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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
SUCCESSORIES, INC.
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(Name of Issuer)
COMMON STOCK, PAR VALUE $.01 PER SHARE
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(Title of Class of Securities)
864591102
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(CUSIP Number)
Marshall E. Eisenberg, Esq.
Neal, Gerber & Eisenberg
Two North LaSalle Street, Chicago, Illinois 60602
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 28, 1999
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(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosure provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
(Continued on following page(s))
Page 1 of 6 Pages
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CUSIP NO. 864591102 13D Page 2 of 6 Pages
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1 NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Jack Miller Family Limited Partnership #1
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) / /
(b) /X/
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (See Instructions)
WC
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
/ /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
412,371
NUMBER
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8 SHARED VOTING POWER
OF SHARES
0
BENEFICIALLY
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OWNED BY
9 SOLE DISPOSITIVE POWER
EACH
412,371
REPORTING
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10 SHARED DISPOSITIVE POWER
PERSON
0
WITH
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
412,371
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(See Instructions)
/ /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11).
5.96% (See Item 5)
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14 TYPE OF REPORTING PERSON (See Instructions)
PN
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CUSIP NO. 864591102 SCHEDULE 13D PAGE 3 OF 6
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ITEM 1. SECURITY AND ISSUER
This statement relates to 412,371 shares of Series A Convertible
Preferred Stock, par value $.01 per share (the "Preferred Stock"), of
Successories, Inc., an Illinois corporation (the "Issuer"), which
currently are convertible into 412,371 shares of common stock, par
value $.01 per share of the Issuer ("Common Stock"). The Issuer's
principal executive offices are located at 2520 Diehl Road, Aurora,
Illinois 60504.
ITEM 2. IDENTITY AND BACKGROUND
This statement is filed on behalf of The Jack Miller Family
Limited Partnership #1, a Delaware limited partnership (the "Reporting
Person"). The business address of the Reporting Person is 100
Schelter Road, Lincolnshire, Illinois 60069. The principal business
of the Reporting Person is to hold, own, transfer or otherwise deal
with the shares of Preferred Stock and any other investment interests
owned or that may be owned by the Reporting Person (including, but not
limited to, exercising any and all management or other voting rights
with respect to such investments) and any and all revenues, sales
proceeds, and other receipts therefrom, and to conduct any other
business or businesses as are permitted to be conducted by a limited
partnership under the Delaware Revised Uniform Limited Partnership
Act. The general partner of the Reporting Person is the Jack Miller
Trust Dated January 18, 1984, a trust organized under the laws of the
State of Illinois (the "General Partner").
During the last five years, neither the Reporting Person nor the
General Partner has been convicted in a criminal proceeding or has
been a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction and, as a result of such proceeding,
was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with
respect to such laws.
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CUSIP NO. 864591102 SCHEDULE 13D PAGE 4 OF 6
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ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The Reporting Person purchased its 412,371 shares of Preferred
Stock for a total purchase price of $1,000,000. The source of such
funds was capital contributions made by the partners of the Reporting
Person.
ITEM 4. PURPOSE OF THE TRANSACTION.
The Reporting Person acquired the shares of Preferred Stock that
are the subject of this Schedule 13D for investment purposes. In
connection with the Reporting Person's acquisition of Preferred Stock,
the Reporting Person became entitled to nominate one person for
election to the board of directors of the Issuer and designated Jack
Miller as its nominee. Except as set forth in this Item 4, the
Reporting Person does not have any plans or proposals that relate to
or would result in any of the matters identified in subparagraphs (a)
through (j), inclusive, of Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) All ownership percentages set forth herein assume that there are
6,922,988 shares of Common Stock issued and outstanding (as
reported in the Issuer's Proxy Statement for it 1999 annual
meeting of shareholders). The Reporting Person beneficially owns
412,371 shares of Preferred Stock, which currently are
convertible into 412,371 shares of Common Stock (or 5.96% of the
outstanding Common Stock).
