the
Company Subsidiaries and their respective employees and agents have acted in
conformity with all applicable Laws pertaining to corrupt, illegal or
unauthorized payments, including, but not limited to, the U.S. Foreign Corrupt
Practices Act of 1977, as amended, 15 U.S.C. §§ 78dd-1, et seq., and all
relevant and applicable non-U.S. counterparts or equivalents of the foregoing,
and neither the Companies nor any Company Subsidiary, nor any director, officer,
or, any agent or employee of the Companies or any Company Subsidiary, or to the
Knowledge of the Companies or any Company Subsidiary, any other Person
associated with or acting for or on behalf of the Companies or any Company
Subsidiary, has directly or indirectly (i) made any unlawful contribution, gift,
bribe, rebate, payoff, influence payment, kickback, or other payment to any
Person, private or public, regardless of form, whether in money, property, or
services (A) to obtain favorable treatment in securing business, (B) to pay for
favorable treatment for business secured, (C) to obtain special concessions or
for special concessions already obtained, for or in respect of the Companies,
the Company Subsidiaries or any Affiliates thereof, or (D) in violation of any
applicable Law; (ii) established or maintained any fund or asset or made any
disbursement or payment that has not been accurately recorded and described in
the books and records of the Company and/or the Company Subsidiaries; or
(iii) has been convicted of any crime in connection with the business of the
Companies and the Company Subsidiaries.

(c) Without limiting the generality of the immediately preceding subsections (a)
and (b), except as set forth in Section 2.17(c) of the Disclosure Schedules, the
Companies have acted in conformity with all applicable U.S. anti-money
laundering Laws (e.g., 18 U.S.C. §§ 1956-57, 18 U.S.C. § 1960 and 31 U.S.C.
§§ 5311-32) and all applicable non-U.S. counterparts or equivalents of the
foregoing.

 

2.18 Licenses; Permits

The Companies and the Company Subsidiaries possess all Permits required to be
obtained for operation of the Money Transfer Business as currently conducted.
Except as set forth in Section 2.18 of the Disclosure Schedules, all Permits of
the Companies and the Company Subsidiaries are validly held by or issued to the
Companies and the Company Subsidiaries and are in full force and effect, there
are no violations of such Permits that would

 

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result in a termination of such Permits and the Sellers, the Companies and the
Company Subsidiaries have not received notice that any of such Permits would not
be renewed by any Governmental Entity. There are no pending or, to the Knowledge
of the Sellers, the Companies and the Company Subsidiaries, threatened
Proceedings seeking to limit, modify or rescind any Permits. None of the Permits
required for operation of the businesses of any Companies or any Company
Subsidiaries will be subject to suspension, modification or revocation or
require the transfer or reissuance by any Governmental Entity as a result of
this Agreement or the consummation of the transactions contemplated hereby.

 

2.19 Money Transfer Business

Except as set forth in Section 2.19 of the Disclosure Schedules, the Companies
and the Company Subsidiaries own the assets and hold the legal rights necessary
to carry on the Money Transfer Business as now conducted by the Companies and
the Company Subsidiaries in all material respects.

 

2.20 Environmental Matters

To the Knowledge of the Sellers and the Companies, the Companies and the Company
Subsidiaries have complied with and are in compliance in all material respects
with all federal, state, foreign, provincial and local statutes, laws,
ordinances, regulations, rules, permits, judgments, orders and decrees
applicable to them or any of their properties, assets, operations or business
relating to environmental protection, including, without limitation, standards
relating to air, water, land and the generation, storage, transportation,
treatment or disposal of solid waste and hazardous waste (“Environmental Laws”),
except for noncompliance that would not, individually or in the aggregate, be
material to the Companies or the Company Subsidiaries. To the Knowledge of the
Sellers and the Companies and except as set forth in Section 2.20 of the
Disclosure Schedules, none of the Sellers, the Companies or the Company
Subsidiaries has received any written or oral notice, report or other
information regarding any actual or alleged violation of any Environmental Laws
with respect to the Companies, the Company Subsidiaries or the Money Transfer
Business. None of the Companies or the Company Subsidiaries has treated, stored,
disposed of, arranged for or permitted the disposal of, transported, handled or
released any substance in a manner that could give rise or could reasonably be
foreseen to give rise to liabilities, including any liability for response
costs, corrective action costs, personal injuries, natural resource damages or
attorneys’ fees or any investigative, corrective action or remedial obligations
pursuant to any Environmental Law, except for liabilities that would not,
individually or in the aggregate, be material to the Companies or the Company
Subsidiaries. To the Knowledge of the Sellers and the Companies, none of the
following exists at any of the Real Property: (a) underground storage tanks;
(b) friable asbestos-containing material; (c) materials or equipment containing
polychlorinated biphenyls; or (d) landfills or open dumps, surface impoundments
or hazardous waste disposal areas.

 

2.21 Employee and Labor Matters

Except as set forth in Section 2.21 of the Disclosure Schedules, none of CEPSI,
the Domestic Subsidiaries or the Non-UK Foreign Subsidiaries is a party to or
otherwise bound by any collective bargaining agreement or other labor union
contract applicable to Persons

 

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employed by CEPSI, the Domestic Subsidiaries or the Non-UK Foreign Subsidiaries,
and no collective bargaining agreement is being negotiated by CEPSI, the
Domestic Subsidiaries or the Non-UK Foreign Subsidiaries. Except as set forth in
Section 2.21 of the Disclosure Schedules, there is no labor strike, or organized
labor dispute, or material work stoppage or lockout actually pending or, to the
Knowledge of the Sellers and the Companies, threatened against or affecting
CEPSI or the Domestic Subsidiaries or the Non-UK Foreign Subsidiaries. Except as
set forth in Section 2.21 of the Disclosure Schedules, there is no contract of
employment (written or oral, express or implied) existing between any employee
and CEPSI, the Domestic Subsidiaries or the Non-UK Foreign Subsidiaries, that
would be breached by Buyer terminating such employee without cause, at any time,
without advance notice. Except as set forth in Section 2.21 of the Disclosure
Schedules, (a) CEPSI, the Domestic Subsidiaries and the Non-UK Foreign
Subsidiaries are in compliance with all applicable Laws relating to employment
and employment practices, wages, hours, and terms and conditions of employment,
occupational safety, discrimination, immigration, and the payment of
payroll-related taxes and other required taxes, including social security taxes,
except for such noncompliance that would not individually or in the aggregate be
material to the Company and the Company Subsidiaries; (b) there are no charges
against CEPSI, the Domestic Subsidiaries or the Non-UK Foreign Subsidiaries
pending before the Equal Employment Opportunity Commission or any state, local
or foreign agency responsible for the prevention of unlawful employment
practices; (c) there is no unfair labor practice charge or complaint against
CEPSI, the Domestic Subsidiaries or the Non-UK Foreign Subsidiaries pending or,
to the Knowledge of the Sellers and the Companies, threatened before the
National Labor Relations Board or any comparable state or foreign agency; and
(d) there is no plan or intention, to the Knowledge of the Sellers and the
Companies, of any employee of CEPSI, the Domestic Subsidiaries or the Non-UK
Foreign Subsidiaries to take any action that would adversely affect the business
of the Sellers.

 

2.22 Transactions With Certain Persons

Except as set forth in Section 2.22 of the Disclosure Schedules, no officer,
director or manager (as applicable) of the Companies or the Company Subsidiaries
or any Affiliate of any such Person nor any member of any such Person’s
immediate family is a party to any contract, agreement, transaction or other
arrangement with the Companies or the Company Subsidiaries (a) providing for the
furnishing of services (except in such Person’s capacity as an officer,
director, manager or employee), (b) providing for the rental of real or personal
property to or from any such Person, (c) providing for a loan or advance of
funds to or from any such Person, or (d) otherwise requiring payments (other
than for services as an officer, director, manager or employee) to or from any
such Person.

 

2.23 Company Books and Records

Except as set forth in Section 2.23 of the Disclosure Schedules, the Companies
have furnished to Buyer for examination accurate and complete copies of (a) the
Charter and Governing Document of each of the Companies and the Company
Subsidiaries as currently in effect, including all amendments thereto, (b) the
minute books of each of the Companies and the Company Subsidiaries, and (c) the
stock transfer books of the Companies and the Company Subsidiaries, or, in each
case, the relevant local equivalent in the jurisdiction of incorporation,
collectively, the “Books and Records.” At the Closing, all of the Books and
Records will be in the possession of the Companies and Company Subsidiaries.

 

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2.24 No Broker or Finder; No Transaction Bonuses

Except as set forth in Section 2.24 of the Disclosure Schedules, (i) none of the
Sellers, the Companies or the Company Subsidiaries has any liability or
obligation, directly or indirectly, to pay any fees or commissions to any
investment banker, broker, finder or financial advisor with respect to the
transactions contemplated by this Agreement, and (ii) there are no special
bonuses or other similar compensation payable by the Sellers, the Companies or
the Company Subsidiaries to any of their respective directors, officers,
employees or consultants in connection with the transactions contemplated
hereby. Notwithstanding anything contained herein to the contrary and except as
set forth in Section 2.24 of the Disclosure Schedules, the Sellers are solely
responsible for all brokerage commissions or other compensation set forth in
Section 2.24 of the Disclosure Schedules.

 

2.25 Receivables

All work in process and all Receivables reflected on the Financial Statements
represent bona fide transactions, arose in the ordinary course of business of
the Companies and the Company Subsidiaries and are properly reflected on their
books and records. All of the Receivables are good and collectible in accordance
with past practice and the terms of such Receivables without any set off or
counterclaims, subject only to any provision, reserve or similar adjustment for
bad debts reflected on the balance sheet included in the Interim Financial
Statements. To the Knowledge of the Sellers, the Companies and the Company
Subsidiaries, no customer or supplier of the Companies and/or any Company
Subsidiary has any basis to believe that it has or would be entitled to any
payment terms other than terms in the ordinary course of business, including any
prior course of conduct. No agreement for deduction, free goods, discount or
other adjustment has been made with respect to such Receivables, and to the
Knowledge of Sellers, no Person has any Encumbrance on any such Receivables or
any part thereof.

 

2.26 Agents

Section 2.26 of the Disclosure Schedules sets forth the names for the fifty
largest third party agents of the Companies and the Company Subsidiaries and all
third party agents that account for more than 5% of the revenue generated by the
Companies and the Company Subsidiaries in the Money Transfer Business during the
year ended December 31, 2009 (individually, a “Major Agent”). No Major Agent has
terminated, materially reduced or otherwise materially altered its business with
the Companies or any Company Subsidiaries since such date and no Major Agent has
notified the Companies or any Company Subsidiaries of any material dispute,
grievance or complaint relating to or arising out of its relationship with the
Companies or any Company Subsidiaries. To the Knowledge of the Sellers and the
Companies, no Major Agent intends to terminate, materially reduce or otherwise
materially alter its business with the Companies or any Company Subsidiaries,
and no Major Agent intends to bring any dispute, grievance or complaint relating
to or arising out of its relationship with the Companies or any Company
Subsidiaries. To the Knowledge of the Sellers and Companies, no Major Agent is
threatened with bankruptcy or insolvency.

 

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2.27 Disclosure

Neither this Agreement nor any of the schedules, attachments or exhibits hereto
contains any untrue statement of a material fact or omits a material fact
necessary to make the statements contained herein or therein, in light of the
circumstances in which they were made, not misleading.

ARTICLE III - REPRESENTATIONS AND WARRANTIES OF BUYER

As a material inducement to Sellers to enter into and perform their obligations
under this Agreement and the Operating Documents, Buyer hereby represents and
warrants to Sellers as of the date of this Agreement and as of the Closing Date
as follows in this Article III:

 

3.1 Organization and Authority

Buyer is an entity duly created, formed and organized, validly existing and in
good standing under the laws of the State of Delaware. Buyer has all requisite
corporate power and corporate authority to own, lease or otherwise hold its
properties and assets as now owned, leased and used and to carry on its business
as presently conducted.

 

3.2 Authorization

Buyer has all requisite corporate power and corporate authority to enter into
this Agreement and to perform its obligations hereunder and to consummate the
transactions contemplated hereby. All necessary corporate acts and other
proceedings required to be taken by Buyer to authorize the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly and properly taken and no other action on the
part of Buyer is necessary to authorize the execution and delivery of this
Agreement by Buyer, the performance by Buyer of its obligations under this
Agreement or the consummation by Buyer of the transactions contemplated by this
Agreement. This Agreement has been duly executed and delivered by Buyer and
constitutes the legal, valid and binding obligation of Buyer, enforceable
against Buyer in accordance with its terms; provided that (a) such enforcement
may be subject to bankruptcy, insolvency, reorganization, moratorium or other
similar Laws now or hereafter in effect relating to creditors’ rights and
(b) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any Proceeding therefor may be brought.

 

3.3 No Conflict

The execution, delivery and performance by Buyer of this Agreement and the other
Operative Documents to which Buyer is a party and the consummation by Buyer of
the transactions contemplated hereby will not (with or without the giving of
notice or the lapse of time, or both) (a) violate or conflict with the governing
documents of Buyer, (b) assuming satisfaction of any requirements imposed by the
HSR Act, violate or constitute a default under

 

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any provision of Law, rule or regulation to which Buyer is subject or violate,
conflict with or constitute a default under any Order, judgment, injunction or
decree applicable to Buyer, (c) require any consent, approval or authorization
of, or declaration, filing or registration with, any Person (except for the
filing of any required report under the HSR Act and the expiration of the
applicable waiting period thereunder, and except for consents and filings that,
if not obtained or made, would not, individually or in the aggregate, have be
material to the Buyer), or (d) violate, breach or constitute a default under or
give rise to a right of termination, cancellation or acceleration of any right
or obligation of Buyer under, or result in the payment of any fee or penalty or
result in the creation of an Encumbrance on any of the properties or assets of
Buyer pursuant to, any provision of any agreement, contract, note, bond,
mortgage, deed of trust, indenture, lease or other instrument binding on Buyer
or any license, franchise, permit or other similar authorization held by Buyer,
except in the case of this clause (d), for any such violation, conflict,
default, right or lien that would not, individually or in the aggregate, be
material to the Buyer.

 

3.4 Financing

The Buyer will have at Closing, cash balances and the ability to borrow funds as
contemplated by this Agreement and the Credit Agreement that are sufficient in
aggregate to pay the Closing Cash Payment to Sellers and the amounts to be paid
to parties as contemplated under this Agreement and the Operative Documents,
including but not limited to, the amounts payable under Section 1.6 of this
Agreement, and the fees and expenses incurred by Buyer in connection with the
transactions contemplated hereby and thereby. The cash balances of Buyer are not
subject to or contingent or conditioned upon any type of financing commitment,
Indebtedness or Encumbrance with respect to any other Person.

 

3.5 Accredited Investor; Investment Intent

Buyer is an “accredited investor” within the meaning of Rule 501 of Regulation D
promulgated under the Securities Act. Buyer is a sophisticated investor, is able
to fend for itself in the transactions contemplated by this Agreement, and has
such knowledge and experience in financial and business matters that it is
capable of evaluating for itself the merits and risks of the transactions
contemplated by this Agreement. The Shares are being acquired by Buyer pursuant
to this Agreement solely for its own account, for investment only and not with a
view to any public distribution thereof.

 

3.6 Litigation; Decrees

There are no lawsuits, Claims, Proceedings, investigations, injunctions,
judgments, Orders or decrees pending or threatened which challenge or seek to
enjoin or delay this Agreement or the transactions contemplated hereby or that
would materially and adversely affect Buyer’s ability to perform its obligations
under this Agreement or to consummate the transactions contemplated hereby.

 

3.7 Required Consents, Approvals, Notices

To the Knowledge of the Buyer, there are no facts or circumstances that could
reasonably be expected to prevent Buyer from obtaining or making, or to be
unable to obtain or make, as

 

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applicable, any of the permits, consents, approvals, authorizations,
qualifications or other filings or notifications contemplated by this Agreement
and the Operative Documents and required to be obtained or made by Buyer in
order to consummate the transactions contemplated hereby and thereby.

ARTICLE IV - COVENANTS

The Sellers, the Companies and Buyer agree as follows in this Article IV.

