MERGER AGREEMENT AND PLAN OF REORGANIZATION
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THIS MERGER AGREEMENT AND PLAN OF REORGANIZATION ("Agreement"), dated May
22, 2000, by and among Asia Prepress Technology, Inc., a Maryland corporation
("Prepress"), Xxxxxx X. Xxx and Xxxxxxx X. Xxx (individually a "Shareholder" and
collectively the "Shareholders"), ZiaSun Technologies, Inc., a Nevada
corporation ("ZiaSun"), and Momentum Merger Corp., a Maryland corporation
("MergerSub").
PLAN OF REORGANIZATION
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The reorganization (the "Reorganization") will comprise, in general, the
merger of MergerSub with and into Prepress and the issuance to the Shareholders
by ZiaSun of one hundred thousand (100,000) restricted shares of the authorized
but unissued voting common stock (the "Common Stock") of ZiaSun (the "Shares"),
and $100,000 cash (collectively the "Acquisition Consideration") in exchange for
the cancellation of the shares of Prepress, all upon and subject to the terms
and conditions of the agreement hereinafter set forth. The parties intend that
the Reorganization qualifies as a tax-free reorganization within the meaning of
Section 368 of the Internal Revenue Code of 1986, as amended (the "Code"). The
parties further intend for the Reorganization to qualify for accounting
treatment as a purchase.
AGREEMENT
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In order to consummate the Reorganization, and in consideration of the
representations and undertakings herein set forth, the parties agree as follows:
1. The Merger. At the Effective Time (as defined in Section 1.1) and
subject to and upon the terms and conditions of this Agreement and the
applicable provisions of the Maryland Code Annotated (the "MDC"), MergerSub
shall be merged with and into Prepress, the separate existence of MergerSub
shall cease and Prepress shall continue as the surviving corporation and as a
wholly-owned subsidiary of ZiaSun (the "Merger"). Prepress as the surviving
corporation after the Merger is sometimes referred to as the "Surviving
Corporation." The Merger shall be accomplished as follows:
1.1 Effective Time. The closing of the Merger (the "Closing") will
take place as promptly as practicable, but in no event later than fourteen
(14) days from the date hereof, at the offices of Wenthur & Chachas, 4180
La Jolla Xxxxxxx Xxxxx, Xxxxx 000, Xx Xxxxx, Xxxxxxxxxx 00000, or via
federal express. At the Closing, the parties shall cause the Merger to be
consummated by filing a Certificate of Merger with the Maryland Secretary
of State (the "Certificate of Merger") in accordance with the relevant
provisions of the MDC. The date and time the Merger becomes effective in
accordance with the provisions of the MDC is the "Effective Time."
1.2 Effect of the Merger. At the Effective Time, the effect of the
Merger shall be as provided in the applicable provisions of the MDC.
Without limiting the generality of the foregoing, and subject thereto, at
the Effective Time, all the property, rights, privileges, powers and
franchises of Prepress and MergerSub shall vest in the Surviving
Corporation, and all debts, liabilities and duties of Prepress and
MergerSub shall become the debts, liabilities and duties of the Surviving
Corporation.
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1.3 Articles of Incorporation: Bylaws. Unless otherwise determined by
ZiaSun prior to the Effective Time, at the Effective Time, the Articles of
Incorporation and Bylaws of Prepress shall be the Articles of Incorporation
and Bylaws of the Surviving Corporation.
1.4 Directors and Officers. The Directors of MergerSub immediately
prior to the Effective Time shall be the initial Directors of the Surviving
Corporation, each to hold office in accordance with the Articles of
Incorporation and Bylaws of the Surviving Corporation. The officers of
MergerSub immediately prior to the Effective Time shall be the initial
officers of the Surviving Corporation, each to hold office in accordance
with the Bylaws of the Surviving Corporation.
1.5 Shares to be Issued. The maximum number of shares of ZiaSun Common
Stock to be issued in exchange for the cancellation of all outstanding
Prepress capital stock shall be one hundred thousand (100,000) restricted
shares. At the Closing Prepress shall have one hundred (100) shares issued
and outstanding and each share of Common Stock of Prepress (the "Prepress
Common Stock") issued and outstanding immediately prior to the Effective
Time will be canceled and extinguished and be converted automatically into
the right to receive 1,000 restricted shares of ZiaSun Common Stock upon
surrender of the certificate representing such shares of Prepress Common
Stock in the manner provided in Section 1.7. From the date hereof until the
Effective Time, Prepress agrees not to issue any additional shares of its
capital Stock (including any options, warrants, conversion privileges or
other rights, commitments or agreements of any nature to purchase any such
shares of Prepress capital Stock). All of the shares of MergerSub owned by
ZiaSun immediately prior to the Effective Time shall be converted into and
exchanged for one validly issued, fully paid and non-assessable share of
Common Stock of the Surviving Corporation. Each stock certificate of
MergerSub evidencing ownership of any shares shall continue to evidence
ownership of shares of capital stock of the Surviving Corporation. No
fraction of a share of ZiaSun Common Stock will be issued, but in lieu
thereof, each holder of shares of Prepress Common Stock who would otherwise
be entitled to a fraction of a share of ZiaSun Common Stock (after
aggregating all fractional shares of ZiaSun Common Stock to be received by
such holder) shall be entitled to receive from ZiaSun in cash, the amount
(rounded to the nearest whole cent) equal to the product of (i) such
fraction, multiplied by (ii) the average closing price of a share of ZiaSun
Common Stock for the five (5) consecutive trading days ending on the
trading day immediately prior to the Closing, as reported on the NASD Over
the Counter Bulletin Board.
1.6 Dissenting Shares. Prior to the execution and delivery of this
Agreement by the parties, all of the holders of Prepress Common Stock shall
have irrevocably consented to and approved the Merger and no holders of any
shares of Prepress Common Stock shall be entitled to appraisal or
dissenters' rights.
