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ASSET PURCHASE AGREEMENT
DATED AS OF NOVEMBER 15, 2001
AMONG
ALLEGRA HOLDINGS LLC,
A MICHIGAN LIMITED LIABILITY COMPANY,
INSTY-PRINTS, INC.,
A MINNESOTA CORPORATION
AND
IPI, INC.,
A MINNESOTA CORPORATION
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "AGREEMENT"), dated as of November
15, 2001 (the "SIGNING DATE"), is made by and among INSTY-PRINTS, INC., a
Minnesota corporation ("INSTY"), IPI, INC., a Minnesota corporation ("IPI"), and
ALLEGRA HOLDINGS LLC, a Michigan limited liability company ("BUYER"). (Insty and
IPI are sometimes referred to herein individually as a "SELLER" and together as
"SELLERS".)
R E C I T A L S:
- - - - - - - -
WHEREAS, Insty, a wholly-owned subsidiary of IPI, is engaged in the
business of franchising printing centers under the trade name of
"Insty-Prints(R)" (the "BUSINESS");
WHEREAS, IPI is the sole shareholder of Insty and owns certain assets
in connection with the Business; and
WHEREAS, Sellers desire to sell to Buyer, and Buyer desires to purchase
from Sellers, certain assets associated with the operation of the Business, on
the terms and conditions contained in this Agreement; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS
1.1. PURCHASE AND SALE. Subject to the terms and conditions of this
Agreement, at the Closing (as defined in Section 1.6), each Seller shall sell,
transfer, convey and deliver to Buyer, and Buyer shall purchase from each
Seller, all of such Seller's right and title to and interest in the Acquired
Assets (as defined in Section 1.2), free and clear of all claims, liens,
mortgages, pledges, charges, security interests, equities and encumbrances of
any nature whatsoever (collectively "ENCUMBRANCES").
1.2. ACQUIRED ASSETS. As used herein, as to each Seller, the term
"ACQUIRED ASSETS" shall mean all of such Seller's right, title and interest in
and to the following:
(a) all rights, title and interest of Seller in and to all
franchise agreements, including any and all amendments, modifications
or extensions thereto, entered into by and between Seller and its
franchisees, or assigned to Seller;
(b) a commercially reasonable amount of unopened and undamaged
inventory relating to the Business purchased and owned by Seller within
ninety (90) days immediately prior to the Closing for products Seller
has sold to franchisees or other customers within such ninety (90) day
period (collectively, the "INVENTORY");
(c) all accounts receivable and notes receivable, including,
without limitation, all trade accounts receivables, notes receivables
from customers, franchisees and all other obligations of customers
and/or franchisees with respect to sale of goods or services, or
amounts due under a franchise agreement or any other contract, whether
or not evidenced by a note, including, without limitation, those listed
on Schedule 1.2(c), as adjusted by the Final Receivables Schedule as
hereinafter provided (all of the foregoing collectively referred to
herein as "RECEIVABLES"); provided, however, Receivables shall exclude
the Turnback Accounts identified on Schedule 1.3(c);
(d) all rights of Seller under the Enumerated Contracts (as
defined in Section 3.7) identified on Schedule 1.2(d) (the "ASSUMED
CONTRACTS");
(e) the signs, off-the-shelf office computer software and
computer hardware for employees hired by Buyer pursuant to Section 5.4;
(f) all Intellectual Property (as defined in Section 3.18) and
all rights of Seller to any Licensed Intellectual Property (as defined
in Section 3.18);
(g) any claim (contractual or otherwise), recovery, refund,
counterclaim, right to offset or other right such Seller may have with
respect to, or which arise out of, any of the Assumed Liabilities (as
defined in Section 1.4) or any of the Acquired Assets or the Business;
(h) all advertising and marketing materials and brochures
(including all artwork related thereto), and other materials and data
relating to the Business; and
(i) all warehouse equipment, racks and related movable items
located at 0000 Xxxxxxx Xxxx, Xxxx Xxxxxxx, Xxxxxxxxx (the "PREMISES");
(j) all claims, deposits, warranties, guarantees, refunds
primarily related to the Acquired Assets, causes of action, right of
recovery, rights of set-off and rights of recoupement of every kind and
nature (except relating to the payment of taxes), other than those
relating primarily to the Excluded Assets;
(k) all authorization, approvals, permits, licenses, orders,
registration, certificate, and similar rights obtained from federal,
state, or local government or governmental agencies or other similar
rights (collectively, "GOVERNMENT LICENSES"), but excluding any such
permits or license that are not transferable, and all data and records
pertaining thereto;
(l) all franchisee, developer and supplier and prospective
franchisee and supplier lists, leads, sales records, and files
(including, without limitation, all original franchise agreements,
Uniform Franchise Offering Circular receipts and other documents
whether in possession of Seller or Seller's attorney, brokers or other
agents); records and files regarding Intellectual Property and all
other books and records (including electronic records), specifications,
designs, layouts, renderings, equipment lists, manuals, training
materials videos, brochures, photographs, negatives, and schedules and
other materials relating primarily to the operation of the Business;
and
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(m) all interests in the Insty-Prints website
(xxx.xxxxxxxxxxx.xxx) and any other websites of Sellers relating to the
Business, including, without limitation, all of Seller's rights, title
and interest in the domain name of such website(s), all links thereto
(to the extent transferable), the contents of the website, and the
right of ownership in such website, and all interests of a Seller in
any other domain name registration for the Business;
(n) all customer deposits and prepaid items relating to the
Business;
(o) all assets distributed to Insty upon dissolution of the
National Advertising Trust Fund pursuant to the terms of the Trust
Agreement Establishing the Insty-Prints National Advertising Trust Fund
dated December 20, 1996 (the "TRUST AGREEMENT"); and
(p) the telephone numbers 000-000-0000 and 0-000-000-0000 and
the fax number 000-000-0000, to the extent same are assignable.
1.3. EXCLUDED ASSETS. The Acquired Assets shall not include the
following assets of each Seller (collectively, the "EXCLUDED ASSETS"), which
such Seller shall specifically retain:
(a) All corporate minute book, stock records and corporate
seal of Seller;
(b) All cash, checks, and other marketable securities, all
utility deposits and all negotiable instruments of Seller;
(c) The accounts and notes receivable listed on Schedule
1.3(c) (the "TURNBACK ACCOUNTS");
(d) All of Seller's rights relating to any insurance policy or
insurance contract maintained by Seller;
(e) All Employee Plans (as defined in Section 3.12);
(f) The sublease between IPI and Intranet Solutions, Inc.
dated June 29, 2000 respecting the Premises;
(g) All tangible assets relating to the company-owned
Insty-Print store(s) owned by Seller (the "CORPORATE STORES") and the
rights of Sellers under that certain Purchase Agreement dated October
5, 2001 by Insty and Xxx Xxxxxxxx;
(h) All furnishings, building improvements, phone system,
furniture, and general office equipment, except for the items listed on
Schedule 1.2(e);
(i) All employment agreements;
(j) Any claims for dividends or other distributions, in cash,
property, securities or otherwise in respect of the capital stock of
Sellers;
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(k) Any claims (including benefits arising therefrom) which
are related solely to liabilities of Sellers which are not Assumed
Liabilities or which are related solely to Excluded Assets;
(l) Sellers' rights under this Agreement and any documents
required to be delivered pursuant hereto;
(m) Income tax returns and other original income tax records
of Sellers and all claims for refunds; and
(n) All of IPI's assets relating solely to its Change of Mind
Learning Centers, Inc. franchise business.
1.4. ASSUMPTION OF CERTAIN LIABILITIES. As partial consideration for
Sellers' sale of the Acquired Assets to Buyer and subject to the provisions of
Section 1.5 below, Buyer hereby assumes those liabilities and obligations of
each Seller that relate solely to events or conditions arising after the Closing
and arising under the Franchise Agreements (as defined in Section 3.19(a)), the
Assumed Contracts, and the trade credits and the accrued liabilities listed on
Schedule 1.4, as modified by the Final Trade Credits and Accrued Liabilities
Schedule (the "TRADE CREDITS AND ACCRUED LIABILITIES") (collectively, the
"ASSUMED LIABILITIES").
1.5. NO ASSUMPTION OF EXCLUDED LIABILITIES. Buyer does not assume or
take subject to any liabilities or obligations of Seller whatsoever which are
not expressly provided in Section 1.4 above (the "EXCLUDED LIABILITIES").
Without limiting the generality of the foregoing, "EXCLUDED LIABILITIES"
include: (a) all liabilities and obligations of Seller relating to any of the
Excluded Assets; (b) all Taxes (defined in Section 3.5), including, without
limitation, those sales taxes, use taxes and other taxes arising in connection
with the purchase and sale of the Acquired Assets; (c) those accrued expenses
related to the operation of the Business covering the period up to the Closing
Date, except for those listed on Schedule 1.4; (d) obligations of a Seller under
any guarantees by such Seller of third-party obligations; and (e) subject to
Section 5.7, obligations of Insty or the trustees under the Trust Agreement.
1.6. CLOSING. Consummation of the transactions this Agreement
contemplates (the "CLOSING") shall take place at the offices of Xxxxxxxxx &
Xxxxxx, P.L.L.P. in Minneapolis, Minnesota, at 11:00 a.m. Central Time on
December 28, 2001 or another date mutually agreed upon by the parties hereto,
but in no event later than January 31, 2001 (the "CLOSING DATE").
