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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ___ )*
IPI, Inc.
(Name of Issuer)
Common Stock, $0.01 par value
(Title of Class of Securities)
449805 10 0
(CUSIP Number)
Thomas G. Lovett IV
Lindquist & Vennum P.L.L.P.
4200 IDS Center
80 South Eighth Street
Minneapolis, Minnesota 55402
Telephone: (612) 371-3211
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
November 2, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box. / /
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter the disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act (however,
see the Notes).
Page 1 of 7 Pages
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- ----------------------------------
CUSIP No. 449805100
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS Dennis M. Mathisen
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See instructions) 00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION UNITED STATES
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER 9,000
SHARES -------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER -0-
OWNED BY -------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER 9,000
REPORTING -------------------------------------------------------------
PERSON 10 SHARED DISPOSITIVE POWER 1,687,772
WITH
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,696,772
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / /
(See instructions)
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 35.8%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See instructions) IN
- --------------------------------------------------------------------------------
Page 2 of 7 Pages
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- ----------------------------------
CUSIP No. 449805100
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Marshall Financial Group, Inc. , 41-1624808
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See instructions) WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION UNITED STATES
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER -0-
SHARES -------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER -0-
OWNED BY -------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER -0-
REPORTING -------------------------------------------------------------
PERSON 10 SHARED DISPOSITIVE POWER 1,687,772
WITH
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,687,772
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / /
(See instructions)
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 35.8%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See instructions) CO
- --------------------------------------------------------------------------------
Page 3 of 7 Pages
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ITEM 1. SECURITY AND ISSUER
This Statement relates to the Common Stock, par value $.01 per share (the
"Common Stock"), of IPI, Inc. (the "Company"), having its principal executive
offices at 15155 Technology Drive, Eden Prairie, Minnesota 55344.
ITEM 2. IDENTITY AND BACKGROUND
MARSHALL FINANCIAL GROUP, INC.
(a) Marshall Financial Group, Inc. ("MFG")
(b) 903 North Third Street, Suite 300, Minneapolis, Minnesota 55401.
(c) Not applicable.
(d) MFG has not been convicted in a criminal proceeding in the last five
years.
(e) MFG has not been a party to a civil proceeding involving violations of
securities laws in the last five years.
(f) MFG is a Minnesota corporation.
DENNIS M. MATHISEN
(a) Dennis M. Mathisen ("Mr. Mathisen").
(b) 7283 Mission Hills Drive, Las Vegas, Nevada 89113
(c) Mr. Mathisen's principal occupation is President of Marshall Financial
Group, a financial services company, 903 North Third Street, Suite 300,
Minneapolis, Minnesota 55401.
(d) Mr. Mathisen has not been convicted in a criminal proceeding in the
last five years.
(e) Mr. Mathisen has not been a party to a civil proceeding involving
violations of securities laws in the last five years.
(f) Mr. Mathisen is a citizen of the United States.
Page 4 of 7 Pages
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ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
MFG is deemed to have acquired beneficial ownership of 1,687,722 shares
of Common Stock of the Company in exchange for $39,636 paid to Dorothy
Galloway ("Galloway") and $804,250 paid to Jacobs Industries, Inc. ("JII")
pursuant to separate option agreements ("Options") between MFG and Galloway
and between MFG and JII dated May 27, 1997 and May 28, 1997, respectively.
MFG may borrow funds from one or more entities to fund this acquisition or
use its working capital.
ITEM 4. PURPOSE OF TRANSACTION
MFG has acquired the securities described in Item 3 above for investment
purposes.
MFG may, from time to time, (1) acquire additional shares of Common Stock
(subject to availability at prices deemed favorable to MFG) in the open
market, in privately negotiated transactions, or otherwise, or (2) attempt to
dispose of shares of Common Stock in the open market, in privately negotiated
transactions or otherwise. In addition, as described in Item 5, MFG has the
right to acquire the shares of JII should JII decide to dispose of those
shares and JII has the right to acquire shares held by MFG should MFG decide
to dispose of these shares.