(b) The Reporting Person has the sole power to vote and the sole
power to dispose of all 412,371 shares of Preferred Stock
beneficially owned by it and the Common Stock into which the
Preferred Stock is convertible.
(c) The Reporting Person has not effected any other transactions in
the Common Stock during the past 60 days.
(d) None.
(e) Not applicable.
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CUSIP NO. 864591102 SCHEDULE 13D PAGE 5 OF 6
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ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
In connection with the Reporting Person's purchase of Preferred
Stock, the Issuer, the Reporting Person, the Howard I. Bernstein
Declaration of Trust dated April 28, 1987 and Eric Achepohl entered
into a Registration Rights Agreement dated May 28, 1999. The
Registration Agreement provides the Reporting Person and the other
shareholders who are parties thereto with certain rights to require
the Issuer to register for sale the shares of Common Stock issuable to
the Reporting Person and such other shareholders (i) upon conversion
of the Preferred Stock, or (ii) as dividends in respect of the
Preferred Stock (and, upon conversion, in respect of the Common
Stock).
The Registration Agreement also provides that, as long as any
shares of the Preferred Stock remain outstanding, the Issuer shall use
its best efforts to nominate one person designated by the majority of
the outstanding Preferred Stock for election to the Board of Directors
of the Issuer, and the Issuer shall take all actions necessary and use
all reasonable endeavors to ensure such designee's election to the
Board. The holders of Preferred Stock have designated Jack Miller as
their initial nominee.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1: Registrations Rights Agreement dated as of May 28, 1999
among the Issuer, the Reporting Person, the Howard I.
Bernstein Declaration of Trust dated April 28, 1987 and
Eric Achepohl.
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CUSIP NO. 864591102 SCHEDULE 13D PAGE 6 OF 6
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: June 4, 1999
JACK MILLER FAMILY LIMITED PARTNERSHIP #1
By: Jack Miller Trust Dated January 18,
1984, its General Partner
By: /s/ Jack Miller
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Jack Miller, Trustee
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EXHIBIT 1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is dated as of May
28, 1999 and is among Successories, Inc., an Illinois corporation (the
"COMPANY"), and the Jack Miller Family Limited Partnership #1, the Howard I.
Bernstein Declaration of Trust dated April 28, 1987 and Eric Achepohl
(collectively, the "STOCKHOLDERS").
W I T N E S S E T H:
WHEREAS, the Stockholders are purchasing from the Company, and the Company
is issuing and selling to the Stockholders, an aggregate of 503,092 shares of
Series A Convertible Preferred Stock, par value $.01 per share ("PREFERRED
STOCK"), of the Company; and
WHEREAS, the Stockholders and the Company desire to set forth the terms and
conditions on which the Company may be obligated to register for sale the shares
of Common Stock issuable to the Stockholders upon conversion of the Preferred
Stock or issued as dividends on or otherwise in respect of the Preferred Stock,
according to the terms thereof.
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:
"COMMON STOCK" means the common stock, par value $.01 per share, of
the Company.
"SHORT-FORM REGISTRATION STATEMENT" means a registration statement on
Form S-3, or any other registration form under the Securities Act subsequently
adopted by the Securities and Exchange Commission (the "SEC"), that permits
inclusion or incorporation of substantial information by reference to other
documents filed by the Company with the SEC.
"HOLDER" means each Stockholder and any person owning or having the
right to acquire Registrable Securities or any assignee thereof in accordance
with Section 12 hereof.
"REGISTER", "REGISTERED," and "REGISTRATION" refer to a registration
effected by preparing and filing a registration statement or similar document in
compliance with the Securities Act, and the declaration or ordering of
effectiveness of such registration statement or document.
