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MEDLEY CREDIT ACCEPTANCE CORP.
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY
WARRANT AGENCY AGREEMENT
Dated as of June . , 1997
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WARRANT AGENCY AGREEMENT, dated this . day of June,
1997 by and between MEDLEY CREDIT ACCEPTANCE CORP., a Delaware
corporation (the "Company"), and AMERICAN STOCK TRANSFER & TRUST
COMPANY.
WITNESSETH:
WHEREAS, in connection with the offering (the
"Offering") to the public, pursuant to the terms of the
Underwriting Agreement (as defined in Section 1(r) below), of a
minimum of 1,200,000 shares of common stock, $.01 par value per
share (the "Common Stock"), and redeemable warrants to purchase a
minimum of 1,200,000 shares of Common Stock (the "Warrants"), and
a maximum of 1,600,000 shares of Common Stock and Warrants to
purchase 1,600,000 shares of Common Stock, the Company will issue
up to 1,600,000 Warrants (subject to increase as provided
herein);
WHEREAS, the Company desires to provide for the
issuance of certificates representing the Warrants; and
WHEREAS, the Company desires the Warrant Agent (as
defined in Section 1(t) hereof) to act on behalf of the Company,
and the Warrant Agent is willing to so act, in connection with
the issuance, registration, transfer and exchange of certificates
representing the Warrants and the exercise of the Warrants.
NOW, THEREFORE, in consideration of the premises and
the mutual agreements hereinafter set forth and for the purpose
of defining the terms and provisions of the Warrants and the
certificates representing the Warrants and the respective rights
and obligations thereunder of the Company, the holders of
certificates representing the Warrants and the Warrant Agent, the
parties hereto agree as follows:
SECTION 1. Definitions. As used herein, the following
terms shall have the following meanings, unless the context shall
otherwise require:
(a) "Act" shall mean the Securities Act of 1933, as
amended.
(b) "Commission" shall mean the Securities and
Exchange Commission.
(c) "Common Stock" shall have the meaning set forth in
Section 8(d) hereof.
(d) "Company" shall have the meaning assigned to such
term in the preamble to this Agreement.
(e) "Corporate Office" shall mean the office of the
Warrant Agent at which at any particular time its principal
business in New York, New York shall be administered, which
office is located on the date hereof at 00 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000.
(f) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
(g) "Exercise Date" shall mean, subject to the
provisions of Section 5(b) hereof, as to any Warrant, the date on
which the Warrant Agent shall have received both (i) the Warrant
Certificate representing such Warrant, with the exercise form
thereon duly executed by the Registered Holder (as defined in
Section l(m) hereof) thereof or his attorney duly authorized in
writing, and (ii) payment in cash or by check made payable to the
Warrant Agent for the account of the Company of an amount in
lawful money of the United States of America equal to the
applicable Purchase Price (as defined in Section l(k) hereof).
(h) "Group" shall mean Medley Group, Inc., a Delaware
corporation.
(i) "Initial Warrant Exercise Date" shall mean . ,
1998.
(j) "Initial Warrant Redemption Date" shall mean . ,
1998.
(k) "NASD" shall mean the National Association of
Securities Dealers, Inc.
(l) "Purchase Price" shall mean, subject to
modification and adjustment as provided in Section 8 hereof,
$5.75 per share of Common Stock.
(m) "Redemption Date" shall mean the date (which may
not occur before the Initial Warrant Redemption Date) fixed for
the redemption of the Warrants in accordance with the terms
hereof.
(n) "Registered Holder" shall mean the person in whose
name any certificate representing the Warrants shall be
registered on the books maintained by the Warrant Agent pursuant
to Section 6(b) hereof.
(o) "Subsidiary" or "Subsidiaries" shall mean any
corporation or corporations, as the case may be, of which stock
having ordinary power to elect a majority of the board of
directors of such corporation or corporations (regardless of
whether or not at the time the stock of any other class or
classes of such corporation shall have or may have voting power
by reason of the happening of any contingency) is at the time
directly or indirectly owned by the Company or by one or more
Subsidiaries, or by the Company and one or more Subsidiaries.
(p) "Transfer Agent" shall mean American Stock
Transfer & Trust Company of New York, New York or its authorized
successor.
(q) "Underwriter" shall mean PCM Securities Limited,
L.P.
(r) "Underwriting Agreement" shall mean the
underwriting agreement dated June . , 1997 between the Company
and the Underwriter relating to the purchase for resale to the
public of a minimum of 1,200,000 shares of Common Stock
(1,000,000 shares of which are being offered by the Company and
200,000 shares of which are being offered by Group) and 1,200,000
Warrants and a maximum of 1,600,000 shares of Common Stock
(1,400,000 shares of which are being offered by the Company and
200,000 shares of which are being offered by Group) and 1,600,000
Warrants.
(s) "Warrant" shall have the meaning set forth in the
recitals to this Agreement.
(t) "Warrant Agent" shall mean American Stock Transfer
& Trust Company of New York, New York or its authorized
successor.
(u) "Warrant Certificate" shall mean a certificate
representing each of the Warrants substantially in the form
annexed hereto as Exhibit A.
