Confidential
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ELECTRONICS FOR IMAGING, INC.
000 Xxxxxxxx Xxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000
February 13, 2003
Printcafe Software, Inc.
Forty 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Ladies and Gentlemen:
Printcafe Software, Inc., a Delaware corporation (the "Company"), is a
party to that certain Credit Agreement, dated as of December 31, 2001 and
amended as of June 10, 2002, by and between the Company and Iris Graphics, Inc.
(the "Existing Credit Agreement") and that certain Guarantee and Collateral
Agreement, dated as of December 31, 2001, by and among the Company, certain of
its subsidiaries and Iris Graphics, Inc. (the "Collateral Agreement" and
together with the Existing Credit Agreement, the "Existing Transaction
Documents").
The Company and Electronics For Imaging, Inc., a Delaware corporation
("EFI"), are engaged in preliminary discussions regarding a potential business
combination between the parties (the "Business Combination"). In order to induce
the Company to take actions in furtherance of the Business Combination , EFI is
prepared to extend credit (the "Standby Credit") to the Company, pursuant to the
terms in the Existing Transaction Documents as modified by this letter agreement
(this "Letter Agreement"). This Letter Agreement and the Existing Transaction
Documents set forth the terms and conditions upon which EFI agrees to extend the
Standby Credit to the Company. Any and all capitalized terms not otherwise
defined herein shall have the meanings given to them in the Existing Credit
Agreement.
EFI and the Company, intending to be legally bound, agree as follows:
1. Standby Credit.
(a) Subject to the terms and conditions hereof, EFI irrevocably
agrees to disburse to the Company, in immediately available funds, $11.0 million
upon three Business Days' Notice of a Standby Trigger Event. For purposes of
this Letter Agreement, a "Standby Trigger Event" shall occur if Iris Graphics,
Inc. or any of its successors or assignees (together with any successors or
assigns, "Iris") declares any amounts owed to Iris under the Existing
Transaction Documents due and payable as the result of any default by the
Company thereunder, which default arises as a result of or in connection with
any action taken by the Company in furtherance of, or otherwise in connection
with, the Business Combination, including, without limitation, the Company's
adoption of a
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stockholders right plan (the "Rights Plan"). Notwithstanding the foregoing, if
all amounts due and payable by the Company as the result of a Standby Trigger
Event are less than $11.0 million, then EFI shall only be obligated to disburse
to the Company such lesser amount; provided, however, that EFI shall remain
obligated to disburse additional funds to the Company, up to $11.0 million, if
additional Standby Trigger Events occur.
(b) Subject to the terms and conditions hereof and on the express
condition that EFI and the Company shall have entered into a definitive merger
agreement on or before February 24, 2003 and such merger agreement has not been
terminated in accordance with its terms, EFI irrevocably agrees to disburse upon
three Business Days' notice, until the earlier of the termination of the merger
agreement in accordance with its terms or the effective time of the merger
contemplated therein, to the Company, in immediately available funds, an amount
equal to $1.0 million if the Company's cash balance as of the close of business
on the date notice is given by the Company is less than $1.0 million; provided
that (i) the Company shall have managed its cash position in accordance with its
past practices (including, without limitation, collecting receivables in the
ordinary course of business, no prepayments of liabilities, and no cash payments
on account of equity interests) and (ii) the Company shall not be permitted to
borrow pursuant to Sections 1(b) and 1(c) collectively more than $3.0 million in
the aggregate.
(c) Subject to the terms and conditions hereof and on the express
condition that EFI and the Company shall have entered into a definitive merger
agreement on or before February 24, 2003, such merger agreement has not been
terminated in accordance with its terms and the requisite majority of the
Company's stockholders have voted to adopt the merger agreement, EFI irrevocably
agrees to disburse, as of the date the stockholders adopt the merger agreement
and upon three Business Days' notice, until the earlier of the termination of
the merger agreement in accordance with its terms or the effective time of the
merger contemplated therein, to the Company, in immediately available funds, an
amount equal to $1.0 million if the Company's cash balance as of the close of
business on the date notice is given by the Company is less than $1.0 million;
provided that the Company shall not be permitted to borrow pursuant to Sections
1(b) and 1(c) collectively more than $3.0 million in the aggregate.
2. Terms and Conditions. If EFI becomes obligated pursuant to paragraph 1
of this Letter Agreement to disburse any portion of the Standby Credit to the
Company, (a) EFI shall have all of the obligations under this Letter Agreement
as the Lender under the Existing Transaction Documents (other than funding
obligations of the Lender arising under the Existing Transaction Documents) as
if such obligations were fully set forth in this Letter Agreement, except as set
forth herein; and (b) the Company shall comply with all of its obligations under
the Existing Transaction Documents (as well as its additional obligations under
this Letter Agreement), except as set forth herein. The obligations of the
Company to EFI arising under the Existing Transaction Documents shall be limited
to those obligations arising on or after the date that the Standby Credit is
funded, after giving effect to the funding of the Standby Credit, and the
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Company shall not be liable thereunder to EFI for any breaches of the Existing
Transaction Documents that occurred prior to such date including, without
limitation, any Event of Default under the Existing Transaction Documents due to
any actions taken by the Company in furtherance of a Business Combination or the
adoption of the Rights Plan. The parties shall construe their respective
obligations under the Existing Transaction Documents in light of the purposes of
this Letter Agreement and shall not be obligated to perform under the Existing
Transaction Documents to the extent that any such performance would be
inconsistent with the purposes of this Letter Agreement. The Company shall not
be liable to EFI for a breach of any of the representations and warranties
contained in the Existing Transaction Documents. Instead, the Company shall only
be liable to the extent that it breaches representations and warranties made to
EFI as of the date of the Closing (the "Closing Date") pursuant to Section 7(j).
3. Interest Rate. Notwithstanding the terms of the Existing Credit
Agreement, all loans pursuant Section 1(a) shall bear interest from the date of
funding at the rate of 8% per annum payable in arrears on January 2, 2004 or
sooner upon the termination of this Letter Agreement in accordance with its
terms and loans pursuant to Sections 1(b) and 1(c) shall bear interest from the
date of funding at a rate per annum equal to the prime rate of interest as
published, from time to time, by Citibank plus two percent and not at the
interest rates specified in the Existing Transaction Documents payable in
arrears on January 2, 2004 or sooner upon the termination of this Letter
Agreement in accordance with its terms.
4. Events of Default; Covenants.
(a) In addition to the Events of Default contained in Section 7 of
the Existing Credit Agreement, the Company hereby agrees that an Event of
Default shall have occurred pursuant to this Letter Agreement and, assuming EFI
has extended the Standby Credit pursuant to this Letter Agreement, if on or
before June 30, 2003, a Business Combination has not occurred between the
Company and EFI unless the reason that such a Business Combination has not
occurred by such date is due to a material breach by EFI of its obligations
under the definitive merger agreement (if, as and when such agreement is
executed and delivered). EFI shall have the right to exercise any and all
remedies provided for in the Existing Transaction Documents if an Event of
Default occurs, except to the extent the Existing Transaction Documents are
modified by this Letter Agreement.
(b) Notwithstanding any other provision of this Letter Agreement or
any provision of the Existing Transaction Documents, the Company shall not be
obligated to comply with the following covenants contained in the Existing
Credit Agreement to the extent set forth below.
