ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered into
as of the 17th day of December, 1998, by and among PRICKLY PEAR PAPER, INC., an
Arizona corporation ("PPPI"), XXXXX XXXXX, an Arizona resident ("Xxxxx"), and
PAPER WAREHOUSE, INC., a Minnesota corporation ("Paper Warehouse").
RECITALS
WHEREAS, PPPI is currently engaged in business as a discount seller of
various paper products and related items;
WHEREAS, PPPI is currently a franchisee of Paper Warehouse Franchising,
Inc., a Minnesota corporation and a subsidiary of Paper Warehouse, in the
operation of four Paper Warehouse-Registered Trademark- stores (store #'s 401,
402, 403, and 404) located in Tucson, Arizona (each a "Store" and collectively,
the "Stores") pursuant to the terms of those certain Paper Warehouse-Registered
Trademark- Franchise Agreements dated July 21, 1988 (for Store # 401), July 21,
1988 (for Store # 402), October 1, 1995 (for Store # 403), and September 1, 1997
(for Store # 404), (the "Franchise Agreements");
WHEREAS, Xxxxx is the majority (95%) shareholder of PPPI; and
WHEREAS, Paper Warehouse desires to acquire substantially all of the
assets of PPPI used in connection with the Stores pursuant to the terms
described below.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants
set forth below, the parties to this Agreement hereby agree as follows:
ARTICLE I
PURCHASE OF ASSETS
Subject to the terms and conditions stated herein, PPPI agrees to
transfer, assign, convey and deliver to Paper Warehouse at the Closing (as
defined below in Section 9.1) and as of the Effective Date (as defined below in
Section 9.1) all of PPPI's property and assets that are used in connection with
the business of any of the Stores (the "Purchased Assets"). The Purchased
Assets shall include:
1.1 INVENTORY. All inventory of each of the Stores (the "Inventory")
which will be based on a physical count of the inventory of the Stores conducted
on November 5, 1998 and November 9, 1998 by RGIS Inventory Service.
1.2 FURNITURE, FIXTURES AND EQUIPMENT. All furniture, fixtures and
equipment of each of the Stores as identified on SCHEDULE 1.2 attached hereto
(the "Fixtures").
1.3 LEASES. The portion of PPPI's right, title and interest
(including the rent deposit thereunder) in and to those certain real estate
leases to which PPPI is a party or by which PPPI is bound which Paper Warehouse
specifically assumes pursuant to Section 2.3(a) of this Agreement.
1.4 CONTRACTS. The portion of PPPI's right, title and interest in and
to those certain contracts and other obligations to which PPPI is a party or by
which PPPI is bound which Paper Warehouse specifically assumes pursuant to
Section 2.3(b) of this Agreement.
1.5 INTANGIBLES. All of PPPI's right, title and interest in and to
all trademarks, service marks, trade names, assumed names and other intangibles,
including goodwill, relating to each of the Stores.
The Purchased Assets shall not include (i) PPPI's cash, (ii) PPPI's
minute books, stock records, financial records and similar records or (ii)
PPPI's right, title and interest in and to any of its accounts receivable that
are accrued as of the Effective Date but not yet paid as of the Closing Date.
Paper Warehouse shall have reasonable access to such records of PPPI to the
extent reasonably necessary for the operation of its business after the Closing
and the preparation of its tax returns and financial statements.
ARTICLE II
CONSIDERATION FOR THE ASSETS
Subject to the terms and conditions stated herein, Paper Warehouse agrees
to acquire the Purchased Assets and in exchange therefore shall deliver to PPPI
the following consideration:
2.1 PURCHASE PRICE. The purchase price for the Purchased Assets will
be $1,206,000 cash (the "Cash Purchase Price") plus 70,749 shares of common
stock of Paper Warehouse (the "Paper Warehouse Common Stock") valued at a price
per share equal to the closing sale price of such common stock as reported by
the Nasdaq National Market on the Closing Date. The sum of the Cash Purchase
Price and the value of the Paper Warehouse Common Stock (as determined above) is
referred to in this Agreement as the "Purchase Price". The Purchase Price will
be paid as follows:
(a) On the Closing Date, Paper Warehouse will pay by
check or wire transfer $1,085,400 in cash. At the sole discretion
of Paper Warehouse, portions of such amount may be paid directly
to third parties to pay, on behalf of PPPI, the obligations of
PPPI not assumed by Paper Warehouse pursuant to the terms of this
Agreement. Any portion of such amount not paid directly to third
parties shall be paid by Paper Warehouse to PPPI, and Paper
Warehouse will provide an accounting of any payments made to third
parties;
(b) On the Closing Date, Paper Warehouse will deliver to
PPPI certificates representing the Paper Warehouse Common Stock;
(c) On or before December 31, 1998, Paper Warehouse will
pay by check or wire transfer $120,600 in cash. Such amount shall
be non-interest bearing and, at the
-2-
sole discretion of Paper Warehouse, portions of such amount may be paid
directly to third parties to pay, on behalf of PPPI, the obligations of
PPPI not assumed by Paper Warehouse pursuant to the terms of this
Agreement. Any portion of such amount not paid directly to third parties
shall be paid by Paper Warehouse to PPPI, and Paper Warehouse will
provide an accounting of any payments made to third parties.
2.2 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be
allocated among the Purchased Assets as follows:
Inventory: $751,000
Fixtures: $317,000
Rent Deposits $14,000
Intangibles; Goodwill $124,000 plus the value of the Paper
Warehouse Common Stock (as determined
above)
Each of the parties agrees to report the transactions contemplated by
this Agreement, including reporting for income tax and other tax purposes,
consistent with such allocation.
2.3 ASSUMPTION OF LEASE AND OTHER CONTRACTS. On the Closing Date,
Paper Warehouse will assume:
(a) All of PPPI's obligations under the real estate
leases of PPPI listed on SCHEDULE 3.9 attached hereto which Paper
Warehouse designates as acquired or assumed on such Schedule which
arise after or relate to the period following the Effective Date
(and specifically excluding any obligations relating to periods on
or prior to the Effective Date), as further set forth in the
Assignment and Assumption of Leases, a copy of which is attached
hereto as EXHIBIT 2.3(a); and
(b) All of PPPI's obligations under the contracts and
other obligations of PPPI listed on SCHEDULE 3.10 attached hereto
which Paper Warehouse designates as acquired or assumed on such
Schedule which arise after or relate to the period following the
Effective Date (and specifically excluding any obligations
relating to periods on or prior to the Effective Date), as further
set forth in the Assignment and Assumption of Contracts, a copy of
which is attached as EXHIBIT 2.3(b).
