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EXHIBIT 10.25
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
NOR UNDER ANY APPLICABLE STATE SECURITIES LAW. THE HOLDER HEREOF HAS
REPRESENTED TO THE ISSUER THAT THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND
NOT WITH A VIEW TO THE DISTRIBUTION OR RESALE THEREOF, AND THIS NOTE MAY NOT BE
TRANSFERRED IN THE ABSENCE OF AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER
HEREOF INDICATING THAT THE PROPOSED TRANSFER WILL NOT BE IN VIOLATION OF THE
REGISTRATION REQUIREMENTS OF SUCH SECURITIES ACT.
SUBORDINATED NOTE (UNSECURED)
RIGHTS OF THE HOLDER TO RECEIVE PAYMENT ARE SUBJECT AND SUBORDINATE TO THE
PRIOR PAYMENT OF ALL OBLIGATIONS OF THE MAKER TO NBD BANK, PURSUANT TO THE
TERMS OF A SUBORDINATION AGREEMENT OF EVEN DATE HEREWITH.
$100,000.00 Lombard, Illinois
____________, 1996
FOR VALUE RECEIVED, SUCCESSORIES, INC., an Illinois corporation (herein
sometimes called "Maker" and sometimes called "Debtor"), hereby promises to pay
to the order of
("Lender") in the manner provided hereinafter, the principal sum of ONE HUNDRED
THOUSAND and 00/100 DOLLARS ($100,000.00), with interest accruing thereon from
and after the disbursement of the loan evidenced hereby at the rate of ten
percent (10%) per annum, payable as follows:
(a) The entire outstanding principal balance and accrued but unpaid
interest thereon shall be due and payable November 1, 1997 (the "Maturity
Date") unless earlier due and payable by reason of the acceleration of the
maturity of this Note.
(b) From and after the occurrence of (i) any default in the payment of
interest or principal when due in accordance with the terms hereof, (ii) or
any other default under this Note, or (iii) the Maturity Date (as
hereinafter defined) of this Note, whether by acceleration or otherwise,
interest shall accrue on the amount of the principal balance outstanding
hereunder at the Default Rate. The Default Rate shall be Twelve percent
(12%) per annum, and interest accruing at the Default Rate shall be payable
on demand.
Interest on this Note shall be calculated on the basis of a 360-day year,
a 30-day month and the actual number of days elapsed in any portion of a month
for which interest may be due.
Prior to the occurrence of any default, all payments received on account
of the indebtedness evidenced by this Note shall be first applied to accrued
interest due on the outstanding principal balance, with the remainder, if any,
to be applied to the outstanding principal balance.
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The Maker shall have the right to prepay all or any portion of the
principal balance or accrued interest due hereunder from time to time and at
any time, without penalty.
Upon written request of the Lender to Maker, all payments made on account
of the indebtedness evidenced by this Note shall be made in certified funds.
Said payments and prepayments are to be made at such place as the legal holder
of this Note may from time to time in writing appoint and, in the absence of
such appointment, then at the address set forth for notices in or near the
penultimate paragraph of this Note.
This Note is one of an issue of Notes (herein collectively called the
"Notes") identical hereto (except for payee and principal amount) issued this
date by Maker in the aggregate principal amount of $ .
It is agreed that a default in the payment of interest or principal when
due in accordance with the terms hereof shall constitute an event of default.
Upon the occurrence of an event of default or a change of control with
respect to the Maker (as hereinafter defined), or at any time thereafter, at
the election of the holder or holders hereof and without notice to Maker, the
principal sum remaining unpaid hereon, together with accrued interest thereon,
shall become at once due and payable, and Lender may proceed to exercise any
rights and remedies against Maker or with respect to this Note which Lender may
have at law, in equity or otherwise. For purposes of this paragraph, a change
of control shall mean the following: (i) a sale or transfer of all or
substantially all the assets of Maker except to an affiliated person or entity,
(ii) a merger or consolidation of the Maker with a non-affiliated entity, or
(iii) a sale, exchange or other transfer or more than fifty percent of the
common stock of the Maker.
The remedies of Lender as provided herein shall be cumulative and
concurrent and may be pursued singularly, successively or together, at the sole
discretion of Lender, and may be exercised as often as occasion therefor shall
arise. Failure of Lender, for any period of time or on more than one occasion,
to exercise its option to accelerate the Maturity Date of this Note shall not
constitute a waiver of the right to exercise the same at any time thereafter or
in the event of any subsequent default. No act of omission or commission of
Lender, including specifically any failure to exercise any right, remedy or
recourse, shall be deemed to be a waiver or release of the same; any such
waiver or release is to be effected only through a written document executed by
Xxxxxx and then only to the extent specifically recited therein. A waiver or
release with reference to any one event shall not be construed as a waiver or
release of any subsequent event or as a bar to any subsequent exercise of
Xxxxxx's rights or remedies hereunder. Except as otherwise specifically
required herein, notice of the exercise of any right or remedy granted to
Lender by this Note is not required to be given.
If: (i) this Note is placed in the hands of an attorney for collection or
enforcement or is collected or enforced through any legal proceeding; (ii) if
an attorney is retained to represent Lender in any bankruptcy, reorganization,
receivership, or other proceedings affecting creditors' rights and involving a
claim under this Note, or any Loan Document; or (iii) if an attorney is
retained to
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represent Lender in any other proceedings whatsoever in connection with this
Note, then Maker shall pay to Lender all reasonable attorneys' fees, costs and
expenses incurred in connection therewith, in addition to all other amounts due
hereunder.