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1.7 Surrender of Certificates. Prior to the Effective Time, ZiaSun
shall designate its legal counsel, Wenthur & Chachas, to act as the
exchange agent (the "Exchange Agent") in the Merger. Promptly after the
Effective Time, ZiaSun shall make available to the Exchange Agent for
exchange in accordance with this Section 1.7, the aggregate number of
shares of ZiaSun Common Stock issuable pursuant to Section 1.5 in exchange
for all issued and outstanding shares of Prepress Common Stock. Promptly
after the Effective Time, the Surviving Corporation shall cause to be
mailed to each holder of record of a certificate or certificates (the
"Certificates") which immediately prior to the Effective Time represented
outstanding shares of Prepress Common Stock whose shares were converted to
the right to receive shares of ZiaSun Common Stock pursuant to Section 1.5,
(i) a letter of transmittal (which shall specify that delivery shall be
effected, and the risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Exchange Agent and shall be
in such form and shall have such other provisions as ZiaSun may reasonably
specify) and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for certificates representing shares of ZiaSun
Common Stock. Upon surrender of a Certificate for cancellation to the
Exchange Agent together with such letter of transmittal duly completed and
validly executed in accordance with the instructions thereto, the holder of
the Certificate shall be entitled to receive in exchange therefore a
certificate representing the number of whole shares of ZiaSun Common Stock
plus cash in lieu of fractional shares in accordance with Section 1.5, to
which such holder is entitled pursuant to Section 1.5, and the Certificate
so surrendered shall forthwith be canceled. Until so surrendered, each
outstanding Certificate that, prior to the Effective Time, represented
shares of Prepress Common Stock will be deemed from and after the Effective
Time, for all corporate purposes, to evidence the ownership of the number
of full shares of ZiaSun Common Stock into which such shares of Prepress
Common Stock shall and have been so converted and the right to receive an
amount in cash in lieu of the issuance of any fractional shares in
accordance with Section 1.5.
1.8 Tax and Accounting Consequences. It is intended by the parties
hereto that the Merger shall constitute a reorganization within the meaning
of Section 368 of the Code and qualify for accounting treatment as a
"purchase."
1.9 Further Action. If, at any time after the Effective Date, any such
further action is necessary or desirable to carry out the purposes of this
Agreement and to vest the Surviving Corporation with full right, title and
possession to all assets, properties, rights, privileges, powers and
franchises of Prepress and MergerSub, the officers and Directors of
Prepress and MergerSub are fully authorized in the name of their respective
corporations or otherwise to take, and will take, all such lawful and
necessary action.
2. Representations and Warranties of Prepress and Shareholders. Prepress
and each of the Shareholders, jointly and severally, represent and warrant to
ZiaSun that, to the best of their knowledge, all of the statements made below in
this Section 2 are true and correct in all material respects. These
representations and warranties are subject to the exceptions set forth on
attached Exhibit 2 (the "Schedule of Exceptions"), specifically identifying the
relevant Section hereof, which exceptions shall be deemed to be representations
and warranties as if made hereunder. The phrase "to the best knowledge of
Prepress" shall, when included in a representation or warranty made by a
Shareholder, means to the best knowledge of such Shareholder.
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2.1 Organization and Standing. Prepress is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Maryland and has full power and authority to carry on its business
as now conducted and as proposed to be conducted. Prepress is not required
to be qualified as a foreign corporation in any jurisdiction; provided,
however, that Prepress need not be qualified in any jurisdiction in which a
failure to qualify would not have a material and adverse effect on its
operations or financial condition.
2.2 Capitalization. The authorized capital stock of Prepress consists
of one thousand (1,000) share of Common Stock, of which one hundred (100)
shares are presently, and at the Effective Time will be issued and
outstanding. All of Prepress's issued and outstanding shares are owned
beneficially and of record by the Shareholders in the amounts set forth on
attached Exhibit 2.2. All outstanding shares of Prepress Common Stock are
duly authorized, validly issued, fully paid and non-assessable and are not
subject to preemptive rights created by statute, the Articles of
Incorporation or Bylaws of Prepress or any agreement to which Prepress or
either Shareholder is a party or by which it is bound. There are no
options, warrants, calls, rights, conversion privileges, commitments or
agreements of any character, written or oral, to which Prepress is party,
or by which it is bound, obligating Prepress to issue, deliver, sell,
repurchase or redeem any shares of the capital stock of Prepress.
2.3 Subsidiaries. Prepress has no subsidiaries or affiliated companies
and does not otherwise own or control, directly or indirectly, any equity
interest in any corporation, association, joint venture, partnership or
other business entity.
2.4 Corporate Authority and Authorization. Prepress has all requisite
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. All corporate action on
the part of Prepress, its officers, directors and Shareholders necessary
for the authorization, execution, delivery and performance of this
Agreement by Prepress and the performance of all of Prepress's obligations
hereunder has been taken. As set forth in Section 1.6 above, all of the
holders of Prepress Capital Stock have consented to and approved the Merger
and no holders of any shares of Prepress Capital Stock are entitled to
appraisal or dissenters' rights. This Agreement constitutes a valid and
binding obligation of Prepress and the Shareholders, enforceable against
Prepress and the Shareholders in accordance with its terms, except as the
indemnification provisions of Section 5.0 hereof may be limited by
principles of public policy and subject to laws of general application
relating to bankruptcy, insolvency and the relief of debtors and rules of
law governing specific performance, injunctive relief or other equitable
remedies.
2.5 Governmental Consent. No consent, approval or authorization of or
designation, declaration or filing with any governmental authority on the
part of Prepress is required in connection with the valid execution and
delivery of this Agreement, or the consummation of any transaction
contemplated hereby.
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2.6 Intellectual Property.
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2.6.1 To the best knowledge of Prepress and Shareholders,
Prepress possesses and has good, valid and marketable title, free and
clear of all security interests, liens, claims, charges, encumbrances
or any other defects in title of any nature whatsoever to, or has the
valid, enforceable right to use (pursuant to written agreements, true
and correct copies of which are listed on Exhibit 2.6.1 and have been
submitted to ZiaSun), all trademarks, trademark rights, trade names,
trade name rights, licenses, franchises, service marks, patents,
patent applications, copyrights, inventions, discoveries,
improvements, processes, trade secrets, confidential or proprietary
information, formulae, proprietary rights or data, shop rights,
algorithms, technical data, ideas or know-how (collectively the
"Intellectual Property") necessary to conduct its business as now
being conducted, without conflict with or infringement upon any valid
rights of others and the lack of which could adversely affect the
operations or condition, financial or otherwise, of Prepress. To the
best knowledge of Prepress and Shareholders, Prepress (i) owns or has
the right to use (and to make, use, sell, license and lease products
incorporating or manufactured using), free and clear of all liens,
claims and restrictions, all Intellectual Property used in the conduct
of its business as now conducted or as proposed to be conducted
without infringing upon or otherwise acting adversely to the right or
claimed right of any person under or with respect to any of the
foregoing, and (ii) is not obligated or under any liability whatsoever
to make any payments by way of royalties, fees or otherwise to any
owner of, licensor of or other claimant to any patent, trademark,
service xxxx, trade name, copyright, license or other right with
respect to the use thereof in connection with the conduct of its
business or otherwise. Prepress owns and has unrestricted rights to
use all Intellectual Property required for or incident to the
development, manufacture, operation and sale of all products and
services sold or proposed to be sold by Prepress, free and clear of
any rights, liens or claims of others, including, without limitation,
former employers or all employees of Prepress, of which it has
knowledge. All of the foregoing rights to Intellectual Property will
be owned and enjoyed by the Surviving Corporation following the Merger
without the consent or approval of any third party and, following such
Merger, the Surviving Corporation will possess and enjoy all of such
rights to Intellectual Property as Prepress did immediately prior to
such Merger.
