STOCK EXCHANGE AGREEMENT
This Stock Exchange Agreement, dated this 20th day of July, 1998, is
made and entered into by and between Ameri-Cap Finance Group, Inc., a Florida
corporation ["Buyer"], the individuals named on Exhibit A attached hereto
[collectively referred to as "Sellers"], Medley Credit Acceptance Corp., a
Delaware corporation ["Medley"], and Ameritrust Holdings Inc., a Florida
corporation ["Corporation"]. [The Buyer and Sellers may be referred to
collectively throughout this Agreement as "Parties" for convenience].
WITNESSETH
WHEREAS, the Sellers collectively owns 100% of the authorized, issued,
and outstanding common shares of Ameritrust Holdings, Inc., consisting of
1,495,000 common shares [the "Shares"], and
WHEREAS, the Corporation is organized and existing under the laws of
the State of Florida and is engaged in commercial and residential lending and
home improvements, and
WHEREAS, the Buyer is a Florida corporation and is desirous of
purchasing from the Seller 90% of the authorized, issued, and outstanding
common shares of the Corporation at closing and the Seller is desirous of
selling same to the Buyer, and
WHEREAS, the Buyer shall have the right to acquire subsequent to
closing the balance of the Corporation's common shares, and
WHEREAS, the Buyer is a wholly owed subsidiary of Medley, and
WHEREAS, Medley is a publically traded over-the-counter company, and
WHEREAS, a portion of the Shares have been sold pursuant to an
exemption to the Securities Act of 1933 (the "Act") pursuant to Section 504,
and
WHEREAS, the Parties desire to document their representations,
warranties, covenants, agreements, and conditions relating to the exchange of
the Shares in a written agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties agree as follows:
1. RECITALS: The above and foregoing recitals are true and correct
and are incorporated herein.
2. EXCHANGE AND TRANSFER OF SHARES: The Seller shall transfer, and
convey to the Buyer and the Buyer shall acquire from the Seller 90% of the
authorized, issued, and outstanding common shares of the Corporation consisting
of 1,345,500 shares as follows:
A. 504 Shares: The Buyer will exchange with the Sellers owning the
Corporation's Shares sold pursuant to Section 504 of the Act ["504 Shares"] one
common share of Medley for each 504 Share owned by the Sellers. The total
number of 504 Shares outstanding by the Corporation are 95,000 shares and all
outstanding 504 Shares owned by the Sellers shall be exchanged on the closing
date.
(1) Medley agrees with respect to the Exchanged 504 Shares to
file a registration statement with the Securities and
Exchange Commission within 30 days following the closing date
and diligently pursue the registration of said shares,
including responding to comment letters, if any, and to do
its best to have the registration become effective.
B. Restricted Shares: The balance of the outstanding Shares of the
Corporation
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owned by the Sellers are not registered under the Act and shall hereafter be
referred to as the "Restricted Shares". The Restricted Shares shall be
exchanged as follows:
(1) At closing the Buyer shall exchange 400,000 common shares of
Medley for 1,345,500 Restricted Shares of the Corporation
owned by the Sellers. The Shares will be exchanged on a pro
rata basis with each selling Shareholder based upon the
number of Shares owned by the selling shareholder in the
Corporation. No fractional shares shall be issued by Medley
and the Sellers agree to determine the pro rata method of
distribution prior to closing and to deliver a written letter
of direction signed by all Sellers setting forth the
distribution computation to the Buyer.
(2) The Restricted Shares not exchanged at the closing shall be
retained solely in the possession of the Sellers and shall be
available for a future exchange with the Buyer according to
the following:
(a) Period 1: The year ending December 31, 1998. If net
earnings before taxes (the "earnings hurdle") of Ameritrust exceed $250,000,
Sellers will exchange 18,678.5 shares of their Restricted Shares for 125,000
shares of Medley Common Stock.
(b) Period 2, 3 and 4: The calendar years ending 1999, 2000,
and 2001, the earnings hurdle shall be $500,000; $750,000; $1,000,000 in each
year respectively. For each year that the net earnings before taxes of
Ameritrust exceed the earnings hurdle in that year, Sellers shall exchange
37,375 shares of their Restricted Shares for 250,000 shares of the Common Stock
of Medley.
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(c) Period 5: The six months ending June 30, 2002, the
earnings hurdle shall be $1,250,000 annualized. If the net earnings before
taxes of Ameritrust exceed the earnings hurdle, Sellers shall exchange 18,678.5
shares of their Restricted Shares for 125,000 shares of Common Stock of Medley.
