EXHIBIT 99.2
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PREFERRED STOCK PURCHASE AGREEMENT
THIS PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is dated as
of May 28, 1999 and is among Successories, Inc., an Illinois corporation (the
"Company"), and the purchasers listed on Schedule A attached hereto (each,
individually, a "Purchaser" and collectively, the "Purchasers").
W I T N E S S E T H:
WHEREAS, each Purchaser desires to purchase from the Company, and the
Company desires to issue and to sell to each Purchaser, the number of shares of
Series A Convertible Preferred Stock, par value $.01 per share, of the Company
("Preferred Stock") indicated opposite such Purchaser's name on Schedule A (such
503,092 shares, collectively, the "Shares"), upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged, the parties hereto, intending legally to be bound, hereby
agree as follows:
1. Definitions. Except as otherwise herein expressly provided herein,
the following terms and phrases shall have the meanings set forth below:
"Affiliate" means, as to any Person (a) any corporation, partnership,
limited liability company, joint venture, trust or individual who or which,
directly or indirectly through one or more intermediaries, is controlled by or
under common control with such Person, or which controls directly or indirectly
through one or more intermediaries, such Person; (b) a trust which has as its
principal beneficiaries such Person or any direct or indirect holder of such
Person, or members of the immediate family of such Person or direct or indirect
holder of such Person; and (c) any members of the immediate family of such
Person or a member of the immediate family of any direct or indirect holder of
such Person. For purposes of this definition, (i) no Person, by virtue of his,
her or its direct or indirect ownership of Shares, shall be deemed to be an
Affiliate of another Person; (ii) the terms "control", "controlled" and "common
control with" mean the ability, whether by the direct or indirect ownership of
voting securities or other equity interest, by contract or otherwise, to elect a
majority of the directors of a corporation, to select the managing partner of a
partnership, or otherwise to select a majority of those Persons exercising
governing authority over an entity; and (iii) the term "immediate family" means
spouses, siblings and lineal descendants of a Person.
"Certificate of Designation" means the Certificate of Designation of
Series A Convertible Preferred Stock, in the form attached hereto as Exhibit A,
setting forth the preferences and rights of the Preferred Stock.
"Financial Statements" means the audited financial statements of the
Company as of and for the year ended January 30, 1999, which financial
statements are included in the Company's
Annual Report on Form 10-K as filed by the Company with the Securities and
Exchange Commission.
"Intellectual Property" means (a) all inventions, improvements
thereto, and all patents, patent applications, and patent disclosures, together
with all reissuances, continuations, continuations-in-part, revisions,
extensions, and reexaminations thereof, (b) all registered and unregistered
trademarks, service marks, trade dress, logos, tradenames, servicenames, and
corporate names, including all goodwill associated therewith, and all
applications, registrations, and renewals in connection therewith, (c) all
copyrightable works, copyrights, and all applications, registrations, and
renewals in connection therewith, (d) all trade secrets, know-how and
confidential business information, (e) all computer software, (f) all other
proprietary rights, and (g) all copies and tangible embodiments thereof.
"Person" means any individual, partnership, limited liability company,
corporation, trust or other entity.
"SEC Filings" means all reports, proxy statements and schedules
required to be filed since January 1, 1998 by the Company with the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934, as
amended.
"Securities Act" means the Securities Act of 1933, as amended.
2. Sale and Purchase. Subject to the conditions set forth herein, each
Purchaser hereby agrees to purchase from the Company, and the Company hereby
agrees to issue and sell to each Purchaser, the number of Shares indicated on
Schedule A for a purchase price of $2.425 per Share, or an aggregate Purchase
Price of $1,220,000 (the "Purchase Price").
3. The Closing.
(a) The closing of the purchase and sale of the Shares
(the "Closing") shall take place at the offices of ▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, Two
North LaSalle Street, Suite 2200, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ simultaneously with
execution of this Agreement. The date of the Closing is sometimes hereinafter
referred to as the "Closing Date."