2.6.2 Set forth in Exhibit 2.6.2 is a complete listing of all
software related in any fashion or manner whatsoever to the business
of Prepress as now conducted (the "Software"). All copies of the
Software were, as of the Closing, in Prepress's possession and
control, except for certain object code copies which then were in the
possession of customers of Prepress. All such customers have entered
into license agreements with Prepress that, to the best knowledge of
Prepress, effectively protect Prepress's rights in and to all such
Software. For purposes of this Section, the term "Software" includes
any set of instructions (including, without limitation, arithmetic,
logical, data transfer, data manipulation and input/output) meant to
run on, or to control the operation of, any computer, whether those
instructions are a complete program, a collection of programs making
up a subsystem or system or are merely subroutines or macro routines
meant to operate in conjunction with other software, and whether such
instructions must be run through another computer program (commonly
referenced as a "compiler") before being usable on a computer, whether
such instructions must be used at execution time in conjunction with
another computer program (commonly referenced as an "interpreter") or
whether such instructions are in a form that can be run on a computer
"as is" without additional programs.
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2.6.3 To the best knowledge of Prepress and Shareholders, the Software
will not, due to a date change: (i) have any operational impediments, (ii)
malfunction, (iii) cease to perform, (iv) generate incorrect or ambiguous
data or results with respect to same-century and multi-century, Leap Year
and other calendar formulas, functions and data or (v) produce incorrect or
ambiguous results with respect to same-century and multi-century, Leap Year
and other calendar formulas, functions, date values and date data
interfaces. The Software is free from all computer "viruses" and other
illicit code. The Software performs in all material respects in accordance
with its functional specifications.
2.7 Manufacturing Rights. Prepress has not granted rights to
manufacture or assemble its products to any other person or entity.
2.8 Officers, Directors and Employees.
2.8.1 With the exception of the duties that Xxxxxx X. Xxx may
have to Maryland Composition Company, a Maryland corporation and its
parent corporation, Consolidated Graphics, Inc., a Texas corporation,
to the best knowledge of Prepress and the Shareholders, no present or
former officer, director or employee of Prepress is a party to, or is
otherwise bound by any agreement or arrangement (including any
agreement of non-competition) that in any way adversely affects his or
her performance of his or her duties as an officer, director or
employee of Prepress or Prepress's ability to conduct its business.
Prepress has established appropriate policies and procedures to ensure
no officer, director or other employee of Prepress misuses
confidential information or trade secrets of others in the course of
their employment or other relationship with Prepress. Prepress is not
a party to any labor agreements, employment contracts, consulting
agreements or any other instruments which limit the rights of Prepress
to terminate the employment or other relationship with a particular
individual at will. To the best of knowledge of Prepress and
Shareholders, Prepress is not aware that any officer, director or key
employee, or that any group of officers, directors or key employees,
would not continue their employment with ZiaSun on the same terms as
previously employed by Prepress.
2.8.2 Except as mandated by the laws of the United States or the
Philippines, Prepress: (i) is not bound by or subject to any
collective bargaining agreement with respect to any of its employees
nor has any labor union requested or, to the best knowledge of
Prepress, sought to represent any of the employees, representatives or
agents of Prepress, (ii) does not have any current labor problems or
disputes, pending or threatened, (iii) does not have in effect any
"employee pension benefit plans" (as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974) or employee benefit
or similar plans qualified under Section 401 of the Internal Revenue
Code of 1986, as amended, except that Xxxx XxXxxxxx, Xxxxxxx Xxx and
Xxxxxx X. Xxx have established simple IRA's which Prepress has
contributed to, and (iv) does not maintain, has not in the past
maintained and is not and has not been a contributor to any
multi-employer plan or single employer plan, as defined in Section
4001 of the Employee Retirement Income Security Act of 1974, as
amended, for the employees of Prepress or any trade or business
(whether or not incorporated) which, together with Prepress, would be
deemed to be a "single employer" within the meaning of such Section
4001. Prepress has complied in all material respects with all laws
relating to the employment of labor, including provisions relating to
wages, hours, equal opportunity, collective bargaining and payment of
Social Security and other taxes.
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2.9 Certain Transactions. Prepress is not indebted, directly or
indirectly, to any of its officers, directors or Shareholders, or to their
respective affiliates, spouses or children, in any amount whatsoever,
except for salaries and fees accrued in the ordinary course of business. To
the best knowledge of Prepress and the Shareholders, none of said officers,
directors or Shareholders, or any of their affiliates or members of their
immediate families, are indebted to Prepress or have any direct or indirect
ownership interest in any firm or corporation with which Prepress is
affiliated or with which Prepress has a business relationship, or any firm
or corporation which competes with Prepress (except with respect to any
interest in less than five percent (5%) of the stock of any corporation
whose stock is publicly traded). With the exception of the relationship
between Maryland Composition Company, Inc. and Prepress, no officer,
director or Shareholder, or any affiliate or member of their immediate
families, is, directly or indirectly, interested in any material contract
with Prepress.
2.10 Compliance with Other Instruments, None Burdensome, Etc. , To the
best knowledge of Prepress and Shareholders, Prepress is not in violation
of any term of its Articles of Incorporation or Bylaws, as amended and in
effect on and as of the Closing. Prepress is not in violation in any
respect of any term or provision of any mortgage, indebtedness, indenture,
contract, agreement, instrument, judgment or decree, order, statute, rule
or regulation applicable to it where such violation would adversely affect
Prepress, its operations or financial condition. The execution, delivery
and performance of and compliance with this Agreement have not resulted and
will not result in any violation of or conflict with, or constitute a
material default under, any mortgage, indebtedness, indenture, contract,
agreement, instrument, judgment or decree, order, statute, rule or
regulation applicable to it, or result in the creation of any mortgage,
pledge, lien, encumbrance or charge upon any of the properties or assets of
Prepress; and there is no such term or provision which adversely affects
Prepress, its operations or financial condition as presently conducted or
as contemplated to be conducted. Prepress and, to the best knowledge of
Prepress, its officers, directors and key employees, are not parties to any
mortgage, indebtedness, indenture, contract, agreement, instrument,
judgment, decree or order restricting its ability to enter or compete in
any line of business or market.
