Exhibit 10.1

STOCK PURCHASE AGREEMENT
 
This Stock Purchase Agreement (this “Agreement”) is executed as of August 10,
2012 by (i) FCFS CO, Inc., a Colorado corporation (“Purchaser”), (ii) First Cash
Financial Services, Inc., a Delaware corporation (“Purchaser’s Parent”), (ii)
LTS, Incorporated, a Colorado corporation (the “Company”), and (iii) David
Jensen and A. Shane Nowak (collectively, “Sellers” and collectively with
Purchaser, Purchaser’s Parent and the Company, the “Parties” and each of them a
“Party”).
 
RECITALS:
 
WHEREAS, Sellers are the record and beneficial owners of all of the issued and
outstanding common stock of the Company (collectively, the “Shares”); and
 
WHEREAS, Sellers desire to sell to Purchaser, and Purchaser desires to purchase
from Sellers, all of the Shares upon the terms and subject to the conditions
herein.
 
NOW, THEREFORE, in consideration of the premises, mutual covenants and
agreements herein and for other good and valuable consideration, the sufficiency
and receipt of which are hereby acknowledged, Purchaser, Sellers, and the
Company, agree as follows:
 
ARTICLE I
SALE AND PURCHASE OF SHARES
 
1.1           Sale and Purchase of Shares.  Subject to the terms and conditions
herein, Sellers will sell and deliver to the Purchaser, and the Purchaser will
purchase from Sellers all of the Shares (the “Purchase”).  The Purchase will be
evidenced by delivery effective
 
 
 

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on the Closing Date (as defined below) to the Purchaser of assignments of the
Shares executed by Sellers and accompanied by duly executed stock powers and
certificates for all Shares.
 
1.2           Closing.  Subject to Article VI and the fulfillment of all
conditions precedent set forth herein, the Purchase will be consummated (the
“Closing”) effective as of September 17, 2012, or such other date as the Parties
will mutually agree in writing (the “Closing Date”).
 
ARTICLE II
PURCHASE PRICE AND TAX MATTERS
 
2.1           Purchase Price.  The total consideration to be paid by the
Purchaser to the Sellers for the Shares (the “Purchase Price”) will be Forty-Six
Million and no/100 dollars ($46,000,000), adjusted as of the close of business
the day before the Closing Date, as follows (“Adjusted Purchase Price”):
 
(a)           increased by the amount by which the combined total of pawn loans
and inventory (including forfeited and purchased inventory) at all the Locations
(defined in Article III, Section 3.1), and due to / from LTS Properties,
Incorporated (the “Related Party Debt”), as of the end of business on the day
prior to the Closing Date exceeds Eleven Million Two Hundred Thousand and no/100
dollars ($11,200,000), or decreased by the amount by which Eleven Million and
no/100 dollars ($11,000,000) exceeds the combined total of pawn loans and
inventory (including forfeited and purchased inventory)  at all the Locations
and Related Party Debt as of the end of business on the day prior to the Closing
Date;
 
 
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(b)           decreased by the amount of the Seller Current Liabilities (as
defined in Section 4.3(g)) that are listed on Exhibit “I”, which shall include
all unpaid Taxes of the Company, in each case as of the close of business the
day before the Closing Date;
 
(c)           increased by the amount of all cash balances on hand in each
Location and the reconciled (to reflect any debits, credits or other adjustments
in transit) balance in all bank accounts of the Company as of the close of
business the day before the Closing Date;
 
(d)           increased by the amount of all prepaid expenses and rental
deposits paid or to be paid by the Company on or prior to the close of business
the day before the Closing Date, as listed on Schedule 2.1(d);
 
(e)           increased by the amount of all trade receivables of the Company as
of the close of business the day before the Closing Date; and
 
(f)           decreased by the amount of  the insurance proceeds received prior
to Closing from the Robbery as defined in Schedule 4.3(f) to the extent they are
not included in the Company’s cash at closing.  Sellers agree to cause the
Company to write off all  the stolen inventory and pawns related to the Robbery
from the Financial Statements prior to Closing and accordingly the inventory and
pawns loans involved in the Robbery will not be included in the amounts used for
purposes of Section 2.1(a).  Sellers agree to provide Purchasers a list of the
unresolved pawn settlements as of closing related to the Robbery and acknowledge
it is the Parties’ intention for the Purchaser to receive the full financial
benefit of any insurance proceeds related to the Robbery.
 
All adjustments described in this Section 2.1 relating to pawn loans and
forfeited inventory will be valued at par (the principal amount of the
applicable pawn loan).  
 
 
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Adjustments relating to purchased inventory will be based on the lesser of fair
market value and actual cost (the purchase price of the inventory).
 
2.2           Payment of Purchase Price.  The Adjusted Purchase Price will be
payable as follows:  (a) two nonnegotiable subordinated secured promissory notes
(each a “Note” and collectively, the “Notes”, the form and substance of which is
attached as Exhibit “B”) with one payable to David Jensen and the other payable
to A. Shane Nowak, each issued and executed by Purchaser’s Parent in the amount
of Four Million, Two Hundred Fifty Thousand and no/100 dollars ($4,250,000) and
secured by the assets of the Company; (b) the direct payment of those notes,
bonds and other debt of the Company listed on Schedule 2.2(b) (the “Seller
Debt”) by Purchaser; (c) the direct payment by Purchaser of any expenses
incurred by the Sellers in connection with the transactions contemplated by this
Agreement but not paid by Sellers at or prior to the Closing; and (d) the
balance of the Adjusted Purchase Price to be paid in cash to Sellers at the
Closing.  The Notes will bear simple interest compounded monthly at the rate of
four percent (4%) per annum, and will be paid in 60 equal monthly installments
of principal and interest and the Purchasers will have the ability to set off
equal amounts against each Note (such equal sharing of reductions of the Notes
hereinafter “Pro Rata”) pursuant to Section 7.1(b)(i) and subject to the
limitations in Article VII.
 
2.3             Section 338(h)(10) Election.  The Parties shall jointly elect
and consent to treat the Purchase of the Shares as a purchase of assets for
Federal and state income tax purposes pursuant to section 338(h)(10) of the
Internal Revenue Code of 1986, as amended (the “Code”), and any similar
provisions under state and other income tax laws (collectively, the “Section 338
Election”).  Such joint election and consent shall be
 
 
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evidenced by the execution of IRS Form 8023 (Elections Under Section 338 for
Corporations Making Qualified Stock Purchases) by Purchaser and Sellers on the
Closing Date.
 
2.4           Purchase Price Allocation.  The Parties agree to allocate the
aggregate Purchase Price of the Company to assets of the Company, as described
in Exhibit “C,” which the Parties agree is consistent with the nature of the
assets acquired and in conformity with the Treasury Regulations
1.338(h)(10)-1(d), 1.338-5, 1.338-6 and 1.338-7, as amended.  Furthermore, the
allocation of the Purchase Price will be disclosed on IRS Form 8883 (Asset
Allocation Statement) and attached to and made part of the Federal income tax
returns filed by the Company and Purchaser in which the effects of the Section
338(h)(10) will be reported.  Sellers will provide a draft copy of the IRS Form
8883 to Purchaser thirty (30) days prior to its due date for review and approval
by Purchaser.  The purchase price allocation will be consistent for purposes of
Form 8883 filed by the Company and Purchaser.
 
2.5           Apportionment of Taxable Income and Taxes.  The Closing Date shall
be the “acquisition date” as said term is defined in Section 338(h)(2) of the
Code and shall be as the last day of a taxable period of the Company (a
“Pre-Closing Tax Period”).  For taxable periods that end on the Closing Date,
all items of income, gain, loss, deduction, and credits other than any such
items resulting from the Section 338 Election (which income, gains or losses
there from will be reported on the federal and state income tax returns ending
on the Acquisition Date) shall be allocated to the periods before and after the
Closing Date by closing the books of the Company as of the Closing Date.  In the
case of Taxes that are payable with respect to a taxable period that begins
before the
 
 
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Closing Date and ends after the Closing Date, the portion of any such tax that
is allocable to the portion of the period ending on the Closing Date shall be:
 
(i) in the case of Taxes that are either (x) based upon or related to income or
receipts, or (y) imposed in connection with any sale or other transfer or
assignment of property (real or personal, tangible or intangible), deemed equal
to the amount which would by payable if the taxable year ended with the Closing
Date; and
 
(ii) in the case of Taxes imposed on a periodic basis with respect to the assets
of the Company, or otherwise measured by the level of any item, deemed to be the
amount of such taxes for the entire period (or, in the case of such taxes
determined on an arrears basis, the amount of such taxes for the immediately
preceding period) multiplied by a fraction, the numerator of which is the number
of calendar days in the period ending on the Closing Date and the denominator of
which is the number of calendar days in the entire period.
 
2.6           Preparation and Filing of Tax Returns. Subject to Section 2.3,
Sellers shall prepare, or cause to be prepared, and file or cause to be filed,
all income tax reports and returns for any Pre-Closing Tax Period, including the
effects to the Company of the Section 338 Election and the income tax returns
(Federal and State) to report the sale hereunder.  When preparing the income tax
reports and returns of the Company for any Pre-Closing Tax Period, Sellers shall
prepare such reports and returns in a manner consistent with prior years and
determine the income, gain, expenses, losses, deductions, and credits of the
Company consistently with prior practices.  With respect to any such income tax
report or return, the Company shall provide to Sellers the information necessary
to prepare such reports and returns no later than 60 days after the Closing
Date.  
 
 
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Sellers shall submit such reports and returns to Purchaser at least 30 days
before filing them with the respective taxing authorities and Sellers shall
permit Purchaser to inspect and comment upon such reports and returns and shall
make such revisions to such returns as are reasonably requested by
Purchaser.  Purchaser will file 2012 payroll, sales, and/or property tax returns
that become due after the Closing Date, if any, for the Company.
 
Purchaser and the Company will prepare and file any non-income Tax return of the
Company which is required to be filed after the Closing Date and which relates
to any period (or portion thereof) up to and including the Closing Date, and
Purchaser will, at least thirty (30) days before the due date of any such
Return, deliver a draft copy to the Sellers.  Within fifteen (15) days of the
receipt of any such Return, the Sellers may reasonably request changes, in which
event Purchaser and Sellers will attempt to agree on a mutually acceptable
resolution of the issues in dispute.  If a resolution is reached, such Return
will be filed in accordance therewith.  If a resolution is not reached, then at
the expense of Purchaser and Sellers (such expense to be shared fifty percent by
Purchaser and 50% by Sellers), such Return will be submitted to a firm of
independent certified public accountants selected by Purchaser (which has not
performed services for Purchaser or its Affiliates at anytime during the
preceding 24 months) and reasonably acceptable to the Sellers, which will be
directed to resolve the issues in dispute and prepare the Return for filing.  As
soon as is practicable after notice from Purchaser to the Sellers at any time
before the date any payment for Taxes attributable to any such Return is due,
provided such Return is prepared for filing in accordance with the foregoing,
Sellers will pay Purchaser and/or the Company an amount equal to the excess, if
any, of (a) taxes that are due with respect to any taxable period pending on or
before the Closing
 
 
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Date, or Taxes that would have been due with respect to a taxable period
beginning before and ending after the Closing Date if such period had ended on
the Closing Date over (b) the amount of such taxes of the Company with respect
to such taxable period which are reflected as Current Tax Liabilities on Exhibit
“I”.  Unless otherwise noted herein, for purposes of this Agreement an
“Affiliate” of an individual, corporation, partnership, joint venture, limited
liability company, governmental authority, unincorporated organization, trust,
association or other entity (each a “Person”) means any other Person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person.  The term “control”
(including the terms “controlled by” and “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
 
2.7           Payment of Income Taxes.  Any taxable income or loss of the
Company for Federal and state income tax purposes for any Pre-Closing Tax Period
(including income, gain or loss recognized as a result of the Section 338
Election) shall be included in all Federal and state income tax reports and
returns that Sellers file after the Closing Date.  Sellers shall pay all of the
taxes owed with respect to such reports and returns when due.  Any Tax refunds
that are received by Purchaser, Company or their Affiliates, and any amounts
credited against Tax to which Purchaser, the Company or their Affiliates become
entitled, that relate to Tax periods or portions thereof ending on or before the
Closing Date shall be for the account of Sellers, and Purchaser shall pay over
 
 
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to Sellers any such refund or the amount of any such credit within fifteen (15)
days after receipt or entitlement thereto.
 
