SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (the "Agreement") is made and
entered into as of December 13, 2001 by and among ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
("Nederlander"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ FOUNDATION (the "Nederlander
Foundation"), RER CORP. ("RER"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇▇▇▇▇"), GROWTH REALTY,
INC. ("GRI"), GROWTH REALTY HOLDINGS L.L.C. ("GRLLC"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
("▇▇▇▇▇"), ▇▇▇▇ ▇▇▇▇▇, trustee under an indenture of trust dated October 25,
1991 ("▇▇▇▇▇ Trust"), ▇▇▇▇ AND ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ FOUNDATION, INC. (the "▇▇▇▇▇
Foundation"), ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇. ("▇▇▇▇▇▇▇▇▇▇▇") and ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
("▇▇▇▇▇▇▇▇"; collectively, Nederlander, the Nederlander Foundation, RER, ▇▇▇▇▇▇,
GRI, GRLLC, ▇▇▇▇▇, ▇▇▇▇▇ Trust, ▇▇▇▇▇ Foundation, ▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ are
referred to herein as the "Sellers") and LC ACQUISITION CORP., a California
corporation (the "Purchaser").
WHEREAS, Nederlander owns two hundred ninety-seven thousand eight
hundred and seven (297,807) shares of the common stock (the "Common Stock") of
Mego Financial Corp., a New York corporation (the "Company");
WHEREAS, Nederlander Foundation owns sixteen thousand six hundred and
sixty-six (16,666) shares of the Common Stock;
WHEREAS, RER owns forty-one thousand six hundred and sixty-six (41,666)
shares of the Common Stock;
WHEREAS, ▇▇▇▇▇▇ owns two hundred fifty thousand four hundred and ten
(250,410) shares of the Common Stock;
WHEREAS, GRI owns two hundred eleven thousand five hundred and six
(211,506) shares of the Common Stock;
WHEREAS, GRLLC owns thirty-nine thousand one hundred and sixty-six
(39,166) shares of the Common Stock;
WHEREAS, ▇▇▇▇▇ owns one hundred eighty-three thousand six hundred and
sixty (183,660) shares of the Common Stock;
WHEREAS, ▇▇▇▇▇ Trust owns eighty-three thousand three hundred and
thirty-three (83,333) shares of the Common Stock;
WHEREAS, ▇▇▇▇▇ Foundation owns four thousand (4,000) shares of the
Common Stock;
WHEREAS, ▇▇▇▇▇▇▇▇▇▇▇ owns twenty-two thousand three hundred
twenty-eight (22,328) shares of the Common Stock;
WHEREAS, ▇▇▇▇▇▇▇▇ owns one hundred nineteen thousand and ninety-two
(119,092) shares of the Common Stock; and
WHEREAS, each of the Sellers is desirous of selling their shares of
Common Stock to the Purchaser, and the Purchaser is desirous of acquiring all of
the shares of Common Stock from the Sellers, on the terms and subject to the
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the promises and of the mutual
obligations hereinafter set forth, and for such other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
ARTICLE I.
PURCHASE AND SALE OF THE SECURITIES;
CLOSING; SELLER REPRESENTATIVE
Section 1.01 Purchase and Sale of the Securities. Subject to the terms
and conditions set forth in this Agreement, the Sellers agree to sell to the
Purchaser, and the Purchaser agrees to purchase from the Sellers, the Sellers'
shares of Common Stock set forth on Schedule 1.01 (individually referred to
herein as a "Security" and collectively referred to herein as the "Securities")
for a purchase price of Four Dollars per Security, or an aggregate purchase
price of FIVE MILLION SEVENTY- EIGHT THOUSAND FIVE HUNDRED AND THIRTY-SIX
DOLLARS ($5,078,536) (collectively referred to herein as the "Purchase Price").
Section 1.02 Closing.
(a) Conditions Precedent. The sale of the Securities by the
Sellers to the Purchaser shall occur only after the approval of the Company's
shareholders to the transactions contemplated herein has been obtained (the
"Closing").