2.4 NO GENERAL ASSUMPTION OF LIABILITIES. Except as expressly stated
in Sections 2.3(a) and 2.3(b), Paper Warehouse shall not and does not assume any
debts, liabilities, or obligations of any nature (whether known or unknown, due
or to become due, absolute or contingent, liquidated, accrued or otherwise) of
PPPI and all such debts, liabilities, and obligations shall remain the debts,
liabilities, and obligations of PPPI. Specifically, but without limiting the
generality of the foregoing, all debts and obligations which have arisen in
connection with the business of the Stores or the Purchased Assets on or prior
to the Effective Date and which are not specifically assumed by Paper Warehouse
shall be the sole and exclusive responsibility of PPPI.
-3-
2.5 OFFSET. Paper Warehouse may offset any amount owing to PPPI under
this Agreement by an amount equal to any amounts which PPPI or Xxxxx owes to
Paper Warehouse or Paper Warehouse Franchising, Inc.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PPPI AND XXXXX
PPPI and Xxxxx jointly and severally represent and warrant to Paper
Warehouse that the following statements were true and correct as of the
Effective Date as if made on that date and will be true and correct as of the
Closing Date as if made on said date:
3.1 AUTHORITY.
(a) PPPI is a corporation duly organized and existing and in
good standing under the laws of the State of Arizona, and is entitled to
own or lease its properties and to conduct its business as presently
conducted. PPPI has full power and authority to transfer, assign, convey
and deliver to Paper Warehouse the Purchased Assets as provided herein.
(b) The execution and delivery of this Agreement do not and the
consummation by each of PPPI and Xxxxx of the transactions contemplated
this Agreement will not (i) conflict with or result in a breach of the
Articles of Incorporation or Bylaws of PPPI, (ii) conflict with, or
result in a breach of, or constitute a default under any material
agreement or instrument to which PPPI or Xxxxx is a party or by which
either of them is bound, and (iii) violate any provision of any judicial
or governmental decree, order or judgment to which PPPI or Xxxxx is a
party or by which either of them is bound.
(c) All corporate and other proceedings necessary to be taken
by PPPI in connection with the transactions provided for by this
Agreement and necessary to make the same effective have been duly and
validly taken, and this Agreement has been duly and validly executed and
delivered by PPPI and Xxxxx and constitutes a valid and binding
obligation of PPPI and Xxxxx and is enforceable in accordance with its
terms.
3.2 SOLE SHAREHOLDER. Xxxxx (95%) and Xxxxx Xxxxxx (5%) are the only
shareholders of PPPI and no other person holds stock or any other equity
interest in PPPI.
3.3 FINANCIAL STATEMENTS. PPPI has furnished to Paper Warehouse the
unaudited balance sheet of PPPI dated October 31, 1998, attached hereto as
SCHEDULE 3.3 (the "Latest Balance Sheet"). The Latest Balance Sheet has been
prepared in accordance with past practices of PPPI, consistently applied, and
fairly presents the financial position, asset and liabilities (whether accrued,
absolute, contingent or otherwise) of PPPI on the date indicated and the results
of its operations for the period then ended.
-4-
3.4 UNDISCLOSED LIABILITIES. PPPI does not have any material
liability or obligation, whether due or to become due, absolute or contingent,
liquidated, accrued or otherwise, including any liability for federal, state,
local or foreign taxes which (a) is not reflected or reserved against on the
Latest Balance Sheet, or (b) has arisen since the date of the Latest Balance
Sheet and which is materially adverse to the business, assets or operations of
PPPI or any of the Stores, or (c) is not referred to in this Agreement or in any
exhibit or schedule attached hereto.
3.5 TITLE TO PROPERTIES. Except as specifically noted in SCHEDULE 3.5
attached hereto, PPPI has good and marketable title to all of the Purchased
Assets, real and personal (including those reflected in the Latest Balance
Sheet, except as since sold or otherwise disposed of in the ordinary course of
business), free and clear of all liens and encumbrances of any nature
whatsoever, other than (a) liens for taxes not yet due and payable and (b) liens
which may be created under applicable bulk sales laws. Except for personal
property that is leased by PPPI for use in the business of any of the Stores,
all of the Purchased Assets are owned by PPPI. All of such personal property
leases are listed on SCHEDULE 3.10 attached hereto.
3.6 CONDITION OF PERSONAL PROPERTY. The Fixtures are in good and
serviceable condition and repair, reasonable wear and tear excepted.
3.7 CONDUCT OF BUSINESS. Since the date of the Latest Balance Sheet,
there has not been and, between the date of this Agreement and the Closing,
neither PPPI nor Xxxxx shall cause or take any action, or fail to take any
action which results in:
(a) any material adverse change in the operation of the
business of any of the Stores;
(b) any change in the accounting methods or practices
followed by PPPI which would cause the Latest Balance Sheet and
any other financial information supplied to Paper Warehouse by
PPPI to be inconsistent or not comparable for purposes of
interpretation thereof;
(c) any sale, lease, abandonment or other disposition by
PPPI of any of the assets or property of PPPI other than sales of
inventory and the utilization of supplies in the ordinary course
of business;
(d) any material increase in the compensation of any
employee of PPPI or any of the Stores, or any material increase in
any benefits of any employee of PPPI or any of the Stores under
any employee benefit program, or, except as good business practice
may dictate, any termination of any of its key employees'
employment;
(e) any business interruption, damage, loss or other
occurrence having a material adverse effect on the Purchased
Assets or the business of any of the Stores, whether or not
covered by insurance;
-5-
(f) any terminations, changes or violations of any of
the leases, contracts, commitments, licenses or other arrangements
of PPPI having a material adverse effect on the Purchased Assets
or the business of any of the Stores;
(g) any violations of any permits, licenses, laws or
regulations having a material adverse effect on the Purchased
Assets or the business of any of the Stores; or
(h) any other occurrence, event or condition of which
PPPI or Xxxxx has knowledge which does or may have a material
adverse effect on the Purchased Assets or the business of any of
the Stores.
3.8 LITIGATION; ORDERS. There are no claims, actions, suits
proceedings or investigations pending or, to the best knowledge of PPPI or
Xxxxx, threatened at law or in equity by a federal, state, municipal or other
governmental department, bureau, agency or instrumentality wherever located,
which if adversely determined would have a material adverse effect on the
business, assets or financial condition of PPPI or any of the Stores or would
prevent or hinder the consummation of the purchase contemplated by this
Agreement. PPPI is not operating under or subject to, or in default with
respect to, any order, writ, injunction or decree of any court or federal,
state, local or other governmental department, bureau, agency or instrumentality
wherever located.