2.8           Cooperation on Tax Matters.  Purchaser, Company and Sellers shall
cooperate fully, as and to the extent reasonably requested by the other Party,
in connection with the filing of Tax returns and reports relating to a
Pre-Closing Tax Period and any audit, litigation of other proceeding with
respect to taxes, in each case at the expense of the requesting Party.  Such
cooperation shall include (x) making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder, and (y) providing such powers of attorney as are
reasonable requested by the other Party.  During the period beginning on the
Closing Date and ending on the day immediately preceding the seventh anniversary
of the Closing Date, Sellers and Purchaser shall provide each other with
reasonable access during normal business hours to the books and records of
Sellers and the Company, respectively, to the extent that such books and records
relate to the condition or operation of the Company prior to the Closing, and
either one of the Sellers or Purchaser requires such books and records to
prepare income tax reports or returns or respond to third party claims,
including any audits or proceedings with respect to such reports or
returns.  Sellers and Purchaser shall have the right to make copies of such
books and records at its or their own expense.
ARTICLE III
FURTHER AGREEMENTS
 
3.1           Leases. Prior to or at the Closing, Sellers and the Company will
deliver to Purchaser landlord consents approving the transactions contemplated
by this Agreement,
 
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reasonably satisfactory to Purchaser in its reasonable discretion, where
required by the terms of the applicable lease for each of the locations listed
on Exhibit “A” (each a “Location”, collectively the “Locations”), other than the
Locations described in Section 3.2 (collectively, the “Third Party
Locations”).  Purchaser will also be permitted to contact the landlords for
purposes of negotiating mutually acceptable amendments to the Leases in
substantially the form attached as Exhibit “J” (the “Amendments”); provided,
however, that Purchaser will inform Sellers regularly of the status and content
of such contracts and the terms of the Amendments upon request.  Each lease
relating to the Third Party Locations (collectively, the “Third Party Leases”)
will be in full force and effect, duly executed by the Company and applicable
landlord for each Third Party Location, and the Company will not be in default
under any Third Party Lease, nor will consummation of any of the transactions
contemplated by this Agreement constitute or result in a default under any Third
Party Lease, other than such default that is cured by, waived or consented to in
the relevant consent, as applicable.
 
3.2           Related Party Leases.  The following five Locations are owned by
an Affiliate of the Company and Sellers: #1 Lakewood,  #2 Federal Heights, #4
Edgewater, #6 Federal and #8 West Colfax (collectively, the “Related Party
Locations”).  Simultaneous with Closing, Sellers and Purchaser agree to enter
into long-term leases for each of the Related Party Locations (collectively, the
“Related Party Leases” and, together with the Third Party Leases, the “Leases”)
in substantially the form attached as Exhibit “K”.

 
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
 
4.1           General Statement. The Parties make the representations and
warranties to each other which are set forth in this Article IV.  All
representations and warranties of the Parties are made subject to the exceptions
which are noted in the respective schedules delivered by the Parties to each
other concurrently herewith and identified as, in the case of Section 4.2, the
“Purchaser Disclosure Schedule” in the form of Exhibit “D’’ and in the case of
Section 4.3, as the “Seller Disclosure Schedule” in the form of Exhibit
“E”.  Copies of all documents referenced in the Purchaser Disclosure Schedule
(other than documents filed by Purchaser’s Parent with the Securities and
Exchange Commission) or Seller Disclosure Schedule have been provided or made
available to Purchaser or its representatives.
 
4.2           Representations and Warranties of Purchaser and Purchaser’s
Parent.  Purchaser and Purchaser’s Parent (together the “Purchaser Parties”)
represent and warrant to Sellers, as of the date hereof, and at the Closing
Date, subject to the exceptions set forth in the Purchaser Disclosure Statement,
which will be deemed to qualify all applicable representations and warranties
under this Agreement regardless of whether specifically cross-referenced as
pertaining thereto:
 
(a)           Organization and Standing.  Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Colorado.  Purchaser’s Parent is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware.  Each of the
Purchaser Parties is duly authorized to conduct business and is in good standing
under the laws of each jurisdiction where the
 
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failure to so qualify would have a Material Adverse Effect. Each of the
Purchaser Parties has all requisite corporate power and authority to carry on
its business as now conducted, and is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction in which the failure
to so qualify would have a Material Adverse Effect.  Whenever used in this
Agreement, “Material Adverse Effect” will mean any event, circumstance, fact,
change or effect that is materially adverse to the business, properties,
condition (financial or otherwise) or results of operations of the Party making
the statement or the ability of the Party making the statement to consummate the
transactions contemplated by this Agreement; provided, however, that “Material
Adverse Effect” shall not include any event, circumstance, fact, change or
effect, directly or indirectly arising out of or attributable to the following,
either alone or in combination: (i) any changes, conditions or effects in the
United States or foreign economies or securities or financial markets in
general; (ii) changes, conditions or effects that affect the industries in which
the Company operates; (iii) any change, effect or circumstance resulting from an
action required or permitted by this Agreement, including any public
announcement of this Agreement or the transactions contemplated hereby; (iv) any
matter set forth on the Seller Disclosure Schedules; or (v) conditions caused by
acts of terrorism, sabotage or war (whether or not declared), military actions
or the escalation thereof or other force majeure events or any natural or
man-made disaster or other acts of God occurring after the date hereof; provided
that the circumstances set forth in (i), (ii) or (v) do not have a
disproportionately negative effect on the Company.
 
(b)           Authorization of Transaction.  Each of the Purchaser Parties has
the full power and authority (including full corporate power and authority) to
execute and deliver
 
 
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this Agreement and to perform its obligations hereunder.  This Agreement
constitutes a valid and legally binding obligation of each of the Purchaser
Parties, enforceable in accordance with its terms and conditions.
 
(c)           Non-contravention.  Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge or other restriction of any government,
governmental agency or court to which either of the Purchaser Parties is subject
or provision of the charter or bylaws of either of the Purchaser Parties,
(ii) conflict with, result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument or other arrangement to which either of the Purchaser
Parties is a party or by which it is bound or to which any of its assets is
subject, except where the violation, conflict, breach, default, acceleration,
termination, modification, cancellation or failure to give notice would not have
a Material Adverse Effect on the ability of the Parties to consummate the
transactions contemplated by the Agreement, or (iii) except as set forth in
Schedule 4.2(c), result in the imposition of any security interest on any assets
of the Company acquired hereunder.  Except as set forth on Schedule 4.2(c), and
except for the consents Seller or the Company is required to obtain, neither of
the Purchaser Parties is required to give any notice to, make any filing with,
or obtain any authorization, consent, or approval of any government or
governmental agency in order for the parties to consummate the transactions
contemplated by this Agreement.
 
 
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(d)           Brokers’ Fees.  Neither of the Purchaser Parties has any liability
for or obligation to pay any fees or commissions to any broker, finder, or agent
with respect to the transactions contemplated by this Agreement for which
Sellers could become liable or obligated.  The Purchaser Parties will be
responsible for and will pay any fees or commissions to Comstock Capital &
Advisory Group, and any other broker, finder, or agent engaged by the either of
the Purchaser Parties with respect to the transactions contemplated by this
Agreement.
 
(e)           Compliance with Laws.  To the best of their knowledge, each of the
Purchaser Parties has complied with all foreign, federal, state, local and
county laws, ordinances, regulations, judgments, orders, decrees or rules of any
court, arbitrator or governmental, regulatory or administrative agency or entity
applicable to their business, except where the failure to so comply would not
have a Material Adverse Effect.  Neither of the Purchaser Parties has received
any governmental notice of any violations by Purchaser of any such laws,
ordinances, regulations or orders, which violation has not been cured or
remedied except where the failure to cure or remedy the violation would not have
a Material Adverse Effect.
 
(f)           Sufficiency of Funds.  The Purchaser Parties, collectively, have
sufficient cash on hand or other sources of immediately available funds to
enable it to make payment of the Purchase Price and consummate the transactions
contemplated by this Agreement.  Notwithstanding anything to the contrary
contained herein, the Parties acknowledge and agree that it shall not be a
condition to the obligations of either of the Purchaser Parties to consummate
the transactions contemplated hereby that the Purchaser Parties have sufficient
funds for payment of the Purchase Price.
 
 
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(g)           Purchaser Parties’ Locations.  Schedule 4.2(g) lists all states
within the United States where Purchaser and Purchaser’s Parent operate their
business.
 
4.3           Representations and Warranties of Company and Sellers.  Company
and  Sellers, jointly and severally, represent and warrant to Purchaser, as of
the date hereof, and at the Closing Date, subject to the exceptions set forth in
the Seller Disclosure Schedule, which will be deemed to qualify all applicable
representations and warranties under this Agreement regardless of whether
specifically cross-referenced as pertaining thereto:
 
(a)           Organization, Qualification and Corporate Power.  The Company is a
corporation duly incorporated, validly existing, and in good standing under the
laws of the State of Colorado.  The Company is duly authorized to conduct
business and is in good standing under the laws of each jurisdiction where the
failure to so qualify would have a Material Adverse Effect on the Company.  The
Company has full corporate power and authority to carry on the business in which
it is engaged and to own and use the properties owned and used by each.  The
Company has delivered or made available to the Purchaser, true and correct
copies of its Articles of Incorporation and Bylaws, including any amendments
thereto.
 
(b)           Capitalization.  The entire authorized, issued and outstanding
capital stock of the Company consists of the following shares of common stock:
 

 
Company
Authorized Shares
Shares Issued and Outstanding
   
LTS, Incorporated
1,000,000
4,000
 

 
Of the four thousand (4,000) issued and outstanding shares of the Company, two
thousand (2,000) shares are issued to each Seller.  All of the issued and
outstanding
 
 
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shares of the Company have been duly authorized, are validly issued, fully paid,
and non-assessable, and are freely owned by the Sellers.  None of the Shares
have been pledged, hypothecated or encumbered in any way.  There are no
outstanding or authorized options, warrants, purchase rights, equity interests,
subscription rights, conversion rights, exchange rights, or other contracts or
commitments that could require the Company to issue, sell or otherwise cause to
become outstanding any of the capital stock of the Company.  There are no
outstanding or authorized stock appreciation, phantom stock, profit
participation or similar rights, bonds, notes or other instruments with voting
rights or that are convertible into any equity security with respect to the
Company.
 
(c)           Authorization of Transaction.  The Company and Sellers have full
power and authority to execute and deliver this Agreement and to perform their
respective obligations hereunder.  This Agreement constitutes a valid and
legally binding obligation of the Company and Sellers, enforceable by Purchaser
in accordance with its terms and conditions, except as such enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws
affecting creditors’ rights generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity).
 
(d)           Non-contravention.  Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Company and/or Sellers are subject or
any provision of the charter or bylaws of the Company or (ii) conflict with,
result in a breach of, constitute a default under,
 
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result in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any agreement,
contract, lease, license, instrument, or other arrangement to which the Company
and/or Sellers are a party or by which either is bound or to which any of their
assets is subject (or result in the imposition of any security interest upon any
of their assets), except where the violation, conflict, breach, default,
acceleration, termination, modification, cancellation or failure to give notice
would not have a Material Adverse Effect on the ability of the parties to
consummate the transactions contemplated by this Agreement.  Except as set forth
on Schedule 4.3(d), neither the Company nor Sellers are required to give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order for the parties to
consummate the transactions contemplated by this Agreement.
 
