SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): December 13, 1999
CADAPULT GRAPHIC SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-21853 87-0475073
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
110 Commerce Drive, Allendale, New Jersey 07401
(Address of principal executive offices)
Registrant's telephone number, including area code: (201) 236-1100
Not applicable
(Former name or former address, if changed since last report.)
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Item 2. Acquisition or Disposition of Assets.
(a) On December 13, 1999, Media Sciences, Inc. ("Media Sciences"), a
wholly-owned subsidiary of Cadapult Graphic Systems, Inc. (the "Company"),
completed the acquisition of certain assets and the assumption of certain
liabilities of UltraHue, Inc., a New Mexico corporation, pursuant to an asset
purchase agreement (the "Asset Purchase Agreement") dated September 7, 1999.
Media Sciences acquired certain proprietary information and intellectual
property rights of UltraHue and other assets owned and used by UltraHue in the
operation of its business, including: any and all right, title and interest
in and to UltraHue's trade secrets; accounts receivable, less allowances;
inventory at lower of cost or fair market value; certain property and
equipment; all right, title and interest in and to the name UltraHue and any
other trademarks, service marks or any copyrights heretofore used and/or
owned by UltraHue; customer lists and all files relating thereto; sales,
service and vendor contracts and security deposits; existing telephone and
fax numbers; databases; and on-going business records.
Under the Asset Purchase Agreement, Media Sciences is to assume
the following liabilities of UltraHue: accounts payable as of the date of
closing; customer deposits as of the date of closing; and, leases and
contracts to the extent they are to be performed after the date of closing.
The consideration given by Media Sciences under the Asset
Purchase Agreement consists of: payment of $2,340,000 at closing; delivery of
a promissory note, executed by Media Sciences and guaranteed by the Company,
in the principal sum of $1,160,000, with interest at the annual rate of 7%,
with the full principal and accrued interest due and payable in full on the
first anniversary of the closing; a sum equivalent to UltraHue's cost for
UltraHue's inventory that is delivered to Media Sciences at closing; as of the
closing, the difference between all accounts receivable collected by Media
Sciences less accounts payable, as collected and paid, respectively; for a
period of one year from the date of closing, payment of a sum equivalent to
10% of the quarterly net profits derived by Media Sciences from the first
$1,500,000 dollars of gross profits plus thirty percent of the net profits
attributable to gross profits in excess of $1,500,000 dollars (in the event
there is a net loss in any quarter during this one year period, the amount of
such loss shall be set off against the net profits for any subsequent quarter,
provided that if there is no subsequent quarter in this one year period, then
a refund shall be due Media Sciences); and for a period of two years from the
first anniversary of the date of closing, after certain distributions shall
have terminated, payment of a sum equivalent to ten percent of the quarterly
net profits derived by Media Sciences from the first $1,000,000 of gross
profits, plus thirty percent of the net profits attributable to the gross
profits in excess of $1,000,000 dollars (in the event there is a net loss in
any quarter during this two year period, the amount of such loss shall be set
off against the net profits for any subsequent quarter, provided that if there
is no subsequent quarter in this two year period, then a refund shall be due
Media Sciences).
The consideration given was negotiated at arms'-length between
the directors and executive officers of Media Sciences and the Company, and
the directors, executive officers and controlling shareholders of UltraHue.
The Board of Directors of Media Sciences and of Cadapult determined in good
faith that the consideration given under the Asset Purchase Agreement was
reasonable under the circumstances.
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No director, executive officer or person who may be deemed to be an
affiliate of the registrant had any direct or indirect interest in UltraHue
prior to entering into the Purchase Agreement. The Company has invited
Donald Gunn, a shareholder of UltraHue, to join the Company's Board of
Directors after the closing. Donald Gunn and Randy Hooker have signed
three year employment agreements with Media Sciences.
(b) Media Sciences has completed the acquisition of certain assets
of UltraHue constituting equipment, physical property, and intellectual
property. UltraHue is engaged primarily in the business of the
manufacture of solid inks and remanufactures and refills color toner
cartridges. The Company intends to continue the use the assets of UltraHue
acquired under the Asset Purchase Agreement in similar activities through
the Company's subsidiary, Media Sciences.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Businesses Acquired.
The financial statements for the acquired business are not available at
this time. The required financial statements will be filed as soon as
practicable by amendment to this Form 8-K not later than 60 days after the
date that this initial report on Form 8-K must be filed.
(b) Pro Forma Financial Information.
The pro forma financial information for the acquired business is not
available at this time. The required pro forma financial statements will be
filed as soon as practicable by amendment to this Form 8-K not later than 60
days after the date that this initial report on Form 8-K must be filed.
(c) The following exhibits are filed with this report on Form 8-K:
Exhibit Number Description of Exhibit
2.1 Asset Purchase Agreement
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CADAPULT GRAPHIC SYSTEMS, INC.
Date: December 20, 1999 By: /s/ Michael W. Levin
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Michael W. Levin, President
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT made this 7th day of September, 1999;
Between: Media Sciences, Inc., a New Jersey corporation and a
wholly owned subsidiary of Cadapult Graphic Systems,
Inc. with offices located at 110 Commerce Drive, Allendale,
New Jersey 07401, hereinafter referred to as "Purchaser";
And: UltraHue, Inc., a New Mexico corporation with offices
Suite 183, 16542 Redmond Way, Redmond, Washington
98502, hereinafter referred to alternatively as "UltraHue"
or "Seller";
And: Donald Gunn and Randy Hooker, individuals, hereinafter
collectively referred to as "Shareholders"
Whereas, Purchaser is a wholly owned subsidiary of Cadapult Graphic Systems,
Inc. formed primarily to acquire, own and operate the Trade Secrets,
Proprietary Information and Assets of Seller; and,
Whereas, Seller is engaged primarily in the business of the manufacture of
solid inks for use in color printers and related equipment; and,
Whereas, Seller has developed certain formulas and processes for
manufacturing the aforesaid inks, and related confidential information and
know-how; and,
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Whereas, Shareholders are the principal stockholders of Seller and are
individually and jointly familiar with such formulas, processes, confidential
information and know-how, and will individually and jointly benefit from
consummation of the within transaction; and,
Whereas, the formulas, processes, confidential information and know-how
related to the manufacture of the aforesaid inks are confidential trade
secrets in the sole possession of Seller and certain of Seller's
Shareholders, principals and employees; and,
Whereas, Purchaser is desirous of acquiring sole ownership of the Trade
Secrets and all other Assets of Seller (as defined hereinafter) owned by
Seller and used in the conduct of its business; and,
Whereas, in order to protect the confidentiality and value of the Trade
Secrets of Seller being acquired by Purchaser, both Seller and those
principals and employees of Seller who have knowledge of any of the Trade
Secrets shall, as a material inducement to Purchaser entering into this
Agreement, agree to execute at Closing Confidentiality Agreements, in the
forms annexed hereto and made a part hereof as Exhibits A through A-3, which
Confidentiality Agreements shall contain representations that (a) the Trade
Secrets have not been heretofore disclosed by them to any persons or
entities, except as otherwise set forth hereafter in this Agreement; and (b)
the Trade Secrets will remain confidential and henceforth not be disclosed
by them.
Now Therefore, in consideration of the mutual covenants, promises and
conditions set forth herein, the parties hereto do hereby agree as follows:
1. Definitions.
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1.01. Agreement. The within Asset Purchase Agreement.
1.02. Accounts Payable. Trade payables, as same are customarily
defined in general accounting terms, accrued by Seller up to Closing
resulting from the purchase of any goods or services in the ordinary course
of conducting its business where such goods and services have been received
or used by Seller but where payment has not been made.
1.03. Accounts Receivable. Accounts receivable, as same are
customarily defined in general accounting terms, acquired by Seller in
relation to sales of Seller's products or services up to Closing for which
payment has not yet been received and is still outstanding through the
Closing.
1.04. Assets. All of the Assets, tangible and intangible, owned and
used by Seller in the operation of its business, including but not limited to
those Assets referenced in Paragraph 3.02 of this Agreement. Assets shall
include Proprietary Information as defined hereinafter.
1.05. Closing. The date upon which all of the actions and agreements
contemplated by this Agreement shall be consummated by both Seller and
Purchaser, including but not limited to conveyance of the Trade Secrets and
Assets by Seller to Purchaser, execution and delivery of the ancillary
agreements annexed to and made a part hereof, and the making of payments due
Seller at such Closing from Purchaser in accordance with the provisions of
Paragraph 4 hereof.
1.06. Deposit. Purchaser's check in the sum Fifty Thousand
($50,000.00) Dollars made payable to the attorney trust account of the Escrow
Agent deposited and held pursuant to the terms of the Escrow Agreement
executed simultaneously herewith.
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1.07. Escrow Agent. Miller, Nash, Wiener, Hager & Carlsen, LLP for
the purpose of holding the Deposit in escrow.
1.08. Proprietary Information. All information, formulas, patterns,
compilations, programs, devices, methods, techniques and processes, other
than Trade Secrets as defined hereinafter, that (1) derive independent
economic value, actual or potential, from not being generally known to the
public or to other persons who can obtain economic value from their
disclosure or use, and (2) are the subject of efforts that are reasonable
under the circumstances to maintain their confidentiality.
1.09 Trade Secrets. All of the formulas, processes, confidential
information and know-how related to the manufacture of solid inks for use in
color printers and related equipment, whether or not patentable, which have
been used by Seller, or developed by Seller prior to Closing, whether or not
at a commercial stage of development.
2. List of Exhibits.
1.01. Exhibits A through A-3. Confidentiality Agreements.
1.02. Exhibit B. Definition of Gross Profits, Net Profits and Net
Losses.
1.03. Exhibit C. Escrow Agreement.
1.04. Exhibit D. Allocation of Purchase Price.
1.04. Exhibit E. Bill of Sale.
1.05. Exhibit F. Employment Agreement for Donald Gunn.
1.06. Exhibit F-1. Employment Agreement for Randy Hooker.
1.07. Exhibit G and G-1. Covenants Not to Compete.
1.08. Exhibit H. Intentionally omitted.
1.09. Exhibit I. Property and Equipment.
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1.10. Exhibit J. Description of patent infringement charges, if any,
and description of the resolution of any such charges resolved by judicial
decree.
1.11. Exhibit K. Proceeds from Subsequent Sale of Trade Secrets.
1.12. Exhibit L. Promissory Note.
1.13. Exhibit M. List of employees of Seller with knowledge of the
Trade Secrets and Proprietary Information who have executed Non-
Disclosure/Non-Compete Agreements in favor of Seller, which agreements are to
be assigned to Purchaser at Closing.
1.14. Exhibit N. Form of Non-Disclosure/Non-Compete Agreement
executed by certain employees of Seller to be assigned to Purchaser at
Closing.
3. Purchase and Sale.
3.01 Seller agrees to sell, transfer and assign to Purchaser, and
Purchaser agrees to purchase from Seller, any and all right, title and
interest in and to the Trade Secrets.
3.02 Seller further agrees to sell to Purchaser and Purchaser agrees
to purchase from Seller all of the other Assets owned and used by Seller in
the operation of its business known as UltraHue, Inc., including but not
limited to the following:
A. Accounts Receivable, less allowances;
B. Inventory at lower of cost or fair market value;
C. Property and equipment as listed on Exhibit I annexed hereto
and made a part hereof;
D. All right, title and interest in and to the name UltraHue and
any other trademarks, service marks or any copyrights heretofore used and/or
owned by Seller;
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E. Customer lists and all files relating thereto;
F. Sales, service and vendor contracts and security deposits;
G. Existing telephone numbers (425) 836-3678; (425) 861-9033 and
(888) 376-8348 and Fax number (425) 861-8548.
H. Databases
I. Originals or duplicates of all of Seller's on-going business
records
3.03 In conjunction with the purchase from Seller by Purchaser of
the Trade Secrets and Assets, as defined herein, Purchaser has agreed to
assume the following liabilities of Seller:
A. Accounts Payable as of the date of Closing;
B. Customer deposits as of the date of Closing;
C. Warranties on products sold prior to the date of Closing;*
D. Leases and contracts to the extent they are to be performed after
the date of Closing.
Purchaser assumes no other liabilities other than those specifically
referenced hereinabove. Liabilities specifically EXCLUDED from assumption by
Purchaser include, but are not limited to, the following: (a) any monies
due any governmental agency, including any federal, state and/or local taxes;
(b) any contingent liabilities resulting from any claim or threatened claim
against Seller which may not, as of this date or date of Closing, have
matured into a debt; (c) any severance obligations to Seller; and (d) any
other obligations of Seller, including any claims made by employees for
unpaid salaries, commissions, pension or other benefits, accrued vacation or
sick pay arising prior to the date of Closing, and, (d) any other undisclosed
liabilities.
*C-1 - Claims relating to defective ink or toner not to exceed $50,000.00 in
the aggregate.
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4. Purchase Price and Terms of Sale.
4.01 Purchaser does hereby agree to assume the liabilities referenced
in Subparagraphs A, B, C and D of Paragraph 3.03 hereinabove (hereinafter
referred to as "Liabilities") and to purchase the Trade Secrets and Assets
for the following consideration:
A. Payment of the sum of Two Million Three Hundred Forty
Thousand ($2,340,000.00) Dollars due at Closing; plus,
B. Delivery of Promissory Note executed by Purchaser and
guaranteed by Cadapult Graphic Systems, Inc. in the principal sum of One
Million One Hundred Sixty Thousand ($1,160,000.00) Dollars, which Note shall
accrue interest at the annual rate of seven (7%) percent with the full
principal and accrued interest thereupon being due and payable in full on the
first anniversary of the Closing. The form of the Promissory Note to be
executed at Closing is annexed hereto as Exhibit L.