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2.11 Material Contracts and Obligations.
2.11.1 Included in the Exhibit 2.11 is a list of all agreements,
contracts and other obligations to which Prepress is a party or by
which it is bound that are material to the operation of its business
and properties, which: (i) provide for aggregate payments to or by
Prepress in excess of Ten Thousand Dollars ($10,000), (ii) obligate
Prepress to share, license or develop any product or technology, (iii)
appoint distributors, dealers or sublicensees of Prepress's products,
which agreements cannot be terminated on thirty (30) days' notice or
less or (iv) involve transactions or proposed transactions between
Prepress and its officers, directors, affiliates or any affiliate
thereof. Copies of such agreements and contracts and documentation
evidencing such other obligations have been delivered to ZiaSun. All
of such agreements and contracts are valid, binding and in full force
and effect in all material respects, assuming due execution by the
other parties to such agreements and contracts. There is no pending or
threatened dispute or disagreement, and there have been no events
which may give rise to any dispute or disagreement, between Prepress
and any of the clients or customers of Prepress, or any other person
having a business relationship with Prepress, which dispute or
disagreement, if resolved unfavorably to Prepress, would have a
materially adverse effect on the operations or financial condition of
Prepress. No client or customer of Prepress, or any other person
having a business relationship with Prepress, has indicated that it
presently contemplates terminating its business relationship with
Prepress.
2.11.2 To the best knowledge of Prepress and Shareholders, all
open orders, licenses and contracts for Prepress's products and
services can be fulfilled by Prepress within its current capacity, in
accordance with the terms thereof, and the fulfillment thereof will
not result in material losses or material warranty or other
liabilities to the Surviving Corporation. Exhibit 2.11 sets forth a
summary of Prepress's backlog (including deferred revenue recorded on
Prepress financials), which includes the total backlog as of the date
of this Agreement, reflecting any written agreements and a monthly
breakdown of the expected shipment dates for the orders represented by
such backlog. All orders reflected in such backlog are evidenced by
written purchase orders or contracts. All such orders or contracts are
firm, fixed, committed and non-cancelable. To the best of its
knowledge, Prepress will collect the revenue from such orders and
contracts in accordance with the terms of their respective purchase
orders or contracts, including, without limitation, receiving payment
in accordance with the deadline set forth therein.
2.12 Hazardous Waste Disposal. To the best knowledge of Prepress and
Shareholders, Prepress has materially complied with all laws regulating the
discharge and disposal of hazardous waste, the violation of which would
have a material, adverse effect on the operations or financial condition of
Prepress, including, but not limited to:
2.12.1 Comprehensive Environmental Response, Compensation and
Liability Act, 42 USC Sections 9601, et seq.;
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2.12.2 Resource Conservation and Recovery Act, 42 USC Sections
6901, et seq.; and
2.12.3 Toxic Substances Control Act, 15 USC Sections 2601, et
seq.
2.13 Licenses and Permits. Included in the Exhibit 2.13 is a complete
and accurate list of all of the licenses, permits, authorizations and
franchises issued to, possessed by, used by or otherwise in effect with
respect to the business of Asia Prepress LLC. Shareholders shall use their
best efforts to assist ZiaSun and Asia Prepress LLC in obtaining any and
all items not currently represented on said exhibit at the earliest
possible time period following the transition. Taking the above into
account, Asia Prepress LLC has delivered to ZiaSun complete and accurate
copies of all of the licenses, permits, authorizations and franchises
identified in said Exhibit. All of the Asia Prepress LLC licenses, permits,
authorizations and franchises identified are valid and in full force and
effect. Said licenses, permits, authorizations and franchises constitute
all of the licenses, permits, authorizations and franchises required to
permit Asia Prepress LLC to conduct its business in the manner in which it
is now being conducted, and to the best knowledge of Prepress and
Shareholders, Asia Prepress LLC is not in violation or breach of any of the
terms, requirements or conditions of any of material licenses, permits,
authorizations or franchises.
2.14 Litigation, Etc. To the best knowledge of Prepress and
Shareholders, there are no actions, suits, proceedings or investigations
pending against Prepress or, to the best knowledge of Prepress, any of its
officers or directors or its properties, before any court or governmental
agency (nor, to the best knowledge of Prepress, is there any reasonable
basis therefore or threat thereof), which, either in any case or in the
aggregate, might result in any material adverse change in the business or
financial condition of Prepress, or in any material impairment of the right
or ability of Prepress to carry on its business as now conducted or in any
material liability on the part of Prepress, or any change in the current
equity ownership of Prepress, and none which questions the validity of this
Agreement or any action taken or to be taken in connection herewith. The
foregoing includes, without limiting its generality, actions pending or
threatened (or any basis therefore known to Prepress) involving the prior
employment of any of Prepress's employees, their use in connection with
Prepress's business of any information or techniques allegedly proprietary
to any of their former employers or their obligations under any agreements
with prior employers.
2.15 Criminal Investigations and Activities. To the best knowledge of
Prepress and Shareholders, Prepress, its past and present officers and
directors and the Shareholders: (i) have never been convicted of a felony,
(ii) have not been named as a defendant in a pending criminal proceeding
involving a felony, and (iii) are not now or ever have been the subject of
any governmental decree or order prohibiting it or any of them from
engaging in certain business activities. There is no pending criminal
investigation of any nature whatsoever into the activities of Prepress, its
officers, directors and Shareholders. Prepress has fully complied with the
provisions of the United States Export Administration Act and all rules and
regulations promulgated thereunder.
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2.16 Material Liabilities. To the best knowledge of Prepress and
Shareholders, Prepress has no liabilities which are, individually or in the
aggregate, material to the financial condition or operating results of
Prepress which have not been disclosed on Exhibit 2.16.
2.17 Prepress Financial Statements. Exhibit 2.17 sets forth Prepress's
audited balance sheets as of December 31, 1998 and 1999 (the "Balance
Sheets") and the related audited statements of operations, stockholders'
equity and cash flows for the years then ended and the Prepress's unaudited
balance sheets dated as of December 31, 1999 and the unaudited statements
of operations for the period then ended (all of the foregoing collectively
the "Prepress Financials"). The Prepress Financials have been prepared in
accordance with generally accepted accounting principles ("GAAP") applied
on a consistent basis throughout the periods presented except that the
unaudited Prepress Financials do not contain the footnotes required by GAAP
and are subject to normal year-end adjustments which will not be material
individually or in the aggregate. The Prepress Financials fairly present
the financial position of Prepress as of their dates and results of
operations for the periods there ended. Except as set forth in the Prepress
Financials, Prepress does not have any liability, indebtedness, obligation,
expense, claim, deficiency, guaranty or endorsement of any type, whether
accrued, absolute, contingent, matured or otherwise (whether or not
required to be reflected in financial statements in accordance with GAAP),
which individually or in the aggregate has not arisen in the ordinary
course of Prepress's business since the unaudited Prepress Financials, in
all cases consistent with past practices and amounts.
