Looking for an agreement? Search from over 1 million agreements now.

EXCHANGE Agreement & PLAN OF REORGANIZATION

This is an actual contract by Fair Isaac.

Save time and money with our Premium Packages.
Buy all (8) recommended agreements for
$140.00 (50% savings)
Agreement Preview
Sectors: Services
Governing Law: Minnesota, View Minnesota State Laws
Effective Date: July 19, 1996
Related Agreement Types:
Search This Document
EXCHANGE AGREEMENT AND PLAN OF REORGANIZATION



DATE: July 19, 1996



PARTIES:



DynaMark, Inc.

a Minnesota corporation

4295 Lexington Avenue North

St. Paul, Minnesota 55126-6164 ("DynaMark")



Printronic Corporation of America, Inc.

a New York corporation

17 Battery Place

New York, New York 10004-1298 ("Printronic")



Leo R. Yochim

737 Park Avenue, Apt. 17-C

New York, New York 10021

(individually a

"Shareholder and

collectively the

"Shareholders")

Susan Keenan

737 Park Avenue, Apt. 17-C

New York, New York 10021





RECITALS:



A. Printronic is engaged in the direct mail computer processing business and provides various services for clients in the direct marketing field ("Printronic's Business"). Printronic is a licensee under a non-exclusive National Ch ange of Address License with the United States Postal Service which is an integral part of its service line.



B. The Shareholders own all of the issued and outstanding stock of Printronic.



C DynaMark is a wholly-owned subsidiary of Fair, Isaac and Company, Incorporated, a Delaware corporation ("Fair, Isaac").



D. Printronic desires to transfer substantially all of its assets to DynaMark in exchange for shares of capital stock of Fair, Isaac, the assumption by DynaMar k of certain of Printronic's liabilities, and certain cash payments upon the terms and conditions set forth herein.













AGREEMENTS:



NOW, THEREFORE, in consideration for the mutual covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:



ARTICLE 1.

EXCHANGE OF ASSETS



1.1) Exchange. On the Closing Date (as defined in Section 6.1 hereof), upon the terms and conditions of this Agreement, Printronic shall transfer to DynaMark all of the Assets (as defined in Section 1.2) and shall receive in exchange therefor the Exchange Co n sideration described in Section 1.4 hereof (the "Exchange"). Each of the parties intends that the Exchange constitute and qualify as a tax-free reorganization pursuant to the provisions of Section 368(a)(1)(C) of the Internal Revenue Code of 198 6, as amended (the "Code"). No consideration of any kind, other than the Exchange Consideration described in Section 1.4 hereof, shall be paid or transferred by DynaMark to Printronic, or to the Shareholders, in connection with the Exchange.



1.2) Assets to Be Transferred. The assets to be transferred to DynaMark by Printronic shall consist of all of the business and assets, tangible and intangible, used in Printronic's Business (the "Assets"). The Assets comprise substantia lly all of the assets and properties of Printronic and include, but not by limitation, the specific assets described in subsections (a) through (g) hereof as follows:



(a) All furniture, equipment, vehicles, machinery, tooling,

trade fixtures and leasehold improvements used in Printronic's

Business, including those items described in Exhibit 1.2(a) hereto

("Equipment");



(b) All intangible personal property, business records,

customer lists and goodwill (together with all documents, records,

files, computer tapes or discs, or other media on or in which the same

may be evidenced or documented) ("Intangible Property"), including the

following:



(i) The corporate name of Printronic and all assumed

names under which it conducts Printronic's Business, as

identified on Exhibit 1.2(b)(i) hereto;



(ii) All trade names, trademarks or service mark

registrations and applications, common law trademarks,

copyrights and copyright registrations and applications

including those items identified on Exhibit 1.2(b)(ii) hereto,

and all goodwill associated therewith ("Trademarks"); and



(iii) All technology, know-how, trade secrets,

processes, formulae, drawings, designs and computer programs

related to or used or useful in Printronic's Business, and all

documentary evidence thereof ("Technology");