 

4.1 Interim Operations

During the period from the date of this Agreement to the Closing Date or the
date, if any, on which this Agreement is earlier terminated pursuant to
Section 6.1 (except (w) as may be required by Law, (x) with the prior written
consent of Buyer which consent shall not be unreasonably withheld, delayed or
conditioned, (y) as contemplated or permitted by this Agreement, or (z) as set
forth in Section 4.1 of the Disclosure Schedules), the business of the Companies
and the Company Subsidiaries shall be conducted only in the ordinary course
consistent with past practice in all material respects, and, to the extent
consistent therewith, the Sellers and the Companies shall use commercially
reasonable efforts to (i) preserve intact the Companies’ and the Company
Subsidiaries’ current business organization and (ii) preserve the Companies’ and
the Company Subsidiaries’ relationships with customers, licensors, employees,
vendors, banks and financial institutions, and others having business dealings
with them. Subject to compliance with applicable Law, from the date hereof until
the earlier to occur of the Closing or the Termination Date, Sellers, the
Companies and the Company Subsidiaries will confer as reasonably requested by
Buyer with one or more representatives of Buyer to report on operational matters
and the general status of the Companies and the Company Subsidiaries’ ongoing
business, operations and finances and will promptly provide to Buyer or its
representatives copies of all filings that the Companies and Company
Subsidiaries make with any Governmental Entity during such period. Without
limiting the generality of the foregoing, prior to the Closing Date, except
(w) as may be required by Law, (x) with the prior written consent of Buyer which
consent shall not be unreasonably withheld, delayed or conditioned, (y) as
contemplated or permitted by this Agreement, or (z) as set forth in Section 4.1
of the Disclosure Schedules, the Companies and the Company Subsidiaries will
not, and the Sellers will not cause the Companies or the Company Subsidiaries
to:

(a) sell, pledge, dispose of or encumber any of their assets, except inventory
or obsolete or excess equipment sold in the ordinary course of business
consistent with past practice (which, individually and in the aggregate, do not
account for more than $100,000 in the value of all assets reflected in the
Financial Statements);

(b) with respect to the Companies and Company Subsidiaries, issue, sell, pledge
or dispose of any additional shares or interests (as applicable), or any
options, warrants or rights of any kind to acquire any shares or interests (as
applicable) with respect to the Companies or Company Subsidiaries;

 

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(c) cause, or take or omit to take any action to allow, any Material Contract to
lapse (other than in accordance with its terms), or to be modified, other than
in the ordinary course of business;

(d) acquire (by merger, consolidation or acquisition of stock or assets) any
corporation, partnership or other business organization or division thereof;

(e) incur any Indebtedness other than intercompany Indebtedness among any of the
Sellers, the Companies and Company Subsidiaries for borrowed money or guarantee
any such Indebtedness or issue or sell any debt securities or guarantee any debt
securities of others;

(f) make any increase in compensation to any Company or Company Subsidiary
employees or any change in personnel policies, employee benefits or other
compensation arrangements affecting the employees of the Companies or the
Company Subsidiaries, other than immaterial changes in personnel policies made
in the ordinary course of business consistent with past practice;

(g) take any action to institute any new severance or termination pay practices
with respect to any of their directors or managers (as applicable), officers or
employees or to increase the benefits payable under their severance or
termination pay practices;

(h) adopt or amend, in any material respect, except as contemplated hereby or as
may be required by applicable Law or Order, any Domestic Employee Benefit Plan,
any Non-UK Foreign Plan, the GPPP, the Life Assurance Scheme or the GIPI Scheme;

(i) make or pay any dividend, distribution or interest or principal payment with
respect to the Shares;

(j) make any change in accounting practices or policies except as required by
GAAP (provided that Sellers provide advance notification to Buyer and provided
that no such change affects the Financial Statements or the determination of Net
Working Capital);

(k) cause, or take or omit to take any action to allow, any governmental
license, permit, consent, approval, authorization or qualification of the
Companies or the Company Subsidiaries to lapse; or

(l) agree or otherwise commit to take any of the actions described in the
foregoing.

 

4.2 Access to Information

The Sellers and Companies shall afford to officers, employees, counsel,
investment bankers, accountants and other authorized representatives
(“Representatives”) of Buyer full and complete access, unless otherwise provided
by applicable Law, in a manner not disruptive to the operations of the business
of the Sellers or the Companies, at all reasonable business hours and upon
reasonable notice throughout the period prior to the Closing Date, to the
properties, books, records, Contracts, documents and personnel of the Companies
and the Company Subsidiaries and, during such period, shall furnish promptly to
such Representatives all information concerning the business, properties and
personnel of the Companies and the Company

 

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Subsidiaries in each case as may reasonably be requested and necessary to
consummate the transactions contemplated by this Agreement; provided, however,
Buyer agrees it shall only have access to Mohit Davar, Frank Lawrence, David
Mard, and such other personnel of the Company and the Company Subsidiaries
(including for the purpose of negotiating potential future employment
arrangements by the Buyer with such personnel) as reasonably agreed by Mohit
Davar. The confidentiality and nondisclosure letter agreement dated August 19,
2009 (including any amendments thereto, the “Confidentiality Agreement”),
between Sellers and Buyer shall apply with respect to information furnished by
the Sellers, Companies and the Company Subsidiaries and their respective
officers, employees and other Representatives hereunder.

 

4.3 No Alternative Transactions

During the period from the date of this Agreement until the earlier of the
Closing and such time as this Agreement is terminated in accordance with the
terms hereof, Sellers and the Companies shall not (and shall cause each of the
Company Subsidiaries and each of their respective officers, directors, managers,
employees, representatives, consultants, financial advisors, attorneys,
accountants or other agents to not), directly or indirectly, through any
officer, director or manager (as applicable), agent or otherwise, (i) solicit,
initiate or encourage the submission of any proposal or offer from any Person
relating to any acquisition or purchase of all or any material portion of the
assets of, or any equity interest in, the Companies or the Company Subsidiaries
(including any acquisition structured as a merger, consolidation or shares
exchange) or any business combination with the Companies or the Company
Subsidiaries, or (ii) participate in any negotiations regarding, or furnish to
any other Person any confidential information with respect to, or otherwise
cooperate or negotiate in any way with, or assist or participate in, facilitate
or encourage, any effort or attempt by any other Person to do or seek any of the
foregoing. None of the Sellers, the Companies and/or Company Subsidiaries shall,
and the Sellers and Companies shall cause each Company Subsidiary to not, vote
any shares of capital stock or other voting securities of the Sellers, the
Companies or any Company Subsidiaries, as applicable, in favor of any such
acquisition. To the extent not otherwise prohibited by existing confidentiality
or other nondisclosure obligations, the Sellers shall promptly notify Buyer upon
receipt of a proposal by any Person to acquire or purchase all or any material
portion of the assets of, or any equity interest in, the Companies or the
Company Subsidiaries.

 

4.4 Notification of Certain Matters

During the period from the date of this Agreement to the Closing Date or the
date, if any, on which this Agreement is earlier terminated pursuant to
Section 6.1, each party shall give prompt notice to the other parties of (a) the
occurrence or nonoccurrence of any event that causes or would be reasonably
likely to cause any representation or warranty made by such party contained in
this Agreement to be untrue or incorrect in any material respect, and (b) any
material failure by such party to comply with or satisfy any covenant, condition
or agreement to be complied with or satisfied by it hereunder. No disclosure by
any Party pursuant to this Section 4.4 will be deemed to amend or supplement the
Disclosure Schedules or to prevent or cure any misrepresentation or breach of
any representation, warranty, or covenant.

 

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4.5 Press Releases

No party shall publish any press release, make any other public announcement or
otherwise communicate with any news media concerning this Agreement or the
transactions contemplated by this Agreement without the prior written consent of
the other parties; provided, however, that nothing shall prevent a party from
promptly making all filings with or notifications to any Governmental Entity as
may in such party’s reasonable judgment be required or advisable under
applicable Law (including but not limited to the notifications set forth in
Section 5.1.3(c) of the Disclosure Schedules).

 

4.6 Tax Matters

(a) Coinstar shall, at its expense, prepare and file, or cause to be prepared
and filed, (i) all consolidated, combined or unitary Income Tax Returns
(including any such amended Income Tax Returns) with respect to which a Seller
or one of its Affiliates (other than any of the Companies or the Company
Subsidiaries) is the common parent that include any of the Companies or the
Company Subsidiaries and (ii) all Income Tax Returns (including any such amended
Income Tax Returns) of UK Holdings and the UK Subsidiaries which relate to
Pre-Closing Tax Periods with respect to which UK Holdings or any UK Subsidiary
has surrendered, or may pursuant to Section 4.6(m) surrender, to any member of
the Sellers’ group any trading losses or other amounts eligible for surrender by
UK Holdings or any UK Subsidiary by way of Group Relief (each a “Combined
Return”), and shall pay or cause to be paid all Taxes to which such Income Tax
Returns relate, subject to each Seller’s right to indemnification pursuant to
Section 4.6(k).

(b) Buyer shall, at its expense, prepare and file, or cause to be prepared and
filed, all Tax Returns (other than Tax Returns described in Section 4.6(a)) of
each of the Companies and the Company Subsidiaries required to be filed after
the Closing Date but which relate to Pre-Closing Tax Periods, and shall pay or
cause to be paid all Taxes to which such Tax Returns relate, subject to Buyer’s
right to indemnification pursuant to Section 4.6(k). Such Tax Returns shall be
prepared in a manner consistent with past practices of the Companies and the
Company Subsidiaries. Buyer shall provide each such Tax Return to Coinstar for
review and approval (not to be unreasonably withheld, delayed or conditioned) at
least thirty (30) days prior to the due date for filing such Tax Return
(including any applicable extensions).

(c) All transfer, documentary, sales (including bulk sales), use, stamp,
registration, conveyance, real estate excise, license, duties and other such
Taxes and fees (including any penalties and interest) incurred in connection
with the transactions contemplated by this Agreement (collectively, “Transfer
Taxes”) and all the expenses of filing all applicable Tax Returns and other
documentation with respect to all such Transfer Taxes shall be borne 50% by the
Buyer and 50% by Sellers. Buyer and Sellers shall cause to be filed all
necessary Tax Returns and other documentation with respect to all such Transfer
Taxes. The parties further agree to use their reasonable commercial efforts to
obtain any certificate or other document from any Governmental Entity or any
other Person as may be necessary to mitigate, reduce or eliminate any such
Transfer Taxes.

 

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(d) Each of the parties shall, at its own expense, cooperate fully, as and to
the extent reasonably requested by the other party, in connection with the
filing of Tax Returns, and any audit, litigation or other proceeding with
respect to Taxes. Such cooperation shall include the retention and (upon the
other party’s request) the provision of records and information which are
reasonably relevant to any such audit, litigation or other proceeding and making
employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder. Without limiting
the generality of the foregoing, within sixty (60) days of the Closing Date,
Buyer shall prepare and make available to Coinstar summary accounting trial
balances, apportionment factors, and other information necessary to complete the
Income Tax Returns described in Section 4.6(a).

(e) Coinstar shall control the conduct, through its counsel, of any audit or
administrative or judicial proceeding with respect to any Combined Return;
provided, however, that Coinstar shall not enter into any settlement or
compromise of such audit or proceeding which reasonably could be expected to
have the effect of increasing the Income Tax liability of Buyer for Tax periods
beginning after the Closing Date without the prior written consent of Buyer
(which consent shall not be unreasonably withheld, delayed or conditioned).
Buyer shall control all other audit or administrative or judicial proceedings
with respect to Taxes of the Companies and the Company Subsidiaries; provided,
however, that Buyer shall not enter into any settlement or compromise of such
audit or proceeding which reasonably could be expected to have the effect of
increasing any Taxes for which Coinstar is responsible under this Agreement
without the prior written consent of Coinstar (which consent shall not be
unreasonably withheld, delayed or conditioned). Notwithstanding anything in this
Agreement to the contrary, in the event of a conflict between the procedures set
forth in this Section 4.6(e) and Section 7.5, the provisions of this
Section 4.6(e) shall govern.

(f) All Tax sharing or similar agreements, if any, between Coinstar or its
Affiliates, on the one hand, and any of the Companies or the Company
Subsidiaries, on the other hand, shall be terminated as of the Closing Date and
shall have no further effect.

(g) Coinstar shall be entitled to all refunds (and any interest thereon received
from the applicable Governmental Entity) in respect of (i) liabilities for Taxes
taken into account in the determination of the Final NWC Amount, and
(ii) Pre-Closing Taxes (excluding Taxes receivable taken into account in the
determination of the Final NWC Amount). If Buyer or its Affiliates receive a
refund to which Coinstar is entitled pursuant to this Section 4.6(g), Buyer
shall pay or cause to be paid to Coinstar the amount to which Coinstar is
entitled within fifteen (15) days after such refund is received (whether
actually or as a credit or other offset to Taxes payable).

(h) Except as expressly provided in Section 4.6(e), without the prior written
consent of Coinstar, which consent may be withheld in its reasonable discretion,
Buyer shall not amend (or cause or permit to be amended) any Tax Return for any
Pre-Closing Tax Periods that includes any of the Companies or the Company
Subsidiaries.

(i) Except to the extent otherwise prohibited by applicable Law, each of the
Companies and the Company Subsidiaries shall elect to relinquish, waive or
otherwise forgo all carrybacks of Tax attributes (including, without limitation,
any net operating loss, net capital loss

 

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or Tax credit) from a Tax period beginning after the Closing Date to a
Pre-Closing Tax Period during which such Company or Company Subsidiary was
included in a Combined Return filed for such Pre-Closing Tax Period.

(j) For purposes of this Agreement, in respect of any Tax period that begins on
or before the Closing Date and ends after the Closing Date (a “Straddle
Period”), Taxes shall be allocated between the period ending on the Closing Date
and the period beginning after the Closing Date, (i) in the case of Taxes based
on or measured by income, sales, gross receipts, wages, transfers or other
taxable events, on the basis of an interim closing of the books as of the close
of business on the Closing Date, and (ii) in the case of any other Tax, pro rata
on the basis of the number of days in such Straddle Period.

(k) Notwithstanding Section 7.4:

(i) Each Seller shall jointly and severally indemnify the Companies, the Company
Subsidiaries, Buyer, and each Buyer Affiliate and hold them harmless from and
against, without duplication, any and all Losses directly or indirectly arising
out of, resulting from, or incurred in relation to or in connection with, or
attributable to, all Pre-Closing Taxes, including without limitation, all
Pre-Closing Taxes payable in connection with any of the pending or threatened
tax audits referenced or described in the Disclosure Schedules.

(ii) From and after the Closing, Buyer shall indemnify and hold Sellers and
their Affiliates harmless from and against, without duplication, any and all
Losses directly or indirectly arising out of, resulting from, or incurred in
relation to or in connection with, or attributable to, all Post-Closing Taxes.

(iii) For the avoidance of doubt, notwithstanding any provision of this
Agreement to the contrary, Sellers shall have no obligation whatsoever to
indemnify Buyer from any Losses arising out of any increase in Post-Closing
Taxes attributable to any adjustment (however effected) to any federal, state,
local or non-U.S. net operating loss, net capital loss, Tax credit, excess
charitable contribution or other similar Tax attributes of the Companies or the
Company Subsidiaries, which attribute arose in any Pre-Closing Tax Period.

(l) Section 338(h)(10) Election

(i) Buyer shall join with Coinstar in making an election under
Section 338(h)(10) of the Code (and any comparable election under state, local,
or non-U.S. Law) with respect to the purchase and sale of the CEPSI Shares (and
the deemed purchase and sale of any shares of any Domestic Subsidiary for which
an election under Section 338(h)(10) of the Code, and any comparable election
under state, local or non-U.S. Law, is available) on IRS Form 8023 (and any
corresponding or similar forms under state, local or non-U.S. Law) (the “Section
338(h)(10) Elections”) provided, however, that Coinstar shall be responsible for
filing the Section 338(h)(10) Elections with the applicable Governmental
Entities, unless otherwise required by Law, and shall provide Buyer with copies
of filed Section 338(h)(10) Elections and proof of filing thereof.

(ii) Buyer shall be entitled to make an election under Section 338(g) of the
Code (“Section 338(g) Election,” and together with the Section 338(h)(10)
Elections, the “Section 338 Elections”) with respect to the deemed purchase and
sale of the shares of stock of eligible Foreign Subsidiaries.

 

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(iii) In connection with making the Section 338 Elections under applicable Law,
Buyer shall prepare and deliver to Coinstar an allocation of the “aggregate
deemed sale price,” within the meaning of Treasury Regulations Section 1.338-4,
and the “adjusted grossed-up basis,” within the meaning of Treasury Regulations
Section 1.338-5, among the assets of CEPSI and the applicable Domestic
Subsidiaries, with respect to the Section 338(h)(10) Elections, and applicable
Foreign Subsidiaries, with respect to the Section 338(g) Election on IRS Form
8883 (and any corresponding or similar forms under state, local or non-U.S. Law)
in accordance with Section 1.4 and Treasury Regulations Sections 1.338-6 and
1.338-7 or any corresponding provisions of state, local or non-U.S. Law) (the
“Section 338 Allocations”) within ninety (90) days after the determination of
the Final NWC Amount for Coinstar’s review and approval, not to be unreasonably
withheld, delayed or conditioned.

(iv) The parties agree to cooperate fully with each other in the making of the
Section 338 Elections and not to take or cause to be taken any position or other
action inconsistent with the Section 338 Elections or the Section 338
Allocations for any Tax reporting purpose, upon examination of any Tax Return,
in any refund claim, or in any litigation, investigation or otherwise, unless
otherwise required by a determination (within the meaning of Section 1313(a) of
the Code or any similar provision of state, local or non-U.S. Law).

