MEDLEY CREDIT ACCEPTANCE CORP.
0000 XXXXX XX XXXX XXXXXXXXX
XXXXX XXXXXX, XXXXXXX 00000
December 24, 1997
Medley Group, Inc.
0000 Xxxxx xx Xxxx Xxxxxxxxx
Xxxxx Xxxxxx, XX 00000
Gentlemen:
This letter is being written to memorialize our agreement whereby
Medley Credit Acceptance Corp., a Delaware corporation ("MCAC"), will post, for
the benefit of Medley Group, Inc., a Delaware corporation ("Group"), a $1.7
million standby letter of credit (the "Letter of Credit"). MCAC has been
advised by Group that the Letter of Credit is being posted for the express
purpose of securing the performance of certain equipment leases concurrently
being sold by Group to an unrelated third party.
In consideration for the financial accommodation hereby being provided
to Group by MCAC, Group hereby agrees to pay to MCAC, on December 24 of each
year during which MCAC has financial exposure under the Letter of Credit, a
cash fee equal to $150,000 per annum. In addition, Group hereby agrees to
reimburse MCAC promptly for all amounts drawn under the Letter of Credit, the
intent of Group and MCAC being that MCAC shall incur no financial or economic
loss as a consequence of its providing Group with the financial accommodation
represented by the Letter of Credit. For purposes of securing the
aforementioned reimbursement obligations of Group, concurrently herewith, Group
and MCAC are entering into a Stock Pledge Agreement pursuant to which, among
other things, Group is pledging to, and granting MCAC a security interest in,
750,000 shares of Common Stock, $.01 par value per share, of MCAC (the "Pledged
Shares") currently owned by Group. For purposes of the consummation of the
transactions contemplated by this Letter Agreement and the Stock Pledge
Agreement, MCAC and Group have agreed that each Pledged Share shall have a cash
value of $2.50.
Medley Group, Inc.
December 24, 1997
Page 2
Kindly confirm your acknowledgment and acceptance of the foregoing by
executing and returning the enclosed duplicate original of this Letter
Agreement.
Very truly yours,
MEDLEY CREDIT ACCEPTANCE CORP.
By:____________________________
ACKNOWLEDGED AND AGREED TO
THIS 24TH DAY OF DECEMBER, 1997:
MEDLEY GROUP, INC.
By:______________________________