(c) All accounts receivable, including trade, employee and

other receivables, as of the Closing Date ("Accounts Receivable"), but

excluding the Excluded Receivables described in Section 1.3(a) below;



(d) All cash and cash equivalents as of the Closing

Date ("Cash");



(e) All assignable licenses, permits and approvals,

governmental or otherwise necessary to conduct Printronic's Business,

including the licenses and permits set forth in Exhibit 1.2(e) hereto

("Licenses and Permits");



(f) All other contract rights related to or useful in

Printronic's Business, including the contract rights set forth in

Exhibit 1.2(f), hereto ("Contracts") but excluding the Excluded

Contracts described in Section 1.3(f) below; and



(g) The work in process, supplies inventory, prepaid expenses,

deposits and other assets of Printronic as of the Closing Date,

including those described on Exhibit 1.2(g).



1.3) Excluded Assets. Notwithstanding anything herein to the contrary, DynaMark does not receive, and Printronic does not transfer, any of the following assets ("Excluded Assets"):



(a) Certain accounts receivable identified by the parties on

Exhibit 1.3(a) hereto (the "Excluded Receivables");



(b) Printronic's corporate minute book and corporate records

(provided that Printronic will provide copies thereof to DynaMark upon

request by DynaMark for reasonable business purposes);



(c) Miscellaneous personal property not material to

Printronic's Business and listed on Exhibit 1.3(c) hereto;



(d) Life insurance policies on the lives of the

Shareholders;



(e) Tax refunds; and



(f) Certain contract rights identified by the parties on

Exhibit 1.3(f) hereof (the "Excluded Contracts").



1.4) Exchange Consideration. Subject to the other provisions of this Article 1, the "Exchange Consideration" shall mean: (i) the Pe rmitted Liabilities assumed by DynaMark as described in Section 1.6; (ii) the aggregate number of shares of Pair, Isaac Common Stock (the Fair, Isaac Shares") to be paid to Printronic pursuant to the Exchange, as described in Section 1.5, and (iii ) the Cash Payment as described in Section 1.7. The certificates evidencing the Fair, Isaac Shares shall contain a legend restricting transfer under the Securities Act of 1933, as amended, and identifying other restrictions or limitations desc ribed in this Agreement, such legends to be substantially as follows:



"The securities represented by this certificate have not been

registered or qualified under the Securities Act of 1933 or

the securities laws of any state, and may be offered and sold

only if registered and qualified pursuant to the relevant

provisions of federal and state securities laws or if the

company is provided an opinion of counsel satisfactory to the

company that registration and qualification under federal and

state securities laws is not required."



The Fair, Isaac Shares when issued shall be fully paid and nonassessable. The Fair, Isaac Shares shall be subject to the terms of an agreement granting limited registration rights in the form attached hereto as Exhibit 1.4.



1.5) Determination of Fair. Isaac Shares: Mechanics of Exchange. As partial consideration for the transfer to DynaMark of the Assets, Printronic shall receive the number of shares of Fair, Isaac Common Stock equal to the Base Consideration (which Base Consideration shall be reduced by the amount of the Cash Payment describ e d in Section 1.7) divided by the Average Market Price. The "Initial Base Consideration" shall be equal to Two Million Two Hundred Thousand and 00/100 Dollars ($2,200,000.00). The Initial Base Consideration shall be adjusted as proved in Section 1 .8 to determine "Base Consideration." The "Average Market Price" shall be equal to the average of the daily closing sale prices of Fair, Isaac Common Stock as reported on the New York Stock Exchange ("NYSE") Composite Tape as reported in the Wa l l Street Journal for the twenty (20) consecutive NYSE trading days ending on and including the trading day immediately preceding the Closing Date. The parties acknowledge and agree that they will be unable to accurately determine the total nu m ber of Pair, Isaac Shares on the Closing Date due to the inability to determine the Base Consideration and the Cash Payment. The parties have estimated the number of Fair, Isaac Shares to be forty-two thousand three hundred (42,300) shar e s. On the Closing Date, DynaMark shall cause Fair, Isaac to issue to Printronic certificates representing the estimated number of Fair, Isaac Shares. A certificate in the amount of twenty-eight thousand nine hundred sixty-seven (28,9 6 7) shares of Fair, Isaac Common Stock shall be delivered to Printronic at the Closing. A certificate in the amount of thirteen thousand three hundred thirty-three (13,333) shares of Fair, Isaac Common Stock shall be delivered to the Escrow Agent a t the Closing pursuant to the terms of an Escrow Agreement in the form attached hereto as Exhibit 1.5 (the "Escrow Agreement").