Except as set forth above, MFG has no present plans or intentions that
would result in or relate to any of the transactions described in
subparagraphs (a) through (j) of Item 4 of Schedule 13D. If MFG exercises
the options, it may, however, take one or more actions that fall within the
transactions described in subparagraphs (a) through (j) of Item 4 of Schedule
13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) In May 1997, MFG, of which Dennis M. Mathisen is the President, Chief
Executive Officer and sole shareholder, and JII, holder of approximately 68%
of the Company's outstanding shares of Common Stock, entered into an Option,
Security Agreement and Buy-Sell Agreement (the "JII-MFG Agreement"), pursuant
to which JII sold to MFG an option to purchase, between January 1, 1998 and
January 5, 1998, 1,608,500 shares of Common Stock (the "MFG Option") owned by
JII.
In addition to the JII-MFG Agreement, MFG entered into a similar option
agreement with Dorothy Galloway, a major shareholder of the Company
("Galloway"), pursuant to which Galloway sold to MFG an option to purchase
between January 1, 1998 and January 5, 1998 79,272 shares of Common Stock
owned by Galloway (the "MFG-Galloway Option"). JII has also advised the
Company that it has entered into a similar option agreement with Galloway
(the "JII-Galloway Option") for the purchase of 79,272 shares. Each of JII
and MFG have agreed with
Page 5 of 7 Page
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Galloway that upon exercise by MFG of the option to purchase shares from JII,
JII and MFG will each exercise their respective option with Galloway.
The JII-MFG Agreement also provides (i) MFG with the potential right to
acquire 1,608,500 additional shares of Common Stock currently held by JII, as
well as the 79,272 shares of Common Stock purchasable by JII from Galloway,
and (ii) JII with the potential right to reacquire the 1,608,500 shares
transferred to MFG pursuant to the JII-MFG Agreement, plus the 79,272 shares
purchased by MFG from Galloway (such provisions are referred to herein as the
"buy-sell agreement"). The buy-sell agreement may be exercised at any time
after the options are exercised in January 1998. Neither party may sell,
transfer, assign or dispose of its shares except pursuant to the buy-sell
agreement. The JII-MFG Agreement terminates only upon written agreement of
the parties. Based solely upon these two options, as of November 12, 1997,
MFG is deemed to beneficially owned 1,687,772 shares of the Common Stock of
the Company, which represented 35.8% of the outstanding Common Stock on such
date, based upon the Company's shares outstanding as reported in the
Company's Form 10-Q for the quarter ended May 31, 1997.
(b) The responses of MFG to Items (7) through (11) of the portions of
the cover page of this Schedule which relate to beneficial ownership of
shares of Common Stock are incorporated herein by reference.
(c) Other than the transactions described in Item 3 above, MFG has not
effected any transactions in the Common Stock during the past sixty days.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
Other than the agreements referred to in Item 5, there are no contracts,
arrangements, understandings or relationships between MFG and any person with
respect to any securities of the Company.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
(1) Option and Security Agreement, dated May 27, 1997, between Marshall
Financial Group, Inc. and Dorothy Galloway.
(2) Option, Security Agreement and Buy-Sell Agreement, dated May 28, 1997,
as amended, between Marshall Financial Group, Inc. and Jacobs Industries,
Inc.
(3) Joint Filing Agreement
Page 6 of 7 Pages
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SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete
and correct.
MARSHALL FINANCIAL GROUP, INC.
Date: November 12, 1997 /s/ John A. Fischer
-----------------------------------
John A. Fischer
Executive Vice President
Date: November 12, 1997 /s/ Dennis M. Mathisen
-----------------------------------
Dennis M. Mathisen
Page 7 of 7 Pages
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EXHIBIT 1
EXECUTION DRAFT
OPTION
AND
SECURITY AGREEMENT
This Agreement (the "AGREEMENT") is made and entered into as of the 27TH
day of May, 1997 by and between MARSHALL FINANCIAL GROUP, INC. ("MARSHALL")
and DOROTHY GALLOWAY ("GALLOWAY").