C. A sum equivalent to Seller's cost of the inventory of Seller
delivered to Purchaser at Closing. Purchaser shall make pro rata payments to
Seller based upon a sum which corresponds to that portion of the inventory
sold by Purchaser after Closing for which payment has been received by
Purchaser. Such periodic payments shall be made to Seller in relation to the
aforesaid sale of inventory every 14 days from the date of Closing, such
amounts to be calculated by Purchaser on a first in, first out basis within
fourteen (14) days after the end of each fourteen (14) day period; plus,
D. The difference between all Accounts Receivable collected by
Purchaser less Accounts Payable, as collected and paid, respectively. At the
end of each 14 day period, Purchaser agrees to reconcile the aforesaid
amounts and pay to
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Seller a sum equivalent to the difference between the Accounts Receivable
collected and Accounts Payable paid that period, such amounts to be
calculated by Purchaser on a first in, first out basis within
fourteen (14) days after the end of each fourteen (14) day period; plus,
E. For a period of One (1) year from the date of Closing, payment
of a sum equivalent to ten (10%) per cent of the quarterly Net Profits
derived by Purchaser from the first One Million Five Hundred Thousand
($1,500,000) Dollars of Gross Profits plus Thirty (30%) per cent of the Net
Profits attributable to Gross Profits in excess of One Million Five Hundred
Thousand ($1,500,000) Dollars. In the event there is a Net Loss in any
quarter during this one (1) year period, the amount of such loss shall be set
off against the Net Profits for any subsequent quarter, provided that if
there is no subsequent quarter in this one (1) year period, then a refund
shall be due Purchaser; plus,
F. For a period of Two (2) years from the first anniversary of
the date of Closing, after the distributions as set forth in Subparagraph E
hereinabove shall have terminated, payment of a sum equivalent to Ten (10%)
per cent of the quarterly Net Profits derived by the Purchaser from the first
One Million ($1,000,000.00) Dollars of Gross Profits plus Thirty (30%) per
cent of the Net Profits attributable to the Gross Profits in excess of One
Million ($1,000,000) Dollars. In the event there is a Net Loss in any
quarter during this two (2) year period, the amount of such loss shall be set
off against the Net Profits for any subsequent quarter, provided that if
there is no subsequent quarter in this two (2) year period, then a refund
shall be due Purchaser.
G. For the purposes of this Paragraph 4.01, the terms Gross
Profits, Net
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Profits and Net Losses shall be defined as set forth in Exhibit B annexed to
and made a part hereof.
H. Upon reasonable notice and at reasonable intervals, not to
exceed twice in any one calendar year, Seller shall have the right to examine
the books and records of Purchaser to verify any of amount of payments due
Seller pursuant to the provisions of this Paragraph 4.
I. In the event Purchaser sells or otherwise transfers the Trade
Secrets to an unrelated third party, i.e., not a wholly owned subsidiary of
Purchaser, for good consideration at any time within a period of three (3)
years from the Closing, the Seller shall have the right to elect to either
continue receiving the payments provided for in subparagraphs E and F of this
Paragraph 4.01; or, in the alternative, "recapture" a portion of the proceeds
derived from said sale or transfer. In the event of the latter election, all
on-going payments which would have been made to the Seller pursuant to this
Paragraph 4, and specifically subparagraphs E and F of hereof, shall
terminate as of the date of transfer to said third party. The extent of
Seller's participation in said subsequent sale is set forth in Exhibit K
annexed to and made a part hereof.
5. Financing Condition Precedent. The obligation of Purchaser to purchase
the Trade Secrets and Assets of Seller pursuant to the terms and conditions
of this Agreement is conditioned upon Purchaser obtaining financing in the
sum of not less than Three Million ($3,000,000) Dollars to fund the within
purchase. In the event Purchaser does not obtain such financing by the
Closing, either party shall then have the option to terminate this Agreement
upon service of written notice to the other in which event this Agreement,
and all of the rights and obligations of the parties
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hereunder, shall be deemed null, void and of no further effect except that
Seller shall have the right to retain the Deposit then being held in escrow
as liquidated damages, the parties having determined that the amount of said
Deposit is a reasonable measure of the damages Seller may suffer as a
consequence of Purchaser not obtaining the financing referenced in this
Paragraph 5.
6. Deposit. Upon execution of this Agreement, Purchaser shall cause the
Deposit to be forwarded to the Escrow Agent. Said funds shall constitute an
earnest money deposit, which monies shall be held in escrow by the aforesaid.
Said funds shall be referred to hereinafter as the "Deposit". In the event
the Closing does not occur as a consequence of either the failure of any
conditions precedent to this Agreement* or Seller's breach, the Deposit shall
be refunded to the Purchaser, without any deduction or set off whatsoever,
within Two (2) business days of demand therefor. In the event the Closing
does not occur, after satisfaction of Purchaser's conditions precedent, as a
consequence of Purchaser's breach of its obligations hereunder, then the
Seller shall have the right to retain the Deposit then being held in escrow as
liquidated damages, the parties having determined that the amount of said
Deposit is a reasonable measure of the damages Seller may suffer as a
consequence of Purchaser's breach. Upon payment to Seller of the Deposit as
liquidated damages, neither party shall have any further claim against the
other, either in law or equity, and this Agreement, and any and all rights of
the parties hereunder, shall thereafter be deemed to be null, void and of no
further effect. The rights and obligations of the parties, including the
Escrow Agent, shall be more definitively set forth in an Escrow Agreement to
be executed
*,other than Purchaser's failure to obtain the financing referenced in
Paragraph 5 of this Agreement by Closing,
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simultaneously herewith in the form annexed hereto and made a part hereof as
Exhibit C.
7. Allocation of Purchase Price. The total purchase price shall be
allocated amongst the various Trade Secrets, Assets and agreements to be
executed at Closing in the manner set forth in Exhibit D annexed hereto and
made a part hereof.
8. Transfer of Trade Secrets and Execution of Confidentiality Agreements.
At Closing, Seller shall execute and deliver a Bill of Sale conveying to
Purchaser any and all of Seller's rights, title and interests in and to the
Trade Secrets and Assets. The form of said Bill of Sale is annexed hereto
and made a part hereof as Exhibit E. In addition, also at Closing, Seller
shall deliver Confidentiality Agreements executed by Donald Gunn and Randy
Hooker in the form annexed hereto and made a part hereof as Exhibits A and A-
1 and Leland Traylor and Thomas Hendricks in the form annexed hereto and made
a part hereof as Exhibits A-2 and A-3 by the terms of which each shall agree
not to disclose, and in all other respects to maintain the secrecy of, said
Trade Secrets. In addition, at Closing Seller does hereby agree to assign
to Purchaser all of its right, title and interest in and to certain Non-
Disclosure/Non-Compete Agreements between Seller and certain of its employees
who have knowledge of the Trade Secrets and Proprietary Information. The
list of the employees who have entered into such agreements, and whose
agreements shall be assigned by Seller to Purchaser at Closing is annexed
hereto as Exhibit M. The form of Non-Disclosure and Non-Compete Agreement to
be assigned is annexed hereto as Exhibit N.
9. Employment Agreements and Covenants Not to Compete.
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A. At Closing, two of Seller's shareholders, Donald Gunn and Randy
Hooker, shall execute separate, but substantially identical, Employment
Agreements in the form annexed to and made a part hereof as Exhibits F and F-
1, respectively. Said Employment Agreements shall provide for the
employment of each for terms of not less than Three (3) years from Closing.
Such Employment Agreements shall also contain post termination restrictions
against competition and disclosure of the Trade Secrets and other
confidential information.
B. At Closing, Seller shall cause to be delivered to Purchaser
Covenants Not to Compete executed by Leyland Traylor and Tom Hendricks. The
executed Covenants Not to Compete shall be in the form annexed hereto and
made a part hereof as Exhibits G and G-1. At Closing, Seller shall also
deliver side letter signed by Traylor and Hendricks whereby each shall agree
that for a period of eighteen months from Closing each shall make themselves
available on an as needed basis to consult with and advise Purchaser. The
side letters shall also provide that Purchaser shall compensate Traylor or
Hendricks at the rate of $500.00 per day, or prorated if less than a full
day, plus reasonable out of pocket expenses, for each day that either
performs consulting services for Purchaser at its request. At Closing, the
side letters shall be countersigned by Purchaser.
C. Failure of Seller to deliver at Closing the executed agreements
referred to in Paragraphs 8 and 9 of this Agreement shall constitute a
material breach of this Agreement.
10. Closing. The Closing shall occur on or about Ninety (90) calendar days
from the date of this Agreement at Seller's offices or at the offices of
Seller's attorneys. All
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monies due and payable at Closing shall be paid in the form of a bank,
certified or attorneys trust account check.
11. Additional Conditions Precedent.
A. Completion of legal due diligence by the Purchaser, including
review of all pleadings, including Stipulation of Settlement and Dismissal,
and related legal documents in relation to the matter of Tektonrix, Inc. vs.
UltraHue, Inc., Civil No. C97-1533-C in the US. District Court for the
Western district of Washington, and any and all other actual or threatened
legal claims by or against Seller. Seller shall provide Purchaser with all
documentation in relation to the aforesaid within Five (5) calendar days of
the date hereof. Purchaser shall then have Twenty (20) business days to
complete its review of said documentation. Upon the completion of
Purchaser's due diligence, it shall advise Seller, through counsel, whether
it deems this condition precedent satisfied and wishes to proceed to Closing
or whether it wishes to cancel this Agreement, in which event Purchaser's
Deposit shall be refunded in full, without delay, deduction or set off.
B. Completion of accounting and business review of all aspects of
Seller's business, including but not limited to annual tax returns through
December 31, 1998, profit and loss statements, vendor and vendee contracts,
accounts receivable and payable, etc. Again, Purchaser shall have Twenty
(20) business days to complete this review. Upon completion of Purchaser's
review as described herein, it shall advise Seller whether it deems this
condition precedent satisfied and wishes to proceed to Closing or whether it
wishes to cancel this Agreement. In the event Purchaser elects to
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cancel this Agreement, the Deposit shall be refunded without delay,
deduction or set off.
C. Acceptance by Purchaser of Seller's leases, copies of which shall
be forwarded to Purchaser's attorney within Ten calendar days, or Five
calendar days after receipt, if later, of the date of this Agreement.
Written notice of approval or disapproval shall be forwarded to Seller's
attorneys within three business days of receipt of the copy of said lease.
On or before the Closing, Seller shall obtain its Landlord's consents, if
required, to an assignment of said Leases to Purchaser.
D. Approval by Purchaser's lender, Summit Commercial/Gibraltar
Financial for it to proceed to Closing pursuant to this Agreement. If such
approval is not secured within Thirty (30) days of the date hereof, either
party hereto may terminate this Agreement by serving written notice upon the
other, in which event the Deposit shall be immediately refunded to Purchaser
without delay, deduction or set off, and neither party shall thereafter have
any further obligation or liability to the other, except as set forth in
Paragraph 5 hereinbefore.
12. Seller's Representations. Seller represents and warrants to Purchaser
as follows:
A. Treatment of Trade Secrets. Seller represents and warrants that
only Donald Gunn, Randy Hooker, Leland Traylor, Thomas Hendricks and the
employees listed in Exhibit M have knowledge of the Trade Secrets and
Proprietary Information. Further, Seller also represents and warrants that
it has taken all reasonable actions to safeguard the secrecy of the Trade
Secrets, including but not limited to limiting access to all written records
containing any of the Trade Secrets to employees of Seller having a need to
know the Trade Secrets; restricting employee and visitor access to areas of
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Seller's business where Trade Secret processes are performed; and marking
writings containing Trade Secrets with indicia indicating the confidential
nature of the information contained therein.
B. Title to Assets. Seller shall, as of the date of Closing, have
good and marketable title to the Trade Secrets and Assets, free and clear of
restrictions on or conditions to transfer or assignment as well as any and
all liens, pledges, charges, licenses to third parties or encumbrances. At
Closing, Seller shall convey to Purchaser all such Trade Secrets and Assets.
C. Efficacy of Trade Secrets. Seller and Seller's Shareholders
represent and warrant that all formulas and processes to be conveyed to
Purchaser, including but not limited to the Trade Secrets, will work for
their intended purpose and the ones used to date in the conduct of Seller's
business. Seller agrees to reduce all of the Trade Secrets to writing and
deliver such writings at Closing to the President of Purchaser, Michael W.
Levin.
D. Indemnification. Seller, and Seller's shareholders shall jointly
and severally agree to protect, indemnify, and hold the Purchaser harmless
from and against any loss, damage or expense, as well as reasonable counsel
fees and costs, if incurred, resulting from any breach of the warranties set
forth in this Paragraph 12. Specifically, this Indemnification shall include
any claim made against Purchaser for any unpaid liability of Seller.
E. Transfer Not Subject to Encumbrances or Third-Party Approval. The
execution and delivery of this Agreement by Seller, and the consummation of
the transaction contemplated herein, will not result in the creation or
imposition of any valid
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lien, charge, or encumbrance on any of the Assets, and will not require the
authorization, consent, or approval of any third party, including any lender
or governmental or regulatory agency.
F. Corporate Existence. Seller is now, and on the Closing Date will
be, a corporation duly organized and validly existing and/or qualified as a
foreign corporation in good standing under the laws of the States of New
Mexico and Washington. At Closing, Seller shall provide a copy of a
Certificate of Good Standing issued by the States of New Mexico and
Washington as well as the New Mexico and/or Washington Department of Revenue,
as applicable.
G. Authorization. The execution, delivery, and performance of this
Agreement has been duly authorized and approved by the Board of Directors and
shareholders of Seller having a majority of the issued and outstanding Common
Stock thereof, and this Agreement constitutes a valid and binding agreement
of Seller in accordance with its terms.
H. Noncancelable Contracts. At the time of Closing, there will be no
leases, employment contracts, contracts for services or maintenance, or other
similar material contracts existing or relating to or connected with the
operation of Seller's business not cancelable at Closing or within 30 days
thereof, except as specifically referenced elsewhere in this Agreement.
I. Continued Operations. Seller will continue to conduct its business
up to the date of Closing in essentially the same manner as it has been
conducted in the past, and in accordance with all applicable laws and
regulations. Until Closing, Seller shall maintain all of its Assets in their
present condition. Seller shall use its reasonable
16
<PAGE>
efforts to preserve, for Purchaser, the goodwill of vendors, suppliers,
customers and others having business relations with it. Prior to Closing,
Seller will not sell or transfer any of the Assets which are the subject of
this Agreement except in the ordinary course of business. Seller has no
knowledge of a business termination of a material customer, vendor or
supplier.
J. Withholding Taxes. Seller has paid in full, or will arrange for the
payment in full, in a timely manner, of all federal and State taxes incurred
by Seller, including, but not limited to income, withholding, social security,
unemployment insurance, and sales taxes due through Closing or any other taxes
incurred in relation to the within transfer, and shall hold Purchaser harmless
therefrom.
K. Employee Benefits. Seller does not maintain any retirement or
deferred compensation plan, savings, incentive, stock option or stock purchase
plan, unemployment compensation plan, vacation pay, severance pay, bonus or
benefit arrangement, insurance or hospitalization program or any other fringe
benefit arrangement for any employee, consultant or agent of the Seller,
whether pursuant to contract, arrangement, custom or informal understanding,
which constitute an "Employee Benefit Plan" (as defined in Section 3(3) of
ERISA), for which the Seller may have any ongoing material liability after
Closing. The Seller does not maintain, nor has it ever contributed to, any
Multi-employer Plan as defined by Section 3(37) of ERISA. The Seller does not
currently maintain any Employee Pension Benefit Plan subject to Title IV of
ERISA. There have been no "prohibited transactions" (as described in Section
406 of ERISA or Section 4975 of the Internal Revenue Code) with respect to an
Employee Pension Benefit Plan or Employee Welfare Benefit party. Seller has
no
17
<PAGE>
employee benefits plans with the exception of major medical coverage insured
by United Health Care . Seller shall be responsible for paying, prior to
Closing, all accrued vacation or sick pay entitlements of its employees.