From and after the occurrence of a default, Lender is expressly authorized
to apply payments made under this Note as Lender may elect against any or all
amounts, or portions thereof, then due and payable hereunder the outstanding
principal balance due under this Note, the unpaid and accrued interest due
under this Note, or any combination of the foregoing.
Maker and any and all others who are now or may become liable for all or
part of the obligations of Maker under this Note (all of the foregoing being
referred to collectively herein as "Obligors") agree to be jointly and
severally bound hereby and jointly and severally: (i) waive and renounce any
and all redemption and exemption rights and the benefit of all valuation and
appraisement privileges against the indebtedness evidenced by this Note or by
any extension or renewal hereof; (ii) waive presentment and demand for payment,
notices of nonpayment and of dishonor, protest of dishonor, and notice of
protest; (iii) waive all notices in connection with the delivery and acceptance
hereof and all other notices in connection with the performance, default, or
enforcement of the payment hereof or hereunder; (iv) waive any and all lack of
diligence and delays in the enforcement of the payment hereof; (v) agree that
the liability of each of Obligors shall be unconditional and without regard to
the liability of any other person or entity for the payment hereof, and shall
not in any manner be affected by any indulgence or forbearance granted or
consented to by Lender to any of them with respect hereto; (vi) consent to any
and all extensions of time, renewals, waivers, or modifications that may be
granted by Lender with respect to the payment or other provisions hereof, and
to the release of any security at any time given for the payment hereof, or any
part thereof, with or without substitution, and to the release of any person or
entity liable for the payment hereof; and (vii) consent to the addition of any
and all other makers, indorsers and other obligors for the payment hereof, and
to the acceptance of any and all other security for the payment hereof, and
agree that the addition of any such obligors or security shall not affect the
liability of any of Obligors for the payment hereof.
Time is of the essence hereof.
Maker agrees that: (i) this instrument and the rights and obligations of
all parties hereunder shall be governed by and construed under the substantive
laws of the State of Illinois, without reference to the conflict of laws
principles of such state; (ii) the obligation evidenced by this Note is an
exempted transaction under the Truth In Lending Act, 15 U.S.C. Section 1601, et
seq.; (iii) said obligation constitutes a business loan within the purview of
815 ILCS 205/4; (iv) the proceeds of the indebtedness evidenced by this Note
will not be used for the purchase of registered equity securities within the
purview of Regulation "U" issued by the Board of Governors of the Federal
Reserve System; and (v) upon the Maturity Date, Lender shall not have any
obligation to refinance the indebtedness evidenced by this Note or to extend
further credit to Maker.
The parties hereto intend and believe that each provision in this Note
comports with all applicable law. However, if any provision in this Note is
found by a court of law to be in violation of any applicable law, and if such
court should declare such provision of this Note to be unlawful, void or
unenforceable as written, then it is the intent of all parties hereto that such
provision shall be given full force and effect to the fullest possible extent
that it is legal, valid and enforceable, that the remainder of this Note shall
be construed as if such unlawful, void or unenforceable provision were not
contained therein, and that the rights, obligations and interests of the Maker
and the holder
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hereof under the remainder of this Note shall continue in full force and effect;
provided, however, that if any provision of this Note which is found to be in
violation of any applicable law concerns the imposition of interest hereunder,
the rights, obligations and interests of Maker and Lender with respect to the
imposition of interest hereunder shall be governed and controlled by the
provisions of the following paragraph.
It being the intention of Lender and Maker to comply with the laws of the
State of Illinois with regard to the rate of interest charged hereunder, it is
agreed that, notwithstanding any provision to the contrary in this Note no such
provision, including without limitation any provision of this Note providing
for the payment of interest or other charges and any provision of the Loan
Documents providing for the payment of interest, fees, costs or other charges,
shall require the payment or permit the collection of any amount ("Excess
Interest") in excess of the maximum amount of interest permitted by law to be
charged for the use or detention, or the forbearance in the collection, of all
or any portion of the indebtedness evidenced by this Note. If any Excess
Interest is provided for, or is adjudicated to be provided for, in this Note
then in such event:
(a) the provisions of this paragraph shall govern and control;
(b) neither Maker nor any of the other Obligors shall be obligated
to pay any Excess Interest;
(c) any Excess Interest that Xxxxxx may have received hereunder
shall, at the option of Xxxxxx, be (i) applied as a credit against the
then outstanding principal balance due under this Note, accrued and
unpaid interest thereon not to exceed the maximum amount permitted by
law, or both, (ii) refunded to the payor thereof, or (iii) any
combination of the foregoing;
(d) the applicable interest rate or rates shall be automatically
subject to reduction to the maximum lawful rate allowed to be contracted
for in writing under the applicable usury laws of the aforesaid State,
and this Note shall be deemed to have been, and shall be, reformed and
modified to reflect such reduction in such interest rate or rates; and
(e) neither Maker nor any of the other Obligors shall have any
action or remedy against Lender for any damages whatsoever or any defense
to enforcement of the Note arising out of the payment or collection of
any Excess Interest.
Upon any endorsement, assignment, or other transfer of this Note by Xxxxxx
or by operation of law, the term "Lender," as used herein, shall mean such
endorsee, assignee, or other transferee or successor to Xxxxxx then becoming
the holder of this Note. This Note shall inure to the benefit of Lender and
its successors and assigns and shall be binding upon the undersigned and its
successors and assigns. The terms "Maker" and "Obligors," as used herein,
shall include the respective successors, assigns, legal and personal
representatives, executors, administrators, devisees, legatees and heirs of
Maker and any other Obligors.