(i) The Company shall not be obligated to comply with the
covenant in Section 5.1(a) that obligates the Company to provide an audit report
that does not contain a "going concern" or like qualification or exception;
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(ii) The Company shall not be obligated to comply with the
covenant contained in Section 5.6(c) relating to certain board observation
rights of the Lender;
(iii) The Company shall not be obligated to comply with the
covenant contained in Section 5.7(d) relating to the Company's obligation to
provide the Lender with notice of any bona fide interest from a third party to
acquire all of the assets or shares of the Company and the details of any such
proposal;
(iv) The Company shall not be obligated to comply with the
covenant contained in Section 5.10 relating to the Company's obligation to pay
off the CSI Debt;
(v) The Company shall not be obligated to comply with the
covenant contained in Section 6.2 to the extent that it does not allow the
Company to incur the additional debt contemplated by this Letter Agreement;
(vi) The Company shall not be obligated to comply with the
covenant contained in Section 6.4 to the extent that it does not include the
liens in favor of the holders of the Xxxxx Debt.
(vii) The Company shall not be obligated to comply with the
covenant contained in Section 6.10 to the extent that it does not permit the
Company to pay off the National City Debt, the Xxxxx Debt or debt arising under
the Existing Transaction Documents.
5. Exercise of Option. To the extent that EFI exercises its option to
purchase shares of the Company pursuant to that certain option agreement, dated
as of the date hereof, by and between EFI and the Company (the "Option
Agreement"), the Company shall be obligated to repay the Standby Credit in an
amount equal to the aggregate purchase price EFI pays the Company for the shares
purchased pursuant to the Option Agreement. The Company shall repay such amount
within 5 days of the closing of the purchase and sale of shares contemplated by
the Option Agreement.
6. Notice. If EFI becomes obligated pursuant to Section 1(a) to extend
the Standby Credit or any portion thereof, the Company shall provide EFI with
written notice of the Standby Trigger Event, together with a copy of any
relevant correspondence received by the Company from Iris or any other person,
as the case may be. If EFI becomes obligated pursuant to Sections 1(b) and 1(c)
to extend the working capital portion of the Standby Credit, the Company shall
provide EFI with written notice of the Company's request for such disbursement,
together with a statement certified by the Company's chief financial officer of
the Company's cash balance as of the close of business on the date that notice
is given.
7. Conditions Precedent. The conditions specified in Section 4 of the
Existing Credit Agreement shall not be applicable; and in lieu thereof, the
agreement of EFI to extend the Standby Credit or any portion thereof is subject
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to the satisfaction, prior to or concurrently with the making of each such loan,
of the conditions precedent set forth below:
(a) Financial Statements. EFI shall have received unaudited December
31, 2002 consolidated financial statements of the Company or, if available, the
audited consolidated financial statements of the Company as of such date, and
the unaudited consolidated financial statements of the Company for each fiscal
month and quarterly period ended subsequent to December 31, 2002 as to which
such financial statements are available, and such financial statements shall
not, in the reasonable judgment of EFI, reflect any material adverse change in
the consolidated financial condition of the Company since December 31, 2002
(other than changes (i) arising out of a Standby Trigger Event, or (ii) relating
to the maturity of the Company's existing indebtedness);
(b) Approvals. EFI shall have received (i) all governmental and third
party approvals or consents necessary in connection with this Letter Agreement,
including, without limitation, the consents of the holders of the M Data Debt
agreeing that in the event EFI replaces or refinances the obligations of Iris
pursuant to the Existing Credit Agreement, the holders of the M Data Debt agree
to allow the Company to grant EFI a junior subordinated security interest in any
assets of M Data, Inc. in which the holders of the M Data Debt have a security
interest, and such approvals and consents shall be in full force and effect; and
(ii) all requisite corporate approvals necessary to authorize the execution,
delivery and performance of this Letter Agreement. Notwithstanding the foregoing
the Company shall not be required to deliver the consents of Iris, the holders
of the Xxxxx Debt and the holders of the National City Debt;
(c) Lien Searches. EFI shall have received (i) an officer's
certificate from the Company that indicates that there are no liens on any of
the assets of the Loan Parties except for (A) Permitted Liens, liens in favor of
Iris arising under the Existing Transaction Documents, the liens previously
granted to the Xxxxx Noteholders and the liens previously granted to National
City Bank, (B) liens described on Schedule 7(c), or (C) liens discharged on or
prior to or in connection with the funding of the Standby Credit pursuant to
documentation satisfactory to EFI and (ii) an undertaking from the Company to
promptly obtain and deliver to EFI the results of a lien search that confirm the
certifications contained in the aforementioned officer's certificate;
(d) Fees. EFI shall have received all fees required to be paid, and
all reasonable expenses incurred by EFI for which invoices have been presented
(including the reasonable fees and expenses of legal counsel) in an aggregate
amount not to exceed $20,000, solely in connection with preparation and
execution of this Letter Agreement and the filing and recording of any financing
statements related thereto. All such amounts will be paid with proceeds of the
Standby Credit on the Closing Date and will be reflected in the funding
instructions given by the Company to EFI on or before the Closing Date;
(e) Closing Certificate; Certified Certificate of Incorporation; Good
Standing Certificates. EFI shall have received (i) a certificate of each Loan
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Party, dated as of the Closing Date, substantially in the form of Exhibit C to
the Existing Transaction Documents (but with conforming changes to reflect
differences between the Existing Credit Agreement and this Letter Agreement),
with appropriate insertions and attachments, including the certificate of
incorporation of each Loan Party that is a corporation certified by the relevant
authority of the jurisdiction of organization of such Loan Party, and (ii) a
short form good standing certificate for each Loan Party from its jurisdiction
of organization as of a date within ten (10) days of the Closing;
(f) Pledged Stock; Stock Powers; Pledged Notes. If the Standby
Trigger Event has occurred, then EFI shall have received a written undertaking
by the Company to (A) promptly use the proceeds of the Standby Credit together
with existing Company funds to pay off all amounts due and payable under the
Existing Credit Agreement, (B) use all commercially reasonable efforts to cause
Iris to release the Pledged Stock and the Pledged Notes in accordance with the
Collateral Agreement, (C) deliver to EFI (promptly after receiving the same from
Iris) the certificates representing the shares of Capital Stock pledged pursuant
to the Collateral Agreement, together with an undated stock power for each such
certificate executed in blank by a duly authorized officer of the pledgor
thereof and (E) deliver to EFI (promptly after receiving the same from Iris)
each promissory note (if any) pledged to Iris pursuant to the Collateral
Agreement endorsed (without recourse) in blank (or accompanied by an executed
transfer form in blank) by the pledgor thereof;
(g) Filings, Registrations and Recordings. If the Standby Trigger
Event has occurred, then EFI shall have received a written undertaking by the
Company to (A) promptly use the proceeds of the Standby Credit together with
existing Company funds to pay off all amounts due and payable under the Existing
Credit Agreement, (B) use all commercially reasonable efforts to cause Iris to
terminate any existing financing statements relating to the Collateral that were
filed in connection with the Existing Credit Agreement under the Uniform
Commercial Code, (C) take such other commercially reasonable actions as may be
necessary to terminate such financing statements, (D) deliver to EFI in a form
proper for filing, registration or recordation, each document (including any
Uniform Commercial Code financing statement) required under law or reasonably
requested by EFI to be filed, registered or recorded in order to create in favor
of EFI, for the benefit of EFI, a perfected Lien on the Collateral, prior and
superior in right to any other Person (other than with respect to the Liens
referred to in clauses (A), (B) or (C) of Section 7(c));
(h) Insurance. EFI shall have received a insurance certificates
satisfying the requirements of Section 5.2(b) of the Guarantee and Collateral
Agreement;
(i) No Default. The Company shall not be in material default of this
Letter Agreement;
(j) Representations and Warranties. Each of the representations and
warranties set forth on Exhibit 7(j) (subject to the exceptions specified in
disclosure schedule at the end of such Exhibit 7(j)) shall be true and correct
in all material respects as of the Closing Date; provided that this condition
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shall be deemed satisfied to the extent that any of the representations and
warranties set forth on Exhibit 7(j) (subject to the exceptions specified in the
disclosure schedule at the end of Exhibit 7(j)) are not true and correct in all
material respects as of the Closing Date solely as a result of the Company's
actions in furtherance of the Business Combination;
(k) No Breach Under Option Agreement. The Company shall not have
breached its obligations, representations or warranties in the option agreement,
dated as of the date hereof, by and between EFI and the Company, executed and
delivered concurrently with this Letter Agreement; and
(l) No Breach Under Ancillary Letter Agreement. The Company shall not
have breached its obligations in the ancillary letter agreement relating to the
Business Combination, dated as of the date hereof, by and between EFI and the
Company, executed and delivered concurrently with this Letter Agreement.