(v) "Warrant Expiration Date" shall mean, unless the
Warrants are redeemed as provided in Section 9 hereof prior to
such date, 5:00 p.m. (New York time) on . , 2002 or, if such date
shall in the State of New York be a holiday or a day on which
banks are authorized to close, then 5:00 p.m. (New York time) on
the next following day which in the State of New York is not a
holiday or a day on which banks are authorized to close, subject
to the Company's right, prior to the Warrant Expiration Date,
with the consent of the Underwriter, to extend such Warrant
Expiration Date on five (5) business days prior written notice to
the Registered Holders.
SECTION 2. Warrants and Issuance of Warrant
Certificates.
(a) One Warrant shall initially entitle the Registered
Holder of the Warrant Certificate representing such Warrant to
purchase at the Purchase Price therefor from the Initial Warrant
Exercise Date until the Warrant Expiration Date one (1) share of
Common Stock upon the exercise thereof, subject to modification
and adjustment as provided in Section 8 hereof.
(b) Upon execution of this Agreement, Warrant
Certificates representing a minimum of 1,200,000 Warrants to
purchase up to an aggregate of 1,200,000 shares of Common Stock
and a maximum of 1,600,000 Warrants to purchase up to an
aggregate of 1,600,000 shares of Common Stock (subject to
modification and adjustment as provided in Section 8 hereof),
shall be executed by the Company and delivered to the Warrant
Agent.
(c) From time to time, up to the Warrant Expiration
Date, the Warrant Agent shall countersign and deliver Warrant
Certificates in required denominations of one or whole number
multiples thereof to the person entitled thereto in connection
with any transfer or exchange permitted under this Agreement. No
Warrant Certificates shall be issued except (i) Warrant
Certificates initially issued hereunder, (ii) Warrant
Certificates issued upon any transfer or exchange of Warrants,
(iii) Warrant Certificates issued in replacement of lost, stolen,
destroyed or mutilated Warrant Certificates pursuant to Section 7
hereof, and (iv) at the option of the Company, Warrant
Certificates in such form as may be approved by its Board of
Directors, to reflect any adjustment or change in the Purchase
Price, the number of shares of Common Stock purchasable upon the
exercise of a Warrant or the redemption price therefor.
SECTION 3. Form and Execution of Warrant Certificates.
(a) The Warrant Certificates shall be substantially in
the form annexed hereto as Exhibit A (the provisions of which are
hereby incorporated herein) and may have such letters, numbers or
other marks of identification or designation and such legends,
summaries or endorsements printed, lithographed or engraved
thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be
required to comply with any law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock
exchange on which the Warrants may be listed, or to conform to
usage. The Warrant Certificates shall be dated the date of
issuance thereof (whether upon initial issuance, transfer,
exchange or in lieu of mutilated, lost, stolen or destroyed
Warrant Certificates).
(b) Warrant Certificates shall be executed on behalf
of the Company by its Chief Executive Officer, President or any
Vice President and by its Treasurer or an Assistant Treasurer or
its Secretary or an Assistant Secretary, by manual signatures or
by facsimile signatures printed thereon, and shall have imprinted
thereon a facsimile of the Company's seal. Warrant Certificates
shall be manually countersigned by the Warrant Agent and shall
not be valid for any purpose unless so countersigned. In case any
officer of the Company who shall have signed any of the Warrant
Certificates shall cease to be such officer of the Company before
the date of issuance of the Warrant Certificates or before
countersignature by the Warrant Agent and issue and delivery
thereof, such Warrant Certificates, nevertheless, may be
countersigned by the Warrant Agent and issued and delivered with
the same force and effect as though the officer of the Company
who signed such Warrant Certificates had not ceased to hold such
office.
SECTION 4. Exercise.
(a) Warrants in denominations of one or whole number
multiples thereof may be exercised commencing at any time on or
after the Initial Warrant Exercise Date, but not after the
Warrant Expiration Date, upon the terms and subject to the
conditions set forth herein (including the provisions set forth
in Sections 5 and 9 hereof) and in the applicable Warrant
Certificate. A Warrant shall be deemed to have been exercised
immediately prior to the close of business on the Exercise Date,
provided that the Warrant Certificate representing such Warrant,
with the exercise form thereon duly executed by the Registered
Holder thereof or his attorney duly authorized in writing,
together with payment in cash or by check made payable to the
Warrant Agent for the account of the Company of an amount in
lawful money of the United States of America equal to the
applicable Purchase Price, have been received by the Warrant
Agent. The person entitled to receive the securities deliverable
upon such exercise shall be treated for all purposes as the
holder of such securities as of the close of business on the
Exercise Date. As soon as practicable on or after the Exercise
Date and in any event within three (3) business days after such
date, the Warrant Agent, on behalf of the Company, shall cause to
be issued to the person or persons entitled to receive the same a
Common Stock certificate or certificates for the shares of Common
Stock deliverable upon such exercise, and the Warrant Agent shall
deliver the same to the person or persons entitled thereto. Upon
the exercise of any Warrants, the Warrant Agent shall promptly
notify the Company in writing of such fact and of the number of
securities delivered upon such exercise and, subject to Section
4(b) hereof, shall cause all payments in cash or by check made
payable to the order of the Company in respect of the Purchase
Price to be deposited promptly in the Company's bank account or
delivered to the Company.