1.6) Liabilities Assumed: Permitted Liabilities. As partial consideration for the transfer to DynaMark of the Assets, DynaMark shall assume, and agrees with Printronic to pay according to their terms each of the following liabilities of Printronic:



(a) Accounts payable which have been incurred in the ordinary

course of business by Printronic in connection with the operation of

Printronic's Business poor to the Closing Date (the "Accounts

Payable"). As soon as possible after the Closing (and in no event later

than ten (10) days after the Closing Date), Printronic shall provide

DynaMark with a detailed schedule of Accounts Payable as of the close

of business on the day immediately preceding the Closing Date;



(b) Loans payable (including accrued interest) and accrued

expenses which are described on Exhibit 1.6(b); and



(c) The liability for accrued sick leave and vacation benefits

described in Section 6.5; and



(d) All liabilities arising from and after the Closing Date

under all assumed Contracts, whether or not such liabilities under the

Contracts are reflected in Printronic's Final Balance Sheet as defined

in Section 1.8(a)(i).



(collectively, the "Permitted Liabilities"). Except as otherwise specifically provided for herein, DynaMark shall not assume any liabilities, obligations or undertaking of Printronic or the Shareholders of any kind or nature whatsoever, whether fixed or contingent, known or unknown, determined or determinable, due or not yet due and Printronic and the Shareholders shall indemnify DynaMark from any such liabilities in accordance with the provisions of Section 8.2. Except as otherwise specific a lly provided for herein, DynaMark specifically disclaims assumption of (a) any liabilities or obligations with respect to negligence, strict liability, product liability, or breach of warranty claims asserted with regard to products or service s sold prior to the Closing Date; or (b) any liabilities and obligations growing out of or relating to relationships and dealings with manufacturers representatives, distributors, licensees, competitors, customers, suppliers, employees, or any other action or inaction of Printronic or its predecessors in interest. No person not a party hereto, other than beneficiaries of obligations specifically assumed by DynaMark, shall have any right, claim or cause of action as a third part y beneficiary of any obligations created hereby.



1.7) Cash Portion of Exchange Consideration. As partial consideration for the transfer to DynaMark of the Assets, DynaMark shall pay to Printronic in cash an amount determined as follows:



(a) The book value of the Permitted Liabilities as reflected

on the Final Balance Sheet shall be added to Base Consideration to

determine "Total Consideration".



(b) Total Consideration shall be multiplied by Eighteen

One-Hundredths (18/100's) to determine the "Maximum Cash Payment".



(c) The amount of any liability assumed by DynaMark and the

amount of any liability to which any property acquired by DynaMark is

subject shall be determined in accordance with the provisions of Code

Section 368(a)(2)(B) and the regulations promulgated thereunder (the

"Allowed Liabilities").



(d) The amount of the Allowed Liabilities shall be subtracted

from the Maximum Cash Payment to determine the "Cash Payment";

provided, however, that if such difference constitutes a negative

number, the amount of the Cash Payment shall be Zero Dollars ($0).



The parties acknowledge and agree that the Cash Payment will not be able to be finally determined by the Closing Date. The parties have estimated the Cash Payment t o be Three Hundred Twenty Thousand and no/100 Dollars ($320,000.00). On the Closing Date, DynaMark shall deliver a certified or cashier's check, or equivalent instrument or funds in the amount of Two Hundred Twenty Thousand and no/100 Dollars ($220, 0 00.00) to Printronic. On the Closing Date, DynaMark shall deliver a certified or cashier's check, or equivalent instrument or funds in the amount of One Hundred Thousand and no/100 Dollars ($100,000.00) to the Escrow Agent pursuant to the terms of the Escrow Agreement. The final determination of the Cash Payment shall be made concurrently with the final determination of Base Consideration pursuant to Section 1.8.