(b) Location. The Closing shall take place at the offices of
▇▇▇▇▇▇▇ Berlin Shereff ▇▇▇▇▇▇▇▇, LLP at The Chrysler Building, ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇., ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ or at such place and time as may be agreed upon
by the Sellers and the Purchaser after delivery by the Company to the Escrow
Agent (as defined below) of notice that shareholder approval to the transactions
contemplated herein has been obtained.
(c) Deliveries. At the Closing, pursuant to Escrow Agreement
#2 by and among the Purchaser, the Sellers, ▇▇▇▇▇▇▇ Berlin Shereff ▇▇▇▇▇▇▇▇,
LLP, as escrow agent (the "Escrow Agent") and other parties named therein (the
"Escrow Agreement"), the Escrow Agent shall (a) deliver to the Purchaser
certificates evidencing the Securities, endorsed in blank or accompanied by
executed assignment documents; (b) have the Purchase Price in cash in escrow,
request the draw down of, and draw down the full amount, equaling the Purchase
Price, of the letter of credit executed by Bank Leumi or backed by Bank of
American or ▇▇▇▇▇ Fargo for the benefit of the Sellers, in substantially the
form annexed hereto as Exhibit A (the "Letter of Credit") or receive from the
Purchaser the Purchase Price by wire transfer of immediately available funds in
accordance with
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written wire instructions to be provided by the Escrow Agent to the Purchaser
not later than one (1) Business Day prior to Closing; and (c) pay The Bank of
Bloomfield Hills ("BOBH"), Comerica Bank ("Comerica") and Community Bank of
Dearborn ("CBOD, collectively referred to herein with BOBH and Comerica as the
"Banks") the minimum payment amounts set forth on Schedule I of their respective
release letters. The Seller Representative shall instruct the Escrow Agent as to
the various entities owed fees and expenses by the Sellers and Banks and the
amount of such fees and expenses and the Escrow Agent shall pay such fees and
expenses from the Purchase Price. Within five business days of the Closing, the
Seller Representative shall instruct the Escrow Agent to pay to each Seller and
Bank, each Seller's or Bank's portion of the Purchase Price minus the same
portion of the fees and expenses incurred by the Sellers and the Banks in
connection with the Purchase Agreement minus, in the case of the Banks, the
amounts received at the Closing.
Section 1.03 Escrow Agent. ▇▇▇▇▇▇▇ Berlin Shereff ▇▇▇▇▇▇▇▇, LLP has and
shall act as escrow agent of all the Sellers and the Purchaser under the terms
of the Escrow Agreement. The Purchaser acknowledges and agrees that ▇▇▇▇▇▇▇
Berlin Shereff ▇▇▇▇▇▇▇▇, LLP is also acting as counsel to one or more of the
Sellers with respect to the transactions contemplated by this Agreement.
Section 1.04 Seller Representative. Nederlander shall act as the
representative of all the Sellers (the "Seller Representative"), at no cost to
any of the Sellers, under the terms of an Authorization Agreement by and among
the Sellers, the Escrow Agent and the Seller Representative (the "Authorization
Agreement").
Section 1.05 Termination. This Agreement shall be automatically
terminated if the Closing has not occurred on or prior to March 1, 2002.
Notwithstanding any provision in this Agreement to the contrary, the provisions
of Sections 4.01 and 4.02 shall survive the termination of this Agreement.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each Seller, severally but not jointly, hereby represents and warrants
to, and agrees with, the Purchaser, as of the date hereof and as of the Closing,
as follows:
Section 2.01 Authorization of Transaction. Such Seller has full power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Seller and, assuming due execution and delivery of the
Agreement by the other Sellers and the Purchaser, this Agreement constitutes a
legal, valid and binding obligation of such Seller enforceable against such
Seller in accordance with its terms and conditions. In the case of Sellers which
are not natural persons, the execution and delivery of this Agreement by such
Seller will not violate any of the provisions of its organizational documents.
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Section 2.02 Litigation. To the Sellers' knowledge there are: (a) no
claims, actions, suits, investigations, or proceedings pending or threatened
against any of the Sellers before any governmental entity or arbitrator, that
would be reasonably likely to prevent or enjoin, or delay in any material
respect, consummation of the transactions described herein; and (b) no orders of
any governmental entity or arbitrator outstanding against any of the Sellers
that would reasonably be likely to prevent or enjoin, or delay in any material
respect, consummation of the transactions described herein.
