1
EXHIBIT 1
MERGER AGREEMENT AND PLAN OF REORGANIZATION
MERGER AGREEMENT AND PLAN OF REORGANIZATION made as of this 16th day of
May, 2000, by and between Advatex Associates, Inc., a Delaware corporation
having its principal place of business at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx Xxx
Xxxx 00000 ("Advatex"), Logical Acquisition Corp., a Delaware corporation having
its principal place of business at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 ("LAC"), Color Acquisition Corp., a Delaware corporation having its
principal place of business at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
("CAC"), Logical Imaging Solutions, Inc., a California corporation having its
principal place of business at 0000 Xxxx Xxxxxx Xxxxxx, Xxxxx Xxx, Xxxxxxxxxx
00000 ("Logical") and Color Image, Inc., a Georgia corporation having its
principal place of business at 0000 Xxxxxxxxx Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000,
Xxxxxxxx, Xxxxxxx 00000 ("Color").
WHEREAS, Advatex, which presently has 5,470,000 shares of Common Stock, par
value $.01 per share ("Advatex Common Stock") outstanding, shall use its best
efforts to cause its stockholders to approve a 1-for-6.07778 reverse stock split
(the "Reverse Split"), resulting in approximately 900,000 shares of Advatex
Common Stock outstanding (the "Advatex Common Shares").
WHEREAS, LAC and CAC each is a wholly owned subsidiary of Advatex and is
each authorized to issue 200 shares of common stock, par value $.01 (referred to
respectively as the "LAC Shares" and the "CAC Shares"), all of which such LAC
Shares and CAC Shares are issued and outstanding and owned by Advatex.
WHEREAS, the respective Boards of Directors of Advatex, LAC, CAC, Logical
and Color (collectively the "Companies") deem it advisable and generally to the
advantage and
1
2
welfare of the Companies, and their respective stockholders, that (i) LAC be
merged with and into Logical (the "Logical Merger") and (ii) CAC be merged with
and into Color (the "Color Merger") under the terms and conditions hereinafter
set forth (the Logical Merger and the Color Merger are referred to collectively
herein as the "Mergers"), the Mergers to be effected pursuant to the California
General Corporation Law, the Georgia Business Corporation Code and the Delaware
General Corporation Law and to be a tax free reorganization under Section
368(a)(1)(A) of the Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the premises, covenants and conditions
hereof, the parties hereto do mutually agree as follows:
1. Vote on Mergers and Related Matters. (a) LAC, CAC, Logical and Color
(the "Constituent Corporations") shall each, as soon as practicable but prior to
closing, and in no event later than 30 days after the execution and delivery
hereof, (i) cause a special meeting of its stockholders to be called to consider
and vote upon the applicable Merger on the terms and conditions hereinafter set
forth, or (ii) obtain written consent of such stockholders as is necessary to
approve the applicable Merger. If the Mergers are approved in accordance with
the applicable state laws, subject to the further conditions and provisions of
this Agreement, a closing of this Agreement shall be held (the "Closing"), and
Certificates of Merger and all other documents or instruments deemed necessary
or appropriate by the parties hereto to effect the Mergers shall be executed and
filed with the Secretary of State of the States of California, Georgia and
Delaware as promptly as possible thereafter. The Certificates of Merger for each
of the Color Merger and Logical Merger (referred to collectively herein as the
"Certificate of Merger") so filed shall be
2
3
substantially in the forms of Exhibit A annexed hereto with respect to the
Logical Merger and Exhibit B annexed hereto with respect to the Color Merger,
with such changes therein as the Boards of Directors of the Constituent
Corporations shall mutually approve.
(b) As soon as practicable, but in no event more than 75 days after
the date hereof, Advatex shall cause a special meeting of its stockholders to be
called to consider and vote upon (i) a Certificate of Amendment to Advatex's
Certificate of Incorporation to approve the change of name of the Company to
"Color Image, Inc." (the "Name Change") and the Reverse Split, and (ii) the
transacting of such other business as may properly come before the meeting or
any adjournment thereof.