8. Representations and Warranties of the Company.
(a) The Company (i) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation and
(ii) has the corporate power and authority to execute, deliver and perform its
obligations under this Letter Agreement .
(b) The execution, delivery and performance by the Company of this
Letter Agreement and the transactions contemplated hereby (i) have been duly
authorized by all necessary corporate action of the Company, (ii) do not
contravene the terms of the Company's certificate of incorporation or bylaws,
(iii) do not violate, conflict with or result in any breach, default or
contravention of (or with due notice or lapse of time or both would result in
any breach, default or contravention of), or the creation of any lien or
encumbrance under, any contractual obligation of the Company or its subsidiaries
or any law, statute, treaty, rule, regulation, right, privilege, qualification,
license or franchise or determination of an arbitrator or a court or other
governmental or regulatory authority or stock exchange applicable to the Company
or its subsidiaries and (iv) do not violate any judgment, injunction, writ,
award, decree or order of any nature of any governmental or regulatory authority
against, or binding upon, the Company or its subsidiaries.
(c) This Letter Agreement has been duly executed and delivered by the
Company, and constitutes, the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms.
9. Representations and Warranties of EFI.
(a) EFI (i) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation and (ii)
has the requisite corporate power and authority to execute, deliver and perform
its obligations under this Letter Agreement.
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(b) The execution, delivery and performance by EFI of this Letter
Agreement and and the transactions contemplated hereby (i) have been duly
authorized by all necessary corporate action of EFI, (ii) do not contravene the
terms of EFI's certificate of incorporation or bylaws, (iii) do not violate,
conflict with or result in any breach, default or contravention of (or with due
notice or lapse of time or both would result in any breach, default or
contravention of), or the creation of any lien or encumbrance under, any
material contractual obligation of EFI or its subsidiaries or any law, statute,
treaty, rule, regulation, right, privilege, qualification, license or franchise
or determination of an arbitrator or a court or other governmental or regulatory
authority or stock exchange applicable to EFI or its subsidiaries and (iv) do
not violate any judgment, injunction, writ, award, decree or order of any nature
of any governmental or regulatory authority against, or binding upon, EFI or its
subsidiaries.
(c) This Letter Agreement has been duly executed and delivered by the
Company, and constitutes the legal, valid and binding obligation of EFI,
enforceable against it in accordance with its terms.
(d) EFI has adequate cash on hand to fund its obligations under this
Letter Agreement.
10. Amendment. Any amendment, supplement or modification of or to any
provision of the Letter Agreement, any waiver of any provision of the Letter
Agreement, and any consent to any departure by the Company or EFI from the terms
of any provision of the Letter Agreement, shall be effective (i) only if it is
made or given in writing and signed by the Company and EFI and (ii) only in the
specific instance and for the specific purpose for which made or given.
11. Assignment. Neither this Letter Agreement nor the rights, duties and
obligations of either party hereunder may be assigned by such party at any time,
by operation of law or otherwise, without the prior written consent of the other
party.
12. Expenses. In addition to the Company's obligation to pay EFI fees as
specified in Section 7(d) hereof, in any action or proceeding between the
parties arising out of this Letter Agreement, the prevailing party shall be
entitled to recover its reasonable attorneys' fees and other costs and expenses
incurred.
13. GOVERNING LAW. THE LETTER AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW THEREOF. THE COMPANY CONSENTS TO THE EXCLUSIVE
JURISDICTION AND VENUE OF THE STATE OR FEDERAL COURTS LOCATED IN XXX XXXX XX XXX
XXXX XXX XXX XXXXX XX XXX XXXX. SERVICE OF PROCESS BY THE HOLDER IN CONNECTION
WITH ANY DISPUTE SHALL BE BINDING ON THE COMPANY IF SENT TO THE COMPANY BY
REGISTERED MAIL AT THE ADDRESS SPECIFIED IN THE EXISTING CREDIT AGREEMENT. THE
COMPANY WAIVES ANY RIGHT THE COMPANY MAY HAVE TO JURY TRIAL.
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14. Counterparts. The Letter Agreement may be executed in two counterparts
and by the parties hereto in separate counterparts, both of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Facsimile execution and delivery of this
Letter Agreement is legal, valid and binding for all purposes.
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Please confirm your acceptance of and agreement to the above terms by
dating and signing this letter and returning one executed copy to the
undersigned.
Very truly yours,
ELECTRONICS FOR IMAGING, INC.
By:______________________________
Name: Xxxxxx Xxxxx
Title: Chief Financial Officer
ACCEPTED AND AGREED AS OF
THE DATE FIRST WRITTEN ABOVE:
PRINTCAFE SOFTWARE, INC.
By:__________________________
Name:
Title:
SCHEDULE 7(b)
Liens
EXHIBIT 7(j)
REPRESENTATIONS AND WARRANTIES
1.1 Organization, Good Standing and Qualification. Each Group Member is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has all requisite corporate power and
authority to carry on its business. Each Group Member is duly qualified as a
foreign corporation or is otherwise duly qualified to transact business and is
in good standing in each jurisdiction in which the failure so to qualify would,
either individually or in the aggregate, have a Material Adverse Effect.
1.2 Subsidiaries; Joint Ventures. The Company does not currently own or
control, directly or indirectly, any interest in any other corporation,
association, or other business entity other than the Subsidiaries set forth on
Schedule 1.2. The Company, either directly or through one of its Subsidiaries,
holds all of the issued and outstanding capital stock of each of the
Subsidiaries. The Company is not a participant in any joint venture, partnership
or similar arrangement.
1.3 Authorization. All corporate action on the part of each Loan Party, its
officers, directors and stockholders necessary for the authorization, execution
and delivery of the Letter Agreement, the performance of all obligations of the
Company under the Letter Agreement and the authorization of the borrowing of the
Letter Agreement on the terms and conditions of the Letter Agreement has been
taken or will be taken prior to the Closing Date, shall constitute valid and
legally binding obligations of such Loan Party, enforceable against such Loan
Party in accordance with its terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, and other laws of
general application affecting enforcement of creditors' rights generally, as
limited by laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies. All corporate action on the part of each
Loan Party and its predecessors, officers, directors, stockholders and
subsidiaries necessary for the authorization, execution and/or delivery, as
applicable, for all past corporate actions was obtained.