(d) Adjustment to Shares to be Exchanged: If at the end of
each exchange period as delineated in (a), (b) or (c) above, net earnings
before taxes is less than the earnings hurdle, but greater than 80% of the then
applicable earnings hurdle, Sellers shall exchange their Restricted Shares
indicated for that period with an amount of Medley shares equal to the actual
net earnings before taxes divided by the earnings hurdle, with that number
multiplied by the number of Medley shares to be exchanged pursuant to the
above.
If the net earnings is greater than 33% of the earnings
hurdle but less 80% of the than the earnings hurdle, than no exchange of shares
shall take place. However, the date for the un-achieved earning hurdle shall be
extended for an additional one (1) calendar year or half year as applicable.
If the net earnings is equal to or below 33% of the earnings
hurdle then Sellers will deliver to Buyer the applicable shares for the period
for no additional Medley Shares and forfeit that period's exchange rights.
As of December 31, 2003, any remaining Restricted Shares of
Ameritrust Common Stock not exchanged by the Sellers due to the Company's
failure to achieve its earnings hurdle shall be conveyed to Buyer or its
assigns without exchange of Medley Shares or consideration.
3. DUE DILIGENCE PERIOD AND RIGHT OF TERMINATION:
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A. By Buyer: The Sellers and Buyer hereby acknowledge that the Buyer,
as of the effective date of this Agreement, has not had the opportunity to
review and evaluate all aspects of the Corporation, as represented by the
Sellers. Therefore, the Buyer shall have, from the effective date through the
end of business 20 days thereafter [Due Diligence Period] to inspect and assess
all aspects of the Corporation, financial and otherwise, and to make such
investigations as the Buyer deems necessary in the Buyer's sole discretion. The
Seller agrees to assist the Buyer in reviewing all records of the Corporation
and to aid and assist the Buyer in arranging meetings and providing documents,
records, and/or information reasonably required by the Buyer or the Buyer's
attorneys or other agents including accountants, in order that the Buyer may
determine the viability of the transaction contemplated by this Agreement.
During the Due Diligence Period, Sellers shall advise the Buyer of any negative
information learned by the Sellers which would have a material, financial
impact: upon the Corporation. In the event the Buyer determines in its sole and
absolute discretion that the representations made by the Sellers prior to
execution of this agreement or those made in this agreement are false,
misleading or incomplete so that the acquisition of the Shares would have a
negative impact on the Buyer or Medley, the Buyer may notify the Seller in
writing by facsimile delivery, mail or hand delivery, prior to the termination
of the Due Diligence Period and the Buyer may at the Buyer's sole discretion
terminate this Agreement. The Buyer's failure to provide written notice of
termination within the time period set forth in this section shall be deemed
conclusive evidence that the Buyer has waived its right to terminate as
contained herein.
B. By Seller: The Sellers and Buyer hereby acknowledge that the
Sellers, as of the effective date of this Agreement, have not had the
opportunity to review and evaluate all aspects of the Buyer and Medley, as
represented in this agreement. Therefore, the Sellers shall have, from
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the effective date through the end of business 20 days thereafter [Due
Diligence Period] to inspect and assess all aspects of the Buyer and Medley,
financial and otherwise, and to make such investigations as the Sellers deems
necessary in the Sellers' sole discretion. The Buyer and Medley agree to assist
the Sellers in reviewing all records of the Buyer and Medley and to aid and
assist the Sellers in arranging meetings and providing documents, records,
and/or information reasonably required by the Sellers or the Sellers'
attorneys or other agents including accountants, in order that the Sellers may
determine the viability of the transaction contemplated by this Agreement.
During the Due Diligence Period, Buyer shall advise the Sellers of any negative
information learned by the Buyer which would have a material, financial impact
upon the Sellers. In the event the Sellers determine in their sole and absolute
discretion that the representations made by the Buyer or Medley prior to
execution of this agreement or those made in this agreement are false,
misleading or incomplete so that the acquisition of the Shares would have a
negative impact on the Sellers, the Sellers may notify the Buyer in writing by
facsimile delivery, mail or hand delivery, prior to the termination of the Due
Diligence Period and the Sellers may at the Sellers' sole discretion terminate
this Agreement. The Sellers' failure to provide written notice of termination
within the time period set forth in this section shall be deemed conclusive
evidence that the Sellers have waived their right to terminate as contained
herein.