4. Representations and Warranties of the Company. To induce Purchasers to
enter into this Agreement, the Company represents and warrants to Purchasers as
follows:
(a) Organization; Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Illinois. The Company is duly qualified and in good standing as a foreign
corporation and is licensed or admitted to do business as a foreign corporation
in each jurisdiction wherein the character of the properties owned or held under
lease by it, or the nature of the business conducted by it, makes such
qualification necessary, except where the failure to so qualify would not
reasonably be expected to have a material adverse effect on (i) the Company's
financial condition or results of operations, or (ii) on the ability of the
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Company to consummate the transactions contemplated by this Agreement (a
"Material Adverse Effect").
(b) Authority. The Company has all requisite corporate power and
authority to execute, deliver and perform this Agreement, the Registration
Rights Agreement in the form attached hereto as Exhibit B, and all other
documents contemplated herein (collectively, the "Transaction Documents") to
which the Company is a party and to issue and sell the Shares to Purchasers. The
execution, delivery and performance by the Company of each of the Transaction
Documents, and the issuance of the Shares, have been duly authorized by all
necessary corporate action on the part of the Company.
(c) Enforceability. Each of the Transaction Documents has been
duly and validly authorized, executed and delivered by the Company and
constitutes the valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as such enforcement may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally,
or (ii) general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
(d) Capitalization. The authorized capital stock of the
Company consists of (i) 20,000,000 shares of common stock, par value $.01 per
share, of which 6,913,293 shares are validly issued and outstanding, fully paid
and nonassessable, and (ii) 1,000,000 shares of preferred stock, of which (A)
400 shares are designated as Series A Cumulative Convertible Preferred Stock,
none of which are outstanding, (B) 1,212 shares are designated Series B
Cumulative Convertible Preferred Stock, none of which are outstanding, and (C)
503,092 shares will be designated as Preferred Stock, upon effectiveness of the
Certificate of Designation, none of which will be outstanding prior to the
Closing. No other class or series of capital stock of the Company is authorized.
When the Certificate of Designation shall be in full force and effect under the
laws of the State of Illinois and when the Shares have been issued and delivered
in accordance with this Agreement against receipt of the Purchase Price, the
Shares will be validly issued, fully paid and nonassessable. Except as set forth
on Schedule 4(d), attached hereto, and as described in the footnotes to the
Financial Statements, there are no options, warrants, subscriptions, calls,
preemptive or other rights, convertible securities or other agreements or
commitments obligating the Company to issue, transfer, sell, redeem, repurchase
or otherwise acquire any shares of its capital stock or securities.
(e) Consents and Approvals. Except as set forth on Schedule
4(e), attached hereto, the execution, delivery and performance by the Company of
each Transaction Document to which the Company is a party do not require any
consent, approval, authorization or other order of, action by, filing with or
notification to any governmental authority or other Person.
(f) No Conflicts. The execution, delivery and performance by
the Company of each of the Transaction Documents to which the Company is a party
will not, with or without the giving of notice, the passage of time or both,
conflict with, result in a breach of, or constitute a violation or default or
give any third party the right to terminate or accelerate any obligation under,
(i) the Articles of Incorporation of the Company or the By-Laws of the Company,
in each case as
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amended to date; (ii) any agreement or other document or instrument to which the
Company is a party or by which it or any of its assets or properties is bound or
affected, the breach, violation or default of which would reasonably be expected
to have a Material Adverse Effect; or (iii) any federal or state law, statute,
rule, regulation, ordinance, writ, order or judgment to which the Company is
subject or by which it or any of its property is bound or affected.
(g) Financial Statements. The Financial Statements have been
prepared in accordance with generally accepted accounting principles, applied on
a consistent basis throughout the periods involved, and fairly present the
financial position, results of operations and changes in financial position of
the Company for the periods indicated. Since the date of the most recent balance
sheet contained in the Financial Statements, there has been (i) no material
change in the manner in which the books and records of the Company have been
maintained or in any accounting practice or procedure, and (ii) no event or
circumstance has occurred that would reasonably be expected to have a Material
Adverse Effect.