ARTICLE 2
CONSIDERATION AND PAYMENT TERMS
2.1. PURCHASE PRICE. The aggregate consideration to be paid to Sellers
by Buyer for the Acquired Assets and the agreement by Sellers to enter into the
Restrictive Covenant Agreement attached as EXHIBIT 7.1(f) hereto (the
"RESTRICTIVE COVENANT AGREEMENT") shall be the Purchase Price plus the Assumed
Liabilities. The Purchase Price shall equal the aggregate of the following
amounts (the "PURCHASE PRICE"):
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(a) Four Million One Hundred Twenty-Five Thousand Dollars
($4,125,000), minus the aggregate amount of Trade Credits and Accrued
Liabilities as set forth on the Final Trade Credits and Accrued
Liability Schedule and assumed by Buyer pursuant to Section 1.4;
(b) An amount equal to Sellers' original acquisition cost for
the Inventory, which shall be paid within thirty (30) days after the
Closing Date;
(c) An amount equal to the "net book value" of prepaids as set
forth on Schedule 2.1(c) hereto, as modified by the Final Prepaids
Schedule, which shall be agreed upon by the parties at least five (5)
days prior to the Closing and payable in immediately available funds at
the Closing; and
(d) An amount determined pursuant to Section 2.2 below for the
Receivables, which shall be payable in the manner set forth in Section
2.2.
2.2. RECEIVABLES. With respect to the Receivables, as set forth in
Schedule 1.2(c), as modified by the Final Receivables Schedule, Buyer and
Sellers have agreed to the following categorizations: "Current," "Settlement,"
"Special Settlements," "Workout," and "Undetermined." With respect to each
category of Receivables, Buyer will pay Sellers the following amounts for the
Receivables, less any reasonable out-of-pocket expenses incurred by Buyer in the
collection of such Receivables, in the manner set forth below:
(a) Current: During the one (1) year period immediately after
the Closing, Buyer will pay Sellers, on or before the tenth (10th) day
of each calendar month, one hundred percent (100%) of the amounts
received by Buyer during the immediately preceding calendar month. All
payments received by Buyer for a "Current" account will be applied to
the most dated Receivable for such account.
(b) Settlements: On the tenth (10th) day after the Closing
Date, Buyer will pay Sellers fifty percent (50%) of the "Net" amount
agreed upon by the parties on the Schedule 1.2(c). In addition, during
the one (1) year period immediately after the Closing, Buyer will pay
Sellers, on or before the tenth (10th) day of each calendar month,
seventy percent (70%) of any amounts received by Buyer in excess of the
"Net" amount set forth in Schedule 1.2(c) during the immediately
preceding calendar month. However, payments received by Buyer with
respect to any account will not be applied to the "Settlement"
Receivables of such account unless there are no outstanding invoices
for such account at the time of payment. Any increase in the Receivable
balance from the amount indicated on Schedule 1.2(c) will be fully
reserved so that the "Net" will not be in excess of the amount
indicated on the Final Receivables Schedule.
(c) Special Settlements: During the one (1) year period
immediately after the Closing, Buyer will pay Sellers on or before the
tenth (10th) day of each calendar month, one hundred percent (100%) of
any amounts received by Buyers during the immediately preceding
calendar month. However, payments received by Buyer with respect to any
account will not be applied to the "Special Settlement" Receivables of
such account unless there are no outstanding invoices for such account
at the time of payment.
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(d) Workouts: On the tenth (10th) day following the Closing
Date, Buyer will pay Sellers ten percent (10%) of the "Net" amount
agreed upon by the parties and set forth on Schedule 1.2(c) in
immediately available funds. In addition, during the one (1) year
period immediately after the Closing, Buyer will pay Sellers, on or
before the fifth (5th) day of each calendar month, fifty percent (50%)
of any amounts received by Buyer in excess of the "Net" amount set
forth on the Schedule 1.2(c) during the immediately preceding calendar
month. However, payments received by Buyer with respect to any account
will not be applied to the "Workout" Receivables of such account unless
there are no outstanding invoices for such account at the time of
payment. Any increase in the Receivable balance from the amount
indicated on Schedule 1.2(c) will be fully reserved so that the "Net"
amount will not be in excess of the amount indicated on the Final
Receivables Schedule.
(e) Undetermined: Buyer and Sellers will agree upon a purchase
price for such Receivables at least five (5) days prior to the Closing.
If the parties cannot agree upon a purchase price, these Receivables
will be deemed Turnback Accounts.
(f) Accruals. Buyer acknowledges that Sellers may not know the
amount of royalties due from each franchisee for the thirty (30) day
period immediately preceding the Closing Date (the "Accrued Amount").
Sellers have the right to estimate a reasonable Accrued Amount due from
each franchisee and include it on the Final Receivables Schedule. Buyer
will treat the Accrued Amount as a valid account receivable, subject to
a further adjustment based on the franchisee's actual reported results,
and will pay the Accrued Amount in accordance with the terms of
2.2(a)-(d).
Notwithstanding anything to the contrary contained herein, Sellers
acknowledge that (i) except for Current Receivables, the "Net" amount for each
Receivable on the Final Receivables Schedule shall not exceed the "Net" amount
for such Receivable on Schedule 1.2(c) attached hereto; (ii) the categorization
of each Receivable on the Final Receivables Schedule shall be the same as the
categorization indicated on Schedule 1.2(c) hereto; and (iii) any amounts
collected by Sellers prior to the Closing from any franchisee or creditor will
reduce the amount payable by Buyer to Sellers on the tenth (10th) day following
the Closing Date under subsections 2.2(b) and 2.2(d) above for such franchisee
or creditor.
2.3. POST DECEMBER 31, 2001 CLOSING. In the event the Closing occurs
after December 31, 2001, the Purchase Price will be reduced by the amount of
revenues received by either Seller in connection with the Business during the
period commencing January 1, 2002 until the Closing Date, less the amount of
reasonable employee salaries and benefits (excluding the salaries and benefits
of any officers other than Xxxxxx Xxxxxx) and reasonable out-of-pocket operating
expenses incurred by Sellers relating solely to the Business during such period
(provided that gross rent for the Premises will be $14,000 per month). Operating
expenses exclude interest and finance charges, income taxes, and non-cash items,
including, without limitation, amortization and depreciation. Any reduction in
Purchase Price under this Section will be determined by Buyer and Sellers within
fifteen (15) days after the Closing Date and such amount will offset amounts
payable by Buyer to Sellers under Section 2.2. Further, the parties agree that
in the event the Closing does not occur by December 31, 2001, all decisions made
after such date relating to all Franchise Agreements, other contracts,
commitments and communications with Franchisees, must be approved by Buyer,
which approval will not be unreasonably withheld.
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2.4. PAYMENT OF PURCHASE PRICE. Except as otherwise specified in this
Article 2, the Purchase Price shall be paid to Seller by wire transfer of same
day funds to the account set forth on Schedule 2.4 and shall be paid on the
Closing Date.
2.5. PURCHASE PRICE ALLOCATION. The parties acknowledge and agree that
the Purchase Price shall be allocated among the Acquired Assets and the
Restrictive Covenant Agreement. Buyers will provide Sellers with the allocation
prior to the Closing Date. The Buyer and Sellers will each file, in accordance
with the Internal Revenue Code of 1986, as amended, an asset allocation
statement on Form 8594 with its federal income tax return for the tax year in
which the Closing occurs that is consistent with the allocation, and neither the
Buyers nor Sellers will file or permit the filing of any tax return on which it
takes a position that is inconsistent with the allocation without the prior
written approval of the other party.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers, jointly and severally, represent and warrant the following to
Buyer as of the Signing Date and as of the Closing Date:
3.1. ORGANIZATION AND STANDING. Each Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Minnesota. Each Seller has all necessary corporate powers and authority to
engage in the business in which it is presently engaged (as it is presently
being conducted), to own all property now owned by it, and to lease all of the
property used by it under lease. Each Seller conducts its Business directly and
not through any subsidiary, association, joint venture, partnership or other
business entity (other than the other Seller). Schedule 3.1 contains a complete
and accurate list of the officers and directors of each Seller
3.2. QUALIFICATION. Except as set forth on Schedule 3.2, neither Seller
has failed to qualify in any jurisdiction where such failure to so qualify would
have a material adverse effect on the Business. Schedule 3.2 identifies each
jurisdiction where each Seller is duly qualified to do business as a foreign
corporation, and such Seller is in good standing in each such jurisdiction.
3.3. NO RESTRICTIONS; AUTHORIZATIONS; BINDING EFFECT. Neither Seller is
subject to any restriction, agreement, law, rule, regulation, ordinance, code,
writ, injunction, award, judgment or decree which would prohibit or be
materially violated by the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby. Provided that IPI's
shareholders approve of the transactions contemplated by this Agreement pursuant
to the Minnesota Business Corporation Act, each Seller has all necessary power
and authority and has taken all action necessary to execute and deliver this
Agreement and the instruments, documents and agreements to be executed and
delivered by such Seller pursuant hereto (collectively, the "SELLER'S
DOCUMENTS"), to consummate the transactions contemplated by this Agreement and
the Seller's Documents and to perform such Seller's obligations under this
Agreement and the
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Seller's Documents. This Agreement and each of the Seller's Documents has been
duly executed and delivered by the applicable Seller, and constitutes a legal,
valid and binding obligation of such Seller, enforceable against such Seller in
accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or similar laws of
general applicability relating to or limiting creditors' rights generally, now
or hereafter in effect and subject to the application of equitable principles
and the availability of equitable remedies.
