-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JXxHVBX0BqotIgMcMucnzbBFhOKkBK8xQAVQe2ShcHfazeSQWi/A9Pf8k8x0/zpx s8QMCoZTMIMYqSfbCwY5+g== 0000950137-01-505281.txt : 20020413 0000950137-01-505281.hdr.sgml : 20020413 ACCESSION NUMBER: 0000950137-01-505281 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20011221 GROUP MEMBERS: BANK ONE TRSUT COMPANY, N.A., AS TRUSTEE OF NO. 262-0051-01 GROUP MEMBERS: BANK ONE TRUST COMPANY, N.A., AS TRUSTEE OF NO. 262-00051-03 GROUP MEMBERS: BANK ONE TRUST COMPANY, N.A., AS TRUSTEE OF NO. 262-00051-05 GROUP MEMBERS: BANK ONE TRUST COMPANY, N.A., AS TRUSTEE OF NO. 262-00051-07 GROUP MEMBERS: ROSS J. MANGANO GROUP MEMBERS: TROON & CO. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MEGO FINANCIAL CORP CENTRAL INDEX KEY: 0000736035 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE DEALERS (FOR THEIR OWN ACCOUNT) [6532] IRS NUMBER: 135629885 STATE OF INCORPORATION: NY FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-34539 FILM NUMBER: 1821052 BUSINESS ADDRESS: STREET 1: 4310 PARADISE RD CITY: LAS VEGAS STATE: NV ZIP: 89109 BUSINESS PHONE: 7027373700 MAIL ADDRESS: STREET 1: 4310 PARADISE RD CITY: LAS VEGAS STATE: NV ZIP: 89109 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MANGANO ROSS J CENTRAL INDEX KEY: 0001013724 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: C/O OLIVER ESTATE INC STREET 2: 112 W JEFFERSON STREET SUITE 613 CITY: SOUTH BEND STATE: IN ZIP: 46601 BUSINESS PHONE: 2192328213 MAIL ADDRESS: STREET 1: 112 WEST FEFFERSON BOULEVARD STREET 2: SUITE 613 CITY: SOUTH BEND STATE: IN ZIP: 46634 SC 13D 1 c66656sc13d.txt SCHEDULE 13D SCHEDULE 13D (RULE 13d-101) Information to be Included in Statements Filed Pursuant to Rule 13d-1(a) and Amendments Thereto Filed Pursuant to Rule 13d-2(a) SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 MEGO FINANCIAL CORP. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock - -------------------------------------------------------------------------------- (Title of Class of Securities) 585162100 - -------------------------------------------------------------------------------- (CUSIP Number) Ross J. Mangano Oliver Estate, Inc. 112 West Jefferson Boulevard Suite 613 South Bend, Indiana 46601 Telephone no. 219-232-8213 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) DECEMBER 13, 2001 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box / /. Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP NO. 585162100 13D - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Troon & Co. FEIN: 35-6224732 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) WC - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Indiana - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF 325,000 SHARES ----------------------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY -0- OWNED BY EACH ----------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER REPORTING 325,000 PERSON ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER WITH -0- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 325,000 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.8%(1) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) PN - -------------------------------------------------------------------------------- - -------------------- (1) Based upon the Preliminary Proxy Statement filed by the issuer on December 14, 2001. 2 CUSIP NO. 585162100 13D - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Bank One Trust Company, N.A., as trustee of Oliver Trust No. 262-00051-03 FEIN: 36-6010984 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) WC - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Illinois - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF -0- SHARES ----------------------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY 91,250 OWNED BY EACH ----------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER WITH 91,250 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 91,250 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.9%(2) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) OO - -------------------------------------------------------------------------------- - --------------------- (2) Based upon the Preliminary Proxy Statement filed by the issuer on December 14, 2001. 3 CUSIP NO. 585162100 13D - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Bank One Trust Company, N.A., as trustee of Oliver Trust No. 262-0051-01 FEIN: 36-6010982 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) WC - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Illinois - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF -0- SHARES ----------------------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY 91,250 OWNED BY EACH ----------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER WITH 91,250 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 91,250 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.9%(3) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) OO - -------------------------------------------------------------------------------- - --------------------- (3) Based upon the Preliminary Proxy Statement filed by the issuer on December 14, 2001. 4 CUSIP NO. 585162100 13D - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Bank One Trust Company, N.A., as trustee of Oliver Illinois Trust No. 262-00051-07 FEIN: 36-6010988 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) WC - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Illinois - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF -0- SHARES ----------------------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY 91,250 OWNED BY EACH ----------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER WITH 91,250 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 91,250 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.9%(4) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) OO - -------------------------------------------------------------------------------- - -------------------- (4) Based upon the Preliminary Proxy Statement filed by the issuer on December 14, 2001. 