(m) Group Relief

(i) Coinstar shall make (or cause to be made) an election (including related
filings as may be required) to change the “accounting reference date” of each of
UK Holdings and the UK Subsidiaries to the last day of any calendar month that
is prior to or that includes the calendar month during which the Closing Date
occurs (each a “Statutory Accounting Period Election”). The parties agree to
cooperate fully with each other in the making of the Statutory Accounting Period
Elections and not to take or cause to be taken any position or other action
inconsistent with the Statutory Accounting Period Elections for any
Tax reporting purpose, upon examination of any Tax Return, in any refund claim,
or in any litigation, investigation or otherwise, unless otherwise required by a
determination (within the meaning of Section 1313(a) of the Code or any similar
provision of state, local or non-U.S. Law).

(ii) Buyer undertakes to the Sellers that Buyer will procure that UK Holdings or
any UK Subsidiary so far as it is legally able to do so surrenders to any member
of the Sellers’ group for no consideration pursuant to the provisions of Part 5
of the Corporation Tax Act 2010 any trading losses or other amounts eligible for
surrender by UK Holdings or any UK Subsidiary by way of Group Relief in respect
of all Pre-Closing Tax Periods.

(iii) Buyer will procure that UK Holdings and the UK Subsidiaries will cooperate
with the Sellers in relation to any surrender under this Section 4.6(m) by
taking all such action as the Sellers may reasonably request, including the
making of all necessary and reasonable claims, consents and notifications.

 

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(iv) Buyer will procure that neither UK Holdings nor the UK Subsidiaries
withdraws any surrender of Group Relief made prior to the date of this Agreement
or withdraws or amends any Group Relief claim made pursuant to this
Section 4.6(m) without the prior written consent of the Sellers.

 

4.7 Commercially Reasonable Efforts

(a) Upon the terms and subject to the conditions set forth in this Agreement,
the Sellers, Companies and Buyer shall each use their commercially reasonable
efforts to promptly, unless prohibited by Law, (i) take, or to cause to be
taken, all actions, and to do, or to cause to be done, and to assist and
cooperate with the other parties in doing all things necessary, proper or
advisable under applicable Law or otherwise to consummate and make effective the
transactions contemplated by this Agreement (including satisfaction, but not
waiver, of the Closing conditions for which it is responsible or otherwise in
control, as set forth in Section 5); (ii) obtain from any Governmental Entities
any actions, non-actions, clearances, waivers, consents, approvals, permits or
Orders required to be obtained by the Sellers, Companies, the Company
Subsidiaries, Buyer or any of its Subsidiaries in connection with the
authorization, execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated by this Agreement; (iii) promptly
make all necessary registrations, notifications and filings, and thereafter make
any other required submissions, with respect to this Agreement under (A) any
applicable federal or state securities Laws, (B) the HSR Act and any applicable
competition, antitrust or investment Laws of jurisdictions other than the United
States, and (C) any other applicable Law; provided, however, that the Sellers,
Companies and Buyer will cooperate with each other in connection with the making
of all such registrations, notifications and filings, including providing copies
of all such filings and attachments to outside counsel for the non-filing party;
(iv) furnish all information required for any application or other filing to be
made or notice to be given pursuant to any applicable Law in connection with the
transactions contemplated by this Agreement (to the extent permitted by any
applicable Governmental Entity or private party and to the extent not involving
a securities exchange); (v) keep the other parties informed in all material
respects of any material communication received by such party from, or given by
such party to, any Governmental Entity and of any material communication
received or given in connection with any proceeding by a private party, in each
case relating to the transactions contemplated by this Agreement (to the extent
permitted by any applicable Governmental Entity or private party and to the
extent not involving a securities exchange); (vi) permit the other parties to
review any material communication delivered to, and consult with the other
parties in advance of any meeting or conference with, any Governmental Entity
(other than, for the purposes of this Section 4.7, a securities exchange)
relating to the transactions contemplated by this Agreement or in connection
with any Proceeding by a private party relating thereto, and give the other
parties the opportunity to attend and participate in such meetings and
conferences (to the extent permitted by such Governmental Entity or private
party and to the extent not involving a securities exchange); (vii) avoid the
entry of, or have vacated or terminated, any decree, Order or judgment that
would restrain, prevent or delay the Closing, including defending any lawsuits
or other legal Proceedings, whether judicial or administrative, challenging this
Agreement or the consummation of the transactions contemplated by this
Agreement; and (viii) execute and deliver any additional instruments necessary
to consummate the transactions contemplated by this Agreement. Buyer and Seller
shall share equally all filing fees required in connection with

 

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any filings of any party under the HSR Act with respect to the transactions
contemplated by this Agreement. No parties to this Agreement shall consent to
any voluntary delay of the Closing at the behest of any Governmental Entity
without the consent of the other parties to this Agreement, which consent shall
not be unreasonably withheld, delayed or conditioned.

(b) As permitted by Law, each party hereto shall give prompt notice to the other
parties of any written notice or other communication from any Governmental
Entity in connection with the transactions contemplated by this Agreement.

(c) Each Seller will give any notices to third parties, and will use its
commercially reasonable efforts to obtain any third party Required Consents
listed on Section 5.1.3 of the Disclosure Schedules, or that Buyer may otherwise
reasonably request in connection with the matters referred to in Section 2.4 of
this Agreement and Section 2.4 of the Disclosure Schedules.

(d) Notwithstanding anything to the contrary in this Section 4.7, this
Agreement, any Operative Document or the Transition Services Agreement, Coinstar
shall not be obligated to (i) permit or agree to any existing or future
Indebtedness by Buyer and/or its Affiliates, including but not limited to any
operating line of credit, or (ii) permit or agree to any terms in any
intercreditor agreement between Coinstar and any third-party lender to Buyer
and/or its Affiliates, that would, in the case of subsection (i) or (ii) or
both, be materially inconsistent with any term or condition set forth in or
otherwise contemplated by (A) Exhibit 1.3, or (B) those terms of the
Intercreditor Agreement set forth on Exhibit 5.1.14. From the date hereof
through Closing, Buyer further agrees not to, and to cause its Affiliates not
to, take any action with respect to any other existing or future Indebtedness of
Buyer and/or its Affiliates that would or would be reasonably likely to be
materially inconsistent with the terms and conditions set forth in or otherwise
contemplated by Exhibit 1.3 and the Intercreditor Agreement Mandatory Terms, or
that would or would be reasonably likely to otherwise prevent or materially
delay or materially impair the ability of Buyer or Seller in connection with
Closing to enter into and to consummate the transactions contemplated by
Exhibit 1.3 and the Intercreditor Agreement Mandatory Terms on the terms set
forth therein.

(e) Notwithstanding anything to the contrary in this Agreement, no parties to
this Agreement shall, without the consent of the other parties to this
Agreement, take any action set forth in Section 4.7(e) of the Disclosure
Schedules.

 

4.8 Post-Closing Cooperation

(a) After the Closing Date, each party hereto shall execute and deliver such
other certificates, agreements, conveyances, and other documents, and take such
other action, as may be reasonably requested by another party in order to give
effect to the transactions contemplated by this Agreement or the Operative
Agreements. After the Closing, Buyer will be entitled to possession of all
documents, books, records, agreements, and financial data of any sort belonging
to (and copies of any similar information relating to) the Companies and the
Company Subsidiaries.

 

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(b) Without prejudice to the immediately preceding subsection (a), the parties
shall cause the following notifications to be made after the Closing Date in the
manner set forth below:

(i) Within thirty (30) days of the Closing Date, the relevant Seller and the
Buyer shall make a joint notification of the Closing to the Bank of Italy in the
prescribed form;

(ii) Within ten (10) business days of the Closing Date, the Buyer shall cause
Coinstar Money Transfer Spain S.A. to make a notification of the Closing to the
Bank of Spain in the prescribed form, such notification to include the required
information about the Buyer and its shareholders; and

(iii) To the extent not performed prior to the Closing Date and to the extent
required by law, Buyer shall make a notification of the Closing in the
prescribed form to the Austrian Financial Markets Authority promptly following
the Closing Date in accordance with the applicable Laws.

(c) After the Closing Date, no Seller will take any action that is designed or
intended to have the effect of discouraging any lessor, licensor, customer,
supplier, or other business associate of any of the Companies or Company
Subsidiaries from maintaining at least as favorable business relationships with
the Companies or Company Subsidiaries after the Closing as it maintained with
the Companies or Company Subsidiaries prior to the Closing. After the Closing
Date, each Seller will, and will cause its Affiliates to, refer all customer,
supplier, and other inquiries relating to the businesses of the Companies or
Company Subsidiaries to Buyer, or an Affiliate thereof.

 

4.9 Names, Signage and Labels

Notwithstanding any provision of this Agreement to the contrary:

(a) Neither Buyer nor its Subsidiaries nor any Affiliate thereof shall, as a
result of the transactions contemplated by this Agreement, acquire any rights,
title or interest in or to, and Buyer will not use or employ in any manner, and
will cause its Subsidiaries and Affiliates not to use or employ in any manner,
the Seller Retained Names. For purposes of this Agreement, “Seller Retained
Names” means “CUHL,” “Coinstar” and any variation thereof, including but not
limited to “Coinstar Money Transfer” and any variation thereof.

(b) Buyer will remove the Seller Retained Names from all assets, properties and
all other items related to the Money Transfer Business as conducted by the
Companies and the Company Subsidiaries as soon as practicable after the Closing
Date, but in any event within twelve (12) months after the Closing Date. Buyer
may not publicly use, and will cause its Subsidiaries and Affiliates not to
publicly use, any business records without first removing or obliterating all
portrayals or references to any of the Seller Retained Names contained in such
records.

(c) Coinstar may change the names of any of the Companies and the Company
Subsidiaries at any time prior to Closing to the extent such names include any
of the Seller Retained Names; provided, however, that Coinstar agrees to
reasonably cooperate with Buyer

 

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to effect such name changes using replacement names as designated by Buyer.
Within sixty (60) days following the Closing, Buyer will file all such documents
reasonably required to change the names of any of the Companies and the Company
Subsidiaries to the extent such names include any of the Seller Retained Names.

 

4.10 Benefits

As of the Closing Date, and for a period of at least six (6) months (or such
longer period as may be required by applicable Law) thereafter, Buyer shall
provide, or shall cause its Subsidiaries and Affiliates to provide, the
employees of the Companies and the Company Subsidiaries (each, a “Company
Employee,” and, collectively, the “Company Employees”) with compensation
(including base salary, commission, and applicable bonus arrangement) and
employee benefits that are no less favorable in the aggregate than the
compensation and employee benefits (exclusive of any equity awards under the
Coinstar, Inc. 1997 Amended and Restated Equity Incentive Plan) provided to the
Company Employees as of the date hereof. Buyer and its Subsidiaries and
Affiliates shall treat, and shall cause each benefit plan, program, practice,
policy and arrangement maintained by Buyer or any of its Subsidiaries or
Affiliates after the Closing and in which any Company Employee (or the spouse or
any dependent of any Company Employee) participates or becomes eligible to
participate (each, a “Buyer Benefit Plan”) to treat, for purposes of determining
eligibility to participate, vesting, accrual of and entitlement to benefits (but
not for accrual of benefits under any “defined benefit plan,” as defined in
Section 3(35) of ERISA) and all other purposes, all service with the Companies
and the Company Subsidiaries and Affiliates (and predecessor employers to the
extent the Companies, the Company Subsidiaries or Affiliates, or the
corresponding Employee Benefit Plan provides past service credit) as service
with Buyer and its Subsidiaries and Affiliates. Buyer and its Subsidiaries and
Affiliates shall cause each Buyer Benefit Plan that is a welfare benefit plan,
within the meaning of Section 3(1) of ERISA, (a) to waive any and all
eligibility waiting periods, evidence of insurability requirements and
pre-existing condition limitations and exclusions with respect to the Company
Employees and their spouses and dependents to the extent waived, satisfied or
not included under the corresponding Domestic Employee Benefit Plan or other
Employee Benefit Plan covering the applicable Company Employee, spouse or
dependent immediately prior to the Closing (each, a “Company Benefit Plan”), and
(b) to recognize for each Company Employee and his or her spouse and dependents
for purposes of applying annual deductible, co-payment and out-of-pocket
maximums under such Buyer Benefit Plan any deductible, co-payment and
out-of-pocket expenses paid by the Company Employee and his or her spouse and
dependents under a corresponding Company Benefit Plan during the calendar year
in which occurs the later of the Closing Date and the date on which the Company
Employee begins participation in such Buyer Benefit Plan. The provisions of this
Section 4.10 do not amend any Company Benefit Plan or any Buyer Benefit Plan.
There are no third party beneficiaries with respect to this Section 4.10 and the
provisions contained herein are enforceable only by the Buyer and the Sellers.

 

4.11 Insurance

Coinstar shall use commercially reasonable efforts to obtain for Buyer the
benefit of Coinstar’s insurance policies, and with regard to its director and
officer indemnification insurance, Coinstar shall maintain such policies or
obtain new policies on substantially

 

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equivalent terms for a period of six (6) years following Closing (other than its
crime and special risk insurance policies) for claims for Losses relating to the
Money Transfer Business that (a) are made prior to the Closing or arise out of
events that occur prior to the Closing and (b) are covered by Coinstar’s
insurance policies in effect at the time of Closing; provided, however, that
with respect to any such claims, the Companies and Company Subsidiaries shall
remain liable for all obligations to pay, and shall pay, all portions of such
Losses that are otherwise required to be paid by the insured under applicable
insurance policies with respect to self-insured amounts, retention, deductibles
and the like. Buyer agrees to make commercially reasonable efforts to cooperate
with Coinstar with respect to all such claims. Coinstar shall not be liable for
and shall have no obligation under this Section 4.11 with respect to claims
related to events that occur after the Closing or that are not otherwise covered
by Coinstar’s insurance policies in effect at the time of Closing.

 

4.12 Delivery of Original Stock Certificates

At the Closing, Sellers shall deliver or cause to be delivered to Buyer original
stock certificates representing the Shares and other issued and outstanding
shares of capital stock of the Company Subsidiaries.

 

4.13 Director and Officer Indemnification

For a period of six (6) years following Closing, Buyer will cause the Companies
and Company Subsidiaries to satisfy (a) their existing indemnification
obligations (including with respect to advancement of expenses and including
such indemnification provisions in the respective Charters and Governing
Documents of the Companies and Company Subsidiaries) as of the date hereof with
respect to present and former directors, officers, employees and agents of the
Companies and Company Subsidiaries and all other Persons who may presently serve
or have served at the request of the Companies or Company Subsidiaries as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust or other enterprise (collectively, the “Indemnitees”) for all
expenses, judgments, fines and amounts paid in settlement by reason of actions
or omissions or alleged actions or omissions occurring at or before the Closing
Date to the fullest extent permitted or required under applicable Law, and
(b) their obligation to provide indemnification (including with respect to
advancement of expenses) pursuant to any employment agreements or
indemnification agreements or other arrangements between the Companies or
Company Subsidiaries and any Indemnitees.

 

4.14 No Financing Contingency; Covenant of Sellers

Buyer acknowledges and agrees that its obligations under this Agreement and the
Operative Documents, including but not limited to its obligation to pay the
Closing Cash Payment, adjustment amounts, if any, under Section 1.5, amounts
payable under Section 1.6, and any other amounts to be paid to other parties
under this Agreement and the Operative Documents and the fees and expenses
incurred by Buyer in connection with the transactions contemplated hereby and
thereby are not subject to any financing condition and are not contingent upon
the results of efforts, if any, of Buyer or its Affiliates to obtain financing
in connection with the transactions contemplated hereby.

 

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4.15 Termination of Certain Agreements

The Sellers and the Companies shall take all necessary actions such that not
later than as of the Closing, the Contracts set forth on Section 4.15 of the
Disclosure Schedules shall be terminated and shall thereafter be of no further
force or effect, with no remaining obligation of the Companies or any Company
Subsidiaries or their respective successors or assigns.

 

4.16 Affiliated Transactions

The Sellers will cause all Contracts and transactions by and between Sellers or
any Affiliate of any Seller, on the one hand, and the Companies and the Company
Subsidiaries, on the other hand, to be terminated effective as of the Closing,
without any cost or continuing obligation to the Companies, the Company
Subsidiaries or Buyer, and will deliver to Buyer evidence of such terminations
that is reasonably acceptable to Buyer.

 

4.17 Seller Release

(a) Each Seller, on behalf of such Seller and each of such Seller’s heirs,
representatives, successors, and assigns, hereby releases and forever discharges
Buyer and each of its officers, directors, managers, employees, agents,
stockholders, controlling persons, representatives, Affiliates, successors, and
assigns, and the Companies and the Company Subsidiaries (individually, a
“Releasee” and collectively, “Releasees”) from any and all Actions, Orders,
damages, Liabilities, and, except as expressly contemplated by this Agreement,
Contracts whatsoever, whether known or unknown, suspected or unsuspected, both
at Law and in equity, which such Seller or any of such Seller’s respective
heirs, representatives, successors or assigns now has, has ever had or may
hereafter have against the respective Releasees arising contemporaneously with
or prior to the Closing Date or on account of or arising out of any matter,
cause, or event occurring contemporaneously with or prior to the Closing Date
including any rights to indemnification or reimbursement from the Companies
and/or any Company Subsidiary, whether pursuant to their respective Charters,
Governing Documents, Contracts or otherwise and whether or not relating to
Actions pending on, or asserted after, the Closing Date; provided, however, that
nothing contained herein will operate to release any obligations of Buyer
arising under this Agreement or the Transition Services Agreement or any
Operative Document.