WHEREAS, Galloway is the owner of 317,087 shares of the common capital
stock of IPI, Inc., a Minnesota corporation ("IPI"); and
WHEREAS, Marshall presently desires to purchase an option to acquire
79,272 of such shares on the terms hereafter set forth; and
WHEREAS, Galloway is willing to grant Marshall an option to purchase from
Galloway 79,272 shares of IPI stock on the terms and conditions hereafter set
forth; and
WHEREAS, if Marshall becomes the owner of the IPI stock by exercising the
Option granted hereunder, Marshall will pledge the 79,272 shares of IPI stock
so acquired to secure payment of the promissory note issued in partial
payment of the purchase price,
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto agree
as follows:
1. GRANT OF OPTION. In consideration of the payment by Marshall to
Galloway of the sum of Thirty-Nine Thousand Six Hundred Thirty-Six and no/100
Dollars ($39,636.00) ($.50 per share) (the "OPTION PRICE"), Galloway hereby
grants to Marshall the right and option (the "OPTION") to purchase 79,272
shares of common capital stock of IPI (the "OPTIONED SHARES") (such number
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being subject to adjustment as provided in paragraph 6 hereof) on the terms
and conditions herein set forth.
2. PURCHASE PRICE. The purchase price of the Optioned Shares shall be
Three Hundred Thirty-Two Thousand Nine Hundred Forty-Two and 40/100 Dollars
($332,942.40) (Four and 20/100 Dollars ($4.20) per share) provided, however,
upon the exercise of the Option as hereinafter provided, the amount of the
Option Price paid by Marshall to Galloway shall be applied as a credit
against the purchase price of the Optioned Shares in the manner hereafter
provided.
3. EXERCISE OF OPTION. The Option shall be exercisable on and after
January 1, 1998 until 2:00 p.m. central standard time on Monday, January 5,
1998 (time being of the essence of this Agreement) by written notice
delivered to Galloway at Westech Business Center, 15155 Technology Drive,
Eden Prairie, Minnesota 55344 together with payment in the form of:
(a) readily available funds in the amount of $126,835.20 which
together with the amount of Option Price of $39,636 shall constitute
payment of one-half of the purchase price of the Optioned Shares, and
(b) a negotiable promissory note (the "NOTE") in customary form
satisfactory to counsel for Galloway duly executed by Marshall in the
principal amount of One Hundred Sixty-Six Thousand Four Hundred Seventy-One
and 20/100 Dollars ($166,471.20) due and payable one year from the date of
exercise of the Option and bearing interest payable quarterly at a rate at
all times one percent (1%) per annum in excess of the prime rate (the
reference rate) in effect from time to time at First Bank, N.A.
4. DELIVERY AND PLEDGE OF STOCK. Immediately upon exercise of the
Option as above provided, Marshall shall become the owner of the Optioned
Shares free and clear of any claims, liens or encumbrances, other than a
security interest by way of pledge to Galloway to secure payment of the Note
in accordance with its terms. Galloway shall cause to be issued and shall
retain in her possession as pledgee an IPI stock certificate (the
"CERTIFICATE") evidencing 79,272 shares of the common capital stock of IPI
registered in the name of Marshall and Marshall shall execute and deliver
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a stock power in blank to be attached to the Certificate for use in the event
of default under the Note and foreclosure of the security interest in such
shares. In the event of default under the Note, Galloway shall have all the
rights in the pledged stock granted to a secured party under the Minnesota
Uniform Commercial Code.
5. NON-TRANSFERABILITY OF OPTION RIGHTS. The Option shall not be
transferable or assignable by operation of law or otherwise and the Option
may be exercised only by Marshall. Any attempt at assignment, transfer,
pledge, hypothecation or other disposition of the Option contrary to the
provisions hereof, or the levy of any execution, attachment or similar
process upon the Option, shall be null and void and without effect.