5 CUSIP NO. 585162100 13D - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Bank One Trust Company, N.A., as trustee of Oliver Illinois Trust No. 262-00051-05 FEIN: 36-6010986 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) WC - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Illinois - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF -0- SHARES ----------------------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY 91,250 OWNED BY EACH ----------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER REPORTING -0- PERSON ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER WITH 91,250 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 91,250 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.9%(5) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) OO - -------------------------------------------------------------------------------- - -------------------- (5) Based upon the Preliminary Proxy Statement filed by the issuer on December 14, 2001. 6 CUSIP NO. 585162100 13D - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Ross J. Mangano - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) WC - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF 425,000(6) SHARES ----------------------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY -0- OWNED BY EACH ----------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER REPORTING 425,000(7) PERSON ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER WITH -0- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 425,000(8) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.0%(9) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) IN - -------------------------------------------------------------------------------- - ------------------ (6) Includes 8,750 shares owned by Mr. Mangano personally and all of the shares owned by Troon & Co., and Oliver Illinois Trusts. Mr. Mangano disclaims ownership of any shares owned by Troon and Oliver Illinois Trusts. (7) Includes 8,750 shares owned by Mr. Mangano personally and all of the shares owned by Troon & Co., and Oliver Illinois Trusts. Mr. Mangano disclaims ownership of any shares owned by Troon and Oliver Illinois Trusts. (8) Includes 8,750 shares owned by Mr. Mangano personally and all of the shares owned by Troon & Co., and Oliver (Illinois) Trust. Mr. Mangano disclaims ownership of any shares owned by Troon and Oliver Illinois Trusts. (9) Based upon the Preliminary Proxy Statement filed by the issuer on December 14, 2001. 7 ITEM 1. SECURITY AND ISSUER. This Schedule 13D relates to the common stock (the "Common Stock") of MEGO Financial Corp., a New York corporation ("MEGO"). The principal executive offices of MEGO are located at 4310 Paradise Road, Las Vegas, Nevada 89109. ITEM 2. IDENTITY AND BACKGROUND. (a) This Schedule 13D is filed by: (i) Troon & Co., an Indiana general partnership ("Troon"), with respect to shares beneficially owned by it, (ii) the following sub-trusts that make up the Oliver Illinois Trust: (A) Bank One Trust Company, N.A., as trustee of Oliver Illinois Trust No. 262-00051-03, (B) Bank One Trust Company, N.A., as trustee of Oliver Illinois Trust No. 262-00051-01, (C) Bank One Trust Company, N.A., as trustee of Oliver Illinois Trust No. 262-00051-07 and (D) Bank One Trust Company, N.A., as trustee of Oliver Illinois Trust No. 262-00051-05 (collectively "Oliver"), with respect to shares beneficially owned by it and (iii) Ross J. Mangano with respect to shares beneficially owned by him. Mr. Mangano disclaims ownership of any shares of Common Stock owned by Troon and Oliver. (b) The address of Troon, Oliver and Mr. Mangano is 112 West Jefferson Boulevard, Suite 613, South Bend, Indiana 46601. (c) Troon was formed for the purpose of investing funds in public and private companies. Oliver was formed for the purpose of investing funds in public and private companies. Mr. Mangano's primary business is acting as a manager to companies that specialize in making investments in public and private companies. (d) None of Troon, Oliver or Mr. Mangano have, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) None of Troon, Oliver or Mr. Mangano have, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, Federal or State securities laws or finding any violation with respect to such laws. (f) Troon is an Indiana general partnership. The Oliver Illinois Trusts are trusts organized in Illinois. Mr. Mangano is a United States citizen. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. Troon contributed $1,300,000 from its working capital to fund its portion of this transaction. Oliver contributed $365,000 from its working capital to fund its portion of this transaction. Mr. Mangano contributed $35,000 of his working capital to fund his portion of this transaction. 8 ITEM 4. PURPOSE OF TRANSACTION. On December 3, 2001, Troon subscribed for 325,000 shares of Series B Exchangeable Preferred Stock (the "Series B Stock") of LC Acquisition Corp., a California corporation ("LC Acquisition") pursuant to a Subscription Agreement attached hereto as Exhibit 99.1, Oliver subscribed for 91,250 shares of Series B Stock pursuant to a Subscription Agreement attached hereto as Exhibit 99.2 and Mr. Mangano subscribed for 8,750 shares of Series B Stock pursuant to a Subscription Agreement attached hereto as Exhibit 99.3. On December 13, 2001, LC Acquisition entered into a Subscription Agreement with MEGO (the "MEGO Subscription Agreement") pursuant to which LC Acquisition subscribed for 750,000 shares of MEGO with a purchase price per share of $4.00 and agreed to purchase 1,269,634 shares of Common Stock of MEGO from certain officers, directors and shareholders of MEGO at $4.00 per share (the "MEGO Stock Purchase Agreement"). Immediately following closing of the transactions contemplated by the MEGO Subscription Agreement and the MEGO Stock Purchase Agreement, LC Acquisition will distribute the shares to the holders of the Series B Stock in redemption of the Series B Stock. This redemption is mandated by LC Acquisition's Articles of Incorporation and will be effected on a one-for-one basis. Thus, immediately following the closing of the transactions