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The relationship of Lender to Debtor is that of lender to borrower, and
nothing contained in this Note or the other Loan Documents shall cause there to
be a partnership or joint venture between Lender and Debtor.
Any notice, demand or other communication which any party may desire or
may be required to give to any other party shall be in writing, and shall be
deemed given if and when personally delivered, or on the second business day
after being deposited in United States registered or certified mail, postage
prepaid, addressed to a party at its address set forth below, or to such other
address as the party to receive such notice may have designated to all other
parties by notice in accordance herewith:
If to Lender:
________________________________
________________________________
________________________________
If to Maker: Successories, Inc.
000 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xx. Xxxxx Xxxxxxxx, President
IN WITNESS WHEREOF, the undersigned has through its duly authorized
officers executed this Note as of the day and year first above written.
SUCCESSORIES, INC.
BY:________________________________
TITLE:___________________________
ATTEST:
____________________________
TITLE:______________________
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THIS OPTION HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, NOR UNDER ANY APPLICABLE STATE SECURITIES LAW. THE HOLDER HEREOF HAS
REPRESENTED TO THE ISSUER THAT THIS Option HAS BEEN ACQUIRED FOR INVESTMENT AND
NOT WITH A VIEW TO THE DISTRIBUTION OR RESALE THEREOF AND THIS Option MAY NOT
BE TRANSFERRED IN THE ABSENCE OF AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER HEREOF INDICATING THAT THE PROPOSED TRANSFER WILL NOT BE IN VIOLATION OF
THE REGISTRATION REQUIREMENTS OF SUCH SECURITIES ACT.
COMMON STOCK OPTION AGREEMENT
OF
SUCCESSORIES, INC.
---------------
TRANSFERABILITY AND EXERCISABILITY
RESTRICTED AS HEREIN PROVIDED
---------------
VOID 5 YEARS FROM THE DATE HEREOF
THIS IS TO CERTIFY THAT, for value received, , or assigns,
is entitled to purchase from SUCCESSORIES, INC., an Illinois corporation
(hereinafter called the "COMPANY"), at the Exercise Price (as defined below)
per share at any time after the date hereof and up to and including 5:00 P.M.
on October 31, 2001 TEN THOUSAND (10,000) shares of common stock, $.01 par
value per share, of the Company, all subject to the provisions and on the terms
and conditions hereinafter set forth. The term, "Exercise Price", shall mean
$6.875 per share. "AGGREGATE OPTION PRICE" shall refer to the said number of
shares originally purchasable hereunder multiplied by the original Exercise
Price, and the Aggregate Option Price shall not be subject to adjustment. The
said price per share is, however, subject to adjustment as hereinafter provided
and is herein sometimes referred to as the "PER SHARE OPTION PRICE", and the
said number of shares purchasable hereunder is likewise subject to adjustment
as hereinafter provided. The shares of Common Stock deliverable or delivered
upon exercise hereof are hereinafter referred to as "Option Shares."
This Option is one of several identical COMMON STOCK Option AGREEMENTS
(hereinafter collectively called the "OPTIONS") issued or to be issued in
connection with the issuance and sale by the Company of Subordinated Notes in
the anticipated aggregate principal amount of $ on or about
the date hereof (the total aggregate amount of such notes is subject to the
Company's discretion). The Company's common stock, $.01 par value per share,
is hereinafter called the "COMMON STOCK".
1. Subject to the conditions hereinafter set forth, this Option may be
exercised in whole at
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any time after the date of the original issuance hereof or in part from time to
time thereafter by the holder hereof, by the surrender of this Option (with the
subscription form at the end hereof duly executed) at the principal office of
the Company, 000 Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, within the period
above named and upon payment to the Company of the Aggregate Option Price (or
the proportionate part thereof if exercised in part) for the shares so
purchased in funds current in Chicago, Illinois. If this Option be exercised
in respect of less than all of the shares of said Common Stock at the time
purchasable hereunder, the holder hereof shall be entitled to receive a new
Option covering the number of shares in respect of which this Option shall not
have been exercised and setting forth the remaining Aggregate Option Price
applicable to such shares; provided, however, that this Option and all rights
and Options hereunder shall expire at the close of business on the date set
forth on the first page hereof, and shall be null and void if and to the extent
the Option shall not have been exercised before it expires.
2. In case at any time or from time to time, as the result of any dividend
(other than a cash dividend) or any split-off, spin-off, stock split,
reclassification, recapitalization or similar corporate rearrangement, the
holders of Common Stock (or any other stock or securities into which the Common
Stock shall have been converted) shall have received, or upon the taking of any
record shall have become entitled to receive, in addition to such Common Stock
(or such other stock or securities) and without payment therefor, any
additional Common Stock or other stock or securities or property (including
cash other than cash received by way of dividend), then in each such case, the
holder of this Option upon the exercise hereof will be entitled to receive the
number of shares of Common Stock (adjusted as herein provided) then being
purchased and paid for in accordance with the terms hereof and, in addition and
without further payment, shall be entitled to receive the additional Common
Stock or other stock or securities or property which such holder would have
held on the date of such exercise if, from the date hereof to and including
such date, he had been the holder of record of the number of shares of Common
Stock then being purchased and paid for and had retained all such additional
Common Stock or other stock or securities or property receivable in respect of
such shares.
