Exhibit 99.2
PIONEER COMMERCIAL FUNDING CORP.
0000 Xxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxx 00000
As of January 29, 1997
To the Individuals and Entities
listed on the Signature Page hereto:
Re: Private Placement Share Subscription
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Gentlemen:
When countersigned by you, this letter will confirm our agreement for
the purchase by each of you or your affiliate(s) or approved designee(s)
(collectively, the "Investors") of certain unregistered securities to be issued
by Pioneer Commercial Funding Corp. (the "Company"), as follows:
1. Subscription. Each Investor will subscribe for the
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following newly-issued, unregistered securities (collectively, the "Securities")
of the Company:
(a) The number of shares (the "Shares") of common stock,
par value $.01 per share ("Common Stock"), set forth
opposite such Investor's name on Schedule 1 annexed
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hereto.
(b) The convertible promissory notes in the original
principal amounts set forth opposite such Investor's
name on Schedule 1 annexed hereto (the "Notes"),
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convertible into shares (the "Conversion Shares") of
Common Stock on the terms set forth in paragraph 3
below.
2. Consideration. At the closing of the transaction,
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the Investors will pay the following consideration to the Company, in cash, as
follows:
(a) Subscription Price per Share: $1.00 per Share.
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(b) Issue Price of the Note: Face value.
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3. Conversion of Notes. Each of the Notes shall be
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convertible, in whole and not in part, into one share of Common Stock for each
$1.00 principal amount of Notes, as follows:
As of January 29, 1997
Page 2
(a) Each Investor acknowledges that the Company does not
presently have sufficient authorized and unreserved
Common Stock to issue the Conversion Shares and that,
accordingly, the Company will undertake to amend its
certificate of incorporation, no later than a mutually
acceptable date (the "Conversion Date"), to increase
the number of authorized shares of Common Stock so as
to enable the Company to issue the Conversion Shares.
(b) On the Conversion Date, each Note shall automatically
be converted into the Conversion Shares, and the Note
payment obligations will terminate.
(c) The Note will not bear interest for the first three
(3) months after issuance, and will bear interest at
the annual rate of 8% thereafter.
4. Securities Unregistered. Each Investor acknowledges that
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the Securities will not have been registered under applicable state and federal
securities laws by reason of certain exemptions therefrom which will depend
upon, among other things, such Investor's status as an "Accredited Investor"
under U.S. securities laws. Accordingly, the Securities will be "restricted
securities" which will not be transferable in the absence of an effective
registration statement under the Securities Act of 1933, as amended, or an
exemption therefrom.
5. Definitive Agreements. Promptly following execution of this
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letter, the Company shall cause its counsel to prepare and submit to each
Investor and its counsel definitive Securities subscription documentation (the
"Definitive Documentation") containing provisions consistent with the contents
of this letter, together with such further terms and conditions as are customary
for a transaction of this nature. Among other things, the Definitive
Documentation shall provide for a closing date no later than February 28, 1997.
6. Conditions Precedent. The parties' obligation to consummate
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the transactions contemplated hereby shall be subject to the condition precedent
that all consents of third parties, including financial institutions and
governmental authorities (and including, but not limited to, NASDAQ and the Bank
of Israel) or filings required for consummation of the transaction contemplated
hereby shall have been obtained or filed.
7. Miscellaneous. The closing of these transactions shall be
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subject to the terms of the Definitive Documentation. Each of the parties shall
bear its own expenses incurred in connection with this letter and the
As of January 29, 1997
Page 3
transactions described herein including, without limitation, legal and
accounting fees. The parties represent and warrant to one another that, other
than with respect to finder's fees payable to Xxxx Enterprises, whose fees shall
be paid by the Company, no broker, finder, agent or intermediary brought about
the transactions contemplated by this letter and that no party is entitled to
any brokerage commission, finder's fee or other compensation in connection with
such transactions.
If the foregoing accurately sets forth our understanding, please so
signify by signing this letter in the space provided and return it to the
undersigned, whereupon this letter will constitute an agreement in principle
between the parties in accordance with the terms and provisions set forth above,
and will supersede all prior agreements between us with respect to the matters
set forth herein.
Very truly yours,
PIONEER COMMERCIAL FUNDING CORP.
By: /S/M. Xxxxxx Xxxxxx
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Name: M. Xxxxxx Xxxxxx
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Title: President
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ACCEPTED AND AGREED TO:
LEEDAN BUSINESS & MANAGEMENT, LTD.
By: /S/Xxxx Xxxxx
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Name: Xxxx Xxxxx
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Title: Director
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By: /S/Xxxx Xxxxx
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Name: Xxxx Xxxxx
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Title: Chief Executive Officer
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/S/Xxx Xxxxxxxx
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XXX XXXXXXXX
SCHEDULE 1
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NO. OF COMMON SHARES
TO BE PURCHASED CONVERTIBLE
INVESTOR AT $1.00/SHARE NOTE AMOUNT
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Leedan Business & Management, Ltd. 1,375,000 $1,125,000
Xxx Xxxxxxxx 825,000 675,000
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TOTAL
PRINCIPAL
TOTAL SHARES: 2,200,000 OF NOTES: $1,800,000