(b) Each Seller hereby irrevocably covenants to refrain from, directly or
indirectly, asserting any cause of Action, or commencing, instituting or causing
to be commenced, any Action, of any kind against any Releasee, based upon any
matter purported to be released by this Section 4.17.

 

4.18 Litigation Support

So long as any party actively is contesting or defending against any third party
Action in connection with (a) the transactions contemplated hereby or (b) any
fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving any Company or Company Subsidiary, each other
party will cooperate with such party and such party’s counsel in the contest or
defense, make reasonably available their personnel, and provide such testimony
and access to their books and records as will be reasonably necessary in
connection with the contest or defense, at the sole cost and expense of the
contesting or defending party (unless the contesting or defending party or one
of its Affiliates is entitled to indemnification therefor under Section 7
hereof).

 

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4.19 Accounts Receivable Report

At least two (2) business days prior to the anticipated Closing Date, Coinstar
shall prepare in good faith and deliver to Buyer a true and accurate report
listing the projected outstanding accounts receivable of the Companies and
Company Subsidiaries (excluding intracompany accounts receivable within the
Companies and Company Subsidiaries) that are or that are expected to be sixteen
(16) or more days past due as of Closing (the “A/R Report”). The A/R Report
shall be in a form substantially similar to the report furnished to Buyer by
Sellers in connection with this Agreement, which reflects the outstanding
accounts receivable of the Companies and Company Subsidiaries (excluding
intracompany accounts receivable within the Companies and Company Subsidiaries)
that were sixteen (16) or more days past due as of May 31, 2010.

 

4.20 Unclaimed Payments Report

At least two (2) business days prior to the anticipated Closing Date, Coinstar
shall prepare in good faith and deliver to Buyer a true and accurate report
listing the projected outstanding unclaimed payments to customers as of Closing
that have previously been written off by the Companies and Company Subsidiaries
and that are no longer listed as liabilities of the Companies and Company
Subsidiaries (the “Unclaimed Payments Report”). The Unclaimed Payments Report
shall be in a form substantially similar to the report furnished to Buyer by
Sellers in connection with this Agreement, which reflects the outstanding
unclaimed payments to customers as of May 31, 2010 that have previously been
written off by the Companies and Company Subsidiaries and that are no longer are
listed as liabilities of the Companies and Company Subsidiaries.

 

4.21 Benefits for M. Davar

Prior to Closing, the Companies shall cause Coinstar Money Transfer Middle East
Limited or such other Company or Company Subsidiary, as applicable, to establish
such Employee Benefit Plans to provide Mohit Davar with benefits substantially
similar to those benefits provided under the Group Life Assurance, Spouse Death
In Service Scheme and Group Income Protection Scheme previously provided by
Coinstar Money Transfer Limited.

ARTICLE V - CONDITIONS TO OBLIGATIONS AT CLOSING

 

5.1 Conditions to Obligations of Buyer

All obligations of Buyer at the Closing are subject at Buyer’s option to the
satisfaction prior to or at the Closing Date of each of the following
conditions, each of which may be waived only in a writing signed by Buyer.

 

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  5.1.1 Accuracy of Representations and Warranties

Each of the representations and warranties of the Companies and Sellers
(including applicable Exhibits and Disclosure Schedules) (a) shall have been
true and correct in all material respects when made, and (b) except (i) for
changes contemplated by this Agreement, (ii) to the extent that such
representations and warranties speak as of an earlier date or only with respect
to a specific period of time (which representations and warranties need only be
true and correct as of such date or with respect to such period), or (iii) where
the failure of such representations and warranties to be so true and correct
(without giving effect to any limitation as to “materiality” or “material
adverse effect” set forth therein) would not, individually or in the aggregate,
have a Company Material Adverse Effect, shall be true and correct in all
material respects as of the Closing Date, as though made on that date.

 

  5.1.2 Performance of Covenants and Conditions

Sellers and the Companies shall have performed and complied in all material
respects with their covenants, agreements and conditions required by this
Agreement to be performed or complied with by them prior to or on the Closing
Date.

 

  5.1.3 Required Consents, Approvals, Notices

(a) All Required Consents set forth in Section 5.1.3(a) of the Disclosure
Schedules shall have been obtained and delivered to Buyer.

(b) Buyer shall have received evidence, in form and substance reasonably
satisfactory to it, that (i) all licenses, permits, consents, approvals,
authorizations, qualifications and Orders of Governmental Entities as are
required by applicable Law in the United States of America in connection with
the transactions contemplated hereby have been obtained by the Sellers, the
Companies, the Company Subsidiaries, Buyer, Buyer’s Affiliates or Buyer’s
Subsidiaries, as applicable, and (ii) all notices to Governmental Entities as
are required by applicable Law in the United States of America in connection
with the transactions contemplated hereby have been given by the Sellers, the
Companies, the Company Subsidiaries, Buyer, Buyer’s Affiliates or Buyer’s
Subsidiaries, as applicable; provided, however, that this Section 5.1.3(b) shall
be deemed satisfied to the extent that (A) the conditions set forth in
Sections 5.1.3(b)(i), 5.1.3(b)(ii), or both, have not otherwise been satisfied
by the Termination Date, (B) the Sellers have complied with the Sellers’
covenants in Section 4.7(a) of this Agreement, (C) the condition set forth in
Section 5.1.3(b)(i) has been satisfied in jurisdictions in the United States of
America which represent an aggregate of at least 85% of the transaction volume
of the Companies and the Company Subsidiaries in the United States of America
based upon the percentages set forth in Section 5.1.3(b)(ii)(C) of the
Disclosure Schedules, and (D) the Companies and Company Subsidiaries have by the
date that is sixty (60) days after the Termination Date (such date, the “Outside
Date”), in accordance with and as permitted by applicable Law, surrendered all
licenses, permits, consents, approvals, authorizations, qualifications and
Orders of Governmental Entities with respect to the Money Transfer Business, or
canceled or otherwise terminated operations of the Money Transfer Business, in
each jurisdiction in the United States of America in which the condition in
Section 5.1.3(b)(i) has not otherwise been satisfied by the Outside Date, other
than with respect to the Mandatory Preserved Operations. With respect to the

 

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immediately preceding subsection (D), the parties hereto acknowledge and agree
that (I) no such surrender, cancellation or termination shall be permitted with
respect to the operations of the Money Transfer Business in the jurisdictions
listed in Section 5.1.3(b)(ii)(D)(I) of the Disclosure Schedules (the “Mandatory
Preserved Operations”), (II) any permitted surrender, cancellation or
termination by the Sellers, the Companies or the Company Subsidiaries pursuant
to such subsection (D) shall not constitute a Company Material Adverse Effect or
a Breach of any representation or warranty, covenant or other obligation of
Sellers, the Companies or the Company Subsidiaries under this Agreement, and
shall not be the basis for any Claim by Buyer for indemnification or equitable
relief under this Agreement, including but not limited to any Claim for specific
performance, and (III) if Sellers are surrendering, canceling or terminating
operations of the Money Transfer Business in any jurisdiction in which Buyer has
existing Permits that would allow Buyer to assume the Contracts of the
then-current agents of the Money Transfer Business in such jurisdiction, then
upon Buyer’s request Sellers shall use commercially reasonable efforts to
cooperate with Buyer to request that such agents consent to the assignment to
Buyer, in connection with Closing, of the agents’ Contracts with respect to the
Money Transfer Business.

(c) Buyer shall have received evidence, in form and substance reasonably
satisfactory to it, that (i) the licenses, permits, consents, approvals,
authorizations, qualifications and Orders of Governmental Entities outside of
the United States of America in connection with the transactions contemplated
hereby as set forth in Section 5.1.3(c)(i) of the Disclosure Schedules have been
obtained by the Sellers, the Companies, the Company Subsidiaries, Buyer, Buyer’s
Affiliates or Buyer’s Subsidiaries, as applicable, and (ii) the notices to
Governmental Entities outside of the United States of America in connection with
the transactions contemplated hereby as set forth in Section 5.1.3(c)(ii) of the
Disclosure Schedules have been given by the Sellers, the Companies, the Company
Subsidiaries, Buyer, Buyer’s Affiliates or Buyer’s Subsidiaries, as applicable;
provided, however, that this Section 5.1.3(c) shall be deemed satisfied to the
extent that (A) the conditions set forth in Sections 5.1.3(c)(i), 5.1.3(c)(ii),
or both, have not otherwise been satisfied by the Termination Date, (B) the
Sellers have complied with the Sellers’ covenants in Section 4.7(a) of this
Agreement, and (C) the Companies and Company Subsidiaries have by the Outside
Date, in accordance with and as permitted by applicable Law, surrendered all
licenses, permits, consents, approvals, authorizations, qualifications and
Orders of Governmental Entities with respect to the Money Transfer Business, or
canceled or otherwise terminated operations of the Money Transfer Business, in
each jurisdiction outside of the United States of America in which the condition
in Section 5.1.3(c)(i) has not otherwise been satisfied by the Outside Date. For
the avoidance of doubt, the parties hereto acknowledge and agree that (I) no
such surrender, cancellation or termination shall be permitted with respect to
the operations of the Money Transfer Business in the jurisdictions listed in
Section 5.1.3(c)(ii)(C)(I) of the Disclosure Schedules (the “Mandatory Preserved
Foreign Operations”), and (II) any permitted surrender, cancellation or
termination by the Sellers, the Companies or the Company Subsidiaries pursuant
to the immediately preceding subsection (C) shall not constitute a Company
Material Adverse Effect or a Breach of any representation or warranty, covenant
or other obligation of Sellers, the Companies or the Company Subsidiaries under
this Agreement, and shall not be the basis for any Claim by Buyer for
indemnification or equitable relief under this Agreement, including but not
limited to any Claim for specific performance.

 

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  5.1.4 Seller Officers’ Certificate

Buyer shall have received from each Seller a certificate, dated as of the
Closing Date, executed on behalf of such Seller by a duly authorized officer of
such Seller, certifying that the conditions set forth in Section 5.1.1 and
Section 5.1.2 have been satisfied.

 

  5.1.5 Seller Secretaries’ Certificate

Buyer shall have received from each Seller a certificate, dated as of the
Closing Date, executed on behalf of such Seller by its secretary or a comparable
officer of such Seller, attaching complete and correct copies of resolutions of
the board of directors authorizing the execution and delivery of this Agreement
and the other Operative Documents.

 

  5.1.6 Transition Services Agreement

The Sellers must have delivered to Buyer a transition services agreement in
substantially the form attached hereto as Exhibit 5.1.6 (the “Transition
Services Agreement”).

 

  5.1.7 Trademark License Agreement

The Sellers must have delivered to Buyer a trademark license agreement in
substantially the form attached hereto as Exhibit 5.1.7 (the “Trademark License
Agreement”).

 

  5.1.8 Credit Agreement

The Sellers must have delivered to Buyer the Credit Agreement.

 

  5.1.9 Assignment and Assumption Agreement

The Sellers must have delivered to Buyer an assignment and assumption agreement
by and between Coinstar E-Payment Services Inc. and Coinstar, Inc. in
substantially the form attached hereto as Exhibit 5.1.9 (the “Assignment and
Assumption Agreement”).

 

  5.1.10 FIRPTA Certificate

Each Seller shall have delivered to Buyer, pursuant to Section 1445 of the Code,
a certificate of non-foreign status in a form reasonably acceptable to Buyer.

 

  5.1.11 Termination of Regulatory Waiting Periods

The waiting periods under the HSR Act and all applicable competition, antitrust
and investment Laws of jurisdictions other than the United States, if any, prior
to consummation of the sale of the Shares shall have expired or been terminated.

 

  5.1.12 Absence of Litigation or Order

No Proceeding by a Governmental Entity or other Person shall be pending or
threatened, and no injunction or other Order shall be in effect, that
constitutes a Company Material Adverse Effect, or which otherwise seeks or will
seek to restrain, prohibit or invalidate the transactions

 

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contemplated by this Agreement and/or the Operative Agreements, provided that
this Section 5.1.12 may not be invoked by Buyer if any such Proceeding,
injunction or other Order was solicited or encouraged by, or resulted from any
failure to comply with Laws by, Buyer.

 

  5.1.13 Release of Liens, Security Interests and Guarantees

Bank of America, N.A. shall have delivered to Sellers an executed and delivered
Consent and Release, in the form and substance previously approved by Buyer.
Sellers shall have furnished to Buyer all security interest termination
documents, UCC-3 termination statements and releases of guarantees relating to
the release of liens, security interests and guarantees set forth on
Section 5.1.13 of the Disclosure Schedules.

 

  5.1.14 Intercreditor Agreement

Sellers shall have delivered to Buyer’s senior lender an intercreditor agreement
in substantially the form attached hereto as Exhibit 5.1.14 (the “Intercreditor
Agreement”).

 

5.2 Conditions to Obligations of the Companies and Sellers

All obligations of the Companies and Sellers at the Closing are subject at
Coinstar’s option to the satisfaction prior to or at the Closing of each of the
following conditions, each of which may be waived only in a writing signed by
Coinstar.

 

  5.2.1 Accuracy of Representations and Warranties

Each of the representations and warranties of Buyer (a) shall have been true and
correct in all material respects when made and, (b) except (i) for changes
contemplated by this Agreement, (ii) to the extent that such representations and
warranties speak as of an earlier date or only with respect to a specific period
of time (which representations and warranties need only be true and correct as
of such date or with respect to such period), or (iii) where the failure of such
representations and warranties to be so true and correct (without giving effect
to any limitation as to “materiality” or “material adverse effect” set forth
therein) would not, individually or in the aggregate, have a Buyer Material
Adverse Effect, shall be true and correct in all material respects as of the
Closing Date, as though made on that date.

 

  5.2.2 Performance of Covenants and Conditions

Buyer shall have performed and complied in all material respects with its
covenants, agreements and conditions required by this Agreement to be performed
or complied with by it prior to or on the Closing Date.

 

  5.2.3 Required Consents, Approvals, Notices

(a) All Required Consents set forth in Section 5.1.3(a) of the Disclosure
Schedules shall have been obtained and delivered to Buyer.

(b) Buyer shall have received evidence, in form and substance reasonably
satisfactory to Sellers, that (i) all licenses, permits, consents, approvals,
authorizations, qualifications and

 

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Orders of Governmental Entities as are required by applicable Law in the United
States of America in connection with the transactions contemplated hereby have
been obtained by the Sellers, the Companies, the Company Subsidiaries, Buyer,
Buyer’s Affiliates or Buyer’s Subsidiaries, as applicable, and (ii) all notices
to Governmental Entities as are required by applicable Law in the United States
of America in connection with the transactions contemplated hereby have been
given by the Sellers, the Companies, the Company Subsidiaries, Buyer, Buyer’s
Affiliates or Buyer’s Subsidiaries, as applicable.

(c) Buyer shall have received evidence, in form and substance reasonably
satisfactory to Sellers, that (i) the licenses, permits, consents, approvals,
authorizations, qualifications and Orders of Governmental Entities outside of
the United States of America in connection with the transactions contemplated
hereby as set forth in Section 5.1.3(c)(i) of the Disclosure Schedules have been
obtained by the Sellers, the Companies, the Company Subsidiaries, Buyer, Buyer’s
Affiliates or Buyer’s Subsidiaries, as applicable, and (ii) the notices to
Governmental Entities outside of the United States of America in connection with
the transactions contemplated hereby as set forth in Section 5.1.3(c)(ii) of the
Disclosure Schedules have been given by the Sellers, the Companies, the Company
Subsidiaries, Buyer, Buyer’s Affiliates or Buyer’s Subsidiaries, as applicable.

 

  5.2.4 Buyer Officer’s Certificate

Sellers shall have received from Buyer a certificate, dated as of the Closing
Date, executed on behalf of Buyer by a duly authorized officer of Buyer,
certifying that the conditions set forth in Section 5.2.1 and Section 5.2.2 have
been satisfied.

 

  5.2.5 Termination of Regulatory Waiting Periods

The waiting periods under the HSR Act and all applicable competition, antitrust
and investment Laws of jurisdictions other than the United States, if any, prior
to consummation of the sale of the Shares shall have expired or been terminated.

 

  5.2.6 Absence of Litigation or Order

No Proceeding by a Governmental Entity or other Person shall be pending or
threatened, and no injunction or other Order shall be in effect, that
constitutes a Buyer Material Adverse Effect or which otherwise seeks or will
seek to restrain, prohibit or invalidate the transactions contemplated by this
Agreement and/or the Operative Documents, provided that this Section 5.2.6 may
not be invoked by Sellers, the Companies or the Company Subsidiaries if any such
Proceeding, injunction or other Order was solicited or encouraged by, or
resulted from any failure to comply with Laws by, Sellers, the Companies or the
Company Subsidiaries.