L. No Infringement. Seller has no knowledge that any of the Trade
Secrets or any of the other formulations, processes, equipment or techniques
used by Seller to manufacture solid inks, or any of the solid inks
manufactured by Seller, infringe upon any patent rights, U.S. or foreign, held
by any third party. Seller has not been charged with infringement of any
patent, trade secret, copyright, trademark or any other intellectual property
rights held by a third party other than as referenced in Exhibit J annexed
hereto and made a part hereof.
M. Accuracy of Representations and Warranties. None of the
representations or warranties of Seller contain or will contain any untrue
statement of a material fact or omit or will omit or misstate a material fact
necessary in order to make statements in this Agreement not misleading.
Seller knows of no fact or circumstance that has resulted, or that in the
reasonable judgment of Seller will result, in a material change in the
business, operations, or assets of Seller that has not been previously
disclosed or set forth in this Agreement.
N. Duration of Seller's Liability hereunder. With the exception of any
knowingly false or fraudulent misrepresentation, Seller's liability pursuant
to the provisions of this Paragraph 12 shall extend for a period of three (3)
years from the date of Closing.
13. Purchaser's Representations. Purchaser represents and warrants to Seller
as follows:
18
<PAGE>
A. Corporate Existence. Buyer is a New Jersey corporation, duly
organized, validly existing and in good standing under the laws of the State
of New Jersey and has the power and authority to carry on its business, as now
conducted, to own and operate its properties and assets, to execute this
Agreement and other agreements and instruments referred to herein and to
deliver and carry out the transactions contemplated herein.
B. Authorization. Execution and delivery of this Agreement and other
agreements and instruments referred to herein have been duly authorized by the
Board of Directors and shareholders of both Media Sciences, Inc. and Cadapult
Graphic Systems, Inc., as guarantor, and shall constitute legal, valid,
binding and enforceable agreements and instruments.
C. Consummation. Neither the execution, delivery or performance of
this Agreement or any other agreement or instrument executed and delivered by
or on behalf of Media Sciences, Inc., or Cadapult Graphic Systems, Inc., to
the extent the latter is obligated to perform under the terms of this
Agreement, nor the consummation of the transactions contemplated herein, nor
compliance with the terms and provisions of this Agreement, contravene the
Certificate of Incorporation, Articles of Incorporation, or Bylaws or any
provision of law, statute, rule, regulation or order of any court or
governmental authority to which Media Sciences, Inc. or Cadapult Graphic
Systems, Inc., to the extent the latter is obligated to perform under the
terms of this Agreement, is subject, or any judgment, decree, franchise, order
or permit applicable to it, or conflicts or is inconsistent with, or will
result in any breach of or constitute a default under, any contract,
commitment, agreement, understanding, arrangement or instrument, or result
19
<PAGE>
in the creation of or imposition of, or the obligation to create or impose any
lien, encumbrance or liability upon, any of the property or assets of it, or
will increase any such lien, encumbrance, or liability.
14. Breach by Seller. In the event of Seller's breach of this Agreement, the
parties hereto acknowledge and agree that monetary damages may not be adequate
to redress such breach and therefore Purchaser shall have the right to seek
not only monetary damages but specific performance to compel Seller, and the
individuals who have executed this Agreement, to perform in accordance with
this agreement and the agreements to be executed at Closing as referenced
herein.
15. Guaranty of Cadapult Graphic Systems, Inc. The obligations and
undertakings of Purchaser as set forth in this Agreement shall be guaranteed
by Purchaser's parent corporation, Cadapult Graphic Systems, Inc.
16. Miscellaneous.
A. Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified, or supplemented only by a written
agreement signed by all of the parties hereto.
B. Notices. All notices, requests, consents, approvals or other
communications under this Agreement shall be in writing and sent via facsimile
to the fax numbers set forth below, or mailed by certified mail, return
receipt requested, postage prepaid, or delivered by a nationally recognized
overnight courier service which obtains delivery receipts (e.g., Federal
Express), addressed:
20
<PAGE>
Seller:
UltraHue, Inc.
Suite 201
16398 NE 85th Street
Redmond, WA 98052
(425) 861-8548
John West, Esq.
Miller, Nash, Wiener, Hager and Carlsen
4400 Two Union Square
601 Union Street
Seattle, Washington 98101
(206) 622-7485
Purchaser:
Media Sciences, Inc.
110 Commerce Drive
Allendale, New Jersey 07401
(201) 818-9040
Bruce M. Meisel, Esq.
263 Center Avenue
Westwood, New Jersey 07675
(201) 666-4356
Either party may, by notice given as aforesaid, change its address for all
subsequent notices. All notices hereunder shall be effective upon receipt of
same.
21
<PAGE>
C. No Broker. The Seller and Purchaser represent and warrant, each to
the other, that neither has engaged or in any way dealt with a broker, finder,
agent, or anyone in a similar capacity, in relation to the transaction
contemplated by this Agreement. To this extent, Seller and Purchaser do each
hereby agree to indemnify, defend and hold the other harmless from and against
any and all loss, expense, including but not limited to reasonable counsel
fees and costs, damage or liability resulting from any claim or claims arising
from an alleged rendering of any services to the indemnifying party in breach
of the within warranty.
D. Titles and Captions. All section titles or captions contained in
this Agreement are for convenience only and shall not be deemed part of the
context nor affect the interpretation of this Agreement. All pronouns and any
variation thereof shall be deemed to refer to the masculine, feminine, neuter,
singular or plural as the identity of the person or persons may require.
E. Entire Agreement. This Agreement, together with the ancillary
agreements to be executed at Closing annexed hereto and made a part hereof,
contains the entire understanding between and among the parties and supersedes
any prior understanding and agreements among them respecting the subject
matter of this Agreement.
F. Presumption. This Agreement, or any Section thereof, shall not be
construed against any party due to the fact that said Agreement or any Section
thereof was drafted by said party.
G. Further Action. The parties hereto shall execute and deliver all
documents, provide all information and take or forebear from all such action
as may be necessary or appropriate to achieve the purpose of this Agreement.
22
<PAGE>
H. Counterparts. This Agreement may be executed in several
counterparts and all so executed shall constitute one Agreement, binding on
all the parties hereto even though all the parties are not signatories to the
original or the same counterpart.
I. Savings Clause. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to persons or circumstances other than those as to which it is held invalid,
shall not be affected thereby.
Executed as of the dates set forth below, in several counterparts, each of
which shall be deemed an original, but all constituting only one agreement.
Purchaser:
Media Sciences, Inc.
Date: 9/8/99
By: /s/ Michael Levin
----------------------------
Michael Levin, President
Seller
UltraHue, Inc.
Date: 8/7/99
By: /s/ Donald Gunn
----------------------------
Donald Gunn, Pres.
Solely as to the provisions of Paragraphs
8, 9A and 12D.
/s/ Donald Gunn
----------------------------
Donald Gunn
/s/ Randy Hooker
----------------------------
Randy Hooker
Guarantor:
Cadapult Graphic Systems, Inc.
By: /s/ Michael W. Levin
--------------------------
Michael W. Levin, Pres.
23
<PAGE>
ADDENDUM
TO
ASSET PURCHASE AGREEMENT
BETWEEN
MEDIA SCIENCES, INC.
AND
ULTRAHUE, INC.
In further consideration of the promises contained in a certain Asset Purchase
Agreement dated September 7, 1999 by and between Media Sciences, Inc. and
UltraHue, Inc. ("hereinafter referred to herein as "Agreement") and performance
Of the covenants and conditions of said Agreement, the parties hereto do hereby
agree as follows:
1. Paragraph 3.03C and C-1 of the aforesaid Agreement shall be and hereby is
deleted therefrom. Accordingly, Media Sciences, Inc. shall not assume
responsibility for any warranties on products sold by UltraHue, Inc. prior to
Closing, including, but not limited to any claims relating to defective ink or
toner.
Dated: December 13, 1999
Media Sciences, Inc.
By: /s/ Michael W. Levin, President
---------------------------------
Michael W. Levin, Pres.
Attest:
/s/ Bruce M. Meisel
- -------------------
Bruce M. Meisel, Esq.
263 Center Avenue
Westwood, New Jersey 07675
/s/ Donald Gunn
----------------
Donald Gunn
Attest:
/s/ Randy Hooker
- ----------------
<PAGE>
EXHIBIT A
CONFIDENTIALITY AGREEMENT
-------------------------
THIS AGREEMENT, made as of this 13th day of December, 1999;
Between: Media Sciences, Inc., a New Jersey corporation which is a
wholly owned subsidiary of Cadapult Graphic Systems, Inc.,
a Delaware corporation, hereinafter referred to as
"Company"
AND: Donald Gunn, an individual hereinafter referred to as
"Shareholder".
1. Recitals.
1.1. The Company is a New Jersey corporation which, simultaneously
herewith, has acquired the Trade Secrets and the Assets of UltraHue, Inc.
1.2. The shareholder heretofore owned a substantial equity interest in
Ultrahue, Inc.; and, as a consequence thereof received substantial
consideration for the transfer of the Trade Secrets and Assets of Ultrahue,
Inc. to the Company.
1.3. A material inducement for the Company to purchase the Trade
Secrets and Assets of UltraHue, Inc., and to pay the consideration therefor,
as set forth in the Asset Purchase Agreement is the representations of and
agreements by the Shareholder that the Trade Secrets and Proprietary
Information of UltraHue, Inc., including, but not limited to, the formulas,
processes and know-how related to the manufacture of solid ink used in color
<PAGE>
printers and related equipment, (a) have not heretofore been disclosed to any
third parties, except employees of UltraHue, Inc. who are subject to Non-
Disclosure/Non-Compete Agreements this date assigned to Media Sciences, Inc.,
and (b) shall hereafter remain confidential and shall not be disclosed by any
of the Shareholder, either directly or indirectly, to any person, persons or
entities other than the employees of the Company as directed by the Company.
1.4. Unless specified to the contrary, the capitalized terms set forth
in this Agreement shall have the same definitions as set forth in the Asset
Purchase Agreement dated September 7, 1999 (hereinafter referred to as "Asset
Purchase Agreement").
NOW THEREFORE, in consideration of the aforesaid, as well as the consideration
paid to the Shareholder as referenced in the accompanying Asset Purchase
Agreement, the parties hereto do hereby agree as follows:,
2. Trade Secrets and Proprietary Information. The Company has this date
acquired from UltraHue, Inc. certain Trade Secrets, specifically the formulas,
processes and know-how related to the manufacture of solid ink for use in
color printers and related equipment and other Proprietary Information
relating to the manufacture of such solid ink and the operation of the
business of UltraHue, Inc., including but not limited to the following:
(A) Names, addresses and all file information and histories of
customers and suppliers of UltraHue, Inc., other than included in the Trade
Secrets.
<PAGE>
(B) All manufacturing processes, formulations, designs, special
equipment, research projects and results, engineering data, specifications and
the like of UltraHue, Inc., other than the Trade Secrets.
(C) All operating procedures utilized by UltraHue, Inc. in conjunction
with the operation of its business.
The Shareholder acknowledges that as a consequence of his association with
UltraHue, Inc., he is in possession and has knowledge of both the Trade
Secrets and the Proprietary Information.
3. Covenant of Confidentiality. The Shareholder does hereby covenant,
warrant and agree that from the date hereof, he shall not, directly or
indirectly, in any capacity or through any means or mechanism whatsoever, do
or cause to be done, or cooperate or assist in, or permit any of the
following:
(A) Disclosure, either directly or indirectly, of any of the Trade
Secrets other than to the Company;
(B) Disclosure, either directly or indirectly, any of the
Proprietary Information other than to the Company;
(C) Use, either directly or indirectly, of any of the Trade
Secrets or Proprietary Information in connection with any other business or
other operation, including, without limitation, any business operating in the
same field, or competing with, the Company;
(D) Notwithstanding the requirements of confidentiality set forth
in this Paragraph, nothing contained herein shall restrict the Shareholder
from disclosing any of the Proprietary Information if, after its disclosure to
the
<PAGE>
Company by Shareholder, such information becomes part of the public domain or
a matter of public knowledge, through no fault of the Shareholder, except to
the extent that the particular application of the information by the Company
constitutes a Trade Secret. The Shareholder shall not be relieved of his
obligation of confidentiality as to any Proprietary Information which is
specific merely because such Proprietary Information is embraced by general
disclosures falling within the provisions of this Paragraph. Further, the
Shareholder shall not be relieved of his obligation of confidentiality as to
Proprietary Information which is a combination of features merely because any
or all of the individual features are included in disclosures falling within
the provisions of this Paragraph, unless all features of the combination are
included in a single disclosure within the provisions of this Paragraph.
4. Enforcement.
The Shareholder acknowledges that upon any breach, or threatened breach, of
the terms, covenants and agreements set forth in this Agreement, and
specifically those set forth in Paragraph 3 hereinabove, an award of monetary
damages would not be adequate to protect the Company's interests and therefore
the Shareholder agrees that upon such breach the Company would have the right
to apply for and obtain, in addition to monetary damages, injunctive relief,
preliminary, temporary and final, to enforce the provisions of Paragraph 3.
To this extent, the Shareholder expressly waives the right to assert, in any
proceeding resulting from breach of the aforesaid provisions, that monetary
damages alone are adequate to protect the rights of the Company.
<PAGE>
5. Miscellaneous.
5.1. This Agreement shall inure to the benefit of and shall be binding
upon the parties hereto and their respective heirs, personal representatives,
successors and assigns.
5.2. This Agreement, and any and all rights hereunder, shall be
governed by and enforced according to the laws of the State of New Jersey
irrespective of the state in which this Agreement is executed or performed.
5.3. This Agreement, together with the Asset Purchase Agreement and
ancillary agreements executed in accordance therewith, constitutes the entire
agreement between the parties, and no modification hereof shall be recognized
or deemed effective or enforceable unless same is in writing and is signed by
the parties hereto, or their assignees.
5.4. The provisions of this Agreement are independent of and are
separable from each other. In the event any provision of this Agreement is
judicially declared to be invalid or unenforceable, such provision or
provisions shall be invalid or unenforceable without invalidating or rendering
unenforceable the remaining provisions hereof.
5.5. Neither failure nor any delay on the part of any party hereto to
exercise any right, remedy, power or privilege under this Agreement shall
operate as a waiver thereof. No single or partial exercise of any right,
remedy, power or privilege shall preclude or be deemed a waiver of any other
or further exercise of the same or of any other right, remedy, power or
privilege.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered on the date first written above.