Section 2.03 Consents. Except as set forth on Schedule 2.03, no
consent, waiver, approval or authorization of any governmental or regulatory
authority or instrumentality or any third party is required to be obtained or
made by such Seller in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby.
Section 2.04 Capital Stock of the Company. Except as set forth on
Schedule 2.04, such Seller holds of record and beneficially the number of
Securities set forth in the Whereas clause next to such Seller's name, free and
clear of any liens, claims, encumbrances or restrictions on transfer (other than
restrictions under the Securities Act of 1933, as amended (the "Securities
Act"), and state securities laws). Other than this Agreement, there are no
options, warrants, rights, contracts, calls, puts or other agreements or
commitments to which such Seller is a party providing for the acquisition or
disposition of any of the Securities.
Section 2.05 No Other Representations or Warranties. Such Seller is not
making any other representations, express or implied, with respect to the
Company, the Securities or the transactions contemplated hereby, except as
otherwise set forth in this Article II. Such Seller agrees that its
representations or warranties contained in this Agreement shall survive the
Closing of the transactions contemplated by this Agreement.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to, and agrees with, the
Sellers, as of the date hereof and as of the Closing, as follows:
Section 3.01 Authority. The Purchaser has full power and authority to
execute and deliver this Agreement, to purchase the Securities from the Sellers
and to consummate the transactions contemplated hereby. This Agreement has been
duly executed and delivered by the Purchaser and, assuming due authorization,
execution and delivery of the Agreement by the Sellers, this Agreement
constitutes a legal, valid and binding obligation of the Purchaser enforceable
against the Purchaser in accordance with its terms and conditions. The execution
and delivery of this Agreement by the Purchaser does not, and the performance of
this Agreement by the Purchaser will not require any consent, approval,
authorization or other action by, or filing with or notification to, any
governmental or regulatory authority and the Purchaser will not violate any of
the provisions of its organizational documents.
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Section 3.02 Litigation. To the Purchaser's knowledge there are: (a) no
claims, actions, suits, investigations, or proceedings pending or threatened
against the Purchaser before any governmental entity or arbitrator, that would
be reasonably likely to prevent or enjoin, or delay in any material respect,
consummation of the transactions described herein; and (b) no orders of any
governmental entity or arbitrator outstanding against the Purchaser that would
reasonably be likely to prevent or enjoin, or delay in any material respect,
consummation of the transactions described herein.
Section 3.03 Consents. No consent, waiver, approval or authorization of
any governmental or regulatory authority or instrumentality or any third party
is required to be obtained or made by the Purchaser in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
Section 3.04 Informed Decision. In reaching an informed decision to buy
the Securities, the Purchaser has sufficient information to evaluate the merits
and risks of an investment in the Securities and representatives of the Company
have (a) fully and satisfactorily answered any questions which the Purchaser or
duly authorized representatives of the Purchaser desired to ask concerning the
Company, and (b) furnished the Purchaser with any additional information or
documents requested to verify the accuracy of or supplement any information
previously delivered to or discussed with the Purchaser or duly authorized
representatives of the Purchaser.
Section 3.05 Investment Experience. The Purchaser is an "accredited
investor" as defined in Rule 501 of Regulation D promulgated under the
Securities Act. The Purchaser acknowledges that it can bear the economic risk of
its investment, and has the knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment
in the Securities and has the capacity to protect its own interests. Moreover,
the Purchaser acknowledges that due to the inherent risk involved in the
investment, the Purchaser's investment may be substantially or totally lost. The
Purchaser also represents it has not been organized solely for the purpose of
acquiring the Securities.