(h) Compliance with Laws. The Company has complied, and is in
compliance, with all laws, rules and regulations of federal, state and local
governments (and all agencies thereof), including, without limitation, laws
relating to environmental protection, hazardous waste, health and safety, and no
action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or commenced against any of them alleging any
failure to so comply, except for any such noncompliance that would not
reasonably be expected to have a Material Adverse Effect.
(i) Taxes. Except as set forth on Schedule 4(i), the Company
has filed, on a timely basis, all required federal, state and local income,
sales, franchise and other tax returns or reports relating to the Company,
accurately reflecting any and all income or other taxes owing to any taxing
authority. There are no tax deficiencies (including penalties and interest) of
any kind assessable against the Company for any taxable periods ending on or
before the date hereof, except for any such deficiency that would not reasonably
be expected to have a Material Adverse Effect.
(j) Absence of Undisclosed Liabilities. Except as set forth on
Schedule 4(j), there are no liabilities, debts, claims or obligations, whether
accrued, absolute, contingent or otherwise, of the Company, except those (i)
reflected or reserved against on the balance sheet included in the Financial
Statements, which reserves have been established on a basis consistent with the
past practices of the Company and in accordance with generally accepted
accounting principles and, to the knowledge of the Company, are sufficient in
all material respects to provide for the liabilities in respect of which they
have been established, or (ii) incurred since January 30, 1999 in the ordinary
course of the business of the Company consistent with the past practice of the
Company, none of which would reasonably be expected to have a Material Adverse
Effect.
(k) Litigation. Except as disclosed in the SEC Filings, the
Company is not (i) subject to any outstanding injunction, judgment, order,
decree, ruling or charge of any judicial or administrative body or agency, or
(ii) a party or, to the best of the Company's knowledge, is threatened to be
made a party to, any action, suit, proceeding, hearing or investigation of, in,
or
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before any court, arbitrator or other body or administrative agency of any
federal, state, local, or foreign jurisdiction that would reasonably be expected
to have a Material Adverse Effect.
(l) Licenses; Permits. Except as set forth on Schedule 4(l),
the Company has obtained all material licenses and permits necessary to conduct
the business of the Company, as now conducted and as currently contemplated to
be conducted, and is not in breach or default of any of such licenses and
permits. All of which licenses and permits are in full force and effect and no
event has occurred and is continuing which would allow any such license or
permit to be revoked or terminated.
(m) SEC Filings. The Company has filed with the Securities and
Exchange Commission (the "SEC"), and has delivered to Purchaser complete and
correct copies of, all SEC Filings. As of their respective dates, the SEC
filings did not contain any untrue statement of a material fact, or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(n) Intellectual Property. The Company has full ownership of,
or the legal right to use, all Intellectual Property that pertains to or is used
in the Company's business (collectively, "Company Intellectual Property") in the
manner in which it is currently used and, to the knowledge of the Company, such
use does not conflict with, misappropriate or infringe, and has not been alleged
to conflict with, misappropriate or infringe, any Intellectual Property rights
or franchises of any Person. To the knowledge of the Company, (i) none of the
Company Intellectual Property is being infringed by any Person, and (ii) the
Company Intellectual Property constitutes all of the Intellectual Property
necessary to enable the Company to lawfully carry on its business as now
conducted and as currently contemplated to be conducted, in either case except
as would not reasonably be expected to have a Material Adverse Effect.
(o) Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company.
(p) Full Disclosure. The representations, warranties and
statements made by the Company in this Agreement, including the Schedules and
other documents delivered pursuant hereto, do not contain any untrue statement
of a material fact, and, when taken together, do not omit to state any material
fact necessary to make such representations, warranties and statements, in light
of the circumstances under which they are made, not misleading.