contemplated by the MEGO Subscription Agreement and the MEGO Stock Purchase Agreement, Troon will receive 325,000 shares of Common Stock in MEGO, Oliver will receive 91,250 shares of Common Stock in MEGO and Mr. Mangano will receive 8,750 shares of Common Stock in MEGO. In addition on December 10, 2001, Oliver purchased a Convertible Promissory Note attached hereto as Exhibit 99.4 from LC Acquisition which may, in the event of the merger of LC Acquisition with MEGO and subject to a number of conditions, convert into 253,000 shares of MEGO. Also on December 10, 2001, Mr. Mangano purchased a Convertible Promissory Note attached hereto as Exhibit 99.5 from LC Acquisition, which may, in the event of the merger of LC Acquisition with MEGO and subject to a number of conditions, covert into 22,000 shares of MEGO. Except as set forth above, none of Troon, Oliver or Mr. Mangano has any plans or proposals that relate to or would result in any of the following: (a) The acquisition of additional securities of MEGO, or the disposition of securities of MEGO; (b) An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving MEGO or any of its subsidiaries; (c) A sale or transfer of a material amount of assets of MEGO; (d) Any material change in the present capitalization or dividend policy of MEGO; (e) Any other material change in MEGO's business or corporate structure; 9 (f) Changes in MEGO's charter, by-laws or instruments corresponding thereto or other actions which may impede the acquisition of control of MEGO by any person; (g) Causing a class of securities of MEGO to be delisted from a national securities exchange or ceasing to be authorized to be quoted on an inter-dealer quotation system of a registered national securities association; (h) A class of equity securities of MEGO becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934 (the "Exchange Act"); or (i) Any action similar to those enumerated above. Any decision by Troon, Oliver or Mr. Mangano in the future to take any such actions with respect to MEGO or its securities will depend upon several factors, including the prospects of MEGO, general market and economic conditions and other factors deemed relevant. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. (a) As of the date hereof Troon beneficially owns 325,000 shares of Common Stock of MEGO, which constitutes approximately 6.8% of the 4,750,550 shares of Common Stock outstanding as of December 14, 2001 as reported in MEGO's preliminary proxy. As of the date hereof, Oliver beneficially owns 91,250 shares of Common Stock of MEGO, which constitutes approximately 1.9% of the 4,750,550 shares of Common Stock outstanding as of December 14, 2001. As of the date hereof, Mr. Mangano may be deemed to beneficially own 425,000 shares of Common Stock of MEGO, which constitutes approximately 9.0% of the 4,750,550 shares of Common Stock outstanding as of December 14, 2001. Mr. Mangano disclaims ownership of any shares owned by Troon and Oliver. (b) Troon has the sole power to vote and dispose of 325,000 shares of Common Stock. Oliver has the sole power to vote and dispose of 91,250 shares of Common Stock. Mr. Mangano has the sole power to vote and dispose of 425,000 shares of Common Stock. Mr. Mangano disclaims ownership of any shares owned by Troon and Oliver. (c) Other than as described in Items 3 and 4 above, none of Troon, Oliver or Mr. Mangano has engaged in any transactions in the Common Stock within the past 60 days. (d) Not applicable. (e) Not applicable. 10 ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Except as set forth in Item 4 of this Schedule 13D, none of Troon, Oliver or Mr. Mangano have any contracts, arrangements, understandings or relationships (legal or otherwise) with any person with respect to any securities of MEGO, including but not limited to transfer or voting of any of the securities of MEGO, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies, or a pledge or contingency the occurrence of which would give another person voting power over the securities of MEGO. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. 99.1 Subscription Agreement between LC Acquisition Corp. and Troon & Co. 99.2 Subscription Agreement between LC Acquisition Corp. and Bank One Trust Company, N.A., as trustee for Oliver Illinois Trust No. 262-00051-03, Bank One Trust Company, N.A., as trustee for Oliver Illinois Trust No. 262-00051-01, Bank One Trust Company, N.A., as trustee for Oliver Illinois Trust No. 262-00051-07, Bank One Trust Company, N.A., as trustee for Oliver Illinois Trust No. 262-00051-05 99.3 Subscription Agreement between LC Acquisition Corp. and Ross J. Mangano 99.4 Convertible Promissory Note issued by LC Acquisition Corp. to Bank One Trust Company, N.A., as trustee for Oliver Illinois Trust No. 262-00051-03, Bank One Trust Company, N.A., as trustee for Oliver Illinois Trust No. 262-00051-01, Bank One Trust Company, N.A., as trustee for Oliver Illinois Trust No. 262-00051-07, Bank One Trust Company, N.A., as trustee for Oliver Illinois Trust No. 262-00051-05 99.5 Convertible Promissory Note issued by LC Acquisition Corp. to Ross J. Mangano 99.6 Joint Filing Agreement among Troon & Co., Bank One Trust Company, N.A., as trustee for Oliver Illinois Trust No. 262-00051-03, Bank One Trust Company, N.A., as trustee for Oliver Illinois Trust No. 262-00051-01, Bank One Trust Company, N.A., as trustee for Oliver Illinois Trust No. 262-00051-07, Bank One Trust Company, N.A., as trustee for Oliver Illinois Trust No. 262-00051-05 and Ross J. Mangano. 