1.4 Governmental Consents. No consent, approval, order or authorization of,
or registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority of the United States is required
in connection with the consummation of the transactions contemplated by the
Letter Agreement, except for (i) consents, authorizations, filings and notices
described in Schedule 1.4, which consents, authorizations, filings and notices
have been obtained or made and are in full force and effect [and (ii) the
filings referred to in Section 1.24.] [OPEN]
1.5 Litigation. Except as set forth on Schedule 1.5, there is no action,
suit, proceeding or investigation pending or, to the Company's knowledge,
currently threatened against the Company or any of its Subsidiaries, or any
basis therefor known to the Company, that questions the validity of the Letter
Agreement or the right of the Company to enter into it, or to consummate the
transactions contemplated hereby or thereby, or that might result, either
individually or in the aggregate, in any Material Adverse Effect. Except as set
forth on Schedule 1.5, neither the Company nor any of its Subsidiaries is a
party or subject to the provisions of any order, writ, injunction, judgment or
decree of any court or government agency or instrumentality. Except as set forth
on Schedule 1.5, there is no action, suit, proceeding or investigation by the
Company or any of its Subsidiaries currently pending or which the Company or any
of its Subsidiaries intends to initiate. The foregoing includes, without
limitation, actions pending or threatened (or any basis therefor known to the
Company) involving the prior employment of any of the Company's or its
Subsidiaries' employees, their use in connection with the Company's or its
Subsidiaries' business of any information or technologies allegedly proprietary
to any of their former employers, or their obligations under any agreements with
prior employers.
1.6 Intellectual Property. Each Group Member owns or possesses sufficient
legal rights to all patents, trademarks, service marks, tradenames, copyrights,
trade secrets, licenses, information and proprietary rights and processes
(collectively, "Intellectual Property Rights") necessary for its business
without any conflict with, or infringement of, the rights of others. To the
Company's knowledge, no third party is infringing or violating any Group
Member's Intellectual Property Rights. Except as set forth on Schedule 1.6, the
Company has not received any written communications alleging that any Group
Member has violated or, by conducting its business, would violate any of the
Intellectual Property Rights of any other person or entity. Except with respect
to license agreements entered into in the ordinary course of a Group Member's
business or as disclosed on Schedule 1.6, there are no outstanding options,
licenses or agreements of any kind related to the foregoing, nor is any Group
Member bound by, or a party to, any options, licenses or agreements of any kind
with respect to Intellectual Property Rights of any other forms.
1.7 Confidential Information and Invention Assignment Agreements. Each
officer, independent contractor, consultant and employee of the Company
(collectively, "Service Providers") has entered into an agreement with the
Company regarding confidentiality, non-solicitation of employees and customers
and assignment of all Intellectual Property Rights, technical information and
other information developed and/or worked on by such Service Provider while
employed or engaged with the Company (each, a "Confidentiality and Invention
Assignment Agreement"). To the Company's knowledge, (i) no past or present
Service Provider is in violation of any term of any Confidentiality and
Invention Assignment Agreement between the Company and such Service Provider;
and (ii) it is not nor will it be necessary to use any inventions of any of its
Service Providers (or persons it currently intends to hire) made prior to their
employment or engagement by the Company. Each Service Provider hired or engaged
by the Company after the date hereof shall, prior to their employment or
engagement with the Company, enter into a Confidentiality and Invention
Assignment Agreement with the Company.
1.8 Compliance with Other Instruments. No Group Member is in violation in
any respect or default of any Requirements of Law, which violation or default is
reasonably likely to result in a Material Adverse Effect. No event has occurred
which with the passage of time or the giving of notice, or both, would
constitute a material breach of or default under any of the foregoing, which
material violation or breach or default is reasonably likely to result in a
Material Adverse Effect. Except as set forth on Schedule 1.8, the execution,
delivery and performance of the Letter Agreement and the consummation of the
transactions contemplated thereby will not result in any such violation or
breach or be in conflict with or constitute, with or without the passage of time
and giving of notice, either a default under any such provision, agreement,
commitment, arrangement, license, instrument, judgment, order, writ, decree or
contract or an event which results in the creation of any lien, charge or
encumbrance upon any assets of any Loan Party. Except as set forth on Schedule
1.8, neither the execution or delivery of the Letter Agreement, nor the carrying
on of any Group Member's business by the employees of such Group Member, nor the
conduct of such Group Member's business as proposed, will conflict in any
material respect with or result in a material breach of the terms, conditions,
or provisions of, or constitute a default under, any contract, covenant or
instrument under which any of such Group Member's employees is now obligated.
1.9 Agreements; Action.
(a) Except as set forth on Schedule 1.9, there are no agreements,
understandings or proposed transactions between the Company and any of its
officers, directors, Affiliates or any Affiliate thereof (other than the
Existing Credit Agreement and the other Loan Documents).
(b) Except as explicitly contemplated by the Letter Agreement, and
agreements entered into in the ordinary course of business or set forth on
Schedule 1.9, there are no agreements, understandings, instruments, contracts or
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proposed transactions to which any Group Member is a party or by which it is
bound that involve (i) obligations (contingent or otherwise) of, or payments to,
any Group Member in excess of $50,000, (ii) the license of any patent,
copyright, trade secret or other proprietary right to or from any Group Member,
or (iii) the grant of rights to manufacture, produce, assemble, license, market,
or sell its products to any other person or affect the Company's exclusive right
to develop, manufacture, assemble, distribute, market or sell its products.
(c) Except as set forth on Schedule 1.9, no Group Member has (i) declared
or paid any dividends, or authorized or made any distribution upon or with
respect to any class or series of its capital stock, (ii) incurred any
Indebtedness in excess of $50,000 or in excess of $100,000 in the aggregate,
(iii) made any loans or advances to any person, other than ordinary advances to
such Group Member's employees for business expenses, or (iv) sold, exchanged or
otherwise disposed of any of its assets or rights, other than the sale of its
inventory in the ordinary course of business.
(d) Except as disclosed in Schedule 1.9, the Company has not entered into
any binding letters of intent with any corporation, partnership, association,
other business entity or any individual regarding (i) the consolidation or
merger of the Company with or into any such corporation or other business
entity, (ii) the sale, conveyance or disposition of all or substantially all of
the assets of the Company or a transaction or series of transactions in which
more than 50% of the voting power of the Company is disposed of, or (iii) any
other form of acquisition, liquidation, dissolution or winding-up of the
Company.
1.10 No Conflict of Interest. No Group Member is indebted, directly or
indirectly, to any of its officers or directors, in any amount whatsoever, other
than in connection with expenses or advances of expenses incurred in the
ordinary course of business or relocation expenses of employees. Except as set
forth on Schedule 1.10, none of any Group Member's officers or directors are,
directly or indirectly, indebted to such Group Member (other than in connection
with purchases of such Group Member's stock) or, to the Company's knowledge,
have any direct or indirect ownership interest in any firm or corporation with
which any Group Member is affiliated or with which any Group Member has a
business relationship, or any firm or corporation which competes with any Group
Member (other than ownership of stock in, but not exceeding two percent (2%) of
the outstanding capital stock of, any publicly traded company that competes with
such Group Member). To the Company's knowledge, except as set forth on Schedule
1.10, none of any Group Member's officers or directors is, directly or
indirectly, interested in any material contract with any Group Member. Except as
set forth on Schedule 1.10, no Group Member is a guarantor of any Indebtedness
of any other person, firm or corporation.
1.11 Title to Property and Assets. Each Group Member has good and valid
title to all of its properties and assets, both real and personal, and has good
title to all its leasehold interests, in each case free and clear of all Liens,
except for Permitted Liens and Liens to secure the Existing Transaction
Documents, the Xxxxx Debt, the M Data Debt and the National City Debt. Each
Group Member owns or leases all properties and assets reasonably necessary to
the operation of its business as now conducted. With respect to the property and
assets it leases, each Group Member is in compliance with such leases and, to
such Group Member's knowledge, holds a valid leasehold interest free of any
Liens, except for Permitted Liens.