5. Representations and Warranties of Each Purchaser. To induce the
Company to enter into this Agreement, each Purchaser, severally and not jointly
and solely with respect to itself, hereby represents and warrants to the Company
as follows:
(a) Organization; Authority. If Purchaser is a partnership or
a trust, Purchaser duly organized and validly existing under the laws of its
jurisdiction of organization and has all of the necessary partnership or trust
power and authority, as applicable, to execute, deliver and perform each
Transaction Document to which Purchaser is a party. If Purchaser is an
individual, Purchaser
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has full power and legal capacity to execute, deliver and perform each of the
Transaction Documents to which Purchaser is a party. If Purchaser is a
partnership or a trust, the execution, delivery and performance by Purchaser of
each Transaction Document to which Purchaser is a party have been duly
authorized by all necessary partnership or trust action, as applicable, on the
part of Purchaser. Each of the Transaction Documents to which Purchaser is a
party has been duly and validly executed and delivered by Purchaser and
constitutes the valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms, except as such enforcement may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally,
or (ii) general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
(b) No Conflicts. The execution, delivery and performance by
Purchaser of the Transaction Documents to which Purchaser is a party will not,
with or without the giving of notice, the passage of time or both, conflict
with, result in a material breach of, or constitute a violation or default or
give any Person the right to terminate or accelerate any obligation under (i)
Purchaser's partnership agreement or trust agreement, as applicable (if
Purchaser is a partnership or a trust); (ii) any agreement or other document or
instrument to which Purchaser is a party or by which Purchaser or any of
Purchaser's assets or properties is bound or affected, the breach, violation or
default of which would reasonably be expected to have a material adverse effect
on Purchaser; or (iii) any federal or state law, statute, rule, regulation,
ordinance, writ, order or judgment to which Purchaser is subject or by which
Purchaser or any of Purchaser's property is bound or affected.
(c) Investment Representations.
(i) Purchaser acknowledges that neither the offer nor sale of the
Shares has been registered under the Securities Act or any state
securities laws and that each certificate representing the Shares
shall bear substantially the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
REGISTRATION THEREUNDER OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT, AND, IN EACH CASE,
IN ACCORDANCE WITH ANY APPLICABLE UNITED STATES STATE
SECURITIES LAWS."
(ii) Purchaser has sufficient cash and/or available credit
facilities to pay the Purchase Price in accordance with the terms of
this Agreement.
(iii Purchaser acknowledges that:
(A) the Shares must be held indefinitely and Purchaser must
continue to bear the economic risk of the investment in the
Shares unless the offer
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and sale thereof is subsequently registered under the Securities Act or an
exemption from such registration is available;
(B) the Shares cannot be sold or otherwise disposed of
unless such sale or disposition is registered under the
Securities Act and all applicable state securities laws or an
exemption from such registration is available; and
(C) Purchaser is purchasing the Shares solely for its own
account, with the intent of holding each of such securities for
investment, without the intent of participating directly or
indirectly in the distribution of any of such securities, and no
other person or entity will have any direct or indirect interest
in the Shares acquired by Purchaser pursuant to this Agreement.
(iv) Purchaser understands the risks involved in investments in
the Company and in the Shares and that investment in the Shares
involves a risk of loss of Purchaser's entire investment and Purchaser
is able financially to bear the risk thereof and can afford the
complete loss thereof. Purchaser represents that the experience and
knowledge of Purchaser and Purchaser's representatives in financial
and business matters, in general, and in investments such as the
Shares, in particular, is sufficient for Purchaser to be able to
evaluate the merits and risks of investment in such securities.
(v) Purchaser is an "Accredited Investor" (as defined in
Rule 501 of Regulation D promulgated under Section 4(2) of the
Securities Act) and has completed and executed a suitability
questionnaire, in the form of Schedule 5(c) attached hereto,
certifying its basis for such representation.
(vi) Purchaser (A) is familiar with the operation of the Company,
(B) has received and has had adequate opportunity to inspect the
materials provided by the Company and identified on Schedule 5(a)
hereto (collectively, the "Disclosure Materials"), (C) has carefully
reviewed the Disclosure Materials and understands the information
contained therein, and (D) has received adequate information to enable
Purchaser to make an informed decision with respect to Purchaser's
ownership of the Shares.