2.18 Tax and Other Returns and Reports.
2.18.1 Definition of Taxes. For the purposes of this Agreement,
"Tax" or, collectively, "Taxes", means any and all federal, state,
local and foreign taxes, assessments and other governmental charges,
duties, impositions and liabilities, including taxes based upon or
measured by gross receipts, income, profits, sales, use and
occupation, and value added, ad valorem, transfer, franchise,
withholding, payroll, recapture, employment, excise and property
taxes, together with all interest, penalties and additions imposed
with respect to such amounts and any obligations under any agreements
or arrangements with any other person with respect to such amounts and
including any liability for taxes of a predecessor entity.
2.18.2 Tax Returns and Audits. Except as set forth in Exhibit
2.18.
(a) Prepress as of the Effective Time will have prepared and
filed all Federal, state, local and foreign returns, estimates,
information statements and reports ("Returns") required to be
filed by such date relating to any and all Taxes concerning or
attributable to Prepress or its operations and such Returns are
or will be true and correct and have or will completed in
accordance with applicable law.
(b) Prepress as of the Effective Time: (a) will have paid or
accrued a reserve to pay all Taxes it is required to pay or
accrue and (b) will have withheld with respect to its employees
all federal and state income taxes, FICA, FUTA and other Taxes
required to be withheld.
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(c) Prepress has not been delinquent in the payment of any
Tax nor is there any Tax deficiency outstanding, proposed or
assessed against Prepress, nor has Prepress executed any waiver
of any statute of limitations on or extending the period for the
assessment or collection of any Tax.
(d) No audit or other examination of any Return of Prepress
is presently in progress, nor has Prepress been notified of any
request for such an audit or other examination.
(e) Prepress does not have any liabilities for unpaid
Federal, state, local or foreign Taxes which have not been
accrued or reserved against on the Prepress Financials, whether
asserted or unasserted, contingent or otherwise, and Prepress has
no knowledge of or, any basis for the assertion of any such
liability attributable to Prepress, its assets or operations.
(f) Prepress has provided to ZiaSun copies of all Federal
and state income and all state sales and use Tax Returns filed to
date for all periods since the date of Prepress's incorporation.
(g) With the exception of the line of credit and any other
Liens, as reflected on the Prepress Financials, attached hereto
as Exhibit 2.17, there are (and as of immediately following the
Closing there will be) no liens, pledges, charges, claims,
security interests or other encumbrances of any sort ("Liens") on
the assets of Prepress relating to or attributable to Taxes
except liens for current taxes not yet delinquent.
(h) Prepress has no knowledge of any basis for the assertion
of any claims relating or attributable to Taxes which, if
adversely determined, would result in any Liens on the assets of
Prepress.
(i) None of Prepress's assets are treated as "tax-exempt use
property" within the meaning of Section 168(h) of the Code.
(j) As of the Effective Time, there will not be any
contract, agreement, plan or arrangement, including but not
limited to the provisions of this Agreement, covering any
employee or former employee of Prepress that, individually or
collectively, could give rise to the payment of any amount that
would not be deductible pursuant to Section 2806 or 162 of the
Code.
(k) Prepress has not filed any consent agreement under
Section 341(f) of the Code or agreed to have Section 341(f)(2) of
the Code apply to any disposition of a subsection (f) asset (as
defined in Section 341(f)(4) of the Code) owned by Prepress.
11
(l) Prepress is not a party to a tax sharing or allocation
agreement nor does Prepress owe any amount under any such
agreement.
(m) Prepress is not, and has not been at any time, a "United
States real property holding corporation" within the meaning of
Section 897(c)(2) of the Code.
(n) Prepress has not agreed to and is not required to make
any adjustment pursuant to Section 481 (a) of the Code (or any
predecessor provision) by reason of any change in any accounting
method, and there is no application by Prepress pending with any
taxing authority requesting permission for any changes in any
accounting method of Prepress. No taxing agency (domestic or
foreign) has proposed any adjustment or change in Prepress's
method of accounting for tax purposes.
2.19 Title. Prepress has good and marketable title to all of its
assets and properties (both tangible and intangible). Such assets and
properties (both tangible and intangible) are not subject to any security
interests, liens, mortgages, pledges, encumbrances or charges of any kind.
2.20 Change of Control. There is no plan or agreement pursuant to
which any amounts may become payable (whether currently or in the future)
to current or former employees, officers and directors of Prepress as a
result of or in connection with the Merger.
2.21 Disclosure. To the best knowledge of Prepress and Shareholders,
Prepress has fully provided ZiaSun with all of the information which ZiaSun
has requested for deciding whether to enter into the Reorganization
hereunder. To the best knowledge of Prepress and Shareholders, this
Agreement, the Prepress Financials, and any written statement or
certificate furnished to ZiaSun pursuant to this Agreement in connection
with the transactions contemplated by this Agreement, when taken together,
do not contain any untrue statement of a material fact nor omit to state a
material fact necessary to make the statements made not misleading.
2.22 Tax Treatment of Transaction. To the best knowledge of Prepress
and Shareholders, and based upon consultation with its independent
advisors, Prepress has not taken or agreed to take any action, and is not
aware of any condition that (without giving effect to any action taken or
agreed to be taken by Prepress) would effect the ability of the parties
hereto to report the business combination to be effected by the Merger as a
tax-free reorganization within the meaning of Section 368 of the Code.
12
3. Representations and Warranties of ZiaSun. ZiaSun represents and warrants
to the Shareholders that:
3.1 Corporate Status. ZiaSun is a corporation duly organized and
existing under the laws of Nevada, with authorized, issued and outstanding
capital stock as set forth in the 1934 Act documents defined in Section 3.4
below.