(e)           Financial Statements.  Except as set forth on Schedule 4.3(e), the
financial statements of the Company (including the related schedules) for the
years ended December 31, 2009, December 31, 2010 and December 31, 2011, true and
correct copies of which are attached as Exhibit “F”, and for the six months
ended June 30, 2012 (all such financial statements, collectively, the “Financial
Statements”), a true and correct copy of which shall be further attached as
Exhibit “F” prior to the Closing Date, have been prepared in accordance with
United States generally accepted accounting principles (“GAAP”) (subject to the
absence of footnotes), applied on a consistent basis throughout the periods
covered thereby, present fairly, in all material respects, the financial
condition of the Company as of the indicated dates and the results of operations
of the Company for
 
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the indicated periods, are correct and complete in all material respects, and
are consistent with the books and records of the Company.
 
(f)           Events Subsequent to May 31, 2012.  Since May 31, 2012, and as of
the Closing Date, there has not been any Material Adverse Effect on the Company,
except as listed on Schedule 4.3(f) or in the Company’s financial statements.
 
(g)           Liabilities.  The Company will have no liability as of the Closing
Date (whether known or unknown, whether asserted or unasserted, whether absolute
or contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due), including any liability for Taxes
(collectively, “Liabilities”), except for those Liabilities of the Company set
forth on Exhibit “I” (the “Seller Current Liabilities”), the non-cash
Liabilities set forth on Schedule 4.3(g), and the Seller Debt set forth on
Schedule 2.2(b).  For the avoidance of doubt, “Liabilities” shall include all
loss, cost or expense, including any debits or charges (including, but not
limited to, outstanding checks, returned items, chargebacks, deposit
adjustments, ACH debits, wire or other funds transfers) to any bank accounts of
the Company occurring after the Closing Date, related to transactions occurring
prior to the Closing Date.
 
(h)           Brokers’ Fees.  Except for Integris Partners Ltd., no broker,
finder or investment banker is entitled to any brokerage, finder’s or other fee
or commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Sellers or the Company.  The
Sellers will be responsible for and will pay any fees or commissions to any
broker, finder, or agent engaged by any of the Sellers or the Company with
respect to the transactions contemplated by this Agreement.
 
 
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(i)           Taxes.  With respect to Taxes (as defined below):
 
(i)           The Company and each of its predecessors have filed, within the
time and in the manner prescribed by law, all returns, declarations, reports,
estimates, information returns and statements (“Returns”) heretofore required to
be filed under federal, state, local or any foreign laws by the Company or its
predecessors, and all such Returns are true, correct and complete in all
material respects.
 
(ii)           The Company and Sellers have within the time and in the manner
prescribed by law, paid (and until the Closing Date will, within the time and in
the manner prescribed by law, pay) all Taxes (as defined below) that are due and
payable.
 
(iii)           There are no liens for Taxes upon the assets of the Company or
Sellers except liens for Taxes not yet due.
 
(iv)           The Company and/or Sellers have made a valid and proper election
under section 1362(a) of the Code to be an S corporation which is still in full
force and effect for Federal and State income tax purposes.
 
(v)           No deficiency for any Taxes has been proposed, asserted or
assessed against either the Company or Sellers which has not been resolved and
paid in full.  Except as set forth in Schedule 4.3(i)(v) of Seller Disclosure
Schedule (which will set forth the type of return, date filed, and date of
expiration of the statute of limitations), (i) the statute of limitations for
the assessment of federal income Taxes has expired for all federal income tax
returns of the Company and its predecessors, or such Returns have been examined
by the Internal Revenue Service for all periods through December 31, 2008; (ii)
the statute of limitations for the assessment of state, local and foreign income
Taxes has expired for all applicable Returns of the Company and its
predecessors, or such
 
 
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Returns have been examined by the appropriate tax authorities for all periods
through December 31, 2007.
 
(vi)           There are no outstanding tolling agreements, waivers or
comparable consents regarding the application of the statute of limitations with
respect to any Taxes or Returns that have been given by the Company, its
predecessors, or Sellers.
 
(vii)          No federal, state, local or foreign audits, investigations or
other administrative proceedings or court proceedings are presently pending with
regard to any Taxes or Returns.
 
(viii)         Neither the Company nor Sellers are a party to any tax-sharing or
allocation agreement, nor do any of the Company or Sellers owe any amount under
any tax-sharing or allocation agreement.
 
(ix)           No amounts payable under any plan, agreement or arrangement will
fail to be deductible for federal income tax purposes by virtue of Section 280G
of the Code.
 
(x)           The Company and Sellers have complied (and until the Closing Date
will comply) in all material respects with all applicable laws, rules and
regulations relating to the payment and withholding of Taxes (including, without
limitation, withholding of Taxes pursuant to Sections 1441 or 1442 of the Code
or similar provisions under any foreign laws) and have, within the time and in
the manner prescribed by law, withheld from employee wages and paid over to the
proper governmental authorities all amounts required to be so withheld and paid
over under all applicable laws.
 
(xi)           The Company has never been (and does not have any liability for
unpaid Taxes because it once was) a member of an “affiliated group” within the
meaning of section 1502 of the Code during any part of any consolidated return
year within any part
 
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of which year any corporation other than the Company was also a member of such
affiliated group.
 
(xii)           For purposes of this Agreement, “Taxes” will mean all Taxes,
charges, fees, levies or other assessments of whatever kind or nature,
including, without limitation, all net income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, license, withholding,
payroll, employment, excise, estimated, severance, stamp, occupancy or property
taxes, customs duties, fees, assessments or charges of any kind whatsoever
(together with any interest and any penalties, additions to tax or additional
amounts) imposed by any taxing authority (domestic or foreign) upon or payable
by the Company, its predecessors, or Sellers relating to the Company.
 
(j)           Agreements; Consents.  Schedule 4.3(j)(i) sets forth a list of all
material contracts of the Company.  Material contracts, includes but is not
limited to any employment agreement, contract, lease or other agreement which
involves payment obligations of the Company, any agreement restricting or
limiting Company’s competition or the disclosure of information by the
Company.  Schedule 4.3(j)(ii) sets forth each agreement with respect to which
the consummation of the transactions contemplated hereby will result in a
violation, breach or conflict with or give rise to any right of termination,
cancellation or acceleration or loss of any benefit to the Company, or require
the consent or approval of any third party.
 
(k)           Employees.  The Company has furnished to Purchaser a list of each
compensation arrangement for each employee or contract worker and furnished to
Purchaser a copy of each employee pension plan, employee profit sharing plan and
 
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employee welfare benefit plan.  The Company is not a party to an employment
agreement.
 
(l)           Litigation and Claims.  Neither the Company nor Sellers is subject
to any litigation or claims or is a party to any decree, judgment or arbitration
award, nor has any litigation or claim been threatened in writing since December
31, 2011, in each case, relating to the business or assets of the Company.
 
(m)           Subsidiaries.  The Company has no subsidiaries and it does not own
any membership interest, capital stock or equity interests of any other entity.
 
(n)           Intangible Assets.  The Company is the owner of or has the lawful
right to use all intangible property rights and all other intangible assets used
in connection with the business of the Company, including, but not limited to,
all software used or licensed by Company in connection with the business of
Company, customer lists (current and former), telephone numbers relating to
business operations at the Locations, website domain names (including without
limitation,  fastcashgoldcenter.com, fastcashgoldcenters.com and
fastcashpawn.com) and the right to use the trade names listed on Exhibit
“G”.  No other person or entity has any ownership interest in or right to
payment attributable to or arising out of the use of such intangible assets.
 
(o)           Intellectual Property.
 
(i)           As used herein, the term “Intellectual Property Rights” means all
intellectual property rights, including, without limitation, patents, patent
applications, patent rights, trademarks, trademark applications, trade names,
service marks, service mark applications, copyrights, copyright applications,
know-how, trade secrets, proprietary processes and formulae, confidential
information, franchises, licenses,
 
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inventions, instructions, marketing materials, trade dress, logos and designs,
website domain name registrations of the Company and all documentation and media
constituting, describing or relating to the foregoing, including, without
limitation, manuals, memoranda and records.
 
(ii)           The Company has the right to use, sell, license and dispose of,
and has the right to bring actions for the infringement of, all Intellectual
Property Rights necessary or required for the conduct of its business as
currently conducted and such rights to use, sell, license, dispose of and bring
actions are sufficient for such conduct of its business.
 
(iii)           Except as set forth in the Seller Disclosure Schedule, there are
no royalties, honoraria, fees or other amounts payable by the Company or Sellers
to any person by reason of the ownership, use, license, sale or disposition of
the Intellectual Property Rights.
 
(iv)           Except as set forth in the Seller Disclosure Schedule, no
activity, service or procedure currently conducted by the Company or Sellers
violates or will violate any contract of the Company with any third party or, to
the actual knowledge of either Seller after reasonable inquiry of those persons
directly reporting to such Seller (“Sellers’ Knowledge”), infringes any
Intellectual Property Right of any other party or person.
 
(v)           Neither the Company nor Sellers has received in writing, including
in an e-mail, from any third party in the past three years any notice, charge,
claim or other assertion that the Company or Sellers is infringing any
Intellectual Property Rights of any third party or has committed any acts of
unfair competition.
 
(vi)           Neither the Company nor Sellers have sent to any third party in
the past three years nor otherwise communicated to another person any notice,
charge, claim or
 
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other assertion of infringement by or misappropriation of any Intellectual
Property Rights of the Company or Sellers by such other person or any acts of
unfair competition by such other person, nor is any such infringement,
misappropriation or unfair competition threatened or to the Sellers’ Knowledge,
occurring.
 
(vii)         The Seller Disclosure Schedule contains a true and complete list
of all applications, filings and other formal actions made or taken by the
Company or Sellers to perfect or protect the Company’s interest in the
Intellectual Property Rights, including, without limitation, all patents, patent
applications, trademarks, trademark applications, service marks, service mark
applications, copyrights and copyright applications, if any.
 
(p)           Title to Assets, Properties and Rights and Related Matters;
Sufficiency.  The Company has such rights and interests in the Intellectual
Property Rights as provided in Section 4.3(o), and except as set forth in the
Seller Disclosure Schedule, good and marketable title to all other assets,
properties and interests in properties, real or personal, reflected on the
financial statements as of December 31, 2011 or acquired after December 31, 2011
(except (i) inventory sold in the ordinary course of business since December 31,
2011, and (ii) accounts receivable and notes receivable to the extent paid in
the ordinary course of business subsequent to December 31, 2011), free and clear
of all encumbrances of any kind or character, except for those encumbrances set
forth in the Seller Disclosure Schedule.  The Company has good and marketable
title to all the assets and property situated at the Locations listed on Exhibit
“A”.  The assets owned or leased by the Company (including, real, personal,
tangible and intangible property), or which each otherwise has or will have the
right to use (including, real, personal, tangible and intangible property),
constitute all of the assets held for use or used in connection with
 
 
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the business of the Company and all are in good operating condition and repair
(normal wear and tear excepted) and are sufficient to conduct the business of
the Company as presently conducted or as proposed to be conducted.  The Company
is the only entity through which Sellers conduct a Competitive Business (as
defined hereafter).
 
(q)           Compliance With Laws.  The Company and Sellers are in material
compliance with all laws, regulations, rules and ordinances in any manner
relating to the ownership or operation of the business or businesses of the
Company, other than such non-compliance that would not have a Material Adverse
Effect on the Company.  Other than this Agreement and as set forth on Schedule
4.3(q), neither the Company nor Sellers is a party to any agreement or other
arrangement which limits or restricts competition or the disclosure of
information.
 
