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Therefore, the purchase agreement required petitioner to obtain
an agreement from each franchisee consenting to the assignment of
petitioner's franchisor's interest to Duskin. Duskin also
expressed concern as to whether petitioner would be able to
obtain the requisite approvals and consents and complete the acts
necessary to transfer the trademarks and franchise agreements.
Consequently, petitioner included two provisions in the purchase
agreement which provided for a refund to Duskin of a portion of
the sale price in the event petitioner was unable to transfer all
or some of the franchise agreements and trademarks.
Article V, paragraph 3(a), of the purchase agreement listed
various documents that petitioner was to deliver to Duskin to
establish that the transfer of the Mister Donut trademarks for
the nonoperating countries had been perfected.10 Article V,
paragraph 4, provided that in the event petitioner was unable to
deliver the requisite documents, petitioner would refund $615,000
of the purchase price to Duskin, and Duskin would reconvey the
trademarks and Mister Donut System for the nonoperating
countries.
10In addition to the trademarks and Mister Donut System,
petitioner was responsible for delivering the following
documents: (1) Certified resolutions from petitioner's board of
directors authorizing performance on the purchase agreement; (2)
an opinion letter from counsel for petitioner stating that the
purchase agreement was valid and enforceable; and (3) an opinion
letter from the law firm of Baker & McKenzie confirming that
petitioner's title in the trademarks in the nonoperating
countries had been transferred to Duskin.
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