3.2 Corporate Authority and Authorization. ZiaSun has the corporate
power and authority to issue and deliver the ZiaSun Common Stock required
to be issued hereunder to Prepress; and such shares when delivered at or
after the Closing will be fully paid and nonassessable. All corporate
action on the part of ZiaSun necessary for the authorization, execution,
delivery and performance of this Agreement by ZiaSun and the performance of
all of ZiaSun's obligations hereunder has been taken. This Agreement
constitutes a valid and binding obligation of ZiaSun, and enforceable
against ZiaSun in accordance with its terms, except the indemnification
provisions of Section 5. hereof may be limited by principals of public
policy and subject to laws of general application relating to bankruptcy,
insolvency and the relief of debtors and rules of law governing specific
performance, injunctive relief or other equitable remedies.
3.3 Governmental Consent. To the best knowledge of ZiaSun, no consent,
approval or authorization or designation, declaration or filing with any
governmental authority on the part of ZiaSun or third parties, is required
in connection with the valid execution and delivery of this Agreement, or
of the consummation of any other transaction contemplated hereby except as
specifically referenced in the Agreement.
3.4 1934 Act Documents. ZiaSun has delivered to Prepress and the
Shareholders a copy of its most current Registration Statement on Form
10-SB, as amended and its Form 10-KSB for the year ended December 31, 2000
(the "1934 Act Documents") filed with the U.S. Securities and Exchange
Commission ("SEC") by ZiaSun pursuant to the Securities Exchange Act of
1934 (the "1934 Act"). To the best knowledge of ZiaSun, None of the 1934
Documents, when taken together, contain any untrue statement of the
material fact or omit to state a material fact necessary to make the
statements made not misleading.
4. Additional Agreements.
4.1 Tax Accounting. ZiaSun, Prepress and the Shareholders have not
taken and will not take any action which reasonably would be expected to
jeopardize the tax-free nature of the reorganization hereunder.
4.2 Substitution of Guaranty. The Line of Credit set forth in Exhibit
2.17 hereto, is secured by the personal guaranty of Xxxxxxx Xxx. ZiaSun
agrees to assume the guaranty of said Line of Credit and obtain the release
of the guaranty of Xxxxxxx Xxx, within 90 days of the Closing and further,
agrees to hold harmless Xxxxxxx Xxx with regard to said guaranty.
13
5. Survival of Representations. Warranties; Indemnity. The respective
representations and warranties given by ZiaSun, Prepress and the Shareholders
contained herein shall remain effective against their respective successors,
heirs and assigns and shall survive the Closing. ZiaSun shall indemnify and hold
Prepress and the Shareholders harmless from any damage, claim, liability or
expense, including reasonable attorneys' fees, arising out of the breach of any
representation or warranty or the nonfulfillment of any agreement contained
herein, or in any certificate to be delivered at the Closing, by ZiaSun.
Prepress and each of the Shareholders, jointly and severally, shall, in
proportion to the Shareholders' respective ownership interest in Prepress,
indemnify and hold ZiaSun harmless from any damage, claim, liability or expense,
including reasonable attorneys' fees, arising out of the breach of any
representation or warranty or the nonfulfillment of any agreement contained
herein, or in any certificate to be delivered at the Closing, by Prepress or the
Shareholders, provided however, that notice of any such breach shall have been
communicated with specificity within two (2) years of the date hereof.
6. Securities Laws Matters. Because of the exemptions from the registration
requirements of the Securities Act of 1933 (the "Act") and from the
qualification requirements of the Nevada Revised Statutes ("NRS") relied upon by
ZiaSun in issuing the shares of ZiaSun Common Stock under Section 1 above (the
"Securities"), the Shareholders represent and warrant that they:
6.1 Are aware that such Securities are highly speculative and that
there can be no assurance as to what return, if any, there may be.
6.2 Are aware of ZiaSun's business affairs and financial condition and
have acquired sufficient information about ZiaSun to reach an informed and
knowledgeable decision to acquire such Securities.
6.3 Are each acquiring such Securities for investment for his or her
own account only and not with a view to, or for sale in connection with,
any "distribution" thereof within the meaning of the Act or the NRS.
6.4 Understand that such Securities have not been registered under the
Act or qualified under the Law by reason of specific exemptions therefrom,
which exemptions depend upon, among other things, the bona fide nature of
the Shareholders' investment intent as expressed herein. In this
connection, the Shareholders' understand that, in the view of the SEC, the
statutory basis for one exemption from the Act may not be present if their
representations mean that their present intentions are to hold such shares
for a minimum capital gains period under the tax statutes, for a deferred
sale, for a market rise, for a sale if the market does not rise, or for a
year or any other fixed period in the future.
6.5 Understand that such Securities must be held indefinitely unless
subsequently registered under the Act and qualified under the Law or an
exemption from such registration and such qualification is available, and
that, except as set forth in Section 7 below, ZiaSun is under no obligation
to effect such registration or qualification or to assure the availability
of any such exemption.
14
6.6 Are aware of Rule 144 promulgated under the Act which permits
limited public resale of the Securities if it is acquired in a non-public
offering subject to the satisfaction of certain conditions, including,
among other things: the availability of certain public information about
ZiaSun, the resale occurring not less than one (1) year after he or she
purchased and completed payment for the Securities to be sold, the sale
being made on the public market through a broker in an unsolicited
"broker's transaction" or to a "market maker" and the amount of the
Securities sold during any three-month period not exceeding specified
limitations (generally, one percent (1%) of all Common Stock outstanding);
except that such conditions need not be met by a person who is not an
affiliate of ZiaSun at the time of sale and has not been an affiliate for
the preceding three (3) months, if the Securities to be sold have been
beneficially owned by such person for at least two (2) years prior to their
sale. The Common Stock may not be publicly traded or ZiaSun may not be
satisfying the current public information requirements of Rule 144 at the
time a Shareholder wishes to sell the Securities; and thus, they may be
precluded from selling the Securities under Rule 144 even though the
minimum holding period may have been satisfied.
6.7 Further understand that in the event the requirements of Rule 144
are not met, registration under the Act, compliance with Regulation A or
some other registration exemption will be required for any disposition of
the Securities; and that, although Rule 144 is not exclusive, the
Commission has expressed its opinion that persons proposing to sell private
placement Securities other than in a registered offering and other than
pursuant to Rule 144 will have a substantial burden of proof in
establishing that an exemption from registration is available for such
offers or sales and that such persons and the brokers who participate in
such transactions do so at their own risk.
6.8 Understand that the certificates evidencing the Securities will be
imprinted with legends in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
FOR THESE SHARES UNDER SUCH ACT OR AN OPINION OF THE COMPANY'S COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER SAID ACT.