1.8) Post-Closing Adjustments. After the Closing, Initial Base Consideration and the estimated Cash Payment shall be adjusted as provided in this Section 1.8.



(a)(i) Not later than sixty (60) days after the

Closing Date, Printronic shall deliver to DynaMark a balance

sheet of Printronic as of the close of business on the day

immediately preceding the Closing Date (the Final Balance

Sheet"). Except as otherwise provided in Sections 6.5 and 6.7,

the Final Balance Sheet shall be prepared by Printronic in

accordance with generally accepted accounting principles

consistently applied. In addition, the parties acknowledge

that the liability for deferred rent will be eliminated as a

liability on the Final Balance Sheet and prepaid taxes will be

eliminated on the Final Balance Sheet. The Final Balance Sheet

shall be reviewed by Gazer, Kohn, Maher & Company, certified

public accountants, and a statement by such accountants to

that effect shall accompany the Final Balance Sheet. The cost

of such review shall be borne by Printronic. The Final Balance

Sheet shall be accompanied by a report (the "Report"),

prepared by Printronic, containing a calculation of Base

Consideration and the Cash Payment. In determining Base

Consideration and the Cash Payment, Printronic shall first

determine the "Net Book Value of the Assets" which shall be

equal to the book value of the Assets as determined from the

Final Balance Sheet reduced by the book value of the

liabilities assumed by DynaMark pursuant to the provisions of

Sections 1.6(a), 1.6(b), 1.6(c) and 1.6(d). The "Adjustment

Amount" shall be equal to the difference between the Net Book

Value of the Assets and an amount equal to Six Hundred

Ninety-Two Thousand Forty-Eight and no/100 Dollars

($692,048.00) (the "Base Book Value") and shall be treated as

a positive number for purposes of this Section 1.8. DynaMark

and DynaMark's independent public accountants shall have the

opportunity to examine the work papers, schedules and other

documents prepared in connection with the preparation of the

Final Balance Sheet and the Report.



(ii) DynaMark shall have thirty (30) days after

delivery of the Final Balance Sheet and the Report within

which to present in writing to Printronic any objections

DynaMark may have to any of the matters set forth therein,

which objections shall be set forth in reasonable detail. If

no objections are presented within such thirty-day period, or

if DynaMark shall deliver to Printronic a notice stating that

DynaMark accepts and approves the Final Balance Sheet and the

Report and shall present no objection to any matter set forth

therein, the Final Balance Sheet and the Report shall be

deemed accepted and approved by DynaMark.



(iii) If DynaMark shall present any objections within

the thirty-day period, DynaMark and Printronic shall attempt

to resolve the matter or matters in dispute and, if resolved

within twenty (20) days (or such longer period as DynaMark and

Printronic may agree upon) after delivery of any such written

objections to Printronic, the parties shall adjust the number

of Fair, Isaac Shares payable to Printronic and the Cash

Payment payable to Printronic as provided in Section 1.8(b)

based upon the Final Balance Sheet and the Report, with such

changes therein, if any, as are required to reflect the

resolution of any such disputed matter or matters.



(iv) If such dispute cannot be resolved by DynaMark

and Printronic, then the specific matters in dispute shall be

submitted to the New York office of McGladrey & Pullen, LLP

or, if such firm declines to act in such capacity, such other

firm of independent public accountants mutually acceptable to

DynaMark and Printronic, which firm shall make a final and

binding written determination as to such matter or matters

within sixty (60) days after submission. Such accounting firm

shall send its written determination to DynaMark and

Printronic and the parties shall adjust the number of Fair,

Isaac Shares payable to Printronic and the Cash Payment

payable to Printronic as provided in Section 1.8(b) in

accordance with such written determination. The fees and

expenses of the accounting firm referred to in this Section

1.8(a)(iv) shall be paid one-half by DynaMark and one-half by



(v) DynaMark and Printronic agree to cooperate with

each other's accountants and authorized representatives in

order that any matters in dispute under this Section 1.8 be

resolved as soon as possible.