3.4. CONDITION OF ACQUIRED ASSETS. All tangible assets are being
transferred "as is," "where is," without any other warranty of any other kind or
nature, whether express or implied, including any warranty as to suitability,
durability, merchantability or fitness for a particular purpose.
3.5. TAXES. Seller has filed with the appropriate authorities all
returns (collectively, the "TAX RETURNS") concerning income, sales, payroll, and
any other kind of taxes, including any interest, penalty or addition thereto
("TAXES"), required to be filed through the Closing Date and will timely file
any Tax Returns for all Taxes required to be filed after the Signing Date which
relate to the operation of the Business prior to the Closing Date. Seller has
paid all Taxes shown to be due by Tax Returns filed prior to the Signing Date.
Each Tax Return is true, correct and complete and prepared in accordance with
the Internal Revenue Code of 1986 and all subsequent amendments thereto or
substitutions therefor.
3.6. TITLE. Seller has good and marketable title to all Acquired
Assets, free and clear of all Encumbrances. No items included in the Inventory
are held on consignment from others.
3.7. CONTRACTS. Except as set forth in Schedule 3.7 hereto, and except
for the Franchise Agreements (as defined in Section 3.19(a)), there is no
contract, agreement, commitment or arrangement ("CONTRACT"), or any outstanding
unaccepted offer ("OFFER"), whether written or oral, to which a Seller is or may
be a party or by which it or any property or asset of a Seller is or may become
bound:
(a) which is or relates to any personal property leased or
otherwise occupied or used by Seller in connection with the Business;
(b) which is or relates to an independent contractor,
distribution, marketing, sales representative or similar agreement with
any individual or entity providing services to Seller relating to the
Business;
(c) involving any remaining or unsatisfied obligation of
Seller under any purchase order or other agreement or commitment to
purchase materials, supplies or goods in the nature of inventory for
the Business ("PURCHASE ORDERS");
(d) evidencing supplier arrangements or agreements to purchase
goods or services; and
(e) any other contracts or commitments not made in the
ordinary course of the business in connection with the Business.
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Sellers have delivered to Buyer true and correct copies of all written Contracts
and Offers set forth in Schedule 3.7 and a written summary setting forth all
material terms and conditions of each oral agreement set forth in Schedule 3.7,
all as presently in effect (collectively the "ENUMERATED CONTRACTS"). Except as
set forth on Schedule 3.7 hereto, all Enumerated Contracts are valid and binding
obligations of a Seller and the other parties thereto, and are in full force and
effect, enforceable in accordance with their respective terms, except as may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or similar laws of general applicability relating to or
limiting creditors' rights generally, now or hereafter in effect and subject to
the application of equitable principles and the availability of equitable
remedies. Except as set forth in Schedule 3.7, neither Seller nor, to Sellers'
knowledge, any other party is in default in the payment of any obligation under,
or in the performance of any material covenant or material obligation to be
performed by it pursuant to, any Enumerated Contract. The execution and delivery
of this Agreement and any documents to be delivered pursuant hereto, and
Sellers' performance of their obligations under this Agreement and such other
documents, will not conflict with or breach any of the provisions of, or
constitute a default (with or without notice or lapse of time, or both) under,
or accelerate any indebtedness due under, or give rise to any other rights or
obligations under, any Enumerated Contract.
3.8. CONSENTS. Except as set forth on Schedule 3.8, neither Seller is
required to obtain any consents or other approvals from any governmental agency
or other person (including any lessor, customer, supplier or lender) as a result
of the transactions contemplated by this Agreement, and no such consent or other
approval is necessary or desirable in order that Buyer can conduct the Business
after the Closing Date in substantially the same manner as Seller conducted the
Business before the Closing Date (any such consent or approval is called a
"CONSENT").
3.9. LITIGATION. Except as set forth on Schedule 3.9, neither Seller is
(a) subject to any outstanding injunction, judgment, order, decree or ruling
relating directly or indirectly to the Business, or (b) a party to or, to the
knowledge of Sellers, threatened to be made a party to, any action, suit,
proceeding, hearing, audit or investigation before any court, quasi-judicial
agency, administrative agency or arbitrator relating directly or indirectly to
the Business.
3.10. COMPLIANCE WITH LAWS. Each Seller has materially complied with
all laws, rules, regulations, ordinances and codes applicable to the Business,
including, without limitation, those governing each Employee Plan (as defined in
Section 3.12), whether federal, state, local or foreign, and neither Seller has
received any notice alleging non-compliance with respect thereto which remains
uncured as of the date hereof.
3.11. LICENSES AND PERMITS. Seller has obtained, and Schedule 3.11
lists, all licenses, permits and other governmental authorizations required to
conduct the Business as presently conducted. Except as disclosed on Schedule
3.11 hereto, all such licenses and permits are transferable to Buyer and will
continue to be in full force and effect in the name of Buyer from and after the
Closing. No proceeding is pending or, to the knowledge of Sellers, threatened,
to revoke or limit any such license or permit.
3.12. EMPLOYEE BENEFITS. Except as set forth on Schedule 3.12 hereto,
Sellers do not maintain and have not established any Employee Plan or similar
arrangement which provides for
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continuing benefits or coverage for any participant or any beneficiary of a
participant after such participant's termination of employment, except as may be
required by the Internal Revenue Code (the "CODE") Section 4980B or Section 601
ET SEQ. of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or under any applicable state law, and at the expense of the
participant or the beneficiary of the participant. Sellers are in material
compliance in form, administration and operation with ERISA, the Code and all
applicable laws and regulations governing each Employee Plan, and all
instruments constituting each Employee Plan. For purposes of this Agreement,
"Employee Plans" shall include any pension, retirement, savings, disability,
medical, dental, health, life, death benefit, group insurance, profit sharing,
deferred compensation, stock option, bonus, incentive, vacation pay, tuition
reimbursement, severance pay, or other employee benefit plan, trust, agreement,
contract, policy or commitment, whether any of the foregoing is funded, insured
or self-funded, written or oral, sponsored or maintained by either Seller.
3.13. LABOR. Neither Seller is a party to or bound by any collective
bargaining agreement. Neither Seller has experienced any attempt of its
employees to organize into a labor union, association or similar organization.
Except as set forth on Schedule 3.9, no allegation, charge or complaint of age,
disability, sex, religious or race discrimination or similar charge has been
made or threatened to be made by or on behalf of any employee against either
Seller and, to Sellers' knowledge, there is no reasonable basis upon which any
such allegation, charge or complaint could be made. Schedule 3.13 contains a
complete and accurate list of the names, titles, annual compensation, commission
structure, all bonus and similar payments made or that will be made with respect
to such individual for the current fiscal year for all directors, officers and
employees of each Seller and all persons engaged by a Seller to offer and sell
franchises as an independent contractor, if any.
3.14. ENVIRONMENTAL. Seller has no ownership interest in any real
property. As of the Closing Date: (a) To Sellers' knowledge, no hazardous
materials exist on, under or about the Premises; (b) the operation of the
Business is and has been in material compliance with all hazardous materials
laws; and (c) there are no existing or, to Sellers' knowledge, threatened,
claims, demands or actions instituted or pending in connection with the
presence, release or discharge of hazardous materials. For purposes of this
Section, "hazardous materials laws" means all federal, state and local laws
regulating the environmental condition of air, water or real property,
pollution, contamination or clean-up, and "hazardous materials" means any toxic,
radioactive or otherwise hazardous substance, any substance or material defined,
listed or identified as, or meeting the criteria for, "hazardous waste" under
the Resource Conservation and Recovery Act, 42 U.S.C. xx.xx. 6901 et seq. or any
similar local, state or federal law or any substance or material defined as a
"hazardous substance" under CERCLA.
3.15. FINANCIAL INFORMATION. Sellers have delivered to Buyer a true and
correct copy of: (i) the audited financial statements of each Seller as at
November 30, 2000, November 30, 1999, and November 30, 1998 (including balance
sheets, profit and loss statements and statements of cash flow, together with
the notes thereto, if any); and (ii) unaudited consolidated financial statements
of IPI for the ten (10) months ended September 30, 2001 (collectively, the
"FINANCIAL STATEMENTS"). Each of the Financial Statements has been prepared in
accordance with the United States generally accepted accounting principles
applied on a consistent basis throughout the periods covered thereby and fairly
presents the financial condition (including
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contingent liabilities) and results of operation of such Seller for the periods
reflected therein and any unaudited financial statements reflect all adjustments
of a normal and recurring nature, necessary for a fair statement, on a basis
consistent with the auditee's audited financial statements.
3.16. BROKERS. Neither Seller has dealt with any broker, finder or
other person entitled to any broker's or finder's fee, commission or other
similar compensation in connection with the transactions contemplated hereby.
3.17. BUSINESS RECORDS. No material records of accounts, franchise
records, or other business records related to the Business have been destroyed
within the last five (5) years, and there exists no such record other than those
records delivered by Sellers to Buyer at the Closing on the Closing Date (other
than the Excluded Assets).
