AGREEMENT OF CHANGE IN CORPORATE STRUCTURE
AGREEMENT OF CHANGE IN CORPORATE STRUCTURE (the "Agreement"), dated April
30, 2002, by and between Media Sciences International, Inc., formerly known as
Cadapult Graphic Systems, Inc., a Delaware corporation (the "Parent
Corporation"), and Cadapult Graphic Systems, Inc., a newly formed wholly owned
New Jersey corporation (the "Subsidiary Corporation").
Whereas, Parent Corporation engages in the business of the manufacture and
sale of workgroup color printer supplies through its Media Sciences business
division ("MSBD") through Media Sciences, Inc., a wholly owned subsidiary
("Media Sciences");
Whereas, Parent Corporation engages in the business of computer graphics
systems supplies and services through its Cadapult business division ("CBD")
through Parent Corporation;
Whereas, Parent Corporation believes that it is in the best interests of the
Parent Corporation, CBD and MSBD that the business, assets and operations of CBD
be organized in a similar manner as Media Sciences is organized, so that the
business of CBD is operated through a subsidiary of Parent Corporation;
Whereas Parent Corporation has organized the Subsidiary Corporation in the
State of New Jersey, which is a wholly owned subsidiary of Parent Corporation,
to acquire substantially all of Parent Corporation's CBD assets, CBD business,
and CBD goodwill, net of liabilities, in exchange solely for the common stock of
the Subsidiary Corporation, in a tax-free reorganization as allowed under
Section 351 of the Internal Revenue Code of 1986, as amended.
Whereas, the purpose of this Agreement is to effect the change in structure
of the operations of CBD as hereinafter provided.
Now, therefore, in consideration of the premises and the respective
agreements hereinafter set forth, the parties agree as follows:
ARTICLE I.
DEFINITIONS
General Definitions. Whenever used herein, the following terms shall have
the meaning set forth below:
"Affiliate" means a Person that directly or indirectly through one or more
intermediaries controls, is controlled by or is under common control with the
Person specified.
"Assets" means assets, properties and rights (including goodwill), wherever
located (including in the possession of vendors or other third parties or
elsewhere), whether real, personal or mixed, tangible, intangible or contingent,
in each case whether or not recorded or reflected or required to be recorded or
reflected on the books and records or financial statements of any Person;
however it specifically excludes any assets of Media Sciences.
"Assumed Assets" means all of the assets of Parent Corporation, specifically
excluding any assets of Media Sciences; provided, that Assumed Assets shall not
include the Retained Assets. Assumed Assets include:
(i) all assets reflected in the Parent Corporation's Balance Sheet; and
(ii) intellectual property rights.
"Assumed Liabilities" means all of the liabilities primarily related to CBD
and specifically excluding any liabilities of Media Sciences; provided, that
Assumed Liabilities shall not include the Retained Liabilities. Assumed
Liabilities include:
(i) all liabilities reflected in the Parent Corporation's Balance
Sheet, subject to any discharge of such liabilities subsequent
to the date of the Parent Corporation's Balance Sheet,
(ii) all contingent liabilities;
(iii) litigation matters;
(iv) employment agreements of officers;
(v) restrictive covenants;
(vi) lease;
(vii) insurance policies;
(viii) payroll, bonus, commission;
(ix) 401(k).
"Intellectual Property" means all trademarks, service marks, trade names,
trade dress, domain names, logos, business and product names, slogans, and
registrations and applications for registration or renewal thereof; copyrights
and registrations or renewals thereof; mask works and registrations thereof;
inventions, processes, designs, formulae, trade secrets, know-how, confidential
and technical information; all other intellectual property and proprietary
rights; copies and tangible embodiments thereof (in whatever form or medium,
including electronic media); and licenses of any of the foregoing; provided,
however, that Intellectual Property shall not include the CBD Trademarks or CBD
Patents.
"Liabilities" shall mean any and all debts, liabilities and obligations,
absolute or contingent, matured or unmatured, liquidated or unliquidated,
accrued or unaccrued, known or unknown, whenever arising, including all costs
and expenses relating thereto, and including, without limitation, those debts,
liabilities and obligations arising under any law, rule, regulation, Action,
threatened Action, order or consent decree of any governmental entity or any
award of any arbitrator of any kind, and those arising under any contract,
commitment or undertaking.
"Person" means an individual, a partnership, a corporation, a limited
liability company, a trust, an unincorporated organization, a government or any
department or agency thereof or any other entity.