3.9 REAL ESTATE; LEASES. Neither PPPI nor Xxxxx owns or has title to
any real estate relating to any of the Stores. Attached hereto as SCHEDULE 3.9
is a true and complete list of all real estate leases (including all amendments
and supplements thereto) relating to any of the Stores (the "Leases"). True and
complete copies of all Leases have been delivered by PPPI to Paper Warehouse.
PPPI is the sole owner of all the lessee or sublessee rights under the Leases
and has not sold, assigned or otherwise transferred to any individual or entity
any of its rights under any of the Leases. PPPI has performed all material
obligations required to be performed by it to date under the Leases. To the
best knowledge of PPPI and Xxxxx, PPPI is not in default under, and there are no
facts which, with notice and/or the passage of time, would constitute a default
under, any of the Leases which would have a material adverse effect on the
business, assets, or financial condition of PPPI or any of the Stores. To the
knowledge of PPPI and Xxxxx, no other party to any of the Leases is in material
default thereunder. The leasehold improvements located in the Stores are in
good condition, normal wear and tear excepted, and the heating, air
conditioning, plumbing and electrical systems of such spaces are in good
operating order and sufficient for operation of a Paper Warehouse-Registered
Trademark- store. To the best knowledge of PPPI and Xxxxx, no condition exists
and no activity has ever been conducted on the real estate on which the Stores
are located which has given rise to, or may give rise to, any liability under
any federal, state or local environmental protection, health, safety or similar
law.
3.10 CONTRACTS. Attached hereto as SCHEDULE 3.10 is a true and
complete list describing briefly each contract, agreement or arrangement
relating to each of the Stores, other than the Leases or the Franchise
Agreements, to which PPPI or Xxxxx is a party, or by which PPPI or any of its
assets are bound (the "Contracts"). True and complete copies of all Contracts,
including all amendments and supplements thereto, have been delivered by PPPI to
Paper Warehouse. PPPI has performed all material obligations required to be
performed by it to date and, to the best knowledge of PPPI and Xxxxx, is not in
default under any of the Contracts, which would have a material
-6-
adverse effect on the business, assets, or financial condition of PPPI or any of
the Stores. To the knowledge of PPPI and Xxxxx, no other party to any of the
Contracts is in material default thereunder.
3.11 TAX MATTERS. PPPI has filed all federal, state, local and foreign
tax returns required to be filed by it and all taxes shown to be due thereon
have been paid by it in a timely manner.
3.12 LABOR MATTERS; BENEFITS. PPPI has no written employment
agreements or other agreements providing for payment of a salary, commission or
fee by PPPI in connection with the business of any of the Stores. Except for
compensation to its employees consisting of wages, salaries, vacations and
holidays consistent with normal business practices and except as provided in
SCHEDULE 3.12 attached hereto, PPPI does not maintain (i) any pension,
retirement, disability, medical, dental, or other death benefit plant, profit
sharing, deferred compensation, stock option, or severance plan, including,
without limitation, any "pension plan" as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") ("Pension
Plan"), (ii) any "welfare plan" as defined in Section 3(1) of ERISA ("Welfare
Plan"), or (iii) any other plan, fund, contract, program, policy, agreement and
arrangement (whether written or not) which is sponsored, maintained or
contributed or required to be contributed to by PPPI, whether or not any of the
foregoing are funded.
With respect to any Pension/Welfare Plan referred to in SCHEDULE 3.12:
(a) Such Pension/Welfare Plans reflect the applicable
requirements of ERISA to the extent required by law and such
Pension/Welfare Plans and their related trusts have received or
requested favorable determinations from the Internal Revenue
Service holding that such Pension/Welfare Plans and trusts qualify
under Section 401 et seq. and other applicable provisions of the
Internal Revenue Code of 1986, as amended. Each of the
Pension/Welfare Plans is in material compliance, and has been
administered in accordance, with the applicable provisions of the
Internal Revenue Code and ERISA;
(b) There is no current matter which would adversely
affect the qualified tax exempt status of any such Pension/Welfare
Plan and trust under the Internal Revenue Code;
(c) All required reports and descriptions (including
Form 5500 Annual Reports, summary annual reports, PBGC-1's and
summary plan descriptions) have been timely filed and distributed
appropriately with respect to each such Pension/Welfare Plan. The
requirements of Part 6 of Subtitle B of Title I of ERISA and IRC
Section 4980B (collectively, "COBRA") have been met with respect
to each Welfare Plan;
(d) All contributions (including all employer
contributions and employee salary reduction contributions) which
are due have been paid to each Pension Plan and all contributions
for any period ending on or before the Closing which are not yet
due have been paid to each Pension Plan or accrued in accordance
with the past custom
-7-
and practice of PPPI. All premiums or other payments due for all periods
ending on or before the Closing have been paid (or, with respect to those
not yet due, will have been paid on or before Closing) with respect to
each Welfare Plan;
(e) PPPI has delivered or will deliver to Paper
Warehouse correct and complete copies of the plan documents and
summary plan descriptions, the most recent determination letter
received from the Internal Revenue Service, the most recent
Form 5500 Annual Report, and all related trust agreements,
insurance contracts, and other funding agreements which implement
each such Pension/Welfare Plan; and
(f) Neither the Pension/Welfare Plans nor trusts created
thereunder, nor any trustee, investment manager or administrator
thereof, has engaged in a non-exempt "prohibited transaction" as
such term is defined in ERISA Section 406 and IRC Section 4975.
All the accrued obligations of PPPI, whether arising by operation
of law, by contract or by past custom, for payments by it to trust or other
funds or any governmental agency with respect to unemployment compensation
benefits and social security benefits have been paid prior to Closing or, if due
after Closing, shall be paid when due under applicable laws and regulations.
All accrued vacation benefits payable to employees of PPPI shall have been paid
prior to or contemporaneously with Closing. All other accrued benefits of
employees of PPPI, and all other reasonably anticipated obligations of PPPI,
whether arising by operation of law, by contract or by past custom, for holiday
pay, bonuses or other forms of compensation or benefits which are and may become
payable to employees of PPPI shall be paid in accordance with the provisions of
applicable laws, regulations, benefit plans or policies, as the case may be. In
no event shall Paper Warehouse assume or be responsible for past or future
obligations of PPPI to any employee, including any obligations to pay salary,
benefits, severance pay, vacation pay or other benefits to any employee,
regardless of whether such employees are hired by Paper Warehouse.