3.18. INTELLECTUAL PROPERTY.
(a) Schedule 3.18(a) correctly identifies (where applicable,
by owner, place of registration, application number and registration or
application dates) all issued domestic and foreign patents, patent
applications, patent applications in process, trademarks, trademark
registrations, trademark registrations applications, service marks,
service xxxx registration applications, service xxxx registrations,
copyrights, copyright registrations, copyright registration
applications, license agreements, logos, trade names and slogans owned
by each Seller and which are presently used in and/or necessary to
conduct the Business, including, without limitation, the xxxx
"Insty-Prints" (the foregoing, along with know-how, proprietary
information and trade secrets owned by Sellers presently used in and/or
necessary to conduct the Business are hereinafter referred to as the
"INTELLECTUAL PROPERTY"). Schedule 3.18 correctly identifies all issued
patents, patent applications pending, patent applications in process,
trademarks, trademark registrations, trademark registration
applications, service marks, service xxxx registrations, service xxxx
registration applications, copyrights, copyright registrations,
copyright registration applications, licenses, rights, logos, trade
names, slogans, know-how and trade secrets that are currently expressly
licensed to a Seller ("LICENSED INTELLECTUAL PROPERTY"). Except
pursuant to the Franchise Agreements, neither Seller has granted any
license to any person with respect to any Intellectual Property or
Licensed Intellectual Property. Except as set forth in Schedule 3.18,
the agreements and/or arrangements for the Licensed Intellectual
Property are in full force and effect and are free and clear of all
encumbrances and no material default by Seller exists thereunder.
(b) There are no interference, opposition or cancellation
proceedings or infringement suits pending, or to Sellers' knowledge,
threatened, with respect to any Intellectual Property or Licensed
Intellectual Property. Neither Seller has received any notice of any
infringement, misappropriation or violation by any Seller of any
intellectual property rights of any third party. To Sellers' knowledge,
neither Seller has infringed, misappropriated or otherwise violated any
such intellectual property rights. Neither Seller has received any
notice of any claim by any third party contesting the validity of any
Intellectual Property or Licensed Intellectual Property. To Sellers'
knowledge, no claims by any third party contesting the validity of any
Intellectual Property or Licensed Intellectual Property is threatened.
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3.19. FRANCHISE MATTERS.
(a) Attached as Schedule 3.19(a) is a true, correct and
complete list of the only franchise agreements, master agreements and
development agreements, to which either Seller is a party in connection
with the Business (collectively, the "FRANCHISE AGREEMENTS"). True,
correct and complete copies of the Franchise Agreements have been made
available to Buyer. Schedule 3.19(a) includes with respect to each of
Insty-Prints business (the "FRANCHISED BUSINESS"): (i) the date and or
agreement number or other identifier of the Franchise Agreement
governing the Franchised Business; (ii) the name of the franchisee, the
address of the Franchised Business; the term commencement and
termination date of each Franchise Agreement; and (iii) the names of
each individual or entity that has an ownership or beneficial interest
in or to each of the Franchised Businesses or the franchises.
(b) Neither Seller has directly or indirectly offered or sold
any franchises or business opportunities other than for (a) the
Insty-Prints franchise system and (b) the Change of Mind Learning
franchise system.
(c) Schedule 3.19(a) also contains a list of rights of first
refusal, development rights or similar rights granted to franchisees.
(d) Except as attached as Schedule 3.19(d), there are no
outstanding, pending, or promised applications to enter into any
Franchise Agreements.
(e) Seller has entered into, or acquired rights, title and
interest in, written Franchise Agreements relating to the franchising
of the Franchised Business with all of its Franchisees (as defined in
3.19(f)), and each of the Franchise Agreements is valid, binding and
enforceable in accordance with its terms except as enforcement may be
limited by applicable franchise relationship laws, bankruptcy,
insolvency, reorganization, moratorium and other laws affecting
enforcement of creditors rights generally and, except as the
availability of equitable remedies, may be limited by applicable law;
provided that for the purposes of this subsection 3.19(e), Sellers
assume due execution and delivery of a Franchise Agreement by any
franchisee which is a business entity.
(f) Except as set forth on Schedule 3.19(f), all franchise
agreements which have been entered into by Insty with its current
franchisees or acquired by Insty (the "FRANCHISEES") have been legally
and validly offered and sold in compliance with all applicable laws and
regulations in effect at the time of offer, sale, execution of such
Franchise Agreements. Schedule 3.19(f) includes a description of the
facts that relate to the cause of any invalid or non-compliant offer or
sale. Except as set forth on Schedule 3.19(f), all franchise agreements
which have been terminated by Insty since January 1, 1996 have been
legally and validly terminated in compliance with all applicable laws
and regulations in effect at the time of the termination of such
franchise agreement. The consummation of the transactions contemplated
by this Agreement should not cause the termination of any Franchise
Agreement, nor should it affect the binding nature or enforceability of
any Franchise Agreement.
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(g) Neither Seller has entered into any Franchise Agreements
other than those which are reflected in written and signed documents.
Unless otherwise set forth on a Schedule pursuant to this Section 3.19,
there are no promises, understandings, commitments or other forms of
undertakings which are contrary or in addition to such written
Franchise Agreements. Except as provided in Schedule 3.19(g), neither
Seller has entered into or endeavored to enter into any agreements,
promises or undertakings with Franchisees to reduce royalty payments or
other fees under the Franchise Agreement.
(h) Except as set forth on Schedule 3.19(h), Insty currently
has valid registrations for offering and selling franchises in effect
in each state requiring such registrations, and has valid exemptions
where required in each state having business opportunities laws.
Schedule 3.19(h) includes a chart of all jurisdictions in which Insty
has valid registrations or exemptions, and indicates all lapse periods,
if any.
(i) Except as set forth on Schedule 3.19(h) and Schedule
3.19(f), Insty is in material compliance with, and has been at all
times in material compliance with, all laws, regulations, rules,
consents, decrees or orders of all state, federal or foreign
governmental authorities or regulatory agencies applicable to the
offer, sale or regulation of franchises or its franchising activities.
(j) Except as set forth on Schedule 3.19(j), Seller has
delivered to Buyer, or made available for Buyer's review a true,
correct and complete copy of each form of Uniform Franchise Offering
Circular ("UFOC") used or currently being used by Insty. All UFOC's
used by Insty in the offer or sale of its franchises comply in all
material respects with all applicable federal and state laws and
regulations pertaining to the offer or sale of franchises, including,
without limitation, the Federal Trade Commission's Disclosure Rule
entitled "Disclosure Requirements and Prohibitions Concerning
Franchising and Business Opportunity Ventures," 16 C.F.R.ss.436, ET
SEQ., and do not contain any untrue statement of fact or omit - to
state a material fact required to be stated in the UFOC or which would
be necessary to make any statement in the UFOC, in light of the
circumstances under which they were made, not misleading.
(k) Except as set forth on Schedule 3.19(k), all agreements
and understandings between Insty and the Franchisees with regard to the
Insty Prints National Advertising Trust Fund are set forth in the
Franchise Agreements.
(l) Except as set forth on Schedule 3.19(l), neither Seller
has received notice of any proceeding, investigation or inquiry by any
state or federal regulatory agency in which the franchising activities
of Insty is or may be involved, other than comment letters, requests
for information and other routine inquiries, and there are no facts
which are likely to lead to any such proceeding, investigation or
inquiry. Sellers have provided Buyer access to all such comment
letters, requests for information and routine inquiries.
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(m) Except as set forth on Schedule 3.19(m), neither Seller
has received notice of any pending claims, and there are no threatened
claims, by any Franchisees or prospective franchisee against either
Seller relating to any Franchise Agreement or Insty's franchising
activities. Except as set forth in Schedule 3.19(m), to the knowledge
of Sellers, there are no facts relating to the Franchise Agreements or
the franchising activities of Insty which are reasonably likely to lead
to any claim against Sellers or its affiliates.
(n) Sellers do not own, lease, operate or manage any of the
Franchised Businesses.
(o) Schedule 3.19(o) includes a true, correct and complete
list identifying each of Seller's "recommended" or designated suppliers
of goods or services to the Franchised Business.
(p) To the knowledge of Sellers, all Franchised Businesses
that have had their franchise agreements terminated by reason of the
expiration of the term thereof or otherwise (the "TERMINATED STORES")
are no longer operated as Insty-Prints businesses (unless sold to other
Franchisees). Except as set forth on Schedule 3.19(p), to the knowledge
of Sellers, the operators of the Terminated Stores (i) have ceased to
use any Intellectual Property and (ii) have made all changes,
modifications or alternations necessary to eliminate any interior and
exterior design features, decor items, signage and other trade dress
items associated with the Franchised Business.
(q) Schedule 3.19(q) contains a correct and complete list of
all outstanding promissory notes made by a Franchisee to a Seller, as
modified by the Final Promissory Notes Schedule (as defined in Section
7.2(c)). Schedule 3.19(q) also contains a correct and complete list of
all Uniform Commercial Code financing statements filed by a Seller
evidencing such Seller's security interest in the assets of a
Franchisee or a Franchised Business (the "FINANCING STATEMENTS").
3.20. NATIONAL ADVERTISING TRUST FUND.
(a) Schedule 3.20(a) contains a true, correct and complete
list of all accounts used by or in connection with the National
Advertising Trust Fund, as referenced in the Franchise Agreements and
governed by the Trust Agreement (collectively, the "TRUST FUND
ACCOUNT"), in which funds have been deposited. All assets of the
National Advertising Trust Fund are, as of the date of this Agreement,
and will be, as of the Closing Date, deposited in the Trust Fund
Accounts. No monies, other than Franchisees' contributions to the
National Advertising Trust Fund and supplier rebates, marketing and
advertising allowances, if any, have been deposited in the Trust Fund
Account.
(b) All contributions to the National Advertising Trust Fund
made by Franchisees, suppliers or any other person or entity have been
deposited in the Trust Fund Account and used solely for purposes of
marketing and advertising the Franchised Businesses, the Corporate
Stores, or the Insty-Prints system, on behalf of, and for the benefit
of, all of the Franchised Business and the Corporate Stores, or as
otherwise provided in the Franchise Agreement or governing documents of
the National Advertising Trust Fund.