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"REGISTRABLE SECURITIES" means (a) the Common Stock issued or issuable
upon conversion of the Preferred Stock, and (b) any Common Stock issued as (or
issuable upon the conversion or exercise of any warrant, right or other security
which is issued as) a dividend or other distribution with respect to, or in
exchange for or in replacement of, such Preferred Stock or Common Stock;
PROVIDED, HOWEVER, that Registrable Securities shall cease to be treated as
"Registrable Securities" hereunder if and when such shares of Registrable
Securities (i) have been transferred by a Holder in a transaction in which such
Holder's rights hereunder are not assigned to the transferee, (ii) have been
sold to or through a broker or dealer or underwriter in a public distribution or
a public securities transaction, or (iii) have been sold, to a transferee who is
not a Holder subject to Rule 144 promulgated under the Securities Act with
respect to such shares, in a transaction exempt from the registration and
prospectus delivery requirements of the Securities Act so that, upon
consummation of such sale, all transfer restrictions and restrictive legends
with respect thereto were removed.
"REGISTRABLE SECURITIES THEN OUTSTANDING" means the number of shares
of Common Stock outstanding which are, and the number of shares of Common Stock
issuable pursuant to then exercisable or convertible securities which are,
Registrable Securities.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
2. DEMAND REGISTRATION.
(a) If the Company shall receive, at any time after May 28, 2000, a
written request from the Holders of a majority of the Preferred Stock that the
Company file a registration statement under the Securities Act covering the
registration of Registrable Securities, then the Company shall (i) within 10
days of the receipt thereof, give written notice of such request to all Holders
and, (ii) subject to the limitations of Section 2(b), use its best efforts to
effect as soon as practicable, and in any event within 120 days of the receipt
of such request, the registration under the Securities Act of all Registrable
Securities which the Holders request to be registered within 20 days after the
mailing of the written notice by the Company described in foregoing clause (i);
provided, however, that the Company shall not be obligated to take any action to
effect any such registration pursuant to this Section 2(a):
(A) during the six-month period after the effective date of any
previously filed registration statement pertaining to securities of the
Company (other than a registration on Form S-4 or Form S-8 or an exchange
offering solely to the Company's existing stockholders);
(B) after the Company has effected one such registration
pursuant to this Section 2(a), and such registration has been declared or
ordered effective; or
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(C) if the Company shall furnish to such Holders a certificate
signed by the Chairman of the Board of the Company certifying that, in the
good faith judgment of the Board of Directors, it would be seriously
detrimental to the Company or its stockholders for a registration statement
to be filed at such time, in which event the Company's obligation to use
its best efforts to register, qualify or comply under this Section 2 shall
be deferred for a period not to exceed 90 days from the date of receipt of
written request from the Holders; PROVIDED, HOWEVER, that the Company shall
not invoke this provision more than once in any 18-month period.
(b) If the Holders initiating the registration request hereunder (the
"INITIATING HOLDERS") intend to distribute the Registrable Securities covered by
their request by means of an underwriting, they shall so advise the Company as a
part of their written request for registration and the Company shall include
such information in the written notice referred to in Section 2(a)(i). The
right of any Holder to include Registrable Securities in such registration shall
be conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting (unless
otherwise mutually agreed by a majority in interest of the Initiating Holders
and such Holder) to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company, as provided in Section 4(e)) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by a majority in interest of the Initiating Holders.
Notwithstanding any other provision of this Section 2, if the underwriter
advises the Initiating Holders in writing that marketing factors require a
limitation of the number of shares to be underwritten, then the Company shall so
advise all Holders of Registrable Securities which would otherwise be
underwritten pursuant hereto, and the number of shares of Registrable Securities
that may be included in the underwriting shall be allocated among all Holders
thereof, including the Initiating Holders, in proportion (as nearly as
practicable) to the amount of Registrable Securities of the Company owned by
each Holder. In any event, the Holders shall have the first right to include
all of their shares in the offering before any other shares.
3. PIGGYBACK REGISTRATION. If (but without any obligation to do so) the
Company proposes to register (including for this purpose a registration effected
by the Company for stockholders other than the Holders) any of its stock or
other securities under the Securities Act in connection with the public offering
of such securities (other than a registration on Form S-4 or Form S-8 or an
exchange offering solely to the Company's existing stockholders), the Company
shall, at such time, promptly give each Holder written notice of such
registration. Upon the written request of each Holder given within 20 days
after receipt of written notice from the Company, the Company shall, subject to
the provisions of Section 8, cause to be registered under the Securities Act all
of the Registrable Securities that each such Holder has requested to be
registered.