 

  5.2.7 Closing Payment

Sellers shall have received from Buyer the Purchase Price described in
Section 1.3.

 

  5.2.8 Section 338(h)(10) Election

Buyer shall have delivered to Coinstar two completed, duly executed IRS Forms
8023.

 

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  5.2.9 Credit Agreements

(a) (i) On or before September 30, 2010, Buyer shall have delivered to Sellers a
binding commitment letter from Buyer’s senior lender in substantially the form
attached hereto as Exhibit 5.2.9(a)(i) and completed to include the terms and
conditions of the proposed credit facilities offered by Buyer’s senior lender
(the “Commitment Letter”) committing such lender to provide, in whole or part, a
revolving credit facility for Buyer in an amount sufficient to permit Buyer to,
together with Buyer’s cash balances and the transactions contemplated by the
Credit Agreement, make all payments required to be made to Sellers in connection
with Closing under this Agreement (the “New Facility”), and (ii) in the event
that the Commitment Letter does not commit the senior lender to provide 100% of
the New Facility, on or before October 31, 2010 Buyer shall have delivered to
Sellers a binding commitment letter or letters from one or more additional
lenders committing such lender(s) to provide the remaining portion of the New
Facility that the senior lender has not committed to fund; and

(b) In connection with the Closing, Buyer shall have delivered to Sellers the
Credit Agreement; and

(c) In connection with the Closing, Buyer’s senior lender shall have delivered
to Sellers the Intercreditor Agreement.

 

  5.2.10 Swingline Closing Balance

Coinstar shall have received from Buyer a wire transfer of immediately available
funds to an account or accounts designated by Coinstar in an amount equal to the
Swingline Closing Balance or portion thereof as set forth in Section 1.6.

ARTICLE VI - TERMINATION, AMENDMENT AND WAIVER

 

6.1 Termination

This Agreement may only be terminated and the transactions contemplated by this
Agreement abandoned at any time prior to the Closing as follows:

(a) By mutual written agreement of Sellers and Buyer.

(b) By Sellers, on the one hand, or Buyer, on the other hand, if the Closing
shall not have occurred on or prior to the date that is six (6) months from the
date of this Agreement (such date, the “Termination Date”); provided, however,
that the right to terminate this Agreement under this Section 6.1(b) shall not
be available (i) to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of the Closing to
occur on or prior to the Termination Date, or (ii) to Buyer until after the
Outside Date if Section 5.1.3(b), Section 5.1.3(c), or both have not otherwise
been satisfied on or prior to the Termination Date.

(c) By Sellers or Buyer if any Governmental Entity having jurisdiction over the
Companies, Sellers or Buyer shall have issued an Order, decree or ruling or
taken any other action, in each case permanently enjoining or otherwise
prohibiting the consummation of the

 

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transactions contemplated by this Agreement, and such Order, decree, ruling or
other action shall have become final and non-appealable, unless the party
seeking to terminate this Agreement pursuant to this Section 6.1(c) shall not
have complied with its obligations under Section 4.7(a).

(d) By Sellers in the event of a Breach by Buyer of any representation, warranty
or agreement of Buyer contained herein that would prevent the satisfaction of
Section 5.2.1 or Section 5.2.2 provided Sellers have notified Buyer in writing
of the Breach and the Breach has not been cured or is not curable by the
Termination Date.

(e) By Buyer in the event of a Breach by the Companies or Sellers of any
representation, warranty or agreement of the Companies or Sellers, as
applicable, contained herein that would prevent the satisfaction of
Section 5.1.1 or Section 5.1.2 provided Buyer has notified Sellers in writing of
the Breach and the Breach has not been cured or is not curable by the
Termination Date.

(f) By Sellers, by giving written notice to Buyer at any time, if satisfaction
of any of Section 5.2.3, Section 5.2.4, Section 5.2.5, Section 5.2.6,
Section 5.2.7, Section 5.2.8, Section 5.2.9 or Section 5.2.10 prior to or on the
Termination Date is or becomes impossible (other than through the failure of the
Companies or Sellers to comply with their obligations under this Agreement).

(g) By Buyer, by giving written notice to Sellers at any time, if
(i) satisfaction of any of Section 5.1.3(a), Section 5.1.4, Section 5.1.5,
Section 5.1.6, Section 5.1.7, Section 5.1.8, Section 5.1.9, Section 5.1.10,
Section 5.1.11, Section 5.1.12, Section 5.1.13 or Section 5.1.14 prior to or on
the Termination Date is or becomes impossible (other than through the failure of
Buyer to comply with its obligations under this Agreement), or (ii) satisfaction
of any of Section 5.1.3(b) or Section 5.1.3(c) prior to or on the Outside Date
is or becomes impossible (other than through the failure of Buyer to comply with
its obligations under this Agreement).

 

6.2 Effect of Termination and Abandonment

In the event of the termination of this Agreement pursuant to this Article VI,
this Agreement shall become void and of no force or effect with no liability on
the part of any party hereto (or of any of its respective directors, managers,
officers, shareholders, members or Affiliates); provided, however, that no such
termination shall relieve any party hereto of any liability or damages resulting
from any material Breach of this Agreement or the Operative Documents prior to
such termination; and provided further, that the provisions of Section 8.10(a)
shall remain in full force and effect. Notwithstanding the foregoing, if Sellers
terminate this Agreement under Section 6.1(d) or Section 6.1(f) and Sellers
elect to receive the Break Fee as provided in this Section 6.2, Buyer and
Buyer’s parent shall be jointly and severally liable to pay to Sellers an amount
in cash equal to five percent (5%) of the Purchase Price (the “Break Fee”)
within five (5) days of such termination. The parties acknowledge and agree that
the agreement to pay the Break Fee under the circumstances set forth herein is
an integral part of the transactions contemplated by this Agreement and that,
without this agreement with respect to the Break Fee, the parties would not have
entered into this Agreement. Accordingly, if Buyer fails to pay the Break Fee
when due and, in order to obtain such payment, Sellers commence a

 

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Proceeding or pursue a Claim for the Break Fee, Sellers shall be entitled to
recover their costs and expenses (including attorneys’ fees and expenses)
incurred in connection with such Proceeding or Claim, together with interest
from the date such payment was required to be made until the date of receipt by
Sellers of the Break Fee and Sellers’ costs and expenses, with such interest
calculated at a rate of 10% per annum, compounded daily. The parties further
acknowledge that the Break Fee is not a penalty, but rather is liquidated
damages in an amount reasonably estimated by the parties to compensate Sellers
in the circumstances in which the Break Fee is payable for the Sellers’ efforts,
resources expended, and opportunities foregone while negotiating this Agreement,
in relying on this Agreement and on the expectation of the consummation of the
transactions contemplated hereby, which amount would otherwise be impossible to
calculate with precision. Notwithstanding anything to the contrary in this
Agreement, Sellers’ right to receive the Break Fee and amounts required under
this Section 6.2 shall, to the extent elected by and paid to Sellers, be the
sole and exclusive remedy of Sellers against Buyer and its former, current or
future stockholders, managers, members, directors, officers, Affiliates or
agents for the Losses suffered as a result of the breach of this Agreement and
termination under Section 6.1(d) or Section 6.1(f), and upon payment of the
amounts required and as provided by this Section 6.2, neither Buyer nor its
former, current or future stockholders, managers, members, directors, officers,
Affiliates or agents shall have any further liability or obligation to Sellers
or any of their respective stockholders, managers, members, directors, officers,
Affiliates or agents relating to or arising out of this Agreement or the
transactions contemplated hereby.

 

6.3 Amendment

This Agreement may be amended by the mutual written agreement of Buyer and
Sellers at any time.

 

6.4 Waiver; Consents

At any time prior to the Closing, the Companies and Sellers, on the one hand, or
Buyer, on the other hand, may, with respect to such other party, (a) extend the
time for the performance of any obligation or other act, (b) waive any
inaccuracy in the representations and warranties contained herein or in any
document delivered pursuant hereto, or (c) waive compliance with any agreement
or condition contained herein. Any such extension or waiver shall be valid only
if set forth in an instrument in writing signed by the party or parties to be
bound thereby, and any such extension, waiver or failure to insist upon strict
compliance with any obligation, representation, warranty, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure. Whenever this Agreement requires or permits consent
by or on behalf of Sellers, Companies or Buyer, such consent shall be given in
writing in a manner consistent with the requirements for a waiver of compliance
as set forth in this Section 6.4.

 

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ARTICLE VII - SURVIVAL AND INDEMNIFICATION

 

7.1 Survival

All Critical Representations shall survive the Closing and shall continue in
full force and effect indefinitely after the Closing (the “Long Term Survival
Period”) regardless of any investigation by Buyer or any knowledge Buyer may
have with respect to any misrepresentation or breach at the time of Closing. All
representations and warranties set forth in Section 2.10 (Taxes) and
Section 2.16 (Employee Benefits) (the “Special Representations”) shall survive
the Closing and continue in full force or effect until the ninetieth (90th) day
following expiration of the applicable statute of limitations (after giving
effect to any extensions or waivers thereof) (the “Special Survival Period”).
All representations and warranties set forth in Section 2.17(b) (Compliance With
Applicable Laws) (the “Compliance Representations”) shall continue for a period
of twenty-seven (27) months after the Closing Date (the “Compliance Survival
Period”). All representations and warranties set forth in Section 2.17(c)
(Compliance With Applicable Laws) (the “AML Representations”) shall continue for
a period of thirty (30) months after the Closing Date (the “AML Survival
Period”). All representations and warranties contained in this Agreement, other
than the Critical Representations, the Special Representations, the Compliance
Representations and the AML Representations, shall survive the Closing for a
period of eighteen (18) months after the Closing Date (the “General Survival
Period” and together with the Special Survival Period, the Compliance Survival
Period, the AML Survival Period and the Long Term Survival Period, the
“Applicable Survival Periods” and individually, the “Applicable Survival
Period”). Notwithstanding anything contained herein to the contrary, (i) any
representation or warranty that would otherwise terminate in accordance with the
immediately preceding two sentences shall survive and continue in full force and
effect if a notice shall have been timely given under Section 7.5 hereof on or
prior to the end of the Applicable Survival Period, until the related claim for
indemnification has been satisfied or otherwise resolved as provided in this
Article VII; and (ii) the obligations of an Indemnifying Party to indemnify and
hold harmless any Indemnified Party for any Claims based on fraud or intentional
misrepresentation shall survive the Closing and continue in full force or effect
until the expiration of the applicable statute of limitations. The covenants and
agreements set forth herein, or in any documents, instruments or agreements
delivered in connection with the transactions contemplated hereby, that
contemplate performance after the Closing shall survive the Closing and shall
continue until all obligations with respect thereto shall have been performed or
satisfied or shall have been terminated in accordance with their terms.

 

7.2 Indemnification by Sellers

Subject to the limitations set forth in this Article VII, from and after the
Closing, Sellers shall jointly and severally indemnify and hold Buyer and its
officers, directors, managers, employees, agents, representatives, Affiliates
and any Person claiming by or through any of them (each, a “Buyer Indemnified
Party” and, together, the “Buyer Indemnified Parties”) harmless from and
against, and in respect of, and shall reimburse the Buyer Indemnified Parties
for, any and all damages, debts, liabilities, obligations, judgments, orders,
awards, writs, injunctions, decrees, fines, penalties, costs or expenses,
diminution in value, losses or deficiencies, whether or not arising out of third
party claims (including, but not limited to, any reasonable legal or accounting
fees and other expenses incident to any suit, action, proceeding or Claim and
all

 

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amounts paid in settlement of, and all reasonable amounts paid in investigation
or defense of, any of the foregoing) (“Losses”) directly or indirectly arising
out of or resulting from:

(a) any Breach of any representation or warranty made by or on behalf of the
Companies or Sellers in this Agreement or in any other Operative Document
(provided that in each case, after determining that a Breach has occurred (other
than a Breach of the first sentence of Section 2.8 (Absence of Changes or
Events)) the amount of Losses for which Buyer Indemnified Parties shall be
indemnified shall be determined without regard to any qualification therein
referencing the terms “materiality” or “Material Adverse Effect” or other terms
of similar import or effect);

(b) any Breach by the Companies or Sellers of any covenant or other obligation
in this Agreement or in any other Operative Document; and

(c) any of the matters specified in Section 7.2 of the Disclosure Schedules
hereto;

provided, however, that in no event shall Sellers be obligated to indemnify or
hold harmless any Buyer Indemnified Parties for any Losses under this
Section 7.2 to the extent that they are remote, speculative, or not reasonably
foreseeable.

 

7.3 Indemnification by Buyer

Subject to the limitations set forth in this Article VII, from and after the
Closing, Buyer shall indemnify and hold Sellers and their respective officers,
directors, managers, employees, agents, representatives, Affiliates and any
Person claiming by or through any of them (each, a “Seller Indemnified Party”
and, together, the “Seller Indemnified Parties”) harmless from and against, and
in respect of, and shall reimburse the Seller Indemnified Parties for, any and
all Losses arising out of or resulting from:

(a) any Breach of any representation or warranty made by or on behalf of the
Buyer in this Agreement or in any other Operative Document (provided that in
each case, after determining that a Breach has occurred, the amount of Losses
for which Seller Indemnified Parties shall be indemnified shall be determined
without regard to any qualification therein referencing the terms “materiality”
or “Material Adverse Effect” or other terms of similar import or effect); and

(b) any Breach by the Buyer of any covenant or other obligation in this
Agreement or in any other Operative Document;

provided, however, that in no event shall Buyer be obligated to indemnify or
hold harmless any Seller Indemnified Parties for any Losses under this
Section 7.3 to the extent that they are remote, speculative, or not reasonably
foreseeable.

 

7.4 Limitations on Liability

(a) No Indemnified Party shall be entitled to receive any indemnification
payment with respect to Claims for indemnification made under Section 7.2(a) or
Section 7.3(a) (as applicable) (the “Misrepresentation Claims”), until the
aggregate Losses that such Indemnified

 

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Party would be otherwise entitled to receive as indemnification with respect to
Misrepresentation Claims exceed $300,000 (such amount, the “Deductible”) and
then only to the extent that the Losses exceed the Deductible; provided that the
Deductible and the limitation specified in the first part of this Section 7.4
shall not apply to any amounts payable in respect of Losses arising out of,
resulting from or incurred in relation to or in connection with any Critical
Representations; provided, however, that for the avoidance of doubt, all amounts
payable in respect of Losses arising out of, resulting from or incurred in
relation to or in connection with (i) any Critical Representation or (ii) any
Claims based on fraud or intentional misrepresentation shall be aggregated with
all other Losses with respect to Misrepresentation Claims under Sections 7.2 or
7.3, as applicable, to determine whether the Deductible has been exceeded.

(b) With respect to Misrepresentation Claims other than Claims arising in
respect of the Critical Representations or the AML Representations, the maximum
aggregate liability of any Indemnifying Party for indemnification under
Section 7.2(a) or under Section 7.3(a) shall be limited to an amount equal to
$6,225,000 (the “General Indemnification Cap”).

(c) With respect to Misrepresentation Claims arising in respect of the AML
Representations, the maximum aggregate liability of the Indemnifying Party for
indemnification under Section 7.2(a) shall be limited to an amount equal to
$10,375,000 (the “AML Indemnification Cap”).

(d) Notwithstanding Sections 7.4(b) and 7.4(c) above, in no event will the
maximum aggregate liability of any Indemnifying Party for indemnification under
Section 7.2(a) or under Section 7.3(a) with respect to Misrepresentation Claims
other than Claims arising in respect of the Critical Representations exceed
$10,375,000 in the aggregate (the “Aggregate Indemnification Cap”).

(e) With respect to Claims for indemnification (i) arising in respect of the
Critical Representations or (ii) under Sections 7.2(b) or 7.3(b), the maximum
aggregate liability of any Indemnifying Party for indemnification under this
Article VII shall not exceed $41,500,000.

(f) Notwithstanding anything contained herein to the contrary, and for the
avoidance of doubt, the limitations set forth in Sections 7.4(a), 7.4(b),
7.4(c), 7.4(d) and 7.4(e) shall not apply to any amounts payable in respect of
Losses arising out of or resulting from (i) any Claims based on fraud or
intentional misrepresentation, and/or (ii) any Claims for indemnification under
Section 7.2(c).

 

7.5 Procedure for Indemnification

(a) An Indemnified Party shall give written notice (the “Claim Notice”) of any
Indemnification Claim (i) in the case of an Indemnification Claim against Buyer,
to Buyer and (ii) in the case of an Indemnification Claim against Sellers, to
Sellers, reasonably promptly, but in any event (in each case of an
Indemnification Claim against Buyer or Sellers) (A) prior to expiration of the
Applicable Survival Period for such Indemnification Claim and (B) if such
Indemnification Claim relates to the assertion against an Indemnified Party of
any Claim by a third party (a “Third Party Claim”), within forty-five (45) days
after receipt by the Indemnified Party of written notice of a legal process
relating to such Third Party Claim; provided, however,

 

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that the failure or delay to so notify the party that is required to provide
indemnification (the “Indemnifying Party”) under subsection 7.5(a)(ii)(B) shall
not relieve the Indemnifying Party of any obligation or liability that the
Indemnifying Party may have to the Indemnified Party, unless, and then only to
the extent that, the Indemnifying Party demonstrates that the Indemnifying Party
is prejudiced thereby. Any such Claim Notice shall describe in reasonable detail
the asserted Indemnification Claim and specify the amount of such
Indemnification Claim if then ascertainable.