11 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: December 21, 2001 TROON & CO., an Indiana general partnership By: /s/ Ross Mangano ---------------------------------------- Name: Ross Mangano Title: Trustee and Partner BANK ONE TRUST COMPANY, N.A., as trustee of Oliver Illinois Trust No. No. 262-00051-03 BANK ONE TRUST COMPANY, N.A., as trustee of Oliver Illinois Trust No. No. 262-00051-01 BANK ONE TRUST COMPANY, N.A., as trustee of Oliver Illinois Trust No. No. 262-00051-07 BANK ONE TRUST COMPANY, N.A., as trustee of Oliver Illinois Trust No. No. 262-00051-05 By: /s/ Thomas Anderson ---------------------------------------- Name: Thomas Anderson Title: Trustee ROSS MANGANO /s/ Ross Mangano ------------------------------------------- 12 EXHIBIT INDEX Exhibit No. Document 99.1 Subscription Agreement between LC Acquisition Corp. and Troon & Co. 99.2 Subscription Agreement between LC Acquisition Corp. and Subscription Agreement between LC Acquisition Corp. and Bank One Trust Company, N.A., as trustee for Oliver Illinois Trust No. 262-00051-03, Bank One Trust Company, N.A., as trustee for Oliver Illinois Trust No. 262-00051-01, Bank One Trust Company, N.A., as trustee for Oliver Illinois Trust No. 262-00051-07, Bank One Trust Company, N.A., as trustee for Oliver Illinois Trust No. 262-00051-05 99.3 Subscription Agreement between LC Acquisition Corp. and Ross J. Mangano 99.4 Convertible Promissory Note issued by LC Acquisition Corp. to Bank One Trust Company, N.A., as trustee for Oliver Illinois Trust No. 262-00051-03, Bank One Trust Company, N.A., as trustee for Oliver Illinois Trust No. 262-00051-01, Bank One Trust Company, N.A., as trustee for Oliver Illinois Trust No. 262-00051-07, Bank One Trust Company, N.A., as trustee for Oliver Illinois Trust No. 262-00051-05 99.5 Convertible Promissory Note issued by LC Acquisition Corp. to Ross J. Mangano 99.6 Joint Filing Agreement among Troon & Co., Bank One Trust Company, N.A., as trustee for Oliver Illinois Trust No. 262-00051-03, Bank One Trust Company, N.A., as trustee for Oliver Illinois Trust No. 262-00051-01, Bank One Trust Company, N.A., as trustee for Oliver Illinois Trust No. 262-00051-07, Bank One Trust Company, N.A., as trustee for Oliver Illinois Trust No. 262-00051-05 and Ross J. Mangano. 13 EX-99.1 3 c66656ex99-1.txt SUBSCRIPTION AGREEMENT EXHIBIT 99.1 LC ACQUISITION CORP. SUBSCRIPTION AGREEMENT LC Acquisition Corp. c/o Union Square Partners, Ltd. 200 Park Avenue South New York, New York 10003 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 325,000 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) ----- ------------------------------ ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- (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 28th day of November, 2001. No. of Shares: 325,000 TROON & CO., an Indiana general partnership /s/ ROSS MANGANO ------------------------------------------- Signature of Investor Subscription Amount: $1,300,000 Trustee and Partner ------------------------------------------- Title, if any Address: c/o Oliver Estate 112 West Jefferson Boulevard Suite 613 South Bend, Indiana 46601 Tax Identification or Social Security #: 35-6224723 --------------------- ACCEPTANCE BY THE CORPORATION: LC ACQUISITION CORP. By: /s/ FLOYD KEPHART -------------------------------------- Title: Chairman and CEO ----------------------------------- EX-99.2 4 c66656ex99-2.txt SUBSCRIPTION AGREEMENT EXHIBIT 99.2 LC ACQUISITION CORP. SUBSCRIPTION AGREEMENT LC Acquisition Corp. c/o Union Square Partners, Ltd. 200 Park Avenue South New York, New York 10003 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) --------- -------------------------------------- ------------------------------------------------------- ------------------------------------------------------- ------------------------------------------------------- (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. 262-00051-03 T.I.N. 36-6010984 BANK ONE TRUST COMPANY, N.A., as trustee of Oliver Illinois Trust No. No. 262-00051-01 T.I.N. 36-6010982 BANK ONE TRUST COMPANY, N.A., as trustee of Oliver Illinois Trust No. No. 262-00051-07 T.I.N. 36-6010988 BANK ONE TRUST COMPANY, N.A., as trustee of Oliver Illinois Trust No. No. 262-00051-05 T.I.N. 36-6010986 /s/ THOMAS M. ANDERSON ----------------------------------------- Signature of Investor Subscription Amount: $365,000 Trustee ----------------------------------------- Title, if any Address: c/o Oliver Estate 112 West Jefferson Boulevard Suite 613 South Bend, Indiana 46601 ACCEPTANCE BY THE CORPORATION: LC ACQUISITION CORP. By: /s/ FLOYD KEPHART -------------------------------------- Title: Chairman and CEO ----------------------------------- EX-99.3 5 c66656ex99-3.txt SUBSCRIPTION AGREEMENT EXHIBIT 99.3 LC ACQUISITION CORP. SUBSCRIPTION AGREEMENT LC Acquisition Corp. c/o Union Square Partners, Ltd. 200 Park Avenue South New York, New York 10003 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 8,750 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) X (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. (ii) The Investor is an entity all of whose equity owners ----- are accredited investors. (iii) Other. (Describe) ----- ------------------------------------- ------------------------------------------------------ ------------------------------------------------------ ------------------------------------------------------ ------------------------------------------------------ (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 28th day of November, 2001. No. of Shares: 8,750 /s/ ROSS J. MANGANO ------------------------------------ Ross J. Mangano Subscription Amount: $35,000 ------------------------------------------- Title, if any Address: c/o Oliver Estate 112 West Jefferson Boulevard Suite 613 South Bend, Indiana 46601 Tax Identification or Social Security #: 310-4606-52 ------------------------ ACCEPTANCE BY THE CORPORATION: LC ACQUISITION CORP. By: /s/ FLOYD KEPHART -------------------------------------- Title: Chairman and CEO ----------------------------------- EX-99.4 6 c66656ex99-4.txt CONVERTIBLE PROMISSORY NOTE EXHIBIT 99.4 THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT AS MAY BE AUTHORIZED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATION THEREUNDER. CONVERTIBLE PROMISSORY NOTE DECEMBER 10, 2001 $460,000.00(U.S.) CHICAGO, ILLINOIS FOR VALUE RECEIVED, the undersigned LC ACQUISITION CORP., a California corporation (hereinafter referred to as the "Maker"), hereby promises to pay to the order of BANK ONE TRUST COMPANY, N.A., as trustee of Oliver Illinois Trust No. No. 262-00051-03,, BANK ONE TRUST COMPANY, N.A., as trustee of Oliver Illinois Trust No. No. 262-00051-01, BANK