Section 3.06 Investment Representation. The Purchaser understands, and
has been advised by counsel, that the Securities have not been registered under
the Securities Act or any applicable state securities laws and are being
transferred in reliance upon an exemption from registration. The Purchaser is,
therefore, acquiring the Securities solely for its own account, for investment
purposes, and not with a view to, or for sale or resale in connection with, any
distribution thereof in violation of applicable law. By way of disclosure, the
Purchaser notes that it may distribute all or a portion of the Securities to its
investors at or promptly after the Closing, all of whom shall also be
"accredited investors" as defined in Rule 501 of Regulation D promulgated under
the Securities Act. The Purchaser understands that the Securities must be held
by it and its distributes indefinitely unless they are subsequently registered
under the Securities Act or an exemption from such registration is available.
The Purchaser acknowledges that the Securities may not be freely transferable
and that the Purchaser and its distributees may have to bear the economic risk
of its and their investment in the Securities for an indefinite period of time.
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Section 3.07 Sufficient Funds. The Purchaser has the funds in cash or
via an irrevocable letter of credit sufficient for the payment of the Purchase
Price pursuant to Section 1.01. To that end, the Escrow Agent has possession of
the cash or the Letter of Credit.
Section 3.08 No Other Representations or Warranties. The Purchaser is
not making any other representations, express or implied, with respect to itself
or the transactions contemplated hereby, except as otherwise set forth in this
Article III. The Purchaser agrees that (a) its representations or warranties
contained in this Agreement shall survive the Closing of the transactions
contemplated by this Agreement and (b) subject to the representations and
warranties contained in Article II hereof, it is purchasing the Securities on an
"as is" basis.
ARTICLE IV.
MISCELLANEOUS
Section 4.01 Expenses. Other than as may be awarded pursuant to Section
4.10 of this Agreement, the Purchaser hereby agrees that all fees and expenses
incurred by the Purchaser in connection with this Agreement shall be borne by
the Purchaser, and the Sellers hereby agree that all fees and expenses incurred
by the Sellers, other than as may be awarded pursuant to Section 4.10 of this
Agreement, in connection with this Agreement shall be borne the Sellers, in each
case including without limitation all legal and accounting fees and expenses.
Section 4.02 Indemnification.
Each Seller, severally but not jointly, hereby agrees to indemnify,
defend, protect and hold harmless the Purchaser from, against and in all respect
of all liabilities, losses and damages, including reasonable attorneys' fees and
expenses, actually incurred by the Purchaser, and all claims and causes of
action made by the Purchaser, as a result of the inaccuracy of any
representation or the breach of any warranty of such Seller. Notwithstanding
anything to the contrary in this Agreement, (i) no Seller shall be required to
indemnify or pay any amount in excess of such Seller's portion of the Purchase
Price pursuant to this Section 4.02 and (ii) a Seller will only be responsible
for those attorneys' fees and expenses which are so ordered to be paid, pursuant
to an arbitration proceeding commenced in accordance with Section 4.10.
The Purchaser hereby agrees to indemnify, defend, protect and hold
harmless each Seller from, against and in all respect of: (i) all liabilities,
losses and damages, including reasonable attorneys' fees and expenses, actually
incurred by such Seller, and all claims and causes of action made by such
Seller, as a result of the inaccuracy of any representation or the breach of any
warranty of the Purchaser; and (ii) all liabilities, losses and damages,
including reasonable attorneys' fees and expenses, actually incurred by such
Seller, as a result of any claim that the consummation or enforcement of the
consummation of the transactions contemplated by this Agreement is a breach of
any of such Seller's duties as an officer, a director or a stockholder.
Notwithstanding anything to the contrary in this Agreement, the Purchaser will
only be responsible for those attorneys' fees and expenses which are so ordered
to be paid, pursuant to an arbitration proceeding commenced in accordance with
Section 4.10.
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Section 4.03 Entire Agreement. This Agreement and the exhibits to this
Agreement constitute the entire agreement among the parties hereto with respect
to the subject matter hereof and supersede any prior oral or written agreement
among the parties.
Section 4.04 No Third-Party Beneficiaries; Assignment. This Agreement
is for the sole benefit of and binding upon the parties hereto and their
permitted successors and assigns and nothing herein, express or implied, is
intended to or shall confer upon any other person or entity any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement. This Agreement shall be binding upon the parties hereto and
their respective successors and permitted assigns, and shall inure to the
benefit of and be enforceable by the parties hereof and their respective
successors and permitted assigns. No party may assign either this Agreement or
any of his or its rights, interests or obligations hereunder without the prior
written consent of the other parties hereto.