2. Representations, Warranties and Covenants of Logical and Color. Logical
and Color, each on behalf of itself, represents and warrants as follows, except
to the extent set forth on the Schedule of Exceptions annexed hereto and made a
part hereof ("Schedule of Exceptions"):
(a) Logical and Color each is, and on the effective date of the
Mergers (the "Effective Date") will be, duly organized and validly existing
corporations in good standing under the laws of their respective states of
incorporation and in such other jurisdictions as they are qualified to do
business. There are issued and outstanding, and on the Effective Date there will
be issued and outstanding, on a fully diluted basis, the shares of capital stock
and other equity interests in (i) Logical as are set forth on Schedule A
attached hereto and incorporated herein, and (ii) Color as are set forth on
Schedule B attached hereto and incorporated herein, all of which such capital
stock and equity interests are, and on the Effective Date will be, duly
authorized, validly issued, fully paid and nonassessable. On the Effective Date
there will be no, issued or outstanding rights, options or warrants to purchase
any capital stock or equity interest in Logical or Color,
3
4
including but not limited to any common stock of Logical or Color or any other
issued or outstanding securities of any nature convertible into or exercisable
or exchangeable for common stock of either Logical or Color, as applicable. On
the Effective Date, up to 147,000 warrants to purchase common stock of Logical
which were in effect prior to the Effective Date shall be converted into
warrants to purchase common stock of Advatex. The outstanding equity interests
of each of Logical and Color have all been issued pursuant to an appropriate
exemption from the registration requirements of the Securities Act of 1933, as
amended (the "Securities Act") and from any applicable registration requirements
of the various states.
(b) Neither Logical nor Color has, and on the Effective Date will not
have, any subsidiaries, nor does it own any direct or indirect interest in any
other business entity.
(c) Logical and Color have, and on the Effective Date will have, full
power and authority to enter into this Agreement and, subject to any required
stockholder or other third party approval in accordance with the laws of the
States of California and Georgia, to consummate the transactions contemplated
hereby. This Agreement and the transactions contemplated hereby have been duly
approved by the Board of Directors of each of Logical and Color and, prior to
the Closing Date, by the respective stockholders of each of Logical and Color.
This Agreement has been duly executed and delivered by Logical and Color and
constitutes a valid and binding obligation of Logical and Color, enforceable
against each of them in accordance with its terms, except as such enforcement
may be subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws hereafter in effect relating to creditors' rights.
(d) Logical and Color are qualified or licensed as foreign
corporations in all jurisdictions where their respective business or ownership
of assets so requires, except where the failure to be
4
5
qualified or licensed would not have a material adverse effect on the respective
businesses of Logical and Color, as applicable. Neither the business of Logical
nor the business of Color requires either to be registered as an investment
company or investment adviser, as such terms are defined under the Investment
Company Act of 1940 and the Investment Advisers Act of 1940, each as amended.
(e) The financial statements of each of Logical and Color, consisting
of their respective Balance Sheets as at December 31, 1999 and 1998, their
respective Statements of Income (Loss) for the fiscal years ended December 31,
1999 and 1998, their respective Statement of Stockholders' Equity for the two
years ended December 31, 1999 and 1998, and their respective Statements of Cash
Flows for the years ended December 31, 1999 and 1998, have been audited by
independent public accountants and fairly present the financial position,
results of operations and other information purported to be shown therein, at
the date and for the respective periods to which they apply. The interim
financial statements of each of Logical and Color, consisting of their
respective Balance Sheets as at March 31, 2000, and their respective Statements
of Income (Loss) for the three months ended March 31, 2000, fairly present the
financial position, results of operations and other information purported to be
shown therein of Logical and Color, at the date and for the respective periods
to which they apply. All such financial statements have been prepared in
conformity with generally accepted accounting principles consistently applied
throughout the periods involved, and have been adjusted for all normal and
recurring accruals. All such financial statements (together, the "Financial
Statements") are incorporated herein and made a part hereof.
5
6
(f) To the knowledge of Logical and Color, there has not been, and on
the Effective Date there will not have been in the aggregate, any material
adverse change in the condition, financial or otherwise, of Logical or Color
from that set forth in the Financial Statements, as applicable.
(g) Except for transactions occurring in the ordinary course of
business, there has not been, and on the Effective Date there will not have
been, any transactions involving Logical or Color since March 31, 2000 in an
amount in excess of $150,000.