ONE TRUST COMPANY, N.A., as trustee of Oliver Illinois Trust No. No. 262-00051-07 and BANK ONE TRUST COMPANY, N.A., as trustee of Oliver Illinois Trust No. No. 262-00051-05, their successors and assigns (hereinafter referred to as the "Holder"), the principal sum of FOUR HUNDRED SIXTY THOUSAND AND 00/100 DOLLARS ($460,000.00 (U.S.)), together with interest thereon at the rate of eight percent (8%) per annum from the date hereof on the balance of principal remaining from time to time unpaid. This Promissory Note is hereinafter referred to as the "Note." All payments hereunder shall be made in immediately available funds in lawful money of the United States. Such principal sum and the interest thereon shall be due and payable on the earlier of (a) the date of the closing of the transactions in which Maker acquires the Acquired Shares (as defined below) and (b) six months from the date hereof. All payments received hereunder shall be first applied to interest and the balance, if any, to principal and other amounts outstanding hereunder. Maker's obligations under this Note shall be referred to herein as "Maker's Liabilities." Time is of the essence of this Note and each of the provisions hereof. Maker represents and warrants to Holder that: (1) Maker is duly incorporated, validly existing and in good standing under the laws of the State of California; (2) all necessary corporate action has been taken on behalf of the Maker by its officers, directors and shareholders in order for the Maker to execute, deliver and perform under this Note; (3) the execution, delivery and performance of this Note does not violate any provision of any organic document of Maker or any agreement or instrument by which the Maker is bound; and (4) this Note constitutes the valid and legally binding obligation of the Maker enforceable in accordance with its terms. At such time as the Maker shall complete a merger or an acquisition for shares of capital stock (the "Acquired Shares") of a corporation organized under the laws of a state of the United States in a transaction that meets the following criteria (the "Closing Criteria"), this Note, including all principal and accrued but unpaid interest shall immediately be exchanged for Acquired Shares acquired by Maker such that Holder shall be entitled to receive 253,000 Acquired Shares (valued at $4.00 per Acquired Share). The Closing Criteria for the Acquired Shares are: (a) The Acquired Shares shall be fully paid and nonassessable shares of a class of equity securities that is registered under Section 12 of the Securities Exchange Act of 1934, as amended, and are traded on the New York Stock Exchange, the American Stock Exchange or the NASDAQ National Market Systems; (b) The issuer of the Acquired Shares shall have shareholders' equity of at least $25 million according to its most recent balance sheet filed with the Securities and Exchange Commission; (c) The net book value of the Acquired Shares shall be at least $8.00 per share according to the most recent balance sheet filed with the Securities and Exchange Commission; and (d) The number of Acquired Shares shall permit the full exchange of this Note for Acquired Shares. Holder shall immediately surrender this Note to the Maker for cancellation in connection with any exchange hereof for Acquired Shares. Maker may prepay in cash all or part of the principal, together with accrued interest on the amount so prepaid, without penalty during the term of this Note, provided that any such prepayment prior to the closing of the acquisition of the Acquired Shares shall require Holder's prior written consent. The occurrence of any one of the following events shall constitute a default by the Maker ("Event of Default") under this Note: (a) Maker fails to pay any of Maker's Liabilities when due and payable or declared due and payable (whether by scheduled maturity, required payment, acceleration, demand or otherwise); (b) Maker fails or neglects to perform, keep or observe any term, provision, condition, covenant, warranty or representation contained in this Note; or (c) Maker becomes insolvent or generally fails to pay or admits in writing its inability to pay debts as they become due, a petition under Title 11 of the United States Code or any similar law or regulation is filed by or against Maker; Maker shall make an assignment for the benefit of creditors; a custodian, receiver or trustee is appointed to take possession of any assets of Maker; any case or proceeding is filed by or against Maker for its dissolution or liquidation; or Maker is enjoined, restrained or in any way prevented by court order from conducting all or any material part of its business affairs. All monies paid by Holder for the purposes herein, and all costs, fees and expenses paid or incurred in connection therewith, shall be payable by the Maker to the Holder on demand. Upon the occurrence of an Event of Default, without notice by Holder to or demand by Holder of Maker, all of Maker's Liabilities shall be immediately due and payable. All of Holder's rights and remedies under this Note are cumulative and non-exclusive. If any payment becomes due and payable on a Saturday, Sunday or legal holiday under the laws of the State of New York, the due date of such payment shall be extended to the next business day. The acceptance by Holder of any partial payment made hereunder after the time when any of Maker's Liabilities become due and payable will not establish a custom, or waive any rights of Holder to enforce prompt payment thereof. Holder's failure to require strict performance by Maker of any provision of this Note or any related document shall not waive, affect or diminish any right of Holder thereafter to demand strict compliance and performance therewith. Any waiver of an Event of Default shall not suspend, waive or affect any other Event of Default. Maker and every endorser waive presentment, demand and protest and notice of presentment, protest, default, non-payment, maturity, release, compromise, settlement, extension or renewal of this Note, and hereby ratify and confirm whatever Holder may do