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(c) Sellers have neither possession of, nor control over, any
other funds contributed by Franchisees, suppliers or any other person
or entity for advertising purposes (national or regional), except for
the trustees' control over the funds in the Trust Fund Account. Except
as provided in Schedule 3.20(a), Sellers have not collected and are not
currently holding any fees designated for use in any advertising
program whether related to the National Advertising Trust Fund or
otherwise.
(d) Insty and the trustees of the National Advertising Trust
Fund who are listed on Schedule 3.20 (d) (the "TRUSTEES") have operated
and administered the National Advertising Trust Fund in material
compliance with laws, rules and regulations applicable to the operation
of the National Advertising Trust Fund and in accordance with the
Franchise Agreements, trust fund governing documents, and their
fiduciary and legal responsibilities, if any, established in any
governing documents of the National Advertising Trust Fund and in any
other agreements or understandings entered into with Franchisees,
suppliers, vendors or others in connection with the National
Advertising Trust Fund. As of the Closing Date, the National
Advertising Trust Fund has no material liabilities or obligations
(other than trade payables and subject to Section 5.7, obligations to
franchisees) of any nature, whether accrued, absolute, contingent or
otherwise, including, without limitation, tax liabilities. To Sellers'
knowledge, there exists no basis for the assertion against the National
Advertising Trust Fund, as of the Signing Date or as of the Closing
Date, of any material liability of any nature or in any amount.
(e) Attached as EXHIBIT 3.20(e) are true, correct and complete
copies of the governing documents of the National Advertising Trust
Fund.
3.21. GUARANTEES. Except as disclosed in Schedule 3.21 hereto, neither
Seller is a guarantor or indemnitor or otherwise liable for or in respect of any
indebtedness of any person except as an endorser of checks received by it and
deposited in the ordinary course of business.
3.22. DISCLOSURE. No representation or warranty of Sellers made
hereunder or in the Schedules or in any certificate, statement or other document
delivered by or on behalf of either Seller contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein or therein not misleading. Except as expressly set
forth in this Agreement and the Schedules and, except as may be a matter of
general public knowledge, neither Seller has any knowledge of any facts which
will or may reasonably be expected to have any material adverse effect on the
Business or any of the Acquired Assets.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants the following to Sellers as of the
Signing Date and as of the Closing Date:
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4.1. ORGANIZATION AND STANDING. Buyer is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Michigan.
4.2. NO RESTRICTIONS; AUTHORIZATIONS; BINDING EFFECT. Buyer is not
subject to any restriction, agreement, law, rule, regulation, ordinance, code,
writ, injunction, award, judgment or decree which would prohibit or be
materially violated by the execution and delivery hereof or the consummation of
the transactions contemplated hereby. Buyer has all necessary power and
authority and has taken all action necessary to execute and deliver this
Agreement and the instruments, documents and agreements to be executed and
delivered by Buyer pursuant hereto (collectively, the "BUYER'S DOCUMENTS"), to
consummate the transactions contemplated by this Agreement and the Buyer's
Documents and to perform Buyer's obligations under this Agreement and the
Buyer's Documents. This Agreement and each of the Buyer's Documents has been
duly executed and delivered by Buyer and constitutes a legal, valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms,
except as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or similar laws of general applicability
relating to or limiting creditors' rights generally, now or hereafter in effect
and subject to the application of equitable principles and the availability of
equitable remedies.
4.3. BROKERS. Buyer has not dealt with any broker, finder or other
person entitled to any broker's or finder's fee, commission or other similar
compensation in connection with the transactions contemplated hereby.
4.4. DISCLOSURE. No representation or warranty of Buyer made hereunder
or in the Schedules or in any certificate, statement or other document delivered
by or on behalf of Buyer contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained herein or therein not misleading.
ARTICLE 5
COVENANTS OF SELLERS AND BUYER
5.1. OPERATION OF THE BUSINESS. Between the Signing Date and the
Closing Date, Sellers will conduct the Business only in the ordinary course of
business and operate the Business in strict compliance with the Franchise
Agreements, including, without limitation, by: (i) implementing and committing
to implement all marketing, advertising and promotional programs for the
Business consistent with past practice; (ii) principal officers and employees
continuing to work the same or substantially the same number of hours in
operating the Business as such officer or employee has worked in the past while
conducting business in the ordinary course; and (iii) maintaining the same level
of employees; provided, however, Sellers will not implement any new policies,
training programs, or marketing programs respecting the Business without prior
written consent of Buyer. As used herein actions taken in the "ordinary course
of business" shall mean that such action is consistent with the past practices
of Sellers and is taken in the ordinary course of the normal day-to-day
operations of the Business.
5.2. LIABILITIES. From and after the Closing Date, Buyer shall pay and
discharge when due all of the Assumed Liabilities. Sellers, prior to and after
the Closing, shall be solely responsible for the payment and performance, when
due, of any liability or obligation of Sellers for any debt, obligation or
liability of either Seller, whenever arising, which is not an Assumed Liability.
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5.3. CONSENTS. Prior to the Closing, Sellers shall have obtained (and
shall have delivered to Buyer copies of) all Consents as set forth on Schedule
3.8.
5.4. EMPLOYEES.
(a) Sellers shall solely be responsible for all severance,
retirement, welfare, vacation, bonus programs or other benefits, if
any, payable to employees of Sellers under all Employee Plans of either
Seller, any oral or written agreement entered into by either Seller on
or before or after the Closing Date and any promise made by either
Seller to any of its employees on, before or after the Closing Date.
(b) Sellers agree not to terminate, without prior written
consent of Buyer, any of Sellers' employees for a period of sixty (60)
days following the Closing Date (the "Employee Period"); provided that
Sellers may terminate any employee for good cause.
(c) Sellers will make available to Buyer the services of any
employees of Sellers that Buyer, in its sole discretion, determines to
be necessary for the Business, unless (i) the employee terminates his
or her employment with Seller prior to the expiration of the Employee
Period, (ii) Buyer hires any such employee as its employee, (iii) Buyer
determines that any such employee is no longer necessary for its
operations, or (iv) Sellers terminate such employee for good cause, but
with prior written notice to Buyer.
(d) In consideration for the services provided by Sellers'
employees, Buyer will pay Sellers for each employee who performs
services for Buyer, such employee's Employment Rate, as adjusted to
reflect the proportion of such employee's working hours spent in the
service of Buyer. "Employment Rate" shall mean an amount equal to such
employee's base salary and the cost of such employee's benefits under
the Sellers' Employee Plans as set forth on Schedule 3.13. Nothing
contained herein shall restrict Sellers in any way with respect to
those employees whose services are not requested by Buyer or with
respect to employees not hired by Buyer upon the expiration of the
Employee Period. Buyer and Sellers acknowledge and agree that, unless
Buyer expressly makes an offer in writing to an employee for such
employee to become an employee of Buyer, and such employee accepts
Buyer's offer of employment, no employee of a Seller will be deemed an
employee of Buyer for any reason.
5.5. RECEIVABLES.
(a) Within five (5) business days after the Closing, Sellers
will deliver to Buyer an updated schedule of the Receivables which
shall be dated as of the Closing Date (the "Final Receivables
Schedule").
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(b) From the Signing Date until the Closing, Sellers may agree
to any settlement on any Receivables or other amounts owed by
franchisees without prior written consent of Buyer; provided that
Sellers give Buyer written notice of such settlement within five (5)
business days. Buyer will abide by and enforce in a commercially
reasonable manner all written settlement agreements Seller enters into
prior to the Closing with respect to the Receivables and will not
modify any such agreements without Sellers' prior written consent
during the one(1) year period immediately after the Closing Date.
During such one (1) year period, Buyer will use its reasonable efforts
to collect the Receivables in the same manner that Buyer pursues
receivables from its current franchisees, provided that Buyer shall not
be required to institute a lawsuit with respect to any Receivables.
Sellers agree that they will have no rights to the Receivables after
the Closing (except rights to receive payment from Buyer under Section
2.2) and will not contact any Franchisee directly or indirectly with
respect to the Receivables.
(c) Buyer shall provide to Seller on the tenth (10th) day of
each month for a period of eighteen (18) months immediately after the
Closing Date a statement of any Receivables collected during the
immediately preceding calendar month and a statement of the reasonable
out-of-pocket expenses incurred by Buyer in collection of such
Receivables. Seller shall have the right to audit such statement by
reviewing correspondence, records, receipts, financial statements,
accounting work papers and any other Receivables related documents of
Buyer, such audit to be performed at Sellers' expense.
5.6. TAX FILINGS. Prior to the Closing, Seller shall pay all fees,
taxes, penalties and other amounts required by any governmental authority or
applicable law (including, without limitation, with respect to Taxes) in
connection with the purchase and sale of the Acquired Assets or any of the
transactions contemplated by this Agreement. Seller agrees to timely file, and
Buyer agrees to assist and cooperate with Seller in timely filing, any notices
or other documents relating to any Taxes that are required to be filed by Seller
or Buyer with any state or local government agency due to the transactions that
this Agreement contemplates.
5.7. NATIONAL ADVERTISING TRUST FUND.
(a) Set forth on Schedule 5.7 hereto is a statement of (i) all
advertising plans, programs or benefits available to franchisees
relating to the National Advertising Trust Fund (the "Fund") existing
as of the Closing Date (the "Fund Programs") (ii) a description of, and
estimated or actual budget for, Fund Programs approved for calendar
years 2001 and 2002. Sellers shall prepare and deliver to Buyer on the
Closing Date a statement of all accounts payable of the Fund as of the
Closing Date (the "Closing Fund Payables").
