ESCROW AGREEMENT
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THIS ESCROW AGREEMENT is made and entered into this ___ day
of June, 1997, by and between MEDLEY CREDIT ACCEPTANCE CORP., a
Delaware corporation having its principal office at 00000 X.X.
Xxxxx Xxxxx Xxxxx, Xxxxx, Xxxxxxx 00000, (hereinafter referred to
as "Company"), MEDLEY GROUP, INC., a Delaware Corporation
(hereinafter referred to as "Group"), PCM SECURITIES LIMITED,
L.P., (hereinafter referred to as the "Underwriter"), and
SUNTRUST/SOUTH FLORIDA, NATIONAL ASSOCIATION, with its office
located at 000 Xxxx Xxx Xxxx Xxxxxxxxx, Xx. Xxxxxxxxxx, Xxxxxxx
00000 (hereinafter referred to as "Escrow Agent").
WITNESSETH
WHEREAS, the Company has filed a registration statement with
the Securities and Exchange Commission for a public offering (the
"Public Offering") of a minimum of One Million Two Hundred
Thousand (1,200,000) shares of common stock at $5.50 per share
and redeemable warrants to purchase a minimum of One Million Two
Hundred Thousand (1,200,000) shares of common stock at $.15 per
warrant on a best efforts,all or none basis (the "Minimum
Offering"), and a maximum of One Million Six Hundred Thousand
(1,600,000) shares of common stock and warrants to purchase One
Million Six Hundred Thousand (1,600,000) shares of common stock
on a best effort basis (the "Maximum Offering"), and
WHEREAS, to close on the Minimum Offering and disburse the
escrowed funds,the Escrow Agent must receive the sum of Six
Million Seven Hundred Eighty Thousand Dollars ($6,780,000.00)
from the sale of shares and warrants in the Minimum Offering for
deposit into Escrow, and
WHEREAS, the ownership of the shares of Common Stock (the
"Common Shares") to be sold in the Minimum Offering are owned as
follows:
(1) Company 1,000,000
(2) Group 200,000
, and
WHEREAS, as a condition to closing on the Minimum Offering,
Group has agreed on behalf of Medley Refrigeration, Inc., Group's
majority owned subsidiary, to remit directly to Company the
proceeds from the sale of Group's 200,000 shares of common stock
in the Minimum Offering ($990,000) for the express purpose of
satisfying in their entirety all receivables then outstanding
from Medley Refrigeration, Inc. to the Company, and
WHEREAS, pending the sale of the Minimum Offering, the
proceeds of the sale are required to be held in escrow so that in
the event within 30 days from the offering's effective date the
Minimum Offering is not sold, all monies received will be
refunded to the subscribers in full, and
WHEREAS, provided the funds from subscriptions for the
Minimum Offering in the sum of Six Million Seven Hundred Eighty
Thousand Dollars ($6,780,000.00) have been received by the Escrow
Agent, timely, the Escrow Agent will be responsible for paying
the proceeds of said subscriptions as required by this Agreement,
and
WHEREAS, the Company, Group, Underwriter and Escrow Agent
desire to memorialize their agreement concerning the escrow into
a written instrument.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein and for other good and valuable
consideration, the parties agree as follows:
1. RECITALS: The above and foregoing recitals are true
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and correct and are incorporated herein.
2. ESCROW: The Escrow Agent agrees to accept all funds
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delivered to it derived from the sale of common stock and
redeemable warrants arising from the Minimum Offering of the
Company and to hold and disburse said funds in furtherance of the
terms of this agreement. The Escrow Agent shall acknowledge to
the Company the receipt of all funds received by it for deposit
into escrow by 5:00 p.m. of each business day during the 30 day
sale period or until this escrow is terminated by the receipt of
the Minimum Offering funds, whichever date shall occur first.
The Escrow Agent shall furnish the Company with an escrow receipt
evidencing each deposit, which receipt shall contain the date of
receipt, the amount received, and the name of the subscriber from
whom the funds are received.
3. REQUIREMENTS FOR DISBURSEMENTS OF ESCROWED FUNDS: The
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Escrow Agent shall disburse and pay over all funds held in escrow
upon the satisfaction of the following conditions:
a. Escrow Agent shall have received Six Million Seven
Hundred Eighty Thousand Dollars ($6,780,000.00).
b. Escrow Agent shall have received written
confirmation from the Underwriter, that subscriptions and
subscription funds representing the Minimum Offering have been
sold and received.
In the event the foregoing requirements are not satisfied
prior to 30 days from the effective date of the offering, and
said date has not been extended by the written agreement of the
Company and Underwriter, delivered to the Escrow Agent on or
before the close of business on the 28th day following the
effective date, all monies received by Escrow Agent will be
refunded and returned to the subscribers in full.
4. INTEREST ON ESCROWED FUNDS: All interest accruing on
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the escrowed funds from the date of deposit to disbursement shall
belong to the Company.
5. DISBURSEMENT OF ESCROWED FUNDS: Provided the
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requirement for disbursement set forth in Section 3 above have
been satisfied, Escrow Agent shall disburse the escrowed funds as
follows:
a. The escrowed funds due Group in the sum of
$990,000.00 shall be paid directly to the Company by the Escrow
Agent pursuant to the terms of this Agreement.
b. The balance of the escrowed funds shall be
disbursed pursuant to a closing statement delivered to the Escrow
Agent on the day of closing executed by the Company and
Underwriter.
6. CLOSING DATE: The closing of this Escrow and the
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disbursement of the escrowed funds shall take place within 72
hours of the Escrow Agent's receipt of the requirements set forth
in Section 3 above.