(b) At any time upon the exercise of any Warrants
after the Initial Warrant Exercise Date, the Warrant Agent shall,
on a daily basis, within two business days after such exercise,
notify the Underwriter, its successors or assigns of the exercise
of any such Warrants and shall, on a weekly basis (subject to
collection of funds constituting the tendered Purchase Price, but
in no event later than five business days after the last day of
the calendar week in which such funds were tendered), for
services rendered by the Underwriter to the Registered Holders of
the Warrants then being exercised, remit to the Underwriter an
amount equal to five percent (5%) of the Purchase Price of such
Warrants then being exercised unless the Underwriter shall have
notified the Warrant Agent that the payment of such amount with
respect to such Warrant is violative of the General Rules and
Regulations promulgated under the Exchange Act, or the rules and
regulations of the NASD or applicable state securities or "blue
sky" laws; provided, that, the Warrant Agent shall not be
obligated to pay any amounts pursuant to this Section 4(b) during
any week that such amounts payable are less than $1,000 and the
Warrant Agent's obligation to make such payments shall be
suspended until the amount payable aggregates $1,000, and
provided further, that, in any event, any such payment
(regardless of amount) shall be made not less frequently than
monthly.
(c) The Company shall not be obligated to issue any
fractional share interests or fractional warrant interests upon
the exercise of any Warrant or Warrants, nor shall it be
obligated to issue scrip or pay cash in lieu of fractional
interests. Any fractional interest shall be eliminated by
rounding any fraction up to the next full share or Warrant, as
the case may be, or other securities, properties or rights.
SECTION 5. Reservation of Shares, Listing, Payment of
Taxes, etc.
(a) The Company covenants that it will at all times
reserve and keep available out of its authorized Common Stock,
solely for the purpose of issuance upon the exercise of Warrants,
such number of shares of Common Stock as shall then be issuable
upon the exercise of all outstanding Warrants. The Company
covenants that, upon exercise of the Warrants and payment of the
Purchase Price for the shares of Common Stock underlying the
Warrants, all shares of Common Stock which shall be issuable upon
such exercise shall be duly and validly issued, fully paid,
non-assessable, free from all preemptive or similar rights, and
free from all taxes, liens and charges with respect to the
issuance thereof, and that upon issuance such shares shall be
listed or quoted on each securities exchange, if any, on which
the other shares of outstanding Common Stock are then listed or
quoted, or if not then so listed or quoted on each place (whether
the Nasdaq Stock Market, Inc., the NASD OTC Electronic Bulletin
Board, the National Quotation Bureau "pink sheets" or otherwise)
on which the other shares of outstanding Common Stock are listed
or quoted.
(b) The Company covenants that if any securities
reserved for the purpose of exercise of Warrants hereunder
require registration with, or approval of, any governmental
authority under any federal securities law before such securities
may be validly issued or delivered upon such exercise, then the
Company will file a registration statement under the federal
securities laws or a post-effective amendment to a registration
statement, use its best efforts to cause the same to become
effective, keep such registration statement current while any of
the Warrants are outstanding and deliver a prospectus which
complies with Section 10(a)(3) of the Act, to the Registered
Holder exercising the Warrant (except, if in the opinion of
counsel to the Company, such registration is not required under
the federal securities law or if the Company receives a letter
from the staff of the Commission stating that it would not take
any enforcement action if such registration is not effected). The
Company will use its best efforts to obtain appropriate approvals
or registrations under the state "blue sky" securities laws of
all states in which Registered Holders reside. Warrants may not
be exercised by, nor may shares of Common Stock be issued to, any
Registered Holder in any state in which such exercise would be
unlawful.
(c) The Company shall pay all documentary, stamp or
similar taxes and other governmental charges that may be imposed
with respect to the issuance of Warrants, or the issuance or
delivery of any shares of Common Stock upon exercise of the
Warrants; provided, however, that if shares of Common Stock are
to be delivered in a name other than the name of the Registered
Holder of the Warrant Certificate representing any Warrant being
exercised, then no such delivery shall be made unless the person
requesting the same has paid to the Warrant Agent the amount of
transfer taxes or charges incident thereto, if any.
(d) The Warrant Agent is hereby irrevocably authorized
as the Transfer Agent to requisition from time to time
certificates representing shares of Common Stock or other
securities required upon exercise of the Warrants, and the
Company will comply with all such requisitions.
SECTION 6. Exchange and Registration of Transfer.
(a) Warrant Certificates may be exchanged for other
Warrant Certificates representing an equal aggregate number of
Warrants or may be transferred in whole or in part. Warrant
Certificates to be so exchanged shall be surrendered to the
Warrant Agent at its Corporate Office, and the Company shall
execute and the Warrant Agent shall countersign, issue and
deliver in exchange therefor the Warrant Certificate or
Certificates which the Registered Holder making the exchange
shall be entitled to receive.
(b) The Warrant Agent shall keep, at such office,
books in which, subject to such reasonable regulations as it may
prescribe, it shall register Warrant Certificates and the
transfer thereof. Upon due presentment for registration of
transfer of any Warrant Certificate at such office, the Company
shall execute and the Warrant Agent shall issue and deliver to
the transferee or transferees a new Warrant Certificate or
Certificates representing an equal aggregate number of Warrants.