(b) Sellers will cause the Fund to be dissolved effective as
of the Closing Date. As of Closing Date, Seller shall cause all Fund
Assets to be transferred to an account designated by Buyer for the
benefit of the Franchisees, the Franchised Businesses and the
Insty-Prints system and Buyer shall assume all Closing Fund Payables
and pay the same when due, pursuant to an Assignment and Assumption of
National Advertising Trust Fund Assets in a form mutually agreed upon
by Sellers and Buyer ("ASSIGNMENT AND ASSUMPTION OF FUND ASSETS").
"Fund Assets" shall mean amounts remaining in the Trust Fund Account,
together with all rights of Sellers in and to any and
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all assets of the Fund held for the benefit of the Franchisees or any
other party having a beneficial interest therein, including, without
limitation, cash, accounts receivables, deposits, advertising
materials, and rights to rebates, marketing and advertising allowances.
As of the Closing, the Fund Assets will be free and clear of any
Encumbrances whatsoever.
(c) Sellers will indemnify and hold harmless Buyer from and
against any and all issues, damages, expenses or claims of any nature
made by any party with respect to the Fund arising on or before the
Closing Date; provided that Buyers will be responsible for
reimbursement obligations pursuant to the Fund Programs set forth in
Schedule 5.7. Buyer will indemnify and hold harmless Sellers from and
against any and all issues, damages, expenses or claims that relate (i)
solely to Buyer's administration of the Fund after the Closing Date or
(ii) provided Seller dissolves the Fund pursuant to the terms of the
Trust Agreement and applicable laws, the dissolution of the Fund by
Seller and transfer of Fund Assets to the Buyer.
(d) On and after the Closing Date, Buyer covenants and agrees,
for a period of one (1) year after the Closing Date, to continue,
maintain and administer Fund Programs as described on Schedule 5.7 and
as such Fund Programs have been established and historically
administered under the Trust Agreement.
5.8. TRANSITION ASSISTANCE. From and after the Signing Date, Sellers
will cooperate with and obtain the approval of Buyer, which approval will not be
unreasonably withheld, with respect to all decisions made after such date
relating to all Franchise Agreements, other contracts, commitments and
communications with Franchisees, communications with Franchisees regarding the
transactions which are the subject of this Agreement and filing with
governmental agencies. From and after the Signing Date, Sellers will assist
Buyer, at Buyer's reasonable out-of-pocket expense, if any, in converting
Sellers' electronic data files relating to billing, accounts receivable, payment
processing, adjustments and credit memos, accounts payable, inventory and sales
history for royalties, National Advertising Trust Fund, matching funds, sales of
supplies, advertising cooperatives and notes to Buyer's electronic accounting
and franchise information systems. Sellers will in good faith assist and
cooperate with Buyer to make all reasonable efforts to complete such conversion
process by November 21, 2001. Such assistance will include, but not be limited
to, providing the foregoing information in a comma delimited file with
descriptions of each field.
5.9. TRADE NAMES.
(a) From and after the Closing Date, neither Seller shall have
any rights to or interest in the name "Insty-Prints" or any variation
thereof. At the Closing, Sellers shall deliver to Buyer a certified
copy of duly adopted joint resolutions of the Board of Directors and
the sole shareholder of Insty authorizing an amendment to the Articles
of Incorporation of Insty to change the corporate name of Insty to
comply with the provisions of this Section 5.9, as well as a copy of
the Articles of Amendment for Insty to be filed with both the
Department of Revenue of the State of Minnesota and the Secretary of
State of Minnesota. Sellers also shall cease using all Intellectual
Property in connection with the Corporate Stores and remove all signs
identifying such stores as Insty-Prints stores.
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(b) Sellers shall grant Buyer and its affiliates a
non-exclusive license to use the "IPI" name and xxxx in connection with
the Business, but only to the extent currently used by Sellers. Buyer
acknowledges the importance to Sellers of the reputation and goodwill
of the "IPI" name and xxxx. Buyer, therefore, agrees to maintain the
reasonable standards of quality as may be set by Sellers from time to
time.
5.10. DUE DILIGENCE. Prior to the Closing Date, Buyer shall have the
right to conduct such due diligence, and Sellers shall provide such due
diligence or access to requested information, as Buyer reasonably requires in
order to satisfy itself with respect to the Business, the Acquired Assets and
the Assumed Liabilities. Sellers will provide Buyer full access to, and
authorize Buyer to make copies of all of the contents of all files maintained by
Sellers' attorneys, brokers or other agents relating to the Franchisees, the
Acquired Assets, the Insty-Prints system, the Franchised Businesses and the
conduct of the Business prior to the Closing.
5.11. PRE-CLOSING DELIVERIES. Not less than five (5) business days
before the Closing Date, Sellers shall deliver to Buyer:
(a) a list of all Trade Credits and Accrued Liabilities to be
assumed by Buyer at the Closing (the "Final Trade Credits and Accrued
Liabilities Schedule");
(b) a true and correct list of all Uniform Commercial Code
financing statements filed by a Seller evidencing such Seller's
security interest in the assets of a Franchisee or a Franchised
Business (the "Financing Statements");
(c) a substantially complete list of all Purchase Orders;
(d) a list of all Inventory which will be delivered to Buyer
at the Closing;
(e) all signed Consents;
(f) a schedule of royalties paid by each Franchisee to Sellers
each month since December 1, 2000; and
(g) of a list of and a description of the variations in
insurance coverage Insty requires the Franchisees to maintain. Sellers
also agree to deliver to Buyer a list of Franchisees who, to Sellers'
knowledge, do not have the required policies in full force and effect
and/or have not named Sellers as additional insureds under their
respective policies; and
(h) a statement of the "net book value" of the prepaids as of
the Closing Date (the "Final Prepaids Schedule") as agreed upon by the
parties;
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(i) an updated Schedule 3.19(o) amended to include a true,
correct and complete list of every agreement then in effect entered
into by either Seller for, and any of Seller's "recommended" or
designated suppliers of, goods or services to the Franchise Business;
and
(j) a statement of Closing Fund Payables pursuant to Section
5.7.
5.12. CONFIDENTIALITY. Sellers shall at all times (including after the
Closing) maintain the absolute confidentiality of the Confidential Information
(defined below) and shall not use or disclose the Confidential Information in
any manner whatsoever, other than in connection with the consummation of the
transactions that this Agreement contemplates. As used in this Section 5.12,
"CONFIDENTIAL INFORMATION" means all information acquired by Sellers relating to
any financial, strategic or business plans, data or analyses of Buyer, or any of
their licensees or franchisees. Notwithstanding the foregoing, nothing contained
herein shall prohibit Seller, from (a) disclosure of Confidential Information
which are generally known to the public and (b) disclosure of Confidential
Information in legal proceedings when Sellers are legally required to disclose
it, provided that Sellers give Buyer an opportunity to obtain an appropriate
legal protective order or other assurance satisfactory to Buyer that the
information required to be disclosed will be treated confidentially.
ARTICLE 6
TERMINATION
6.1. TERMINATION BY BUYER. This Agreement and the transactions
contemplated hereby may be terminated by Buyer at any time prior to the Closing
if:
(a) Sellers' representations and warranties are not true and
correct as of the Closing Date; or
(b) either Seller has failed in any manner to timely perform
or comply with any covenant to be performed by it hereunder; or
(c) Seller fails to deliver any executed Consent (including
from the landlord under the sublease for the Premises); or
(d) at any time between the Signing Date and the Closing Date
there occurs a material adverse change in any Acquired Asset, the
Business, the condition (financial or other), results of operations or
prospects of Sellers, or any information disclosed to Buyer in the
Schedules delivered to Buyer on the Signing Date; or
(e) Seller shall have received a written statement by Buyer on
or before 5:00 p.m. Minneapolis, Minnesota time on November 27, 2001
notifying Seller that based upon its review of materials (described on
Schedule 6.1(e)) provided by Sellers to Buyer after the Signing Date,
Buyer in its reasonable judgement concludes that either (i) there has
been an uncured breach of any of the representations, warranties or
pre-closing covenants of Sellers hereunder; or (ii) Buyer has learned
from its review of Schedule 6.1(e) materials, of any event or condition
which could reasonably be expected to have a material adverse effect on
any Acquired Asset or the Business. Provided however, that any written
statement to be provided under this Section 6.1(e) which is received by
Seller
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after 5:00 p.m. Minneapolis, Minnesota time on November 27, 2001 shall
be ineffective to terminate the transactions contemplated by this
Agreement. Provided further, that Buyer's review under this Section
6.1(e) shall have no effect on the liability of Sellers to Buyer under
this Agreement for breach of any representations, warranties or
covenants of Sellers hereunder.
Nothing herein shall be construed to prevent Buyer, in its sole and
absolute discretion, from waiving in writing any of the above conditions, in
whole or in part, at any time up to the Closing.
6.2. TERMINATION BY SELLER. This Agreement and the transactions
contemplated hereby may be terminated by Seller at any time prior to the Closing
if:
(a) Buyer's representations and warranties are not true and
correct as of the Closing Date; or
(b) Buyer has failed in any manner to timely perform or comply
with any covenant to be performed by it hereunder.