"Reasonable Efforts" means the obligated party is required to make a
diligent, reasonable and good faith effort to accomplish the applicable
objective. Such obligation, however, does not require any expenditure of funds
or the incurrence of any liability, in either case which is unreasonable in
light of the related objective, nor does it require that the obligated party act
in a manner which would otherwise be contrary to prudent business judgment in
light of the objective attempted to be achieved. The fact that the objective is
not actually accomplished is not dispositive evidence that the obligated party
did not in fact utilize its Reasonable Efforts in attempting to accomplish the
objective.
"Retained Assets" means the assets of Parent Corporation and its Affiliates
other than the CBD Assets, including without limitation:
(1) ownership of Media Sciences;
(2) loan payable by Media Sciences.
"Retained Business" shall mean the businesses conducted by Parent
Corporation and its Affiliates other than the CBD.
"Retained Liabilities" means any of the following liabilities or obligations
of Parent Corporation or its Affiliates, whether or not related to the Business
and whether direct or indirect, known or unknown, or absolute or contingent:
(1) any liabilities or obligations incurred by Parent Corporation or its
Affiliates in connection with the conduct of the Retained Business;
(2) any liability pertaining solely to a Retained Asset;
(3) any liabilities or obligations related to indemnification or other
provision under any contract or other agreement pursuant to which
any sale or disposition was made of any business or product line
formerly owned or operated by Parent Corporation or any predecessor
but not presently so owned or operated;
(4) any liabilities or obligations of Parent Corporation or any of its
Affiliates for indemnification of any present or former director or
officer of (or other person serving in a fiduciary capacity at the
request of) Parent Corporation or its Affiliates based on actual or
alleged breach of fiduciary duty of such person prior to Closing;
(5) any liabilities or obligations incurred on or prior to the Closing
Date related to intercompany trade payables or intercompany debt;
(6) any obligations related to common stock, preferred stock, stock
options, warrants, or other securities issued by Parent Corporation;
(7) any (x) Tax of Subsidiary Corporation or Parent Corporation
described in clause (i) of the definition of Tax related to all
taxable periods ending on or prior to the Closing Date or the
pre-Closing portion of all complete taxable periods that include,
but do not end on, the Closing and (y) Tax described in clause (ii)
or (iii) of the definition of Tax, and any liability as transferee.
For purposes of this Agreement, "Tax" means (i) any net income, alternative or
add-on minimum tax, gross income, gross receipts, sales, use, ad valorem, value
added, transfer, franchise, profits, license, registration, recording,
documentary, conveyancing, gains, withholding on amounts paid to or by Parent
Corporation or Subsidiary Corporation, payroll, employment, excise, severance,
stamp, occupation, premium, property, environmental or windfall profit tax,
custom duty or other tax, governmental fee or other like assessment or charge of
any kind whatsoever, together with any interest, penalty, addition to tax or
additional amount imposed by any governmental authority responsible for the
imposition of any such tax (domestic or foreign), (ii) in the case of Subsidiary
Corporation, liability for the payment of any amount of the type described in
clause (i) as a result of being or having been before the Closing Date a member
of an affiliated, consolidated, combined or unitary group and (iii) liability
for the payment of any amounts of the type described in (i) as a result of being
party to any agreement or any express or implied obligation to indemnify any
other Person; and
1.3 Interpretation. Unless the context of this Agreement otherwise requires,
(a) words of any gender shall be deemed to include each other gender, (b) words
using the singular or plural number shall also include the plural or singular
number, respectively, and (c) reference to "hereof", "herein", "hereby" and
similar terms shall refer to this entire Agreement.
ARTICLE II.
TRANSFERS
2.1 (a) Transfer of assets to Subsidiary Corporation. Subject to the terms
and conditions of this Agreement, Parent Corporation will convey and transfer to
the Subsidiary Corporation at the closing hereunder substantially all of Parent
Corporation's then existing assets and business as a going concern which include
the Assumed Assets, including, without limitation, its goodwill and its right to
the use of its name; and Parent Corporation shall at the time of the closing
deliver such assets and business at the then location thereof to the Subsidiary
Corporation.
(b) Transfer of liabilities to Subsidiary Corporation. Subject to the terms
and conditions of this Agreement, Parent Corporation will convey and transfer to
the Subsidiary Corporation at the closing Parent Corporation's then existing
liabilities identified as Assumed Liabilities (whether or not reflected or
reserved against in Parent Corporation's balance sheets, books of account, and
records).
(c) Consideration for Transfer to Subsidiary Corporation. The Subsidiary
Corporation shall issue shares of its common stock to Parent Corporation.
(d) Misallocated Assets. In the event that at any time or from time to time
(whether prior to, on or after the Closing Date), any party hereto shall receive
or otherwise possess any asset that is allocated to any other Person pursuant to
this Agreement, such party shall promptly transfer, or cause to be transferred,
such asset to the Person so entitled thereto. Prior to any such transfer, the
Person receiving or possessing such asset shall hold such asset in trust for any
such other Person.