4. CLOSING DATE: The Closing under this Agreement shall take place on
or before August 15, 1998 at the Law Offices of Xxxxxxx X. Xxxxxxx, Esquire,
0000 Xxxxx xx Xxxx Xxxxxxxxx, Xxxxx Xxxxxx, Xxxxxxx 00000 or at such other time
and place as shall be set forth in a writing signed by the Parties hereto.
5. REPRESENTATIONS AND WARRANTIES OF SELLER: The Sellers represent
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and warrant to the Buyer as follows:
a. The Corporation is a validly existing Corporation in good
standing under the laws of the State of Florida and is
validly conducting business pursuant to the laws of the State
of Florida.
b. The Sellers and the Corporation have the power to enter into
and carry out their obligations under this Agreement.
c. The Corporation holds all licenses necessary to conduct the
business of the Corporation and complies with all laws, rules
and regulations presently established by all governmental
agencies in connection with same.
d. The Shares being exchanged by the Seller to the Buyer are
fully paid and non-assessable.
e. The aggregate number of shares that the Corporation is
authorized to have outstanding as of the date hereof is
7,500,000 shares of common stock of which 1,495,000 are
presently issued and outstanding and held collectively in the
name of the Sellers.
f. The only stock authorized to be outstanding by the
Corporation is one class of common stock represented by the
shares owned by the Sellers.
g. The Seller is and will be on the closing date the sole owners
of all of the authorized, issued, and outstanding shares of
the common stock of the Corporation, free and clear of any
and all liens and encumbrances.
h. That as of the date of executing this Agreement, as well as
on the date of closing, the Corporation shall have no debts,
liabilities, or obligations for
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which payment needs to be made except for those debts,
liabilities, and obligations set forth on Exhibit "B"
attached to this Agreement.
i. The Sellers do not have any knowledge or any basis for the
assertion of any material liability against the Corporation.
j. The Corporation is not subject to any order, judgment,
decree, stipulation, or any other agreements with any
governmental body or agency with respect to the Corporation
unless specifically set forth in this Agreement.
k. The Corporation is not a party to any long-term contract or
commitment unless specifically set forth in this Agreement on
Exhibit "C" attached hereto. The only Employment Agreements
between the Corporation and its employees are attached as
Exhibit "D".
l. Neither the Sellers nor the Corporation have received notice
nor have any claims been made against the Corporation or the
Sellers by any governmental authority to the effect that the
Corporation or the business of the Corporation fails to
comply in any material respect to any law, rule, regulation,
or ordinance or that a license, permit, or order which is not
in the possession of the Corporation is necessary for the
Corporation to conduct its business.
m. On the day of closing, the Sellers will have the full and
unrestrictive legal and equitable title to the shares being
sold to the Buyer, free and clear of all liens and
encumbrances.
n. Any action required to be taken by the Corporation in order
to complete the transaction contemplated in this Agreement
has been or will be by the closing
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date duly approved by the Board of Directors and
Shareholders of the Corporation.
o. The Sellers represent that their are no liabilities,
including but not limited to liabilities for federal, state,
and local taxes, penalties, assessments, lawsuits or claims
against the Corporation or the Sellers, whether such
liabilities, suits, or claims are contingent or absolute,
direct or indirect, matured or unmatured, which could in any
way affect the shares being conveyed hereunder, the assets of
the Corporation, or the Corporation's ability to conduct its
business.
p. The Articles of Incorporation and By-Laws attached to this
Agreement as Exhibit "E" are complete and accurate as of the
date hereof and contain all amendments through the date
hereof. The Minute Book of the Corporation is complete and
accurate and reflects all proceedings of Shareholders and
Directors of the Corporation through the date of this
Agreement.
q. The transfer and delivery of the Shares to the Buyer,
pursuant to this Agreement, will be valid and will vest title
to the Shares in the Buyer free and clear of all liens,
encumbrances, conditions, and restrictions of any kind.
r. The Corporation will not issue any additional shares of its
common stock prior to the closing. There are no outstanding
options, contracts, commitments, warrants or other rights of
any character affecting or relating in any manner to the
common stock of the Corporation.
s. The documents, agreements, and materials delivered or to be
delivered by the
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Seller to the Buyer in furtherance of the Buyer's Due
Diligence examination of the Corporation shall be complete
and accurate in all material respects and will not have been
amended or modified by any oral agreements.