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4. OBLIGATIONS OF THE COMPANY. Whenever required under this Agreement to
effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective and, upon the request of the Holders
of a majority of the Registrable Securities registered thereunder, keep such
registration statement effective until the earlier of the date the Registrable
Securities are sold or for 12 months.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders;
PROVIDED THAT the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement; provided that such underwriting agreement shall not provide
for indemnification or contribution obligations on the part of the Holders
greater than the obligations set forth in Section 9(b).
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
(g) Furnish, at the request of any Holder requesting registration of
Registrable Securities pursuant to this Agreement, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with a registration pursuant to this
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Agreement, if such securities are being sold through underwriters, or, if
such securities are not being sold through underwriters, on the date that the
registration statement with respect to such securities becomes effective, (i)
an opinion, dated such date, of the counsel representing the Company for the
purposes of such registration, in form and substance as is customarily given
to underwriters in an underwritten public offering, addressed to the
underwriters, if any, and to the Holders requesting registration of
Registrable Securities, and (ii) if such offering is being underwritten, a
letter dated such date, from the independent certified public accountants of
the Company, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public
offering, addressed to the underwriters.
5. FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Sections 2, 3 and 11
with respect to the Registrable Securities of any selling Holder that such
Holder shall furnish to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of disposition of
such securities as shall be required to effect the registration of such Holder's
Registrable Securities.
6. EXPENSES OF DEMAND REGISTRATION. All expenses incurred in connection
with the registration, filing or qualification pursuant to Section 2, including
all registration, filing and qualification fees, printers' and accounting fees
but excluding underwriting discounts and commissions, shall be borne by the
Company; PROVIDED, HOWEVER, that the Company shall not be required to pay for
any expenses of any registration proceeding begun pursuant to Section 2 if the
registration request is subsequently withdrawn at the request of the Holders of
a majority of the Registrable Securities to be registered (in which case all
participating Holders shall bear such expenses), unless the Holders of a
majority of the Registrable Securities agree to forfeit their right to a demand
registration pursuant to Section 2; provided, further, that if at the time of
such withdrawal, the Holders have learned of a material adverse change in the
condition, business, or prospects of the Company from that known to the Holders
at the time of their request, then the Holders shall not be required to pay any
of such expenses and shall retain their rights pursuant to Section 2.
7. EXPENSES OF PIGGYBACK REGISTRATION. The Company shall bear and pay
all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registrations
pursuant to Section 3 for each Holder, including all registration, filing, and
qualification fees, printers and accounting fees relating or apportionable
thereto but excluding underwriting discounts and commissions and fees and
expenses of legal counsel for the selling Holders relating to Registrable
Securities.
8. UNDERWRITING REQUIREMENTS. In connection with any offering initiated
by the Company for the underwritten sale of shares being issued and sold by the
Company, the Company shall not be required under Section 3 to include any of the
Holders' securities in such underwriting unless they accept the terms of the
underwriting as agreed upon between the Company and the underwriters selected by
it, and then only in such quantity as will not,
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in the opinion of the underwriters, jeopardize the success of the offering by
the Company; provided, that such underwriting agreement shall not provide for
indemnification or contribution obligations on the part of the Holders
greater than the obligations set forth in Section 9(b). If the total amount
of securities, including Registrable Securities, requested by stockholders of
the Company to be included in such offering exceeds the amount of securities,
sold other than by the Company, that the underwriters reasonably believe is
compatible with the success of the offering, then the Company shall be
required to include in the offering only that number of such securities,
including Registrable Securities, which the underwriters believe will not
jeopardize the success of the offering (the securities so included to be
apportioned pro rata among the selling stockholders according to the total
amount of securities entitled to be included therein owned by each selling
stockholder or in such other proportions as shall mutually be agreed to by
such selling stockholders; PROVIDED THAT the Holders shall have the first
right to include all of their shares in the offering before any shares held
by other selling stockholders). For purposes of apportionment, any selling
stockholder which is a Holder of Registrable Securities and which is a
partnership or corporation, the partners, retired partners and stockholders
of such Holder, or the estates and family members of any such partners and
retired partners and any trusts for the benefit of any of the foregoing
persons shall be deemed to be a single "selling stockholder", and any pro
rata reduction with respect to such "selling stockholder" shall be based upon
the aggregate amount of shares carrying registration rights owned by all
entities and individuals included in such "selling stockholder," as defined
in this sentence.