3.13 COMPLIANCE WITH LAWS. PPPI is in compliance in all material
respects with all applicable laws, regulations and orders of federal, state,
local and foreign governments and all agencies and courts thereof, which affect
the business of any of the Stores or any owned or leased properties of PPPI used
in connection with the business of any of the Stores and to which PPPI may be
subject and, to the best knowledge of PPPI and Xxxxx, no claims have been filed
and are outstanding against PPPI alleging a violation of any such laws,
regulations or orders.
3.14 PERMITS; LICENSES. PPPI holds all of the material permits,
licenses, certificates or other authorizations of federal, state, local or
foreign governments and all agencies and courts thereof required for the conduct
of the business of each of the Stores. Attached hereto as SCHEDULE 3.14 is a
true and complete list of all such permits, licenses, certificates or other
authorizations. PPPI has performed all material obligations required to be
performed by it to date under, and, to the best knowledge of PPPI and Xxxxx, is
not in default under any such permits, licenses, certificates or other
authorizations.
3.15 COMPLETENESS OF DISCLOSURE. Neither this Agreement nor any
exhibit, certificate, instrument or other information furnished or to be
furnished to Paper Warehouse pursuant to this
-8-
Agreement or in connection with the transactions contemplated by this Agreement,
contains or will contain any untrue statement of a material fact or, to the best
knowledge of PPPI and Xxxxx, omits or will omit to state a material fact
necessary in order to make the statements contained therein not misleading.
Neither PPPI nor Xxxxx knows of any fact which materially adversely affects the
present or proposed business or condition (financial or otherwise) of any of the
Stores, PPPI or any of the Purchased Assets which has not been set forth herein
or in any exhibit, schedule, certificate or other instrument furnished to Paper
Warehouse pursuant to this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PAPER WAREHOUSE
Paper Warehouse represents and warrants to PPPI and Xxxxx that the
following statements were true and correct as of the Effective Date as if made
on that date and will be true and correct as of the Closing Date as if made on
said date:
4.1 AUTHORITY.
(a) Paper Warehouse is a corporation duly organized, validly
existing and in good standing under the laws of the State of Minnesota,
and has the corporate power to own or lease its current properties and
conduct its business as presently conducted. Paper Warehouse has full
power and authority to complete the transactions contemplated by this
Agreement.
(b) The execution and delivery of this Agreement do not and the
consummation by Paper Warehouse of the transactions contemplated this
Agreement will not (i) conflict with or result in a breach of the
Articles of Incorporation or Bylaws of Paper Warehouse, (ii) to the best
knowledge of Paper Warehouse, conflict with, or result in a breach of, or
constitute a default under any agreement or instrument to which Paper
Warehouse is a party or by which it is bound, and (iii) to the best
knowledge of Paper Warehouse, violate any provision of any judicial or
governmental decree, order or judgment to which Paper Warehouse is a
party or by which it is bound.
(c) All corporate and other proceedings necessary to be taken
by Paper Warehouse in connection with the transactions provided for by
this Agreement and necessary to make the same effective have been duly
and validly taken, and this Agreement has been duly and validly executed
and delivered by Paper Warehouse and constitutes a valid and binding
obligation of Paper Warehouse and is enforceable in accordance with its
terms.
4.2 COMPLETENESS OF DISCLOSURE. To the knowledge of Paper Warehouse,
neither this Agreement nor any exhibit, certificate or other instrument
furnished or to be furnished to PPPI by Paper Warehouse pursuant to this
Agreement or in connection with the transactions contemplated by this Agreement,
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary in order to make the statements
contained therein not misleading. Paper Warehouse knows of no fact which
materially adversely affects the present
-9-
business or condition (financial or otherwise) of Paper Warehouse or its assets
which may materially affect the ability of Paper Warehouse to pay the Purchase
Price which has not been set forth herein or in any exhibit, schedule,
certificate or other instrument furnished to PPPI or Xxxxx pursuant to this
Agreement.
ARTICLE V
COVENANTS OF PPPI AND XXXXX
Between the date of this Agreement and the Closing:
5.1 ACCESS TO PPPI. PPPI and Xxxxx shall afford to the officers and
authorized representatives of Paper Warehouse access to the premises,
properties, books and records of PPPI relating to each of the Stores, and PPPI
shall furnish Paper Warehouse with such additional financial and operating data
and other information as to the business and properties of each of the Stores as
Paper Warehouse may from time to time reasonably request.
5.2 CONSENTS OF THIRD PARTIES. PPPI and Xxxxx shall use its/her best
efforts to obtain in writing all consents of third persons required to permit
PPPI to perform all the commitments made by PPPI in this Agreement and to
satisfy all the conditions to be satisfied by PPPI.
5.3 PRESERVATION OF BUSINESS ORGANIZATION AND OPERATION OF STORE
PENDING THE CLOSING. Pending the Closing of the purchase contemplated by this
Agreement, PPPI and Xxxxx shall use its/her best efforts to preserve PPPI's
relationships with its principal suppliers and principal customers and dealers
and PPPI will not take any action or do any act that would adversely affect the
continuous operation of any of the Stores.
5.4 EXCLUSIVE RELATIONSHIP WITH PAPER WAREHOUSE. Until the
termination of this Agreement or the Closing, whichever occurs first, PPPI shall
not offer any assets of any of the Stores to any prospective purchasers other
than Paper Warehouse (except for sale of inventory in the ordinary course of
business prior to the Closing Date), nor conduct any negotiations or discussions
with prospective purchasers (other than Paper Warehouse) of such assets (except
for sale of inventory in the ordinary course of business prior to the Closing
Date) or for the sale of equity interests toward that end.
ARTICLE VI
COVENANTS OF PAPER WAREHOUSE
Between the date of this Agreement and the Closing:
6.1 CONSENTS OF THIRD PARTIES. Paper Warehouse shall use its best
efforts to obtain in writing all consents of third persons required to permit
Paper Warehouse to perform all commitments made by Paper Warehouse in this
Agreement and to satisfy all the conditions to be satisfied by Paper Warehouse.
-10-
ARTICLE VII
MUTUAL COVENANTS AND POST-CLOSING COVENANTS
7.1 BROKERS. Paper Warehouse shall hold PPPI and Xxxxx, and PPPI and
Xxxxx shall hold Paper Warehouse and its affiliates, harmless against any and
all claims or liabilities asserted by or due to any brokers, finders or
consultants upon the basis of an engagement by PPPI or by Paper Warehouse, as
the case may be, in connection with this Agreement and the transactions
contemplated hereby.