in this regard. Maker further waives any and all notice or demand to which Maker might be entitled with respect to this Note by virtue of any applicable statute or law (to the extent permitted by law). In addition to principal and interest, Holder shall be entitled to collect all costs, including, but not limited to, all costs of collection and reasonable attorneys' fees incurred in connection with any of Holder's collection or enforcement efforts, whether or not suit on this Note or any related document is filed, and all such costs and expenses shall be payable on demand. To the extent not paid, the same shall become part of Maker's Liabilities. Any and all notices, requests, consents and demands required or permitted to be given hereunder shall be in writing and shall be deemed given and received upon personal delivery or upon facsimile with confirmation receipt, or five (5) business days after deposit in the United States mail, by certified or registered mail, postage prepaid and addressed as follows: To Holder: Oliver Estate 112 West Jefferson Boulevard Suite 613 South Bend, Indiana 46601 Attention: Ross J. Mangano To the Maker: LC Acquisition Corp. c/o Union Square Partners, Ltd. 200 Park Avenue South New York, New York 10003 Any party may change, by notice, the address to which notices to it are to be addressed. In connection with the issuance of this Note (this Note, and securities issued upon conversion hereof, collectively, the "Securities"), Holder hereby further agrees, represents and warrants as follows: (i) Holder is acquiring the Securities solely for its own account for investment and not with a view to or for sale or distribution of the Securities or any portion thereof; and (ii) Holder is an "accredited investor" within the meaning of Regulation D promulgated under the Securities Act. If any provision of this Note or the application thereof to any party or circumstance is held invalid or unenforceable, the remainder of this Note and the application thereof to other parties or circumstances will not be affected thereby, the provisions of this Note being severable in any such instance. All terms, conditions and agreements herein are expressly limited so that in no contingency or event whatsoever, whether by reason of advancement of the proceeds hereof, acceleration of maturity of the unpaid principal balance hereof, or otherwise, shall the amount paid or agreed to be paid to the holders hereof for the use, forbearance or detention of the money to be advanced hereunder exceed the highest lawful rate permissible under applicable laws. If, from any circumstances whatsoever, fulfillment of any provision hereof shall involve transcending the limit of validity prescribed by law which a court of competent jurisdiction may deem applicable hereto, then ipso facto, the obligation to be fulfilled shall be reduced to the limit of such validity, and if under any circumstances the holder hereof shall ever receive as interest an amount which would exceed the highest lawful rate, such amount which would be excessive interest shall be applied to reduction of the unpaid principal balance due hereunder and not to the payment of interest. This Note shall be governed and controlled by the internal laws of the State of Illinois as to interpretation, enforcement, validity, construction, effect and in all other respects. No modification, waiver, estoppel, amendment, discharge or change of this Note or any related instrument shall be valid unless the same is in writing and signed by the party against which the enforcement of such modification, waiver, estoppel, amendment, discharge or change is sought. This Note shall be binding upon Maker and its successors and permitted assigns and inure to the benefit of Holder and its successors and assigns. As used herein, the term "Holder" shall mean and include the successors and assigns of the Holder and the holder or holders of this Note from time to time. MAKER HEREBY WAIVES ANY RIGHT IT MIGHT HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO THIS NOTE. MAKER: LC ACQUISITION CORP., a California corporation By: /s/ FLOYD KEPHART ------------------------------------------- Title: Chairman and CEO ---------------------------------------- Name: Floyd W. Kephart ----------------------------------------- EX-99.5 7 c66656ex99-5.txt CONVERTIBLE PROMISSORY NOTE EXHIBIT 99.5 THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT AS MAY BE AUTHORIZED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATION THEREUNDER. CONVERTIBLE PROMISSORY NOTE DECEMBER 10, 2001 $40,000.00(U.S.) CHICAGO, ILLINOIS FOR VALUE RECEIVED, the undersigned LC ACQUISITION CORP., a California corporation (hereinafter referred to as the "Maker"), hereby promises to pay to the order of ROSS J. MANGANO, his successors and assigns (hereinafter referred to as the "Holder"), the principal sum of FORTY THOUSAND AND 00/100 DOLLARS ($40,000.00 (U.S.)), together with interest thereon at the rate of eight percent (8%) per annum from the date hereof on the balance of principal remaining from time to time unpaid. This Promissory Note is hereinafter referred to as the "Note." All payments hereunder shall be made in immediately available funds in lawful money of the United States. Such principal sum and the interest thereon shall be due and payable on the earlier of (a) the date of the closing of the transactions in which Maker acquires the Acquired Shares (as defined below) and (b) six months from the date hereof. All payments received hereunder shall be first applied to interest and the balance, if any, to principal and other amounts outstanding hereunder. Maker's obligations under this Note shall be referred to herein as "Maker's Liabilities." Time is of the essence of this Note and each of the provisions hereof. Maker represents and warrants to Holder that: (1) Maker is duly incorporated, validly existing and in good standing under the laws of the State of California; (2) all necessary corporate action has been taken on behalf of the Maker by its officers, directors and shareholders in order for the Maker to execute, deliver and perform