(r)           Pawn Loan Compliance.  All pawn loans made by the Company have
been made in the ordinary course of the Company’s business in material
compliance and accordance with all applicable U.S. federal, state or local law
or statute (“Laws”).  All pawn loan documents required by law including but not
limited to pawn tickets and police forms related to the Company’s outstanding
pawn loans (the “Outstanding Pawn Loan Documents”) represent bona fide assets of
the Company and bona fide transactions between the Company and the respective
parties to such transactions.  The Company's books and records contain an
accurate record, in all material respects, of the outstanding pawn loans and the
Outstanding Pawn Loan Documents.  All Outstanding Pawn Loan Documents are valid
and enforceable, create a valid and perfected security interest in the
collateral described therein and not subject to any defense or offset.  Except
as set forth on Schedule 4.3(r), the Company is in possession of all collateral
described in the
 
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Outstanding Pawn Loan Documents.  All interest, fees and charges on each pawn
loan do not exceed the maximum rate of interest, charges and fees allowed by
applicable Laws.  In addition to, and without limiting the foregoing, the
Outstanding Pawn Loan Documents are complete in every material respect and
comply in all material respects with all applicable Laws.
 
(s)           Governmental Authorizations and Licenses.  The Company has all
material licenses, orders, authorizations, permits, concessions, certificates
and other franchises or analogous instruments of any governmental entity
required by applicable law to operate its business (collectively, the
“Government Licenses”) which Government Licenses are in full force and effect,
and are in compliance with the terms, conditions, limitations, restrictions,
standards, prohibitions, requirements and obligations of such Government
Licenses.  There is not now pending, nor to the Sellers’ Knowledge is there
threatened, any action, suit, investigation or proceeding against the Company or
Sellers before any governmental entity with respect to the Government Licenses,
nor is there any issued or outstanding notice, order or complaint (in each case,
in writing, including in an e-mail) with respect to the violation by the Company
or Sellers of the terms of any Government License or any rule or regulation
applicable thereto.
 
(t)           Distributions.  Schedule 4.3(t) sets forth all cash or non-cash
distributions made as of the date hereof to Sellers since December 31,
2011.  All cash at the Locations in excess of $10,000 per location, and all cash
in bank accounts of the Company may be distributed to Sellers prior to Closing,
provided such distributions are disclosed on the Exhibit “H.”  There will be no
non-cash distributions through the Closing Date, unless approved in writing by
Purchaser and listed in Exhibit “H.”
 
 
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(u)           Interested Transactions.  Schedule 4.3(u) contains a complete list
of all amounts and obligations owed between any Seller and his affiliates, on
the one hand, and the Company on the other hand, and transactions and services
provided since January 1, 2011 between any Seller and his affiliates, on the one
hand, and the Company on the other hand.  As used in this Section 4.3(u),
“affiliate” means any entity controlled by any Seller’s parents, any descendants
of such Seller’s parents, such Seller’s spouse, the parents of such Seller’s
spouse, and any descendants of the parents of such Seller’s spouse (in each
case, whether by blood, adoption or marriage), as well as any entity controlled
by such Seller and any entity controlled by or under common control with such
entity.
 
(v)           Environmental Matters.  Except (i) as set forth on Schedule 4.3(v)
or (ii) in a manner or amount that would not reasonably be expected to result in
any liability under any law or regulation, no material amount of any substance
defined as a hazardous substance, hazardous waste, hazardous material, pollutant
or contaminant by any law or regulation regulating the environment, nor any
petroleum hydrocarbon and any degradation product of a petroleum hydrocarbon,
asbestos, PCB, airborne mysote, mold spores, or similar substance, the handling,
storage, treatment or exposure of or to which is subject to regulation have been
generated, recycled, used, treated or stored on, transported to or from, or
released or disposed of by Sellers or the Company on, any real property owned or
leased by the Company or, to the Sellers’ Knowledge, any property adjoining or
adjacent such property.  The Company is in material compliance with all
applicable laws and regulations regulating the environment or constituents of
concern
 
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(including by obtaining all necessary permits or approvals), and the
requirements of any such permits.
 
(w)           Benefit Plans.
 
(i)             Schedule 4.3(w)(i) sets forth a list of all employee benefit
plans (as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended (“ERISA”)), and all other compensation or benefit plans,
programs, arrangements, contracts or schemes, written or oral, statutory or
contractual (specifically including all equity, severance, change in control,
bonus and incentive arrangements), with respect to which the Company or any
ERISA Affililate (as defined below) has or has had any obligation or liability
to contribute or which are or were maintained, contributed to or sponsored by
either Company or any ERISA Affiliate for the benefit of any current or former
employee, consultant, officer or director of either Company or any ERISA
Affiliate (collectively, the “Plans”).  With respect to each Plan, the Company
has delivered or made available to the Purchaser a true and complete copy of
each such Plan (including all amendments thereto) and a true and complete copy
of each material document (including all amendments thereto) prepared in
connection with each such Plan including, and to the extent applicable, (i) a
copy of each trust or other funding arrangement, (ii) each summary plan
description and summary of material modifications, and (iii) if applicable, the
three most recently filed annual reports (Form 5500, including all
schedules).  With respect to this Agreement, “ERISA Affiliate” means any person
that, together with Company, would be or was at any time treated as a single
employer under Internal Revenue Code Section 414 or Section 4001 of ERISA.
 
 
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(ii)           None of the Plans (i) is a plan that is or has ever been subject
to Title IV of ERISA, Section 302 of ERISA or Section 412 of the Code, (ii) is a
“multiemployer plan” as defined in Section 3(37) of ERISA, (iii) is a “multiple
employer plan” within the meaning of Section 210(a) of ERISA or Section 413(c)
of the Code, (iv) is a plan maintained in connection with a trust described in
Section 501(c)(9) of the Code, (v) provides for the payment of separation,
severance, termination or similar-type benefits to any person or (vi) other than
as required under Section 4980B of the Code, provides benefits or coverage in
the nature of health, life or disability insurance following retirement or other
termination of employment (other than death benefits when termination occurs
upon death).
 
(iii)           Except as would not have a Material Adverse Effect on the
Company, to Sellers’ Knowledge, each Plan complies with, and has been operated
in accordance with, its terms and the requirements of all applicable Laws
(including ERISA and the Code and the regulations promulgated thereunder).
 
(iv)           No action, suit, claim or proceeding is pending or, to Sellers’
Knowledge, threatened with respect to any Plan (other than claims for benefits
in the ordinary course) and no fact or event exists that is reasonably expected
to give rise to any such action, suit or claim.
 
(v)           Each Plan or related trust that is intended to be qualified under
Section 401(a) of the Code (a “Qualified Plan”) has received a favorable
determination letter from the Internal Revenue Service of the United States
(“IRS”), or with respect to a prototype plan, can rely on an opinion letter from
the IRS to the prototype plan sponsor, to the effect that such Qualified Plan is
so qualified and that the Qualified Plan and trust
 
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related thereto are exempt from federal income Taxes under Sections 401(a) and
501(a), respectively, of the Code, and, to Sellers’ Knowledge, nothing has
occurred that could reasonably be expected to cause the revocation of such
determination letter or the unavailability of reliance on such opinion letter,
as applicable.
 
(vi)           Except as would not have a Material Adverse Effect on the
Company, all benefits, contributions and premiums required by and due under the
terms of each Plan or applicable Law have been timely paid in accordance with
the terms of such Plan or applicable Laws.
 
(vii)           Except as would not have a Material Adverse Effect on the
Company, neither the Company nor any ERISA Affiliate has incurred any liability
for any excise Tax arising under the Code with respect to a Plan and no fact or
event exists that would reasonably be expected to give rise to such liability.
 
(viii)           Neither the Company nor any ERISA Affiliate has incurred any
liability relating to Title IV of ERISA, and no fact or event exists that could
give rise to any such liability.
 
(x)           Inventory.  The inventories reflected on Company’s most recent
financial statements are properly recorded thereon at the lesser of cost or fair
market value determined in accordance with GAAP.  All of the inventories consist
of items of a quality usable or saleable in the ordinary course of business and
are and will be in quantities sufficient for the normal operation of the
business in the ordinary course of business.
 
(y)           Insurance and Bank Accounts.  Schedule 4.3(y)(i) sets forth a true
and complete list of all accounts and deposit boxes maintained by the Company at
any bank or other financial institution and the names of the persons authorized
to effect
 
 
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transactions in such accounts and with access to such boxes.  Schedule
4.3(y)(ii) sets forth a list of all insurance policies and fidelity bonds
covering the assets, business, operations, employees, and officers, directors
and managers, as applicable, of the Company.  Except as set forth on Schedule
4.3(y)(iii), there is no material claim by the Company pending under any of such
policies or bonds as to which coverage has been questioned, denied or disputed
by the issuers or underwriters of such policies or bonds.  All premiums due and
payable under all such policies and bonds have been paid, and the Company is not
liable for any retrospective premiums under any such policies or bonds.  The
Company has complied in all material respects with the terms and conditions of
all such policies and bonds.  Such policies of insurance and bonds (or other
policies and bonds providing substantially similar insurance coverage) are in
full force and effect.
 
ARTICLE V
COVENANTS
 
5.1           Conduct of Business of the Company Pending the Purchase.  Sellers
and the Company agree that from the date hereof and prior to the Closing Date or
earlier termination of this Agreement:
 
(a)           Full access.  Sellers and the Company will permit representatives
of Purchaser to have full access to all premises, properties, personnel, books,
records, accounts, contracts and documents pertaining to the Company, all at
reasonable times, upon reasonable request and in a manner that is not disruptive
to the Company’s business.
 
(b)           Business as Usual.  Sellers will cause the Company to diligently
carry on its business and operations at the Locations in the ordinary course
consistent with past
 
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practice, to maintain the good will of the Company, to maintain all personal
property of the Company in good working order, reasonable wear and tear
excepted, to pay its Liabilities when due and, except with respect to actions
Purchaser takes pursuant to Section 3.1, to use its reasonable efforts to
maintain the goodwill of its customers, employees and vendors.
 
(c)           Encumbrances.  Neither Sellers nor the Company will, directly or
indirectly, perform or fail to perform any act that might reasonably be expected
to result in the creation or imposition of any lien, claim or encumbrance on the
Shares or any of the assets of the Company, other than such liens, claims, and
encumbrances that exist on the date of this Agreement and are listed on the
Seller Disclosure Schedule.
 
(d)           Restrictions on Sale of Assets.  Without Purchaser’s prior written
consent, Sellers will not sell, assign, transfer, lease, sublease, pledge or
otherwise encumber or dispose of any of the Company’s assets, except in the
ordinary course of business and will keep their business, assets and properties
substantially intact, including their present operations, physical facilities
(reasonable wear and tear excepted), working conditions, and relationships with
customers, lessors, licensors, suppliers and employees.
 
(e)           Operating Liabilities.  Until the Closing Date, Sellers and the
Company will continue to timely pay as they become due all usual operating
liabilities of the Company in the ordinary course of business.
 
(f)           Insurance.  Sellers and the Company will maintain their current
insurance program in place with respect to the Locations until the Closing, but
not after.
 
(g)           Other Prohibitions.  Without limiting the generality of the
foregoing:
 
 
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(i)            The Company will not authorize or effect any change in its
charter or bylaws;
 
(ii)           The Company will not grant any options, warrants, or other rights
to purchase or obtain any of its capital stock or issue, sell, pledge or
otherwise dispose of any of its capital stock.
 