(b) In the case of a Third Party Claim, unless the Indemnifying Party contests
in writing and provides notice to the Indemnified Party within forty-five
(45) days of receipt by the Indemnifying Party of a Claim Notice that it objects
to such Claim Notice, including but not limited to the Losses identified in such
Claim Notice, the Indemnified Party shall, subject to the other terms of this
Article VII, be paid the amount of the Losses identified in such Claim Notice or
the uncontested portion thereof.

(c) Except as otherwise provided herein and, for as long as it diligently
conducts such defense, the Indemnifying Party shall have the right to defend and
to direct the defense against any such Third Party Claim, in its name or in the
name of the Indemnified Party, as the case may be, at the expense of the
Indemnifying Party, and with counsel selected by the Indemnifying Party (which
is reasonably acceptable to the Indemnified Party) if the Indemnifying Party
provides the Indemnified Party with written notice of its election to do so
within forty-five (45) days of receiving notice of a Third Party Claim;
provided, however, the Indemnifying Party shall not be entitled to assume the
defense or control of a Third Party Claim and shall pay the fees and expenses of
counsel retained by the Indemnified Party if (i) the Indemnifying Party does not
acknowledge to the Indemnified Party in writing (in form and substance
reasonably satisfactory to the Indemnified Party) its obligations to indemnify
the Indemnified Party with respect to all elements of such claim in full without
any reservation of rights (i.e., pursuant to which the Indemnifying Party agrees
to be fully responsible for all Losses relating to such claims and agrees to
provide full indemnification to the Indemnified Party for all Losses relating to
such claim, subject to the limitations set forth in this Article VII), (ii) such
Third Party Claim seeks an order, injunction or other equitable relief against
the Indemnified Party, the Companies or any Company Subsidiaries, (iii) such
Third Party Claim involves any criminal proceeding, action, indictment,
allegation or investigation, or (iv) counsel to the Indemnified Party shall have
reasonably concluded in writing that (a) there is a conflict of interest between
the Indemnified Party and the Indemnifying Party in the conduct of the defense
of such Third Party Claim or (b) the Indemnified Party has one or more defenses
not available to the Indemnifying Party; provided, further, in the event any
Third Party Claim is brought or asserted which, if adversely determined, would
not entitle the Indemnified Party to full indemnity pursuant to this Article VII
by reason of any of the limitations set forth in this section or otherwise, the
Indemnified Party may elect to participate in a joint defense of such Third
Party Claim for which the expenses of such joint defense will be shared equally
by such parties subject to the limitations set forth in this Article VII and the
retention of counsel shall be reasonably satisfactory to both parties.
Notwithstanding anything in this Agreement to the contrary, the Indemnified
Party shall, in connection with any such joint defense, cooperate with the
Indemnifying Party, and keep the Indemnifying Party fully informed, in the joint
defense of a Third Party Claim. The Indemnified Party shall have the right to
participate in the defense of any Third Party Claim with counsel employed at its
own expense; provided, however, that, in

 

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the case of any Third Party Claim described in clause (i), (ii), (iii) or
(iv) above or as to which the Indemnifying Party shall not in fact have employed
counsel to assume the defense of such Third Party Claim, the reasonable fees and
disbursements of such counsel shall be at the expense of the Indemnifying Party
subject to the limitations set forth in this Article VII. No compromise or
settlement of any Third Party Claim may be effected by the Indemnifying Party
without the Indemnified Party’s consent, which shall not be unreasonably
withheld, conditioned or delayed, unless (x) the sole relief provided in the
compromise or settlement is monetary damages, there is no finding or admission
of any violation of Law in connection therewith and there is no effect on any
other claims that may be made against such Indemnified Party or its Affiliates,
(y) each Indemnified Party that is Party to such Third Party Claim is fully and
unconditionally released from liability with respect to such claim and (z) such
settlement or compromise will not, in the good faith judgment of the Indemnified
Party, be reasonably likely to establish a precedent, custom or practice
materially adverse to the continuing business interests of the Indemnified
Party. The Indemnified Party shall not agree to a settlement of, or consent to
the entry of any judgment to, any Third Party Claim without the prior written
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld, conditioned or delayed.

(d) In the event that an Indemnified Party determines that it has a Claim for
Losses against an Indemnifying Party hereunder (other than as a result of a
Third Party Claim), the Indemnified Party shall give reasonably prompt written
notice thereof to the Indemnifying Party, specifying the amount of such Claim
(to the extent then reasonably determinable by the Indemnified Party) and any
relevant facts and circumstances relating thereto (a “Direct Claim Notice”)
(provided that no delay on the part of the Indemnified Party in notifying any
Indemnifying Party shall relieve the Indemnifying Party from any obligation
hereunder unless, and then solely to the extent, the Indemnifying Party is
prejudiced thereby). The Indemnified Party shall provide the Indemnifying Party
with reasonable access to its books, records and personnel for the purpose of
allowing the Indemnifying Party a reasonable opportunity to evaluate such Direct
Claim Notice. The Indemnifying Party shall notify the Indemnified Party within
forty-five (45) days following its receipt of such Direct Claim Notice if the
Indemnifying Party disputes its liability to the Indemnified Party under this
Article VII with respect to such Direct Claim Notice. If the Indemnifying Party
does not so notify the Indemnified Party, the Claim or undisputed portion of
such Claim specified by the Indemnified Party in such Direct Claim Notice shall
be conclusively deemed to be a liability of the Indemnifying Party under this
Article VII, and subject to the limitations of this Article VII, the
Indemnifying Party shall pay the amount of such liability to the Indemnified
Party on demand or, in the case of any notice in which the amount of the Claim
(or any portion of the Claim) is estimated, on such later date when the amount
of such Claim (or such portion of such Claim) is finally determined by
(i) mutual agreement between the Buyer and Sellers which shall be memorialized
in writing or (ii) the final decision of a court or other trier of fact. All
disputed Claims for indemnification under this Article VII shall be resolved by
(i) mutual agreement between Buyer and Sellers, which shall be memorialized in
writing or (ii) the final decision of a court or other trier of fact.

(e) Sellers’ obligation to make any indemnification payment under this Agreement
(“Seller Indemnity Payment”) shall be satisfied, subject to the limitations of
this Agreement, (i) first by setting off and deducting an amount equal to the
Seller Indemnity Payment from the next quarterly payment of principal due
pursuant to the promissory note under the Credit

 

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Agreement, (ii) to the extent that the Seller Indemnity Payment is not fully
satisfied by the set off and deduction described in the immediately preceding
subsection (i), from the following quarterly payment of principal due pursuant
to the promissory note under the Credit Agreement, and (iii) to the extent that
the Seller Indemnity Payment is not fully satisfied by the set off and deduction
described in the immediately preceding subsections (i) and (ii), by Coinstar’s
immediate (or in any event within five (5) business days) payment in cash of an
amount equal to the unpaid portion of the Seller Indemnity Payment.

 

7.6 Tax Treatment of Indemnity Payments

Any indemnity payment made under this Agreement shall be treated as an
adjustment to the US Purchase Price or the UK Purchase Price, as the case may
be, for Tax purposes, unless otherwise required under applicable Law, which
adjustment for purposes of Section 1.4 shall be allocated to the CEPSI Shares or
the UK Holdings Shares with respect to which the Indemnification Claim giving
rise to the indemnification payment relates. Buyer shall prepare and deliver to
Coinstar for Coinstar’s review and approval, not to be unreasonably withheld,
delayed or conditioned, amended Section 338 Allocations to reflect any such
adjustment allocated to the CEPSI Shares, and an amended UK Purchase Price
Allocation to reflect any such adjustment allocated to the UK Holdings Shares,
within forty-five (45) days after the indemnity payment is made.

 

7.7 Reduction of Losses

The amount of Losses otherwise eligible for indemnification under this
Article VII shall be reduced (but not less than zero) by (a) the amount of any
insurance proceeds actually recovered by an Indemnified Party in respect
thereof, including pursuant to Section 4.11, (b) any Tax-related benefits that
the Indemnified Party actually realized as a result of the incurrence of such
Losses, (c) the amount reserved, if any, on the Closing Balance Sheet in respect
thereof, and (d) any actual recovery from third Persons (less the fees and
expenses incurred to obtain such proceeds). Notwithstanding anything to the
contrary in this Agreement, no indemnification shall be made by Sellers with
respect to any Losses covered by insurance policies of the Buyer, the Companies
or the Company Subsidiaries, and Buyer shall be required to make applicable
claims on such insurance policies prior to seeking indemnification from Sellers
hereunder. To the extent that Sellers indemnify Buyer for Losses hereunder and
any of the Buyer, the Companies or the Company Subsidiaries subsequently
collects insurance proceeds or actually realizes Tax-related benefits with
respect to the claim upon which Buyer’s indemnification was based, Buyer shall
reimburse Sellers the amount of the Losses for which Sellers indemnified Buyer
within five (5) business days of receipt of such insurance proceeds or
realization of such Tax-related benefits (whether as a refund or as a credit or
other offset to Taxes payable).

 

7.8 Exclusive Remedy

Notwithstanding anything contained in this Agreement to the contrary, after
Closing, except in the case of fraud or intentional misrepresentation, the
indemnification provisions of this Article VII will be the sole and exclusive
remedy of any Indemnified Party arising under this Agreement.

 

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7.9 No Duplication

Any liability for indemnification pursuant to this Article VII shall be
determined without duplication of recovery by reason of the state of facts
giving rise to such liability constituting a Breach of more than one
representation, warranty, covenant or agreement.

 

7.10 Mitigation

Buyer and Sellers shall cooperate with each other with respect to resolving any
claim or liability with respect to which one party is obligated to indemnify
another party under this Article VII, including by making commercially
reasonable efforts to mitigate.

ARTICLE VIII - MISCELLANEOUS

 

8.1 Notices

All notices, demands and requests required or permitted to be given under the
provisions of this Agreement shall be (a) in writing, (b) delivered by personal
delivery, sent by commercial delivery service or certified mail, return receipt
requested, or transmitted by facsimile, (c) deemed to have been given on the
date of personal delivery, the date set forth in the records of the delivery
service or on the return receipt, or the date of facsimile confirmation, and
(d) addressed as follows:

 

If to CEPSI (prior to Closing):   

Coinstar E-Payment Services Inc.

c/o Coinstar, Inc.

1800 114th Avenue SE

Bellevue, WA 98004

Attention: Donald R. Rench, General Counsel

Facsimile: (425) 943-8090

With copies (which shall not constitute notice) to:   

Perkins Coie LLP

1201 Third Avenue, Suite 4800

Seattle, WA 98101

Attention: Lynn E. Hvalsoe

Facsimile: (206) 359-9000

If to UK Holdings (prior to Closing):   

Coinstar UK Holdings Limited

c/o Coinstar, Inc.

1800 114th Avenue SE

Bellevue, WA 98004

Attention: Donald R. Rench, General Counsel

Facsimile: (425) 943-8090

 

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With copies (which shall not constitute notice) to:   

Perkins Coie LLP

1201 Third Avenue, Suite 4800

Seattle, WA 98101

Attention: Lynn E. Hvalsoe

Facsimile: (206) 359-9000

If to CUHL (prior to Closing):   

CUHL Holdings Inc.

c/o Coinstar, Inc.

1800 114th Avenue SE

Bellevue, WA 98004

Attention: Donald R. Rench, General Counsel

Facsimile: (425) 943-8090

With copies (which shall not constitute notice) to:   

Perkins Coie LLP

1201 Third Avenue, Suite 4800

Seattle, WA 98101

Attention: Lynn E. Hvalsoe

Facsimile: (206) 359-9000

If to Coinstar:   

Coinstar, Inc.

1800 114th Avenue SE

Bellevue, WA 98004

Attention: Donald R. Rench, General Counsel

Facsimile: (425) 943-8090

With copies (which shall not constitute notice) to:   

Perkins Coie LLP

1201 Third Avenue, Suite 4800

Seattle, WA 98101

Attention: Lynn E. Hvalsoe

Facsimile: (206) 359-9000

If to Buyer:   

Sigue Corporation

13291 Ralston Avenue

Sylmar, CA 91342

Attention: Robert Pargac, General Counsel

Facsimile: (866) 744-8306

With copies (which shall not constitute notice) to:   

Stubbs Alderton Markiles LLP

15260 Ventura Blvd., 20th Floor

Sherman Oaks, CA 91403

Attention: Jonathan R. Hodes

Facsimile: (818) 444-6308

or to any other or additional Persons and addresses as the parties may from time
to time designate in a writing delivered in accordance with this Section 8.1.

 

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8.2 Assignment; Benefit and Binding Effect

No party to this Agreement may assign any rights or delegate any obligations
under this Agreement prior to Closing without the prior written consent of the
other parties. This Agreement shall be binding on and inure to the benefit of
the parties and their respective successors and assigns.

 

8.3 Further Assurances

The parties shall take any actions and execute any other documents that may be
necessary or desirable to the implementation and consummation of the
transactions contemplated by this Agreement and the Operative Agreements.

 

8.4 Governing Law

This Agreement shall be governed by, and construed in accordance with, the Laws
of the State of Washington applicable to contracts executed in and to be
performed in that state without giving effect to principles of conflicts of
Laws. In any action among or between any of the parties arising out of or
relating to this Agreement, each of the parties irrevocably and unconditionally
consents and submits to the exclusive jurisdiction and venue of the state and
federal courts located in San Francisco, California.

 

8.5 Waiver of Jury Trial

Each party hereto hereby irrevocably waives all right to trial by jury in any
action, Proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to this Agreement, the transactions
contemplated hereby or the actions of such parties in the negotiation,
administration, performance and enforcement hereof.

 

8.6 Headings

The headings in this Agreement are included for ease of reference only and shall
not control or affect the meaning or construction of the provisions of this
Agreement.

 

8.7 Interpretation

Words used in this Agreement, regardless of the gender and number specifically
used, shall be deemed and construed to include any other gender, masculine,
feminine or neuter, and any other number, singular or plural, as the context
requires. Whenever the words “include,” “includes” or “including” are used in
this Agreement, they will be deemed to be followed by the words “without
limitation.” Unless otherwise indicated to the contrary herein by the context or
use thereof, the words “herein,” “hereto,” “hereof” and words of similar import
refer to this Agreement as a whole and not to any particular section or
paragraph hereof. Where any amount in this Agreement which is expressed in
United States Dollars is applicable to the Money Transfer Business as carried on
outside of the United States of America the relevant amount for such
jurisdiction shall be deemed to be the amount converted from United States
Dollars into the relevant local currency at the prevailing interbank foreign
exchange rate quoted in the Wall Street Journal at the date of this Agreement.
Any reference in this Agreement to a legal term

 

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used in the United States of America for any action, remedy, method of judicial
proceeding, legal document, legal status, court, official, governmental or
administrative authority or agency or any legal concept or legislation includes
in respect of any jurisdiction other than the United States of America, a
reference to whatever most closely approximates in that jurisdiction to the
relevant legal term or reference used in the United States of America.

 

8.8 Severability

If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of Law, or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner adverse to any party. Upon
such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in a mutually acceptable manner in order that the
transactions contemplated hereby be consummated as originally contemplated to
the fullest extent possible.

 

8.9 Entire Agreement

The Disclosure Schedules and all Exhibits attached hereto are hereby
incorporated by reference into, and made a part of, this Agreement. This
Agreement (including all Disclosure Schedules and Exhibits hereto), the
Confidentiality Agreement, the confidentiality and nondisclosure letter
agreement dated July 9, 2010 between Coinstar and Buyer, and the other Operative
Documents constitute the entire understanding and agreement among the parties
with respect to the subject matter hereof and supersede all prior negotiations
between the parties with respect to the subject matter hereof.

 

8.10 Expenses; Attorneys’ Fees

(a) Whether or not the transactions contemplated by this Agreement are
consummated, all costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be borne by the party incurring
such expenses, except as otherwise expressly set forth hereunder.

(b) Notwithstanding any provision of this Agreement to the contrary, in the
event legal action is instituted to interpret or enforce the provisions of this
Agreement, the prevailing party shall be entitled to recover from the other
party the prevailing party’s costs and attorneys’ fees, including, without
limitation, all costs and fees that are incurred in any trial, any appeal, and
in connection with collecting or enforcing any judgment.

 

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8.11 Specific Performance

Each of the parties acknowledges and agrees that the other parties hereto would
be damaged irreparably in the event any of the provisions of this Agreement are
not performed in accordance with their specific terms or otherwise are Breached.
Accordingly, each of the parties hereto agrees that the other parties hereto
shall be entitled to an injunction to prevent Breaches of the provisions of this
Agreement and to enforce specifically this Agreement and the terms and
provisions hereof (including the indemnification provisions hereof) in any
competent court having jurisdiction over the parties, in addition to any other
remedy to which they may be entitled at Law or in equity.