3. In case at any time, by reason of any recapitalization or
reclassification of the capital stock of the Company, the consolidation or
merger of the Company with another corporation, or the sale of all or
substantially all of its assets to another corporation, the holders of Common
Stock shall have received or shall have become entitled to receive any other
stock, securities or property (including cash) in lieu of or in substitution
for such Common Stock or any part thereof (including without limitation Common
Stock upon a reverse stock split), then the holder of this Option, upon the
exercise hereof, shall be entitled to receive, in lieu of the shares
theretofore purchasable hereunder, such stock or other securities or other
property to which the holder hereof would have been entitled upon the
consummation of such recapitalization, reclassification, consolidation, merger
or sale, if such holder had exercised this Option immediately prior thereto,
and, in any such case, the provisions of this Option shall thereafter be
applicable to the shares of stock or other securities or other property
thereafter deliverable upon the exercise of this Option without any diminution
in the Aggregate Option Price.
4. If, prior to the expiration of this Option, the Board of Directors of
the Company shall declare any dividend on its Common Stock, or in the case of
any capital reorganization or reclassification of Common Stock of the Company,
or in the case of consolidation or merger of the Company with or into another
corporation, or in the case of the sale of all or substantially all of the
assets of the Company, the Company shall cause notice of the date fixed by the
Board of Directors for the taking of the record
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of stockholders entitled to participate in such dividend or the relevant date
upon which such capital reorganization, reclassification, consolidation, merger
or sale will take place to be mailed to the holder hereof not less than 15 days
prior to the record date or such relevant date thus fixed at the address of the
holder of the Option appearing on the books of the Company, and shall specify
the amount of such dividends and whether the same is to be paid in cash or
otherwise, and in the case of any other of the events above described shall
briefly describe the relevant event, matter or action.
5. The Company will not by any amendment of its Certificate of
Incorporation, or through reorganization, consolidation, merger, dissolution,
or sale of assets, or by any other voluntary act or deed, avoid or seek to
avoid the observance or performance of any of the covenants, stipulations or
conditions to be observed or performed hereunder by the Company, but will at
all times in good faith assist, in so far as it is able, in the carrying out of
all provisions of this Option and in the taking of all other action which may
be necessary in order to protect the rights of the holder hereof against
dilution. Without limiting the generality of the foregoing, the Company agrees
that it will not increase the par value of shares of Common Stock above the per
share Option Price then in effect, and that, before taking any action which
would cause an adjustment reducing the per share Option Price hereunder below
the then par value of the shares of Common Stock issuable upon the exercise of
this Option, the Company will take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable shares of such Common Stock at the
per share Option Price as so adjusted.
6. In each case of an adjustment in the number of, or the character of,
the shares of stock or other securities or property issuable on the exercise of
this Option, or in the per share Option Price, the Company, shall, at the
Company's expense, compute the adjustments in accordance with the provisions of
this Option and prepare a letter setting forth the adjustment and showing in
detail the facts upon which such adjustment is based. The Company will
forthwith mail a copy of each such letter to the holders of Options. In the
event that the holder of this Option shall disagree with the Company's
computation, the holder may by written notice to the Company require the
Company to cause independent certified public accountants of nationally
recognized standing selected by the Company (who may be the regular auditors of
the Company), to make the computations and mail the letter described in this
paragraph. The expense of such accountants shall be borne by the Company;
provided, however, that if the computation of such accounts is identical with
that of the Company, the Company shall have a right to recover the expense of
such accountants from the holder who required the recomputation.
7. All notices and other communications from the Company to the holder of
this Option shall be mailed by first class registered or certified mail,
postage prepaid, to the address furnished to the Company in writing by the last
holder of this Option who shall have furnished an address to the Company in
writing, or if the Company shall not have been so furnished with an address, to
the last address of such holder known to the Company.
8. The Company will at all times reserve and keep available out of its
authorized capital stock, solely for issuance upon the exercise of this Option,
such number of shares of Common Stock and other securities as from time to time
shall be issuable upon the exercise of this Option.
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9. The Company stipulates that the remedies at law of the holder of this
Option in the event of any default by the Company in the performance of or
compliance with any of the terms or conditions hereof are not and will not be
adequate, and that the same may be specifically enforced.
10. Fractional shares shall not be issued upon the exercise of this Option
but in any case where the holder hereof would, except for the provisions of
this paragraph, be entitled under the terms hereof to receive a fractional
share upon the complete exercise of this Option, the Company shall, upon the
exercise of this Option for the largest number of whole shares then called for,
pay a sum in cash equal to the excess of the market value of such fractional
share (determined in such manner as may be prescribed in good faith by the
Board of Directors of the Company, which determination in the absence of fraud
or gross negligence shall be final and conclusive) over the proportional part
of the per share Option Price represented by such fractional share.
11. The Company covenants and agrees that the shares of Common Stock
represented by each and every certificate for its Common Stock to be delivered
on the exercise of this Option as herein provided shall, at the time of such
delivery, be validly issued and outstanding and be fully paid and
nonassessable. The Company further covenants and agrees that it will pay when
due and payable any and all federal and state original issue taxes which may be
payable in respect of the issue of this Option or of any stock or certificates
upon the exercise of this Option pursuant to the provisions hereof. The
Company shall not, however, be required to pay any tax which may be payable in
respect of any transfer involved in the transfer and delivery of stock
certificates in a name other than that of the holder of this Option presented
for exercise, and any such tax shall be paid by such holder at the time of
presentation.
12. The right to exercise this Option shall not be suspended during any
period while the stock transfer books of the Company for its Common Stock may
be closed. The Company shall not be required, however, to deliver certificates
of its Common Stock upon the exercise of this Option while such books are duly
closed for any purpose, but the Company may postpone the delivery of the
certificates for such shares of Common Stock until the opening of such books,
and they shall, in such case, be delivered forthwith upon the opening thereof,
or as soon as practicable thereafter.