(e) Mistaken Assignments and Assumptions. In addition to those transfers and
assumptions accurately identified and designated by the parties to take place
but which the parties are not able to effect prior to the Closing Date, there
may exist (i) assets that the parties discover were, contrary to the agreements
between the parties, by mistake or omission, transferred to Subsidiary
Corporation or (ii) liabilities that the parties discover were, contrary to the
agreements between the parties, by mistake or omission, assumed by Subsidiary
Corporation. The parties shall cooperate in good faith to effect the transfer or
re-transfer of such assets, and/or the assumption or re-assumption of such
liabilities, to or by the appropriate party and shall not use the determination
that remedial actions need to be taken to alter the original intent of the
parties hereto with respect to the assets to be transferred to or liabilities to
be assumed by Subsidiary Corporation. Each party shall reimburse the other or
make other financial adjustments (e.g., without limitation, cash reserves) or
other adjustments to remedy any mistakes or omissions relating to any of the
assets transferred hereby or any of the liabilities assumed hereby.
(f) Subsidiary Corporation and Parent Corporation shall execute and deliver
such other transfer documents as are necessary and appropriate to consummate the
transactions contemplated in this Section 2.1.
ARTICLE III.
CLOSING AND CLOSING DELIVERIES
3.1 Closing Date. The term "Closing" as used herein shall refer to the
actual transfers, assignments, conveyances and deliveries contemplated by
Article II as taking place at the Closing. The Closing shall take place as soon
as reasonably practical following the date upon which the conditions precedent
set forth in Section 5.1 are satisfied or such other effective time as the
parties may agree (the "Closing Date").
3.2 Deliveries at Closing.
(a) With respect to the transactions contemplated by Article II:
(i) Parent Corporation shall deliver to Subsidiary Corporation the
following:
(A) all such deeds, bills of sale, lease assignments and other
contract assignments and other documents and instruments of sale,
transfer, assignment, conveyance and deliverance as may be necessary
and appropriate to implement the intended transfers contemplated by
Article II; and
(B) such other documents and instruments as may be reasonably
necessary to implement the transfers contemplated hereby.
(ii) Subsidiary Corporation shall deliver to Parent Corporation the
following:
(A) such documents and instruments as may be reasonably
necessary to implement the transfers and assumption of the Assumed
Liabilities.
3.3 Cooperation. Each of Parent Corporation and Subsidiary Corporation
shall, at the request of the other party, prior to, on and after the Closing,
cooperate with one another by furnishing any additional information, executing
and delivering any additional documents and/or instruments and doing any and all
such other things as may be reasonably required to consummate or otherwise
implement the transactions contemplated by this Agreement.
ARTICLE IV.
PRE-CLOSING FILINGS, CONSENTS AND OTHER MATTERS
4.1 Governmental Filings. The parties hereto covenant and agree with each
other to (a) promptly file, or cause to be promptly filed, with any Governmental
Authority all such notices, applications (including applications for permits,
licenses and other similar instruments), forms or other documents as may be
necessary to consummate the transactions contemplated hereby.
4.2 Approval by transferor's shareholders. Parent Corporation shall have
duly called and given due notice of a meeting of the holders of its common stock
for the purpose of voting upon the transfer contemplated herein to the
Subsidiary Corporation, a name change, and shall have obtained sufficient votes
to approve the transactions.
4.3 Consent of Third Parties. Parent Corporation shall use its Reasonable
Efforts to obtain prior to the Closing any consents, approvals, authorizations
and agreements of and to give all notices and make all other filings with, any
third parties, including Governmental Authorities, necessary to authorize,
permit or approve the consummation of the transactions contemplated hereby or to
continue in effect and to assure that Subsidiary Corporation shall be entitled
to all of the material benefits of Parent Corporation's material contracts (the
"Material Contracts"). Subsidiary Corporation and Parent Corporation shall
cooperate with each other with respect thereto.
ARTICLE V.
CONDITIONS PRECEDENT
5.1 Conditions to Closing. The obligations of the parties hereto to close
the transactions hereunder are subject to the following conditions precedent:
(a) No investigation, action, suit or proceeding by any Governmental
Authority, and no action, suit proceeding by any other Person, shall be pending
on the Closing Date which challenges, or might reasonably result in a challenge
to, this Agreement or any of the transactions contemplated hereby, or which
claims, or might reasonably give rise to a claim for, damages in a material
amount as a result of the consummation of this Agreement.
(b) All documents and instruments to be executed and delivered pursuant to
this Agreement, including, without limitation, the documents and instruments to
be delivered pursuant to Article III, shall be reasonably satisfactory to the
parties hereto to whom such documents are to be delivered.