t. Financial Statements: The Corporation has furnished the Buyer
with Financial Statements of the Corporation as of December
31, 1997. The Financial Statements fairly present the
financial condition of the Corporation on such date. To the
best of the Seller's knowledge, there are no matters pending
which would have an adverse or material affect on the
Financial Statements of the Corporation.
u. Subsequent to the date of the Corporation's last Financial
Statement, the business of the Corporation has been conducted
in its ordinary course of business and to the best of the
Seller's knowledge there has been no material loss of any of
the Corporation's customers and clients which would have an
adverse affect on the Corporation's future income and
profitability.
v. The Sellers acknowledge that with the exception of the Buyers
obligation to register the Sellers 504 Shares, the balance of
the Exchange Shares have not been registered under the "Act"
for resale and may not be offered or sold except pursuant to
an effective registration under the Act or to the extent
applicable under Rule 144 of the Act or such other exemption
from registration as may be given in an opinion of counsel or
counsel acceptable to counsel for Medley.
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w. Following the closing date the Sellers shall not transfer,
convey, mortgage, pledge or otherwise hypothecate their
Shares to be exchanged subsequent to closing pursuant to
Section 2B(2).
x. The execution, delivery and performance of this agreement by
the Corporation has been duly approved by all requisite
actions of the Corporation's board of directors and
shareholders.
y. The Corporation has the following wholly owned subsidiaries:
(1) Residential Financial Services, Inc.
(2) Community Re-Development Corp.
All representations and warranties contained in this section
applicable to the Corporation are applicable to the subsidiaries as if restated
in full.
The representations and warranties set forth above shall survive the
closing.
6. REPRESENTATIONS AND WARRANTIES OF THE BUYER: The Buyer represents
and warrants to the Sellers as follows:
a. The Buyer is a Corporation, duly organized and validly
existing in good standing under the laws of the State of
Florida with full power and authority to carry on its
business.
b. The execution, delivery, and performance of this Agreement
has been duly approved or will be duly approved by all
requisite corporate actions by the closing date.
c. The Buyer has the power to enter into and carry out its
obligations under this
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agreement.
d. The common stock of Medley being transferred to the Seller
will be fully paid and non-assessable.
e. The authorized capital stock of the Buyer consists of one
class of common stock having 7,500,000 shares authorized at
$.01 per share all of which stock is owned by Medley.
f. The Buyer is not subject to any order, judgment, decree,
stipulation or other agreement which would prohibit the
transaction contemplated under this agreement.
g. Any action required to be taken by the Buyer in order to
complete the transaction contemplated in this agreement has
been or will be by the closing date duly approved by the
Board of Directors of the Buyer.
h. The transfer and delivery of the Medley shares contemplated
under this agreement will vest title to said shares in the
Sellers free of all liens, encumbrances, conditions and
restrictions except those pertaining to the Federal Securities
Act of 1933, as amended and such State Securities laws as may
be applicable.
7. REPRESENTATIONS AND WARRANTIES OF MEDLEY: Medley represents and
warrants to the Seller as follows:
X. Xxxxxx is a duly organized and existing corporation under the laws
of the State of Delaware and is authorized to conduct business in the state of
Florida.
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X. Xxxxxx has the power and authority to enter into this agreement and
the execution, delivery and performance of this agreement has been duly
approved or will be duly approved by all requisite corporate actions by the
closing date.
C. The authorized capital stock of Medley consists of the following:
(1) 15 million shares of Common Stock having a par value of $.001
per share
(2) five million shares of Preferred Stock
(3) five million Warrants
X. Xxxxxx is a publicly traded company, whose registered shares trade
in the over the counter market and to the best of its knowledge all filings
with the Security and Exchange Commission or other public and private governing
bodies were accurate as of the date of their filing.
E. The documents, agreements and materials delivered to the Seller in
furtherance of the Seller's due diligence of Medley and the Buyer are complete
and accurate in all material respects.
X. Xxxxxx does not have any knowledge or any basis for the assertion
of any material liability against Medley.
X. Xxxxxx is not subject to any order, judgment, decree, stipulation,
or any other agreements with any governmental body or agency with respect
Medley unless specifically set forth in this Agreement.
H. On the day of closing, Medley will have the full unrestrictive
legal and equitable title to the shares being exchanged, free and clear of all
liens and encumbrances.