1.12 Financial Statements. The consolidated balance sheet, statement of
operations and statement of cash flows of the Company for the fiscal year ended
December 31, 2002 (collectively, the "Financial Statements") have been prepared
in accordance with GAAP consistently applied (except that the unaudited
financial statements do no contain footnotes and are subject to normal year-end
audit adjustments). The Financial Statements are complete in all material
respects and in accordance with the books and records of the Group Members and
fairly present the financial condition and operating results of the Group
3
Members as of the dates, and for the periods, indicated therein (except that the
unaudited financial statements do no contain footnotes and are subject to normal
year-end audit adjustments). Except as set forth in the Financial Statements, no
Group Member has any material liabilities, contingent or otherwise, other than
(i) liabilities incurred in the ordinary course of business subsequent to
December 31, 2002, and (ii) obligations under contracts and commitments incurred
in the ordinary course of business and not required under generally accepted
accounting principles to be reflected in the Financial Statements.
1.13 Changes. Except as set forth on Schedule 1.13, since December 31, 2002
there has not been:
(a) any change in the assets, liabilities, financial condition or operating
results of the Company from that reflected in the Financial Statements, except
changes in the ordinary course of business that have not had, in the aggregate,
a Material Adverse Effect;
(b) any damage, destruction, loss or other occurrence or development that
has had a Material Adverse Effect;
(c) any waiver or compromise by the Company of a valuable right or any
material debt owed to it;
(d) except as contemplated in connection with the Letter Agreement or the
Business Combination, any satisfaction or discharge of any lien, claim, or
encumbrance or payment of any obligation by the Company, except in the ordinary
course of business and that is not material to the assets, business, properties
or financial condition or operating results of the Company;
(e) any material change or amendment to a material contract or agreement by
which the Company or any of its assets or properties is bound or subject;
(f) any material change or amendment in any compensation arrangement or
agreement with any employee, officer, director or stockholder;
(g) any sale, assignment or transfer of any patents, trademarks,
copyrights, trade secrets or other intangible assets;
(h) any resignation or termination of employment of any officer or key
employee of the Company; and the Company, is not aware of any impending
resignation or termination of employment of any such officer or key employee;
(i) except as contemplated in connection with the Letter Agreement or the
Business Combination, any transfer of a security interest in, or Lien, created
by any Group Member, with respect to any of its material properties or assets,
except for Permitted Liens;
(j) except as contemplated in connection with the Letter Agreement or the
Business Combination, any loans or guarantees made by any Group Member to or for
the benefit of its employees, officers or directors, or any members of their
immediate families, other than travel advances and other advances made in the
ordinary course of its business;
(k) except with respect to the Rights Plan, any declaration, setting aside
or payment or other distribution in respect to any of the Company's capital
stock, or any direct or indirect redemption, purchase, or other acquisition of
any of such stock by the Company;
4
(l) to the Company's knowledge, any other event or condition of any
character that might have a Material Adverse Effect; or
(m) any arrangement or commitment by the Company to do any of the things
described in this Section 1.13.
1.14 Distributions. Except with respect to the Rights Plan, there has been
no declaration or payment by the Company of any dividend, nor any distribution
by the Company of any assets of any kind, to any of its stockholders.
1.15 Tax Returns and Payments. Except as set forth on Schedule 1.15, each
Group Member has filed all tax returns and reports as required by applicable law
and such tax returns and reports are true and correct in all material respects.
Except as set forth on Schedule 1.15, each Group Member has paid all taxes,
fees, assessments and other governmental charges upon such Group Member, or upon
any of its properties, income, or franchises, shown in such returns and on
assessments received by such Group Member to be due as of the date hereof and no
such taxes or assessments are being contested.
1.16 Insurance. The Company has in full force and effect fire and casualty
insurance policies, with extended coverage, sufficient in amount (subject to
reasonable deductibles) to allow it to replace any of its properties that might
be damaged or destroyed, and the Company has such other insurance policies and
coverages as are customary in the Company's industry.
1.17 Employee Benefit Plans. Schedule 1.17 sets forth all currently
effective employment contracts, deferred compensation arrangements, bonus plans,
incentive plans, profit sharing plans, retirement agreements or other employee
compensation agreements. No Group Member has any Employee Benefit Plan as
defined in the Employee Retirement Income Security Act of 1974, as amended.
1.18 Labor Agreements and Actions. No Group Member is bound by or subject
to (and none of its assets or properties is bound by or subject to) any written
or oral, express or implied, contract, commitment or arrangement with any labor
union, and no labor union has requested or, to the knowledge of such Group
Member, has sought to represent any of the employees, representatives or agents
of such Group Member. There is no strike or other labor dispute involving any
Group Member pending, or to the knowledge of such Group Member threatened, which
could have a Material Adverse Effect, nor is any Group Member aware of any labor
organization activity involving its employees. Except as set forth on Schedule
1.18, the employment of each officer and employee of each Group Member is
terminable at the will of such Group Member. The service of each consultant and
independent contractor is terminable by such Group Member upon not more than
thirty (30) days prior written notice. To its knowledge, each Group Member has
complied in all material respects with all applicable state and federal equal
employment opportunity laws and with other laws related to employment.
1.19 Compliance with Environmental Requirements. To the Company's
knowledge, it has obtained all material permits, licenses and other
authorizations required under federal, state and local laws relating to
pollution or protection of the environment. The Company has not violated any
applicable Environmental Law, the violation of which is reasonably likely to
result in a material adverse change in the financial condition, assets,
liabilities, operations or financial performance of the Company. To the
knowledge of the Company, there are no present requirements of any applicable
Environmental Law which are due to be imposed upon it which will materially
increase its cost of complying with the Environmental Laws. All past on-site
generation, treatment, storage and disposal of Waste, including Hazardous Waste,
by the Company and, to its knowledge, by its predecessors have been done in
compliance with the currently applicable Environmental Laws, and all past
off-site treatment, storage and disposal of Waste, including Hazardous Waste,
generated by the Company and, to its knowledge, by its predecessors have been
5
done in compliance with the currently applicable Environmental Laws. As used in
the Letter Agreement, the terms (i) "Environmental Laws" include, but are not
limited to, any federal, state, local or foreign law, statute, charter or
ordinance, and any rule, regulation, binding interpretation, binding policy,
permit, order, court order or consent decree issued pursuant to any of the
foregoing, which pertains to, governs or otherwise regulates any of the
following activities, including, without limitation, (a) the emission,
discharge, release or spilling of any substance into the air, surface water,
groundwater, soil or substrata; (b) the manufacturing, processing, sale,
generation, treatment, storage, disposal labeling or other management of any
Waste, Hazardous Substance or Hazardous Waste, and (ii) "Waste," "Hazardous
Substance," and "Hazardous Waste" include any substance defined as such by any
applicable Environmental Law.
1.20 Permits. Each Group Member has all franchises, permits, licenses and
any similar authority necessary for the conduct of its business, the lack of
which could result in a Material Adverse Effect and, to its knowledge, it can
obtain, without undue burden or expense, any similar authority for the conduct
of its business as planned to be conducted. Except as set forth on Schedule
1.20, no Group Member is in default in any material respect under any of such
franchises, permits, licenses or other similar authority.
1.21 Compliance with Other Laws. Except as set forth on Schedule 1.21, the
Company has complied in all material respects with all laws, statutes, rules,
regulations and orders of federal, state, local and foreign agencies and
authorities, applicable to its business, properties and operations.
1.22 Federal Regulations. No part of the proceeds of the Term Loan, and no
other extensions of credit hereunder, will be used for "buying" or "carrying"
any "margin stock" within the respective meanings of each of the quoted terms
under Regulation U as now and from time to time hereafter in effect or for any
purpose that violates the provisions of the Regulations of the Board. If
requested by the Lender, the Company will furnish to the Lender a statement to
the foregoing effect in conformity with the requirements of FR Form G-3 or FR
Form U-1, as applicable, referred to in Regulation U.