9. INDEMNIFICATION. In the event any Registrable Securities are included
in a registration statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, any underwriter (as defined in the Securities Act)
for such Holder and each person, if any, who controls such Holder or underwriter
within the meaning of the Securities Act or the Securities Exchange Act of 1934,
amended (the "EXCHANGE ACT"), and their respective officers, directors,
partners, agents, employees and successors, against any losses, claims, damages,
or liabilities (joint or several) to which they may become subject under the
Securities Act, the Exchange Act or other federal or state law, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon any of the following statements, omissions or
violations (collectively a "VIOLATION"): (i) any untrue statement or alleged
untrue statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities law; and the Company will pay to each
such Holder, underwriter or controlling person, as incurred, any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action; PROVIDED, HOWEVER,
that the
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indemnity agreement contained in this Section 9(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability, or action if
such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld), nor shall the Company be liable in any
such case for any such loss, claim, damage, liability, or action to the
extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information regarding any Holder
furnished expressly for use in connection with such registration by such
Holder.
(b) To the extent permitted by law, each selling Holder, severally
and not jointly, will indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the registration statement, each
person, if any, who controls the Company within the meaning of the Securities
Act, any underwriter, any other Holder selling securities in such registration
statement, and their respective officers, directors, partners, agents, employees
and successors and any controlling person of any such underwriter or other
Holder, against any losses, claims, damages, or liabilities (joint or several)
to which any of the foregoing persons may become subject, under the Securities
Act, the Exchange Act or other federal or state law, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereto) arise out of or
are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information regarding such Holder furnished by any Holder (or by any
representative of the Holders) expressly for use in connection with such
registration; and each such Holder will pay, as incurred, any legal or other
expenses reasonably incurred by any person intended to be indemnified pursuant
to this Section 9(b), in connection with investigating or defending any such
loss, claim, damage, liability, or action; PROVIDED, HOWEVER, that the indemnity
agreement contained in this Section 9(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld. Notwithstanding the foregoing, in no event shall
any indemnity under this Section 9(b) exceed the net proceeds from the offering
received by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 9, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; PROVIDED, HOWEVER, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. In the event any
indemnified party elects to retain its own counsel for reasons other than the
differing interests described in the foregoing proviso, such indemnified party
shall be solely responsible for the fees and
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expenses of such counsel. If the indemnified party fails to deliver written
notice to the indemnifying party within a reasonable time after the
indemnified party's receipt of notice of the commencement of any such
action, the indemnifying party's liability under this Section 9 shall be
reduced to the extent such failure to notify was prejudicial to the
indemnifying party's ability to defend such action, but the omission to so
deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Section 9.
(d) If the indemnification provided for in Section 9 is held by a
court of competent jurisdiction to be unavailable to an indemnified party with
respect to any losses, claims, damages or liabilities referred to herein, the
indemnifying party, in lieu of indemnifying such indemnified party thereunder,
shall to the extent permitted by applicable law contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
in connection with the Violation(s) that resulted in such loss, claim, damage or
liability, as well as any other relevant equitable considerations. The relative
fault of the indemnifying party and of the indemnified party shall be determined
by a court of law by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to state a material
fact relates to information supplied by the indemnifying party or by the
indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission;
provided, that in no event shall any contribution by a Holder hereunder exceed
the net proceeds from the offering received by such Holder.