(vii) Purchaser and Purchaser's advisors have had a reasonable
opportunity to ask questions of and receive information and answers
from a person or persons acting on behalf of the Company concerning
the offering of the Shares and, as Purchaser may deem necessary, to
verify the information contained in the Disclosure Materials, and all
questions have been answered and all such information has been
provided to the full satisfaction of Purchaser.
(viii) No oral or written representations have been made, or oral
or written information furnished to Purchaser or Purchaser's advisors
in connection with the offering of the Shares, which were inconsistent
with the information stated in the Disclosure Materials.
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(ix) Purchaser is not receiving the Shares as a result of any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or
radio, or presented at any seminar or meeting, or any solicitation of
a subscription by a person not previously known to the Purchaser in
connection with investments in securities generally.
(x) Purchaser's overall commitment to investments that are not
readily marketable is not disproportionate to Purchaser's net worth
and Purchaser's holding of the Shares will not cause such overall
commitment to become disproportionate to Purchaser's net worth.
(xi) Purchaser is not relying on the Company with respect to the
economic considerations of Purchaser relating to this investment. In
regard to such considerations, Purchaser has relied on the advice of,
or has consulted with, only Purchaser's own advisors.
(xii) Purchaser recognizes that an investment in the Shares
involves a number of significant risks, including those set forth in
the Disclosure Materials. Purchaser recognizes no federal or state
agency has passed upon the adequacy of the information presented to
Purchaser or made any finding or determination as to the fairness of
this investment.
(xiii) All information which Purchaser has heretofore furnished
and furnishes herewith in writing to the Company, including, without
limitation, the information contained on Schedule 5(c) hereto, and any
other information with respect to Purchaser's financial position and
business experience set forth herein is correct and complete as of the
date of this Agreement, and, if there should be any material change in
such information prior to the Closing Date, Purchaser will immediately
furnish such revised or corrected information to the Company.
(xiv) Purchaser hereby agrees promptly, upon the request of the
Company, to provide such information and execute and deliver such
documents as may be reasonably necessary to comply with any and all
laws and ordinances to which the Company is subject.
(xv) The foregoing representations, warranties and agreements,
together with all other representations and warranties made or given
by Purchaser to the Company in any other written statement or document
delivered in connection with the transactions contemplated hereby,
shall be true and correct in all material respects on and as of the
Closing Date.
(xvi) Purchaser understands that the Company, in issuing and
selling the Shares to Purchaser hereunder, is relying upon the
representations, warranties and covenants made by Purchaser in this
Agreement.
(d) Consents and Approvals. The execution, delivery and performance
by Purchaser of each Transaction Document to which Purchaser is a party do not
require any consent,
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approval, authorization or other order of, action by, filing with or
notification to any governmental authority or other Person.
(e) Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Purchaser.
6. Conditions Precedent to Closing.
(a) Conditions to Purchasers' Obligations. The obligations of each
Purchaser to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction, on or prior to the Closing Date, of the following
conditions:
(i) the Company shall have delivered to each Purchaser one or
more stock certificates (as may be requested by such Purchaser), duly
executed by the Company, evidencing such Purchaser's ownership of the
Shares purchased by such Purchaser;
(ii) the Company shall have delivered to Purchasers the
Registration Rights Agreement, in the form attached as Exhibit B, duly
executed by the Company;
(iii) the Company shall have received all third party consents
and all authorizations, consents and approvals of governments and
governmental agencies necessary to consummate the transactions
contemplated hereby; and
(iv) the Company's Articles of Incorporation, as amended to
include the Certificate of Designation, shall be in full force and
effect under the laws of the State of Illinois as of the Closing and
shall not have been further amended or modified.
(b) Conditions to the Company's Obligations. The obligation of the
Company to consummate the transactions contemplated by this Agreement shall be
subject to the delivery by Purchasers of (i) the Purchase Price, and (ii) the
Registration Rights Agreement, in the form attached as Exhibit B, duly executed
by Purchasers.
7. Indemnification.
(a) Survival. Each of the representations and warranties contained in
this Agreement shall survive the execution and delivery of this Agreement for a
period of one year.