(iii)           Except for the pre-closing cash distributions described in
Section 4.3(t), the Company will not declare, set aside, or pay any dividend or
distribution with respect to its capital stock (whether in cash or in kind), or
redeem, repurchase, or otherwise acquire any of its capital stock;
 
(iv)          The Company will not issue any note, bond, or other debt security
or create, incur, assume, or guarantee any indebtedness for borrowed money or
capitalized lease obligation, other than draws on the Company’s existing line of
credit consistent with past practice and in the ordinary course of business;
 
(v)           The Company will not grant or impose any new security interest
upon any of its assets;
 
(vi)          The Company will not make any capital investment in, make any loan
to, or acquire the securities or assets of any other person or entity outside
the ordinary course of business;
 
(vii)         The Company will not make any change in employment terms
(including benefit plans) for any of its directors, officers, and employees
outside the ordinary course of business;
 
(viii)        The Company will not enter into any new contracts, benefit plans,
operating leases or other financial commitments (with the exception of contracts
and
 
 
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commitments entered into in the ordinary course of business, including but not
limited to Pawn Documents, the purchase of inventory, the purchase of gold, and
the making of draws on the Company’s line or credit); and
 
(ix)           The Company will not commit to any of the foregoing.
 
(h)           Exclusivity.  Neither Sellers nor the Company will solicit,
initiate or encourage the submission of any proposal or offer from any person
relating to the acquisition of any of the capital stock or assets of the
Company.  Sellers and the Company will notify the Purchaser immediately if any
person makes any proposal, offer, inquiry or contact with respect to any of the
foregoing.
 
(i)           Consents and Approvals.  As of the Closing, Sellers will have
obtained or caused to be obtained all of the consents and approvals of all
persons or entities necessary, if any, to assign and transfer the Shares to
Purchaser.  Sellers will use their reasonable commercial efforts to take all
actions and to do all things necessary, proper or advisable in order to
consummate and make effective the transactions contemplated by this Agreement in
accordance with its terms and conditions.
 
5.2           Non-competition.  As an inducement to entering into this
Agreement, which Purchaser would otherwise not be willing to do, Sellers
unconditionally agree that for a period of five (5) years beginning with the
Closing Date, Sellers will not (1) enter into any agreement with or directly or
indirectly solicit a person who is at the time a current employee of the Company
or who was an employee of the Company as of the Closing Date or any time six (6)
months prior thereto or representatives of the Company (or its successor(s)) for
the purpose of causing them to leave the Company (or its successor(s)) to take
employment with Sellers, any Affiliate of Sellers, or any other
 
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person or business entity, other than those persons listed on Schedule 5.2; (2)
engage, directly or indirectly, in the pawn business, any business involving
buying and selling of gold jewelry or used merchandise, check cashing business,
or payroll advance, credit services or other consumer lending business (each a
“Competitive Business”) in the State of Colorado, or within a 20 mile radius of
any Location or any other locations of Purchaser or the Company existing on the
Closing Date, including the Purchaser’s locations in the states listed on
Schedule 4.2(g) (the “Restricted Area”), (3) act as an officer, director,
consultant, shareholder, partner, lender, agent, associate, owner or principal
of any entity engaged in a Competitive Business in the Restricted Area, (4)
participate directly or indirectly in the ownership, management, operation or
control of any Competitive Business in the Restricted Area, except Sellers may
own stock in any publicly traded company in an amount that does not exceed two
percent (2%) of the outstanding capital stock of such company, (5) solicit
customers or potential customers of Purchaser (or its successor) or the Company
or any of their respective subsidiaries in the Restricted Area, in connection
with a Competitive Business, or (6) own or apply for a license or permit in the
Restricted Area, for use in a Competitive Business.  Purchaser for purposes of
this Section 5.2 includes Purchaser as described in the first paragraph of this
Agreement, its parents, and each of their respective successors, subsidiaries,
joint ventures or Affiliates.  To induce Purchaser to enter into this Agreement
and to acquire the Shares, Sellers, for themselves and their Affiliates,
jointly, severally and unconditionally represent and warrant to Purchaser that
the restrictions in the foregoing provisions are reasonable and that such
provisions are necessary to protect the businesses of Purchaser, the Company and
their respective subsidiaries.  Sellers acknowledge that
 
 
 
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Purchaser is entering into this Agreement in reliance upon the foregoing
representation and warranty of the Sellers.  Notwithstanding the foregoing,
should it ever be determined by a court or arbitration tribunal of competent
jurisdiction, as applicable in accordance with the dispute resolution procedures
set forth herein, that the restrictive covenants herein contained as to time,
geographical area, or scope of activity to be restrained are unenforceable
because they are not reasonable or impose a greater restraint than necessary to
protect the good will and other business interests of the Purchaser, its
Affiliates and the Company, such court or arbitration tribunal will reform the
restrictive covenants to the extent necessary to cause the restrictive covenants
to be enforceable.  As used herein, the term “participate in” will mean that any
Seller will directly or indirectly, for his own benefit or for, with or through
any other person, firm or corporation, own, manage, operate or control a
business, loan money to, or participate in the ownership, management, or control
of a business, or be connected with a business as a director, officer, employee,
partner, consultant, agent, independent contractor or otherwise, except Sellers
may own stock in any publicly traded company in an amount that does not exceed
two percent (2%) of the outstanding capital stock of such company.  As used
herein, the term “subsidiary” will mean any corporation in which more than fifty
percent (50%) of the capital stock is owned directly or indirectly by Purchaser
or the Company or the parent of Purchaser or any subsidiary.
 
In the event of the breach by Sellers of any of the covenants contained in this
Section 5.2, it is understood that damages will be difficult to ascertain and
Purchaser (or its successor) and the Company may petition an arbitrator or court
of law or equity, as applicable and in accordance with the procedures herein
contained, for injunctive relief in
 
 
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addition to any other relief which Purchaser (or its successor) or the Company
may have under law, this Agreement or any other agreement in connection
therewith.  In connection with the bringing of any successful legal or
successful equitable action for the enforcement of this Agreement, Purchaser (or
its successor) and the Company will be entitled to recover, whether Purchaser
(or its successor) or the Company seeks equitable relief, and regardless of what
relief is afforded, such reasonable attorney's fees and expenses as Purchaser
(or its successor) may incur in prosecution of Purchaser's or the Company’s
claim for breach hereof.  The existence of any claim or cause of action of any
of Sellers against Purchaser, whether predicated on this Agreement or otherwise,
will not alone constitute a defense to the enforcement by Purchaser or the
Company of the covenants and agreements of Sellers contained in this Section
5.2.
 
5.3           Third Party Consents.  Except as otherwise explicitly provided
hereunder, each Party to this Agreement will use its reasonable best efforts to
obtain, as soon as reasonably practicable, all permits, authorizations,
consents, waivers and approvals from third parties or governmental authorities
necessary to consummate this Agreement and the transactions contemplated hereby
or thereby, including, without limitation, (a) any permits, licenses,
authorizations, consents, waivers and approvals required in connection with the
Purchase and (b) the Amendments.
 
5.4           Releases.  On or prior to the Closing Date, Sellers will cause
each person or entity possessing a security interest or other lien in any assets
of the Company, to release all such liens and security interests, including all
financing statements evidencing same.  Sellers will provide all such releases to
Purchaser on or before the Closing Date.
 
 
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5.5           Confidentiality.  Sellers acknowledge and agree that because
Purchaser’s Parent is a public company, except in connection with the Sellers’
obligations under Sections 5.3 and 5.4, Sellers are required to keep (and will
keep) this Agreement and all information relating to this Agreement and the
transactions contemplated hereby confidential until it is disclosed by
Purchaser’s Parent.  Sellers will treat and hold as confidential all of the
Confidential Information (as hereinafter defined), refrain from using any of the
Confidential Information except in connection with this Agreement, and deliver
promptly to the Purchaser or destroy, at the request and option of the
Purchaser, all tangible embodiments (and all copies) of the Confidential
Information which are in his or its possession.  In the event that Sellers are
requested or required (by oral question or request for information or documents
in any legal proceeding, interrogatory, subpoena, civil investigation demand, or
similar process) to disclose any Confidential Information, Sellers will notify
the Purchaser promptly of the request or requirement so that the Purchaser may
seek an appropriate protective order or waive compliance with the provisions of
this Section 5.5.  If, in the absence of a protective order or the receipt of a
waiver hereunder, Sellers are, on the advice of counsel, compelled to disclose
any Confidential Information to any tribunal or else stand liable for contempt,
Sellers may disclose the Confidential Information to the tribunal; provided,
however, that the disclosing Seller will use his reasonable best efforts to
obtain, at the request of the Purchaser, an order or other assurance that
confidential treatment will be accorded to such portion of the Confidential
Information required to be disclosed as the Purchaser will designate.  As used
herein the term “Confidential Information” will mean any
 
 
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material information concerning the businesses and affairs of the Purchaser that
is not generally available to the public immediately prior to the time of
disclosure.
 
5.6           Supplement to Schedules and Exhibits.  From time to time prior to
the Closing, Sellers shall supplement or amend the Exhibits and Schedules
hereto, including the Seller Disclosure Schedule, with respect to any matter
hereafter arising or of which they become aware after the date hereof (each a
“Supplement”), and each such Supplement shall be deemed to be incorporated into
and to supplement and amend this Agreement as of the Closing Date; provided,
however, that if such event, development or occurrence which is the subject of
the Supplement constitutes or relates to something that has caused any of the
Sellers’ representations to be materially untrue, then Purchaser shall have the
right to terminate this Agreement for failure to satisfy the closing condition
set forth in Section 6.3(a).
 
5.7           Plant Closings and Mass Layoffs.  Purchaser shall not, and shall
cause the Company not to, take any action following the Closing that could
result in WARN Act liability to the Sellers.  As used in this Section 5.7, “WARN
Act” means the federal Worker Adjustment and Retraining Notification Act of
1988, and similar state, local and foreign laws related to plant closings,
relocations, mass layoffs and employment losses.
 
5.8           Release of Guarantees.  The parties agree to cooperate and use
their reasonable best efforts to obtain the release of either Seller or their
respective Affiliates that are a party to each of the guarantees, performance
bonds, bid bonds and other similar agreements listed on Schedule 5.8 (the
"Guarantees").  If any of the Guarantees is not released prior to or at the
Closing, Purchaser will provide the Sellers at the Closing with a guarantee that
indemnifies and holds Sellers and their Affiliates that are a party to each
 
 
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such Guarantee harmless for any and all payments required to be made under, and
costs and expenses incurred in connection with, such Guarantee by Sellers or
their Affiliates that are a party to such Guarantee until such Guarantee is
released.
 
ARTICLE VI
CONDITIONS TO CLOSING
 
6.1           Conditions to Each Party’s Obligation to Effect the Purchase. The
respective obligations of each Party to effect the Purchase will be subject to
the fulfillment of all of the following conditions precedent at or prior to the
Closing Date, unless otherwise waived in writing by the Parties:
(a)           No injunction, order or decree by any Federal, state or foreign
court which prevents the consummation of the Purchase will have been issued;
(b)           No statute or regulation will exist or have been enacted which
would prevent consummation of the Purchase; and
(c)           All governmental licenses, permits, consents and approvals
required for the Purchase and operation of the Locations will have been
obtained.
 