under this Note; (3) the execution, delivery and performance of this Note does not violate any provision of any organic document of Maker or any agreement or instrument by which the Maker is bound; and (4) this Note constitutes the valid and legally binding obligation of the Maker enforceable in accordance with its terms. At such time as the Maker shall complete a merger or an acquisition for shares of capital stock (the "Acquired Shares") of a corporation organized under the laws of a state of the United States in a transaction that meets the following criteria (the "Closing Criteria"), this Note, including all principal and accrued but unpaid interest shall immediately be exchanged for Acquired Shares acquired by Maker such that Holder shall be entitled to receive 22,000 Acquired Shares (valued at $4.00 per Acquired Share). The Closing Criteria for the Acquired Shares are: (a) The Acquired Shares shall be fully paid and nonassessable shares of a class of equity securities that is registered under Section 12 of the Securities Exchange Act of 1934, as amended, and are traded on the New York Stock Exchange, the American Stock Exchange or the NASDAQ National Market Systems; (b) The issuer of the Acquired Shares shall have shareholders' equity of at least $25 million according to its most recent balance sheet filed with the Securities and Exchange Commission; (c) The net book value of the Acquired Shares shall be at least $8.00 per share according to the most recent balance sheet filed with the Securities and Exchange Commission; and (d) The number of Acquired Shares shall permit the full exchange of this Note for Acquired Shares. Holder shall immediately surrender this Note to the Maker for cancellation in connection with any exchange hereof for Acquired Shares. Maker may prepay in cash all or part of the principal, together with accrued interest on the amount so prepaid, without penalty during the term of this Note, provided that any such prepayment prior to the closing of the acquisition of the Acquired Shares shall require Holder's prior written consent. The occurrence of any one of the following events shall constitute a default by the Maker ("Event of Default") under this Note: (a) Maker fails to pay any of Maker's Liabilities when due and payable or declared due and payable (whether by scheduled maturity, required payment, acceleration, demand or otherwise); (b) Maker fails or neglects to perform, keep or observe any term, provision, condition, covenant, warranty or representation contained in this Note; or (c) Maker becomes insolvent or generally fails to pay or admits in writing its inability to pay debts as they become due, a petition under Title 11 of the United States Code or any similar law or regulation is filed by or against Maker; Maker shall make an assignment for the benefit of creditors; a custodian, receiver or trustee is appointed to take possession of any assets of Maker; any case or proceeding is filed by or against Maker for its dissolution or liquidation; or Maker is enjoined, restrained or in any way prevented by court order from conducting all or any material part of its business affairs. All monies paid by Holder for the purposes herein, and all costs, fees and expenses paid or incurred in connection therewith, shall be payable by the Maker to the Holder on demand. Upon the occurrence of an Event of Default, without notice by Holder to or demand by Holder of Maker, all of Maker's Liabilities shall be immediately due and payable. All of Holder's rights and remedies under this Note are cumulative and non-exclusive. If any payment becomes due and payable on a Saturday, Sunday or legal holiday under the laws of the State of New York, the due date of such payment shall be extended to the next business day. The acceptance by Holder of any partial payment made hereunder after the time when any of Maker's Liabilities become due and payable will not establish a custom, or waive any rights of Holder to enforce prompt payment thereof. Holder's failure to require strict performance by Maker of any provision of this Note or any related document shall not waive, affect or diminish any right of Holder thereafter to demand strict compliance and performance therewith. Any waiver of an Event of Default shall not suspend, waive or affect any other Event of Default. Maker and every endorser waive presentment, demand and protest and notice of presentment, protest, default, non-payment, maturity, release, compromise, settlement, extension or renewal of this Note, and hereby ratify and confirm whatever Holder may do in this regard. Maker further waives any and all notice or demand to which Maker might be entitled with respect to this Note by virtue of any applicable statute or law (to the extent permitted by law). In addition to principal and interest, Holder shall be entitled to collect all costs, including, but not limited to, all costs of collection and reasonable attorneys' fees incurred in connection with any of Holder's collection or enforcement efforts, whether or not suit on this Note or any related document is filed, and all such costs and expenses shall be payable on demand. To the extent not paid, the same shall become part of Maker's Liabilities. Any and all notices, requests, consents and demands required or permitted to be given hereunder shall be in writing and shall be deemed given and received upon personal delivery or upon facsimile with confirmation receipt, or five (5) business days after deposit in the United States mail, by certified or registered mail, postage prepaid and addressed as follows: To Holder: Ross J. Mangano 112 West Jefferson Boulevard Suite 613 South Bend, Indiana 46601 To the Maker: LC Acquisition Corp. c/o Union Square Partners, Ltd. 200 Park Avenue South New York, New York 10003 Any party may change, by notice, the address to which notices to it are to be addressed. In connection with the issuance of this Note (this Note, and securities issued upon conversion hereof, collectively, the "Securities"), Holder hereby further agrees, represents and warrants as follows: (i) Holder is acquiring the