(c) With respect to any Warrant Certificates presented
for registration of transfer, or for exchange or exercise, the
subscription or assignment form, as the case may be, on the
reverse thereof shall be duly endorsed or be accompanied by a
written instrument or instruments of subscription or assignment,
in form satisfactory to the Company and the Warrant Agent, duly
executed by the Registered Holder thereof or his attorney duly
authorized in writing.
(d) No service charge shall be made for any exchange
or registration of transfer of Warrant Certificates. However, the
Company may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection
therewith.
(e) All Warrant Certificates surrendered for exercise
or for exchange shall be promptly cancelled by the Warrant Agent.
(f) Prior to due presentment for registration or
transfer thereof, the Company and the Warrant Agent may deem and
treat the Registered Holder of any Warrant Certificate as the
absolute owner thereof of each Warrant represented thereby
(notwithstanding any notations of ownership or writing thereon
made by anyone other than the Company or the Warrant Agent) for
all purposes and shall not be affected by any notice to the
contrary.
SECTION 7. Loss or Mutilation. Upon receipt by the
Company and the Warrant Agent of evidence satisfactory to them of
the ownership of and the loss, theft, destruction or mutilation
of any Warrant Certificate and (in the case of loss, theft or
destruction) of indemnity satisfactory to them, and (in case of
mutilation) upon surrender and cancellation thereof, the Company
shall execute and the Warrant Agent shall countersign and deliver
in lieu thereof a new Warrant Certificate representing an equal
number of Warrants. Applicants for a substitute Warrant
Certificate shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Warrant
Agent may prescribe.
SECTION 8. Adjustments to Purchase Price and Number of
Securities.
(a) Subdivision and Combination. In case the Company
shall at any time subdivide or combine the outstanding shares of
Common Stock, the Purchase Price shall forthwith be
proportionately decreased in the case of subdivision or increased
in the case of combination.
(b) Stock Dividends and Distributions. In case the
Company shall pay dividend in, or make a distribution of, shares
of Common Stock or of the Company's capital stock convertible
into Common Stock, the Purchase Price shall forthwith be
proportionately decreased. An adjustment made pursuant to this
Section 8(b) shall be made as of the record date for the subject
stock dividend or distribution.
(c) Adjustment in Number of Securities. Upon each
adjustment of the Purchase Price pursuant to the provisions of
this Section 8, the number of Warrant Securities issuable upon
the exercise at the adjusted Purchase Price of each Warrant shall
be adjusted to the nearest whole number by multiplying a number
equal to the Purchase Price in effect immediately prior to such
adjustment by the number of Warrant Securities issuable upon
exercise of the Warrants immediately prior to such adjustment and
dividing the product so obtained by the adjusted Purchase Price.
(d) Definition of Common Stock. For the purpose of
this Agreement, the term "Common Stock" shall mean (i) the class
of stock designated as Common Stock in the Amended and Restated
Certificate of Incorporation of the Company as may be amended or
restated as of the date hereof, or (ii) any other class of stock
resulting from successive changes or reclassifications of such
Common Stock consisting solely of changes in par value, or from
par value to no par value, or from no par value to par value. In
the event the Company shall after the date hereof issue Common
Stock with greater or superior voting rights than the shares of
Common Stock outstanding as of the date hereof, each Holder, at
its option, may receive upon exercise of any Warrant either
shares of Common Stock or a like number of such securities with
greater or superior voting rights.
(e) Merger or Consolidation or Sale.
(i) In case of any consolidation of the Company
with, or merger of the Company with, or merger of the Company
into, another corporation (other than a consolidation or merger
which does not result in any reclassification or change of the
outstanding Common Stock), the corporation formed by such
consolidation or surviving such merger shall execute and deliver
to the Holder a supplemental warrant agreement providing that the
holder of each Warrant then outstanding or to be outstanding
shall have the right thereafter (until the expiration of such
Warrant) to receive, upon exercise of such Warrant, the kind and
amount of shares of stock and other securities and property
receivable upon such consolidation, merger, sale or transfer by a
Holder of the number of shares of Common Stock of the Company for
which such Warrant might have been exercised immediately prior to
such consolidation, merger, sale or transfer. Such supplemental
warrant agreement shall provide for adjustments which shall be
identical to the adjustments provided in this Section 8. The
above provision of this subsection shall similarly apply to
successive consolidations or mergers.
(ii) In the event of (A) the sale by the Company
of all or substantially all of its assets, or (B) the engagement
by the Company or any of its affiliates in a "Rule 13e-3
transaction" as defined in paragraph (a)(3) of Rule 13e-3 of the
General Rules and Regulations under the Exchange Act or (C) a
distribution to the Company's stockholders of any cash, assets,
property, rights, evidences of indebtedness, securities or any
other thing of value, or any combination thereof, the Holders of
the unexercised Warrants shall receive notice of such sale,
transaction or distribution twenty (20) days prior to the date of
such sale or the record date for such transaction or
distribution, as applicable, and, if they exercise such Warrants
prior to the date of such transaction or distribution, they shall
be treated as holders of Common Stock of the Company upon the
consummation of such transaction or distribution.
(f) No Adjustment of Exercise Price in Certain Cases.
No adjustment of the Exercise Price shall be made if the amount
of said adjustment shall be less than ten cents per share of
Common Stock, provided, however, that in such case any adjustment
that would otherwise be required then to be made shall be carried
forward and shall be made at the time of and together with the
next subsequent adjustment which, together with any adjustment so
carried forward, shall amount to at least ten cents per share of
Common Stock.