 

8.12 Counterparts

This Agreement may be executed and delivered (including by facsimile
transmission) in one or more counterparts, and by the different parties hereto
in separate counterparts, each of which when executed and delivered shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement. To expedite the process of entering into this Agreement,
the parties acknowledge that Transmitted Copies of this Agreement will be
equivalent to original documents until such time as original documents are
completely executed and delivered. “Transmitted Copies” will mean copies that
are reproduced or transmitted via photocopy, facsimile or other process of
complete and accurate reproduction and transmission.

ARTICLE IX - DEFINITIONS

 

9.1 Definitions

As used in this Agreement, the following defined terms shall have the meanings
indicated below:

“Accounting Arbitrator”: Is defined in Section 1.5(d).

“Action”: Means any action, appeal, petition, plea, charge, complaint, claim,
suit, demand, litigation, arbitration, mediation, hearing, inquiry,
investigation or similar event, occurrence, or proceeding.

“Affiliate”: Means (a) any Person directly or indirectly controlling, controlled
by or under common control with another Person, (b) any Person owning or
controlling 10% or more of the outstanding voting securities of another Person,
(c) any officer, director, partner, manager or member of an entity, (d) if such
other Person is an officer, director, partner, manager or member, any entity for
which such Person acts in any such capacity, and (e) the spouse and the natural
or adopted lineal ancestors or descendants of an individual, and trusts for the
benefit of a Person and/or any of the foregoing.

“Aggregate Indemnification Cap”: Is defined in Section 7.4(d).

“Agreed Accounting Policies”: Is defined in Section 2.7.

“Agreement”: Is defined in the Preamble.

 

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“AML Indemnification Cap”: Is defined in Section 7.4(c).

“AML Representations”: Is defined in Section 7.1.

“AML Survival Period”: Is defined in Section 7.1.

“Applicable Survival Period” and “Applicable Survival Periods”: Are defined in
Section 7.1.

“A/R Report”: Is defined in Section 4.19.

“Assignment and Assumption Agreement”: Is defined in Section 5.1.9.

“Balance Sheet Date”: Is defined in Section 2.7.

“Books and Records”: Is defined in Section 2.23.

“Breach” or “Breached”: A “Breach” of a representation, warranty, certification,
covenant, obligation or other provision of this Agreement or any Operative
Document will be deemed to have occurred, or a representation, warranty,
certification, covenant, obligation or other provision of this Agreement or any
Operative Document will have been “Breached,” if there is or has been any
inaccuracy in or breach of, or any failure to perform or comply (in whole or in
part) with, such representation, warranty, certification, covenant, obligation
or other provision, and such inaccuracy or breach, or failure to perform or
comply, is not known by and has not otherwise been disclosed in the Disclosure
Schedules to, the party alleging such Breach. The term “Breach” includes any
breach, inaccuracy, failure to perform, failure to comply, or violation.

“Break Fee”: Is defined in Section 6.2.

“Buyer”: Is defined in the Preamble.

“Buyer Benefit Plan”: Is defined in Section 4.10.

“Buyer Estimated NWC”: Is defined in Section 1.5(c).

“Buyer Indemnified Party” and “Buyer Indemnified Parties”: Are defined in
Section 7.2.

“Buyer Material Adverse Effect”: Means any fact, circumstance, change,
occurrence or effect that, individually or in the aggregate with all other
facts, circumstances, changes, occurrences or effects, (1) is or would
reasonably be expected to be materially adverse to the business, financial
condition or results of operations of Buyer, or (2) prevents or materially
delays or materially impairs, or would reasonably be expected to prevent or
materially delay or materially impair, the ability of Buyer to consummate the
transactions contemplated by this Agreement, except for any such facts,
circumstances, changes, occurrences or effects arising out of or relating to
(i) the announcement or the existence of this Agreement and the transactions
contemplated hereby, (ii) changes in general economic or political conditions or
the financial,

 

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credit or securities markets (to the extent Buyer is not disproportionately
affected thereby), (iii) changes in applicable Laws, rules, regulations or
orders of any Governmental Entity or interpretations thereof by any Governmental
Entity or changes in accounting rules or principles (to the extent Buyer is not
disproportionately affected thereby), (iv) changes affecting generally the
industries in which Buyer conducts business (to the extent Buyer is not
disproportionately affected thereby), or (v) any outbreak or escalation of
hostilities or war or any act of terrorism (to the extent Buyer is not
disproportionately affected thereby).

“CEPSI”: Is defined in the Preamble.

“CEPSI Shares”: Is defined in the Recitals.

“Charter”: Means, with respect to Coinstar, the Amended and Restated Certificate
of Incorporation of Coinstar, Inc., dated July 11, 1997; with respect to CUHL,
the Certificate of Incorporation dated May 29, 2009; with respect to CEPSI, the
Articles of Incorporation of Coinstar E-Payment Services Inc. dated
September 30, 2004, as amended by the Certificate of Amendment dated October 20,
2004; with respect to GroupEx Financial Corporation, a Delaware corporation, the
Articles of Incorporation of GroupEx Financial Corporation dated November 6,
1998, as amended by the Certificate of Amendment dated May 12, 2000; with
respect to JRJ Express Inc., a California corporation, the Articles of
Incorporation of JRJ Express Inc. dated May 10, 1988, as amended by the
Certificate of Amendment dated September 19, 1988; with respect to Kimeco, LLC,
a California limited liability company, the Articles of Organization of Kimeco,
LLC filed on June 16, 1997; with respect to Coinstar Money Transfer SAS, a
company formed under the laws of France, the Au Greffe du Tribunal de Commerce
de Paris dated July 20, 2007; with respect to GroupEx LLC, a Delaware limited
liability company, the Certificate of Formation of GroupEx LLC dated October 11,
2000; with respect to Mxes. S. de R.L. de C.V., a company formed under the laws
of Mexico, the Testimonio de law Escritura de Constitucion de “Mxes” dated
September 21, 2001; with respect to GroupEx Financial, S.A., a company formed
under the laws of Guatemala, the Protocolo dated December 4, 2006; with respect
to Coinstar UK Holdings Limited, a company formed in England and Wales, the
Certificate of Incorporation dated May 12, 2006; with respect to Coinstar Money
Transfer (Holdings) Limited, a company incorporated in England and Wales, the
Certificate of Incorporation dated May 12, 2006; with respect to Coinstar Money
Transfer Limited, a company incorporated in England and Wales, the Certificate
of Incorporation dated April 11, 2003 and the Certificates of Incorporation on
change of name dated July 21, 2003 and October 31, 2006; with respect to
Coinstar Support Services Private Limited, a company formed under the laws of
India, the Certificate of Incorporation of Coinstar Support Services Private
Limited dated January 9, 2008; with respect to Coinstar Money Transfer (Ireland)
Limited, a company formed under the laws of Ireland, the Certificate of
Incorporation of First Remit Limited dated April 30, 2001; with respect to
Coinstar Money Transfer SA, a company formed under the laws of Belgium, the
Constitution of Coinstar Money Transfer dated November 13, 2006, as revised by
the Revision to Constitution dated 2007; with respect to Coinstar Hellas SA
(Greece), a company formed under the laws of Greece, the Articles of
Association; with respect to Coinstar Money Transfer Spain S.A., a company
formed under the laws of Spain, the Deed of Incorporation dated March 17, 2005;
and with respect to Coinstar Money Transfer Limited, a company formed under the
laws of Hong Kong, the Certificate of Incorporation of Travelex Money Transfer
(Hong Kong) Limited dated December 30, 2005.

 

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“Claim”: Means any charge, allegation, notice, civil, criminal or administrative
claim, demand, complaint, cause of action, suit, proceeding, arbitration,
hearing or investigation.

“Claim Notice”: Is defined in Section 7.5(a).

“Closing”: Is defined in Section 1.2.

“Closing Balance Sheet”: Is defined in Section 1.5(b).

“Closing Cash Payment”: Is defined in Section 1.3.

“Closing Date”: Is defined in Section 1.2.

“Code”: Means the Internal Revenue Code of 1986, as amended, and Treasury
Regulations promulgated thereunder, as in effect from time to time.

“Coinstar”: Is defined in the Preamble.

“Combined Return”: Is defined in Section 4.6(a).

“Commitment Letter”: Is defined in Section 5.2.9(a)(i).

“Company” and “Companies”: Are defined in the Preamble.

“Company Benefit Plan”: Is defined in Section 4.10.

“Company Employee” and “Company Employees”: Are defined in Section 4.10.

“Company Intellectual Property”: Is defined in Section 2.12(a).

“Company Material Adverse Effect”: Means any fact, circumstance, change,
occurrence or effect that, individually or in the aggregate with all other
facts, circumstances, changes, occurrences or effects, (1) is or would
reasonably be expected to be materially adverse to the business, financial
condition or results of operations of the Companies and the Company
Subsidiaries, taken as a whole, or (2) prevents or materially delays or
materially impairs, or would reasonably be expected to prevent or materially
delay or materially impair, the ability of Sellers and the Companies to
consummate the transactions contemplated by this Agreement, except for any such
facts, circumstances, changes, occurrences or effects arising out of or relating
to (i) the announcement or the existence of this Agreement and the transactions
contemplated hereby, the identity of Buyer or actions by Buyer, the Companies or
the Company Subsidiaries required to be taken pursuant to this Agreement
(including, in each case, any loss of customers, suppliers or employees or any
disruption in business relationships), (ii) changes in general economic or
political conditions or the financial, credit or securities markets (to the
extent the Companies and the Company Subsidiaries, taken as a whole, are not
disproportionately affected thereby), (iii) changes in applicable laws, rules,
regulations or orders of any Governmental Entity or interpretations thereof by
any Governmental Entity or changes in accounting rules or principles (to the
extent the Companies and the Company Subsidiaries, taken as a whole, are not
disproportionately affected thereby), (iv) changes affecting generally the

 

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industries in which the Companies and the Company Subsidiaries conduct business
(to the extent the Companies and the Company Subsidiaries, taken as a whole, are
not disproportionately affected thereby), or (v) any outbreak or escalation of
hostilities or war or any act of terrorism (to the extent the Companies and the
Company Subsidiaries, taken as a whole, are not disproportionately affected
thereby).

“Company Subsidiaries”: Means, collectively, the Domestic Subsidiaries, the UK
Subsidiaries and the Non-UK Foreign Subsidiaries, and “Company Subsidiary” means
each or any one of such Company Subsidiaries.

“Compliance Representations”: Is defined in Section 7.1.

“Compliance Survival Period”: Is defined in Section 7.1.

“Confidentiality Agreement”: Is defined in Section 4.2.

“Contract”: Means any contract, agreement, arrangement, binding commitment or
other similar binding understanding, whether written or oral.

“Credit Agreement”: Is defined in Section 1.3.

“Critical Representations”: Means the representations and warranties set forth
in Section 2.1 (Good Title; Capitalization), Section 2.2 (Authorization),
Section 2.3 (Organization and Authority), and Section 2.24 (No Broker or Finder;
No Transaction Bonuses), as well as Section 3.1 (Organization and Authority) and
Section 3.2 (Authorization), and Paragraph 5 of Exhibit II.

“CUHL”: Is defined in the Preamble.

“CUHL Stock”: Is defined in Section 2.1.

“Deductible” : Is defined in Section 7.4(a).

“Direct Claim Notice”: Is defined in Section 7.5(d).

“Disclosed Scheme”: Is defined in Exhibit II, Section 2.1.

“Disclosure Schedules”: Is defined in the first paragraph of Article II.

“Domestic Employee Benefit Plan” and “Domestic Employee Benefit Plans”: Are
defined in Section 2.16.1.

“Domestic Subsidiary” and “Domestic Subsidiaries”: Are defined in
Section 2.6(a).

“Employee Benefit Plan”: Means each plan, program, policy, payroll practice,
contract, agreement or other arrangement providing for compensation, severance,
termination pay, performance awards, stock or stock related awards, fringe
benefits or other employee benefits of any kind, whether formal or informal,
funded or unfunded, written or oral and whether or not legally binding,
including each “employee benefit plan” within the meaning of Section 3(3) of
ERISA.

 

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“Encumbrance”: Means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge, standard security,
assignation in security or security interest in, on or of such asset or other
arrangement to provide priority or preference with respect to such asset,
(b) the interest of a vendor or a lessor under any conditional sale agreement,
capital lease or title retention agreement (or any financing lease having
substantially the same economic effect as any of the foregoing) relating to such
asset, and (c) in the case of securities, any purchase option, call or similar
right of a third party (other than customary rights of first refusal and tag,
drag and similar rights in joint venture agreements) with respect to such
securities.

“Environmental Laws”: Is defined in Section 2.20.

“Equity Interest”: Means (a) with respect to a corporation, any and all shares
of capital stock, (b) with respect to a partnership, limited liability company,
trust or similar Person, any and all units, interests, or other
partnership/limited liability company interests, and (c) any other direct equity
ownership.

“ERISA”: Is defined in Section 2.16.2.

“ERISA Affiliate”: Means any business or entity that must be aggregated with
CEPSI and the Domestic Subsidiaries under Section 414(b), (c), (m) or (o) of the
Code.

“European Operations Subsidiaries”: Is defined in Section 2.15.

“Exchange Act”: Means the Securities Exchange Act of 1934, as amended.

“Exhibits”: Means the Exhibits hereby incorporated into and made a part of this
Agreement for all purposes.

“Final NWC Amount”: Is defined in Section 1.5(e).

“Final NWC Decrease”: Is defined in Section 1.5(f).

“Final NWC Increase”: Is defined in Section 1.5(e).

“Financial Statements”: Is defined in Section 2.7.

“FIRPTA”: Means Foreign Investment in Real Property Tax Act.

“Foreign Subsidiaries”: Means, collectively, the UK Subsidiaries and the Non-UK
Foreign Subsidiaries.

“GAAP”: Is defined in Section 1.5(a)(iii).

“General Indemnification Cap”: Is defined in Section 7.4(b).

“General Survival Period”: Is defined in Section 7.1.

“GIPI Scheme”: Is defined in Exhibit II, Section 2.1.

 

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“Governing Document”: Means, with respect to Coinstar, the Amended and Restated
Bylaws of Coinstar, Inc., dated April 3, 2008; with respect to CUHL, the Bylaws
of CUHL Holdings Inc., dated June 30, 2009; with respect to CEPSI, the Bylaws of
Coinstar Electronic Payment Services Inc. dated September 30, 2004; with respect
to GroupEx Financial Corporation, a Delaware corporation, the Amended and
Restated Bylaws of GroupEx Financial Corporation adopted February 28, 2007; with
respect to JRJ Express, Inc., a California corporation, the By-Laws of JRJ
Services, Inc.; with respect to Kimeco, LLC, a California limited liability
company, the Operating Agreement of Kimeco, LLC effective June 17, 1987, as
amended by the First Amendment to Operating Agreement effective as of
December 31, 1999, the Second Amendment to Operating Agreement effective as of
January 1, 2000, the Third Amendment to Operating Agreement effective as of
December 31, 2004, and the Fourth Amendment to Operating Agreement effective as
of January 1, 2006; with respect to Coinstar Money Transfer SAS, a company
formed under the laws of France, the Statuts dated October 1, 2008; with respect
to GroupEx LLC, a Delaware limited liability company, the Limited Liability
Company Agreement of GroupEx LLC effective as of July 2003, as amended by the
First Amendment to Operating Agreement of GroupEx LLC effective as of
December 31, 2004; with respect to Mxes. S. de R.L. de C.V., a company formed
under the laws of Mexico, the , the Testimonio de la Escritura de Constitucion
de “Mxes” dated September 21, 2001; with respect to GroupEx Financial, S.A., a
company formed under the laws of Guatemala, the Protocolo dated December 4,
2006; with respect to Coinstar UK Holdings Limited, a company incorporated in
England and Wales, the Memorandum and Articles of Association of Coinstar UK
Holdings Limited dated May 12, 2006; with respect to Coinstar Money Transfer
(Holdings) Limited, a company incorporated in England and Wales, the Memorandum
and Articles of Association of Coinstar Money Transfer (Holdings) Limited dated
May 12, 2006; with respect to Coinstar Money Transfer Limited, a company
incorporated in England and Wales, the Memorandum and Articles of Association of
Coinstar Money Transfer Limited dated April 11, 2003 as amended on September 8,
2005, February 21, 2006 and November 7, 2006; with respect to Coinstar Support
Services Private Limited, a company formed under the laws of India, the Bylaws
or equivalent document in effect as of the date hereof; with respect to Coinstar
Money Transfer (Ireland) Limited, a company formed under the laws of Ireland,
the Memorandum and Articles of Association of Coinstar Money Transfer (Ireland)
Limited; with respect to Coinstar Money Transfer SA, a company formed under the
laws of Belgium, the Bylaws or equivalent document in effect as of the date
hereof; with respect to Coinstar Hellas SA (Greece), a company formed under the
laws of Greece, the Bylaws or equivalent document in effect as of the date
hereof; with respect to Coinstar Money Transfer Spain S.A. , a company formed
under the laws of Spain, the Bylaws; and with respect to Coinstar Money Transfer
Limited, a company formed under the laws of Hong Kong, the Memorandum and
Articles of Association of Travelex Money Transfer (Hong Kong) Limited dated
December 22, 2005.

