International Multifoods Corporation and Affiliated Companies - Page 12

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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                     

               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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Last modified: May 25, 2011