EXHIBIT 99.2
LC ACQUISITION CORP.
SUBSCRIPTION AGREEMENT
LC Acquisition Corp.
c/o Union Square Partners, Ltd.
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The undersigned subscriber or subscribers (hereinafter the "Investor")
has received certain information including portions of a confidential Investment
Summary regarding the opportunity for investment in LC Acquisition Corp., a
California corporation (the "Corporation").
The Corporation is offering 91,250 shares of Series B
Preferred Stock (the "Shares") for a purchase price of $4.00
per share.
The undersigned hereby subscribes for the purchase of the number of Shares set
forth opposite the Investor's signature to this Subscription Agreement. The
undersigned understands that the Shares are being offered for sale without
registration under the Securities Act of 1933, as amended (the "Securities
Act"), or state securities laws in reliance upon exemptions contained therein
and rules and regulations promulgated thereunder, and that such reliance is
based in part upon the representations, warranties, and covenants set forth
herein.
1. Subscription. Subject to the terms and conditions of this subscription
agreement (the "Subscription Agreement"), the Investor hereby irrevocably
subscribes for and agrees to purchase the number of Shares indicated on the
signature page hereof and hereby tenders this Subscription Agreement, together
with a check in the amount of the purchase price, payable to the order of "LC
Acquisition Corp." The Investor agrees that this subscription shall be
irrevocable and shall survive the death or disability of the Investor. The
Investor understands that if this subscription is not accepted, in whole or in
part, funds received by the Corporation pursuant hereto will be returned to the
Investor without interest.
2. Acceptance of Subscription. The Investor acknowledges that the
Corporation has the right to accept or reject this subscription, in whole or in
part, for any reason, and that this subscription shall be deemed to be accepted
by the Corporation only when it is signed on its behalf. This Subscription
Agreement will either be accepted or rejected, in whole or in part, as promptly
as practicable. The Investor agrees that subscriptions need not be accepted in
the order in which they are received. Upon rejection of this Subscription
Agreement for any reason, all items and funds tendered with this Subscription
Agreement shall be returned to the Investor without deduction for any fee,
commission or expense, and this Subscription Agreement shall be deemed to be
null and void and of no further force or effect.
3. Representations, Warranties and Covenants of the Investor. The Investor
hereby represents and warrants to and covenants with the Corporation as follows:
(a) The Investor recognizes that an investment in the Corporation
involves a high degree of risk. The Investor further recognizes that the
Corporation has no financial and operating history.
(b) The Investor has been advised that (i) there will be no market for
the investment made in the Corporation and (ii) it may not be possible to
readily liquidate this investment.
(c) The Investor's overall commitment to investments which are not
readily marketable is not disproportionate to its net worth; its investment in
the Corporation will not cause such overall commitment to become excessive; and
it can afford to bear the loss of its entire investment.
(d) The Investor has adequate means of providing for its current needs
and personal contingencies and has no need for liquidity in its investment in
the Corporation.
(e) The Investor is familiar with the provisions of Regulation D under
the Securities Act. The Investor is an "accredited investor" as that term is
used in Regulation D in that: (Check one of the following)
(i) The Investor is a natural person whose individual net
--------- worth, or joint net worth with his or her spouse,
exceeds $1,000,000 and/or the Investor had an
individual income of $200,000 in each of the two most
recent years or joint income with his or her spouse in
excess of $300,000 and has a reasonable expectation of
reaching the same income level in the current year.
X (ii) The Investor is an entity all of whose equity
--------- owners are accredited investors.
(iii) Other. (Describe)
--------- --------------------------------------
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(f) The Investor has received and reviewed carefully the applicable
portions of the Investment Summary provided to the Investor and all attachments
thereto including the dilution table. Except as set forth in the Investment
Summary, no representations or warranties have been made to the Investor by the
Corporation or any agent, officer, employee or affiliate, and in entering into
this transaction the Investor is
not relying upon any information other than that contained in such documents and
the results of its own independent investigation.
(g) The Investor has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of an
investment in the Corporation.
(h) The Investor confirms that all documents, records, and books
pertaining to its proposed investment in the Corporation which it requested to
be made available to it have been made so available.
(i) The Investor has had an opportunity to ask questions of and
receive answers from officers or representatives of the Corporation concerning
the terms and conditions of this investment, and all such questions have been
answered to its full satisfaction.
(j) The Investment for which the Investor hereby subscribes will be
acquired for its account for investment and not with the view toward resale or
redistribution in a manner that would require registration under the Securities
Act and the Investor does not now have any reason to anticipate any change in
its circumstance.
(k) The Investor understands and acknowledges that the Company may pay
an advisory fee of approximately 10% of the gross proceeds from the sale of
these securities to its financial advisor.
(l) The Investor understands that no securities administrator of any
state or other jurisdiction has made any finding or determination relating to
the fairness of this investment and that no securities administrator of any
state or other jurisdiction has recommended or endorsed, or will recommend or
endorse, this Offering.