(e) The obligations of the Company and Holders under this Section 9
shall survive, for the applicable statute of limitations, the completion of any
offering of Registrable Securities in a registration statement under this
Agreement.
10. REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a view to making
available to the Holders the benefits of Rule 144 promulgated under the
Securities Act and any other rule or regulation of the SEC that may at any time
permit a Holder to sell securities of the Company to the public without
registration or pursuant to a registration on Short-Form Registration Statement,
the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144;
(b) take such action as is necessary to enable the Holders to utilize
a Short-Form Registration Statement for the sale of their Registrable
Securities;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
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(d) furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company that
it has complied with the reporting requirements of SEC Rule 144, the Securities
Act and the Exchange Act, or that it qualifies as a registrant whose securities
may be resold pursuant to a Short-Form Registration Statement, (ii) a copy of
the most recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company, and (iii) such other information as may
be reasonably requested in availing any Holder of any rule or regulation of the
SEC which permits the selling of any such securities without registration or
pursuant to such form.
11. SHORT-FORM REGISTRATION.
(a) If, at any time after May 28, 2000, the Company shall receive a
written request from the Holders of at least twenty-five percent (25%) of the
Preferred Stock that the Company effect a registration on a Short-Form
Registration Statement with respect to all or a part of the Registrable
Securities owned by such Holders, the Company will:
(i) promptly give written notice of the proposed registration,
and any related qualification or compliance, to all other Holders; and
(ii) use its best efforts to effect such registration and all
such qualifications and compliances as may be so requested and as would permit
or facilitate the sale and distribution of all or such portion of such Holder's
or Holders' Registrable Securities as are specified in such request, together
with all or such portion of the Registrable Securities of any other Holder or
Holders joining in such request as are specified in a written request given
within 15 days after receipt of such written notice from the Company; provided,
however, that the Company shall not be obligated to effect any such
registration, qualification or compliance, pursuant to this Section 11: (A) if
Form S-3 is not available for such offering by the Holders; (B) if the Company
shall furnish to the Holders a certificate signed by the Chairman of the Board
of the Company stating that in the good faith judgment of the Board of Directors
of the Company, it would be seriously detrimental to the Company and its
stockholders for a Short-Form Registration Statement to be effected at such
time, in which event the Company shall have the right to defer the filing of
such Short-Form Registration Statement for a period of not more than 90 days
after receipt of the request of the Holder or Holders under this Section 11;
PROVIDED, HOWEVER, that the Company shall not invoke this provision more than
once in any 18-month period; or (C) if the Company has already effected one
registration on a Short-Form Registration Statement for the Holders pursuant to
this Section 11.
(b) In the event the Holders request registration on a Short-Form
Registration Statement pursuant to Section 11 and the Company believes, upon
written advice of its investment bankers (which written advice shall be provided
to such Holders) that, due to the number of shares for which Holders have
requested registration, an underwritten offering is advisable, the Holders shall
elect to either (i) participate in an underwritten
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offering, or (ii) reduce the number of shares requested to be registered and
utilize a Short-Form Registration Statement. Subject to the foregoing, the
Company shall file a registration statement covering the Registrable
Securities and other securities so requested to be registered as soon as
practicable after receipt of the request or requests of the Holders and use
its best efforts to keep such registration statement effective until the
earlier of (A) the date that all of the registered Registrable Securities are
sold, or (B) for one year. All expenses incurred in connection with a
registration requested pursuant to Section 11, including all registration,
filing, qualification, printer's and accounting fees, but excluding any
underwriters' discounts and commissions and fees and expenses of legal
counsel retained by the Holders, shall be borne by the Company. Any
registration effected pursuant to this Section 11 shall not be counted as a
demand for registration or as a registration effected pursuant to Section 2
or Section 3, respectively.
12. ASSIGNMENT OF REGISTRATION RIGHTS. The rights of any Holder to cause
the Company to register Registrable Securities pursuant to this Agreement may be
assigned by such Holder to: any member of such Holder's immediate family; any
stockholder, partner or member of such Holder; 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 Holder or which controls, directly or indirectly
through one or more intermediaries, such Holder; or any trust for the benefit
of, or partnership, corporation, limited liability company or other entity owned
or controlled by, any of the foregoing. For purposes of this Section 12, 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.
13. LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From and after the
date of this Agreement, the Company shall not, without the prior written consent
of the Holders of at least a majority of the then outstanding Registrable
Securities, enter into any agreement with any holder or prospective holder of
any securities of the Company that would (a) allow such holder or prospective
holder to include such securities in any registration subject to the terms of
this Agreement unless, under the terms of such agreement, such holder or
prospective holder may include such securities in any such registration only to
the extent that the inclusion of such securities will not reduce the amount of
the Registrable Securities of the Holders being registered, or (b) give such
holder or prospective holder any registration rights the terms of which are as
favorable or more favorable than the registration rights granted to the Holders
hereunder.
14. REMEDIES. Any Holder having rights under any provision of this
Agreement shall be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties agree and acknowledge
that money damages may not be an adequate
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remedy for any breach of the provisions of this Agreement and, accordingly,
in addition to all other remedies available to any Holder having rights under
any provision of this Agreement, any such Holder may, in his/its sole
discretion, apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive relief in order to enforce, or prevent
any violation of, the provisions of this Agreement. The Company agrees to
waive the defense in any action for specific performance that a remedy at law
would be adequate and to waive any requirement for the posting of a bond in
connection with such remedy.
15. MISCELLANEOUS.
(a) BOARD NOMINEE. For so long as any shares of the Preferred Stock
remains outstanding, the Company shall use its best efforts to nominate Jack
Miller, or another individual designated by the majority of the outstanding
Preferred Stock, for election to the Board of Directors of the Company and shall
take all actions necessary and use all reasonable endeavors (including obtaining
the consent of the officers, directors, significant stockholders and affiliates
of the Company) to ensure Mr. Miller's or such designee's election to the Board
of Directors.
(b) 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.
(c) 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 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(c)):
if to the Stockholders:
BenIda Group LLC
100 Schelter Road
Lincolnshire, Illinois 60069
Attention: Jack Miller
Telecopy: (847) 634-6699
and
Attention: Eric Achepohl
Telecopy: (847) 634-9521
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and to:
Howard I. Bernstein
6541 N. Kilbourn Ave.
Lincolnwood, Illinois 60646
Telecopy (773) 693-6255
with a copy to:
Neal, Gerber & Eisenberg
Two North LaSalle Street, Suite 2200
Chicago, Illinois 60602
Attention: Marshall E. Eisenberg, Esq.
Telecopy: (312) 269-1747
if to the Company:
Successories, Inc.
2520 Diehl Road
Aurora, Illinois 60504
Attention: Gary Rovansek
Telecopy: (630) 820-3003
with a copy to:
Vedder, Price, Kaufman & Kammholz
222 N. LaSalle Street
Chicago, Illinois 60601
Attention: Guy Snyder, Esq.
Telecopy: (312) 609-5005
(d) 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.
(e) 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.
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<PAGE>
(f) 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.
(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.
(j) ASSIGNMENT. 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. Except as expressly provided herein, no party may assign
its rights or obligations under this Agreement without the prior written consent
of the other party.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first above written.
THE COMPANY:
SUCCESSORIES, INC.
By: /s/ Gary J. Rovansek
---------------------------------------------
Gary J. Rovansek, President and
Chief Operating Officer
STOCKHOLDERS:
JACK MILLER FAMILY LIMITED PARTNERSHIP #1
By: Jack Miller Trust Dated January 18, 1984, its
general partner
By: /s/ Jack Miller
---------------------------------------------
Jack Miller, trustee of the general partner
HOWARD I. BERNSTEIN DECLARATION OF TRUST DATED
APRIL 28, 1987
By: /s/ Howard Bernstein
---------------------------------------------
Howard I. Bernstein, trustee
/s/ Eric Achepohl
------------------------------------------
Eric Achepohl
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