6. CHANGES IN CAPITAL STRUCTURE. If the Option is exercised subsequent
to any share dividend, recapitalization, merger, consolidation, exchange of
shares or reorganization as a result of which shares of any class shall be
issued in respect to the presently outstanding stock of IPI or such stock
shall be changed into the same or a different number of shares of the same or
another class or classes of stock, upon exercising the Option, Marshall shall
receive the number and class of shares to which it would have been entitled
if it had purchased the Optioned Shares at the date hereof.
7. NO REGISTRATION. Marshall acknowledges that the Optioned Shares
have not been and will not be, upon exercise of this Option, registered under
the Securities Act of 1933. Marshall represents to Galloway that it is
acquiring the shares for investment purposes and it is able to bear the
economic risk of the investment for an indefinite period of time since the
shares so acquired cannot be sold unless they are subsequently registered or
an exemption from such registration is available. Marshall agrees that a
legend may be placed on the stock certificates acknowledging the restrictions
on subsequent distribution of the shares.
8. NO REPRESENTATIONS BY GALLOWAY. Marshall represents and acknowledges:
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(a) that it is an experienced and sophisticated investor;
(b) that in purchasing the Option it has not received or relied
upon any representations of any kind by Galloway or any individual
associated with Galloway; and
(c) that in deciding whether to exercise the Option, it will make
such investigation of the relevant facts as it deems appropriate and it will
not rely upon any representations by Galloway or individuals associated with
Galloway.
9. OBLIGATION TO EXERCISE OPTION. On or about May ____, 1997, Jacobs
Industries, Inc. ("INDUSTRIES") entered into an agreement with Marshall
granting to Marshall an option to acquire from Industries 1,608,500 shares of
IPI stock (the "INDUSTRIES OPTION"). Marshall agrees that in the event
Marshall effectively exercises the Industries Option, Marshall will
immediately thereafter exercise the Option granted to it hereunder.
10. REFUND OF OPTION PRICE. In the event that Industries is required
under the provisions of the Industries Option agreement to refund to Marshall
the Option Price paid by Marshall thereunder, Galloway agrees that she will
forthwith refund to Marshall the Option Price paid to her by Marshall
hereunder together with interest thereon at a rate at all times one percent
(1%) per annum in excess of the prime rate (the reference rate) in effect
from time to time at First Bank, N.A. from the date of payment of the Option
Price to the date of the refund.
11. GOVERNING LAWS. This Agreement shall be governed by the laws of the
State of Minnesota.
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IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
MARSHALL FINANCIAL GROUP, INC.
By:
------------------------------------
Its:
-----------------------------
----------------------------------------
DOROTHY GALLOWAY
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EXHIBIT 2
OPTION,
SECURITY AGREEMENT
AND
BUY-SELL AGREEMENT
This Agreement (this "AGREEMENT") is made and entered into as of the 28TH
day of May, 1997 by and between JACOBS INDUSTRIES, INC., a Minnesota
corporation ("INDUSTRIES") and MARSHALL FINANCIAL GROUP, INC. ("MARSHALL").
WHEREAS, Industries is the owner of 3,217,000 shares of the common
capital stock of IPI, Inc., a Minnesota corporation ("IPI") which represents
approximately 67.1% of the total outstanding shares of IPI stock; and
WHEREAS, Marshall is interested in exploring in depth the advisability of
its making a substantial investment in IPI by purchasing 1,608,500 shares of
IPI stock from Industries and Marshall presently desires to purchase an
option to acquire such shares on the terms hereafter set forth; and
WHEREAS, Industries is willing to grant Marshall an option to purchase
from Industries 1,608,500 shares of IPI stock on the terms and conditions
hereafter set forth; and
WHEREAS, if Marshall becomes the owner of the IPI stock by exercising the
Option granted hereunder, Marshall will pledge its IPI stock to secure
payment of the promissory note issued in partial payment of the purchase
price, and the parties also desire to restrict either party from transferring
stock of IPI other than as hereafter provided,
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto agree
as follows:
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1. GRANT OF OPTION. In consideration of the payment by Marshall to
Industries of the sum of Eight Hundred Four Thousand Two Hundred Fifty and
no/100 Dollars ($804,250.00) ($.50 per share) the "OPTION PRICE"), Industries
hereby grants to Marshall the right and option (the "OPTION") to purchase
1,608,500 shares of common capital stock of IPI (the "OPTIONED SHARES") (such
number being subject to adjustment as provided in paragraph 7 hereof) on the
terms and conditions herein set forth.