7.2 POST-CLOSING COVENANT TO TRANSMIT RECEIVABLES. If, after Closing,
PPPI and/or Xxxxx receives any payments due to Paper Warehouse under the terms
of this Agreement as a result of receivables arising from the sale of inventory
or relating to the Purchased Assets or any of the Stores after the Effective
Date, PPPI and/or Xxxxx shall immediately transmit such funds to Paper
Warehouse. If, after Closing, Paper Warehouse receives any payments due to PPPI
and/or Xxxxx under the terms of this Agreement as a result of receivables
arising from the sale of inventory or relating to the Purchased Assets or any of
the Stores prior to the Effective Date, Paper Warehouse shall immediately
transmit such funds to PPPI and/or Xxxxx.
7.3 WAIVER OF COMPLIANCE WITH APPLICABLE BULK SALES LAWS. PPPI, Xxxxx
and Paper Warehouse hereby waive compliance with any applicable bulk sales laws
with respect to transfer and conveyance of the Purchased Assets, provided that
(a) PPPI and Xxxxx shall discharge all debts, liabilities and obligations not
specifically assumed by Paper Warehouse under this Agreement in a timely and
commercially reasonable manner but no later than 45 days following the Closing
Date, and (b) PPPI and Xxxxx shall fully indemnify and hold Paper Warehouse
harmless against any claim based on failure to comply with any applicable bulk
sales laws, as more fully set forth in Article XI hereof.
7.4 POST-CLOSING COVENANT TO DISCHARGE OBLIGATIONS TO EMPLOYEES OF
PPPI. PPPI and/or Xxxxx shall discharge all payment obligations to employees of
any of the Stores which are accrued as of the Effective Date (including accrued
salary, expense reimbursements and benefits which may be accrued under any plan
or agreement for the benefit of employees) in a timely and commercially
reasonable manner but no later than 45 days following the Closing Date.
7.5 POST-CLOSING COVENANT TO DISCHARGE OBLIGATIONS TO THIRD PARTIES.
PPPI and/or Xxxxx shall discharge all debts, liabilities and obligations not
specifically assumed by Paper Warehouse under this Agreement in a timely and
commercially reasonable manner but no later than 45 days following the Closing
Date.
7.6 INSURANCE POLICIES. The parties hereto agree that Paper Warehouse
shall not purchase any insurance policies of PPPI relating to the Purchased
Assets or any of the Stores, and after the date of Closing, PPPI may, at its
option, cancel all such policies of insurance.
7.7 COST OF INVENTORY. PPPI and Paper Warehouse agree to split evenly
the cost of the inventory count conducted on November 5 and November 9, 1998 by
RGIS Inventory Service. The amount owing to Paper Warehouse by PPPI for the
cost of such inventory count shall be paid by
-11-
PPPI to Paper Warehouse by offsetting such amount against the Cash Purchase
Price to be paid by Paper Warehouse to PPPI.
ARTICLE VIII
CLOSING CONDITIONS
8.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF PAPER WAREHOUSE. All
obligations of Paper Warehouse under this Agreement are, at the option of the
Paper Warehouse, subject to fulfillment of each of the following conditions on
or prior to the Closing Date:
(a) Paper Warehouse shall have obtained an assignment of
the Leases with the consent of the landlords identified on such
Leases in form and content satisfactory to Paper Warehouse or, at
Paper Warehouse's option, shall have terminated one or more of the
Leases and entered into one or more new leases for the Stores.
(b) The representations and warranties of PPPI and Xxxxx
contained in this Agreement or in any exhibit, schedule,
certificate or document delivered hereunder or otherwise in
connection with the transactions contemplated hereby, shall be
true and correct in all respects on and as of the date of the
Closing as though such representations and warranties were made on
and as of such dates. All terms and conditions of this Agreement
to be complied with and performed by PPPI and Xxxxx on or before
the date of the Closing will have been duly complied with and
performed.
(c) As of the date of the Closing, no claim, action,
suit or proceedings shall be pending or threatened against PPPI,
Xxxxx, or Paper Warehouse, which, if adversely determined, would
prevent or hinder the consummation of the transaction and other
actions contemplated hereby or result in the payment of
substantial damages as a result of such transaction and action.
(d) All actions, proceedings, instruments and documents
required to carry out this Agreement or incidental thereto and all
other related legal matters shall have been approved as to legal
sufficiency by Xxxx, Plant, Xxxxx, Xxxxx & Xxxxxxx, P.A., legal
counsel to Paper Warehouse.
(e) There shall have been no material misrepresentation
or omission to state any material fact by PPPI or Xxxxx in
connection with the information provided to Paper Warehouse
relative to the transactions contemplated by this Agreement.
(f) PPPI shall have delivered to Paper Warehouse the
instruments of transfer, assignment and conveyance, warranty of
title and other documents as described in Article IX hereof.
(g) No material adverse events affecting any of the
Stores shall have occurred prior to the date of the Closing.
-12-
(h) PPPI and Xxxxx shall have provided, on a timely
basis, such financial statements and supporting documentation as
may be required by this Agreement.
(i) As of the date of the Closing, there shall be no
outstanding judgments or actions pending against PPPI or Xxxxx or
any personnel of PPPI commenced by a governmental or regulatory
agency or by any private party (except those as to which Paper
Warehouse waives such condition in writing) or any unsatisfied
liabilities, liens or encumbrances, which materially adversely
affects the Purchased Assets, including the business of any of the
Stores.
8.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF PPPI AND XXXXX. The
obligations of PPPI and Xxxxx under this Agreement are, at the option of PPPI
and Xxxxx, subject to fulfillment of each of the following conditions on or
prior to the Closing Date:
(a) The representations and warranties of Paper
Warehouse contained in this Agreement or in any exhibit, schedule,
certificate or document delivered hereunder or otherwise in
connection with the transactions contemplated hereby, shall be
true and correct in all respects on and as of the date of the
Closing as though such representations and warranties were made on
and as of such dates. All terms, covenants and conditions of this
Agreement to be complied with and performed by Paper Warehouse on
or before the Closing will have been duly complied with and
performed.
(b) The Franchise Agreements shall have been terminated,
and PPPI and Xxxxx shall have received from Paper Warehouse
Franchising, Inc., written acknowledgment of such termination,
pursuant to the terms of the Termination Agreements referenced in
Section 9.2 of this Agreement.