Section 4.05 Amendment. This Agreement may be amended or modified only
by an instrument in writing signed by all parties hereto; provided, that the
parties hereto acknowledge and agree that Section 1.02(a) shall not, under any
circumstances be amended or modified.
Section 4.06 Counterparts. This Agreement may be executed in one or
more counterparts, each of which when executed shall be deemed to be an original
but all of which taken together shall constitute one and the same agreement.
Section 4.07 Gender and Number; Headings. Whenever used in this
Agreement, the singular number shall include the plural, the plural the
singular, and the use of any gender shall be applicable to all genders. The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
Section 4.08 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions described herein is not affected in any manner
materially adverse to any of the parties. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that transactions described herein are fulfilled to the extent
possible.
Section 4.09 Notices. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been duly
given or made as of the date delivered, mailed or transmitted if delivered
personally, mailed by registered or certified mail (postage prepaid, return
receipt requested) or sent by overnight courier (providing proof of delivery) to
the parties at the following addresses or sent by electronic transmission to the
following facsimile numbers (or at such other address or facsimile number for a
party as shall be specified by like notice):
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(a) If to the Purchaser:
LC Acquisition Corp.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (509) 277- 1484
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
With a copy (which shall not constitute notice) to:
▇▇▇▇▇▇▇▇▇ Glusker Fields Claman Machtinger
& ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
(b) If to the Sellers:
To the address, facsimile number and name specified
on the signature pages.
With a copy (which shall not constitute notice) to:
▇▇▇▇▇▇▇ Berlin Shereff ▇▇▇▇▇▇▇▇, LLP
The Chrysler Building
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Section 4.10 Governing Law; Arbitration. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New York
without giving effect to the principles of conflicts of laws thereof. Any
dispute or controversy arising under or in connection with this Agreement shall
be resolved by arbitration (by three arbitrators) in the City of New York
conducted in accordance with the then prevailing rules of the American
Arbitration Association, except that in selection of the panel of three
arbitrators, the Sellers and the Purchaser shall each select one arbitrator and
such party-selected arbitrators shall select the third arbitrator. The parties
hereby agree that no party shall be entitled to punitive damages or injunctive
relief under this Section 4.10. The judgment of a majority of the arbitrators in
any such proceeding shall be final, binding and conclusive on the parties, and a
judgment may be entered by the prevailing party on account thereof. The
prevailing party in an arbitration conducted pursuant to this Section 4.10 shall
be entitled to recover its legal fees and expenses from the losing party
thereof.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first written above.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ FOUNDATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: President
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
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Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
RER CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: President
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GROWTH REALTY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
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Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
GROWTH REALTY HOLDINGS L.L.C.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
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▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ # ▇▇▇
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Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
10
/s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
▇▇▇▇ ▇▇▇▇▇, trustee under an indenture of
trust dated October 25, 1991
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ #▇▇▇
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Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ AND ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
FOUNDATION, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
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Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇.
-----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇.
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
11
LC ACQUISITION CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman & Chief Executive Officer
12
SCHEDULE 1.01
--------------------------------------------------------------------------------
SELLER NUMBER OF SHARES OF PERCENTAGE OF
------ ------------------- -------------
COMMON STOCK PURCHASE PRICE
------------ --------------
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ 297,807 23.46%
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ Foundation 16,666 1.31%
--------------------------------------------------------------------------------
RER Corp. 41,666 3.28%
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 250,410 19.72%
--------------------------------------------------------------------------------
Growth Realty, Inc. 211,506 16.66%*
--------------------------------------------------------------------------------
Growth Realty Holdings L.L.C. 39,166 3.08%*
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 183,660 14.47%
--------------------------------------------------------------------------------
▇▇▇▇▇ Trust 83,333 6.56%
--------------------------------------------------------------------------------
▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------------------------------------------
Foundation, Inc. 4,000 0.32%
--------------------------------------------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇. 22,328 1.76%
--------------------------------------------------------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 119,092 9.38%
--------------------------------------------------------------------------------
TOTAL 1,269,634 100.00%
--------------------------------------------------------------------------------
--------
* Such percentage of Purchase Price minus the same percentage of fees and
expenses, outlined in the Authorization Agreement, shall be paid directly
to certain banks in consideration of a release of all security interests
and liens such banks have on all shares of Common Stock owned by GRI and
GRLLC. See Schedule 2.04 for details
13
SCHEDULE 2.03
APPROVALS*
---------
1) Approval of a majority of Mego Financial Corp. Shareholders other then
the Sellers.