13. In case any Option shall be mutilated, lost, stolen, or destroyed, the
Company may issue a new Option of like date, tenor and denomination and deliver
the same in exchange and substitution for and upon surrender and cancellation
of any mutilated Option, or in lieu of any Option lost, stolen or destroyed,
upon receipt of evidence satisfactory to the Company of the loss, theft or
destruction of such Option, or upon receipt of indemnity satisfactory to the
Company.
14. This Option does not confer upon the holder hereof any right to vote
or to consent or to receive notice as a stockholder of the Company, as such, in
respect of any matters whatsoever, or any other rights or liabilities as a
stockholder.
15. By acceptance of this Option the holder hereof represents to the
Company that this Option is being acquired for investment for the account of
the holder hereof and not with a view to distribution or resale hereof and that
no person other than the holder hereof will acquire any interest herein as a
result of the acquisition of the Option by the holder hereof. This Option has
not been registered under the Securities Act of 1933, as amended (the
"Securities Act").
16. The holder hereof further represents that he will not exercise the
Option except for the purpose of acquiring Common Stock for investment for the
account of the holder hereof and not with
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a view to distribution or resale of such Common Stock, unless a registration
statement under the Securities Act is then in effect with respect to such
Common Stock or an exemption from the registration requirements of the
Securities Act is then applicable to such Common Stock.
17. Except with respect to a transfer to an affiliate as defined in Rule
144 under the Securities Act, this Option and the Common Stock issuable upon
exercise of this Option may not be transferred unless previously transferred
(or, with respect to the Common Stock, issued) at a time when such security was
registered under the Securities Act or unless a registration statement under
the Securities Act is then in effect with respect to the transfer of such
Option and Common Stock or unless the holder thereof has first presented to the
Company a written opinion of counsel satisfactory to the Company indicating
that the proposed transfer will not be in violation of any of the provisions of
the Securities Act or the rules or regulations promulgated thereunder, and an
agreement to indemnify the Company against all liabilities, costs or expenses
which might result from said proposed transfer should he in fact violate the
provisions of such Securities Act, or any of the rules or regulations
promulgated thereunder, requiring such registration.
18. Unless this Option has been transferred, and unless the Common Stock
issuable upon exercise of this Option has been issued or later transferred at a
time when such security was registered under the Securities Act or unless a
registration statement under the Securities Act is then in effect with respect
to the transfer of such Option or with respect to the issuance or transfer of
such Common Stock, each Option and each certificate representing shares of such
Common Stock shall bear on the face thereof the following legend:
"(This Option) (the shares of stock represented by this certificate)
has (have) not been registered under the Securities Act of 1933, as
amended, or under any applicable state securities law. The holder hereof
has represented to the issuer that (this Option) (such shares of stock) has
(have) been acquired by him for investment and not with a view to the
distribution or resale thereof and (this Option) (such shares of stock) may
not be transferred in the absence of an opinion of counsel satisfactory to
the issuer hereof indicating that the proposed transfer will not be in
violation of the registration requirements of such Securities Act.";
and the transfer agent (if other than the Company) for the Options and Common
Stock will be directed by the Company not to effect any transfer thereof in
violation of the terms hereof.
19. If at any time, the Company proposes to register any shares of its
Common Stock under the Securities Act, the Company shall give to all registered
holders of Options or Option Shares written notice of its intention in that
regard and use its best efforts to effect the registration under such act, if
such registration is permissible, of such Option Shares as may be specified by
written notice from any of such holders delivered to the Company within 20 days
after such notice is given (which notice shall be deemed to have been given
upon the deposit thereof in first-class or express U.S. mail, postage pre-paid,
addressed to each holder at the address of such holder as shown in the books of
the Company), provided, however, that (i) the Company shall not be required to
give such notice with respect to, or to include such Option Shares in, any such
registration which is primarily (A) a registration of a stock Option plan or
other employee benefit plan or of securities issued or issuable pursuant to any
such plan, or (B) a registration of securities proposed to be issued in
exchange for securities or assets of, or in connection with a merger or
consolidation with, another corporation, and (ii) if the registration is in
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connection with an underwritten public offering, Option Shares which (A) the
managing underwriter determines will materially impair the marketability of the
securities being registered or (B) the holder thereof decides not to include in
the offering, shall not be registered.
20. The costs and expenses of such registration, including but not limited
to legal fees, special audit fees, printing expenses, filing fees, fees and
expenses relating to qualifications under state securities or blue sky laws and
the premiums for insurance, if any, incurred by the Company in connection
therewith, shall be borne entirely by the Company; provided, however, that any
holders participating in such registration shall bear their own underwriting
discounts and commissions and the fees and expenses of their own counsel or
accountants in connection with any such registration.
21. The Company shall, at its expense, also take reasonable measures to
qualify the Option Shares included in any registration statement pursuant
hereto for sale under applicable blue sky laws.
22. Upon the exercise of registration rights pursuant hereto, each holder
agrees to supply the Company with such information as may be required by the
Company to register or qualify such Option Shares.
23. In the event of any registration of securities pursuant hereto, the
Company shall indemnify each holder of securities subject to such registration,
its officers, directors and general partners and each person, if any, who
controls such holder within the meaning of Section 15 of the Securities Act
against all losses, claims, damages and liabilities caused by any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement or prospectus (and as amended or supplemented) relating
to such registration, or caused by omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which they are made
unless such statement or omission made in reliance upon and in conformity with
information furnished in writing by such holder to the Company expressly for
use in such registration statement or prospectus.