(c) There shall have been no material misrepresentation
or omission to state any material fact by Paper Warehouse in
connection with the information provided to PPPI and Xxxxx
relative to the transactions contemplated by this Agreement.
(d) Paper Warehouse shall have employed Xxxxx and Xxxxx
Xxxxxx in accordance with the terms outlined in Paper Warehouse's
letter to Xxxx Xxxxxx dated September 28, 1998.
ARTICLE IX
CLOSING
9.1 CLOSING DATE. The consummation and closing (the "Closing") of the
purchase contemplated by this Agreement shall take place on December 17, 1998,
or such other date to which the parties may agree, by mail, facsimile and/or
phone (the "Closing Date") but shall be effective as of close of business on
November 9, 1998 (the "Effective Date").
-13-
9.2 CONVEYANCE OF ASSETS. PPPI shall, at the Closing, deliver to
Paper Warehouse, in addition to the instruments and agreements listed in Article
VIII hereof as prerequisites to Closing:
(a) such bills of sale with covenants of general
warranty, endorsements, assignments and other good and sufficient
instruments of transfer, assignment, conveyance and release and
satisfaction of liens and encumbrances in form reasonably
satisfactory to Paper Warehouse and its counsel as shall be
effective to vest in Paper Warehouse good and marketable title to
all of the Purchased Assets, all as provided in this Agreement;
(b) that portion of the Purchased Assets comprised of
PPPI's contracts (including agreements with its personnel,
customers, and business associates), contract amendments,
commitments, leases, books, business records (including original
invoices, receiving reports, bills of lading and purchase orders)
and other data relating to the Purchased Assets;
(c) Termination Agreements respecting the Franchise
Agreements the form of which is attached hereto as EXHIBIT 9.2(c),
executed by PPPI and Xxxxx (the "Termination Agreements"); and
(d) A Subscription Agreement for the Paper Warehouse
Common Stock, the form of which is attached hereto as EXHIBIT
9.2(d).
9.3 PAPER WAREHOUSE'S OBLIGATIONS AT CLOSING. Paper Warehouse shall
deliver the following documents to PPPI at the Closing:
(a) Termination Agreements respecting the Franchise
Agreements, executed by Paper Warehouse; and
(b) Documents whereby Paper Warehouse formally assumes
those obligations set forth in Sections 2.3(a) and 2.3(b) above.
ARTICLE X
TERMINATION OF AGREEMENT AND REMEDIES
10.1 TERMINATION. This Agreement and the transactions contemplated
hereby may be terminated at any time prior to the Closing:
(a) by written consent of Paper Warehouse and PPPI;
(b) by Paper Warehouse if there has been a material
misrepresentation or breach of the representations and warranties
of PPPI or Xxxxx set forth herein or in any exhibit delivered
pursuant hereto by such party;
-14-
(c) by Paper Warehouse if the transactions contemplated
by this Agreement have become impracticable by reason of the
institution or threat by state, local, or federal government
authorities, or by any other person, of material litigation or
proceedings against PPPI, which may materially affect the
Purchased Assets, or the prospects for profitable operation of the
Store;
(d) by Paper Warehouse if PPPI or Xxxxx fails to fulfill
those obligations set forth in Section 8.1 above; or
(e) by PPPI if Paper Warehouse fails to fulfill those
obligations set forth in Section 8.2 above.
10.2 RESCISSION. If this Agreement is terminated pursuant to Section
10.1 without a material default, material misrepresentation or breach of
warranty by either party, or because of the failure to satisfy any of the
conditions specified in Article VIII for reasons other than a material breach of
any party, then all further obligations of the parties to this Agreement under
this Agreement shall terminate without liability.
10.3 REMEDIES. In the event of the breach of this Agreement or any
party's failure to perform the covenants set forth in this Agreement or
delivered hereunder, the measure of damages at law to the affected party will be
difficult to ascertain and the remedy at law may be inadequate. Accordingly,
PPPI and Paper Warehouse agree that they shall be entitled to the remedy of
specific performance to enforce the terms and conditions of this Agreement. If
any dispute between the parties concerning this Agreement leads to legal action,
the prevailing party shall be entitled to reimbursement by the other party for
all of its costs and expenses incurred in such action, including its reasonable
attorneys' fees.
ARTICLE XI
POST-CLOSING OBLIGATIONS
11.1 INDEMNIFICATION OF PAPER WAREHOUSE. Each of PPPI and Xxxxx agrees
to defend, indemnify and hold Paper Warehouse harmless from, against and in
respect of:
(a) any and all losses, damages or deficiencies
resulting from any and all misrepresentations or breaches of
warranty or covenants by PPPI or Xxxxx made or contained in (i)
this Agreement or (ii) in any agreement, list, document, exhibit
or schedule delivered to Paper Warehouse under or in connection
with this Agreement or the transaction contemplated herein;
(b) any and all claims relating to failure to comply
with any applicable bulk sales law in connection with the
transactions contemplated by this Agreement;
(c) any and all obligations, liabilities, or commitments
arising with respect to the Store and the Purchased Assets before
the Effective Date which are not specifically assumed by Paper
Warehouse under the terms of this Agreement; and
-15-
(d) all costs and expenses incident to any and all
claims, suits, proceedings, claims, demands, assessments or
judgments in respect to subsection (a), (b), or (c) above,
including legal and accounting fees and expenses;
PROVIDED, HOWEVER, that if any such action, suit or proceeding is commenced
against Paper Warehouse or if any such claim, demand or assessment is asserted
against Paper Warehouse for which Paper Warehouse proposes to demand
indemnification, PPPI and Xxxxx shall be notified to that effect with reasonable
promptness and shall have the right, but not the obligation, to assume the
entire control of the defense, compromise or settlement thereof, including, at
their own expense, employment of counsel reasonably satisfactory to Paper
Warehouse and, in connection therewith, Paper Warehouse shall cooperate fully to
make available to PPPI all pertinent information under its control.