ATTEST: Media Sciences, Inc.
/s/ Bruce M. Meisel By: /s/ Michael W. Levin, President
- ------------------- ---------------------------------
Bruce M. Meisel, Esq. Michael W. Levin, Pres.
263 Center Avenue
Westwood, New Jersey 07675
/s/ Donald Gunn
----------------
Donald Gunn
WITNESS:
/s/
- -----------------
<PAGE>
EXHIBIT A-1
CONFIDENTIALITY AGREEMENT
-------------------------
THIS AGREEMENT, made as of this 13th day of December, 1999;
Between: Media Sciences, Inc., a New Jersey corporation which is a
wholly owned subsidiary of Cadapult Graphic Systems, Inc.,
a Delaware corporation, hereinafter referred to as "Company"
AND: Randy Hooker, an individual hereinafter referred to as
"Shareholder".
1. Recitals.
1.1. The Company is a New Jersey corporation which, simultaneously
herewith, has acquired the Trade Secrets and the Assets of UltraHue, Inc.
1.2. The shareholder heretofore owned a substantial equity interest in
Ultrahue, Inc.; and, as a consequence thereof received substantial
consideration for the transfer of the Trade Secrets and Assets of Ultrahue,
Inc. to the Company.
1.3. A material inducement for the Company to purchase the Trade
Secrets and Assets of UltraHue, Inc., and to pay the consideration therefor,
as set forth in the Asset Purchase Agreement is the representations of and
agreements by the Shareholder that the Trade Secrets and Proprietary
Information of UltraHue, Inc., including, but not limited to, the formulas,
processes and know-how related to the manufacture of solid ink used in color
<PAGE>
printers and related equipment, (a) have not heretofore been disclosed to any
third parties, except employees of UltraHue, Inc. who are subject to Non-
Disclosure/Non-Compete Agreements this date assigned to Media Sciences, Inc.,
and (b) shall hereafter remain confidential and shall not be disclosed by any
of the Shareholder, either directly or indirectly, to any person, persons or
entities other than the employees of the Company as directed by the Company.
1.4. Unless specified to the contrary, the capitalized terms set forth
in this Agreement shall have the same definitions as set forth in the Asset
Purchase Agreement dated September 7, 1999 (hereinafter referred to as "Asset
Purchase Agreement").
NOW THEREFORE, in consideration of the aforesaid, as well as the consideration
paid to the Shareholder as referenced in the accompanying Asset Purchase
Agreement, the parties hereto do hereby agree as follows:,
2. Trade Secrets and Proprietary Information. The Company has this date
acquired from UltraHue, Inc. certain Trade Secrets, specifically the formulas,
processes and know-how related to the manufacture of solid ink for use in
color printers and related equipment and other Proprietary Information
relating to the manufacture of such solid ink and the operation of the
business of UltraHue, Inc., including but not limited to the following:
(A) Names, addresses and all file information and histories of
customers and suppliers of UltraHue, Inc., other than included in the Trade
Secrets.
<PAGE>
(B) All manufacturing processes, formulations, designs, special
equipment, research projects and results, engineering data, specifications and
the like of UltraHue, Inc., other than the Trade Secrets.
(C) All operating procedures utilized by UltraHue, Inc. in conjunction
with the operation of its business.
The Shareholder acknowledges that as a consequence of their association with
UltraHue, Inc., each is in possession and has knowledge of both the Trade
Secrets and the Proprietary Information.
3. Covenant of Confidentiality. The Shareholder does hereby covenant,
warrant and agree that from the date hereof, he shall not, directly or
indirectly, in any capacity or through any means or mechanism whatsoever, do
or cause to be done, or cooperate or assist in, or permit any of the
following:
(A) Disclosure, either directly or indirectly, of any of the Trade
Secrets other than to the Company;
(B) Disclosure, either directly or indirectly, any of the
Proprietary Information other than to the Company;
(C) Use, either directly or indirectly, of any of the Trade
Secrets or Proprietary Information in connection with any other business or
other operation, including, without limitation, any business operating in the
same field, or competing with, the Company;
(D) Notwithstanding the requirements of confidentiality set forth
in this Paragraph, nothing contained herein shall restrict the Shareholder
from disclosing any of the Proprietary Information if, after its disclosure to
the
<PAGE>
Company by Shareholder, such information becomes part of the public domain or
a matter of public knowledge, through no fault of the Shareholder, except to
the extent that the particular application of the information by the Company
constitutes a Trade Secret. The Shareholder shall not be relieved of his
obligation of confidentiality as to any Proprietary Information which is
specific merely because such Proprietary Information is embraced by general
disclosures falling within the provisions of this Paragraph. Further, the
Shareholder shall not be relieved of his obligation of confidentiality as to
Proprietary Information which is a combination of features merely because any
or all of the individual features are included in disclosures falling within
the provisions of this Paragraph, unless all features of the combination are
included in a single disclosure within the provisions of this Paragraph.
4. Enforcement.
The Shareholder acknowledges that upon any breach, or threatened breach, of
the terms, covenants and agreements set forth in this Agreement, and
specifically those set forth in Paragraph 3 hereinabove, an award of monetary
damages would not be adequate to protect the Company's interests and therefore
the Shareholder agrees that upon such breach the Company would have the right
to apply for and obtain, in addition to monetary damages, injunctive relief,
preliminary, temporary and final, to enforce the provisions of Paragraph 3.
To this extent, the Shareholder expressly waives the right to assert, in any
proceeding resulting from breach of the aforesaid provisions, that monetary
damages alone are adequate to protect the rights of the Company.
<PAGE>
5. Miscellaneous.
5.1. This Agreement shall inure to the benefit of and shall be binding
upon the parties hereto and their respective heirs, personal representatives,
successors and assigns.
5.2. This Agreement, and any and all rights hereunder, shall be
governed by and enforced according to the laws of the State of New Jersey
irrespective of the state in which this Agreement is executed or performed.
5.3. This Agreement, together with the Asset Purchase Agreement and
ancillary agreements executed in accordance therewith, constitutes the entire
agreement between the parties, and no modification hereof shall be recognized
or deemed effective or enforceable unless same is in writing and is signed by
the parties hereto, or their assignees.
5.4. The provisions of this Agreement are independent of and are
separable from each other. In the event any provision of this Agreement is
judicially declared to be invalid or unenforceable, such provision or
provisions shall be invalid or unenforceable without invalidating or rendering
unenforceable the remaining provisions hereof.
5.5. Neither failure nor any delay on the part of any party hereto to
exercise any right, remedy, power or privilege under this Agreement shall
operate as a waiver thereof. No single or partial exercise of any right,
remedy, power or privilege shall preclude or be deemed a waiver of any other
or further exercise of the same or of any other right, remedy, power or
privilege.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered on the date first written above.
ATTEST: Media Sciences, Inc.
/s/ Bruce M. Meisel By: /s/ Michael W. Levin, President
- ------------------- ---------------------------------
Bruce M. Meisel, Esq. Michael W. Levin, Pres.
263 Center Avenue
Westwood, New Jersey 07675
/s/ Randy Hooker
----------------
Randy Hooker
WITNESS:
/s/ Donald Gunn
- ---------------
<PAGE>
EXHIBIT A-2
CONFIDENTIALITY AGREEMENT
-------------------------
THIS AGREEMENT, made as of this 13th day of December, 1999;
Between: Media Sciences, Inc., a New Jersey corporation which is a
wholly owned subsidiary of Cadapult Graphic Systems, Inc.,
a Delaware corporation, hereinafter referred to as "Company"
AND: Leland Traylor, an individual hereinafter referred to as
"Former Shareholder".
1. Recitals.
1.1. The Company is a New Jersey corporation which, simultaneously
herewith, has acquired the Trade Secrets and the Assets of UltraHue, Inc.
1.2. The Former Shareholder heretofore owned common stock of Ultrahue,
Inc.; and, as a consequence thereof received substantial consideration in
anticipation of and in conjunction with transfer of the Trade Secrets and
Assets of Ultrahue, Inc. to the Company pursuant to a certain Asset Purchase
Agreement.
1.3. A material inducement for the Company to purchase the Trade
Secrets and Assets of UltraHue, Inc., and to pay the consideration therefor,
as set forth in the Asset Purchase Agreement, is the representations of and
agreements by the Former Shareholder that the Trade Secrets and Proprietary
<PAGE>
Information of UltraHue, Inc., including, but not limited to, the formulas,
processes and know-how related to the manufacture of solid ink used in color
printers and related equipment, (a) have not heretofore been disclosed to any
third parties, except employees of UltraHue, Inc. who are subject to Non-
Disclosure/Non-Compete Agreements this date assigned to Media Sciences, Inc.,
and (b) shall hereafter remain confidential and shall not be disclosed by any
of the Former Shareholder, either directly or indirectly, to any person,
persons or entities other than the employees of the Company as directed by the
Company.
1.4. Unless specified to the contrary, the capitalized terms set forth in
this Agreement shall have the same definitions as set forth in the Asset
Purchase Agreement dated September 7, 1999 (hereinafter referred to as "Asset
Purchase Agreement").
NOW THEREFORE, in consideration of the aforesaid, as well as the consideration
paid to the Former Shareholder as referenced in the accompanying Asset
Purchase Agreement, the parties hereto do hereby agree as follows:,
2. Trade Secrets and Proprietary Information. The Company has this date
acquired from UltraHue, Inc. certain Trade Secrets, specifically the formulas,
processes and know-how related to the manufacture of solid ink for use in
color printers and related equipment, and other Proprietary Information
relating to the manufacture of such solid ink and the operation of the
business of UltraHue, Inc., including but not limited to the following:
(A) Names, addresses and all file information and histories of
customers and suppliers of UltraHue, Inc., other than included in the Trade
Secrets.
<PAGE>
(B) All manufacturing processes, formulations, designs, special
equipment, research projects and results, engineering data, specifications and
the like of UltraHue, Inc., other than the Trade Secrets.
(C) All operating procedures utilized by UltraHue, Inc. in conjunction
with the operation of its business.
The Former Shareholder acknowledges that as a consequence of his association
with UltraHue, Inc., he is in possession and has knowledge of both the Trade
Secrets and the Proprietary Information.
3. Covenant of Confidentiality. The Former Shareholder does hereby covenant,
warrant and agree that from the date hereof, he shall not, directly or
indirectly, in any capacity or through any means or mechanism whatsoever, do
or cause to be done, or cooperate or assist in, or permit any of the
following:
(A) Disclosure, either directly or indirectly, of any of the
Trade Secrets other than to the Company;
(B) Disclosure, either directly or indirectly, any of the
Proprietary Information other than to the Company;
(C) Use, either directly or indirectly, of any of the Trade
Secrets or Proprietary Information in connection with any other business or
other operation, including, without limitation, any business operating in the
same field, or competing with, the Company;
(D) Notwithstanding the requirements of confidentiality set forth
in this Paragraph, nothing contained herein shall restrict the Former
Shareholder from disclosing any of the Proprietary Information if, after its
disclosure to the
<PAGE>
Company by Former Shareholder, such information becomes part of the public
domain or a matter of public knowledge, through no fault of the Former
Shareholder, except to the extent that the particular application of the
information by the Company constitutes a Trade Secret. The Former Shareholder
shall not be relieved of his obligation of confidentiality as to any
Proprietary Information which is specific merely because such Proprietary
Information is embraced by general disclosures falling within the provisions
of this Paragraph. Further, the Former Shareholder shall not be relieved of
his obligation of confidentiality as to Proprietary Information which is a
combination of features merely because any or all of the individual features
are included in disclosures falling within the provisions of this Paragraph,
unless all features of the combination are included in a single disclosure
within the provisions of this Paragraph.
4. Enforcement.
The Former Shareholder acknowledges that upon any breach, or threatened
breach, of the terms, covenants and agreements set forth in this Agreement,
and specifically those set forth in Paragraph 3 hereinabove, an award of
monetary damages would not be adequate to protect the Company's interests and
therefore the Former Shareholder agrees that upon such breach the Company
would have the right to apply for and obtain, in addition to monetary damages,
injunctive relief, preliminary, temporary and final, to enforce the provisions
of Paragraph 3. To this extent, the Former Shareholder expressly waives the
right to assert, in any proceeding resulting from breach of the aforesaid
provisions, that monetary damages alone are adequate to protect the rights of
the Company.
<PAGE>
5. Miscellaneous.
5.1. This Agreement shall inure to the benefit of and shall be binding
upon the parties hereto and their respective heirs, personal representatives,
successors and assigns.
5.2. This Agreement, and any and all rights hereunder, shall be
governed by and enforced according to the laws of the State of New Jersey
irrespective of the state in which this Agreement is executed or performed.
5.3. This Agreement, together with the Asset Purchase Agreement and the
ancillary agreements executed in accordance therewith, constitutes the entire
agreement between the parties, and no modification hereof shall be recognized
or deemed effective or enforceable unless same is in writing and is signed by
the parties hereto, or their assignees.
5.4. The provisions of this Agreement are independent of and are
separable from each other. In the event any provision of this Agreement is
judicially declared to be invalid or unenforceable, such provision or
provisions shall be invalid or unenforceable without invalidating or rendering
unenforceable the remaining provisions hereof.
5.5. Neither failure nor any delay on the part of any party hereto to
exercise any right, remedy, power or privilege under this Agreement shall
operate as a waiver thereof. No single or partial exercise of any right,
remedy, power or privilege shall preclude or be deemed a waiver of any other
or further exercise of the same or of any other right, remedy, power or
privilege.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered on the date first written above.
ATTEST: Media Sciences, Inc.
/s/ Bruce M. Meisel By: /s/ Michael W. Levin, President
- ------------------- ---------------------------------
Bruce M. Meisel, Esq. Michael W. Levin, Pres.
263 Center Avenue
Westwood, New Jersey 07675
WITNESS: /s/ Leland Traylor
------------------
Leland Traylor
/s/ Paul Treaster
- ------------------
<PAGE>
EXHIBIT A-3
CONFIDENTIALITY AGREEMENT
-------------------------
THIS AGREEMENT, made as of this 13th day of December, 1999;
Between: Media Sciences, Inc., a New Jersey corporation which is a
wholly owned subsidiary of Cadapult Graphic Systems, Inc.,
a Delaware corporation, hereinafter referred to as "Company"
AND: Thomas Hendricks, an individual hereinafter referred to as
"Former Shareholder".
1. Recitals.
1.1. The Company is a New Jersey corporation which, simultaneously
herewith, has acquired the Trade Secrets and the Assets of UltraHue, Inc.
1.2. The Former Shareholder heretofore owned common stock of Ultrahue,
Inc.; and, as a consequence thereof received substantial consideration in
anticipation of and in conjunction with transfer of the Trade Secrets and
Assets of Ultrahue, Inc. to the Company pursuant to a certain Asset Purchase
Agreement.