SECTION 9. Redemption.
(a) Commencing on the Initial Warrant Redemption Date,
the Company may (but only with the prior written consent of the
Underwriter), on thirty (30) days' prior written notice, redeem
all of the Warrants, in whole and not in part, at a redemption
price of fifteen cents ($.15) per Warrant; provided, however,
that before any such call for redemption of Warrants can take
place, the (i) average closing bid quotation for the Common
Stock, as reported by the National Association of Securities
Dealers Automated Quotation System, or (ii) if not so quoted, as
reported by any other recognized quotation system on which the
Common Stock is quoted, shall have for all twenty-five (25)
trading days ending on the third trading day prior to the date on
which the notice contemplated by Sections 9(b) and 9(c) hereof is
given, equalled or exceeded 150% of the $5.50 per share initial
public offering price for shares of Common Stock in the Offering
(subject to adjustment in the event of any stock splits or other
similar events as provided in Section 8 hereof).
(b) In case the Company shall exercise its right to
redeem all of the Warrants, it shall give or cause to be given
notice to the Registered Holders of the Warrants, by mailing to
such Registered Holders a notice of redemption, first class,
postage prepaid, at their last address as shall appear on the
records of the Warrant Agent. Any notice mailed in the manner
provided herein shall be conclusively presumed to have been duly
given whether or not the Registered Holder receives such notice.
Not less than five (5) business days prior to the mailing to the
Registered Holders of the Warrants of the notice of redemption,
the Company shall deliver or cause to be delivered to the
Underwriter or its successors or assigns a similar notice
telephonically and confirmed in writing, together with a list of
the Registered Holders (including their respective addresses and
number of Warrants beneficially owned by them) to whom such
notice of redemption has been or will be given.
(c) The notice of redemption shall specify (i) the
redemption price, (ii) the date fixed for redemption, which shall
in no event be less than thirty (30) days after the date of
mailing of such notice, (iii) the place where the Warrant
Certificates shall be delivered and the redemption price shall be
paid, and (iv) that the Underwriter is the Company's exclusive
warrant solicitation agent and shall receive the commission
contemplated by Section 4(b) hereof and (v) that the right to
exercise the Warrant shall terminate at 5:00 p.m. (New York time)
on the business day fixed for redemption. The date fixed for the
redemption of the Warrants shall be the "Redemption Date" for
purposes of this Agreement. No failure to mail such notice nor
any defect therein or in the mailing thereof shall affect the
validity of the proceedings for such redemption except as to a
holder (A) to whom notice was not mailed or (B) whose notice was
defective. An affidavit of the Warrant Agent or the Secretary or
Assistant Secretary of the Company that notice of redemption has
been mailed shall, in the absence of fraud, be prima facie
evidence of the facts stated therein.
(d) Any right to exercise a Warrant shall terminate at
5:00 p.m. (New York time) on the Redemption Date. The redemption
price payable to the Registered Holders shall be mailed to such
persons at their addresses of record.
(e) The Company shall indemnify the Underwriter and
each person, if any, who controls the Underwriter within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act against all loss, claim, damage, expense or liability
(including all expenses reasonably incurred in investigating,
preparing or defending against any claim whatsoever) to which any
of them may become subject under the Act, the Exchange Act or
otherwise, arising from the registration statement or prospectus
referred to in Section 5(b) hereof to the same extent and with
the same effect (including the provisions regarding contribution)
as the provisions pursuant to which the company has agreed to
indemnify the Underwriter contained in Section 7 of the
Underwriting Agreement.
(f) The Company shall as soon as practicable after the
Redemption Date, and in any event within 15 months thereafter,
make "generally available to its security holders" (within the
meaning of Rule 158 under the Act) an earnings statement (which
need not be audited) complying with Section 11(a) of the Act and
covering a period of at least 12 consecutive months beginning
after the Redemption Date.
SECTION 10. Concerning the Warrant Agent.
(a) The Warrant Agent acts hereunder as agent and in a
ministerial capacity for the Company and the Underwriter, and its
duties shall be determined solely by the provisions hereof. The
Warrant Agent shall not, by issuing and delivering Warrant
Certificates or by any other act hereunder, be deemed to make any
representations as to the validity or value or authorization of
the Warrant Certificates or the Warrants represented thereby or
of any securities or other property delivered upon exercise of
any Warrant or whether any stock issued upon exercise of any
Warrant is fully paid and non-assessable.
(b) The Warrant Agent shall not at any time be under
any duty or responsibility to any holder of Warrant Certificates
to make or cause to be made any adjustment of the Purchase Price
provided in this Agreement, or to determine whether any fact
exists which may require any such adjustment, or with respect to
the nature or extent of any such adjustment, when made, or with
respect to the method employed in making the same. It shall not
(i) be liable for any recital or statement of fact contained
herein or for any action taken, suffered or omitted by it in
reliance on any Warrant Certificate or other document or
instrument believed by it in good faith to be genuine and to have
been signed or presented by the proper party or parties, (ii) be
responsible for any failure on the part of the Company to comply
with any of its covenants and obligations contained in this
Agreement or in any Warrant Certificate, or (iii) be liable for
any act or omission in connection with this Agreement except for
its own gross negligence or willful misconduct.