“Governmental Entity”: Means a federal, state, provincial, local, county or
municipal government, governmental, regulatory or administrative agency,
department, commission, board, bureau or other authority or instrumentality,
domestic or foreign, including any body exercising or entitled to exercise any
administrative, executive, judicial, legislative, police, regulatory or taxing
authority or power of any nature, including, without limitation, a securities
exchange.

“GPPP”: Is defined in Exhibit II, Section 2.1.

 

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“Group Relief”: Means any of the following: (a) relief surrendered or claimed
pursuant to Part 5 Corporation Tax 2010 (or Chapter IV of Part X of the Income
and Corporation Taxes Act); or (b) a tax refund relating to an accounting period
as defined by Section 963 Corporation Tax Act 2010 (surrender of tax refund
within group) in respect of which a notice has been given pursuant to
Section 963(2) of that statute (or Section 102 of the Finance Act 1989).

“HSR Act”: Means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended and in effect.

“Immaterial Non-Compliance”: Means any failure to comply with applicable Laws
that could not reasonably be expected to, directly or indirectly, result in any
criminal Claims or criminal liability whatsoever and that do not (and reasonably
could not), directly or indirectly, result in any liability or Losses in excess
of $200,000 (either individually or in the aggregate).

“Income Tax Returns”: Means any Tax Returns relating to Income Taxes, including,
without limitation, any U.S. federal Income Tax Returns.

“Income Tax” or “Income Taxes”: Means any and all Taxes that are imposed on or
measured by (i) net income or net profits, (ii) net worth or capital, or
(iii) multiple bases, if at least one of the bases is described in clauses
(i) or (ii). For purposes of this Agreement, the term Income Taxes includes,
without limitation, any U.S. federal income Taxes.

“Indebtedness”: Means, of any Person, without duplication, (a) all obligations
of such Person for borrowed money, (b) all obligations of such Person evidenced
by bonds, debentures, notes or similar instruments, (c) all obligations of such
Person upon which interest charges are customarily paid, but not to the extent
that such obligations are reflected as accounts payable in the current
liabilities of the Companies and the Company Subsidiaries in the Financial
Statements, (d) all obligations, contingent or otherwise, of such Person as an
account party or applicant in respect of letters of credit, and (e) all
obligations, contingent or otherwise, of such Person in respect of bankers’
acceptances.

“Indemnification Claim”: Means any Claim(s) for indemnification under
Article VII.

“Indemnified Party”: Means a Buyer Indemnified Party or Seller Indemnified
Party, as the case may be.

“Indemnifying Party”: Is defined in Section 7.5(a).

“Indemnitees”: Is defined in Section 4.13.

“Initial Purchase Price”: Is defined in Section 1.4(c).

“Intellectual Property”: Means all of the following: (i) inventions and
discoveries (whether or not patentable and whether or not reduced to practice),
improvements thereto, and patents, patent applications, invention disclosures,
and other rights of invention, worldwide, including any reissues, divisions,
continuations and continuations-in-part, provisionals, extensions, reexamined
patents or other applications or patents claiming the benefit of the filing date
of any such application or patent; (ii) trademarks, service marks, trade names,
trade dress,

 

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logos, Internet domain name registrations, corporate names, product names and
slogans, including any common Law rights, registrations, and applications for
registration for any of the foregoing, and the goodwill associated with all of
the foregoing, worldwide; (iii) copyrightable works, copyrights (registered and
unregistered), Website content, and other rights of authorship, and any
applications, registrations and renewals in connection therewith, moral rights
and sui generis database rights, worldwide; (iv) trade secrets and any other
confidential business and technical information, including user information,
customer and supplier lists and related information, pricing and cost
information, business and marketing plans, advertising statistics, any other
financial, marketing and business data, formulations, compositions, production
and labeling processes and techniques, research and development information,
technical data, specifications, schematics and know-how; (v) to the extent not
covered by clauses (i) through (iv), software and Websites (including all
related computer code, programs and applications, whether in source code or
object code, user interfaces and content), databases and related documentation
(including user manuals, flowcharts and schematics); (vi) creative materials,
advertising, marketing and promotional materials (including those materials
submitted to a Governmental Entity for approval), studies, reports, data and
collections of data (including marketing and industry data), and other printed
and written materials; (vii) rights to exclude others from appropriating any of
such Intellectual Property, including the rights to sue for and remedies against
past, present and future infringements of any or all of the foregoing and rights
of priority and protection of interests therein; and (viii) any other
proprietary, intellectual property and other rights relating to any or all of
the foregoing anywhere in the world.

“Intercreditor Agreement”: Is defined in Section 5.1.14.

“Interim Financial Statements”: Is defined in Section 2.7.

“IRS”: Means the United States Internal Revenue Service.

“Item of Dispute”: Is defined in Section 1.5(d).

“Knowledge”: (A) With respect to the Sellers, the Companies and the Company
Subsidiaries, means (i) the actual knowledge of Mohit Davar, Peter Rowan, Frank
Lawrence, David Mard and Jackie Betancourt and (ii) all facts of which the
Persons identified in the foregoing clause (A)(i), after reasonably inquiry,
should be aware; and (B) with respect to Buyer, (i) the actual knowledge of
Guillermo de la Vina, Leandro Miguel, Robert Pargac, Victor Cohen and Joseph
Aguilar and (ii) all facts of which the Persons identified in the foregoing
clause (B)(i), after reasonably inquiry, should be aware.

“Law”: Means any domestic or foreign constitutional provision, statute or other
law, rule, regulation, requirement or interpretation of any Governmental Entity
and any decision, decree, injunction, judgment, order, ruling or assessment of
any Governmental Entity or any arbitrator.

“Liability” or “Liable”: Means any liability or obligation, whether known or
unknown, asserted or unasserted, absolute or contingent, matured or unmatured,
conditional or unconditional, latent or patent, accrued or unaccrued, liquidated
or unliquidated, or due or to become due.

 

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“Life Assurance Scheme”: Is defined in Exhibit II, Section 2.1.

“Long Term Survival Period”: Is defined in Section 7.1.

“Losses”: Is defined in Section 7.2.

“Major Agent”: Are defined in Section 2.26.

“Mandatory Preserved Foreign Operations”: Is defined in Section 5.1.3(c).

“Mandatory Preserved Operations”: Is defined in Section 5.1.3(b).

“Material Contract”: Is defined in Section 2.13.1.

“Misrepresentation Claims”: Is defined in Section 7.4(a).

“Money Transfer Business”: Means the business of (A) providing national and
international electronic money transfer services, including but not limited to
courier services, to consumers, and (B) the sale and issuance of payment
instruments to consumers.

“Net Working Capital”: Is defined in Section 1.5(a).

“New Facility”: Is defined in Section 5.2.9(a)(i).

“Non-UK Foreign Plan”: Is defined in Section 2.16.7.

“Non-UK Foreign Subsidiaries”: Is defined in Section 2.6(b).

“Non-UK Real Property Leases”: Is defined in Section 2.11(c).

“NWC Dispute Notice”: Is defined in Section 1.5(d).

“Operative Documents”: Is defined in the first paragraph of Article II.

“Order”: Means any award, decision, restriction, settlement, agreement,
injunction, restraining order, judgment, decree, writ, order, regulation, rule,
subpoena or verdict entered, issued, made or rendered by any court,
administrative agency or other Governmental Entity or by any arbitrator.

“Outside Date”: Is defined in Section 5.1.3(b).

“Permit”: Means any permit, license, certificate of authority, or franchise that
is required to be issued by any Governmental Entity.

“Permitted Encumbrance”: Means with respect to all Real Property and personal
property (as the case may be) (a) real estate taxes, assessments and other
governmental levies, fees or charges imposed with respect to such property which
are not due and payable as of the Closing Date, or which are being contested in
good faith and for which appropriate reserves have been established in
accordance with GAAP; (b) mechanic’s liens and similar liens for labor,

 

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materials or supplies provided with respect to such property incurred in the
ordinary course of business for amounts which are not due and payable;
(c) zoning, building codes and other land use laws regulating the use or
occupancy of the Real Property or the activities conducted thereon which are
imposed by any Governmental Entity having jurisdiction over such Real Property
which are not violated by the current use or occupancy of such Real Property or
the operation of the business thereon; (d) easements, covenants, conditions,
restrictions and other similar matters of record affecting title to the Real
Property which do not or would not materially impair the use or occupancy of
such Real Property in the operation of the business conducted thereon; and
(e) rights of the landlords and property owners under the applicable leases.

“Person”: Means any individual, partnership, joint venture, corporation, trust,
limited liability company, unincorporated organization, Governmental Entity and
any other legal entity.

“Post-Closing Taxes”: Means (i) any and all Taxes up to the amount that were
taken into account in the determination of the Final NWC Amount, (ii) any and
all Taxes of the Companies or the Company Subsidiaries relating to all
Post-Closing Tax Periods, (iii) any Transfer Taxes for which Buyer is
responsible under Section 4.6(c), and (iv) any and all Taxes of the Companies or
the Company Subsidiaries arising from (x) any Breach by Buyer of any covenant or
other obligation in this Agreement or any other Operative Document or (y) any
transaction or event occurring on the Closing Date, but after the Closing, that
is outside the ordinary course of business.

“Post-Closing Tax Periods”: Means, collectively, all Tax periods that begins
after the Closing Date and all Straddle Periods with respect to that portion
thereof beginning after the Closing Date.

“Pre-Closing Taxes”: Means any and all Taxes (or the non-payment thereof) (i) of
the Companies and the Company Subsidiaries relating to all Pre-Closing Tax
Periods, and (ii) of any member of an affiliated, consolidated, combined or
unitary group of which Companies or any of its Subsidiaries (or any predecessor
of any of the foregoing) is or was a member on or prior to the Closing Date,
including pursuant to Treasury Regulation §1.1502-6 or any analogous or similar
state, local, or non-U.S. Law, (iii) any Taxes resulting from the Section 338
Elections, (iv) any and all Taxes of any person (other than Companies and its
Subsidiaries) imposed on Companies or any of its Subsidiaries as a transferee or
successor, by contract or pursuant to any Law, rule, or regulation, which Taxes
relate to an event or transaction occurring before the Closing, and (v) any
Transfer Taxes for which Sellers are responsible under Section 4.6(c), in each
case, excluding any Post-Closing Taxes.

“Pre-Closing Tax Periods”: Means, collectively, all Tax periods ending on or
prior to the Closing Date and all Straddle Periods with respect to that portion
thereof ending on the Closing Date.

“Proceeding”: Means any action, arbitration, audit, hearing, investigation,
litigation or suit (whether civil, criminal, administrative, investigative or
informal) commenced, brought, conducted or heard by or before, or otherwise
involving any Governmental Entity or arbitrator.

“Purchase Price”: Is defined in Section 1.3.

 

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“Real Property”: Means all real property and interests in real property and
rights of any kind in or to real property, including, but not limited to, all
fee estates, leaseholds and subleaseholds, purchase options or rights,
easements, licenses and sublicenses, entitlements, rights to access, rights of
way, rights of ingress and egress, permits, mineral rights, all buildings and
other improvements and fixtures thereon, and all other real property rights,
interests and appurtenances.

“Receivables”: Means all receivables of the Companies and the Company
Subsidiaries, including all Contracts in transit, notes receivable, accounts
receivable, and trade account receivables.

“Releasee” and “Releasees”: Are defined in Section 4.17(a).

“Representatives”: Is defined in Section 4.2.

“Required Consents”: Means the consents set forth in Section 5.1.3 of the
Disclosure Schedules.

“Section 338 Allocations”: Is defined in Section 4.6(l)(iii).

“Section 338 Elections”: Is defined in Section 4.6(l)(ii).

“Section 338(g) Election”: Is defined in Section 4.6(l)(ii).

“Section 338(h)(10) Elections”: Is defined in Section 4.6(l)(i).

“Securities Act”: Means the Securities Act of 1933, as amended.

“Seller” and “Sellers”: Are defined in the Preamble.

“Seller Indemnified Party” and “Seller Indemnified Parties”: Are defined in
Section 7.3.

“Seller Indemnity Payment”: Is defined in Section 7.5(e).

“Seller Retained Names”: Is defined in Section 4.9(a).

“Sellers’ Estimated NWC”: Is defined in Section 1.5(b).

“Shares”: Is defined in the Recitals.

“Special Representations”: Is defined in Section 7.1.

“Special Survival Period”: Is defined in Section 7.1.

“Statutory Accounting Period Election”: Is defined in Section 4.6(m)(i).

“Straddle Period”: Is defined in Section 4.6(j).

 

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“Subsidiary” or “Subsidiaries”: Means, as to any Person, any corporation,
partnership, limited liability company, association or other business entity
(i) of which such Person directly or indirectly owns securities or other equity
interests representing more than 50% of the aggregate voting power, (ii) of
which such Person possesses more than 50% of the right to elect directors or
Persons holding similar positions, or (iii) that such Person controls directly
or indirectly through one or more intermediaries.

“Swingline”: Means the revolving credit arrangement by which Coinstar loans
money to the Companies and Company Subsidiaries to provide cash to temporarily
fund working capital needs, including pre-funding agent transactions and
satisfying regulatory requirements, and to otherwise facilitate the operation of
the Money Transfer Business.

“Swingline Certificate”: Is defined in Section 1.6.

“Swingline Closing Balance”: Is defined in Section 1.6.

“Target Closing Date”: Is defined in Section 1.2.

“Target Net Working Capital”: Means an amount of Net Working Capital equal to
$9,000,000.

“Tax” or “Taxes”: Means any federal, state, local or non-U.S. income, gross
receipts, franchise, estimated, alternative minimum, add-on minimum, sales, use,
transfer, registration, value added, excise, natural resources, severance,
stamp, occupation, premium, windfall profit, environmental, customs duty or fee,
other import duty or fee, real property, personal property, abandoned and
unclaimed property, capital stock, social security, unemployment, disability,
payroll, license, employee or other withholding, or other tax, of any kind
whatsoever, whether computed on a separate or consolidated, unitary or combined
basis or in any other manner, including any interest, penalties or additions to
tax or additional amounts in respect of the foregoing.

“Tax Returns”: Means any return, declaration, report, refund claim, information
return, statement or other similar document relating to Taxes and filed with a
Governmental Entity, including any schedule or attachment thereto and any
amendment thereof.

“Termination Date”: Is defined in Section 6.1(b).

“Third Party Claim”: Is defined in Section 7.5(a).

“Total Current Assets”: Is defined in Section 1.5(a)(i).

“Total Current Liabilities”: Is defined in Section 1.5(a)(ii).

“Trademark License Agreement”: Is defined in Section 5.1.7.

“Transfer Taxes”: Is defined in Section 4.6(c).

“Transition Services Agreement”: Is defined in Section 5.1.6.

 

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“Transmitted Copies”: Is defined in Section 8.12.

“UK Entities”: Means, collectively, UK Holdings, Coinstar Money Transfer
(Holdings) Limited and Coinstar Money Transfer Limited.

“UK Holdings”: Is defined in the Preamble.

“UK Holdings Shares”: Is defined in the Recitals.

“UK Purchase Price”: Is defined in Section 1.4(c).

“UK Purchase Price Allocation”: Is defined in Section 1.4(a).

“UK Subsidiaries” and “UK Subsidiary”: Are defined in Section 2.6.

“Unclaimed Payments Report”: Is defined in Section 4.20.

“US Purchase Price”: Is defined in Section 1.4(c).

“Year End Financial Statements”: Is defined in Section 2.7.

[Signatures on following page]

 

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SIGNATURE PAGES TO STOCK PURCHASE AGREEMENT

IN WITNESS WHEREOF, the parties named above have executed this Agreement as of
the date first above written.

 

CEPSI: COINSTAR E-PAYMENT SERVICES INC.

By:

 

/s/ Stephen J. Verleye

 

Name:

  Stephen J. Verleye  

Title:

  President

 

UK HOLDINGS: COINSTAR UK HOLDINGS LIMITED

By:

 

/s/ Donald R. Rench

 

Name:

  Donald R. Rench  

Title:

  Secretary

 

CUHL: CUHL HOLDINGS INC.

By:

 

/s/ Paul D. Davis

 

Name:

  Paul D. Davis  

Title:

  President

 

COINSTAR: COINSTAR, INC.

By:

 

/s/ Paul D. Davis

 

Name:

  Paul D. Davis  

Title:

  Chief Executive Officer

 

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BUYER: SIGUE CORPORATION

By:

 

/s/ Guillermo de la Vina

 

Name:

  Guillermo de la Vina  

Title:

  Chief Executive Officer and Chairman of the Board

 

By:  

/s/ Alfredo de la Vina

  Name: Alfredo de la Vina   Title: Secretary and Treasurer

 

By:  

/s/ Leandro Miguel

  Name: Leandro Miguel   Title: President

 

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