1.3. A material inducement for the Company to purchase the Trade
Secrets and Assets of UltraHue, Inc., and to pay the consideration therefor,
as set forth in the Asset Purchase Agreement, is the representations of and
agreements by the Former Shareholder that the Trade Secrets and Proprietary
<PAGE>
Information of UltraHue, Inc., including, but not limited to, the formulas,
processes and know-how related to the manufacture of solid ink used in color
printers and related equipment, (a) have not heretofore been disclosed to any
third parties, except employees of UltraHue, Inc. who are subject to Non-
Disclosure/Non-Compete Agreements this date assigned to Media Sciences, Inc.,
and (b) shall hereafter remain confidential and shall not be disclosed by any
of the Former Shareholder, either directly or indirectly, to any person,
persons or entities other than the employees of the Company as directed by the
Company.
1.4. Unless specified to the contrary, the capitalized terms set forth
in this Agreement shall have the same definitions as set forth in the Asset
Purchase Agreement dated September 7, 1999 (hereinafter referred to as "Asset
Purchase Agreement").
NOW THEREFORE, in consideration of the aforesaid, as well as the consideration
paid to the Former Shareholder as referenced in the accompanying Asset
Purchase Agreement, the parties hereto do hereby agree as follows:,
2. Trade Secrets and Proprietary Information. The Company has this date
acquired from UltraHue, Inc. certain Trade Secrets, specifically the formulas,
processes and know-how related to the manufacture of solid ink for use in
color printers and related equipment, and other Proprietary Information
relating to the manufacture of such solid ink and the operation of the
business of UltraHue, Inc., including but not limited to the following:
(A) Names, addresses and all file information and histories of
customers and suppliers of UltraHue, Inc., other than included in the Trade
Secrets.
<PAGE>
(B) All manufacturing processes, formulations, designs, special
equipment, research projects and results, engineering data, specifications and
the like of UltraHue, Inc., other than the Trade Secrets.
(C) All operating procedures utilized by UltraHue, Inc. in conjunction
with the operation of its business.
The Former Shareholder acknowledges that as a consequence of his association
with UltraHue, Inc., he is in possession and has knowledge of both the Trade
Secrets and the Proprietary Information.
3. Covenant of Confidentiality. The Former Shareholder does hereby covenant,
warrant and agree that from the date hereof, he shall not, directly or
indirectly, in any capacity or through any means or mechanism whatsoever, do
or cause to be done, or cooperate or assist in, or permit any of the
following:
(A) Disclosure, either directly or indirectly, of any of the
Trade Secrets other than to the Company;
(B) Disclosure, either directly or indirectly, any of the
Proprietary Information other than to the Company;
(C) Use, either directly or indirectly, of any of the Trade
Secrets or Proprietary Information in connection with any other business or
other operation, including, without limitation, any business operating in the
same field, or competing with, the Company;
(D) Notwithstanding the requirements of confidentiality set forth
in this Paragraph, nothing contained herein shall restrict the Former
Shareholder from disclosing any of the Proprietary Information if, after its
disclosure to the
<PAGE>
Company by Former Shareholder, such information becomes part of the public
domain or a matter of public knowledge, through no fault of the Former
Shareholder, except to the extent that the particular application of the
information by the Company constitutes a Trade Secret. The Former Shareholder
shall not be relieved of his obligation of confidentiality as to any
Proprietary Information which is specific merely because such Proprietary
Information is embraced by general disclosures falling within the provisions
of this Paragraph. Further, the Former Shareholder shall not be relieved of
his obligation of confidentiality as to Proprietary Information which is a
combination of features merely because any or all of the individual features
are included in disclosures falling within the provisions of this Paragraph,
unless all features of the combination are included in a single disclosure
within the provisions of this Paragraph.
4. Enforcement.
The Former Shareholder acknowledges that upon any breach, or threatened
breach, of the terms, covenants and agreements set forth in this Agreement,
and specifically those set forth in Paragraph 3 hereinabove, an award of
monetary damages would not be adequate to protect the Company's interests and
therefore the Former Shareholder agrees that upon such breach the Company
would have the right to apply for and obtain, in addition to monetary damages,
injunctive relief, preliminary, temporary and final, to enforce the provisions
of Paragraph 3. To this extent, the Former Shareholder expressly waives the
right to assert, in any proceeding resulting from breach of the aforesaid
provisions, that monetary damages alone are adequate to protect the rights of
the Company.
<PAGE>
5. Miscellaneous.
5.1. This Agreement shall inure to the benefit of and shall be binding
upon the parties hereto and their respective heirs, personal representatives,
successors and assigns.
5.2. This Agreement, and any and all rights hereunder, shall be
governed by and enforced according to the laws of the State of New Jersey
irrespective of the state in which this Agreement is executed or performed.
5.3. This Agreement, together with the Asset Purchase Agreement and the
ancillary agreements executed in accordance therewith, constitutes the entire
agreement between the parties, and no modification hereof shall be recognized
or deemed effective or enforceable unless same is in writing and is signed by
the parties hereto, or their assignees.
5.4. The provisions of this Agreement are independent of and are
separable from each other. In the event any provision of this Agreement is
judicially declared to be invalid or unenforceable, such provision or
provisions shall be invalid or unenforceable without invalidating or rendering
unenforceable the remaining provisions hereof.
5.5. Neither failure nor any delay on the part of any party hereto to
exercise any right, remedy, power or privilege under this Agreement shall
operate as a waiver thereof. No single or partial exercise of any right,
remedy, power or privilege shall preclude or be deemed a waiver of any other
or further exercise of the same or of any other right, remedy, power or
privilege.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered on the date first written above.
ATTEST: Media Sciences, Inc.
/s/ Bruce M. Meisel By: /s/ Michael W. Levin, President
- ------------------- ---------------------------------
Bruce M. Meisel, Esq. Michael W. Levin, Pres.
263 Center Avenue
Westwood, New Jersey 07675
WITNESS: /s/ Thomas Hendricks
--------------------
Thomas Hendricks
_______________
<PAGE>
I, Thomas Hendricks, acknowledge that I have signed the Confidentiality
Agreement and Covenant Not to Compete, in connection with the Asset Purchase
Agreement dated September 7, 1999, between UltraHUE, Inc. and Media
Sciences, Inc.
/s/ Thomas Hendricks
- --------------------
Thomas Hendricks
Witness: /s/
<PAGE>
Exhibit B
Financial Definitions
Net Profits (Loss): The pre-tax profits (loss), as determined by generally
accepted accounting principles. For the purposes of this calculation, any
litigation costs, judgments, awards or settlements, whether in favor of Media
Sciences, Inc. or not, shall be included as either an expense or income as the
case may be.
Gross Profit: The Net Profit (Loss) as defined above, less all remuneration
paid to Randy Hooker and Don Gunn under their Employment Agreements executed
at Closing.
<PAGE>
EXHIBIT C
ESCROW AGREEMENT
----------------
AGREEMENT made this 7th day of September, 1999,
BETWEEN: MEDIA SCIENCES, INC., a New Jersey corporation with offices
located at 110 Commerce Drive, Allendale, New Jersey 07401,
hereinafter referred to as "MSI";
AND: ULTRAHUE, INC., a corporation of the State of New Mexico, with
offices located at Suite 201, 16398 NE 85th Street, Washington,
hereinafter referred to as "UltraHue";
AND: Miller, Nash, Weiner, Hager and Carlsen, LLP. with offices
located at 4400 Two Union Square, 601 Union Street,
Seattle, Washington, hereinafter referred to as "Escrow
Agent".
1. Asset Purchase Agreement. The parties hereto have this date entered into
-------------------------
a certain Asset Purchase Agreement by the terms of which MSI has caused to be
deposited with the Escrow Agent named hereunder certain sums as set forth in
Paragraph 4 of the aforesaid Asset Purchase Agreement.
2. Escrow. Pursuant to terms and provisions of Paragraph 6 of aforesaid
-------
Asset Purchase Agreement of even date, MSI has deposited into escrow the
initial sum of Fifty Thousand ($50,000.00) Dollars representing an earnest
money deposit. The funds being held in escrow at any one time pursuant to this
Agreement shall hereinafter be referred to as the "Escrowed Funds".
3. Escrow Distribution. In the event the Trade Secrets and Assets of
--------------------
UltraHue are not purchased by MSI as a consequence of the failure of any
conditions precedent as set forth in the Asset Purchase Agreement, other than
Cadapult's failure to obtain the financing referenced in Paragraph 5 of the
Asset Purchase Agreement by the Closing,
<PAGE>
or breach of said Asset Purchase Agreement by UltraHue, the within Escrowed
Funds shall be refunded to MSI, without deduction or set off, within two (2)
business days of receipt by the Escrow Agent designated hereinafter of written
request by MSI for such disbursal. In the alternative, in the event the Trade
Secrets and Assets of UltraHue are not acquired by MSI as a consequence of
either MSI's failure to obtain the financing referenced in Paragraph 5 of the
Asset Purchase Agreement by Closing or MSI's breach of any other of its
obligations as set forth in the aforesaid Asset Purchase Agreement, the Escrow
Agent shall then disburse said Escrowed Funds to UltraHue within Two (2)
business days of receipt by the Escrow Agent of a written request by UltraHue
for such disbursal.
4. Interest. In the event any of the Escrowed Funds are placed in an
---------
interest bearing account, any interest earned on such funds shall be deemed as
part of the Escrowed Funds and shall be disbursed to the party receiving same.
5. Dispute. In the event any dispute shall arise between the rights of
--------
either MSI or UltraHue hereunder, including but not limited to any dispute as
to the Escrowed Funds, the Escrow Agent may elect to take any of the following
actions: (i) retain the Escrowed Funds in trust pending either settlement of
the dispute by the parties or final determination of the rights of the parties
by a court of competent jurisdiction; or, (ii) deposit the Escrowed Funds into
a court of competent jurisdiction pursuant to an Interpleaded action. During
the course of any dispute involving litigation, the Escrow Agent may also
deposit the Escrowed Funds held hereunder with the clerk, or other designated
officer of the Court in which such litigation is pending. In any event, the
aforesaid Escrow Agent shall in no event incur any liability hereunder in the
absence of fraud or gross negligence including but not limited to any fees,
including attorney's fees, court costs and/or disbursements incurred in
relation to serving as Escrow Agent hereunder and, MSI and UltraHue do each
hereby, 'jointly and severally, agree to indemnify and hold said Escrow Agent
free of and harmless form same. The named
<PAGE>
Escrow Agent shall not be liable for any action taken or omitted thereby,
provided same is in good faith and believed to have been within the rights and
powers conferred upon by this Agreement.
6. Escrow Agent. The parties do hereby designate Miller, Nash, Weiner,
-------------
Hager and Carlsen, LLP to serve as Escrow Agent hereunder. In the event the
Escrow Agent named herein shall resign or refuse to act further as Escrow
Agent hereunder, MSI's attorney, Bruce M. Meisel, Esq. shall then be
designated as substitute Escrow Agent. In the event Bruce M. Meisel, Esq. is
unable or unwilling to serve in such capacity, then the parties hereto shall
mutually agree upon a successor Escrow Agent, or in the absence of such
agreement, shall apply to a court of competent jurisdiction for the
appointment of same.
7. Execution of Necessary Documents. Each of the parties hereto does
---------------------------------
hereby agree to execute, acknowledge and deliver any and all instruments that
may be required to give full force and effect to the terms and conditions of
this Escrow Agreement.
8. Governing Law. The parties hereto acknowledge that this Agreement,
--------------
and the rights and obligations of the Escrow Agent designated hereunder, shall
be governed by and construed in accordance with the laws of the State of
Delaware.
9. Corporate Action. Purchaser and Seller do each acknowledge and
-----------------
represent that execution of the within Agreement has been duly authorized by
the Board of Directors of each Corporation and that the Presidents thereof
have been authorized to execute the within Agreement on behalf of each
corporation.
10 Notices. All notices required under this Agreement shall be sent by
Registered or Certified Mail, return receipt requested, postage prepaid, or
overnight courier service such as Federal Express or UPS, to the party who is
to receive such notice, at the address set forth on Page 1 of this Agreement,
or such other address as to which each party may from time to time notify the
others.
<PAGE>
11. Entire Agreement. This Agreement represents the entire
understanding of the parties hereto and there are no warranties,
representations or covenants made by any party to any other party unless the
same are contained in the Agreement or in any other instrument delivered in
connection with the transaction contemplated hereby.
Media Sciences, Inc.
Date: BY:_______________________
Michael W. Levin, Pres.
UltraHue, Inc.
BY: /s/ Donald Gunn
-----------------------
Date: 9/7/99 Donald Gunn, Pres.
ESCROW AGENT:
Miller, Nash, Weiner, Hager & Carlsen, LLP
By:_____________________
<PAGE>
EXHIBIT D - Allocation of Purchase Price
Inventory Tax basis at start of Closing Date
Accounts receivable Tax basis at start of Closing Date
Property and equipment Depreciated tax basis at start of
Closing Date
Prepaid commitments and
Customer deposits Face amount at start of Closing Date
Trade Secrets $3,450,000
Covenants not to compete $50,000
Goodwill and other intangible assets Entire remainder of purchase price.
[Any post-closing adjustments to purchase price will increase or decrease the
allocation to goodwill and other intangible assets.]
<PAGE>
EXHIBIT E
BILL OF SALE
THIS BILL OF SALE TRANSFERS BOTH THE TRADE SECRETS AND ASSETS OF
ULTRAHUE, INC.
KNOW ALL MEN BY THESE PRESENTS
THAT UltraHue, Inc. a corporation of the State of New Mexico with
offices located at Suite 201, 16398 NE 85th Street, Redmond, Washington 98502
("Seller"), for and in consideration of the payments as set forth in a certain
Asset Purchase Agreement dated September 7, 1999 ( hereinafter referred to as
"Asset Purchase Agreement") paid to it at or before delivery of this Bill of
Sale by Media Sciences, Inc., a corporation of the State of New Jersey and a
wholly owned subsidiary of Cadapult Graphic Systems, Inc. with offices located
at 110 Commerce Drive, Allendale, New Jersey 07401 ("Purchaser") TRANSFERS,
SETS OVER and ASSIGNS unto Purchaser all of its rights, title and interest in
and to the following:
Any and all Trade Secrets and Proprietary Information
of Seller, as those terms are defined in the Asset Pur-
chase Agreement, including but not limited to all
formulas, processes and know-how related to the
manufacture of solid ink for use in color printers
and related equipment, which have been or
currently are being used by Seller in the conduct
of its business;
Together with all of the Assets, as defined in the aforesaid Asset
Purchase Agreement, owned and used by Seller in the operation of its business,
including but not limited to the following:
A. Accounts receivable
B. Inventory
C. Property and Equipment as listed on Exhibit A annexed to,
and made a part hereof
D. All right, title and interest in and to the name "UltraHue"
and any other trademarks, service marks and any copyrights
owned by Seller;
E. Customer lists and files relating thereto
F. Sales, service and vendor contracts and security deposits
G. Existing telephone numbers (425) 836-3678; (425) 861-9033
and (888) 376-8348 and Fax Number (425) 861-8548.