7. INVESTMENTS: Funds held in escrow under this Escrow
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Agreement shall be invested in short term U.S. Government
Securities, money market funds or such other similar short term,
highly liquid investments as authorized by the Company.
Investment income derived on the funds held in escrow shall
accrue and be deposited into a separate escrow fund for
accounting purposes.
8. ESCROW AGENT'S RIGHT TO RELY; DUTIES: All funds
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deposited with the Escrow Agent shall be accepted, subject to
clearance. The Escrow Agent may act in reliance upon any writing
or instrument or signature which it, in its sole discretion,
believes to be genuine; may assume the validity and accuracy of
any statements or assertions contained in such writing or
instrument; and may assume that any person purporting to give any
writing, notice, advice,or instruction in connection with
provisions hereof, has been duly authorized to do so. The Escrow
Agent shall not be liable to any party to this Escrow Agreement,
or to any other individual or entity in any manner for the
sufficiency or correctness as to form, manner of execution, or
validity of any written instructions delivered to it, nor as to
the identity, authority, or rights of any person executing the
same. The Escrow Agent undertakes to perform only such duties as
are expressly set forth herein, and no implied duties or
obligations shall be read into this Escrow Agreement as against
the Escrow Agent.
9. INDEMNIFICATION: The Escrow Agent may consult with
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counsel of its own choice and shall have full and complete
authorization and protection for any action taken or suffered by
it hereunder in good faith and in accordance with the opinion of
such counsel. The Escrow Agent shall otherwise not be liable for
any mistakes of fact or error of judgment, or for any acts of
omissions of any kind unless caused by its willful misconduct or
gross negligence and the Company agrees to indemnify and hold
harmless the Escrow Agent from any claims, demands, causes of
action, liabilities, damages or judgments, including the cost of
defending any action against it, together with any reasonable
attorney's fees of any nature (including appeal) incurred
therewith in connection with Escrow Agent's undertakings pursuant
to the terms and conditions of the Escrow Agreement, unless such
act or omission is a result of the willful misconduct or gross
negligence of the Escrow Agent.
10. INTERPLEADER: If disagreement arises about the
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interpretation of this Escrow Agreement, or about the rights and
obligations or the propriety of any action contemplated by the
Escrow Agent hereunder,Escrow Agent may, at its sole discretion,
file an action in interpleader to resolve the said disagreement.
The Escrow shall be indemnified by the Company for all costs,
including reasonable attorneys' fees of any nature (including
appeal) in connection with any aforesaid interpleader action and
the Escrow Agent shall be fully protected in suspending all or a
part of its activities under this Escrow Agreement until a final
judgment in the interpleader action shall have been rendered by
the appropriate judicial body.
11. COMPENSATION: The Escrow Agent shall receive
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compensation in accordance with its schedule of fees attached
hereto as "Exhibit A" and incorporated herein as part of this
Escrow Agreement. The fee schedule may be modified from time to
time, provided however, that all parties hereto shall be given 30
days notice prior to the effective date of any fee increase.
12. RESIGNATION: The Escrow Agent may resign at any time
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for any reason upon the giving of 30 days' written notice to the
Company. If a notice of appointment of a successor Escrow Agent
is not delivered to the Escrow Agent within 30 days after notice
of resignation, the Escrow Agent may petition any court of
competent jurisdiction (the "Court") to name a successor escrow
agent, and the Escrow Agent herein shall be fully relieved of all
liability to any and all parties upon the transfer of all cash or
property in its possession under the Escrow Agreement to the
successor escrow agent either designated or appointed by the
Court.
13. GOVERNING LAW: This Escrow Agent shall be construed
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and enforced according to the laws of the State of Florida.
14. ENTIRE AGREEMENT: This Escrow Agreement represents the
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entire agreement between SunTrust/South Florida, N.A., as Escrow
Agent, and all other parties to this Escrow Agreement, with
respect to the subject matter of this Escrow Agreement, and shall
be binding upon the parties, their respective successions and
assigns.
15. COUNTERPARTS: This Agreement may be executed through
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the use of separate signature pages or in any number of
counterparts, and each of such counterparts shall, for all
purposes, constitute one agreement binding on all the parties,
notwithstanding that all parties are not signatories to the same
counterpart.
16. NOTICES: Any notices and communication required or
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permitted hereunder shall be sufficiently given if sent by first-
class mail, postage prepaid, addressed as follows:
(a) If to Company addressed to:
Medley Credit Acceptance Corp.
Attn: Xxxxxx X. Press, President
00000 X.X. Xxxxx Xxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
with a copy to: Xxxxxxx X. Xxxxxxx, Esq.
Xxxxxxx & Xxxx
0000 Xxxxx xx Xxxx Xxxx.
Xxxxx Xxxxxx, Xxxxxxx 00000
(b) If to the Escrow Agent, addressed to:
SunTrust/South Florida, N.A.
000 Xxxx Xxx Xxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: Corporate Asset Management
Division
Trust and Investment Management
Group
(c) If to GROUP addressed to:
Medley Group, Inc.
Attn: Xxxxxx X. Press, President
00000 X.X. Xxxxx Xxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
(d) If to Underwriter addressed to:
PCM Securities Limited, L.P.
00 Xxx Xxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 10005
IN WITNESS WHEREOF, the parties hereto have hereunder set
their hands and seals as of the day and year first above written.
COMPANY:
MEDLEY CREDIT ACCEPTANCE CORP.
BY:
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XXXXXX X. PRESS, PRESIDENT
GROUP:
MEDLEY GROUP, INC.
BY:
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XXXXXX X. PRESS, PRESIDENT
UNDERWRITER:
PCM SECURITIES LIMITED, L.P.
BY:
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ESCROW AGENT:
SUNTRUST/SOUTH FLORIDA, N.A.
BY:
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