1.23 Investment Company Act; Other Regulations. No Loan Party is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur Indebtedness.
6
DISCLOSURE SCHEDULES
The disclosures made in the following schedules or in documents that have
been previously delivered or made available to EFI are intended to provide
information to supplement or complete certain representations and warranties
made by the Company in the Letter Agreement to which these Disclosure Schedules
are attached. All capitalized terms used in these Disclosure Schedules and not
otherwise defined herein shall have the meanings ascribed to them in the Letter
Agreement.
References to any document are to such document as amended as of the date
of the Letter Agreement. All descriptions in the attached schedules of documents
that have been previously delivered or made available to the Purchasers or their
counsel are qualified in their entirety by reference to the actual provisions.
In preparing certain parts of these Disclosure Schedules, the Company has
provided information not necessarily called for by the Letter Agreement but
which seemed relevant or possibly useful to EFI, even though the Company does
not believe all such information to be material to its business or financial
condition. In no event shall the listing of such agreements or other matters in
these Disclosure Schedules be deemed or interpreted to broaden or otherwise
amplify the Company's representations and warranties, covenants or agreements
contained in the Letter Agreement, and nothing in these Disclosure Schedules
shall influence the construction or interpretation of any of the representations
and warranties contained in the Letter Agreement.
7
SCHEDULE 1.2
SUBSIDIARIES; JOINT VENTURES
1. Printcafe Europe Ltd.
2. printCafe Systems, Inc., a Delaware corporation
3. M Data, Inc., an Arizona corporation
4. printCafe IP Management, Inc., a Delaware corporation
5. printCafe Pty. Ltd.
8
SCHEDULE 1.4
GOVERNMENTAL CONSENTS
None.
9
SCHEDULE 1.5
LITIGATION
1. Xxxxx Xxxxxxx v. Prograph Systems, Inc. (a predecessor to the Company) -
Xx. Xxxxxxx was terminated in August 1999. In connection with his
termination, Xx. Xxxxxxx alleged breach of his employment contract and age
discrimination. The lawsuit was filed in August 2000. Xx. Xxxxxxx claimed
damages of $127,500, bonus entitlement, stock options, vacation, health
insurance, interest, costs and attorney fees.
2. Dayton Legal Blank ("DLB") - DLB alleges that a former customer of a
subsidiary of the Company breached its obligations pursuant to a license
agreement. The parties have tentatively agreed to settle the matter for the
payment of $50,000 to DLB.
3. Xxxxx Xxxx - Xx. Xxxx is a former employee of the Company who has alleged
that she was improperly terminated. To the Company's knowledge, no legal
action has been filed.
4. XXXX Media-Mohndruck Gmbh ("XXXX Media"), a subsidiary Bertelsmann, has
alleged that the Company breached the terms of an agreement between the
parties. To the Company's knowledge, no legal action has been filed. The
Company has engaged in settlement discussions with XXXX Media and offered
to refund a license fee paid by XXXX Media and provide XXXX Media with
certain software.
5. The Company has received a letter from counsel to e-LYNXX Corporation
("ELC") alleging that certain of the Company's competitive bidding print
procurement systems infringe upon a patent held by ELC (Registration No.
6,397,197). There has been further correspondence from ELC since April
2002.
6. The Company entered into a consent decree with Quad Graphics which
prohibits the Company from stating that Quad Graphics is a customer of the
Company or uses the Company's products.
7. The Company's Minneapolis office is undergoing an OSHA audit for 2003
pursuant to which the Company is required to track and report safety
violations for work-related injuries. The Minneapolis office was selected
randomly by OSHA and the audit is not part of any formal action.
10
SCHEDULE 1.6
INTELLECTUAL PROPERTY
1. License Agreement dated March 9, 2000 between Xxxxx X. Xxxxxxxx and the
Company.
2. The Group Members license intellectual property owned by such Group Members
in the ordinary course of business.
3. License Agreement dated December 31, 2001 among Xxxxxxx Xxxxxx, Xxxx Xxxxxx
and printCafe Systems.
4. Patent License Agreement dated as of October 31, 2002 between ImageX, Inc.
and Printcafe Systems.
5. IP Purchase and License Agreement dated October 27, 2002 by and among Creo
Inc., the Company and Printcafe Systems.
6. The Company has entered into a Master Software Escrow Agreement with DSI
Technologies for the benefit of certain of the Company's customers.
7. The Company's intellectual property is encumbered by security agreements
entered into with National City, Iris, the Xxxxx Noteholders and the
holders of the M Data Debt.
11
SCHEDULE 1.8
COMPLIANCE WITH OTHER INSTRUMENTS
1. The execution of the Letter Agreement and consummation of the related
transactions may require the consent of the following Persons:
(a) NCB pursuant to the NCB Debt;
(b) Xxxxxxx X. Xxxxxx and Xxxx X. Xxxxxx pursuant to the Security
Agreement executed by M Data, Inc. in connection with the M Data Debt;
(c) Xxxxx Noteholders pursuant to the Xxxxx Debt; and
(d) Iris pursuant to the Existing Credit Facility and related documents.
12
SCHEDULE 1.9
AGREEMENTS; ACTION
1. Stock Purchase Agreements with Employees:
(a) Founder Stock Purchase Agreement dated as of March 11, 1999 between
the Company and Xxxx Xxxx.
(b) Founder Stock Purchase Agreement dated as of November 8, 1999 between
the Company and Xxxxxxx Xxxxxxx.
(c) Founder Stock Purchase Agreement dated as of November 8, 1999 between
the Company and Xxx Xxxxxx.
(d) Founder Stock Purchase Agreement dated as of November 8, 1999 between
the Company and Xxxxxxx Stock.
(e) Founder Stock Purchase Agreement dated as of November 8, 1999 between
the Company and Xxxxxx Xxxxxx.
(f) Founder Stock Purchase Agreement dated as of March 11, 1999 between
the Company and Xxxxxxxxx Xxxxx.
(g) Founder Stock Purchase Agreement dated as of December 22, 1999 between
the Company and Xxxxxx X. Xxxxx.
2. Employment Agreements:
(a) Employment Agreement dated as of January 1, 2002 between the Company
and Xxxx Xxxx.
(b) Employment Agreement dated as of January 1, 2002 between the Company
and Xxx Xxxxxx.
(c) Employment Agreement dated November 8, 1999 between the Company and
Xxxxxxx Stock, as amended.
(d) Employment Agreement dated as of January 1, 2002 between the Company
and Xxxxxx X. Xxxxx.
(e) Employment Agreement dated as of January 1, 2002 between the Company
and Xxxxxx Xxxxxx.
(f) Employment Agreement dated January 25, 2000 between the Company and
Xxxxx XxXxxxxx, as amended.
(g) Employment Agreement dated March 9, 2000 between the Company and
Xxxxxx Xxxxxxxxx.
(h) Employment Agreement dated March 8, 2000 between the Company and Udi
Arieli.
(i) Employment Agreement dated April 7, 2000 between the Company and
Xxxxxxxx Xxxx.
13
(j) Employment Agreement dated January 27, 2000 between Programmed
Solutions, Inc. and Xxxxxxx Xxxxxxxx.
(k) printCafe Systems has agreed to severance benefits to Xxxxxxx Xxxxxx
through June 30, 2003.
(l) Employment Agreement dated as of January 15, 2001 between printCafe
Systems, Inc. and Xxxxxxxxx Xxxxx.
(m) Employment Agreement dated as of March 10, 2000 between M Data, Inc.
and Xxxxxxx Xxxxxx, as amended.
