UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) July 21, 2005
---------------
Money Centers of America, Inc.
--------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 000-49723 23-2929364
---------------------------- ------------- ---------------------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
700 South Henderson Road, Suite 325, King of Prussia, Pennsylvania 19406
------------------------------------------------------------------ ----------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (610) 354-8888
--------------
-------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2 (b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4 (c))
Item 1.01. Entry Into a Material Definitive Agreement.
Effective July 21, 2005, we entered into a Settlement Agreement and Mutual
Release (the "Settlement Agreement") with Chex Services, Inc., the wholly owned
operating subsidiary of FastFunds Financial Corporation ("Chex") and Equitex,
Inc. ("Equitex"), pursuant to which the parties agreed to resolve all pending
litigation between them and release all claims related to such litigation. The
subject litigation is described in our Annual Report on Form 10-K for the year
ended December 31, 2004. No party to the Settlement Agreement admitted any
wrongdoing or liability related to the litigation. The litigation was dismissed
with prejudice on July 22, 2005.
Under the Settlement Agreement, Equitex and Chex agreed to cancel our
outstanding $2,000,000 principal liability under a $2,000,000 promissory note
from us to Chex, dated January 6, 2004, as well as any liability for accrued but
unpaid interest under that promissory note. We agreed to pay Chex $500,000
within 60 days of July 21, 2005. To secure our obligations under the Settlement
Agreement, we entered into a Security Agreement with Chex and Equitex pursuant
to which we granted Chex and Equitex a junior security interest in substantially
all of our assets. In addition, Money Centers agreed to deliver to Fastfunds
Financial, Inc., Chex's corporate parent, a contingent warrant to purchase up to
500,000 shares of our common stock at a purchase price of $0.50 per share. The
warrant is not exercisable until we achieve $1,000,000 in net income during a
fiscal year.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MONEY CENTERS OF AMERICA, INC.
Date: July 28, 2005 By: /s/ Jason P. Walsh
---------------------------
Jason P. Walsh
Chief Financial Officer