Securities solely for its own account for investment and not with a view to or for sale or distribution of the Securities or any portion thereof; and (ii) Holder is an "accredited investor" within the meaning of Regulation D promulgated under the Securities Act. If any provision of this Note or the application thereof to any party or circumstance is held invalid or unenforceable, the remainder of this Note and the application thereof to other parties or circumstances will not be affected thereby, the provisions of this Note being severable in any such instance. All terms, conditions and agreements herein are expressly limited so that in no contingency or event whatsoever, whether by reason of advancement of the proceeds hereof, acceleration of maturity of the unpaid principal balance hereof, or otherwise, shall the amount paid or agreed to be paid to the holders hereof for the use, forbearance or detention of the money to be advanced hereunder exceed the highest lawful rate permissible under applicable laws. If, from any circumstances whatsoever, fulfillment of any provision hereof shall involve transcending the limit of validity prescribed by law which a court of competent jurisdiction may deem applicable hereto, then ipso facto, the obligation to be fulfilled shall be reduced to the limit of such validity, and if under any circumstances the holder hereof shall ever receive as interest an amount which would exceed the highest lawful rate, such amount which would be excessive interest shall be applied to reduction of the unpaid principal balance due hereunder and not to the payment of interest. This Note shall be governed and controlled by the internal laws of the State of Illinois as to interpretation, enforcement, validity, construction, effect and in all other respects. No modification, waiver, estoppel, amendment, discharge or change of this Note or any related instrument shall be valid unless the same is in writing and signed by the party against which the enforcement of such modification, waiver, estoppel, amendment, discharge or change is sought. This Note shall be binding upon Maker and its successors and permitted assigns and inure to the benefit of Holder and its successors and assigns. As used herein, the term "Holder" shall mean and include the successors and assigns of the Holder and the holder or holders of this Note from time to time. MAKER HEREBY WAIVES ANY RIGHT IT MIGHT HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO THIS NOTE. MAKER: LC ACQUISITION CORP., a California corporation By: /s/ FLOYD KEPHART ------------------------------------------- Title: Chairman and CEO ---------------------------------------- Name: Floyd Kephart ----------------------------------------- EX-99.6 8 c66656ex99-6.txt JOINT FILING AGREEMENT EXHIBIT 99.6 JOINT FILING AGREEMENT This JOINT FILING AGREEMENT, dated as of December 20, 2001, by and among each of the persons named on the signature pages hereto. WHEREAS, Ross J. Mangano, Troon & Co., an Indiana general partnership and BANKONE TRUST COMPANY, N.A., as trustee of Oliver Illinois Trust No. 262-00051-03, BANK ONE TRUST COMPANY, N.A., as trustee of Oliver Illinois Trust No. 262-00051-01, BANK ONE TRUST COMPANY, N.A., as trustee of Oliver Illinois Trust No. 262-00051-07, BANK ONE TRUST COMPANY, N.A., as trustee of Oliver Illinois Trust No. 262-00051-05 (collectively, the "Stockholders"), may be deemed to beneficially own shares (the "Shares") of common stock of MEGO Financial Corp., a New York corporation (the "Company"); and WHEREAS, the parties hereto constitute a "group" with respect to the beneficial ownership of the Shares owned by the Shareholders for purposes of Rule 13d-1 and Schedule 13D promulgated by the Securities and Exchange Commission (the "Commission"). NOW, THEREFORE, the parties hereto hereby agree as follows: 1. The parties hereto shall prepare a statement containing the information required by Schedule 13D with respect to their respective interests in the Shares (the "Schedule 13D") and any necessary amendments thereto. Each party hereto shall be responsible for the completeness and accuracy concerning him, her or it contained therein, but shall not be responsible for the completeness and accuracy of the information concerning any other party contained therein, except to the extent that he, she or it knows or has reason to believe that such information is inaccurate. 2. Ross J. Mangano shall be designated as the person authorized to receive notices and communications with respect to the Schedule 13D and any amendments thereto. 3. Each of the undersigned hereby constitutes and appoints Ross J. Mangano his, her or its true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution for him, her or it and in his, her or its name, place and stead, in any and all capacities, to sign the Schedule 13D and any amendments thereto, and other documents in connection therewith, to be filed with the Commission, granting unto said attorney-in-fact and agent all power and authority to do and perform each and every act requisite and necessary to be done, as fully to all intents and purposes as he, she or it might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. 4. This Agreement may be executed in counterparts, each of which taken together shall constitute one and the same instrument. [signature page attached] IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written. /s/ ROSS MANGANO ---------------------------------------------- Ross J. Mangano TROON & CO., an Indiana general partnership By: /s/ ROSS MANGANO ------------------------------------------- Name: Ross J. Mangano Title: Trustee and Partner BANK ONE TRUST COMPANY, N.A., as trustee of Oliver Illinois Trust No. No. 262-00051-03 BANK ONE TRUST COMPANY, N.A., as trustee of Oliver Illinois Trust No. No. 262-00051-01 BANK ONE TRUST COMPANY, N.A., as trustee of Oliver Illinois Trust No. No. 262-00051-07 BANK ONE TRUST COMPANY, N.A., as trustee of Oliver Illinois Trust No. No. 262-00051-05 By: /s/ THOMAS ANDERSON ------------------------------------------- Name: Title: Trustee -----END PRIVACY-ENHANCED MESSAGE-----