(h) There are, and on the Effective Date will be, no liabilities
(including, but not limited to, tax liabilities) or claims against either
Logical or Color (whether such liabilities or claims are contingent or absolute,
direct or indirect, matured or unmatured) not appearing on the Financial
Statements, other than liabilities incurred in the ordinary course of business
or taxes incurred on earnings since March 31, 2000, which such liabilities,
individually or in the aggregate for each of Logical and Color respectively, are
in an amount greater than $150,000. This representation shall survive for a
period of one (1) year following the date of Closing; provided, however, that
any representation as to tax liabilities (and related penalties, interest and
costs) shall survive indefinitely.
(i) All federal, state, county and local income, excise, property and
other tax returns required to be filed by Logical or Color have been filed, and
all required taxes, fees or assessments have been paid or an adequate reserve
therefor has been established in the Financial Statements. The federal income
tax returns and state and foreign income tax returns of each of Logical and
Color have not been audited by the Internal Revenue Service ("IRS") or any other
taxing authority within the past five (5) years. Neither the IRS nor any state,
local or other taxing authority has proposed any additional taxes, interest or
penalties with respect to either Logical or
6
7
Color or any of their respective operations or businesses. There are no pending,
or to the knowledge of Logical or Color, as applicable, threatened, tax claims
or assessments, and there are no pending, or to the knowledge of Logical or
Color, as applicable, threatened, tax examinations by any taxing authorities.
Neither Logical nor Color has given any waivers of rights (which are currently
in effect) under applicable statutes of limitations with respect to the federal
income tax returns of Logical or Color, as applicable, for any year.
(j) Except as provided for in the Financial Statements, both Logical
and Color, as applicable, have, and on the Effective Date will have, good and
marketable title to all of their respective furniture, fixtures, equipment and
other assets as set forth in the Financial Statements, and such assets are owned
free and clear of all security interests, pledges, liens, restrictions and
encumbrances of every kind and nature, except as set forth in the Financial
Statements.
(k) Logical and Color each is the owner of its respective inventory as
set forth in the Financial Statements and each has good and marketable title
thereto.
(l) The accounts receivable as set forth in the Financial Statements
represent amounts due for goods sold or services rendered by Logical and Color
in the ordinary course of business.
(m) A copy of all agreements, contracts, arrangements, understandings
and commitments, whether written or oral, to which Logical or Color, as
applicable, is or on the Effective Date will be, a party, or from which either
Logical or Color will receive substantial benefits and which are material to
Logical and Color (collectively, "Contracts"), have been delivered to Advatex
and LAC. A list of such Contracts as to Logical is attached hereto as Schedule
C, and a list of such Contracts as to Color is attached hereto as Schedule D
each of which such schedules shall be amended at the Effective Date to reflect
any Contracts entered into between the date hereof and
7
8
the Effective Date. Neither Logical nor Color is now, nor will be on the
Effective Date, in material default under any Contract. The validity and
enforceability of, and rights of Logical and Color, as applicable, contained in,
each such Contract shall not be adversely effected by the Mergers or the
transactions contemplated hereby or any actions taken in furtherance hereof.
(n) There are, and on the Effective Date there will be, no legal,
administrative, arbitral or other proceedings, claims, actions or governmental
investigations of any nature pending, or to either of Logical or Color's
knowledge, as applicable, threatened, involving Logical or Color, individually
or in the aggregate in which an unfavorable determination could result in
suspension or termination of either Logical or Color's business or authority to
conduct such business in any jurisdiction or could result in the payment by
either Logical or Color of more than $50,000, or challenging the validity or
propriety of the transactions contemplated by this Agreement and, to Logical and
Color's best knowledge, as applicable, there is no reasonable basis for any such
proceeding, claim, action or governmental investigation. Neither Logical nor
Color is a party to any order, judgment or decree which will, or might
reasonably be expected to, materially adversely affect the business, operations,
properties, assets or financial condition of either Logical or Color, as
applicable.