(c) All required consents and approvals of any Governmental Authority and
the consents and approvals of any other Persons and all permits, licenses and
similar instruments shall have been obtained and be in full force and effect as
of the Closing Date and such consents, approvals, permits, licenses and other
instruments shall not impose any restrictions, limitations or conditions which
would have a material adverse effect on the financial condition or results of
operations of the Business.
ARTICLE VI.
TERMINATION
6.1 Termination. This Agreement shall be terminated upon the occurrence of
upon mutual agreement of Parent Corporation and Subsidiary Corporation.
ARTICLE VII.
MISCELLANEOUS
7.1 Further Actions.
(a) The parties hereto agree to use Reasonable Efforts to take all actions
and to do all things necessary, proper or advisable to consummate the
transactions contemplated hereby at or prior to the Closing.
(b) Parent Corporation shall, and shall cause its Affiliates to, use
Reasonable Efforts to enter into such agreements and other arrangements
(including sublicenses and subleases) with the appropriate parties as are
necessary to ensure that Subsidiary Corporation after the Closing own or hold
the assets, properties and rights of CBD sufficient to operate the CBD as
operated on the date hereof.
(c) Subsidiary Corporation shall pay or cause to be paid the fees and
expenses incurred in connection with this Agreement or, following the Closing,
shall reimburse Parent Corporation for any such amounts, which amounts shall not
constitute Retained Liabilities.
7.2 Notices. Unless otherwise provided herein, any notice, request,
instruction or other document to be given hereunder by any party to the others
shall be in writing and effective when delivered in person or by courier or
nationally recognized overnight delivery service (with a receipt obtained
therefor), or by facsimile transmission (with an executed copy mailed as
described below), or effective on the date receipt is acknowledged when mailed
by certified mail, postage prepaid, return receipt requested, as follows:
If to Parent Corporation:
Cadapult Graphics Systems, Inc.
00 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn.: Xxxxxxx X. Xxxxx, President
If to Subsidiary Corporation:
Cadapult Graphics Systems, Inc.
00 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn.: Board of Directors
or to such other place and with such other copies as either party may designate
as to itself by written notice to the others.
7.3 Entire Agreement. The agreement of the parties, which is comprised of
this Agreement, the Exhibits and the Schedules hereto and the documents referred
to herein, sets forth the entire agreement and understanding between the parties
and supersedes any prior agreement or understanding, written or oral, relating
to the subject matter of this Agreement.
7.4 Assignment; Binding Effect; Severability. This Agreement may not be
assigned by any party hereto without the written consent of the other party.
This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the successors, legal representatives and permitted assigns of
each party hereto. The provisions of this Agreement are severable, and in the
event that any one or more provisions are deemed illegal or unenforceable, the
remaining provisions shall remain in full force and effect unless the deletion
of such provision shall cause this Agreement to become materially adverse to any
party, in which event the parties shall use Reasonable Efforts to arrive at an
accommodation which best preserves for the parties the benefits and obligations
of the offending provision.
7.5 Governing Law. This Agreement shall be construed, interpreted and the
rights of the parties determined in accordance with the laws of the State of
Delaware and enforced in the City, County and State of New Jersey.
7.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7.7 Headings. The headings of the Articles and Sections herein are inserted
for convenience of reference only and are not intended to be a part of or to
affect the meaning or interpretation of this Agreement.
7.8 Amendment and Waiver. The parties may by mutual agreement amend this
Agreement in any respect, and any party, as to such party, may (a) extend the
time for the performance of any of the obligations of any other party, (b) waive
any inaccuracies in representations by any other party, (c) waive compliance by
any other party with any of the agreements contained herein and performance of
any obligations by such other party, and (d) waive the fulfillment of any
condition that is precedent to the performance by such party of any of its
obligations under this Agreement. To be effective, any such amendment or waiver
must be in writing and be signed by the party against whom enforcement of the
same is sought.
7.9 Bulk sales law. Parent Corporation hereby waives compliance by
Subsidiary Corporation with the bulk transfer provisions of the Uniform
Commercial Code of any applicable jurisdiction in connection with the transfer
to the Subsidiary Corporation.
SIGNATURE PAGE
Subsidiary Corporation:
Cadapult Graphic Systems, Inc.,
a New Jersey corporation
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Xxxxxxx X. Xxxxx, President
Attest:
/s/ Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxx, Secretary
Corporate seal
Parent Corporation:
Media Sciences International, Inc., f/k/a
Cadapult Graphic Systems, Inc.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Xxxxxxx X. Xxxxx, President
Attest:
/s/ Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxx, Secretary
Corporate seal