6.2           Conditions to Obligations of Sellers to Consummate the
Purchase.  Unless otherwise waived in writing by the Sellers and in addition to
the conditions in Section 6.1, the obligation of Sellers to effect and
consummate the Purchase are also subject to fulfillment of all of the following
conditions precedent at or prior to the Closing Date:
(a)           All representations and warranties in Section 4.2 will be true and
correct in all material respects;
(b)           Purchaser will have performed and complied with all obligations,
agreements and covenants under this Agreement;
 
 
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(c)           No action, suit or proceeding will be pending or threatened before
any court or quasi-judicial or administrative agency of any federal, state,
local, or foreign jurisdiction or before any arbitrator wherein an unfavorable
injunction, judgment, order, decree or ruling would (A) prevent consummation of
any of the transactions contemplated by this Agreement; (B) cause the business
operations of the Company or any of the transactions contemplated by this
Agreement to be in violation of such injunction, judgment, order, decree or
ruling or applicable law, or (C) adversely affect the right of the Company to
own its assets and to operate its business (and no such injunction, judgment,
order, decree, ruling or charge will be in effect).
(d)           All consents and approvals necessary for the consummation of the
Purchase will have been obtained; and
(e) The subordination and intercreditor agreement required by Purchaser and
Purchaser’s Parent’s lender(s) shall be in form and substance acceptable to
Sellers.
 
6.3           Conditions to Obligations of Purchaser to Effect the Purchase.
Unless otherwise waived in writing by the Purchaser, in addition to the
conditions in Section 6.1, the obligations of Purchaser to effect and consummate
the Purchase are also subject to the fulfillment of all of the following
conditions precedent at or prior to the Closing Date.
(a)           The representations and warranties in Section 4.3 made by the
Sellers will be true and correct in all material respects;
(b)           The Company and Sellers will have performed and complied with all
of their respective obligations under this Agreement;
(c)           No action, suit or proceeding will be pending or threatened before
any court or quasi-judicial or administrative agency of any federal, state,
local, or foreign
 
 
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jurisdiction or before any arbitrator wherein an unfavorable injunction,
judgment, order, decree or ruling would (A) prevent consummation of any of the
transactions contemplated by this Agreement; (B) cause the business operations
of the Company or any of the transactions contemplated by this Agreement to be
in violation of such injunction, judgment, order, decree or ruling or applicable
law, (C) affect adversely the right of Purchaser to own the capital stock of the
Company or (D) adversely affect the right of the Company to own its assets and
to operate its business (and no such injunction, judgment, order, decree, ruling
or charge will be in effect);
(d)           Purchaser will have received a certificate of the president of the
Company, in form and substance reasonably satisfactory to Purchaser, certifying
that the conditions contained in Section 6.3(a) and 6.3(b) have been fulfilled;
(e)           Sellers will have furnished Purchaser original stock certificates
evidencing the ownership of all of the Shares together with stock powers, in
form reasonably satisfactory to Purchaser, executed by Sellers;
(f)           The S corporation election under section 1362(a) of the Internal
Revenue Code made by the Company will be valid and will allow the Company to be
treated as an S corporation for Federal and State income tax purposes;
(g)           Sellers will have delivered to Purchaser all required lessor
consents for the Third Party Locations.  In addition, Purchaser will have
secured for at least six of the eleven Third Party Locations (i) remaining lease
terms (comprised of the current lease term plus option terms with agreed rents)
of at least ten (10) years with average annual scheduled rent increases for any
option terms included in that minimum 10-year period no greater than CPI, capped
at 2.5% and (ii) reasonable change in law provisions
 
 
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allowing Purchaser to terminate the affected leases if any governmental or other
body enacts, initiates or cancels any legislation or rules resulting in the
Purchaser no longer being licensed or permitted to operate under applicable law,
regulation or agreement as a pawn shop, or no longer being reasonably able to
operate profitably as a pawn shop;
(h)           Purchaser shall have completed the due diligence items listed on
Schedule 6.3(h);
(i)           The consents and approvals listed on Schedule 4.3(d) will have
been obtained;
(j)           Sellers and the Company will have delivered to Purchaser a
certificate, in form and substance reasonably satisfactory to Purchaser,
detailing and attesting to the accuracy of the pawn loan portfolio of the
Company as of the Closing Date;
(k)           Sellers and the Company will have delivered to Purchaser a
certificate, in form and substance reasonably satisfactory to Purchaser,
detailing and attesting to the accuracy of the inventory of the Company as of
the Closing Date;
(l)           Sellers shall have delivered new Leases for the Related Party
Locations, which Leases will have been executed by the applicable Affiliate of
the Company, as lessor under such Leases;
(m)           Purchaser will have received letters from each of the holders of
any notes, bonds or other debt listed on Schedule 2.2(b) providing (i) current
payoff amounts, (ii) direct payment instructions and (iii) consent or approval
of the transactions contemplated under this Agreement, if applicable, and
committing to release any and all claims or encumbrances against the Shares or
the assets of the Company upon payment in full of the provided payoff amounts;
 
 
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(n)           Purchaser will have received a certificate executed by the
secretary of the Company, in form and substance reasonably satisfactory to
Purchaser, which includes: (1) a copy of the Company’s Articles of Incorporation
and copies of all merger agreements to which the Company was a party, certified
by the Colorado Secretary of State; (2) a copy of the bylaws of the Company; (3)
a certificate of good standing issued by the Colorado Secretary of State; (4) a
copy of the resolutions of the Board of Directors of the Company which approved
this Agreement; and (5) an incumbency certificate setting forth the names,
offices and signatures of the Company’s officers who execute any documents on
behalf of Company in connection with this Agreement;
(o)           Purchaser will have received the resignation of each of the
directors and officers of the Company; and
(p)            Sellers shall have executed a subordination and intercreditor
agreement in a form satisfactory to Purchaser and Purchaser’s Parent’s
lender(s).
 
ARTICLE VII
INDEMNIFICATION
 
7.1           Indemnification Covenants.
(a)           Survival.  Each representation and warranty in Article IV will
survive eighteen months (18) months after the Closing Date, except for “Special
Indemnities.”  Special Indemnities will mean indemnification for claims (a) for
fraud, intentional misrepresentation or willful misconduct, (b) arising from
breaches of covenants (which will survive until performed), or arising from
breaches of representations and warranties (1) by Sellers regarding ownership of
the Shares (which will survive indefinitely), breaches of Section 4.3(i)
(Taxes), or breaches of Section 4.3(v) (Environmental Matters)
 
 
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(each of which will survive until the expiration of the relevant statute of
limitations), (2) by Purchaser of 4.2(b) (Authority) or 4.2(d) (Brokers Fees)
(each of which will survive until the expiration of the relevant statute of
limitations) and (c) for any Undisclosed Liabilities (as defined in Section
7.1(b)(i), which shall survive until the expiration of the relevant statute of
limitations).  Except for claims for fraud, intentional misrepresentation or
willful misconduct, Purchaser’s and Sellers’ sole and exclusive remedy for any
breach of a representation or warranty under Article IV will be to make a claim
for indemnity under this Article VII.
(b)           Indemnification.
 
(i)           Indemnity by Sellers.  Sellers will jointly and severally
indemnify and hold harmless Purchaser, the Company, and their respective
employees, officers, directors, attorneys, agents and representatives (the
“Purchaser Indemnified Parties”) from and against any costs or expenses
(including outside attorneys’, experts’ and consultants’ reasonable fees
actually incurred), judgments, fines, penalties, losses, claims, liabilities and
damages (each a “Loss” and collectively, “Losses”) that are the result of, arise
out of or relate to (i) any breach of any representation or warranty or failure
to perform any covenant made by Sellers in this Agreement, (ii) any material
agreements of the Company in effect prior to the Closing and involving
post-Closing payment obligations of the Company, excluding the Leases, not
listed on the Seller Disclosure Schedule and (iii) any Liabilities of the
Company existing as of the Closing Date and not disclosed on Exhibit “I,”
Schedule 2.2(b) or Schedule 4.3(g) (hereafter, “Undisclosed
Liabilities”).  Purchaser may, but is not required to setoff the amount of any
Losses Pro Rata against the Notes upon written notice to Sellers (the “Setoff
Notice”).  If Sellers
 
 
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dispute the setoff they shall within sixty (60) days of Sellers’ receipt of the
Setoff Notice, initiate an arbitration pursuant to Section 9.6 or Sellers will
be deemed to have accepted the Setoff Notice.
 
(ii)  Environmental Indemnity.  The Company’s #1 Lakewood store (owned by LTS
Properties, Inc.) is undergoing or has undergone remediation.  Likewise, the
Company’s #11 North Federal store is undergoing or has undergone
remediation.  Both of these store locations were gas stations prior to their use
or occupancy by the Company.  To the extent both the Lakewood and North Federal
remediation processes are not covered by Colorado State Cleanup Fund, Sellers
will indemnify and hold harmless Company and Purchaser Parties for any costs or
resulting liability incurred by the Company or the Purchaser Parties arising out
of the fact that these store locations were gas stations prior to their use or
occupancy by the Company.
 
(iii) Indemnity by Purchaser.  Purchaser and Purchaser’s Parent will, jointly
and severally, indemnify and hold harmless Sellers and their heirs,
administrators, executors, personal representatives, successors and assigns (the
“Seller Indemnified Parties” and together with Purchaser Indemnified Parties,
“Indemnified Parties”) from and against any Losses that are the result of, arise
out of or relate to (i) any breach of any representation or warranty or failure
to perform any covenant made by or on behalf of Purchaser or Purchaser’s Parent
in this Agreement, (ii) any payment obligations of the Company due or accruing
after the Closing Date, except to the extent they are Liabilities existing as of
the Closing Date and not disclosed on Exhibit I, Schedule 2.2(b) or Schedule
4.3(g), and (iii) any fees of any broker or intermediary hired by or on behalf
of Purchaser or Purchaser’s Parent.
 
 
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(c)           Certain Limitations.  The indemnification provided for in Section
7.1(b) shall be subject to the following limitations:
 
(i)           Payments and setoffs by any Party pursuant to Section 7.1(b) to
the applicable Indemnified Party (such paying Party, an “Indemnifying Party”) in
respect of any Loss incurred by such Indemnified Party shall be limited to the
amount of any Losses that remain after deducting therefrom any insurance
proceeds actually received on account of policies in effect prior to the Closing
Date net of deductibles or increase in premiums.
 
(ii)           Each Indemnified Party shall take, and cause its Affiliates to
take, all steps required under Delaware law to mitigate any Loss upon becoming
aware of any event or circumstance that would be reasonably expected to, or
does, result in a Loss, including incurring costs to the extent necessary to
satisfy the requirements of Delaware law.
 
(iii)           In no event shall any Indemnifying Party be liable to any
Indemnified Party for any punitive or exemplary damages.
 
(iv)           The Sellers shall not be obligated to indemnify any Purchaser
Indemnified Party with respect to any Loss to the extent that a specific accrual
or reserve for the amount of such Loss was reflected on the Financial Statements
or the notes thereto or is listed on Exhibit I, Schedule 2.2(b) or Schedule
4.3(g).
 
(v) The Sellers shall not be obligated to indemnify any Purchaser Indemnified
Parties with respect to any Loss to the extent that the Purchaser or
 
 
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Purchaser’s Parent received a benefit from the reflection of such matter in the
calculation of the Adjusted Purchase Price, pursuant to Section 2.1 of this
Agreement, and in such case Sellers shall be liable for that portion of the Loss
that exceeds the amount by which Purchaser or Purchaser’s Parent received a
benefit from the reflection of such matter in the calculation of the Adjusted
Purchase Price.
 
(vi) The Parties will not be obligated to pay any amounts for indemnification
for any Losses until the aggregate amount of all Losses incurred by such Party
exceeds the sum of One Hundred Fifty Thousand Dollars (US $150,000.00) (the
“Basket” or “Deductible”), whereupon Sellers, jointly and severally, or
Purchaser and Purchaser’s Parent, jointly and severally, will pay in full such
Losses in excess of the Basket.  The indemnification obligations of the Sellers,
on the one hand, and the Purchaser and Purchaser’s Parent, on the other hand,
will be subject to an aggregate cap of 15% of the Purchase Price (the
“Indemnification Cap”); provided, however, (x) Sellers will be obligated to pay
all Losses arising out of Special Indemnities without regard to the Basket or
Indemnification Cap and (y) Purchaser and Purchaser’s parent, jointly and
severally, will be obligated to pay all Losses arising out of Special
Indemnities without regard to the Basket or the Indemnification Cap.
 