(c) IPI does not obtain approval of the transaction
contemplated by this Agreement by the affirmative vote of the holders
of a majority of the outstanding shares of IPI's Common Stock entitled
to vote at a meeting of shareholders called for that purpose, other
than failure of IPI to obtain approval as a result of actions of
shareholders who are also officers, directors or who benficially own in
excess of 10% of the outstanding shares of IPI's Common Stock. Nothing
herein shall be construed to prevent either Seller, in such Seller's
sole and absolute discretion, from waiving in writing any of the above
conditions, in whole or in part, at any time up to the Closing.
ARTICLE 7
CLOSING DELIVERIES
7.1. CLOSING DOCUMENTS. At the Closing, the parties hereto shall
execute and deliver the following agreements and documents:
(a) Buyer and each Seller shall execute and deliver the
assumption agreement substantially in the form of EXHIBIT 7.1(a)
attached hereto;
(b) Insty shall execute and deliver to Buyer an intellectual
property substantially in the form of EXHIBIT 7.1(b) attached hereto;
(c) Insty shall execute and deliver to Buyer executed
assignments, in form for filing with applicable governmental agencies,
of all Intellectual Property;
(d) Sellers shall execute and deliver to Buyer executed
assignments (with consents, if required) of each agreement constituting
Licensed Intellectual Property;
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(e) Sellers shall execute and deliver a Xxxx of Sale,
substantially in the form of EXHIBIT 7.1(e) attached hereto, conveying
good and marketable title to all Acquired Assets not otherwise
transferred or conveyed pursuant to this Section;
(f) Buyer and Sellers shall execute and deliver the
Restrictive Covenant Agreement substantially in the form of EXHIBIT
7.1(f) attached hereto;
(g) Buyer and IPI shall execute and deliver the Temporary
Space License Agreement substantially in the form of EXHIBIT 7.1(g)
attached hereto;
(h) Sellers shall execute all amendments and/or assignment
necessary to assign all of Sellers' interest in the Financing
Statements to Buyer;
(i) Sellers shall cause the Trustees and Insty to execute the
Assignment of Fund Assets and any other documents reasonably required
for the purposes of Section 5.8; and
(j) Buyer and Sellers shall execute and deliver such other
instruments and documents as are reasonably required in order to
consummate the transactions contemplated hereby.
7.2. ADDITIONAL DELIVERIES BY SELLERS. Sellers, at their sole expense,
shall deliver to Buyer at the Closing:
(a) certified copies of joint resolutions duly adopted by the
shareholders and the Board of Directors of each Seller authorizing the
execution of this Agreement and the consummation of the transactions
contemplated hereby;
(b) Certificates of Good Standing of Insty and IPI, dated
within fifteen (15) days prior to the Closing Date, from the state of
incorporation and any other state or foreign jurisdiction within which
such Seller is qualified to do business as a foreign corporation;
(c) A correct and complete list of all outstanding promissory
notes made by a Franchisee to a Seller as of the day immediately prior
to the Closing Date (the "Final Promissory Note Schedule");
(d) certificate from each Seller, signed by an officer of such
Seller, dated as of the Closing Date, certifying, without
qualifications or exceptions, (i) all pre-closing covenants set forth
in Article 5 have been fully satisfied and (ii) all representations and
warranties of such Seller contained herein or in any certificate or
other writing delivered pursuant hereto or in connections herewith are
accurate as of the Closing date. Each such certificate shall be deemed
a representation and warranty by such Seller.
(e) an opinion of Xxxxxxxxx & Xxxxxx, P.L.L.P., counsel to
Sellers, dated the Closing Date, in the form of EXHIBIT 7.2(e) attached
hereto.
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7.3. ADDITIONAL DELIVERIES BY BUYER. Buyer, at its expense, shall
deliver to Sellers at the Closing:
(a) certified copy of resolutions duly adopted by members of
Buyer authorizing the execution of this Agreement and the consummation
of the transactions contemplated hereby; and
(b) opinion of Xxxxx Xxxxxxx Xxxxxxx & Xxxxx, counsel to
Buyer, dated the Closing Date, in the form of EXHIBIT 7.3(b) attached
hereto.
ARTICLE 8
INDEMNIFICATION
8.1. INDEMNIFICATION BY SELLERS. Sellers, jointly and severally, shall
indemnify, defend and hold harmless Buyer and its affiliates and each of their
respective shareholders, officers, directors, agents, representatives,
employees, successors and assigns (collectively, the "BUYER INDEMNIFIED
PARTIES") against all costs, expenses, losses, direct or indirect damages
(including incidental, consequential and punitive damages), fines, penalties or
liabilities (including, without limitation, attorneys' fees, arbitrators' fees,
expert witness fees, costs of investigation and proof of facts and other costs
of litigation or arbitration, whether or not such litigation or arbitration is
commenced) (collectively, "DAMAGES") incurred by any of the Buyer Indemnified
Parties and arising directly or indirectly from, with respect to or in
connection with:
(a) the existence of any fact, circumstance or condition
constituting a breach or violation of any of the representations and
warranties of a Seller contained in this Agreement or any other
document delivered by a Seller to Buyer in connection herewith;
(b) the breach by a Seller of any covenant or agreement
contained in this Agreement or any other document delivered by a Seller
to Buyer in connection herewith;
(c) any threatened or instituted claim, suit, action or cause
of action, investigation or proceeding of any kind whatsoever, whether
instituted or commenced prior to or after the Closing Date, which
relates to, or arises directly or indirectly from, the Business or the
Acquired Assets on or before the Closing Date; and
(d) any threatened or instituted claim, suit, action or cause
of action, investigation or proceeding of any kind whatsoever, whether
instituted or commenced prior to or after the Closing Date, which
relates to, or arises directly or indirectly from, the employees of a
Seller before, on or after the Closing Date.
If any indemnification obligation under this Section 8.1 might arise from the
claim, action or allegation of a third party or any litigation or alternate
dispute resolution resulting therefrom (a "CLAIM"), Sellers shall assume the
defense of any such Claim and any investigation, defense and settlement
resulting from such Claim, provided that Sellers shall use counsel reasonably
satisfactory to Buyer to defend against such Claim and may not settle any such
Claim without the prior written consent of Buyer, which shall not be
unreasonably withheld. Notwithstanding the
24
above, Buyer may, at its option, participate in the investigation, defense and
settlement of any Claim and engage counsel of its choice to participate in the
defense of any Claim at Buyer's risk and expense, provided that Buyer and its
counsel shall proceed diligently and in good faith with respect thereto.
8.2. INDEMNIFICATION BY BUYER. Buyer shall indemnify, defend and hold
harmless Sellers, their affiliates and each of their respective shareholders,
officers, directors, agents, representatives, employees, successors and assigns
(collectively, the "SELLER INDEMNIFIED PARTIES") against all Damages incurred by
any of the Seller Indemnified Parties and arising directly or indirectly from,
with respect to or in connection with:
(a) the existence of any fact, circumstance or condition
constituting a breach or violation of any of the representations and
warranties of Buyer contained in this Agreement or any other document
delivered by Buyer to Sellers in connection herewith;
(b) a breach by Buyer of any covenant or agreement contained
in this Agreement or any other document delivered by Buyer to Sellers
in connection herewith;
(c) any threatened or instituted claim, suit, action or cause
of action, investigation or proceeding of any kind whatsoever which
relates solely to or arises solely from the Business or the Acquired
Assets after the Closing Date;
(d) any of the Assumed Liabilities.
If any indemnification obligation under this Section 8.2 might arise
from a Claim, Buyer shall assume the defense of such Claim and any
investigation, defense and settlement resulting from such Claim, provided that
Buyer shall use counsel reasonably satisfactory to Sellers to defend against
such Claim and may not settle any such Claim without the prior written consent
of Sellers, which shall not be unreasonably withheld. Notwithstanding the above,
Sellers may, at their option, participate in the investigation, defense and
settlement of any Claim and engage counsel of their choice to participate in the
defense of any Claim at Sellers' expense, provided that Sellers and their
counsel shall proceed diligently and in good faith with respect thereto.
8.3. SURVIVAL. All covenants and agreements of any party hereto shall
survive the Closing. Except as is otherwise expressly provided in this Section
8.3, all representations and warranties of any party hereto set forth herein
shall survive the Closing for a period of one (1) year following the Closing
Date, at which time they shall be deemed terminated. Any representation and
warranty in Section 3.6 or any representation or warranty which was known by
Sellers to be untrue when made shall survive the Closing without limitation. Any
claim which Buyer makes against Sellers in writing prior to the expiration of
the applicable cut-off period set forth in this Section 8.3 shall survive the
expiration of such period and Buyer shall have the right to pursue the same in
accordance with the applicable indemnification provisions set forth in this
Agreement. Any representation and warranty in this Agreement shall be deemed to
be material and to have been relied upon by the party to which made,
notwithstanding any investigation or inspection made by or on behalf of such
party, and shall not be affected in any respect by any such investigation or
inspection.
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8.4. RIGHT TO OFFSET. To the extent Buyer is entitled to any payment
for indemnification under Section 8.1 hereof or any payment under Section 5.5(a)
(an "INDEMNIFICATION PAYMENT"), Buyer may (but is not obligated to) offset any
part or the full amount of any such Indemnification Payment against any payment
or payments, if any, coming due from Buyer to Sellers under this Agreement or
otherwise until such Indemnification Payment is fully satisfied; provided,
however, that nothing herein shall be deemed to prohibit or restrict Buyer's
right or ability to collect any Indemnification Payment.