H. Databases
I. Originals and duplicates of all of Seller's on-going
business records.
<PAGE>
Seller warrants and represents that the Trade Secrets, Proprietary Information
and Assets being conveyed by this Bill of Sale are free and clear of any and
all liens, pledges, charges, licenses to third parties or encumbrances except
for Accounts Payable assumed by Purchaser pursuant to the Asset Purchase
Agreement and customer deposits as set forth on Exhibit B annexed to and made
a part of this Bill of Sale.
Unless otherwise specifically set forth to the contrary, all terms used in
this Bill of Sale have the same meaning as set forth in the Asset Purchase
Agreement.
Seller shall, at the time of execution of this Bill of Sale, furnish to
Purchaser copies of all documents, records, notebooks and similar repositories
of or containing information or data relating to, describing, or providing the
Trade Secrets and Proprietary Information.
Seller covenants and agrees to WARRANT AND DEFEND this sale of the Trade
Secrets, Proprietary Information and Assets described herein to Purchaser
against any and all person(s), entity or entities, and/or claimant(s).
All the terms, covenants and conditions herein contained shall be for, and
shall inure to the benefit of and shall bind the respective parties hereto and
their legal representatives, successors and assigns, respectively.
IN WITNESS WHEREOF, the Seller has hereunto caused these presents to be signed
by its proper corporate officers and caused its corporate seal to be hereto
affixed this 13th day of December, 1999.
UltraHue, Inc.
By: /s/ Donald Gunn
---------------------------
Donald Gunn, President
<PAGE>
Exhibit F
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of this 13th day of December, 1999;
Between: Media Sciences, Inc., a New Jersey corporation which is a
wholly owned subsidiary of Cadapult Graphic Systems, Inc.,
a Delaware corporation, hereinafter referred to as
"Company"
AND Donald Gunn, an individual residing at
REDMOND, WA, hereinafter referred to as
"Executive Employee".
1. Recitals.
1.1. The Company is a New Jersey corporation which, simultaneously
herewith, has acquired the Assets of UltraHue, Inc.
1.2. The Agreement between the Company and the Executive Employee for
the latter to be employed by the former pursuant to the terms and conditions
of this Agreement as set forth hereinafter is a material inducement for the
Company to acquire the Trade Secrets (as defined in the Asset Purchase
Agreement of even date) and Assets of UltraHue, Inc.
NOW THEREFORE, in consideration of the aforesaid, and the mutual covenants,
conditions and promises as set forth hereinafter, the parties hereto do hereby
agree as follows:
<PAGE>
1. Term of Employment. The Company hereby agrees to employ Executive
Employee and the Executive Employee accepts such employment for a Term of
Three (3) years from the date of this Agreement pursuant to the terms and
conditions of this Agreement as set forth hereinafter.
2. Scope of Duties. Executive Employee is hereby employed as Vice President
of sales and to such extent shall perform the duties previously performed by
him on behalf of UltraHue, Inc. before its acquisition by the Company as well
as those other such duties as may from time to time be established by the
Board of Directors of the Company. Executive Employee agrees that during the
Term of this Agreement he shall devote his full time, attention and best
efforts to the performance of his duties for the Company as set forth herein.
3. Compensation. The Executive Employee's compensation package is set forth
in Exhibit A annexed to and made a part hereof.
4. Termination.
4.1. Termination by the Company. The Company shall have the right to
terminate the Executive Employee for any one of the following reasons: (i) a
material breach of this Employment Agreement, including but not limited to
breach of any of confidentiality covenants as set forth hereinafter; (ii) a
conviction against he Executive Employee for a gross misdemeanor involving
moral turpitude or felony; or (iii) misconduct on the part of the Executive
Employee of such a serious nature as to render his continued employment
hereunder detrimental to the business of the Company.
<PAGE>
4.2. Termination Upon Disability of the Executive Employee. The
Company shall have the right to terminate the Executive Employee in the event
he is so disabled that he is unable to perform his Duties, as defined herein,
to the extent and at the level previously performed for a period in excess of
Thirty (30) days. In the event of such disability, the Executive Employee
shall continue to receive his full compensation for a period of Ninety (90)
days and fifty (50%) percent of his compensation from the date of the notice
from the Company of its election to terminate his services .
4.3 Termination Upon Death of Executive Employee or Dissolution or
Insolvency of the Company. This Employment Agreement and all obligations
hereunder shall automatically terminate and the employment relationship shall
cease and become null, void and of no further force and effect immediately
upon the death of the Executive Employee, provided however, that in such event
the Executive Employee's estate shall be receive the Executive Employee's
salary for Ninety (90) days following the date of his death. Likewise, this
Agreement and all obligations hereunder shall also automatically terminate and
the employment relationship shall cease and become null, void and of no
further force and effect immediately upon any dissolution of the Company or
any adjudication that the Company is insolvent under the laws of the State of
New Jersey, Delaware or the United States of America, or upon permanent
cessation of normal business operations by the Company.
4.4. Termination by the Executive Employee. The Executive Employee
shall have the right to terminate the within Employment Agreement as
<PAGE>
a consequence of (i) a material breach of this Employment Agreement by the
Company; or (ii) a substantial and material reduction in rank or material
alteration of duties and responsibilities imposed upon the Executive Employee
by the Company. In the event of termination for the reasons set in subpart
(i) above, the Executive Employee shall have the right to continue to receive
his compensation for the remainder of this Agreement constituting liquidated
damages in relation to such breach so that no further damages may be claimed
by the Executive Employee in relation thereto. In the event of termination
for the reasons set forth in subpart (ii) above, the Executive Employee shall
receive his full compensation for a period constituting the earlier of six (6)
months from date of termination or the termination of the within Agreement.
4.5. Remuneration Upon Termination. Upon termination, the Executive
Employee shall be entitled to all remuneration accrued but unpaid up the
effective dates of the termination of his employment.
5. Restrictions on Disclosure of Trade Secrets, Confidential Information and
Competition while Employed and After Termination.
5.1. Executive Employee acknowledges that the Company has this date
acquired from UltraHue, Inc., a corporation in which Executive Employee owned
an equity position prior to said sale and in relation to which said Executive
Employee received substantial consideration from the Company, certain Trade
Secrets, and specifically the process for the manufacture and formulation of
solid ink for use in color printers and related equipment.
<PAGE>
5.2 In addition, Executive Employee further acknowledges that as a
consequence of his prior position with UltraHue, Inc. and his current position
with the Company, he was and will be in possession and has, and will have,
knowledge of additional proprietary information of the Company, including, but
not limited to, the following:
(A) Names, addresses and all file information and histories of
customers and suppliers acquired or developed by the Company;
(B) All business plans, budgets, sales forecasts, strategic plans,
etc.;
(C) In addition to the aforereferenced Trade Secrets, any and all
other unique manufacturing processes, whether or not patented, formulations,
designs, special equipment, research projects and results, engineering data,
etc.;
(D) All operating procedures utilized by the Company in
conjunction with the operation of its business;
(E) Any and all financial information concerning the business of
the Company;
(F) Such other and further information as the Company may in the
future designate as confidential and proprietary.
5.3. Employee covenants, warrants and agrees that both during and after
the Term of his employment by the Company, said Executive Employee shall not,
directly or indirectly, except with the written permission of the Company,
through any means or mechanism whatsoever, including as a shareholder,
director, officer, employee,
<PAGE>
partner, member, principal or agent, do or cause to be done or cooperate, or
assist in, or permit any of the following:
(A) Disclosure, either directly or indirectly, of the Trade
Secrets of the Company as defined herein and in the Asset Purchase Agreement
of even date;
(B) Disclosure, either directly or indirectly, of any
proprietary information of the Company as defined hereinabove;
(C) Use, either directly or indirectly, of the aforereferenced
Trade Secrets or proprietary information in connection with any other business
or other operation, including, without limitation, any business operating in
the same field, or competing with, the Company
5.4. Executive Employee further covenants and agrees that during the
Term of his Employment by the Company, and for a period of time extending for
Three (3) years after the date of any termination, whether or not for cause,
and whether or not said termination is initiated by the Company or the
Executive Employee, said Executive Employee shall not, directly or indirectly,
through any means or mechanism whatsoever, including as a shareholder,
director, officer, employee, partner, member, principal or agent, compete
against the Company in any manner nor provide any information to any
competitor which would aid or assist it in competing against the Company.
6. Enforcement of Paragraph 5 and its subparts, including Sections 5.3 and
5.4.
<PAGE>
6.1. The Executive Employee acknowledges and agrees that the
restrictions imposed under Paragraph 5, and specifically subsections 5.3 and
5.4, including any time periods of such restrictions in the event of
termination, as well as the lack of any specific geographic area (recognizing
the international nature of the Company's business) represent a fair and
reasonable balance between the legitimate interests of the Company in
protecting the Trade Secrets, proprietary information and Assets this date
acquired by it from UltraHue, Inc. for substantial consideration, and in
protecting against unfair competition, and that these limitations are not so
onerous as to unreasonably interfere with the Executive Employee's ability to
utilize his skills and talents developed during the course of his employment
both for the Company and UltraHue, Inc., in order to continue to work and to
earn a livelihood in another industry of his choice.
6.2 If for any reason any court, or other tribunal, having jurisdiction
shall determinate that the restrictions set forth hereinabove are over-broad
in any respect, then, and in that event, the provisions thereof shall
nevertheless continue in full force and effect, but the terms thereof shall be
deemed restricted only to the extent required to bring them into conformance
with such determination by a court or tribunal of competent jurisdiction.
6.3. Executive Employee agrees and acknowledges that upon any breach or
threatened breach by him of the terms, covenants and agreements set forth in
Paragraph 5 hereinabove, and specifically subsections 5.3 and 5.4 thereof, an
award of monetary damages would not be adequate to protect the Company's
interests and therefore said Executive Employee agrees that upon such breach
<PAGE>
the Company would have the right to apply for and obtain, in addition to
monetary damages, injunctive relief, preliminary, temporary and final, to
enforce the provisions of Paragraph 5 and specifically is subsections 5.3 and
5.4 thereof. To this extent, Executive Employee expressly waives the right to
assert in any proceeding resulting from breach of these provisions that
monetary damages are adequate to protect the rights of the Company.
7. Miscellaneous.
7.1. This Agreement shall inure to the benefit of and shall be binding
upon the parties hereto and their respective heirs, personal representatives,
successors and assigns.
7.2. This Agreement, and any and all rights hereunder, shall be
governed by and enforced according to the laws of the State of New Jersey
irrespective of the place of performance.
7.3. This Agreement constitutes the entire agreement between the
parties, and no modification hereof shall be recognized or deemed effective or
enforceable unless same is in writing and is signed by both of the parties, or
their assignees, hereto.
7.4. The provisions of this Agreement are independent of and are
separable from each other. In the event any provision of this Agreement which
is judicially declared to be invalid or unenforceable, such provision or
provisions shall be invalid or unenforceable without invalidating or rendering
unenforceable the remaining provisions hereof.
<PAGE>
7.5. Neither failure nor any delay on the part of either party hereto
to exercise any right, remedy, power or privilege under this Agreement shall
operate as a waiver thereof. No single or partial exercise of any right,
remedy, power or privilege shall preclude or be deemed a waiver of any other
or further exercise of the same or of any other right, remedy, power or
privilege.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered on this date first written above.
ATTEST: Media Sciences, Inc.
/s/ Bruce M. Meisel By: /s/ Michael W. Levin, President
- ------------------- ---------------------------------
Bruce M. Meisel, Esq. Michael W. Levin, Pres.
263 Center Avenue
Westwood, New Jersey 07675
WITNESS: /s/ Donald Gunn
---------------
Donald Gunn
/s/
<PAGE>
EXHIBIT A: COMPENSATION.
A. Base Salary. Employer shall pay Employee an annual salary of
------------
eighty thousand dollars ($80,000) or such greater amount as may be established
by Employer's Board of Directors, which shall be payable in appropriate
installments to conform with the regular payroll dates for salaried personnel
of Employer.
B. Other Benefits. Employee shall be entitled to the following
---------------
fringe benefits, perquisites, and other benefits of employment during the Term
of Employment to the extent that the Board of Directors determines such
benefits are to be made available to the Company's employees in general: (i)
medical and dental insurance under such group medical and dental insurance
policies as Employer may provide to its employees; (ii) sick days in
accordance with Employer's policy regarding officers; (iii) up to four (4)
weeks vacation in each year fully worked, and it is not to be deemed to have
any cash value; (iv) participation in Employer's 401(k) plan or such other
plan as Employer may adopt; and (v) options to purchase 16,667 shares of
Cadapult Graphic Systems, Inc. common stock at the fair market value on the
date of this document, after 12 months of employment and options to purchase
an additional 16,667 shares of Cadapult Graphic Systems, Inc. common stock at
the fair market value on the date of this document, after 24 months of
employment, and options to purchase an additional 16,667 shares of Cadapult
Graphic Systems, Inc. common stock at the fair market value on the date of
this document, upon completion of 36 months of employment.
C. Bonus. Employee may be granted a performance bonus, at the
------
sole and exclusive discretion of the Board of Directors of Employer.
<PAGE>
Exhibit F-1
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of this 13th day of December, 1999;
Between: Media Sciences, Inc., a New Jersey corporation which is a
wholly owned subsidiary of Cadapult Graphic Systems, Inc.,
a Delaware corporation, hereinafter referred to as
"Company"
AND Randy Hooker, an individual residing at
REDMOND, WA, hereinafter referred to as
"Executive Employee".
1. Recitals.
1.1. The Company is a New Jersey corporation which, simultaneously
herewith, has acquired the Assets of UltraHue, Inc.
1.2. The Agreement between the Company and the Executive Employee for
the latter to be employed by the former pursuant to the terms and conditions
of this Agreement as set forth hereinafter is a material inducement for the
Company to acquire the Trade Secrets (as defined in the Asset Purchase
Agreement of even date) and Assets of UltraHue, Inc.
NOW THEREFORE, in consideration of the aforesaid, and the mutual covenants,
conditions and promises as set forth hereinafter, the parties hereto do hereby
agree as follows:
<PAGE>
1. Term of Employment. The Company hereby agrees to employ Executive
Employee and the Executive Employee accepts such employment for a Term of
Three (3) years from the date of this Agreement pursuant to the terms and
conditions of this Agreement as set forth hereinafter.