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I. The transfer and delivery of the Exchanged Shares to the Sellers,
pursuant to this Agreement, will vest title to the shares in the Sellers free
and clear of all liens and encumbrances.
J. Financial Statements: Medley has furnished the Sellers with
financial statements as of December 31, 1997. The financial statements fairly
present the financial condition of Medley on such date. To the best of the
Sellers' knowledge, there are no matters pending which would have an adverse or
material affect on the financial statements of Medley.
8. CONDITIONS PRECEDENT TO CLOSING: The Buyer's obligation to close
the transaction contemplated by this Agreement is subject to the following
conditions:
a. Neither the Sellers or the Buyer have terminated this
Agreement during their Due Diligence Period.
b. The representations and warranties of the Parties contained
in this Agreement are true and correct in all material
respects on the closing date.
c. Any and all agreements to be performed by the Parties prior
to the closing date have been performed.
9. INDEMNIFICATION:
A. By The Seller: Subject to the items disclosed in this Agreement,
the Sellers shall defend, indemnify, and hold the Buyer or Medley and any of
the Buyer's or Medley's successors and assigns, harmless against all damages,
losses, costs, or expenses [including reasonable attorney's fees at all levels
of trial or appeal incurred in defending any claim for such damage, loss, cost,
or expense incurred by the Buyer or Medley resulting from or in respect to:
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(1) Any breach of the Sellers' representations, warranties, or
covenants in this Agreement or any untruth or inaccuracy
thereof.
(2) Any claim by a broker, agent, or finder alleged to be
employed by, representing, or otherwise involved with the
Corporation or the Sellers relating to this transaction.
(3) Any claim which accrued prior to closing attributable to the
Acts of the Corporation or Sellers not disclosed in this
agreement.
B. By Buyer and Medley: Subject to the items disclosed in this
Agreement, the Buyer and Medley shall defend, indemnify, and hold the Sellers
harmless against all damages, losses, costs, or expenses, including reasonable
attorneys' fees at all levels of trial or appeal incurred in defending any
claim for damage, loss, cost, or expense incurred by Sellers resulting from or
in respect to:
(1) Any breach of the Buyer or Medley's representations,
warranties or covenants in this Agreement or any untruth or
inaccuracy thereof.
(2) Any claim by a broker, agent, or finder alleged to be
employed by, representing, or otherwise involved with the
Corporation or the Buyer and Medley relating to this
transaction.
(3) The Buyer and/or its assigns agrees to indemnify and hold
harmless Xxxxx Xxxxxxx, his personal representatives, heirs
and successors harmless against all damage, loss, costs or
expenses, including reasonable attorney's fees at all levels
of trial or on appeal which may arise from his execution as
co-maker of that certain promissory note dated July 1, 1996
in favor of Xxxxxxx Xxxxxxx in the principal
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amount of $220,000.00, which note was assigned to Poser
Investments and has an outstanding principal balance as of
the date of this agreement of approximately $145,000.00 and
is payable in equal monthly installments of principal and
interest in the sum of $4,460.00 per month until July 31,
2001 when said note has been fully amortized. A copy of said
note is attached to this agreement as Exhibit "F". It is
agreed that the indemnification of Xxxxx Xxxxxxx set forth
herein shall be absolute on the part of the Buyer without
defense or set off of any nature against Xxxxx Xxxxxxx.
However, notwithstanding the agreement not to set off said
agreement shall not be construed as a waiver of the Buyer's
rights it may have in the future.
C. Notice of claims: In the event any party (Indemnified Party) shall
receive any written notice of any claim or proceeding against them (or in the
case of Buyer the Corporation shall receive notice of a claim or proceeding),
the Indemnified Party shall give the Indemnifying Party written notice of any
such claim or demand and the Indemnifying Party shall have the right to contest
or defend any action brought against the Indemnified Party at the Indemnifying
Party's own expense, provided, that should the Indemnifying Party fail to
notify the Indemnified Party of the assumption of the defense of any action
within 10 days of the Indemnified Party giving written notice to the
Indemnifying Party, then the Indemnified Party shall have the right to take any
such action it deems reasonable to defend, contest, settle or compromise any
action or claim made against the Indemnified Party. If the Indemnifying Party
defends any action for which indemnification is claimed, the
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Indemnified Party shall be entitled to participate at its own expense in the
defense of such action; provided, however, that the Indemnifying Party shall
bear the fees and expenses of the Indemnified Party's counsel should there
exist a conflict of interest between Indemnified Party and Indemnifying Party
which would render it inappropriate for counsel selected by the Indemnifying
Party to represent the Indemnified Party.