(b) In the event the Adjustment Amount indicates that the Net

Book Value of the Assets exceeds the Base Book Value, and in the event

the Adjustment Amount exceeds Fifty Thousand and no/100 Dollars

($50,000.00), the Initial Base Consideration shall be increased by the

amount by which the Adjustment Amount exceeds Fifty Thousand and no/100

Dollars ($50,000.00). In the event the Adjustment Amount indicates that

the Base Book Value exceeds the Net Book Value of the Assets, and in

the event the Adjustment Amount exceeds Fifty Thousand and no/100

Dollars ($50,000.00), the Initial Base Consideration shall be decreased

by the amount by which the Adjustment Amount exceeds Fifty Thousand and

no/100 ($50,000.00). Following final determination of the Base

Consideration and the Cash Payment, the parties shall determine the

number of Fair, Isaac Shares transferable to Printronic in accordance

with the provisions of Section 1.5. The parties shall initially take

such actions to cause the number of shares of Fair, Isaac Stock held by

the Escrow Agent to be adjusted so that the Escrow Agent will hold a

whole number of shares of Fair, Isaac Common Stock as will equal Six

Hundred Thousand and no/100 Dollars ($600,000.00) or as close as

possible. If, thereafter, as a result of the adjustments described in

this Section 1.8, the number of Fair, Isaac Shares to which Printronic

is entitled is greater than the number delivered at Closing, DynaMark

shall cause Fair, Isaac to issue such additional Shares within ten (10)

business days after the determination of the number of Fair, Isaac

Shares. If instead the number of Fair, Isaac Shares to which Printronic

is entitled is less than the number of Fair, Isaac Shares delivered at

Closing, Printronic shall return the necessary number of Shares to

DynaMark for cancellation by Fair, Isaac within ten (10) business days

after the determination of the number of Fair, Isaac Shares. DynaMark

and Printronic shall instruct the Escrow Agent to disburse the Escrow

Funds (as defined in the Escrow Agreement) to the parties consistent

with the determination of the actual amount of the Cash Payment. The

Escrow Agent shall, in accordance with the terms of the Escrow

Agreement, disburse the Escrow Funds to the parties in accordance with

such instructions. If, as a result of the adjustments described in this

Section 1.8, the Cash Payment to which Printronic is entitled is

greater than the estimated Cash Payment, DynaMark shall deliver to

Printronic by certified or bank cashier's check or by wire transfer to

an account designated by Printronic, within ten (10) business days

after final determination of the Cash Payment, the difference between

the estimated Cash Payment and the actual amount of the Cash Payment.

If the Cash Payment to which Printronic is entitled is less than the

estimated Cash Payment and the Escrow Funds are not adequate to satisfy

the obligation to DynaMark, Printronic shall deliver to DynaMark by

certified or bank cashier's check or by wire transfer to an account

designated by DynaMark within ten (10) business days after final

determination of the Cash Payment, the difference between the estimated

Cash Payment (reduced by the amount of other Escrow Funds paid to

DynaMark) and the actual amount of the Cash Payment.



1.9) Distribution to Shareholders. Following the Closing and the final determination of the number of Fair, Isaac Shares and the Cash Payment payable to Printronic hereto in the Exchange, it is understood and agreed that Printronic s h all distribute, in complete liquidation of Printronic, to the Shareholders, the Fair, Isaac Shares and the Cash Payment in exchange for the surrender and cancellation of all of the Shareholders' stock; and that, in connection therewith, an d in accordance with the provisions of Code Section 368(a)(1)(G), Printronic shall distribute all of its remaining assets and provide for the payment of any remaining liab
-- End of Preview --
Home| About Us| FAQ| Subscription | Contact Us |

Privacy Policy   Terms of Service  34.235.143.190