(b) Purchasers' Right to Indemnification. Subject to the provisions
of this Section 7 and in addition to any other rights and remedies available to
each Purchaser under applicable law, the Company hereby covenants and agrees to
indemnify each Purchaser and its respective Affiliates, employees, agents and
representatives, and all successors, permitted assigns and fiduciaries thereof
(the "Purchaser Indemnified Parties"), and to save and hold each Purchaser
Indemnified Party harmless from and against, any and all liabilities, claims,
causes of action, assessments, losses, costs, damages or expenses (whether or
not arising out of third party claims),
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including, without limitation, interest, penalties, reasonable attorneys' fees
and all amounts paid in investigation, defense or settlement of any of the
foregoing (collectively, "Losses") that any Purchaser Indemnified Party may
suffer, sustain or become subject to, resulting from, arising out of or relating
to:
(i) breach of any representation or warranty made by or on
behalf of the Company in any Transaction Document to which the Company
is a party; or
(ii) any nonfulfillment or breach of any covenant or agreement to
be fulfilled by the Company under any Transaction Document to which
the Company is a party.
(c) The Company's Right to Indemnification. Subject to the provisions of
this Section 7 and in addition to any other rights and remedies available to the
Company under applicable law, each Purchaser, severally and not jointly, hereby
covenants and agrees to indemnify the Company and all of the Company's
Affiliates, employees, agents and representatives, and all successors, permitted
assigns and fiduciaries thereof (the "Company Indemnified Parties"), and to save
and hold each Company Indemnified Party harmless from and against, any and all
Losses that any Company Indemnified Party may suffer, sustain or become subject
to, resulting from, arising out of or relating to:
(i) breach of any representation or warranty made by such
Purchaser in any Transaction Document to which such Purchaser is a
party; or
(ii) any nonfulfillment or breach of any covenant or agreement to
be fulfilled by such Purchaser under any Transaction Document to which
such Purchaser is a party.
(d) Nothing contained in this Section 7 shall confer any rights upon,
or inure to the benefit of, any third party other than those parties specified
in this Section 7, it being understood that such other parties, to the extent
not actually parties hereto or specified in Section 7, shall not be third party
beneficiaries of any party's obligations hereunder.
8. Miscellaneous.
(a) Expenses. Except as otherwise specified in this Agreement, all
costs and expenses, including, without limitation, fees and disbursements of
counsel, financial advisors and accountants, incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses.
(b) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made) upon the earliest to occur of
(i) receipt, if made by personal service, (ii) two days after delivery to a
reputable overnight courier service, (iii) upon the delivering party's receipt
of a written confirmation of a transmission made by facsimile, or (iv) five days
after being mailed by registered or certified air mail (postage prepaid, return
receipt requested) to the respective parties at
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the following addresses (or at such other address for a party as shall be
specified in a notice given in accordance with this Section 8(b)):
if to Purchasers:
BenIda Group LLC
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and to:
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy (▇▇▇)▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇, Gerber & ▇▇▇▇▇▇▇▇▇
Two North LaSalle Street, Suite 2200
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Company:
Successories, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Vedder, Price, ▇▇▇▇▇▇▇ & Kammholz
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
11
(c) Headings. The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
(d) Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any law or public policy,
such provision shall be severed and the remaining provisions hereof shall be
enforced to the extent possible or modified in such a way as to make it
enforceable, and the invalidity, illegality or unenforceability thereof shall
not affect the validity, legality or enforceability of the remaining provisions
of this Agreement.
(e) Entire Agreement. This Agreement, including all of the Exhibits
and Schedules hereto that are incorporated herein by this reference, constitutes
the entire agreement of the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and undertakings, both written and
oral, between any party hereto with respect to the subject matter hereof.
(f) Assignment. This Agreement and the rights and duties hereunder
may not be assigned or assumed by operation of law or otherwise without the
express prior written consent of the other parties, except that the rights and
obligations of either Purchaser hereunder may be assigned to and assumed by any
Affiliate of such Purchaser. This Agreement and all the terms and provisions
hereof shall be binding upon and shall inure to the benefit of the parties
hereto, and their respective heirs, legal representatives, permitted successors
and permitted assigns.