The indemnification set forth above shall survive the closing of this
transaction and shall enure to the benefit of the heirs, successors and assigns
of the parties to this agreement.
10. AGREEMENT NOT TO TRANSFER EXCHANGE SHARES: The Sellers agree that
they will not offer to sell, sell, transfer or otherwise dispose of their
Restricted Shares in Medley for a period of twelve months following the closing
date without the approval of Medley's Board of Directors. In addition should
the Company in the future elect to register any of its authorized but unissued
shares for sale under the Act, the Sellers agree to execute such restrictions
or lock up agreements on the sale of their Shares as the underwriters for
Medley may reasonably require of all insiders, officers, or Directors. The
obligation contained herein shall survive the closing and at Medley's option
may be restated in a separate instrument to be signed at closing.
11. COVENANTS:
A. Anti-Dilution Restrictions on Medley Stock: Medley agrees that if
at any time after effective date of this Agreement that it issues or sells any
shares of common stock, including shares held in its treasury, shares of common
stock issued upon the exercise of any options, rights or warrants to subscribe
for shares of common stock, shares of common stock issued upon the direct or
indirect conversion or exchange of securities for shares of common stock or
effect any transactions, including, but not limited to the write-off of assets
which results either, directly or
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indirectly, in the reduction of Sellers' equity per share for the shares of
Medley's common stock acquired pursuant to this Agreement below the sum of
$1.75 per share, then forthwith upon such issuance or sale or upon the
happening of said event which results in the reduction of a Sellers' equity per
share below the sum of $1.75 per share, Medley shall immediately issue to
Sellers an increased quantity of common stock having an aggregate equity
necessary to equal that which should have existed had Medley's stockholder's
equity per share remained at the sum of $1.75 per share. Notwithstanding the
foregoing, shares issued pursuant to Medley's employee stock option plan dated
December 1, 1996 and shares issued pursuant to existing employment or existing
consulting agreements, shall not be subject to this provision.
B . Restrictions on Depletion of Assets of the Corporation: Medley
agrees following the closing of this transaction that it will not take any
action which would have the effect of reducing the net worth of the Corporation
to an amount less than it is on the closing date. Medley further agrees that it
will not withdraw the capital from the Corporation so as to impair the
Corporation's ability to conduct its business. Income received by the
Corporation from operations shall be used for corporate purposes in the
ordinary course of business.
C. Piggy-Back Registration: If at any time following the Closing Date
the Company proposes to file a registration statement under the Securities Act
of 1933 with respect to an offering of common stock for the Company's own
account, then the Company shall give written notice of such proposed filing to
Sellers and any other holders of the Company's common stock that possess
Piggy-Back Registration Rights for shares of common stock held by them as soon
as practicable but in no event less than 30 days before the anticipated filing
date and such notice shall offer Sellers and other holders of registerable,
shares subject to the terms and conditions hereof, the
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opportunity to request that such registration statement include some or all of
their registerable shares for sale, pro rata with the registerable shares of any
other holders of registerable shares participating in such Piggy-Back
Registration statement on the same terms and conditions as the Company's common
stock.
D. Material Change: In the event that there is a material change in
the control of Medley, Medley agrees to immediately register with the
Securities and Exchange Commission all of Seller's unregistered shares acquired
pursuant to this Agreement at the Seller's expense and shall use its best
effort to cause the statement to become effective.
E. Indemnification of Sellers: Medley agrees that it shall indemnify
the Sellers for any liability or payment on obligations included on the
attached Exhibit "F".
F. Board of Directors: When the Medley Board of Directors is increased
to seven members within 45 days thereafter Medley agrees that a representative
of the Corporation shall be named to the Board of Directors of Medley and said
representative shall continue to be on the Board so long as Ameritrust achieves
its earnings hurdles as described herein.
G. Right of Rescission: For a period of twelve months from the date of
closing, any representations made by Buyer and/or Medley discovered to be
materially untrue or in the event that the value of Medley's stock falls below
the sum of $1.75 or Medley fails to issue additional shares as required
pursuant to this Agreement or should any regulatory body suspend the trading of
Medley's registered shares for a period of greater than 30 days as a result of
acts occurring prior to December 31, 1997, the parties to this transaction
shall have the right to rescind this transaction and return of all shares
transferred. In the event of recission, any outstanding loans owed by
Ameritrust to Medley or any of its subdivisions or any loans by Ameritrust
guaranteed by Medley or any of its
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subsidiaries will be immediately due and payable at closing of the recission.