24. The registration rights granted to the Purchaser pursuant hereto shall
also be for the benefit of, and enforceable by, any subsequent holder hereof or
of Option Shares, whether or not any express assignment of such rights to any
such subsequent holder is made.
IN WITNESS WHEREOF, CELEX GROUP, INC. has through its duly authorized
officers executed this Option this ___ day of__________________ , 1995.
CELEX GROUP, INC.
BY:____________________________
TITLE:______________________
ATTEST:
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BY:________________________
TITLE:__________________
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FORM OF SUBSCRIPTION
(TO BE SIGNED ONLY UPON EXERCISE OF OPTION)
TO CELEX GROUP, INC.
The undersigned, the holder of the within Option, hereby irrevocably
elects to exercise the purchase right represented by said Option for, and to
purchase thereunder _________ shares of Common Stock of CELEX GROUP, INC. and
herewith makes payment of $_______ therefor, and requests that the certificates
for such shares be issued in the name of, _______________________
________________________, and be delivered to ___________________
________________________, whose address is ______________________
_________________________________.
DATED:
__________________________________________
(Signature must conform in all respects to
name of Xxxxxx as specified on the face of
the Option.)
FORM OF ASSIGNMENT
(TO BE SIGNED ONLY UPON TRANSFER OF OPTION)
FOR VALUE RECEIVED and in accordance with the provisions hereof
restricting the transferability of the within Option, the undersigned hereby
sells, assigns and transfers unto _____________________________ the right
represented by the within Option to purchase the shares of the Common Stock of
CELEX GROUP, INC., to which the within Option relates, and appoints
______________________________ attorney to transfer said right on the books of
CELEX GROUP, INC. with full power of substitution in the premises.
DATED:
__________________________________________
(Signature must conform in all respects to
name of Xxxxxx as specified on the face of
the Option.)
In the Presence of:
_____________________________________
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SUBORDINATION AGREEMENT
DATED:__________________ , 1996
NBD BANK ("Lender") and the undersigned creditor ("Junior Creditor") of
Successories, Inc., Celebrating Excellence, Inc. and Successories of Illinois,
Inc. (collectively "Borrower") agree to the following:
1. Borrower is now indebted to Junior Creditor and may be indebted to Junior
Creditor for other and further loans and advances in the future (all of which
are referred to as the "Indebtedness").
2. Junior Creditor represents that the Indebtedness has not been
previously assigned to or subordinated in favor of any other person or entity.
3. Junior Creditor is entering to this Agreement:
a. to induce Xxxxxx to grant credit pursuant to that certain
Xxxxxxx and Restated Credit Agreement as of July 31, 1995 as amended
by that certain First Amendment to Credit Agreement, dated September
25, 1995, entered into by the Borrower and the Bank (as so amended,
the "Credit Agreement");
b. to induce Lender to continue its present lending arrangement
with Borrower pursuant to the Credit Agreement;
c. in consideration of any of Borrower's obligations to Lender,
now existing or arising in the future.
4. The Indebtedness is hereby subordinated to any present or future
indebtedness, obligations or liabilities of Borrower (and, in addition, of
Borrower as a Debtor-in-Possession under any bankruptcy act or code, state or
federal law, common law or equitable doctrine and of any trustee, receiver or
other party appointed for Borrower under any such laws, doctrine or proceedings)
to Lender, including any indebtedness, obligations or liabilities evidenced by
the Credit Agreement or any Note issued pursuant thereto, and including interest
accrued or to be accrued (including post-bankruptcy petition interest, whether
or not Lender shall be entitled to same), absolute or contingent obligations and
obligations acquired by purchase or otherwise as well as all reasonable
collection costs and attorneys' fees incurred by Lender in enforcing its rights
against Borrower (the "Obligations").
5. Junior Creditor hereby expressly and unconditionally subordinates to
Lender any and all right, title, liens, security interests and mortgages which
such Junior Creditor may presently have or which it may hereafter acquire from
Borrower in property of the Borrower, whether now owned or hereafter created or
acquired and wherever located. Junior Creditor agrees that all liens, security
interests and mortgages granted in favor of Junior Creditor in property, of the
Borrower are and shall be junior in right of priority to and subordinate to any
and all liens, security interests and mortgages Lender, its successors or
assigns have or may have in the same property. The priorities provided for in
this Agreement shall apply:
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a. without regard to the time or order of attachment,
perfection, filing or recording of the mortgages, security interests
and other liens to secure the obligations of the Borrower, or the
failure to give notice of the acquisition or expected acquisition of
any such mortgage, security interest or lien;
b. notwithstanding anything to the contrary in the provisions
of the United States Bankruptcy Code or the Uniform Commercial Code in
any relevant state of the United States or the laws of the State of
Illinois or any other relevant state, which relate to the priority of
liens, security interests or mortgages;
c. with respect to all obligations of the Borrower to Junior
Creditor, and of the Borrower to the Lender, whenever made, created or
acquired; and
d. notwithstanding the lapse of perfection of Xxxxxx's liens or
security interests or Xxxxxx's failure to perfect its liens or
security interests.
Junior Creditor also agrees to execute any other documents or financing
statements reasonably required by Xxxxxx to effectuate the terms and provisions
of this Agreement.