2. Scope of Duties. Executive Employee is hereby employed as Vice President
of marketing and to such extent shall perform the duties previously performed
by him on behalf of UltraHue, Inc. before its acquisition by the Company as
well as those other such duties as may from time to time be established by the
Board of Directors of the Company. Executive Employee agrees that during the
Term of this Agreement he shall devote his full time, attention and best
efforts to the performance of his duties for the Company as set forth herein.
3. Compensation. The Executive Employee's compensation package is set forth
in Exhibit A annexed to and made a part hereof.
4. Termination.
4.1. Termination by the Company. The Company shall have the right to
terminate the Executive Employee for any one of the following reasons: (i) a
material breach of this Employment Agreement, including but not limited to
breach of any of confidentiality covenants as set forth hereinafter; (ii) a
conviction against he Executive Employee for a gross misdemeanor involving
moral turpitude or felony; or (iii) misconduct on the part of the Executive
Employee of such a serious nature as to render his continued employment
hereunder detrimental to the business of the Company.
<PAGE>
4.2. Termination Upon Disability of the Executive Employee. The
Company shall have the right to terminate the Executive Employee in the event
he is so disabled that he is unable to perform his Duties, as defined herein,
to the extent and at the level previously performed for a period in excess of
Thirty (30) days. In the event of such disability, the Executive Employee
shall continue to receive his full compensation for a period of Ninety (90)
days and fifty (50%) percent of his compensation from the date of the notice
from the Company of its election to terminate his services .
4.3 Termination Upon Death of Executive Employee or Dissolution or
Insolvency of the Company. This Employment Agreement and all obligations
hereunder shall automatically terminate and the employment relationship shall
cease and become null, void and of no further force and effect immediately
upon the death of the Executive Employee, provided however, that in such event
the Executive Employee's estate shall be receive the Executive Employee's
salary for Ninety (90) days following the date of his death. Likewise, this
Agreement and all obligations hereunder shall also automatically terminate and
the employment relationship shall cease and become null, void and of no
further force and effect immediately upon any dissolution of the Company or
any adjudication that the Company is insolvent under the laws of the State of
New Jersey, Delaware or the United States of America, or upon permanent
cessation of normal business operations by the Company.
4.4. Termination by the Executive Employee. The Executive Employee
shall have the right to terminate the within Employment Agreement as
<PAGE>
a consequence of (i) a material breach of this Employment Agreement by the
Company; or (ii) a substantial and material reduction in rank or material
alteration of duties and responsibilities imposed upon the Executive Employee
by the Company. In the event of termination for the reasons set in subpart
(i) above, the Executive Employee shall have the right to continue to receive
his compensation for the remainder of this Agreement constituting liquidated
damages in relation to such breach so that no further damages may be claimed
by the Executive Employee in relation thereto. In the event of termination
for the reasons set forth in subpart (ii) above, the Executive Employee shall
receive his full compensation for a period constituting the earlier of six (6)
months from date of termination or the termination of the within Agreement.
4.5. Remuneration Upon Termination. Upon termination, the Executive
Employee shall be entitled to all remuneration accrued but unpaid up the
effective dates of the termination of his employment.
5. Restrictions on Disclosure of Trade Secrets, Confidential Information and
Competition while Employed and After Termination.
5.1. Executive Employee acknowledges that the Company has this date
acquired from UltraHue, Inc., a corporation in which Executive Employee owned
an equity position prior to said sale and in relation to which said Executive
Employee received substantial consideration from the Company, certain Trade
Secrets, and specifically the process for the manufacture and formulation of
solid ink for use in color printers and related equipment.
<PAGE>
5.2 In addition, Executive Employee further acknowledges that as a
consequence of his prior position with UltraHue, Inc. and his current position
with the Company, he was and will be in possession and has, and will have,
knowledge of additional proprietary information of the Company, including, but
not limited to, the following:
(A) Names, addresses and all file information and histories of
customers and suppliers acquired or developed by the Company;
(B) All business plans, budgets, sales forecasts, strategic plans,
etc.;
(C) In addition to the aforereferenced Trade Secrets, any and all
other unique manufacturing processes, whether or not patented, formulations,
designs, special equipment, research projects and results, engineering data,
etc.;
(D) All operating procedures utilized by the Company in
conjunction with the operation of its business;
(E) Any and all financial information concerning the business of
the Company;
(F) Such other and further information as the Company may in the
future designate as confidential and proprietary.
5.3. Employee covenants, warrants and agrees that both during and after
the Term of his employment by the Company, said Executive Employee shall not,
directly or indirectly, except with the written permission of the Company,
through any means or mechanism whatsoever, including as a shareholder,
director, officer, employee,
<PAGE>
partner, member, principal or agent, do or cause to be done or cooperate, or
assist in, or permit any of the following:
(A) Disclosure, either directly or indirectly, of the Trade
Secrets of the Company as defined herein and in the Asset Purchase Agreement
of even date;
(B) Disclosure, either directly or indirectly, of any
proprietary information of the Company as defined hereinabove;
(C) Use, either directly or indirectly, of the aforereferenced
Trade Secrets or proprietary information in connection with any other business
or other operation, including, without limitation, any business operating in
the same field, or competing with, the Company
5.4. Executive Employee further covenants and agrees that during the
Term of his Employment by the Company, and for a period of time extending for
Three (3) years after the date of any termination, whether or not for cause,
and whether or not said termination is initiated by the Company or the
Executive Employee, said Executive Employee shall not, directly or indirectly,
through any means or mechanism whatsoever, including as a shareholder,
director, officer, employee, partner, member, principal or agent, compete
against the Company in any manner nor provide any information to any
competitor which would aid or assist it in competing against the Company.
6. Enforcement of Paragraph 5 and its subparts, including Sections 5.3 and
5.4.
<PAGE>
6.1. The Executive Employee acknowledges and agrees that the
restrictions imposed under Paragraph 5, and specifically subsections 5.3 and
5.4, including any time periods of such restrictions in the event of
termination, as well as the lack of any specific geographic area (recognizing
the international nature of the Company's business) represent a fair and
reasonable balance between the legitimate interests of the Company in
protecting the Trade Secrets, proprietary information and Assets this date
acquired by it from UltraHue, Inc. for substantial consideration, and in
protecting against unfair competition, and that these limitations are not so
onerous as to unreasonably interfere with the Executive Employee's ability to
utilize his skills and talents developed during the course of his employment
both for the Company and UltraHue, Inc., in order to continue to work and to
earn a livelihood in another industry of his choice.
6.2 If for any reason any court, or other tribunal, having jurisdiction
shall determinate that the restrictions set forth hereinabove are over-broad
in any respect, then, and in that event, the provisions thereof shall
nevertheless continue in full force and effect, but the terms thereof shall be
deemed restricted only to the extent required to bring them into conformance
with such determination by a court or tribunal of competent jurisdiction.
6.3. Executive Employee agrees and acknowledges that upon any breach or
threatened breach by him of the terms, covenants and agreements set forth in
Paragraph 5 hereinabove, and specifically subsections 5.3 and 5.4 thereof, an
award of monetary damages would not be adequate to protect the Company's
interests and therefore said Executive Employee agrees that upon such breach
<PAGE>
the Company would have the right to apply for and obtain, in addition to
monetary damages, injunctive relief, preliminary, temporary and final, to
enforce the provisions of Paragraph 5 and specifically is subsections 5.3 and
5.4 thereof. To this extent, Executive Employee expressly waives the right to
assert in any proceeding resulting from breach of these provisions that
monetary damages are adequate to protect the rights of the Company.
7. Miscellaneous.
7.1. This Agreement shall inure to the benefit of and shall be binding
upon the parties hereto and their respective heirs, personal representatives,
successors and assigns.
7.2. This Agreement, and any and all rights hereunder, shall be
governed by and enforced according to the laws of the State of New Jersey
irrespective of the place of performance.
7.3. This Agreement constitutes the entire agreement between the
parties, and no modification hereof shall be recognized or deemed effective or
enforceable unless same is in writing and is signed by both of the parties, or
their assignees, hereto.
7.4. The provisions of this Agreement are independent of and are
separable from each other. In the event any provision of this Agreement which
is judicially declared to be invalid or unenforceable, such provision or
provisions shall be invalid or unenforceable without invalidating or rendering
unenforceable the remaining provisions hereof.
<PAGE>
7.5. Neither failure nor any delay on the part of either party hereto
to exercise any right, remedy, power or privilege under this Agreement shall
operate as a waiver thereof. No single or partial exercise of any right,
remedy, power or privilege shall preclude or be deemed a waiver of any other
or further exercise of the same or of any other right, remedy, power or
privilege.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered on this date first written above.
ATTEST: Media Sciences, Inc.
/s/ Bruce M. Meisel By: /s/ Michael W. Levin, President
- ------------------- ---------------------------------
Bruce M. Meisel, Esq. Michael W. Levin, Pres.
263 Center Avenue
Westwood, New Jersey 07675
WITNESS: /s/ Randy Hooker
-----------------
Randy Hooker
/s/
<PAGE>
EXHIBIT A : COMPENSATION.
A. Base Salary. Employer shall pay Employee an annual salary of
------------
eighty thousand dollars ($80,000) or such greater amount as may be established
by Employer's Board of Directors, which shall be payable in appropriate
installments to conform with the regular payroll dates for salaried personnel
of Employer.
B. Other Benefits. Employee shall be entitled to the following
---------------
fringe benefits, perquisites, and other benefits of employment during the Term
of Employment to the extent that the Board of Directors determines such
benefits are to be made available to the Company's employees in general: (i)
medical and dental insurance under such group medical and dental insurance
policies as Employer may provide to its employees; (ii) sick days in
accordance with Employer's policy regarding officers; (iii) up to four (4)
weeks vacation in each year fully worked, and it is not to be deemed to have
any cash value; (iv) participation in Employer's 401(k) plan or such other
plan as Employer may adopt; and (v) options to purchase 16,667 shares of
Cadapult Graphic Systems, Inc. common stock at the fair market value on the
date of this document, after 12 months of employment and options to purchase
an additional 16,667 shares of Cadapult Graphic Systems, Inc. common stock at
the fair market value on the date of this document, after 24 months of
employment, and options to purchase an additional 16,667 shares of Cadapult
Graphic Systems, Inc. common stock at the fair market value on the date of
this document, upon completion of 36 months of employment.
C. Bonus. Employee may be granted a performance bonus, at the
------
sole and exclusive discretion of the Board of Directors of Employer.
<PAGE>
EXHIBIT G
CONVENANTS NOT TO COMPETE
--------------------------
THIS AGREEMENT, made as of this 13th day of December, 1999;
Between: Media Sciences, Inc., a New Jersey corporation which is a
wholly owned subsidiary of Cadapult Graphic Systems, Inc.,
a Delaware corporation, hereinafter referred to as "Company"
AND Leland Traylor, an individual hereinafter referred to
collectively as "Former Shareholder".
1. Recitals.
1.1. The Company is a New Jersey corporation which, simultaneously
herewith, has acquired the Trade Secrets and Assets of UltraHue, Inc.
1.2. The Former Shareholder heretofore owned a substantial number of
the issued and outstanding common stock of Ultrahue, Inc. which has heretofore
been purchased in anticipation of and in conjunction with the acquisition of
the Trade Secrets and Assets by the Company.
1.3. Unless otherwise specifically defined herein, the capitalized
terms set forth herein shall have the same definitions as set forth in a
certain Asset Purchase Agreement dated September 7, 1999 (hereinafter referred
to as "Asset Purchase Agreement").
1.4. A material inducement for the Company to purchase the Trade
Secrets and Assets of UltraHue, Inc., and to pay the consideration therefore,
as set forth in Asset Purchase Agreement is the representations of and
agreements
<PAGE>
by amongst the Former Shareholder that the Trade Secrets and Proprietary
Information of UltraHue, Inc. would remain confidential, and have not been and
would not be disclosed by any of the Former Shareholder, either directly or
indirectly, any person, persons, or entity other than employees of the Company
as directed by the Company, and that the Former Shareholder designated herein
would be restricted from competing with the Company for the period of time
designated herein.
NOW THEREFORE, in consideration of the aforesaid, as well as the consideration
paid to the Former Shareholder as referenced in the Asset Purchase Agreement
dated September 7, 1999, the parties hereto do hereby agree as follows:,
1. Restrictions on Competition. The Former Shareholder does hereby warrant
and agree that for a period of three (3) years from the date hereof said
Former Shareholder shall not, either directly or indirectly, in any capacity
or through any means or mechanism whatsoever, compete with the Company in any
manner nor provide any information to any competitor which would aid or assist
it in competing against the Company. Nothing contained herein shall preclude
the Former Shareholder from investing minor sums (less than 1% of the total
capitalization) in public companies which may be competitors.
2. Enforcement.
2.1. The Former Shareholder agrees and acknowledges that upon any
breach or threatened breach of the terms, covenants and agreements set forth
in this Agreement, and specifically Paragraph 1 hereinabove, an award of
monetary damages would not be adequate to protect the Company's interests and
<PAGE>
therefore the Former Shareholder agrees that upon such breach the Company
would have the right to apply for and obtain, in addition to monetary damages,
injunctive relief, preliminary, temporary and final, to enforce the provisions
of Paragraph 1. To this extent, the Former Shareholder expressly waives the
right to assert in any proceeding resulting from breach of these provisions
that monetary damages alone are adequate to protect the rights of the Company.
If for any reason any court, or other tribunal having jurisdiction, shall
determine that the restrictions set forth hereinabove are over-broad in any
respect, then and in that event the provisions thereof shall nevertheless
continue in full force and effect, but the terms thereof shall be deemed
restricted only to the extent required to bring them into conformance with
such determination by a court or tribunal of competent jurisdiction.
2.2. The Former Shareholder acknowledges and agrees that the
restrictions imposed in this Agreement, and specifically Paragraph 1
hereinabove, including any time periods of such restrictions and lack of any
specific geographical area represent a fair and reasonable balance between the
legitimate interests of the Company in protecting the Trade Secrets,
Proprietary Information and Assets this date acquired from UltraHue, Inc. for
substantial consideration, and in protecting against unfair competition.
3. Miscellaneous.
3.1. This Agreement shall inure to the benefit of and shall be binding
upon the parties hereto and their respective heirs, personal representatives,
successors and assigns.
<PAGE>
3.2. This Agreement, and any and all rights hereunder, shall be
governed by and enforced according to the laws of the State of New Jersey,
irrespective of the place of performance.
3.3. This Agreement, together with the Asset Purchase Agreement and
ancillary agreements to be executed in relation thereto, constitute the entire
agreement between the parties, and no modification hereof shall be recognized
or deemed effective or enforceable unless same is in writing and is signed by
both of the parties, or their assignees, hereto.