(n) Employment Agreement dated as of March 10, 2000 between M Data, Inc.
and Xxxx Xxxxxx, as amended.
(o) Employment Agreement dated as of March 10, 2000 between M Data, Inc.
and Xxxxxxx XxXxxxx, as amended.
(p) Employment Agreement dated June 6, 2001 between printCafe Systems,
Inc. and Xxxxx Xxxxxxx.
(q) The Company entered into the following agreements with Xxxxxxx Xxxxxxx
in connection with the termination of Xx. Xxxxxxx'x employment
agreement:
(i) Separation and Mutual General Release Agreement dated April 26,
2001.
(ii) Secured Promissory Note dated April 26, 2001 issued by Xxxxxxx
Xxxxxxx in favor of the Company.
(iii) Option Agreement dated April 26, 2001.
(iv) Unsecured Promissory Note dated April 26, 2001 issued by the
Company. in favor of Xxxxxxx Xxxxxxx.
(r) The Company has offered stay bonuses and moving incentives to certain
developers in the Company's Norwalk, CT office in connection with the
Company's planned closing of such office in June 2003.
(s) printcafe Systems has agreed to severance benefits to Xxxxxx Xxxxx
through March 15, 2003.
(t) printcafe Systems has agreed to severance benefits to Xxxxx Xxxxx
through February 28, 2003.
(u) Printcafe Systems has agreed to severance benefits to Xxxx Xxxxxxxxx
through May 15, 2003.
3. Loan Agreements executed in connection with the purchase of shares of
capital stock by employees of the Company:
(a) Loan Agreement dated November 8, 1999 between the Company, as lender,
and Xxxx Xxxx, as Company, in the original amount of $99,282.04.
(b) Loan Agreement dated November 8, 1999 between the Company, as lender,
and Xxxxxxx Xxxxxxx, as borrower, in the original amount of
$380,581.16.
14
(c) Loan Agreement dated November 8, 1999 between the Company, as lender,
and Xxxxxx Xxxxxx, as borrower, in the original amount of $36,535.73.
(d) Loan Agreement dated November 8, 1999 between the Company, as lender,
and Xxxxxxx Stock, as borrower, in the original amount of $97,585.09.
(e) Loan Agreement dated November 8, 1999 between the Company, as lender,
and Xxxxxx Xxxxxx, as borrower in the original amount of $62,100.
(f) Loan Agreement dated December 22, 1999 between the Company, as lender,
and Xxxxxx Xxxxx, as borrower, in the original amount of
$1,048,826.30.
4. The Company has entered into Indemnification Agreements with certain of its
officers and directors.
5. Debt Instruments:
(a) Term Loan Agreement dated July 6, 1999 between the Company and NCB in
the original principal amount of $900,000. The Term Loan Agreement is
secured by a general security interest in all the assets of the
Company.
(b) Demand Line of Credit dated May 25, 2000 between the Company and NCB
providing for the Company to borrow up to $2,000,000. The Demand Line
of Credit is secured by a general security interest in all the assets
of the Company.
(c) The M Data Debt and related security agreement.
(d) The Xxxxx Debt and related security agreement.
(e) The Existing Credit Facility and related security agreement.
6. Real Property Leases:
(a) Lease dated January 25, 2000 between printCafe Systems, Inc. and 00xx
Xxxxxx Associates, LLP, for certain office space located on the second
floor of the building located at 00 00xx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxxxxxx, as amended.
(b) Lease Agreement dated April 28, 1995 between printCafe Systems, Inc.
and 00xx Xxxxxx Associates, LLP, for certain office space located on
the fifth floor of the building located at 00 00xx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxxxxxx, as amended.
(c) Sublease dated August 24, 2001 between printCafe Systems, Inc. and
Stargate Industries, L.L.C. pursuant to which printCafe Systems, Inc.
subleases its office space on the Fifth Floor of the building located
at 00 00xx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx to Stargate Industries.
(d) Sublease dated August 24, 2001 between printCafe Systems, Inc. and
Stargate Industries, L.L.C. pursuant to which printCafe Systems, Inc.
subleases certain office space located on the first floor of the
building located at 00 00xx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx from
Stargate Industries.
(e) Standard Form Commercial Lease dated June 28, 1999, between printCafe
Systems, Inc. and Unicorn Realty Trust for certain office space
located at 000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx.
15
(f) Agreement of Lease dated May __, 1998 [date blank in original] between
the Programmed Solutions, Inc. and Prime Development Group, LLC, for
certain office space located at 00 Xxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxxx.
(g) Real Property Lease Agreement, dated January 5, 1999, between
Programmed Solutions, Inc. and 0000 Xxxx Xxxxx Court, LTD, for the
office space located at 0000 Xxxx Xxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx,
Xxxxxxxxxx.
(h) Sublease dated May 31, 2002, between Creo Americas, Inc and the
Company pursuant to which the Company subleases certain office space
located at 0000 Xxxxx Xxxx, Xxxxxxxx, Xxxxxxxx, from Creo Americas,
Inc.
(i) Lease dated May 1, 1998 between M Data, Inc. and Grampion Management
LLC for the lease of the real property located at 000 X. Xxxx Xxx.,
Xxxxxxxx, XX.
(j) Sublease dated June 28, 2002, between Programmed Solutions, Inc. and
Workstream, Inc. pursuant to which Workstream, Inc. subleases certain
office space located at 00 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxx, from
Programmed Solutions, Inc.
(k) Lease Agreement dated February 1, 2000 between printCafe Systems, Inc.
and Rialto Investments, LLP for the building located at 0000 Xxxx Xxxx
Xxxxxxx, Xxxx Xxxxxxx, XX.
(l) Lease Agreement between Logic Associates, Inc. and Etna Road
Associates for the office building located at 000 Xxxx Xxxx, Xxxxxxx,
XX 00000.
(m) Lease Agreement between Logic Associates, Inc. and Ms. E. L. Little
for an office located at 000X Xx. Xxxxxxxx Xx., Xxx Xxxxxxx,
Xxxxxxxxx, X.X., as amended
(n) Temporary Lease Agreement dated June 11, 2002 between Programmed
Solutions, Inc. and Xxxx-Xxxx Realty, L.P. for 3,478 square feet on
the fifth floor of 00 Xxxxxxxx Xxxxxx, Xxxxxxx, XX.
0. Equipment Lease Agreements between printCafe Systems, Inc. and the
following lessors, each of which is secured by a general security interest
in the lease assets:
(a) Norstar Financial Services
(b) Siemens Financial Services, Inc.
(c) Fidelity Credit Corporation
8. Equipment Lease Agreements between printCafe Systems, Inc. and National
Fleet Leasing Corp. for the lease of an automobile.
9. Software Licensing Agreement between Programmed Solutions, Inc. and Macola
for the use of system integrated accounting software.
10. Fifth Amended and Restated Investors' Rights Agreement dated as of December
31, 2001 among the Company and the parties listed on the signature page
thereto.
11. Strategic Alliance and Other Marketing Agreements:
(a) Amended and Restated Strategic Alliance Agreement, dated December 31,
2001 between the Company and Creo Products Inc.
16
(b) 2002 Sales Channel Agreement dated as of January 1, 2002 among Creo
Products Inc., CreoScitex America, Inc. and the Company.
(c) Marketing Alliance Agreement dated March 7, 2000 between printCafe
Systems, Inc. and Xxxxxxxx Consulting LLP.
(d) Marketing Alliance Agreement dated as of January 4, 2001 between
CoNext Holdings, Inc. and printCafe Systems, Inc. and related Reseller
Agreements executed in connection with the sale of e-commerce services
to Clorox Corporation and Guardian Life Insurance Company.