(c) The Warrant Agent may at any time consult with
counsel satisfactory to it (who may be counsel for the Company or
the Underwriter) and shall incur no liability or responsibility
for any action taken, suffered or omitted by it in good faith in
accordance with the opinion or advice of such counsel.
(d) Any notice, statement, instruction, request,
direction, order or demand of the Company shall be sufficiently
evidenced by an instrument signed by the Chairman of the Board of
Directors, President or any Vice President (unless other evidence
in respect thereof is herein specifically prescribed). The
Warrant Agent shall not be liable for any action taken, suffered
or omitted by it in accordance with such notice, statement,
instruction, request, direction, order or demand.
(e) The Company agrees to pay the Warrant Agent
reasonable compensation for its services hereunder and to
reimburse it for its reasonable expenses hereunder; the Company
further agrees to indemnify the Warrant Agent and hold it
harmless against any and all losses, expenses and liabilities,
including judgments, costs and counsel fees, for anything done or
omitted by the Warrant Agent in the execution of its duties and
powers hereunder except losses, expenses and liabilities arising
as a result of the Warrant Agent's gross negligence or willful
misconduct.
(f) The Warrant Agent may resign its duties and be
discharged from all further duties and liabilities hereunder
(except liabilities arising as a result of the Warrant Agent's
own gross negligence or willful misconduct), after giving thirty
(30) days' prior written notice to the Company. At least fifteen
(15) days prior to the date such resignation is to become
effective, the Warrant Agent shall cause a copy of such notice of
resignation to be mailed to the Registered Holder of each Warrant
Certificate at the Company's expense. Upon such resignation the
Company shall appoint in writing a new warrant agent. If the
Company shall fail to make such appointment within a period of
thirty (30) days after it has been notified in writing of such
resignation by the resigning Warrant Agent, then the Registered
Holder of any Warrant Certificate may apply to any court of
competent jurisdiction for the appointment of a new warrant
agent. Any new warrant agent, whether appointed by the Company or
by such a court, shall be a bank or trust company having a
capital and surplus, as shown by its last published report to its
stockholders, of not less than ten million dollars ($10,000,000)
or a stock transfer company doing business in New York, New York.
After acceptance in writing of such appointment by the new
warrant agent is received by the Company, such new warrant agent
shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named herein as the
warrant agent, without any further assurance, conveyance, act or
deed; but if for any reason it shall be necessary or expedient to
execute and deliver any further assurance, conveyance, act or
deed, the same shall be done at the expense of the Company and
shall be legally and validly executed and delivered by the
resigning Warrant Agent. Not later than the effective date of any
such appointment, the Company shall file notice thereof with the
resigning Warrant Agent and shall forthwith cause a copy of such
notice to be mailed to the Registered Holder of each Warrant
Certificate.
(g) Any corporation into which the Warrant Agent or
any new warrant agent may be converted or merged, any corporation
resulting from any consolidation to which the Warrant Agent or
any new warrant agent shall be a party, or any corporation
succeeding to the corporate trust business of the Warrant Agent
or any new warrant agent shall be a successor warrant agent under
this Agreement without any further act, provided that such
corporation is eligible for appointment as successor to the
Warrant Agent under the provisions of the preceding paragraph.
Any such successor warrant agent shall promptly cause notice of
its succession as warrant agent to be mailed to the Company and
to the Registered Holders of each Warrant Certificate.
(h) The Warrant Agent, its subsidiaries and
affiliates, and any of its or their officers or directors, may
buy and hold or sell Warrants or other securities of the Company
and otherwise deal with the Company in the same manner and to the
same extent and with like effect as though it were not Warrant
Agent. Nothing herein shall preclude the Warrant Agent from
acting in any other capacity for the Company or for any other
legal entity.
(i) The Warrant Agent shall retain for a period of two
(2) years from the date of exercise any Warrant Certificate
received by it upon such exercise.
SECTION 11. Modification of Agreement.
The Warrant Agent and the Company may by supplemental
agreement make any changes or corrections in this Agreement (a)
that they shall deem appropriate to cure any ambiguity or to
correct any defective or inconsistent provision or manifest
mistake or error herein contained, or (b) that they may deem
necessary or desirable and which shall not adversely affect the
interests of the holders of Warrant Certificates; provided,
however, that this Agreement shall not otherwise be modified,
supplemented or altered in any respect except with the consent in
writing of the Registered Holders holding not less than sixty-six
and two-thirds percent (66-2/3%) of the Warrants then
outstanding; provided, further, that no change in the number or
nature of the securities purchasable upon the exercise of any
Warrant, and no change that increases the Purchase Price of any
Warrant, other than such changes as are specifically set forth in
this Agreement as originally executed, shall be made without the
consent in writing of each Registered Holders affected by such
change. In addition, this Agreement may not be modified, amended
or supplemented without the prior written consent of the
Underwriter or its successors or assigns, other than to cure any
ambiguity or to correct any defective or inconsistent provision
or manifest mistake or error herein contained or to make any such
change that the Warrant Agent and the Company deem necessary or
desirable and which shall not adversely affect the interests of
the Underwriter or its successors or assigns.
SECTION 12. Notices.