3.4. The provisions of this Agreement are independent of and are
separable from each other. In the event any provision of this Agreement which
is judicially declared to be invalid or unenforceable, such provision or
provisions shall be invalid or unenforceable without invalidating or rendering
unenforceable the remaining provisions hereof.
3.5. Neither failure nor any delay on the part of either party hereto
to exercise any right, remedy, power or privilege under this Agreement shall
operate as a waiver thereof. No single or partial exercise of any right,
remedy, power or privilege shall preclude or be deemed a waiver of any other
or further exercise of the same or of any other right, remedy, power or
privilege.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered on the date first written above.
ATTEST: Media Sciences, Inc.
/s/ Bruce M. Meisel By: /s/ Michael W. Levin, President
- ------------------- ---------------------------------
Bruce M. Meisel, Esq. Michael W. Levin, Pres.
263 Center Avenue
Westwood, New Jersey 07675
WITNESS: /s/ Leland Traylor
-------------------
Leland Traylor
/s/ Paul Treaster
- -----------------
<PAGE>
EXHIBIT G-1
CONVENANTS NOT TO COMPETE
-------------------------
THIS AGREEMENT, made as of this 13th day of December, 1999;
Between: Media Sciences, Inc., a New Jersey corporation which is a
wholly owned subsidiary of Cadapult Graphic Systems, Inc.,
a Delaware corporation, hereinafter referred to as "Company"
AND Thomas Hendricks, an individual hereinafter referred to
collectively as "Former Shareholder".
1. Recitals.
1.1. The Company is a New Jersey corporation which, simultaneously
herewith, has acquired the Trade Secrets and Assets of UltraHue, Inc.
1.2. The Former Shareholder heretofore owned a substantial number of
the issued and outstanding common stock of Ultrahue, Inc. which has heretofore
been purchased in anticipation of and in conjunction with the acquisition of
the Trade Secrets and Assets by the Company.
1.3. Unless otherwise specifically defined herein, the capitalized
terms set forth herein shall have the same definitions as set forth in a
certain Asset Purchase Agreement dated September 7, 1999 (hereinafter referred
to as "Asset Purchase Agreement").
1.4. A material inducement for the Company to purchase the Trade
Secrets and Assets of UltraHue, Inc., and to pay the consideration therefore,
as set forth in Asset Purchase Agreement is the representations of and
agreements
<PAGE>
by amongst the Former Shareholder that the Trade Secrets and Proprietary
Information of UltraHue, Inc. would remain confidential, and have not been and
would not be disclosed by any of the Former Shareholder, either directly or
indirectly, any person, persons, or entity other than employees of the Company
as directed by the Company, and that the Former Shareholder designated herein
would be restricted from competing with the Company for the period of time
designated herein.
NOW THEREFORE, in consideration of the aforesaid, as well as the consideration
paid to the Former Shareholder as referenced in the Asset Purchase Agreement
dated September 7, 1999, the parties hereto do hereby agree as follows:,
1. Restrictions on Competition. The Former Shareholder does hereby warrant
and agree that for a period of three (3) years from the date hereof said
Former Shareholder shall not, either directly or indirectly, in any capacity
or through any means or mechanism whatsoever, compete with the Company in any
manner nor provide any information to any competitor which would aid or assist
it in competing against the Company. Nothing contained herein shall preclude
the Former Shareholder from investing minor sums (less than 1% of the total
capitalization) in public companies which may be competitors.
2. Enforcement.
2.1. The Former Shareholder agrees and acknowledges that upon any
breach or threatened breach of the terms, covenants and agreements set forth
in this Agreement, and specifically Paragraph 1 hereinabove, an award of
monetary damages would not be adequate to protect the Company's interests and
<PAGE>
therefore the Former Shareholder agrees that upon such breach the Company
would have the right to apply for and obtain, in addition to monetary damages,
injunctive relief, preliminary, temporary and final, to enforce the provisions
of Paragraph 1. To this extent, the Former Shareholder expressly waives the
right to assert in any proceeding resulting from breach of these provisions
that monetary damages alone are adequate to protect the rights of the Company.
If for any reason any court, or other tribunal having jurisdiction, shall
determine that the restrictions set forth hereinabove are over-broad in any
respect, then and in that event the provisions thereof shall nevertheless
continue in full force and effect, but the terms thereof shall be deemed
restricted only to the extent required to bring them into conformance with
such determination by a court or tribunal of competent jurisdiction.
2.2. The Former Shareholder acknowledges and agrees that the restrictions
imposed in this Agreement, and specifically Paragraph 1 hereinabove, including
any time periods of such restrictions and lack of any specific geographical
area represent a fair and reasonable balance between the legitimate interests
of the Company in protecting the Trade Secrets, Proprietary Information and
Assets this date acquired from UltraHue, Inc. for substantial consideration,
and in protecting against unfair competition.
3. Miscellaneous.
3.1. This Agreement shall inure to the benefit of and shall be binding
upon the parties hereto and their respective heirs, personal representatives,
successors and assigns.
<PAGE>
3.2. This Agreement, and any and all rights hereunder, shall be
governed by and enforced according to the laws of the State of New Jersey,
irrespective of the place of performance.
3.3. This Agreement, together with the Asset Purchase Agreement and
ancillary agreements to be executed in relation thereto, constitute the entire
agreement between the parties, and no modification hereof shall be recognized
or deemed effective or enforceable unless same is in writing and is signed by
both of the parties, or their assignees, hereto.
3.4. The provisions of this Agreement are independent of and are
separable from each other. In the event any provision of this Agreement which
is judicially declared to be invalid or unenforceable, such provision or
provisions shall be invalid or unenforceable without invalidating or rendering
unenforceable the remaining provisions hereof.
3.5. Neither failure nor any delay on the part of either party hereto
to exercise any right, remedy, power or privilege under this Agreement shall
operate as a waiver thereof. No single or partial exercise of any right,
remedy, power or privilege shall preclude or be deemed a waiver of any other
or further exercise of the same or of any other right, remedy, power or
privilege.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered on the date first written above.
ATTEST: Media Sciences, Inc.
/s/ Bruce M. Meisel By: /s/ Michael W. Levin, President
- ------------------- ---------------------------------
Bruce M. Meisel, Esq. Michael W. Levin, Pres.
263 Center Avenue
Westwood, New Jersey 07675
WITNESS: /s/ Thomas Hendricks
--------------------
Thomas Hendricks
_________________
<PAGE>
Exhibit I
Albuquerque:
Owned Equipment
1 Paser 840 Printer s/n B9B7268
1 Phaser 350 printer s/n B6B1379
1 Phaser 350 printer s/n B7F4723
1 eMachines Computer s/n R33C09501396
1 KDF Monitor s/n 0395921707
1 Epson 600Q Printer s/n ATP0020313
1 Grainger Hoist
1 Pallet Jack
1 Oven
1 Freezer
1 Refrigerator
1 Microwave Oven
1 Digital Gram Scale
1 Digital Shipping Scale
48 Aluminum Molds
Desk and funiture
Storage Cabinets and Shelves
1 EconoCorp Packaging Machine
1 Alarm System
2 cordless Telephones
1 Fax machine
8 digital Temperature Controllers
1 Microscope
Redmond
Owned Equipment
3 Phaser 840 Printers
2 Pahser 360 printers
1 Phaser 560 printer
1 Advanced Matrix Technology Printer
1 Calibre Computer
1 Futura 19" Moniter
Desk and funiture
3 business Telephones
1 Fax machine
1 Syquest Drive
1 Zip Drive
1 IBM ThinkPad 560 Notebook Computer
<PAGE>
Exhibit J
The following have been provided to Purchaser and is hereby incorporated by
reference as if fully annexed to this Exhibit J:
1. Complaint and Stipulation of Settlement and Dismissal in the matter of
Tektronix vs. UltraHue, Inc., Civil No. C97-1533-C, U.S. District Court for
the Western District of Washington.
2. Letter date June 6, 1998 from Dummet Corp. written on behalf of Willett
Holdings.
3. Letter dated May 17, 1999 from Fish & Neave written on behalf of Willett
Holdings.
<PAGE>
Exhibit K - Proceeds From Subsequent Sale of Trade Secrets
Sale of Trade Secrets during the 25% of proceeds from sale of
first year of this Agreement. Trade Secrets
Sale of Trade Secrets during the 20% of proceeds from sale of
second year of this Agreement. Trade Secrets
Sale of Trade Secrets during the 20% of proceeds from sale of
first quarter of the third year of Trade Secrets
this Agreement.
Sale of Trade Secrets during the 15% of proceeds from sale of
second quarter of the third year of Trade Secrets
this Agreement.
Sale of Trade Secrets during the 10% of proceeds from sale of
third quarter of the third year of Trade Secrets
this Agreement.
Sale of Trade Secrets during the 5% of proceeds from sale of
fourth quarter of the third year of Trade Secrets
this Agreement.
<PAGE>
Exhibit L
PROMISSORY NOTE
$1,160,000.00 Dated: December 13, 1999
FOR VALUE RECEIVED, Media Sciences, Inc., a New Jersey Corporation and wholly
owned subsidiary of Cadapult Graphic Systems, Inc.(hereinafter sometimes
referred to as the "Maker"), and promises to pay to UltraHue, Inc.
(hereinafter sometimes referred to collectively as the "Holder"), or at such
other place as may be designated from time to time by the Holder, the
principal sum of One Million One Hundred Sixty Thousand ($1,160,000.00)
Dollars, with interest at the rate of Seven (7%) percent per annum, payable on
December 13, 2000.
All payments hereunder shall be made to the Holder in lawful money of the
United States of America and in immediately available funds. Interest on any
payment which is not paid within applicable grace periods, shall until
acceleration, be due and payable within 10 days of written demand received,
such unpaid amounts bearing interest at the higher of 9% per annum or the rate
from time to time announced by Chase Manhattan Bank, N.A., or an institutional
equivalent, as its "Prime Rate", calculated on the basis of factual days
elapsed, from due date of the unpaid amount or amounts.
The Maker shall have the right to prepay this Note in whole or in part.
Thereafter, at any time and from time to time Maker shall have the right to
prepay this Note, in whole or in part, without penalty or premium. Each
partial prepayment of this Note shall be applied to the latest maturing
installment of principal required hereunder in inverse order of maturity
thereof.
The Holder shall not by any act, delay, omission, failure to act, or otherwise
be deemed to have waived any right, power, privilege, or remedy hereunder, and
no waiver whatever shall be valid unless in writing signed by the Holder and
then only to the extent therein set forth; nor shall any single or partial
exercise of any right, power, privilege or remedy hereunder preclude any
further exercise thereof, or the exercise of any other right, power, privilege
or remedy. The rights and remedies herein provided are cumulative and not
exclusive of any rights or remedies provided by law and may be exercised
singly or concurrently. A waiver by the Holder of any remedy under the terms
of this Note on any one occasion shall not be construed as a bar to any right
or remedy which the Holder would otherwise have had on any further occasion.
No executory agreement, unless in writing and signed by the Holder, and no
course of dealing between the Maker and the Holder shall be effective to
change or modify or discharge, in whole or in part, this Note.
At the option of the Holder, any one of the following occurrences shall
constitute a default under this Note:
(i) the failure of the Maker to make any payment of principal or
interest on this Note when
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due and such failure shall continue for a period of ten (10) days after
written notice thereof is received by Maker from the Holder;
(ii) the failure of the Maker to perform any term, condition, covenant
or agreement herein contained and such failure shall continue for a period of
thirty (30) days after written notice thereof is received by Maker from the
Holder;
(iii) If Maker shall file a voluntary petition in bankruptcy or
insolvency, commence a case under the Federal Bankruptcy Code, or shall be
adjudicated a bankrupt or insolvent, or file any petition or answer seeking
any reorganization arrangement, composition, readjustment, liquidation,
dissolution or similar relief under the present or any future federal
bankruptcy act or any other present or future applicable federal, state or
other statute or law (foreign or domestic), or shall make an assignment for
the benefit of creditors or shall seek or consent or acquiesce in the
appointment of any receiver liquidator or Maker or of all of any part of
Maker's personal property; or,
(iv) If, within 60 days after the commencement of any proceeding
against Maker, and same is not discharged within sixty (60) days whether by
the filing of a petition or otherwise, seeking any reorganization,
arrangement, composition, readjustment, future federal bankruptcy act or any
other present or future applicable federal, state or other statute of law
(foreign or domestic), such proceeding shall not have been dismissed, or if,
within 60 days after the appointment of any receiver or liquidator of Maker or
of all of Maker's personal property, without the consent or acquiescence of
Maker, such appointment shall not have been vacated or otherwise discharged.
The Maker agrees that whenever an attorney is used to collect or enforce this
Note or to enforce, declare or adjudicate any rights or obligations under this
Note, or with respect to any collateral security therefore, whether by suit or
any other means whatever, the reasonable counsel fees of Holder's counsel
shall be payable by the Maker, together with all costs and expenses of such
collection, enforcement or adjudication, and shall constitute part of the
principal obligation hereunder.
The Maker waives presentment for payment, notice of dishonor, protest, notice
of protest of this Note or other notice of any kind and all demands
whatsoever, except as may be herein expressly provided to the contrary.
Whenever any payment to be made hereunder shall be due on a Saturday, Sunday
or public holiday, such payment may be made on the next succeeding business
day.
Any provision hereof which may prove unenforceable under any law shall not
affect the validity of any other provision hereof.
This Note may be not changed or terminated orally, but only by a written
document signed by the Holder hereof.
The parties waive trial by jury, and consent to the jurisdiction and venue of
the State of New Jersey.
Furthermore, in the event of default, any legal issues arising in relation to
this Note shall be
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governed by the laws of the State of New Jersey.
ATTEST: Media Sciences, Inc.
BY: /s/
------------------------
Michael W. Levin, Pres.
By: /s/
------------------------------
GUARANTY
If Maker shall default in any payment due under the Note, then the undersigned
will, on demand, pay all sums due thereunder arising of a consequence of
Maker's default. Holder may, at its option, join the below Guarantor in any
action or proceeding commenced by Holder against Maker based upon a default
under the terms of the Note and any recovery thereunder may be obtained
against the below Guarantor without Holder first asserting, prosecuting or
exhausting any remedy or claim against the Holder, its successors or assigns.
Cadapult Graphic Systems, Inc.
By: /s/
------------------------
Michael W. Levin, Pres.
Attest:
By: /s/
------------------------------
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Exhibit M
List of Non-Disclosed employees
Paul Treaster
3528 Parisain Way NE
Alburquerque, NM 87111
Sean Lang
6500 Montgomery NE
Apt 409
Alburquerque, NM 87109
Barry Gayles
6601 Tennyson NE
#2201
Alburquerque, NM 87111
Jacob Romero
10457 Edith NE
Alburquerque, NM 87119