7. Compliance with Securities Act.
7.1 Reports Under the 1934 Act. With a view to making available to the
Shareholders the benefits of certain rules and regulations promulgated by
the SEC that may permit the Shareholders to sell shares of ZiaSun's stock
to the public without registration, ZiaSun agrees to:
15
7.1.1 Make and keep adequate current public information available, as
those terms are understood and defined in Rule 144, at all times subsequent
to the Closing; and
7.1.2 Furnish to any Shareholder upon request, a written statement by
ZiaSun that it has complied with the reporting requirements of Rule 144,
and of the Act and the 1934 Act, a copy of the most recent annual or
quarterly report of ZiaSun, and such other reports and documents so filed
by ZiaSun as may be reasonably requested in availing the Shareholder of any
rule or regulation promulgated by the Commission that allows the selling of
any such securities without registration.
8. Expenses. Except as provided to the contrary herein, ZiaSun and Prepress
shall pay all of its own costs and expenses incurred with respect to the
negotiation, execution and delivery of this Agreement.
9. Severability. If any provision of this Agreement, or the application
thereof, shall for any reason and to any extent be invalid or unenforceable, the
remainder of this Agreement and application of such provision to other persons
or circumstances shall be interpreted so as best to reasonably effect the intent
of the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
which will achieve, to the extent possible, the economic, business and other
purposes of the void or unenforceable provision.
10. Entire Agreement. This Agreement, the exhibits hereto, the documents
referenced herein, and the exhibits thereto, constitute the entire understanding
and agreement of the parties hereto with respect to the subject matter hereof
and thereof and supersede all prior and contemporaneous agreements or
understandings, inducements or conditions, express or implied, written or oral,
between the parties with respect hereto and thereto. The expressed terms hereof
control and supersede any course of performance or usage of the trade
inconsistent with any of the terms hereof.
11. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original as against any party whose
signature appears thereon and all of which together shall constitute one and the
same instrument. This Agreement shall become binding when one or more
counterparts hereof, individually or taken together, shall bear the signatures
of all of the parties reflected hereon as signatories.
12. Broker's or Finder's Fees. The parties hereto represent that no other
broker has brought about this Agreement, and no other finder's fee has been paid
or is payable by either party, except for the broker or finder whose name is set
forth on Exhibit 12, and whose fee shall be paid by ZiaSun. Each party hereto
shall indemnify and hold the other harmless against any and all claims, losses,
liabilities or expenses which may be asserted against it as a result of its
dealings, arrangements or agreements with any other broker.
16
13. Other Remedies. Any and all remedies herein expressly conferred upon a
party shall be deemed cumulative with and not exclusive of any other remedy
conferred hereby or by law on such party, and the exercise of any one remedy
shall not preclude the exercise of any other.
14. Amendment and Waivers. Any term or provision of this Agreement may be
amended, and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively)
only by a writing signed by the party to be bound thereby. The waiver by a party
of any breach hereof for default in payment of any amount due hereunder or
default in the performance hereof shall not be deemed to constitute a waiver of
any other default or succeeding breach or default.
15. Survival of Agreements. All covenants, agreements, representations and
warranties made herein shall survive the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby.
16. No Waiver. The failure of any party to enforce any of the provisions
hereof shall not be construed to be a waiver of the right of such party
thereafter to enforce such provisions.
17. Attorneys' Fees. Should suit be brought to enforce or interpret any
part of this Agreement, the prevailing party shall be entitled to recover, as an
element of the costs of suit and not as damages, reasonable attorneys' fees to
be fixed by the court (including without limitation, costs, expenses and fees on
any appeal).
18. Notices. Whenever any party hereto desires or is required to give any
notice, demand, or request with respect to this Agreement, each such
communication shall be in writing and shall be effective only if it is delivered
by personal service or mailed, United States certified mail, postage prepaid,
addressed as follows:
If to Prepress, addressed to:.
----------------------------
Xx. Xxxxxxx X. Xxx, , President
Asia Prepress Technology, Inc.
0000 Xxxxx Xxxx
Xxxx Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to Prepress Counsel, addressed to:
---------------------------------------------
Xx. Xxx X. Xxxxxx
Attorney at Law
X.X. Xxxxx Building
Suite 901
00 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
17
If to ZiaSun, addressed to:
--------------------------
Xx. Xxxxx X. Xxxxxxx
President and CEO
ZiaSun Technologies, Inc.
000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to ZiaSun counsel, addressed to:
-------------------------------------------
Xx. Xxxxxx X. Xxxxxxx
Wenthur & Chachas
0000 Xx Xxxxx Xxxxxxx Xxxxx
Xxxxx 000
Xx Xxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Such communications shall be effective when they are received by the
addressee thereof; but if sent by certified mail in the manner set forth
above, they shall be effective five (5) days after being deposited in the
United States mail. Any party may change its address for such
communications by giving notice thereof to the other party in conformity
with this Section.
19. Time. Time is of the essence of this Agreement.
20. Construction of Agreement. This Agreement has been negotiated by the
respective parties hereto and their attorneys and the language hereof shall not
be construed for or against any party. A reference in this Agreement to any
Section shall include a reference to every Section the number of which begins
with the number of the Sections to which reference is specifically made (e.g., a
reference to Section 5.8 shall include a reference to Sections 5.8.1 and
5.8.2.1). The titles and headings herein are for reference purposes only and
shall not in any manner limit the construction of this Agreement which shall be
considered as a whole.
21. No Joint Venture. Nothing contained in this Agreement shall be deemed
or construed as creating a joint venture or partnership between any of the
parties hereto. No party is by virtue of this Agreement authorized as an agent,
employee or legal representative of any other party. No party shall have the
power to control the activities and operations of any other and their status is,
and at all times, will continue to be, that of independent contractors with
respect to each other. No party shall have any power or authority to bind or
commit any other. No party shall hold itself out as having any authority or
relationship in contravention of this Section.
22. Further Assurances. Each party agrees to cooperate fully with the other
parties and to execute such further instruments, documents and agreements and to
give such further written assurances, as may be reasonably requested by any
other party, to better evidence and reflect the transactions described herein
and contemplated hereby, and to carry into effect the intents and purposes of
this Agreement.
18
23. Absence of Third Party Beneficiary Rights. No provisions of this
Agreement are intended nor shall be interpreted to provide or create any
third-party beneficiary rights or any other rights of any kind in any client,
customer, affiliate, shareholder, or partner of any party hereto or any other
person; unless specifically provided otherwise herein, and, except as so
provided, all provisions hereof shall be personal solely between the parties to
this Agreement.
24. Parties in Interest. Nothing herein expressed or implied is intended or
shall be construed to confer upon or to give any person, firm or corporation
other than the parties hereto any rights or remedies under or by reason hereof.