6. Junior Creditor hereby represents and warrants to Lender as follows:
a. Attached hereto is a true, correct and accurate original of
the note evidencing the Indebtedness, which has not been modified and
is in full force and effect. There are no other agreements or
understandings relating to the Indebtedness between Borrower and
Junior Creditor;
b. Junior Creditor has no mortgage, lien, security interest or
other charge or encumbrance in or upon any of Borrower's property,
whether real, personal or mixed, as security for the Indebtedness; and
c. This Agreement has been duly executed and delivered by
Junior Creditor, and is the valid and binding obligation of Junior
Creditor, enforceable against him in accordance with its terms, except
as may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and by general principles of equity.
7. Unless Borrower defaults under the Credit Agreement or any Note issued
pursuant thereto given to Lender by Borrower or unless an event occurs which,
with the passage of time or with notice, would become an event of default under
the Credit Agreement or any such Note, and Lender gives notice of the same to
Junior Creditor, Junior Creditor may receive interest payments from Borrower on
account of the Indebtedness. However, upon receipt of such notice of default,
Junior Creditor agrees not to ask for, demand, sue for, take or receive payment,
whether by setoff or otherwise, on account of the Indebtedness or take or
receive security for any part of the Indebtedness, until all Obligations to
Lender have been fully paid to Lender. Any payments received by Junior Creditor
on account of the Indebtedness after receiving such notice from Lender will be
held by Junior Creditor in trust for Xxxxxx and will be immediately turned over
to Lender to be credited against the Obligations.
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8. At all times Obligations are owing to Lender, and until all the Credit
Agreement has expired or otherwise terminated, Junior Creditor agrees that he
will not accept prepayments of the Indebtedness or any payments on the
Indebtedness other than payments in accordance with the original terms of the
Indebtedness, without acceleration.
9. If Borrower defaults on the Indebtedness, the Junior Creditor shall
give Lender written notice of the default. However, regardless of Xxxxxxxx's
default on the Indebtedness, Junior Creditor will not seek to foreclose or
otherwise realize upon any security for the Indebtedness. Junior Creditor shall
have no right to foreclose or otherwise realize on any security, until and
unless all Obligations have been fully paid and discharged and the Credit
Agreement expired or otherwise terminated. Junior Creditor will not accept any
additional collateral security for the payment of the Indebtedness or any other
obligation of Borrower to Junior Creditor, or obtain a mortgage, lien, security
interest or other charge or encumbrance of any nature whatsoever against
Xxxxxxxx's property, whether now owned or hereafter acquired.
10. Upon any distribution of any of Borrower's assets, whether by reason
of sale, reorganization, liquidation, dissolution, arrangement, bankruptcy,
receivership, assignment for the benefit of creditors, foreclosure or otherwise,
Lender shall be entitled to receive payment in full of the Obligations prior to
the payment of all or any part of the Indebtedness. To enable Lender to assert
and enforce its rights under this Agreement or upon any default under the Credit
Agreement or default under any Note issued pursuant thereto given to Lender by
Borrower, Lender or any person Lender may designate is appointed agent and
attorney-in-fact for Junior Creditor. This appointment is coupled with an
interest and is irrevocable so long as any Obligations remain unpaid or the
Credit Agreement remains in effect. Lender or any person it may designate will
have full power to act in the place of Junior Creditor, including, in the event
of any proceeding in bankruptcy, general assignment for the benefit of
creditors, equitable receivership or other reorganization or insolvency
proceeding affecting Borrower or its properties, the right to make, present,
file and vote proofs of claim(s) against Borrower on account of any part of the
Indebtedness as Lender may deem advisable and to receive and collect any and all
dividends or other payments made on the Indebtedness, and to apply such funds to
the balance due on the Obligations. To secure payment and performance of the
Credit Agreement, Junior Creditor hereby assigns to the Lender and grants it a
security interest in the Indebtedness, any instruments now or later evidencing
the Indebtedness, and any property, real or personal, now or later securing the
Indebtedness. Borrower shall notify the Lender within three (3) days after the
creation of any Indebtedness that arises after the execution of this Agreement.
Such additional Indebtedness shall be evidenced by a note or notes. Junior
Creditor shall endorse and deliver said note or notes to Lender as additional
collateral for the Credit Agreement. Junior Creditor will execute and deliver to
the Lender any further assignments of its interest the Lender may request.
11. While this Agreement remains in effect, Junior Creditor will not,
without Xxxxxx's prior written consent, (a) assign or subordinate in favor of
any other person or entity, any part of the Indebtedness or any right, claim or
interest in the Indebtedness, or (b) commence or join with any other creditor in
commencing any bankruptcy, reorganization or insolvency proceeding against
Borrower, or (c) amend, cancel or discharge the Indebtedness, except upon
payment in full to Lender pursuant to the
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terms of this Agreement.
12. Lender may at any time, in its sole discretion, renew or extend the
time of payment of any part of the Obligations, amend, modify, extend or
supplement the Credit Agreement or any agreement evidencing or securing the
Obligations, increase the outstanding principal amount of the Obligations, waive
or release any collateral that may be held as security, release any guarantor of
the Obligations, and enter into any agreements with Borrower which Lender may
deem desirable, without notice to or further assent from Junior Creditor and
without in any way affecting Lender's rights under this Agreement, except that
Junior Creditor shall be entitled to receive written notice of any default that
Xxxxxx has declared against Borrower. This Agreement shall remain in full force
and effect notwithstanding any lack of validity or enforceability of the Credit
Agreement or any other agreement or instrument evidencing or securing the
Obligations, and notwithstanding any other circumstance that might otherwise
constitute a defense to, or a discharge of, Borrower or Junior Creditor.