12. INSTRUMENTS TO BE DELIVERED AT CLOSING: At the Closing, the
following instruments shall be executed and delivered, if required.
A. Certificates representing the Shares of the Corporation being
exchanged, duly endorsed by the Sellers in favor of the Buyer with all required
transfer tax stamps affixed.
B. A Resolution of the Board of Directors of the Corporation
authorizing the execution and delivery of this agreement and the consummation
of the transactions contemplated hereby certified as of the closing date by an
officer of the Corporation as having been adopted being in full force and
effect and unmodified on the closing date.
C. An affidavit by the Sellers affirming that the warranties and
representations of the Sellers are true and correct on the closing date.
D. A certificate by the Board of Directors of the Corporation to the
effect that the representations and warranties of the Corporation are true and
correct in all material respects as of the closing date.
E. Certificates representing the shares of Medley being duly endorsed,
being transferred to the Sellers in such pro rata amounts as the Sellers direct
in writing with all required transfer tax stamps affixed, if required.
F. A resolution of the Board of Directors of the Buyer authorizing the
transaction.
G. A resolution of the Board of Directors of Medley authorizing the
transaction.
H. A certificate by the Board of Directors of the Buyer to the effect
that the
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representations and warranties of the Corporation are true and correct in all
material respects as of the closing date.
I. A certificate by the Board of Directors of Medley to the effect
that the representations and warranties of the Corporation are true and correct
in all material respects as of the closing date.
J. Such other documents as may reasonably be requested by either party
or their counsel.
13. COVENANT OF FURTHER ASSURANCES: After the closing, each party to
this agreement shall, at the reasonable request of the other party and without
further consideration, furnish, executed and deliver such documents,
instruments, certificates, notices or other further assurances as the
requesting party shall reasonably request as necessary or desirable to effect
complete consummation of this agreement and the transaction contemplated
herein.
14. NOTICES: Except as otherwise provided for herein, all notices,
requests, demands and other communications hereunder shall be in writing and
will be deemed to have been duly given if personally delivered, or when
transmitted by facsimile with confirmation of receipt from one party to the
other or when received if mailed by the United States first class certified or
registered mail, postage prepaid, with return receipt requested and marked
delivered or refused, or via an overnight delivery service with proof of
delivery or refusal of delivery, to the other parties at the following
addresses:
To the Buyer: Medley Credit Acceptance Corporation
I 000 Xxxxx Xx Xxxx Xxxx.
Xxxxx Xxxxxx, Xxxxxxx 00000
with a copy to: Xxxxxxx X. Xxxxxxx, Esq.
21
0000 Xxxxx Xx Xxxx Xxxx.
Xxxxx Xxxxxx, Xxxxxxx 00000
To the Sellers: SEE EXHIBIT A
To the Corporation: Ameritrust Holdings, Inc.
0000 X. Xxxxx Xxxx 0
Xxxxx 000
Xxxxxxxxx, Xxxxxxx 00000
with a copy to: Xxxx X. Xxxxx
0000 Xxxx Xxxxxxx Xxxx.
Xxxxx 000
Xxxx Xxxxxxxxxx, XX 00000
15. MISCELLANEOUS PROVISIONS:
A. Assignment: No party may assign its obligations or rights under
this agreement without the written consent of the other parties.
B. Modification: There are no other agreements, promises or
undertakings between the parties except as specifically set forth herein. No
alteration, change, modification or amendment to this agreement shall be made
except in writing and signed by the parties hereto.
C. Severability: If any provision or paragraph of this agreement is
deemed to be unlawful or unenforceable by any court, administrative agency or
statute, law or ordinance, the said provision or paragraph shall be severed
from this agreement without affecting the enforceability of the remainder of
this agreement. The parties shall make a good faith effort to redraft the
severed provision or paragraph consistent with the party's original intention
but in such a way as to be lawful and enforceable.
D. Binding Effect: This agreement supersedes and cancels any and all
other agreements referring to the subject matter herein. This agreement shall
be binding upon and
22
inure to the benefit of the respective parties, their successors and assigns,
if applicable as well as to the heirs and legal representatives of the parties
hereto, if applicable.