11.2 INDEMNIFICATION OF PPPI AND XXXXX. Paper Warehouse agrees to
defend, indemnify and hold PPPI and Xxxxx harmless from, against and in respect
of:
(a) any and all losses, damages or deficiencies
resulting from any and all misrepresentations or breaches of
warranty or covenants by Paper Warehouse made or contained in (i)
this Agreement or (ii) in any agreement, list, document, exhibit
or schedule delivered to PPPI under or in connection with this
Agreement or the transactions contemplated herein;
(b) any and all obligations, liabilities, or commitments
arising with respect to the Store and the Purchased Assets after
the Effective Date; and
(c) all costs and expenses incident to any and all
actions, suits, proceedings, claims, demands, assessments or
judgments in respect to subsection (a) or (b) above, including
legal and accounting fees and expenses;
PROVIDED, HOWEVER, that if any such action, suit or proceeding is commenced
against PPPI or Xxxxx or any such claim, demand or assessment is asserted
against PPPI or Xxxxx for which PPPI or Xxxxx proposes to demand
indemnification, Paper Warehouse shall be notified to that effect with
reasonable promptness and shall have the right, but not the obligation, to
assume the entire control of the defense, compromise or settlement thereof,
including, at its own expense, employment of counsel reasonably satisfactory to
PPPI and Xxxxx and, in connection therewith, PPPI and Xxxxx shall cooperate
fully to make available to Paper Warehouse all pertinent information under their
control.
11.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; LIMITATION ON
INDEMNIFICATION. Each of the representations and warranties of made by PPPI,
Xxxxx and Paper Warehouse in this Agreement shall survive for a period of two
years after the Closing Date, provided, however, that the representations and
warranties made in Section 3.5 of this Agreement (relating to title to
properties) shall survive without limitation, the representations and warranties
made in Section 3.11 of this Agreement (relating to tax matters) shall survive
until the applicable statutes of limitations relating to tax matters shall have
expired, and the representations and warranties made in Section
-16-
3.13 of this Agreement (relating to compliance with laws) shall survive for a
period of five years after the Closing Date. After the expiration date of any
representations and warranties no claim for indemnification based on such
representations and warranties may be asserted by PPPI, Xxxxx or Paper
Warehouse, except that claims first asserted in writing with reasonable detail
before the expiration date may be pursued until they are finally resolved.
11.4 NONCOMPETITION. PPPI and Xxxxx shall be subject to the
noncompetition provisions set forth in the Termination Agreement.
ARTICLE XII
GENERAL MATTERS
12.1 NOTICES. All notices provided for in this Agreement shall be in
writing and hand delivered or sent by certified or registered mail, return
receipt requested, directed as follows:
To Paper Warehouse: Paper Warehouse, Inc.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
with a copy to: Xxxxx X. Xxxxxxx, Esq.
Xxxx, Plant, Xxxxx,
Xxxxx & Xxxxxxx, P.A.
3400 City Center
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
To PPPI and Xxxxx Xxxxx
Xxxxx: 0000 Xxxx Xxx Xxxxxxx
Xxxxxx, Xxxxxxx 00000
with a copy to: Xxxx Xxxxxx, Esq.
Xxxxxx & Xxxxx, P.C.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxx 00000
Notice, if mailed, shall be deemed effective as of the date such notice is
deposited in the United States mail, certified, return receipt requested,
postage prepaid and properly addressed to the address listed above or to such
other address as the parties may so notify each other of pursuant to the terms
of this Section 12.1.
12.2 PARTIES IN INTEREST. This Agreement shall benefit and bind the
parties hereto, and their respective heirs, successors and assigns.
-17-
12.3 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
12.4 COMPLETE AGREEMENT. This Agreement, together with the agreements,
instruments and documents contemplated by this Agreement, is intended by the
parties as the final and binding expression of their agreement and as the
complete and exclusive statement of the terms hereof and thereof. This
Agreement supersedes and revokes all prior negotiations, representations and
agreements, whether oral or written, including Paper Warehouse's letter of
intent dated September 28, 1998 and PPPI's attorney's response thereto dated
October 6, 1998, relating to the subject matter hereof or thereof. This
Agreement may be supplemented, altered, amended or revoked only by a writing
signed by each of the parties hereto.
12.5 APPLICABLE LAW. This Agreement was made and entered into in the
State of Minnesota and the laws of the State of Minnesota (without regard to its
conflicts of laws rules) shall govern and be applicable to this Agreement and
any construction and interpretation thereof.
12.6 INDEPENDENT INVESTIGATION. Each of the parties hereto
acknowledges that it/he has conducted an independent investigation of the
transaction contemplated hereby and, in entering into this Agreement, has not
relied upon any representation or inducement of any other party to this
Agreement that it/he has not independently confirmed or examined.
12.7 TAX IMPLICATIONS. NONE OF THE PARTIES TO THIS AGREEMENT WARRANT
ANY TAX ASPECTS OF THE TRANSACTION CONTEMPLATED HEREBY. NOTHING HEREIN, OR ANY
EXHIBIT OR OTHER INFORMATION FURNISHED IN CONNECTION HERETO, SHALL BE CONSTRUED
AS LEGAL, BUSINESS OR TAX ADVICE. EACH PARTY TO THIS AGREEMENT IS URGED TO
CONSULT WITH HIS/HER/ITS OWN TAX ADVISOR AS TO THE TAX IMPLICATIONS OF THIS
TRANSACTION ON HIS/HER/ITS OWN AFFAIRS. THERE SHALL BE NO RECOURSE BY ANY PARTY
HERETO AGAINST ANY OTHER PARTY HERETO BY REASON OF THE FACT THAT THE EXECUTION
OF CONSUMMATION OF THIS AGREEMENT OR OF ANY TRANSACTION CONTEMPLATED HEREBY DOES
NOT HAVE THE SAME TAX CONSEQUENCES AFFECTING SUCH PARTY AS MAY BE ANTICIPATED BY
SUCH PARTY.
12.8 FURTHER ASSURANCES. On the Closing Date, and from time to time
thereafter, at the request of any party, any of the other parties will (a)
execute and deliver to the requesting party all assignments, endorsements and
other documents, and take such other actions, as the requesting party may
reasonably request in order to (i) accomplish the purposes and transactions
contemplated in this Agreement, (ii) more effectively transfer and assign to the
requesting party the rights granted to the requesting party pursuant to this
Agreement, (iii) confirm the title of the requesting party thereto, and (iv)
assist the requesting party in exercising its rights with respect thereto and
under this Agreement, and (b) obtain assignments, endorsements and other
documents from, and compel action by any affiliate of any party who or which may
have or claim any rights to or interest in the Purchased Assets or the Store.
-18-
12.9 FEES AND EXPENSES. Each party to this Agreement shall pay all
fees and disbursements of its respective legal counsel, accountants, and other
agents, representatives and advisors arising in connection with this Agreement
and the transactions contemplated hereby.