--------
* Approval to be obtained prior to or on the Closing.
14
SCHEDULE 2.04
LIENS*
-----
1) The Bank of Bloomfield Hills has a lien on 89,666 shares of the Common
Stock owned by GRI and GRLLC.
2) Comerica Bank has a lien on 152,673 shares of the Common Stock owned
by GRI.
3) Community Bank of Dearborn has a lien on 8,333 shares of the Common
Stock owned by GRI.
--------
* Liens to be released or extinguished on the Closing.
15
EXHIBIT A
16
APPLICANT: LC ACQUISITION CORP.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
BENEFICIARY: ▇▇▇▇▇▇▇ BERLIN SHEREFF ▇▇▇▇▇▇▇▇, LLP
THE CHRYSLER BUILDING
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
WE HEREBY ESTABLISH OUR IRREVOCABLE LETTER OF CREDIT NUMBER T-%%%%%% IN
YOUR FAVOR AT THE REQUEST AND FOR THE ACCOUNT OF LC ACQUISITION CORP FOR AN
AMOUNT OF USD $5,078,536 AVAILABLE BY YOUR DRAFT(S) AT SIGHT DRAWN ON THE ______
___________BANK, WHEN ACCOMPANIED BY THE DOCUMENTS INDICATED BELOW.
DOCUMENT REQUIRED:
BENEFICIARY'S WRITTEN CERTIFICATE IN THE FORM OF ANNEX A HERETO SIGNED BY ONE OF
ITS PARTNERS.
PARTIAL DRAWINGS ARE NOT PERMITTED HEREUNDER.
ARTICLE 41 OF THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (1993
REVISION) PUBLICATION NO. 500 SHALL NOT APPLY TO THIS LETTER OF CREDIT.
IT IS A CONDITION OF THIS IRREVOCABLE LETTER OF CREDIT THAT IT SHALL BE
AUTOMATICALLY EXTENDED FOR AN ADDITIONAL PERIOD OF ONE MONTH FROM THE PRESENT OR
EACH FUTURE EXPIRATION DATE, UNLESS AT LEAST 30 DAYS PRIOR TO SUCH DATE WE SEND
YOU NOTICE IN WRITING, BY REGISTERED MAIL, OR HAND DELIVERY AT THE ABOVE
ADDRESS, THAT WE ELECT NOT TO RENEW THIS LETTER OF CREDIT FOR SUCH ADDITIONAL
PERIOD, HOWEVER IN NO EVENT SHALL THIS LETTER OF CREDIT BE EXTENDED BEYOND THE
FINAL EXPIRY DATE OF APRIL 30, 2002.
THIS LETTER OF CREDIT IS TRANSFERABLE IN ITS ENTIRETY (BUT NOT IN PART). WE
SHALL NOT RECOGNIZE ANY TRANSFER OF THIS LETTER OF CREDIT UNTIL THIS ORIGINAL
LETTER OF CREDIT AND A SIGNED AND COMPLETED TRANSFER FORM SATISFACTORY TO US IS
RECEIVED BY US. TRANSFER CHARGES ARE FOR APPLICANT'S ACCOUNT. THE FORMS REQUIRED
ARE ATTACHED.
THE CORRECTNESS OF THE SIGNATURE AND TITLE OF THE PERSON SIGNING
THE TRANSFER FORMS MUST BE VERIFIED BY YOUR BANK.
