JOINT NOTICE OF PUBLIC SALE BY ORDER OF THE SECURED PARTY AND ASSIGNEE FOR THE BENEFIT OF CREDITORS OF MODAGRAFICS, INC.

1. Executive Summary.

1. On May 8, 2019, Modagrafics, Inc., an Illinois corporation located at 5300 Newport Rd., Rolling Meadows, IL (“Modagrafics”) initiated an Assignment for the Benefit of Creditors by delivering a signed Trust Agreement and Assignment for the Benefit of Creditors (“Assignment”) to Howard B. Samuels, not individually, but solely as Assignee (“Assignee”).
2. The Assignee, together with Modagrafic’s senior secured creditor (“Lender,” together with the Assignee, the “Sellers”), shall hold a joint public auction (“Auction”) in accordance with the Uniform Commercial Code (as adopted under Illinois law) and other applicable law (“Joint Sale”) of substantially all assets of Modagrafics (collectively the “Sale Assets”), as further described below.
3. Modagrafics, was established in 1973 as an innovative provider of one-source visual marketing programs to its clients. Beginning with design and engineering through production, fulfillment and installation. Modagrafics has since became one of the largest manufacturers of digital printing for fleet graphics.

2. Time and Date of Auction.

1. To qualify to bid at the Auction a party must comply with #6 below by Noon CT on Tuesday, May 28, 2019 (the “Bid Deadline”).
2. The Auction will be held on Wednesday, May 29, 2019 at 2:00 pm, CDT (“Sale Date”),
3. The Auction will be held at the offices of Rally Capital Services, LLC, 350 North LaSalle St, Suite 1100, Chicago, IL 60654.

3. The Sale Assets. The Sale Assets will include all of the Assignee’s right, title and interest in and to substantially all of Modagrafic’s right, title and interest in and to all of its assets whether tangible or intangible, real or personal or mixed, owned or leased (including indirect and other forms of beneficial interest) wherever located or by whomever possessed as set forth in the APA.

4. Certain Terms and Conditions of the APA. The Sale Assets sold or to be sold are being sold as a single lot “As Is” and “Where Is” and with no express or implied warranties, representation, statements or conditions of any kind including but not limited to warranties of merchantability or fitness for a particular purpose and are to be sold in accordance with the terms and provisions set forth above. The Assignee is not transferring or selling herein any leased property, whether real or personal, whether evidenced by a true lease or a capital lease (unless the capital lessor so consents).  The Sellers reserve the right, on or prior to the Sale Date, to modify, waive or amend any terms or conditions of the sale or impose any other terms or conditions on the sale, and, if the Sellers deem appropriate, to reject any bids or continue the sale (whether for all of the Sale Assets or separate lots) without prior notice.

5. Stalking Horse Bid. On May 8, 2019, the Assignee received and accepted an Asset Purchase Agreement (“APA”) from an unrelated third party purchaser (“Purchaser”), for the Assignee’s right, title and interest in and to the Sale Assets (the description of the assets being purchased is set forth in detail in the APA), in a single lot for a price of $2,300,000, plus such other financial considerations which shall be made final by May 29, 2019, plus all interim advances (“Interim Advances”) expended by the Purchaser to operate the business from May 8, 2019 through the Sale Date (collectively “Purchase Price”).  The final Purchase Price will not be less than the foregoing and may be higher; and shall be determined by the Assignee by May 29, 2019.  The APA is subject to the Assignee’s right to receive a higher and better bid from a qualified purchaser at the Auction.

6. Qualified Bids. To be a qualified bidder, a party must, by the Bid Deadline, submit to the Assignee a cash deposit (“Deposit”) in the amount of $150,000 and a fully executed subsequent offer (“Subsequent Offer”).  Any Subsequent Offer from a qualified purchaser must include: (a) a copy of the APA, marked to show any proposed changes; plus (b) $80,000.  The Sellers further reserve the right to determine the qualifications of any qualified purchaser including the ability to close the transaction on the terms and conditions referenced herein.

7. Bidding Procedures at Auction.

1. All bidding for the Sale Assets shall be conducted in the same room with the identity and bid terms of all bidders fully disclosed and, on the record, as recorded by a court reporter.
2. All subsequent overbids shall be at least $25,000 greater than the then prevailing bid in the Auction; provided, however, the Sellers reserve the right to change the minimum bid from time to time during the Auction.
3. At the conclusion of the Auction, the Sellers shall declare on the record which bid has been declared the highest and best bid accepted and shall recite the terms of winning bid into the record with the concurrence of the prevailing bidder.
4. The balance of the purchase price must be paid to the Sellers within 24 hours after the Auction.  If the highest bidder fails to pay the balance of its bid, then its Deposit will be forfeited and the Sale Assets may, at the Seller’s option, be sold to the next highest bidder without prejudice to or waiver of the Seller’s rights and remedies against the defaulting highest bidder.
5. The Sellers reserve the right to adjourn the sale from time to time without further notice except as announced at the Auction. Every qualified purchaser who participates in the Auction, including the Purchaser, accepts or must accept the terms and conditions provided for herein as well as the APA and have agreed or must agree to these terms and conditions.

8. Further information. For further information regarding the Sale Assets and to arrange for an inspection of the Sale Assets, please contact Sellers as follows:

9. About Rally Capital. Rally is a consulting firm specializing in providing financial, administrative and operational service to high growth, under-performing and distressed companies within or out of bankruptcy. Rally has collaborated with hundreds of businesses and their financial advisors to help restore profitability, enhance performance, improve fiscal management, restructure and properly manage growth.