(d)           Claims.
 
(i)           In the case of any representation or warranty that is limited by
the word “material” or a similar term (other than Section 4.3(f)), the breach of
such representation or warranty and the amount of Losses resulting therefrom
shall be determined as if the term “material” or other similar term or
limitation were not included,
 
 
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it being the intent of the Parties that notwithstanding the presence of the word
“material” to limit the representations and warranties that the concept of
materiality is adequately covered by the provision of the Basket; provided,
however, that once the aggregate amount of Losses suffered by a Party is equal
to the Basket, this Section 7.1(d)(i) shall be of no further force or effect
with respect to the other Party’s representations and warranties.
 
(ii)           If an Indemnified Party intends to seek indemnification pursuant
to this Article VII, such Indemnified Party will promptly notify the
Indemnifying Party in writing of such claim (“Indemnity Demand”), sufficiently
promptly to enable the Indemnifying Party to protect its rights.  The Indemnity
Demand will include a summary of the factual and contractual basis for such
claim, and will include a description of any third-party claim in respect of
which indemnification is sought, along with supporting documentation.  The
failure promptly to provide such Indemnity Demand will not affect any rights
hereunder except to the extent the Indemnifying Party is materially prejudiced
thereby.  The Indemnifying Party will respond in writing to said Indemnity
Demand sufficiently promptly to enable the Indemnified Party to protect its
rights, but not later than twenty (20) business days following the Indemnity
Demand, either by accepting its indemnification obligations hereunder, or
setting forth the factual and contractual basis for its refusal, if any, to so
perform.
 
(iii)           If such claim involves a claim by a third party against the
Indemnified Party, the Indemnifying Party may, within twenty (20) business days
after receipt of the Indemnity Demand and upon notice to the Indemnified Party,
assume at its own expense, through counsel chosen by the Indemnifying Party and
reasonably
 
 
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satisfactory to such Indemnified Party in its reasonable judgment, the
settlement or defense thereof, and the Indemnified Party will cooperate with it
in connection therewith, provided, that the Indemnified Party may participate in
such settlement or defense at the Indemnified Party’s expense, except as
specifically provided in the following sentence, through counsel chosen by
it.  If the Indemnified Party reasonably determines that representation by the
Indemnifying Party’s counsel of both the Indemnifying Party and the Indemnified
Party will present such counsel with a material conflict of interest, then the
Indemnifying Party will pay the reasonable fees and expenses of the Indemnified
Party’s separate counsel, so long as such counsel has been approved by the
Indemnifying Party.  Notwithstanding anything in this Section to the contrary,
the Indemnifying Party may not, without the consent of the Indemnified Party,
settle or compromise any action or consent to the entry of any judgment, such
consent not to be unreasonably withheld.
 
(iv)           If (A) a firm written offer is made by the third party to settle
a third-party claim referred to in Section 7.1(d)(iii), (B) the Indemnifying
Party proposes to accept such settlement and (C) the Indemnified Party refuses
to consent to such settlement, then, provided that such proposed settlement: (a)
includes a full and unconditional release of the Indemnified Party, (b) does not
provide for anything other than the payment of money damages, and (c) will be
paid in full by the Indemnifying Party, then (i) the Indemnifying Party will be
excused from, and the Indemnified Party will be solely responsible for, all
further defense of such third party claim, (ii) the maximum liability of the
Indemnifying Party relating to such third party claim will be the amount of the
proposed settlement, and other amounts to which the Indemnified Party would be
entitled before the rejection of the proposed settlement, if the amount
thereafter
 
 
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recovered from the Indemnified Party on such third party claim is greater than
the amount of the proposed settlement, and (iii) the Indemnified Party will pay
all attorneys’ fees incurred after the rejection of such settlement by the
Indemnified Party.  If the amount thereafter recovered by such third party from
the Indemnified Party is less than the amount of the proposed settlement, the
Indemnified Party will be reimbursed by the Indemnifying Party for such
attorneys’ fees up to a maximum amount equal to the difference between the
amount recovered by such third party and the amount of the proposed settlement.
 
(e)           If in accordance with the provisions of this Section an
Indemnified Party is entitled to be represented by counsel of its own choosing
at the Indemnifying Party’s expense, the Indemnifying Party will directly
compensate all counsel promptly on or before the due date for such counsel’s
statements for services rendered.  This provision will be specifically
enforceable by means of injunction.
 
7.2           Tax Indemnity.
(a)           The Sellers will pay, indemnify, defend and hold harmless
Purchaser and Company from and against any and all Taxes (including any interest
or penalties) of Company with respect to any period (or any portion thereof) up
to and including Closing, except for any Taxes of Company which are reflected as
current liabilities for taxes on Exhibit “I,” together with all reasonable legal
fees, disbursements and expenses incurred by Purchaser and Company in connection
therewith.
(b)           The indemnity provided for in this Section 7.2 will be in addition
to and cumulative of any other indemnity provision herein, and any other rights
provided at law or in equity, and will be considered Special Indemnities as
defined in Section 7.1(a)(i);
 
 
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provided, however, that the indemnity provided for in this Section 7.2 shall be
subject to the limitations set forth in Sections 7.1(c)(i)-(v).
 
7.3           Indemnifying Party’s Failure to Provide Defense.  So long as the
Indemnifying Party has undertaken the defense of any such claim and is
contesting any such claim in good faith, the Indemnified Party will not pay or
settle any such claim without the Indemnifying Party’s consent, such consent not
to be unreasonably withheld.  If, in accordance with the foregoing provisions of
this Article VII, an Indemnified Party is entitled to defense against a claim,
cause of action, assessment or other asserted liability, and if the Indemnifying
Party fails to provide such defense, the Indemnified Party will have the right,
without prejudice to its right of indemnification hereunder, in its sole
discretion, to contest, defend, litigate and/or settle such claim, cause of
action, assessment or other asserted liability, at such time and upon such terms
as the Indemnified Party deems fair and reasonable, in which event the
Indemnifying Party will be liable for all of the Indemnified Parties’ reasonable
outside attorneys’ fees and other expenses of defense actually incurred, plus
all amounts, if any, paid in settlement or pursuant to any judgment.
 
7.4           Certain Tax and Other Matters.
(a)           If, in connection with the audit of any Return, a proposed
adjustment is asserted in writing with respect to any Taxes of the Company for
which the Sellers are required to indemnify Purchaser pursuant to Section
7.2(b)(ii), Purchaser will notify the Sellers of such proposed adjustment within
ten (10) days after the receipt thereof.  Upon notice to Purchaser within ten
(10) days after receipt of the notice of such proposed
 
 
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adjustment from Purchaser, the Sellers may assume (at the Sellers’ own cost and
expense) control of and contest such proposed adjustment.
(b)           Alternatively, if the Sellers do not provide a timely request in
accordance with Section 7.4(a), Purchaser will handle the defense of such
proposed adjustment, in which event Purchaser will be entitled (in its sole
discretion) to contest, settle or agree to pay in full such proposed
adjustment.  In either case, Sellers will be jointly and severally obligated to
pay all reasonable out-of-pocket costs and expenses (including legal fees and
expenses) which Purchaser may incur, as well as all amounts, if any, paid in
settlement of or pursuant to a Final Determination with respect to the proposed
adjustment. Purchaser may provide a Setoff Notice in accordance with Section
7.1(b)(i), or seek payment from the Sellers, for any proposed adjustment upon a
Final Determination thereof.
(c)           For purposes of this Section 7.4, a “Final Determination” will
mean (i) the entry of a decision of a court of competent jurisdiction at such
time as an appeal may no longer be taken from such decision or (ii) the
execution of a closing agreement or its equivalent between the particular
taxpayer and the Internal Revenue Service, as provided in Section 7121 and
Section 7122, respectively, of the Code, or a corresponding agreement between
the particular taxpayer and the particular state or local taxing authority.
 
7.5           Certain Information.  Purchaser and Sellers agree to furnish or
cause to be furnished to each other (at reasonable times and at no charge) upon
request as promptly as practicable such information (including access  to books
and records) pertinent to the  Company and assistance relating to the  Company
as is reasonably necessary for the preparation, review and audit of financial
statements or the prosecution or defense of any
 
 
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claim, suit or proceeding relating to any proposed adjustment or which may
result in the Sellers being liable under the indemnification provisions of this
Section 7, provided, that access will be limited to items pertaining solely to
the Company.
 
7.6           Covenant Not to Sue by the Sellers.  Sellers promise not to
commence any litigation or other legal or administrative proceeding against
Purchaser, or the Company or any of their respective officers, directors,
employees or affiliates, asserting any claims that either Seller owns a
different number of the Shares than as set forth in Section 4.3(b).
 
7.7           Release by the Sellers. Sellers hereby release and discharge
Purchaser and the Company and each of their officers and directors from all
claims, whether in law or equity, known and unknown, any of them now has, has
ever had or may hereafter have against the Company arising contemporaneously
with or prior to the Closing or on account of or arising out of any matter,
cause or event occurring contemporaneously with or prior to the Closing,
(including, but not limited to, any rights to dividends, distributions or other
payments, obligations, or reimbursement from the Company or any of its
subsidiaries) other than claims or demands arising out of or related to the
transactions contemplated by this Agreement.  For the avoidance of doubt, this
release (a) is not prospective and is not intended to release any claims of any
type against any individual for any matter, cause or event that arises or occurs
after the Closing, and (b) does not release any Party for fraud or criminal
activity.
 
 
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ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
 
8.1           Termination.  This Agreement may be terminated at any time prior
to the Closing Date, whether before or after approval by the boards of directors
of Purchaser and/or the Company:
(a)           By mutual consent of Purchaser and the Sellers; or
(b)           By Purchaser or Sellers if (i) the Purchase will not have been
consummated on or before September 15, 2012 (the “Termination Date”) through no
fault of the terminating Party, (ii) any governmental or regulatory body, the
consent of which is a condition to the obligations of Purchaser or Company to
consummate the transactions contemplated hereby or by this Agreement, will have
determined not to grant its consent and all appeals of such determination will
have been taken and have been unsuccessful, or (iii) any court of competent
jurisdiction in the United States or any State will have issued an order,
judgment or decree (other than a temporary restraining order) restraining,
enjoining or otherwise prohibiting the Purchase and such order, judgment or
decree will have become final and non-appealable.
 
8.2           Effect of Termination.  In the event of termination of this
Agreement by Purchaser, Sellers or the Company, pursuant to and as provided in
Section 8.1, this Agreement will forthwith become void and there will be no
liability on the part of either Sellers, the Company, Purchaser or their
respective officers or directors.  Nothing in this Section 8.2 will relieve any
Party from liability for any breach of this Agreement.
 
8.3           Amendments and Waivers.  The Parties may mutually amend any
provision of this Agreement at any time prior to the Closing Date with the prior
 
 
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authorization of their respective boards of directors.  No amendment of any
provision of this Agreement will be valid unless the same will be in writing and
signed by the Company, Purchaser and Sellers.  No waiver by any Party of any
default, misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, will be deemed to extend to any prior or subsequent default,
misrepresentation, or breach of warranty or covenant hereunder or affect in any
way any rights arising by virtue of any prior or subsequent such occurrence.
 
ARTICLE IX
MISCELLANEOUS
 
9.1           Press Releases and Public Announcements.  Sellers will not issue
any press release or make any public announcement relating to the subject matter
of this Agreement without the prior written approval of the
Purchaser.  Purchaser may issue a press release or other public disclosure in
its sole discretion.
 
