Item 1.01 - Entry into a Material Definitive Agreement OnJune 9, 2021 (the "Closing Date"),EZCORP, Inc. (the "Company") completed the acquisition of 128 pawn stores inMexico operating under the name "Cash ApoyoEfectivo ." The acquisition was completed pursuant to an Equity Interest Purchase Agreement (the "Purchase Agreement"), which was executed and delivered on the Closing Date. The parties to the Purchase Agreement are EZPAWN ManagementMexico ,S. de R.L. de C.V. and EZPAWN Services Mexico,S. de R.L. de C.V. , two indirect wholly-owned subsidiaries of the Company (the "Buyers");Gabriel Rafael Mondragón Mondragón andAna Dolores Negrete Culbert (the "Sellers"); andPLO delBajio ,S. de R.L. de C.V. (the "Acquired Company "). Under the terms of the Purchase Agreement, the Sellers agreed to sell, and the Buyers agreed to purchase, 100% of the equity interests in theAcquired Company for an initial purchase price of$33.8 million . The initial purchase price included: •$17.3 million in cash; •212,879 shares of the Company's Class A Non-Voting Common Stock, valued at$1.6 million , consisting of registered shares from the Company's shelf registration statement on Form S-4; and •Repayment of$14.9 million of theAcquired Company's existing debt. The Sellers will be entitled to receive additional "earn-out" payments of up to$4.6 million over the first two years following the Closing Date so long as the aggregate pawn portfolio balance of the acquired stores reaches specified levels. The Company will have the option of paying up to 50% of the earn-out payments in the form of Class A Non-Voting Common Stock. The Purchase Agreement contains customary representations and warranties. Most of those representations and warranties survive for a period of one year following the Closing Date, but certain fundamental representations and tax representations survive for a period of five years. The Sellers have agreed to indemnify the Buyers for breaches of such representations and warranties, and the Company withheld$2.0 million of the initial purchase price as a contingency fund to secure the Seller's indemnification obligations. Absent breaches of representations and warranties that trigger such indemnification obligations, the contingency fund will be released to the Sellers primarily over a period of one year following the Closing Date, with a smaller portion being held for up to five years. The Sellers have agreed that, for a period of three years following the Closing Date, neither they nor any of their affiliates will (a) engage in any competitive business within 10 kilometers of any of the Company's existing locations or (b) solicit or hire any of the Company's existing employees. The transaction was approved by the Mexican Comisión Federal de Competencia Económica (Federal Economic Competition Commission ) prior to the Closing Date. Item 7.01 - Regulation FD Disclosure OnJune 9, 2021 , the Company issued a press release announcing the completion of the Cash Apoyo Efectivo acquisition. A copy of that press release is included as Exhibit 99.1 to this report. Item 9.01 - Financial Statements and Exhibits (d) Exhibits.
99.1 Press release, dated
© Edgar Online, source