STOCK PURCHASE AGREEMENT
THIS AGREEMENT, is made and entered into this 1st day of December, 1992,
by and between Yale X. Xxxxxxxx, a Minnesota resident (the "Purchaser"), and
LSG Corporation, a Minnesota corporation (the "Seller").
WHEREAS, the business of Paper Warehouse, Inc., (the "Corporation") is
the retail sale of paper, party and office supply products; and
WHEREAS, 58,629 shares of Common Stock are issued and outstanding, of which
17,589 shares are owned by the Seller; and
WHEREAS, Seller desires to sell, transfer and assign to Purchaser, and
Purchaser desires to purchase from Seller, all of Seller's Common Stock in
the corporation for the consideration and upon the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants, conditions, representations and warranties set forth in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. PURCHASE AND SALE. Upon and subject to the terms, covenants,
conditions, representations, and warranties herein stated, Seller agrees to
sell, transfer, and assign to Purchaser on the Closing Date (as hereinafter
defined) free and clear of all liens, proxies, pledges, claims and
encumbrances of any kind, nature or description, and Purchaser agrees to
purchase from Seller, 17,589 shares of the Common Stock of the Corporation
(the "Shares") for the consideration set forth in paragraph 2 below. The
transfer of the Shares shall be accomplished by delivery of a certificate or
certificates evidencing such Shares, together with duly executed stock
assignments. At any time, and from time to time, upon request by Purchaser,
Seller agrees to duly execute, acknowledge and deliver all such further
documents (and take such other action consistent with this Agreement), as
shall be necessary to effectuate the transfer of Seller's Shares.
2. PURCHASE PRICE. The purchase price to be paid to Seller in
consideration for the sale of the Shares shall be Two Hundred Eighty-Thousand
Three Hundred Nine and No/100 Dollars ($280,309.00) (the "Purchase Price").
The Purchase Price shall be paid as follows: (a) One Hundred Seventy-Five
Thousand and No/100 Dollars ($175,000.00) in cash or by certified check
payable to the order of Seller at the Closing, and (b) by delivery, at the
Closing, of an unsecured promissory note, in the form attached hereto as
Exhibit A, in the amount of One Hundred Five Thousand Three Hundred Nine and
No/100 Dollars ($105,309.00).
3. RESIGNATION AS DIRECTORS AND OFFICERS. As of the Closing Date,
Xxxxxxxx Xxxxxx, Xxxxxxxx Xxxxxx and Xxxx Xxxxx shall resign as directors of
the Corporation.
4. REPRESENTATIONS AND WARRANTIES OF THE SELLER. As an inducement to
Purchaser to enter into and consummate this Agreement, Seller makes the
following representations and warranties:
a. SELLER'S ENTIRE INTEREST. The Shares being sold and purchased
under this Agreement constitute the Seller's entire equity interest in the
Corporation.
b. STOCK ENCUMBRANCES. Seller has, as of the Closing Date, good and
marketable title to the Shares, free and clear of all liens, proxies,
pledges, claims and encumbrances. Seller has the full legal right, power
and authority to transfer and assign such Shares to the Purchaser as
contemplated by this Agreement.
c. DUE AUTHORIZATION. This Agreement has been duly and validly
executed by the Seller and constitutes the valid and legal binding
obligation of the Seller, and enforceable in accordance with its terms
except as such enforcement may be limited by bankruptcy, insolvency,
moratorium, or other similar laws or presently or hereafter affect
effecting the enforcement of creditors' rights generally.
d. NO COMMITMENTS. The Seller is not a party to any contract,
commitment, or agreement, and neither of the Seller nor any of its
properties or assets are subject to or bound or affected by any order,
judgment, decree, law, statute, ordinance, rule, regulation or other
restriction of any kind or character, which would prevent the Seller from
entering into this Agreement or from consummating the transactions
contemplated hereby.
5. INDEMNIFICATION BY SELLER. Seller shall indemnify and hold harmless
the Purchaser from and after the date of this Agreement for any and all
liability, damage, claim, penalty, cost or other expense resulting from any
violation of any representation, warranty, covenant or agreement made by the
Seller and contained in this Agreement.
6. WAIVER AND TERMINATION OF SHAREHOLDERS' AGREEMENT. The Purchaser and
Seller hereby waive any and all rights to purchase and sell the capital stock
of the Corporation, including, but not limited, to those provided in the
Shareholders' Agreement, dated June 23, 1986, and the Purchaser and Seller
hereby agree that such Agreement shall be hereafter null and void.
7. FINANCIAL INFORMATION. Seller acknowledges that it has received or
had access to, all financial information of the
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Corporation which the Seller would deem necessary in order to freely enter
into this Agreement.
8. MISCELLANEOUS.
a. BINDING EFFECT. Subject to the terms and conditions hereof, this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, executors, administrators successors
and assigns.
b. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the state of Minnesota.
c. NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties made herein shall be true and complete in
every respect on and as of the Closing Date. All representations warranties
covenants and agreements of the parties contained in this Agreement or in
any instrument, certificate or other writing provided for herein, shall
survive the Closing Date.
d. COMPLETE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto with respect to the transactions
contemplated hereby and shall not be altered or terminated except by a
written instrument signed by the party against whom enforcement is sought.
e. EXPENSES. Each of the parties hereto shall pay their own expenses
and costs, including legal fees, in connection with this Agreement and the
transactions contemplated herein. Seller shall not be reimbursed by the
Corporation for his expenses. The parties acknowledge and agree that no
broker or finder has been retained in connection with the sale of the
Shares, and no commission or finder's fees are due thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date and year first written above.
LSG CORPORATION
By /s/ Xxxx Xxxx
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Its President
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"Seller"
/s/ Yale X. Xxxxxxxx
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Yale T Dolginow
"Purchaser"
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