2. PURCHASE PRICE. The purchase price of the Optioned Shares shall be
Six Million Seven Hundred Fifty-five Thousand Seven Hundred and no/100
Dollars ($6,755,700.00) (Four and 20/100 Dollars ($4.20) per share) provided,
however, upon the exercise of the Option as hereinafter provided, the amount
of the Option Price paid by Marshall to Industries shall be applied as a
credit against the purchase price of the Optioned Shares in the manner
hereafter provided.
3. COMPLIANCE WITH MINNESOTA STATUTES SECTION 302A.671. Industries and
Marshall acknowledge that Marshall's acquisition of the shares of IPI is
within the provisions of the Minnesota Statutes Section 302A.671. Marshall
agrees that within ninety (90) days after execution of this Agreement, it
will deliver to IPI an information statement complying with the provisions of
subdivision 2 of Minnesota Statutes Section 302A.671 together with a written
undertaking to pay or reimburse IPI's expenses for conducting a special
meeting of the shareholders as provided in subdivision 3 of Minnesota
Statutes Section 302A.671. At the time of delivery of the information
statement, Marshall shall request that a special meeting of the shareholders
of IPI be called and Marshall agrees that such meeting may be held at any
time prior to December 1, 1997. Industries agrees that it will use its best
efforts to call a special meeting of the shareholders of IPI pursuant to
subdivision 3 of Minnesota Statutes Section 302A.671 for the purpose of
obtaining shareholder approval that the shares to be acquired by Marshall
under the Option shall have the same voting rights
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as other shares of the same class of stock of IPI. In the event that the
shareholders of IPI have not approved voting rights for the shares to be
acquired by Marshall under the Option on or before December 1, 1997, the
Option shall terminate and Industries shall thereupon forthwith refund to
Marshall the Option Price together with interest thereon at a rate at all
times one percent (1%) per annum in excess of the prime rate (the reference
rate) in effect from time to time at First Bank, N.A. from the date of the
payment of the Option Price to the date of the refund.
4. EXERCISE OF OPTION. The Option shall be exercisable on and after
January 1, 1998 until 2:00 p.m. central standard time on Monday, January 5,
1998 (time being of the essence of this Agreement) by written notice
delivered to the office of Industries at Suite 2500, 100 South Fifth Street,
Minneapolis, Minnesota 55402 together with payment in the form of:
(a) readily available funds in the amount of $2,573,600 which
together with the amount of Option Price of $804,250 shall constitute
payment of one-half of the purchase price of the Optioned Shares, and
(b) a negotiable promissory note (the "NOTE") in customary form
satisfactory to counsel for Industries duly executed by Marshall in the
principal amount of Three Million Three Hundred Seventy-seven Thousand Eight
Hundred Fifty and no/100 Dollars ($3,377,850.00) due and payable one year
from the date of exercise of the Option and bearing interest payable
quarterly at a rate at all times one percent (1%) per annum in excess of the
prime rate (the reference rate) in effect from time to time at First Bank,
N.A. The maturity of the Note shall be subject to acceleration as provided
in paragraph 10B hereof.
5. DELIVERY AND PLEDGE OF STOCK. Immediately upon exercise of the
Option as above provided, Marshall shall become the owner of the Optioned
Shares free and clear of any claims, liens or encumbrances, other than a
security interest by way of pledge to Industries to secure payment of the
Note in accordance with its terms. Industries shall cause to be issued and
shall retain in its possession as pledgee an IPI stock certificate (the
"CERTIFICATE") evidencing 1,608,500 shares of the common capital stock of IPI
registered in the name of Marshall and Marshall shall execute and deliver a
stock power in blank to be attached to the Certificate for use in the event
of default under the Note
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and foreclosure of the security interest in such shares. In the event of
default under the Note, Industries shall have all the rights in the pledged
stock granted to a secured party under the Minnesota Uniform Commercial Code.