All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed
to have been made when delivered or mailed first-class postage
prepaid or delivered to a telegraph office for transmission, if
to the Registered Holder of a Warrant Certificate, at the address
of such holder as shown on the registry books maintained by the
Warrant Agent; if to the Company at Medley Credit Acceptance
Corp., 00000 X.X. Xxxxx Xxxxx Xxxxx, Xxxxx, Xxxxxxx 00000,
Attention: President, or at such other address as may have been
furnished to the Warrant Agent in writing by the Company; and if
to the Warrant Agent, at its Corporate Office. Copies of any
notice delivered pursuant to this Agreement shall be delivered to
the Underwriter, PCM Securities Limited, L.P., 00 Xxx Xxxx, 0xx
Xxxxx, Xxx Xxxx, XX 00000, Attention: Chief Executive Officer or
at such other address as may have been furnished to the Company
and the Warrant Agent in writing.
SECTION 13. Governing Law.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without giving
effect to conflicts of laws rules or principals.
SECTION 14. Binding Effect.
This Agreement shall be binding upon and inure to the
benefit of the Company, the Warrant Agent and their respective
successors and assigns and the holders from time to time of
Warrant Certificates or any of them. Except as hereinafter
stated, nothing in this Agreement is intended or shall be
construed to confer upon any other person any right, remedy or
claim or to impose upon any other person any duty, liability or
obligation. The Underwriter is, and shall at all times
irrevocably be deemed to be, a third-party beneficiary of this
Agreement, with full power, authority and standing to enforce the
rights granted to it hereunder.
SECTION 15. Counterparts.
This Agreement may be executed in several counterparts,
which taken together shall constitute a single document.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
MEDLEY CREDIT ACCEPTANCE CORP. AMERICAN STOCK TRANSFER
& TRUST COMPANY
As Warrant Agent
By:___________________________ By:___________________________
Name: Xxxxxx X. Press Name:
Title: President Title:
EXHIBIT A
No. W- VOID AFTER JUNE . , 2002
--------------------------
_________________ WARRANTS
REDEEMABLE WARRANT CERTIFICATE TO PURCHASE SHARES OF COMMON STOCK
MEDLEY CREDIT ACCEPTANCE CORP.
CUSIP 58501J 11 8
THIS CERTIFIES THAT, FOR VALUE RECEIVED _________________________
or registered assigns (the "Registered Holder") is the owner of
the number of Redeemable Warrants (the "Warrants") specified
above. One Warrant initially entitles the Registered Holder to
purchase, subject to the terms and conditions set forth in this
Certificate and the Warrant Agency Agreement (as hereinafter defined),
one fully paid and non-assessable share of common stock, $.01 par
value per share (the "Common Stock"), of Medley Credit Acceptance
Corp., a Delaware corporation (the "Company"), at any time from
June . , 1998 and prior to 5:00 p.m. on the Expiration Date (as
hereinafter defined) upon the presentation and surrender of this
Warrant Certificate with the Subscription Form on the reverse
hereof duly executed, at the corporate office of American Stock
Transfer & Trust Company, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
as Warrant Agent, or its successor (the "Warrant Agent"),
accompanied by payment of $ 5.75 per share, subject to adjustment
(the "Purchase Price"), in lawful money of the United States of
America in cash or by check made payable to the Warrant Agent for
the account of the Company.
This Warrant Certificate, and each Warrant represented
hereby, is issued pursuant to and are subject in all respects to
the terms and conditions set forth in the Warrant Agency Agreement
(the "Warrant Agency Agreement") dated June . , 1997 by and between
the Company and the Warrant Agent.
In the event of certain contingencies provided for in
the Warrant Agency Agreement, the Purchase Price and the number of
shares of Common Stock subject to purchase upon the exercise of
each Warrant represented hereby are subject to modification or
adjustment.
Each Warrant represented hereby is exercisable at the
option of the Registered Holder, but no fractional interests will
be issued. In the case of the exercise of less than all of the
Warrants represented hereby, the Company shall cancel this
Warrant Certificate upon the surrender hereof and shall execute
and deliver a new Warrant Certificate or Warrant Certificates of
like tenor, which the Warrant Agent shall countersign, for the
balance of such Warrants.
The term "Expiration Date" shall mean 5:00 p.m. (New
York time) on June . , 2002. If such date shall in the State of
New York be a holiday or a day on which banks are authorized to
close, then the Expiration Date shall mean 5:00 p.m. (New York
time) on the next day which in the State of New York is not a
holiday or a day on which banks are authorized to close.
The Company shall not be obligated to deliver any
securities pursuant to the exercise of this Warrant unless a
registration statement under the Securities Act of 1933, as
amended (the "Act"), with respect to such securities is effective
or an exemption thereunder is available. The Company has
covenanted and agreed that it will file a registration statement
under the Federal securities laws, use its best efforts to cause
the same to become effective, to keep such registration statement
current, if required under the Act, while any of the Warrants are
outstanding, and deliver a prospectus which complies with Section
10(a)(3) of the Act to the Registered Holder exercising this
Warrant. This Warrant shall not be exercisable by a Registered
Holder in any state where such exercise would be unlawful.