25. Binding upon Successors and Assigns. Subject to, and unless otherwise
provided in, this Agreement, each and all of the covenants, terms, provisions,
and agreements contained herein shall be binding upon, and inure to the benefit
of, the successors, executors, heirs, representatives, administrators and
assigns of the parties hereto.
26. Governing Law. It is the intention of the parties hereto that the
internal laws of the State of California (irrespective of its choice of law
principles) shall govern the validity of this Agreement, the construction of its
terms, and the interpretation and enforcement of the rights and duties of the
parties hereto.
27. Negotiated Agreement. This Agreement has been negotiated by the parties
hereto and their respective legal counsel, and the language hereof shall not be
construed for or against any such party.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above.
ZIASUN TECHNOLOGIES, INC.
A Nevada Corporation
Dated: 05/24/2000 /s/ D. Xxxxx Xxxxx
-------------------------------
By: D. Xxxxx Xxxxx
Its: Chairman
Dated: 22 May 2000 /s/ Xxxxx X. Xxxxxxx
-------------------------------
By: Xxxxx X. Xxxxxxx
Its: President and CEO
19
MOMENTUM MERGER CORP.
A Maryland Corporation
Dated: 22 May 2000 /s/ Xxxxx X. Xxxxxxx
------------------------------
By: Xxxxx X. Xxxxxxx
Its: President and Secretary
ASIA PREPRESS TECHNOLOGY, INC.
A Maryland Corporation
Dated: 5/25/2000 /s/ Xxxxxxx X. Xxx
------------------------------
By: Xxxxxxx X. Xxx
Its: President
Dated: 5/25/00 /s/ Xxxx XxXxxxxx
------------------------------
By: Xxxx XxXxxxxx
Its: Secretary
SHAREHOLDERS
Dated: 5/25/2000 /s/ Xxxxxxx X. Xxx
------------------------------
Xxxxxxx X. Xxx
Dated: 5/25/2000 /s/ Xxxxxx X. Xxx
------------------------------
Xxxxxx X. Xxx
20
LIST OF EXHIBITS
----------------
EXHIBIT 2 Schedule of Exceptions for ASIA PREPRESS
EXHIBIT 2.2 Shares Issued and Outstanding of ASIA PREPRESS
EXHIBIT 2.6.1 Intellectual Property Right Agreements of ASIA PREPRESS
EXHIBIT 2.6.2 Software and Proprietary Programs of ASIA PREPRESS
EXHIBIT 2.11 Material Agreements, Contracts and Obligations of
ASIA PREPRESS
EXHIBIT 2.13 Licenses, Permits and Authorizations Related to ASIA
PREPRESS
EXHIBIT 2.16 Material Liabilities of ASIA PREPRESS
EXHIBIT 2.17 Audited Financial Statements of ASIA PREPRESS
EXHIBIT 2.18 Tax Reports and Returns of ASIA PREPRESS
EXHIBIT 12 Brokers
EXHIBIT 2
---------
SCHEDULE OF EXCEPTIONS FOR ASIA PREPRESS
--------------------------------------------------------------------------------
NONE
EXHIBIT 2.2
-----------
SHARES ISSUED AND OUTSTANDING OF ASIA PREPRESS
--------------------------------------------------------------------------------
Shareholder Name Shares Owned
-----------------------------------------------------------------
Xxxxxxx X. Xxx 99
Xxxxxx X. Xxx 1
EXHIBIT 2.6.1
-------------
INTELLECTUAL PROPERTY RIGHT AGREEMENTS OF ASIA PREPRESS
--------------------------------------------------------------------------------
NONE
EXHIBIT 2.6.2
-------------
SOFTWARE AND PROPRIETARY PROGRAMS OF ASIA PREPRESS
--------------------------------------------------------------------------------
NONE
EXHIBIT 2.11
------------
MATERIAL AGREEMENTS, CONTRACTS AND OBLIGATIONS OF ASIA PREPRESS
--------------------------------------------------------------------------------
NONE
EXHIBIT 2.13
------------
LICENSES, PERMITS AND AUTHORIZATIONS RELATED TO ASIA PREPRESS LLC
--------------------------------------------------------------------------------
1. Certificate of Registration issued by Xxxxx Development Corporation,
Republic of the Philippines, Office of the President for the Philippine
Branch on September 26, 1995.
2. Certificate of Registration issued by Xxxxx Development Corporation,
Republic of the Philippines, Office of the President for the LLC-Xxxxx
Xxxxxx on March 20, 1998.
3. Certificate of Registration issued by Bureau of Internal Revenue of the
Philippines on March 20, 1998.
4. Certificate of Tax Exemption issued by Xxxxx Development Corporation,
Republic of the Philippines, Office of the President on January 15, 1997,
5. Application for Registration issued by Republic of Philippines on September
26, 1995.
6. Certificate of Registration and Tax Exemption issued by Subic Bay
Metropolitan Authority for the Philippine Branch on August 10,1999.
EXHIBIT 2.16
------------
MATERIAL LIABILITIES OF ASIA PREPRESS
--------------------------------------------------------------------------------
A working capital line of credit exists in the amount of $250,000, between
Asia Prepress and First Union National Bank, dated January 29, 1999. Under this
line of credit Asia Prepress may borrow, repay and reborrow, from time to time,
so long as the total indebtedness outstanding at any one time does not exceed
the principal amount. The loan proceeds are to be used solely to finance
inventory and/or accounts receivable. The interest rate shall accrue on the
unpaid principal balance at the rate of Bank's Prime Rate plus 1.50% as that
rate may change form time to time. The personal guarantor of the line of credit
is Xxxxxxx X. Xxx. In the event of a default, all outstanding obligations shall
bear interest at the Bank's Prime Rate plus 3%, in addition, any necessary
attorney's fee will be collected which will equal 15% of the guaranteed
obligations then outstanding. All principal and accrued interest under this
agreement are due and payable in full on June 1, 2000. As of June 1, 2000 the
unpaid principal and interest due on the line of credit will be $159,228.28.
EXHIBIT 2.17
------------
AUDITED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
TO BE PROVIDED WITHIN 60 DAYS OF CLOSING
EXHIBIT 2.18
------------
TAX REPORTS AND RETURNS OF ASIA PREPRESS
--------------------------------------------------------------------------------
SEE ATTACHED
EXHIBIT 12
----------
BROKERS
--------------------------------------------------------------------------------
With the exception of the shares issued to the Shareholders of ASIA
PREPRESS as set forth herein, no brokerage of finders fees in the form of cash
or securities were paid to any party or person in connection with the
acquisition.