(e) Strategic Alliance Agreement dated as of April 17, 2000 between
Hewlett-Packard Company and printCafe Systems, Inc.
(f) Strategic Alliance Agreement dated October 23, 2001 between
XXXXXxxxxx.xxx, Inc. and printCafe Systems, Inc.
(g) Authorized Reseller Agreement dated as of December 11, 2001 between
printCafe Systems, Inc. and Horizon Systems Pty. Ltd.
12. The Company has entered into Warrant Agreements with the following
companies for the following amounts of warrants (amounts are adjusted for
stock splits and conversion into common stock, if applicable):
A. Time Warner - 1,501
B. Time Warner - 13,513
C. Accenture Technology Ventures - 7,833
D. Accenture Technology Ventures - 6,756
X. Xxxxxxxx Group - 1,501
X. Xxxxxx, Xxxxxxxxxx & Suttcliffe - 1,501
X. Xxxxxxx-Xxxxxxx - 375
H. Primedia Inc. - 1,251
I. Transcontinental - 3,753
X. Xxxxxx Ventures II, L.P.:
(i) 1,876
(ii) 1,876
(iii) 3,753
(iv) 4,692
(v) 10,145
K. Creo SRL:
(i) 1,876
(ii) 1,876
(iii) 4,692
17
(iv) 10,145
L. CoNext Holdings, Inc. - 37,537
M. Credit Suisse First Boston - 13,527
N. Constellation Software, Inc. - 3,378
13. Agreement dated October 30, 2000 between the Company and Creo SRL re:
filing fees under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended ("HSR Act").
14. Master Agreement dated July 23, 2001 between printCafe Systems, Inc. and
AT&T Corporation.
15. Managed Network Agreement dated August 22, 2001 between Stargate
Industries, L.L.C. and printCafe Systems, Inc.
16. Master Services Agreement dated June 7, 2001 between printCafe Systems,
Inc. and Exodus Communications, Inc.
17. Microsoft Enterprise Enrollment Agreement dated December 23, 2000 between
printCafe Systems, Inc. and Microsoft Corporation and related agreements,
as amended.
18. License Agreement dated December 13, 2000 between Pantone, Inc. and
printCafe Systems, Inc., as amended
19. Services Resale Agreement dated as of June 27, 2001 between WebEx
Communications, Inc. and printCafe Systems, Inc., as amended
20. Asset Purchase Agreement dated January 11, 2001 between printCafe Systems,
Inc. and Strings, Inc.
21. Asset Purchase Agreement dated May 14, 2001 between M Data, Inc. and
Sherwood Partners, Inc. for the intellectual property assets formerly owned
by Impresse Corporation.
22. License Agreement dated July 19, 2001 between printCafe Systems, Inc. and
Archistra, Inc.
23. Professional Services Agreement dated July 19, 2001 between the printCafe
Systems, Inc. and Archistra, Inc.
24. Oracle Term License Agreement dated May 22, 2000 between printCafe Systems,
Inc. and Oracle Credit Corporation.
25. Big Pond Select Server Agreement dated December 5, 2000 between Telstra
Corporation Limited and printCafe Pty. Ltd.
26. Letter Agreement dated as of January 31, 2003 among UBS Warburg LLC, the
Company and the Special Committee of the Company's Board of Directors.
27. License Agreement dated March 9, 2000 between the Company and Xxxxx X.
Xxxxxxxx.
28. Ariba Logo License Agreement dated October 12, 2000 between printCafe
Systems, Inc. and Ariba, Inc.
18
29. Master Professional Services Agreement dated as of September 13, 2001
between RWD Technologies, Inc. and printCafe Systems, Inc.
30. Asset Purchase Agreement dated October 23, 2002 between printChannel, Inc.
and Printcafe Systems.
31. OEM License Agreement dated February 11, 2003 between Crystal Decisions,
Inc. and Printcafe Systems.
32. The Company has adopted the Rights Plan which provides for a stock dividend
under certain circumstances.
19
SCHEDULE 1.10
NO CONFLICT OF INTEREST
1. See the Employment Agreements between the Company and various officers and
directors of the Company set forth on Schedule 1.9.
2. See the Loan Agreements between the Company and various officers and
directors of the Company set forth on Schedule 1.9.
3. See the Founder Stock Purchase Agreements between the Company and various
officers and directors of the Company set forth on Schedule 1.9.
4. See the Indemnification Agreements between the Company and various officers
and directors of the Company set forth on Schedule 1.9.
5. See the 2002 Sales Channel Agreement, Amended and Restated Strategic
Alliance Agreement and agreement with respect to the payment of fees under
the HSR Act set forth on Schedule 1.9.
6. See agreements with Xxxxxxx Xxxxxxx set forth on Schedule 1.9.
7. The Company has guaranteed the M Data Debt.
8. The Company has guaranteed the Lease Agreement dated February 1, 2000
between printCafe Systems, Inc. and Rialto Investments, LLP
20
SCHEDULE 1.13
CHANGES
1. The Company has adopted the Rights Plan
2. The Company has agreed to pay each member of the Special Committee of the
Board of Directors $5,000 per month.
3. The Company has entered into retention agreements with certain members of
senior management of the Company.
21
SCHEDULE 1.15
TAX RETURNS AND PAYMENTS
22
SCHEDULE 1.17
EMPLOYEE BENEFIT PLANS
1. The Company maintains a discretionary matching 401(k) Retirement Plan
through CIGNA for the benefit of its employees.
2. The Company provides employee medical and prescription benefits through
Highmark Blue Cross Blue Shield for the benefit of its employees.
3. The Company provides employee dental benefits through Metlife for the
benefit of its employees.
4. The Company provides employee vision benefits through Highmark Blue Cross
Blue Shield Optichoice for the benefit of its employees.
5. The Company provides employee life insurance benefits through Jefferson
Pilot for the benefit of its employees.
6. The Company provides employee disability insurance benefits through
Jefferson Pilot for the benefit of its employees.
7. The Company provides supplemental employee disability insurance benefits
through UNUM for the benefit of a select group of employees.
8. The plans listed in Nos. 1 though 7 of this Schedule 1.17 are Employee
Benefit Plans as defined in the Employee Retirement Income Security Act of
1974.
9. The Company provides access to a Section 529 Education Plan administered by
Alliance Capital for the benefit of its employees.
10. 1999 Stock Option Plan.
11. Non-compliance with I.R.S. Form 5500 filing requirement for 1998 with
respect to PSI's 401(k) Retirement Plan.
12. See the employment agreements and severance obligations set forth on
Schedule 1.9.
13. 2000 Incentive Stock Plan.
14. 2002 Employee Stock Purchase Plan
15. 2002 Executive Management Stock Incentive Plan
16. 2002 Incentive Stock Plan.
17. Logic Associates, Inc., which was acquired by the Company in April 2000,
failed to file Form 5500's for plan years 2000 and 2001.
23
SCHEDULE 1.18
LABOR AGREEMENTS AND ACTIONS
1. See the employment agreements and severance obligations set forth on
Schedule 1.9 and retention agreements described on Schedule 1.13.
24
SCHEDULE 1.20
PERMITS
1. Non-compliance with I.R.S. Form 5500 filing requirement for 1998 with
respect to Programmed Solutions, Inc. ("PSI") 401(k) Retirement Plan.
25
SCHEDULE 1.21
COMPLIANCE WITH OTHER LAWS
1. Non-compliance with I.R.S. Form 5500 filing requirement for 1998 with
respect to PSI 401(k) Retirement Plan.
2. Suspension of PSI by State of Oklahoma Tax Commission, November 10, 1999.
3. Logic Associates, Inc., which was acquired by the Company in April 2000,
failed to file Form 5500's for plan years 2000 and 2001.
26