6. NON-TRANSFERABILITY OF OPTION RIGHTS. The Option shall not be
transferable or assignable by operation of law or otherwise and the Option
may be exercised only by Marshall. Any attempt at assignment, transfer,
pledge, hypothecation or other disposition of the Option contrary to the
provisions hereof, or the levy of any execution, attachment or similar
process upon the Option, shall be null and void and without effect. In the
event of the death of Dennis Mathisen before the Option is exercised, the
Option shall terminate and Industries shall thereupon forthwith refund to
Marshall the Option Price together with interest thereon at a rate at all
times one percent (1%) per annum in excess of the prime rate (the reference
rate) in effect from time to time at First Bank, N.A. from the date of the
payment of the Option Price to the date of the refund.
7. CHANGES IN CAPITAL STRUCTURE. If the Option is exercised subsequent
to any share dividend, recapitalization, merger, consolidation, exchange of
shares or reorganization as a result of which shares of any class shall be
issued in respect to the presently outstanding stock of IPI or such stock
shall be changed into the same or a different number of shares of the same or
another class or classes of stock, upon exercising the Option, Marshall shall
receive the number and class of shares to which it would have been entitled
if it has purchased the Optioned Shares at the date hereof.
8. NO REGISTRATION. Marshall acknowledges that the Optioned Shares
have not been and will not be, upon exercise of this Option, registered under
the Securities Act of 1933. Marshall represents to Industries that it is
acquiring the shares for investment purposes and it is able to bear the
economic risk of the investment for an indefinite period of time since the
shares so acquired cannot be sold unless they are subsequently registered or
an exemption from such registration is
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available. Marshall agrees that a legend may be placed on the stock
certificates acknowledging the restrictions on subsequent distribution of the
shares.
9. NO REPRESENTATIONS BY INDUSTRIES. Marshall represents and
acknowledges:
(a) that it is an experienced and sophisticated investor;
(b) that in purchasing the Option it has relied upon publicly
available information regarding the business affairs and financial condition
of IPI and it has not received or relied upon any representations of any
kind by Industries or any individual associated with Industries; and
(c) that in deciding whether to exercise the Option, it will make
such investigation of the relevant facts as it deems appropriate and it will
not rely upon any representations by Industries or individuals associated
with Industries.
10. BUY-SELL AGREEMENT.
A. At any time after valid exercise of the Option and until this
Agreement is terminated as provided in paragraph 11 hereof, either Industries
or Marshall shall have the right to initiate the buy-sell procedures and
terms set forth in this section with respect to all of the shares of IPI
stock owned by Marshall upon exercise of the Option (1,608,500 shares) and
the like number of shares which will be owned by Industries after exercise of
the Option (1,608,500 shares). To initiate the procedure a party (the
"ELECTING PARTY") shall give a written offer (the "OFFER") to the other party
(the "NON-ELECTING PARTY") to sell its 1,608,500 shares of IPI stock at a
specified price per share (the "SPECIFIED PRICE") payable in cash or
equivalent at closing (the "CLOSING") or to purchase the Non-Electing Party's
1,608,500 shares of IPI stock at the Specified Price per share payable in
cash or equivalent at Closing. Within ninety (90) days after receipt of the
Offer from the Electing Party the Non-Electing Party shall, by written notice
to Electing Party, accept either the Electing Party's Offer to sell or its
Offer to buy, at the option of the Non-Electing Party. If the Non-Electing
Party fails to give such written notice within the time specified, the
Non-Electing Party shall be deemed to have
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accepted the Offer from the Electing Party to buy and the Non-Electing party
shall be bound to sell and the transaction shall proceed at Closing as if the
Non-Electing Party had agreed by written notice to accept the Electing
Party's Offer to buy.
B. The Closing of a transaction initiated pursuant to this section
shall occur on or before the 120th day following the receipt of the Offer.