ARTICLE 9
MISCELLANEOUS
9.1. ARBITRATION. ALL CONTROVERSIES, DISPUTES OR CLAIMS BETWEEN BUYER,
ITS OFFICERS, DIRECTORS, AGENTS, EMPLOYEES AND ATTORNEYS (IN THEIR
REPRESENTATIVE CAPACITY) AND SELLER ARISING OUT OF OR RELATING TO: (1) THIS
AGREEMENT OR ANY PROVISION HEREOF OR ANY RELATED AGREEMENT; (2) THE RELATIONSHIP
OF THE PARTIES HERETO; OR (3) THE VALIDITY OF THIS AGREEMENT OR ANY RELATED
AGREEMENT, OR ANY PROVISION HEREOF; SHALL BE SUBMITTED FOR ARBITRATION TO BE
ADMINISTERED BY THE AMERICAN ARBITRATION ASSOCIATION. SUCH ARBITRATION
PROCEEDINGS SHALL BE CONDUCTED IN CHICAGO, ILLINOIS AND, EXCEPT AS OTHERWISE
PROVIDED IN THIS AGREEMENT, SHALL BE CONDUCTED BY ONE ARBITRATOR IN ACCORDANCE
WITH THE THEN CURRENT COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION
ASSOCIATION. THE ARBITRATOR SHALL HAVE THE RIGHT TO AWARD OR INCLUDE IN HIS OR
HER AWARD ANY RELIEF WHICH HE OR SHE DEEMS PROPER IN THE CIRCUMSTANCES,
INCLUDING, WITHOUT LIMITATION, MONEY DAMAGES (WITH INTEREST ON UNPAID AMOUNTS
FROM DATE DUE), SPECIFIC PERFORMANCE, INJUNCTIVE RELIEF, ATTORNEYS' FEES AND
COSTS. THE AWARD AND DECISION OF THE ARBITRATOR SHALL BE CONCLUSIVE AND BINDING
UPON ALL PARTIES HERETO AND JUDGMENT UPON THE AWARD MAY BE ENTERED IN ANY COURT
OF COMPETENT JURISDICTION. ALL MATTERS WITHIN THE SCOPE OF THE FEDERAL
ARBITRATION ACT (9 U.S.C. SECTIONS 1 ET SEQ.) SHALL BE GOVERNED BY IT AND NOT BY
ANY STATE ARBITRATION LAW. THE PARTIES FURTHER AGREE THAT IN CONNECTION WITH ANY
SUCH ARBITRATION PROCEEDING EACH SHALL FILE ANY COMPULSORY COUNTERCLAIM (AS
DEFINED BY RULE 13 OF THE FEDERAL RULES OF CIVIL PROCEDURE) WITHIN THIRTY (30)
DAYS OF THE DATE OF THE FILING OF THE CLAIM TO WHICH IT RELATES; OTHERWISE, SUCH
COUNTERCLAIM SHALL BE FOREVER BARRED. THE PARTIES FURTHER AGREE THAT ARBITRATION
WILL BE CONDUCTED ON AN INDIVIDUAL, NOT A CLASS-WIDE BASIS AND THAT AN
ARBITRATION PROCEEDING BETWEEN THE PARTIES, AND/OR THEIR AFFILIATES' RESPECTIVE
SHAREHOLDERS, OFFICERS, DIRECTORS, AGENTS AND/OR EMPLOYEES, MAY NOT BE
CONSOLIDATED WITH ANY OR OTHER ARBITRATION PROCEEDING. DESPITE THE PARTIES'
AGREEMENT TO ARBITRATE, BUYER AND SELLERS EACH HAVE THE RIGHT IN A PROPER CASE
26
TO SEEK TEMPORARY RESTRAINING ORDERS AND TEMPORARY OR PRELIMINARY INJUNCTIVE
RELIEF FROM A COURT OF COMPETENT JURISDICTION; PROVIDED, HOWEVER, THAT SELLERS
AND BUYER MUST CONTEMPORANEOUSLY SUBMIT THEIR DISPUTE FOR ARBITRATION ON THE
MERITS AS PROVIDED IN THIS SUBSECTION.
9.2. CONSENT TO JURISDICTION. Subject to the parties' obligations under
Section 9.1, Buyer and Sellers agree that all actions arising under this
Agreement, any related agreement, the relationship of the parties hereto, or the
validity of this Agreement or any related agreement must be commenced in the
state or federal court of general jurisdiction in or nearest to Troy, Michigan.
Sellers and Buyer irrevocably submit to the jurisdiction of those courts and
waive any objection of jurisdiction or venue in those courts.
9.3. TRANSACTION EXPENSES. Each party will bear all of its own
respective expenses incurred in the negotiations and consummation of the
transactions contemplated hereby, including all legal, accounting and other
advisors' fees.
9.4. NOTICES. All notices, requests, demands and other communications
required or permitted under this Agreement are sufficient if in writing and
delivered personally, delivered by a nationally recognized overnight courier
service, mailed first-class, postage prepaid, registered or certified mail, or
facsimile and in any event addressed as follows:
If to Buyer to: Allegra Holdings LLC
0000 Xxxx Xxxxx Xxxx
Xxxx, XX 00000
Attention: Xx. Xxxxxxx XxXxxxxx
Fax: (000) 000-0000
with a copy to: Xxxxx Xxxxxxx Xxxxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
If to Sellers to: Xxxxxx Management Corporation
0000 XXX Xxxxxx
00 Xxxxx 0xx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Fax: (000) 000-0000
with a copy to: Xxxxxxxxx & Xxxxxx, P.L.L.P.
0000 XXX Xxxxxx
00 Xxxxx 0xx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxx
Fax: (000) 000-0000
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Notice is effective (a) when delivered personally, (b) on the business
day after being sent by nationally recognized courier service or transmittal by
facsimile, or (c) three (3) business days after being sent by registered or
certified mail. Either party may designate, by notice in writing, a new address
to which any notice, demand or communication may hereafter be so given or sent.
9.5. WRITTEN AGREEMENT TO GOVERN. This Agreement (along with all
documents and instruments to be delivered pursuant hereto, including all
Exhibits and Schedules) sets forth the entire understanding, and supersedes all
prior and contemporaneous discussions, negotiations, understandings and oral and
written agreements, among the parties relating to the subject matter it contains
and merges all prior and contemporaneous discussions among them. No party shall
be bound by any definition, condition, representation, warranty, covenant or
provision other than as expressly stated in this Agreement or in the other
documents referred to in this Agreement which form a part of this Agreement.
9.6. CONSTRUCTION. The parties expressly agree that it is not any
party's intention to violate any public policy, statutory or common laws, rules,
regulations, treaties or decisions of any government. If any provision of this
Agreement is judicially or administratively interpreted or construed as being
unenforceable, such provision shall be inoperative, and the remainder of this
Agreement shall remain binding upon the parties. If any provision of this
Agreement is determined by a court of competent jurisdiction to be invalid as
written by reason of its scope, the parties intend that such provision be
enforced to the maximum extent permitted under applicable laws.
9.7. WAIVER OF PROVISIONS. The headings in this Agreement are inserted
for convenience of reference only and are not a part of and will not control or
affect the meaning of this Agreement. The terms, covenants, representations,
warranties and conditions of this Agreement may be waived only by a written
instrument executed by the party waiving compliance. The failure of any party at
any time to require performance of any obligation under this Agreement or any
other instrument or document to be delivered pursuant hereto shall in no manner
affect the right at a later date to enforce the same. No waiver by any party of
any condition, or any breach of any provision, term, covenant, representation or
warranty contained in this Agreement, whether by conduct or otherwise in any one
or more instances, shall be deemed to be or construed as a further or continuing
waiver of any such condition or the breach of any other provision, term,
covenant, representation or warranty of this Agreement.
9.8. LAW TO GOVERN. All matters relating to arbitration shall be
governed exclusively by the Federal Arbitration Act (9 U.S.C. Sections 1 ET
SEQ.). Except to the extent governed by the Federal Arbitration Act or other
federal law, all matters arising from or relating to the validity, construction
or enforceability of this Agreement shall be governed in all respects by the
laws of the State of Michigan, without regard to its conflicts of laws rules.
9.9. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, personal
representatives, administrators successors and assigns; however, neither this
Agreement nor the rights or obligations of either Seller arising hereunder or in
connection herewith may be assigned by such Seller except with the written
consent of Buyer, which consent shall not be unreasonably withheld.
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9.10. THIRD PARTY BENEFICIARIES. Nothing in this Agreement shall confer
any rights upon any person or entity other than the parties hereto and their
respective heirs, successors and permitted assigns.
9.11. FURTHER ASSURANCES. From the Signing Date until the Closing Date,
and continuing after the Closing, the parties agree (a) to use all reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable to consummate and effectuate the
transaction contemplated by this Agreement; (b) to execute and deliver to the
others any documents, instruments or conveyances of any kind which may be
reasonably necessary or advisable to consummate and effectuate the transactions
contemplated by this Agreement, including, without limitation, any documents
requested by the telephone company or other service provider in connection with
the transfer of the telephone number or any service used in the Business'
operation to Buyer; and (c) to cooperate with each other in connection with the
foregoing.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the day and year first written above.
BUYER: SELLERS:
ALLEGRA HOLDINGS LLC, IPI, INC., a Minnesota corporation
a Michigan limited liability company
By: /s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxx
--------------------------------- -------------------------------
Xxxx X. Xxxxxxx Xxxxxx X. Xxxxxx
Its: Vice President of Finance Its:President
INSTY-PRINTS, INC., a Minnesota
corporation:
By: Xxxxx X. Xxxxxx
--------------------------------
Its: President
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