[Rest of page intentionally left blank]
-19-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
PAPER WAREHOUSE, INC. PRICKLY PEAR PAPER, INC.
By /s/ Xxxxxx X. Xxxxxx By /s/ Xxxxx X. Xxxxx
---------------------------------- ------------------------------------
Xxxxxx X. Xxxxxx, Chief Xxxxx Xxxxx, President
Financial Officer
XXXXX XXXXX
/s/ Xxxxx Xxxxx
--------------------------------------
Xxxxx Xxxxx, individually
-20-
SCHEDULE 1.2
FIXTURES
1. See attached list.
SCHEDULE 3.3
FINANCIAL STATEMENTS
1. See attached copy of Latest Balance Sheet.
SCHEDULE 3.5
TITLE TO PROPERTY
1. National Bank of Arizona claims a security interest in all inventory,
furniture and equipment of PPPI, including (i) all accessions, additions,
replacements and substitutions relating thereto, (ii) all records of any
kind relating thereto, and (iii) all proceeds relating thereto. In
connection with the Closing, Paper Warehouse will pay a portion of the
Purchase Price to National Bank of Arizona on behalf of PPPI so that
National Bank of Arizona will release its security interest in all of the
Purchased Assets.
SCHEDULE 3.9
LEASES
1. Lease of real property at 0000 Xxxx 00xx Xxxxxx, Xxxxxx, Xxxxxxx. Paper
Warehouse will assume from and after the Effective Date.
2. Lease of real property at 0000 X. Xx Xxxxxx Xxxxxxxxx (Foothills Mall),
Tucson, Arizona. Paper Warehouse will assume from and after the
Effective Date.
3. Lease of real property at 000 Xxxx Xxxxxxx, Xxxxxx, Arizona. Paper
Warehouse will assume from and after the Effective Date.
4. Lease of real property at 0000 Xxxx Xxxxx, Xxxxxx, Arizona. Paper
Warehouse will assume from and after the Effective Date.
SCHEDULE 3.10
CONTRACTS
1. GENERAL
(a) See contracts listed on Schedule 3.12. Paper Warehouse will not
assume.
2. FOOTHILLS MALL
(a) Business Music, Inc.
Effective 09/30/97 for a period of 60 months, with automatic
renewal clause. Paper Warehouse will not assume.
(b) Honeywell, Inc., Home and Building Control
Security System
Effective 10/07/97 for a period of 60 months, with automatic
renewal clause. Paper Warehouse will not assume.
(c) Truly Xxxxx Exterminating, Inc.
Commercial Pest Management Agreement
Effective 12/97 for a period of one year, with automatic renewal
clause. Paper Warehouse will assume from and after the Effective
Date.
3. 405 X. XXXXXXX
(a) Business Music, Inc.
Effective 03/05/97 for a period of 60 months, with automatic
renewal clause. Paper Warehouse will not assume.
(b) Honeywell, Inc., Protection Services Division
Burglar Alarm System
Effective __/08/90 for a period of 60 months, with automatic
renewal clause. Paper Warehouse will not assume.
(c) Truly Xxxxx Exterminating, Inc.
Commercial Pest Management Agreement
Effective 05/16/97 for a period of one year, with automatic
renewal clause. Paper Warehouse will assume from and after the
Effective Date.
(c) ACS Air Conditioning Services
Preventive Maintenance Agreement
3-times a year Maintenance and Inspection
Effective 11/01/98 for a period of one year. Paper Warehouse will
assume from and after the Effective Date.
(e) Yellow Pages Co.
(National Internet Yellow Pages Directory)
12-month term
10/98. Paper Warehouse will not assume.
4. 4861 X. XXXXX
(a) Business Music, Inc.
Effective 03/07/97 for a period of 60 months, with automatic
renewal clause. Paper Warehouse will not assume.
(b) Honeywell, Inc., Home and Building Control
Security System
Effective 09/11/95 for a period of 60 months, with automatic
renewal clause. Paper Warehouse will not assume.
(c) Tucson Newspapers
Retail/National Advertising Contract
12-month term
Effective 08/31/98 for a period of one year. Paper Warehouse will
assume from and after the Effective Date.
(d) ACS Air Conditioning Services
Preventive Maintenance Agreement
3-times a year Maintenance and Inspection
Effective 11/01/98 for a period of one year. Paper Warehouse will
assume from and after the Effective Date.
5. 0000 X. 00XX XXXXXX
(a) Business Music, Inc.
Effective 03/05/97 for a period of 60 months, with automatic
renewal clause. Paper Warehouse will not assume.
(b) Honeywell, Inc., Protection Services
Burglar Alarm System
Effective 11/08/95 for a period of 60 months, with automatic
renewal clause. Paper Warehouse will not assume.
(c) ACS Air Conditioning Services
Preventive Maintenance Agreement
3-times a year Maintenance and Inspection
Effective 11/01/98 for a period of one year. Paper Warehouse will
assume from and after the Effective Date.
(d) Truly Xxxxx Exterminating, Inc.
Commercial Pest Management Agreement
Pigeons on Sign
Service Schedule: April
Effective 04/09/98 for a period of one year, with automatic
renewal clause. Paper Warehouse will assume from and after the
Effective Date.
(e) Truly Xxxxx Exterminating, Inc.
Commercial Pest Management Agreement
Effective 07/23/97 for a period of one year, with automatic
renewal clause. Paper Warehouse will assume from and after the
Effective Date.
SCHEDULE 3.12
LABOR MATTERS; BENEFITS
1. PPPI maintains a 401(k) Plan for its employees.
2. PPPI maintains a health insurance plan for its employees.
SCHEDULE 3.14
PERMITS; LICENSES
1. 0000 Xxxx 00xx Xxxxxx
Certificate of Occupancy (11-3-95)
Business Privilege License (11-8-95) (#107536)
Transaction Privilege License (10-8-88) (#10-125261-U)
2. 0000 X. Xx Xxxxxx Xxxxxxxxx (Foothills Mall)
Certificate of Occupancy (10-17-97) (#P97CP10815)
Transaction Privilege License (10-8-88) (#10-125261-U)
3. 405 X. Xxxxxxx
Certificate of Occupancy (2-6-90)
Business Privilege License (3-1-90) (#108223)
Transaction Privilege License (10-8-88) (#10-125261-U)
4. 4861 X. Xxxxx
Certificate of Occupancy (9-15-95)
Business Privilege License (9-25-95) (#139136)
Transaction Privilege License (10-8-88) (#10-125261-U)
Copies of each of these licenses are attached hereto.