This Warrant Certificate is exchangeable, upon the
surrender hereof by the Registered Holder at the corporate office
of the Warrant Agent, for a new Warrant Certificate or Warrant
Certificates of like tenor representing an equal aggregate number
of Warrants, each of such new Warrant Certificates to represent
such number of Warrants as shall be designated by such Registered
Holder at the time of such surrender. Upon due presentment and
payment of any tax or other charge imposed in connection
therewith or incident thereto, for registration of transfer of
this Warrant Certificate at such office, a new Warrant
Certificate or Warrant Certificates representing an equal
aggregate number of Warrants will be issued to the transferee in
exchange therefor, subject to the limitations provided in the
Warrant Agency Agreement.
Prior to the exercise of any Warrant represented
hereby, the Registered Holder shall not be entitled to any rights
of a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends or other distributions,
and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided in the Warrant
Agency Agreement.
Subject to the provisions of the Warrant Agency Agreement,
this Warrant may be redeemed at the option of the Company, in
whole and not in part, at a redemption price of $.15 per Warrant,
at any time commencing June . , 1998 provided that (i) the
average closing bid price for the Company's Common Stock, as
reported by the National Association of Securities Dealers
Automated Quotation System (or, if not so quoted, as reported by
any other recognized quotation system on which the price of the
Common Stock is quoted), shall have, for all twenty-five (25)
trading days ending on the third (3rd) trading day prior to the
date on which the Notice of Redemption (as defined below) is
given, equalled or exceeded 150% of the $5.50 per share initial
public offering price for shares of the Company's Common Stock
(subject to adjustment in the event of any stock splits or other
similar events) and (ii) the Company has obtained the prior
written consent of PCM Securities Limited, L.P. Notice of
redemption (the "Notice of Redemption") shall be given not later
than the thirtieth (30th) day before the date fixed for
redemption, all as provided in the Warrant Agency Agreement. On and
after the date fixed for redemption, the Registered Holder shall
have no rights with respect to this Warrant except to receive the
$.15 per Warrant upon surrender of this Certificate.
Prior to due presentment for registration of transfer
hereof, the Company and the Warrant Agent may deem and treat the
Registered Holder as the absolute owner hereof and of each
Warrant represented hereby (notwithstanding any notations of
ownership or writing hereon made by anyone other than a duly
authorized officer of the Company or the Warrant Agent) for all
purposes and shall not be affected by any notice to the contrary,
except as provided in the Warrant Agency Agreement.
This Warrant Certificate shall be governed by and
construed in accordance with the laws of the State of New York
without giving effect to conflicts of laws.
This Warrant Certificate is not valid unless
countersigned by the Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed, manually or in facsimile by two
of its officers thereunto duly authorized and a facsimile of its
corporate seal to be imprinted hereon.
Dated:_______________, 1997
MEDLEY CREDIT ACCEPTANCE CORP.
{SEAL}
By:_____________________________________
Name: Xxxxxx X. Press
Title: President
ATTEST:
By:_____________________________________
Name: Xxxxxx X. Xxxxxxx
Title: Secretary
COUNTERSIGNED:
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Warrant Agent
By:______________________________
Authorized Officer
SUBSCRIPTION FORM
To Be Executed by the Registered Holder
in Order to Exercise Warrant
The undersigned Registered Holder hereby irrevocably
elects to exercise Warrants represented by this Warrant
Certificate, and to purchase the securities issuable upon the
exercise of such Warrants, and requests that certificates for
such securities shall be issued in name of
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
_________________________
_________________________
_________________________
_________________________
(please print or type name and address)
and be delivered to
_________________________
_________________________
_________________________
_________________________
(please print or type name and address)
and if such number of Warrants shall not be all the Warrants
evidenced by this Warrant Certificate, that a new Warrant
Certificate for the balance of such Warrants be registered in the
name of, and delivered to, the Registered Holder at the address
stated below.
IMPORTANT: PLEASE COMPLETE THE FOLLOWING:
1. If the exercise of this Warrant was
solicited by PCM Securities Limited,
L.P., please check the following box { }
2. The exercise of this Warrant was
solicited by ____________________ { }
3. If the exercise of this Warrant was
not solicited, please check the following
box { }
Dated:___________________ X__________________________________
___________________________________
Address
___________________________________
Social Security or Taxpayer
Identification Number
___________________________________
Signature Guaranteed
___________________________________
ASSIGNMENT
To Be Executed by the Registered Holder
in Order to Assign Warrants
FOR VALUE RECEIVED, ______________________________,
hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER
___________________________________
___________________________________
___________________________________
(please print or type name and address)
_________________________ of the Warrants represented by this
Warrant Certificate, and hereby irrevocably constitutes and
appoints _______________________________ Attorney to transfer
this Warrant Certificate on the books of the Company, with full
power of substitution in the premises.
Dated: _______________________ X______________________________
_______________________________
Signature Guaranteed
THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST
CORRESPOND TO THE NAME(S) AS WRITTEN UPON THE FACE OF THIS
WARRANT CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATSOEVER AND MUST BE GUARANTEED BY A
COMMERCIAL BANK OR TRUST COMPANY OR A MEMBER FIRM OF THE AMERICAN
STOCK EXCHANGE, NEW YORK STOCK EXCHANGE, PACIFIC STOCK EXCHANGE,
MIDWEST STOCK EXCHANGE OR BOSTON STOCK EXCHANGE.