E. Construction: This agreement shall be construed and enforced under
the laws of the state of Florida.
F. Counterparts: This agreement may be executed in several
counterparts, each of which shall be deemed an original but all of which
counterparts collectively shall constitute one instrument representing the
agreement between the parties.
G. Captions and Headings: The captions and headings of each section or
subsection in this agreement are for convenience of reference only and shall in
no manner or way whatsoever effect the interpretation or meaning of such
section or subsection.
H. Exhibits: The exhibits attached hereto together with all documents
incorporated by reference herein form an integral part of this agreement and
are hereby incorporated herein wherever reference is made to them to the same
extent as if they were set out in full at the point at which such reference is
made.
I. Attorney's Fees: The prevailing party in any litigation arising out
of the terms of this agreement shall be entitled to reimbursement of reasonable
attorney's fees and costs at the trial and appellate court level.
IN WITNESS WHEREOF, the parties have hereunto executed this agreement
the date above written.
AMERI-CAP FINANCE GROUP, INC.
a Florida corporation
By: /s/ Xxxxxx X. Press
--------------------------------
XXXXXX X. PRESS, President
23
MEDLEY CREDIT ACCEPTANCE CORP., a
Delaware corporation
By: /s/ Xxxxxx X. Press
------------------------------------
XXXXXX X. PRESS, President
SELLER:
/s/ Xxxxxx Xxxxxx
---------------------------------------
Xxxxxx Xxxxxx
/s/ Xxxxx Xxxxxxxx
---------------------------------------
Xxxxx Xxxxxxxx
Xxxxxxxxxx Capital Corp.
By:/s/
------------------------------------
Xxxxxxxx Family Limited Holdings
By:/s/
------------------------------------
Blue Lake Capital Corp.
By:/s/
------------------------------------
/s/ Xxxxxxxx Xxxxxx
---------------------------------------
Xxxxxxxx Xxxxxx cust. for Xxxxxxx Xxxxxx
/s/ Xxxxxxxx Xxxxxx
---------------------------------------
Xxxxxxxx Xxxxxx cust. for Xxxxxx Xxxxxx
/s/ Xxxxxxxx Xxxxxx
---------------------------------------
Xxxxxxxx Xxxxxx
/s/ Xxxxx Xxxxx
---------------------------------------
Xxxxx Xxxxx
/s/ Xxxxxxx Xxxxxxxx
---------------------------------------
Xxxxxxx Xxxxxxxx J/Ten
/s/ Xxxx Xxxxxx Barbakow
---------------------------------------
Xxxx Xxxxxx Xxxxxxxx J/Ten
24
/s/ Xxxxx Xxxxxxx
---------------------------------------
Xxxxx Xxxxxxx J/Ten
/s/ Xxxxx Xxxxxxx
---------------------------------------
Xxxxx Xxxxxxx J/Ten
/s/ Xxxxx Xxxxxx
---------------------------------------
Xxxxx Xxxxxx J/Ten
/s/ Xxxxxx Xxxxxx
---------------------------------------
Xxxxxx Xxxxxx J/Ten
AMERITRUST HOLDINGS, INC.
By /s/ Xxxxx Xxxxxx
---------------------------------------
XXXXX X. XXXXXX, President
25
EXHIBIT A
NAMES OF SELLERS
AND NUMBER OF SHARES
A. Xxxxxx Xxxxxx .................................................. 75,000
B. Xxxxx Xxxxxxxx ................................................. 20,000
X. Xxxxxxxxxx Capital Corp . ...................................... 360,000
X. Xxxxxxxx Family Limited Holdings ............................... 40,000
E. Blue Lake Capital Corp . ....................................... 100,000
F. Xxxxxxxx Xxxxxx cust. for Xxxxxxx Xxxxxx ....................... 25,000
G. Xxxxxxxx Xxxxxx cust. for Xxxxxx Xxxxxx ........................ 25,000
H. Xxxxxxxx Xxxxxx ................................................ 50,000
I. Xxxxx Xxxxx .................................................... 200,000
J. Xxxxxxx Xxxxxxxx and Xxxx Xxxxxx Xxxxxxxx J/Ten ................ 200,000
K. Xxxxx Xxxxxxx and Xxxxx Xxxxxxx J/Ten .......................... 200,000
L. Xxxxx Xxxxxx and Xxxxxx Xxxxxx J/Ten ........................... 200,000