(g) Amendments and Waivers. No amendment of this Agreement
shall be valid unless the same shall be in writing and signed by all parties
hereto. No waiver by any party of any default, misrepresentation or breach
hereunder, whether intentional or not, shall be deemed to extend to any prior or
subsequent default, misrepresentation or breach hereunder or affect in any way
any rights of any other party arising by virtue of any prior or subsequent such
occurrence.
(h) Governing Law. This Agreement shall be governed by, and construed
in accordance with, the internal laws of the State of Illinois, without regard
to its principals regarding conflicts of law.
(i) Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
[Signature Page Follows]
12
IN WITNESS WHEREOF, the parties have executed this Preferred Stock Purchase
Agreement as of the date first above written.
THE COMPANY:
SUCCESSORIES, INC.
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President and
Chief Operating Officer
PURCHASERS:
▇▇▇▇ ▇▇▇▇▇▇ FAMILY LIMITED
PARTNERSHIP #1
By: ▇▇▇▇ ▇▇▇▇▇▇ Trust Dated January 18,
1984, its general partner
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
▇▇▇▇ ▇▇▇▇▇▇, trustee of the
general partner
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ DECLARATION
OF TRUST DATED APRIL 28, 1987
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, trustee
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇
13
SCHEDULE A
PURCHASERS
No. Shares Aggregate
Name/Address of Purchaser Purchased Purchase Price
------------------------- --------- --------------
▇▇▇▇ ▇▇▇▇▇▇ Family Limited Partnership #1 412,371 $1,000,000
c/o BenIda Group LLC
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Declaration of Trust 82,474 $200,000
Dated April 28, 1987
c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Ltd.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ 8,274 $20,000
c/o BenIda Group LLC
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
SCHEDULE 5(C)
ACCREDITED INVESTOR STANDARDS
Purchaser is an Accredited Investor because Purchaser is (please check
applicable box and return to the Company):
[] A natural person whose individual net worth, or joint net worth with
that person's spouse, at the time of his or her purchase exceeds
$1,000,000.
[] A natural person who had an individual income in excess of $200,000 in
each of the two most recent years or joint income with that person's
spouse in excess of $300,000 in each of those years and has a reasonable
expectation of reaching the same level in the current year.
[] A bank as defined in Section 3(a)(2) of the Securities Act, or any
savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act whether acting in its individual or
fiduciary capacity; a broker or dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934, as amended; an insurance company
as defined in Section 2(13) of the Securities Act; an investment company
registered under the Investment Company Act of 1940 or a business
development company as defined in Section 2(a)(48) of such Act; a Small
Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958; a plan established and maintained by a state,
its political subdivisions, or any agency or instrumentality of a state
or its political subdivisions, for the benefit of its employees, if such
plan has total assets in excess of $5,000,000; or an employee benefit
plan within the meaning of the Employee Retirement Income Security Act
of 1974 if the investment decision is made by a plan fiduciary, as
defined in Section 3(21) of such Act, which is either a bank, savings
and loan association, insurance company, or registered adviser, or if
the employee benefit plan has total assets in excess of $5,000,000 or,
if a self-directed plan, with investment decisions made solely by
persons that are accredited investors.
[] A private business development company as defined in Section 202(a)(22)
of the Investment Advisers Act of 1940.
[] An organization described in section 501(c)(3) of the Internal Revenue
Code, a corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the Shares
offered, with total assets in excess of $5,000,000.
[] A director, executive officer or general partner of the Company.
[] A trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the Shares offered, whose purchase is
directed by a sophisticated person as described in Rule 506(b)(2)(ii) of
Regulation D promulgated under Section 4(2) of the Securities Act.
[] An entity in which all the equity owners are accredited investors.
IN WITNESS WHEREOF, the undersigned has executed this Schedule and certifies
that it is true and correct as of the date hereof.
[Purchaser]
By:________________________________
Name:
Title:
Date as of May 28, 1999