13. Lender is hereby authorized to demand specific performance of the
provisions of this Agreement and Junior Creditor hereby irrevocably waives any
defense based on adequacy of a remedy at law that might be asserted to the
remedy of specific performance. Junior Creditor hereby acknowledges that the
provisions of this Section 13 shall be enforceable at all times, whether before
or after the commencement of proceedings described in Section 10 hereof, and
whether such proceedings shall have been commenced with respect to Borrower or
Junior Creditor.
14. Junior Creditor will type, write or otherwise conspicuously imprint on
each note, document or other instrument evidencing or related to the
Indebtedness the following legend:
RIGHTS OF THE HOLDER TO RECEIVE PAYMENT ARE SUBJECT AND SUBORDINATE TO
THE PRIOR PAYMENT OF ALL OBLIGATIONS OF THE MAKER TO NBD BANK, PURSUANT
TO THE TERMS OF A SUBORDINATION AGREEMENT DATED AS OF________________,
1995.
15. This Agreement shall remain in effect and shall be a continuing
subordination until all Obligations to Lender from Borrower are paid in full and
the Credit Agreement has expired or otherwise terminated.
16. Junior Creditor further agrees that if at any time Borrower's payment
or payment(s) to Lender or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, rescinded and/or required
to be repaid by Lender to a trustee, receiver or any other party under any
bankruptcy act or code, state or federal law, common law or equitable doctrine,
then to the extent of any sum not finally retained by Lender, the Junior
Creditor's obligations to Lender shall be reinstated and this Agreement shall
remain in full force and effect (or be reinstated) until full and final payment
shall have been made to Lender. If any action or proceeding seeking such
repayment is pending or, in Xxxxxx's sole judgment, threatened, this Agreement
shall remain in full force and effect notwithstanding that Borrower may not then
be obligated to Lender and notwithstanding the expiration or other termination
of the Credit Agreement. Junior Creditor agrees to hold in trust for Xxxxxx and
promptly remit to Lender any payment(s) received by Junior Creditor after such
invalidated, rescinded or returned payment(s), above described, were originally
made.
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17. Junior Creditor, on his own behalf and on behalf of his successors and
permitted assigns, hereby expressly waives all rights, if any, to require a
marshalling of assets by Lender or to require that Lender first resort to some
or any portion of any collateral security Borrower's obligations to Lender
before foreclosing upon, selling or otherwise realizing on any other portion
thereof.
18. This Agreement shall inure to the benefit of Lender, its parent,
subsidiary or affiliated corporation(s), and any of Lender's successors and
assigns, and shall be binding on Junior Creditor, and Junior Creditor's heirs,
executors, administrators, personal representatives, successors and assigns.
Lender may assign or otherwise transfer all or any portion of the Obligations,
or grant any participation therein to any other person or entity, and such other
person or entity shall thereupon become vested with all the rights in respect
thereof granted Lender herein or otherwise.
19. In the event that there is an express conflict between the terms and
provisions of the Credit Agreement and of this Agreement, the terms and
conditions of this Agreement shall govern and control. In the event that there
is an express conflict between the terms and provisions of the agreements
between Junior Creditor and Borrower relating to the Indebtedness and of this
Agreement, the terms and conditions of this Agreement shall govern and control.
20. Except where the context otherwise requires, each term stated in
either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter.
21. This Agreement constitutes the entire understanding of Junior Creditor
and Lender regarding the subject matter provided for in this Agreement. This
Agreement may only be modified, amended or supplemented by a writing signed by
Junior Creditor and Xxxxxx.
22. Junior Creditor agrees to pay, upon demand, to Lender the amount of
any and all expenses incurred by Xxxxxx including, without limitation,
attorneys' fees, which Xxxxxx may incur in connection with the exercise or
enforcement of any of its rights, remedies or interests hereunder.
23. All notices and other communications hereunder shall be in writing and
shall be delivered or sent to the party to be notified at the address stated
beneath such party's signature line contained below, or to such other address as
may be designated by such party to the other parties hereto. All such notices
and other communications shall be deemed to have been given at the time of
actual delivery thereof to such address, or if sent by certified or registered
mail, postage prepaid, to such address, on the third day after the date of
mailing.
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24. This Agreement shall be governed by and construed according to the
internal laws of the State of Illinois
SIGNATURE AND ADDRESS OF JUNIOR CREDITOR(S)
_________________________
Address:
_________________________
_________________________
_________________________
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XXXXXXXX'S ACKNOWLEDGEMENT
Successories, Inc., Celebrating Excellence, Inc. and Successories of
Illinois, Inc. (collectively, the "Borrower"), on _____________________ ,
1995, acknowledges receiving notice of the attached Subordination Agreement
between Lender and the listed creditor of Borrower and agrees to be bound by
all the terms, provisions and conditions of the Subordination Agreement. The
Borrower further agrees that unless Xxxxxx's written consent is received, it
will not repay any part of the present or any future indebtedness (the
"Indebtedness"), issue any note or other instrument evidencing the Indebtedness
or grant any collateral security for the Indebtedness, except as expressly
permitted by the terms of the Subordination Agreement.
SUCCESSORIES, INC. CELEBRATING EXCELLENCE, INC.
BY:__________________________________ BY:__________________________________
ITS:_________________________________ ITS:_________________________________
ACCEPTED:
NBD BANK SUCCESSORIES OF ILLINOIS, INC.
BY:_________________________________ BY:__________________________________
ITS:________________________________ ITS:_________________________________
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