IN CASE OF ANY TRANSFER UNDER THIS LETTER OF CREDIT, THE DRAFT AND REQUIRED
STATEMENT MUST BE EXECUTED BY THE TRANSFEREE.
THIS LETTER OF CREDIT MAY NOT BE TRANSFERRED TO ANY PERSON WITH WHICH U.S.
PERSONS ARE PROHIBITED FROM DOING BUSINESS UNDER U.S. FOREIGN ASSETS CONTROL
REGULATIONS OR OTHER APPLICABLE U.S. LAWS AND REGULATIONS.
THIS LETTER OF CREDIT SETS FORTH IN FULL THE TERMS OF OUR UNDERTAKING AND SUCH
UNDERTAKING SHALL NOT IN ANY WAY BE MODIFIED, AMENDED OR AMPLIFIED BY REFERENCE
TO ANY NOTE, DOCUMENT, INSTRUMENT OR AGREEMENT REFERRED
TO HEREIN OR IN WHICH THIS LETTER OF CREDIT IS REFERRED TO OR TO WHICH THIS
LETTER OF CREDIT RELATES, AND ANY SUCH REFERENCE SHALL NOT BE DEEMED TO
INCORPORATE HEREIN BY REFERENCE ANY SUCH NOTE, DOCUMENT, INSTRUMENT OR
AGREEMENT.
THIS LETTER OF CREDIT EXPIRES AT OUR COUNTERS LOCATED AT _______________________
_________ATTENTION: STANDBY LETTER OF CREDIT DEPARTMENT AT OUR CLOSE OF BUSINESS
ON APRIL 30, 2002. DRAFTS MUST BE DRAWN AND PRESENTED AT OUR COUNTERS NOT LATER
THEN THE EXPIRATION DATE INDICATED ABOVE. DRAFTS MUST BE MARKED "DRAWN UNDER ___
___________________THE BANK LETTER OF CREDIT NUMBER T-%%%%%%, DATED ######."
WE HEREBY AGREE THAT ANY DRAFT DRAWN UNDER AND IN COMPLIANCE WITH THE TERMS AND
CONDITIONS OF THIS LETTER OF CREDIT WILL BE DULY HONORED UPON PRESENTATION AND
DELIVERY OF DOCUMENTS AS INDICATED HEREIN.
EXCEPT AS OTHERWISE EXPRESSLY STATED HEREIN, THIS LETTER OF CREDIT IS SUBJECT TO
THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION)
INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NO. 500 AND ENGAGES US IN
ACCORDANCE WITH THE TERMS THEREOF.
2
Annex A
CERTIFICATE FOR "A" DRAWING
The undersigned, a duly authorized partner in the Beneficiary named
below (the "Beneficiary"), hereby certifies to Bank (the "Bank"), with reference
to Irrevocable Letter of Credit No. (the "Letter of Credit") any capitalized
term used herein and not defined shall have its respective meaning as set forth
in the Letter of Credit issued by the Bank in favor of the Beneficiary, that:
(1) The Beneficiary is the Beneficiary under the Letter of Credit.
(2) The Beneficiary hereby demands payment of $_________________ under
the Letter of Credit.
(3) The Beneficiary hereby represents that (a) it is the Escrow Agent
(as defined in the Securities Purchase Agreement dated November___, 2001 between
LC ACQUISITION CORP ["Buyer"], the Beneficiary and SELLING SHAREHOLDERS [the
"Purchase Agreement"]); and (b) all conditions precedent to the draw down of the
Letter of Credit have been satisfied.
(4) The amount of the demand for payment set forth in paragraph (2)
does not exceed the amount available on the date hereof to be drawn under the
Letter of Credit.
(5) Payment of the amount referred to in paragraph (2) shall be made to
the Beneficiary at ______________________, ABA # _______________, for credit to
_________________________________ Account # _______________.
(6) The Beneficiary has sent a copy of this certificate to Buyer to the
address to which it is required to send notices to Buyer under the Purchase
Agreement.
IN WITNESS WHEREOF, the Beneficiary has executed and delivered this
Certificate as of the __________ day of _____________________.
_____________________________, as
Beneficiary
By:
-----------------------------
Title:
-----------------------
A-2