At Closing, the purchasing party shall pay the purchase price in readily
available funds against delivery of certificates evidencing the purchased
shares duly endorsed for transfer to the purchasing party good and sufficient
to transfer to the purchasing party title to such shares free and clear of
all claims and encumbrances. If the Note is not paid in full at the time of
closing, the unpaid balance shall be due and payable at closing.
C. Prior to execution of the Option, Industries agrees that it will not
sell, transfer, assign or otherwise dispose of the 1,608,500 shares of IPI
stock owned by it. Upon exercise of the Option, Industries and Marshall
agree that neither party shall transfer, assign or otherwise dispose of the
1,608,500 shares of IPI owned by each of them except in accordance with the
procedures provided in Section 10 of this Agreement.
D. Industries and Marshall agree that the certificates evidencing the
1,608,500 shares of IPI stock owned by each of them shall be endorsed with a
legend stating that transfer of such shares is prohibited except in
accordance with this Agreement.
11. TERMINATION OF THIS AGREEMENT. This Agreement may be terminated at
any time by written agreement duly executed by Industries and Marshall.
12. GOVERNING LAWS. This Agreement shall be governed by the laws of the
State of Minnesota.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
6
<PAGE>
JACOBS INDUSTRIES, INC.
By:
------------------------------------
Its:
----------------------------
MARSHALL FINANCIAL GROUP, INC.
By:
------------------------------------
Its:
----------------------------
7
<PAGE>
FIRST AMENDMENT TO OPTION, SECURITY AGREEMENT
AND BUY-SELL AGREEMENT
THIS FIRST AMENDMENT TO OPTION, SECURITY AGREEMENT AND BUY-SELL
AGREEMENT, is made and entered into as of the _____ day of May, 1997 by
and between JACOBS INDUSTRIES, INC. ("INDUSTRIES") and MARSHALL FINANCIAL
GROUP, INC. ("MARSHALL");
WHEREAS, Industries and Marshall entered into an Option, Security
Agreement and Buy-Sell Agreement on the _____ day of May, 1997 (the
"AGREEMENT"); and
WHEREAS, Industries has entered into an Option and Security Agreement
with DOROTHY GALLOWAY ("GALLOWAY") whereunder Galloway has granted to
Industries an option to acquire 79,272 shares of the common capital stock of
IPI, INC., a Minnesota corporation ("IPI"); and
WHEREAS, Marshall has entered into an Option and Security Agreement with
Galloway whereunder Galloway has granted to Marshall an option to acquire
79,272 shares of the common capital stock of IPI; and
WHEREAS, Industries and Marshall desire that paragraph 10 of the
Agreement be amended so as to extend to and cover the shares that either may
acquire from Galloway by exercise of the options granted to each as
hereinabove stated,
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto have
agreed and do hereby agree as follows:
1. Any shares of IPI stock acquired by Marshall and Industries from
Galloway, whether pursuant to the options granted by Galloway hereinabove
mentioned, or otherwise, shall be subject to and covered by all of the terms
of paragraph 10 of the Agreement in the same manner and with the same effect
as is provided therein with respect to the 1,608,500 shares of IPI stock that
is specifically referred to in the Agreement.
<PAGE>
2. Except as amended and supplemented as provided herein, the Option,
Security Agreement and Buy-Sell Agreement shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties have executed this First Amendment to
Option, Security Agreement and Buy-Sell Agreement the day and year first
above written.
JACOBS INDUSTRIES, INC.
By:
------------------------------------
Its:
----------------------------
MARSHALL FINANCIAL GROUP, INC.
By:
------------------------------------
Its:
----------------------------
2
<PAGE>
EXHIBIT 3
JOINT FILING AGREEMENT
The undersigned, Marshall Financial Group, Inc. and Dennis M. Mathisen,
hereby agree that this Schedule 13D relating to securities of IPI, Inc. shall
be filed on behalf of each of them.
Dated: November 12, 1997
MARSHALL FINANCIAL GROUP, INC.
/s/ John A. Fischer
----------------------------------------
By: John A. Fischer
Its: Executive Vice President
/s/ Dennis M. Mathisen
----------------------------------------
Dennis M. Mathisen