(m) The execution, delivery and performance by the Investor of the
Subscription Agreement are within the powers of the Investor, have been duly
authorized and will not constitute or result in a breach or default under, or
conflict with, any order, ruling or regulation of any court or other tribunal or
of any governmental commission or agency, or any agreement or other undertaking,
to which the Investor is a party or by which the Investor is bound; and, if the
Investor is not an individual, will not violate any provision of the
incorporation papers, bylaws, indenture of trust or partnership agreement, as
applicable, of the Investor. The signatures on the Subscription Agreement are
genuine; and the signatory, if the Investor is an individual, has legal
competence and capacity to execute the same, or, if the Investor is not an
individual, the signatory has been duly authorized to execute the same; and the
Subscription Agreement constitutes the legal, valid and binding obligation of
the Investor, enforceable in accordance with its terms.
4. Indemnification. The Investor acknowledges that it understands the
meaning and legal consequence of the representations, warranties and covenants
in Paragraph 3 hereof and that the Corporation has relied upon such
representations, warranties and covenants, and the Investor hereby agrees to
indemnify and hold harmless the
Corporation, its respective officers, directors, controlling persons, agents and
employees, from and against any and all loss, damage or liability due to or
arising out of a breach of any representation, warranty or covenant made by
Investor herein. Notwithstanding the foregoing, however, no representation,
warranty, acknowledgment or agreement made herein by the Investor shall in any
manner be deemed to constitute a waiver of any rights granted to the Investor
under Federal or state securities laws or the securities laws of any other
jurisdiction. All representations, warranties and covenants contained in this
Subscription Agreement and the indemnification contained in this Paragraph 4
shall survive the acceptance of this subscription.
5. Restrictions on Transfer. The Investor understands the provisions
regarding restrictions on withdrawal and transferability of its investment and
agrees that the following restrictive legend will be placed on all certificates
representing the Shares:
THE SHARES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES
LAW. SUCH SHARES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED UNTIL THE
SAME HAVE BEEN REGISTERED UNDER SAID ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR UNTIL THE CORPORATION HAS RECEIVED AN OPINION OF
LEGAL COUNSEL SATISFACTORY TO IT THAT SUCH SHARES MAY LEGALLY BE SOLD
OR OTHERWISE TRANSFERRED WITHOUT SUCH REGISTRATION.
6. Registration and Piggyback Rights. The Company agrees that if it merges
with or is acquired by a publicly traded company or files an initial or
subsequent registration statement with the Securities and Exchange Commission,
that the Investor will be permitted, subject only to underwriter approval, to
sell all or any portion of the acquired Shares in any public transaction. The
Company agrees to provide the Investor with such registration documents as may
be required at any time to effect the sale of said securities, provided the
Company is a publicly traded entity.
7. Modification. Neither this Subscription Agreement nor any provisions
hereof shall be modified, changed, discharged or terminated except by an
instrument in writing signed by the party against whom any modifications,
waiver, change, discharge or termination is sought.
8. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:
(a) If to the Investor, to the address set forth on the signature page
hereto;
or
(b) If to the Corporation, to the address set forth on the first page
of the Subscription Agreement; or such other address as the Investor or the
Corporation may hereafter have advised the other.
9. Binding Effect. Except as otherwise provided herein, this Subscription
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their heirs, executors, administrators, successors, legal representatives
and assigns. If the Investor is more than one person, the obligation of such
Investor shall be joint and several and the agreements, representations,
warranties and acknowledgments herein contained shall be deemed to be made by
and be binding upon each such person and his, her or its heirs, executors,
administrators, successors, legal representatives and assigns.
10. Entire Agreement. This Subscription Agreement contains the entire
agreement of the parties with respect to the matters set forth herein.
11. Assignability. This Subscription Agreement is not transferable or
assignable by the undersigned.
12. Applicable Law. This Subscription Agreement shall be governed by and
construed in accordance with the laws of the State of California, without
reference to the choice of law principles thereof.
IN WITNESS WHEREOF, this Subscription Agreement has been executed by
the undersigned on this 3rd day of December, 2001.
No. of Shares: 91,250 BANK ONE TRUST COMPANY, N.A., as trustee
of Oliver Illinois Trust No.
No. 000-00000-00
T.I.N. 00-0000000
BANK ONE TRUST COMPANY, N.A., as trustee
of Oliver Illinois Trust No.
No. 000-00000-00
T.I.N. 00-0000000
BANK ONE TRUST COMPANY, N.A., as trustee
of Oliver Illinois Trust No.
No. 000-00000-00
T.I.N. 00-0000000
BANK ONE TRUST COMPANY, N.A., as trustee
of Oliver Illinois Trust No.
No. 000-00000-00
T.I.N. 00-0000000
/s/ XXXXXX X. XXXXXXXX
-----------------------------------------
Signature of Investor
Subscription Amount: $365,000 Trustee
-----------------------------------------
Title, if any
Address: x/x Xxxxxx Xxxxxx
000 Xxxx Xxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxx Xxxx, Xxxxxxx 00000
ACCEPTANCE BY THE CORPORATION:
LC ACQUISITION CORP.
By: /s/ XXXXX XXXXXXX
--------------------------------------
Title: Chairman and CEO
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