9.2           Notices.  All notices, requests, demands, claims, and other
communications hereunder will be in writing.  Any notice, request, demand,
claim, or other communication hereunder will be deemed duly given (a) three (3)
business days after if it is sent by registered or certified mail, return
receipt requested, postage prepaid, or (b) upon actual receipt by the intended
recipient if it is sent personal delivery, expedited courier, messenger service,
ordinary mail, or electronic mail, in each case addressed to the intended
recipient as set forth below:
 
If to the Company:                          LTS, Incorporated
If to the Sellers:                               A. Shane Nowak

and

 
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David Jensen

Copy to:                                           Holland & Hart, LLP

If to the Purchaser:                         FCSF CO, Inc.

If to the Purchaser’s Parent:         First Cash Financial Services, Inc.

Any Party may change the address to which notices, requests, demands, claims,
and other communications hereunder are to be delivered by giving the other
Parties notice in the manner herein set forth.
 
9.3           Counterparts.  This Agreement may be executed in one or more
counterparts each of which will be deemed an original.  A signed counterpart to
this Agreement delivered by facsimile, e-mail or other means of electronic
transmission shall be deemed to have the same legal effect as delivery of an
original signed copy of this Agreement.
 
9.4           Non Waiver.  The failure of any party to insist upon performance
of any terms, covenants or conditions will not be construed as a subsequent
waiver of any such terms, covenants or conditions.
 
9.5           Severability.  If any term or provision of this Agreement is
deemed invalid or unenforceable by a court or arbitration tribunal of competent
jurisdiction, such provision will be severed from the remaining terms of the
agreement, and the Agreement will be enforced without such provision, provided
that such severance does not undermine the fundamental purposes of this
agreement.
 
9.6           Governing Law.  This Agreement will be governed by and construed
in accordance with the domestic laws of the State of Delaware without giving
effect to any choice or conflict of law provision or rule (whether of the State
of Delaware or any other
 
 
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jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Delaware.  All parties to this Agreement hereby consent
to general personal jurisdiction in the State of Delaware for all disputes, if
any, with any other party or parties to this Agreement.
 
9.7           Waiver of Rights to Trial by Jury; Arbitration; Venue.
 
(a)           WITH THE EXCEPTION OF AN ACTION TO ENFORCE AN ARBITRATOR’S ORDER
FOR INJUNCTIVE RELIEF, AS OUTLINED BELOW IN PARAGRAPH 9.7(C), EACH PARTY TO THIS
AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANYWAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO
WITH RESPECT TO THIS AGREEMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE (HEREINAFTER COLLECTIVELY, "DISPUTES").
 
(b)           EACH PARTY HEREBY AGREES AND CONSENTS THAT ALL DISPUTES OTHER THAN
AN ACTION TO ENFORCE AN ARBITRATOR’S ORDER FOR INJUNCTIVE RELIEF WILL BE DECIDED
BY BINDING ARBITRATION, CONDUCTED IN WILMINGTON, DELAWARE, BEFORE ONE OR MORE
ARBITRATORS (AS DESCRIBED BELOW), UNDER THE THEN CURRENT COMMERCIAL RULES OF THE
AMERICAN ARBITRATION ASSOCIATION, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE
AN ORIGINAL
 
 
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COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT OR THE AMERICAN ARBITRATION
ASSOCIATION AS WRITTEN EVIDENCE OF THE AGREEMENT OF THE SIGNATORIES HERETO TO
ARBITRATE ALL DISPUTES AND TO WAIVE THEIR RIGHT TO TRIAL BY JURY WITH REGARD TO
ALL DISPUTES. THIS AGREEMENT TO ARBITRATE WILL INCLUDE CLAIMS FOR INJUNCTIVE
RELIEF.
 
(c)           PROCEDURE FOR INJUNCTIVE RELIEF.  IN THE EVENT A PARTY SEEKS
INJUNCTIVE RELIEF, THE CLAIM WILL BE ADMINISTRATIVELY EXPEDITED BY THE AAA,
WHICH WILL APPOINT A SINGLE, NEUTRAL ARBITRATOR FOR THE LIMITED PURPOSE OF
DECIDING SUCH CLAIM.  SUCH ARBITRATOR WILL BE A QUALIFIED ATTORNEY IN GOOD
STANDING, AND PREFERABLY WILL BE A RETIRED STATE OR FEDERAL DISTRICT JUDGE.  ALL
OBJECTIONS TO THE APPOINTMENT MUST BE SUBMITTED TO THE AAA WITHIN 24 HOURS OF
NOTICE OF APPOINTMENT AND WILL BE RESOLVED BY THE AAA.  THE SINGLE ARBITRATOR
WILL DECIDE THE CLAIM FOR INJUNCTIVE RELIEF IMMEDIATELY ON HEARING OR, IF THE
PARTIES AGREE TO SUBMIT THE CLAIM FOR AND DEFENSES TO INJUNCTIVE RELIEF ON
WRITTEN SUBMISSIONS, WITHIN 24 HOURS OF THE ARBITRATOR’S RECEIPT OF THE PARTIES’
WRITTEN SUBMISSIONS.  TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY TEMPORARY
RELIEF GRANTED UNDER THIS PROCEDURE FOR INJUNCTIVE RELIEF WILL BE SPECIFICALLY
ENFORCEABLE IN ANY COURT OF COMPETENT JURISDICTION ON AN EXPEDITED EXPARTE BASIS
AND WILL NOT BE THE
 
 
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SUBJECT OF ANY EVIDENTIARY HEARING OR FURTHER SUBMISSION BY EITHER PARTY, BUT
THE COURT, ON APPLICATION TO ENFORCE INJUNCTIVE RELIEF, WILL ISSUE SUCH ORDERS
AS NECESSARY TO ITS ENFORCEMENT.
 
(d)           PROCEDURE FOR RESOLVING REMAINING CLAIMS AFTER AN ORDER ON
INJUNCTIVE RELIEF IS ENTERED OR WHERE NO CLAIM FOR INJUNCTIVE RELIEF IS
MADE.  IF A CLAIM IS MADE FOR INJUNCTIVE RELIEF AND AN ARBITRATOR IS APPOINTED
TO RESOLVE THAT CLAIM (THE “INJUNCTIVE RELIEF ARBITRATOR”) AND THE PARTIES DO
NOT OBJECT, THE INJUNCTIVE RELIEF ARBITRATOR WILL RESOLVE THE REMAINDER OF THE
DISPUTE BETWEEN THE PARTIES.  IF A PARTY OBJECTS TO THE INJUNCTIVE RELIEF
ARBITRATOR OR IF NO CLAIM IS MADE FOR INJUNCTIVE RELIEF, THE ARBITRATOR WILL BE
SELECTED AS FOLLOWS: IN THE EVENT THE PARTIES TO THE ARBITRATION AGREE ON ONE
ARBITRATOR, THE ARBITRATION WILL BE CONDUCTED BY SUCH ARBITRATOR.  IN THE EVENT
THE PARTIES TO THE ARBITRATION DO NOT SO AGREE, EACH SIDE WILL SELECT ONE
INDEPENDENT, QUALIFIED ARBITRATOR, AND THE TWO ARBITRATORS SO SELECTED WILL
SELECT THE THIRD ARBITRATOR.  IF A PARTY DOES NOT BELIEVE AN ARBITRATOR IS
INDEPENDENT OR QUALIFIED, THAT PARTY MAY FILE WRITTEN OBJECTIONS WITH THE AAA
WITHIN 10 BUSINESS DAYS OF NOTIFICATION OF THE SELECTION FOR RESOLUTION BY THE
AAA.  SELLERS WILL TOGETHER BE CONSIDERED ONE SIDE, AS WILL PURCHASER AND/OR
 
 
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PURCHASER’S CONTROLLING MEMBER.  THE ARBITRATOR(S) ARE HEREIN REFERRED TO AS THE
“PANEL.”  EITHER PARTY WILL HAVE THE RIGHT TO STRIKE ANY INDIVIDUAL ARBITRATOR
WHO IS EMPLOYED BY OR AFFILIATED WITH AN ORGANIZATION THAT IS IN DIRECT
COMPETITION WITH SUCH PARTY, AS DETERMINED BY THE ARBITRATOR(S).
 
9.8           Succession and Assignment.  Agreement will be binding upon and
inure to the benefit of the Parties and their respective successors and
permitted assigns.  No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Parties.
 
9.9           Headings.  The section headings contained in this Agreement are
inserted for convenience only and will not affect in any way the meaning or
interpretation of this Agreement.
 
9.10           Expenses.  The Sellers will bear all their own costs and expenses
(including legal fees and expenses and any amounts payable to bankers, brokers
or other advisors in relation to the transactions contemplated by this
Agreement, including, but not limited to Stephen van den Heever and Integris
Partners, Ltd.) incurred in connection with this Agreement and the transactions
contemplated hereby.  The Purchaser and Purchaser’s Parent will bear all their
own costs and expenses (including legal fees and expenses and any amounts
payable to bankers, brokers or other advisors in relation to the transactions
contemplated by this Agreement, including but not limited to Comstock Capital &
Advisory Group) incurred in connection with this Agreement and the transactions
contemplated hereby.
 
 
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9.11           Entire Agreement.  This Agreement (including the exhibits and
schedules referred to herein) constitutes the entire agreement among the Parties
and supersedes any prior understandings, agreements, or representations by or
among the Parties, written or oral, to the extent they relate in any way to the
subject matter hereof.
 
9.12           No Third-Party Beneficiaries.  This Agreement is for the sole
benefit of the Parties and their permitted assigns and nothing herein expressed
or implied will give or be construed to give to any Person any legal or
equitable rights under this Agreement, other than (a) the Parties and such
permitted assigns and (b) an Indemnified Party.  Nothing contained herein,
express or implied, shall be construed to establish, amend or modify any benefit
plan, program, agreement or arrangement of either Party.
 
9.13           Legal Representation.  In any dispute or proceeding arising under
or in connection with this Agreement, the Sellers shall have the right, at their
election, to retain the firm of Holland & Hart LLP to represent them in such
matter and Purchaser and Purchaser’s Parent, for themselves and for their
successors and assigns, hereby irrevocably waive and consent to any such
representation in any such matter.  Purchaser and Purchaser’s Parent, for
themselves and for their successors and assigns, hereby irrevocably acknowledge
and agree that (a) all communications between Sellers and their counsel,
including without limitation Holland & Hart LLP, made in connection with the
negotiation, preparation, execution, delivery and closing under, or any dispute
or proceeding arising under or in connection with, this Agreement, or any matter
relating to any of the foregoing, are privileged communications between Sellers
and such counsel and (b) Purchaser, Purchaser’s Parent and the Company, and any
Person purporting to act
 
 
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on behalf of or through Purchaser, Purchaser’s Parent or the Company, shall not
seek to obtain the same by any process.
 
 
[remainder of page intentionally blank]

 
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In witness whereof, the Parties have executed this Stock Purchase Agreement on
the date first above written.

 
PURCHASER:
 
FCFS CO, INC., a Colorado corporation
 
 
 
By: _______________________________________
Rick L. Wessel, President
 
 
 
COMPANY:
 
LTS, INCORPORATED, a Colorado corporation
 
 
 
By: _______________________________________
A. Shane Nowak, President
 
 
 
SELLERS:
 
 
__________________________________________
A. Shane Nowak
 
 
__________________________________________
David Jensen
 

 
 
[Signature Page to Stock Purchase Agreement]
 
 

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PURCHASER’S PARENT:
 
FIRST CASH FINANCIAL SERVICES, INC.,
a Delaware corporation
 
 
 
By: _______________________________________
Rick L. Wessel, Chief Executive Officer
 
 

 
 
 
 
 
 
[Signature Page to Stock Purchase Agreement]

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