(o) Since March 31, 2000 there have been, and through the Effective
Date there will be (i) no bonuses or extraordinary compensation to any of the
officers, directors or stockholders of either Logical or Color, (ii) no loans
made to or any other transactions with any of the officers, directors or
stockholders of either Logical or Color or their families, and (iii) no
dividends or other distributions declared or paid by either Logical or Color.
8
9
(p) Both Logical and Color have, and on the Effective Date will have,
maintained casualty and liability policies and other insurance policies with
respect to their respective businesses which are appropriate and customary for
businesses similar in size, industry and risk profile. Copies of all of the
policies of insurance and bonds presently in force with respect to both Logical
and Color, including without limitation those covering properties, buildings,
machinery, equipment, worker's compensation, officers and directors and public
liability, have been delivered to Advatex, CAC and LAC. All such insurance is
outstanding and in full force and effect, with all premiums thereon duly paid,
and neither Logical nor Color have received any notice of cancellation of any
such policies.
(q) Schedule E and Schedule F, respectively, set forth descriptions of
Logical's and Color's patents, patent applications, trademarks, trademark
registrations or applications, trade names, copyrights, copyright registrations
or applications, and other intellectual property. Neither Logical nor Color has
knowledge of any infringements by either of them, as applicable, of any third
party's intellectual property.
(r) Since their respective inceptions, Logical and Color have, and on
the Effective Date will have, in all material respects operated their respective
businesses and conducted their respective affairs in compliance with all
applicable laws, rules and regulations, except where the failure to so comply
did not have and would not be expected to have a material adverse effect on
their respective businesses or property.
(s) Except as set forth on the Schedule of Exceptions, there are, and
on the Effective Date there will be, no loans, leases or other Contracts
outstanding between either of Logical and Color
9
10
and any of their respective officers, directors or any person related to or
affiliated with any such officers or directors.
(t) Except as set forth on the Schedule of Exceptions, during the past
five year period neither Logical nor Color, nor any of their respective officers
or directors, nor any person intended upon consummation of the Mergers to become
an officer or director of either Logical, Color, Advatex or any successor entity
or subsidiary, has been the subject of:
(1) a petition under the Federal bankruptcy laws or any other
insolvency or moratorium law or has a receiver, fiscal agent or similar officer
been appointed by a court for the business or property of Logical or Color or
such person, or any partnership in which Logical or Color or any such person was
a general partner at or within two years before the time of such filing, or any
corporation or business association of which Logical or Color or any such person
was an executive officer at or within two years before the time of such filing;
(2) a conviction in a criminal proceeding or a named subject of a
pending criminal proceeding (excluding traffic violations which do not relate to
driving while intoxicated or driving under the influence);
(3) any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining Logical or Color or any such person from, or otherwise
limiting, the following activities:
(i) Acting as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor broker,
leverage transaction merchant, any other person regulated by the
United States Commodity Futures Trading Commission or an associated
person of any of the foregoing, or as an investment adviser,
underwriter,
10
11
broker or dealer in securities, or as an affiliated person, director
or employee of any investment company, bank, savings and loan
association or insurance company, or engaging in or continuing any
conduct or practice in connection with such activity;
(ii) Engaging in any type of business practice; or
(iii) Engaging in any activity in connection with the purchase or
sale of any security or commodity or in connection with any violation
of Federal, state or other securities laws or commodities laws;
(4) any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any Federal, state or local authority barring,
suspending or otherwise limiting for more than 60 days the right of Logical or
Color or any such person to engage in any activity described in the preceding
sub-paragraph, or to be associated with persons engaged in any such activity;
(5) a finding by a court of competent jurisdiction in a civil action
or by the Securities and Exchange Commission (the "Commission") to have violated
any securities law, regulation or decree and the judgment in such civil action
or finding by the Commission has not been subsequently reversed, suspended or
vacated; or
(6) a finding by a court of competent jurisdiction in a civil action
or by the Commodity Futures Trading Commission to have violated any federal
commodities law, and the judgment in such civil action or finding by the
Commodity Futures Trading Commission has not been subsequently reversed,
suspended or vacated. All items described in clauses (1) through (6) above are
collectively referred to herein as "Bad Events."
11
12
(u) Neither Logical nor Color has any pension plan, profit sharing or
similar employee benefit plan, except as set forth on the Schedule of
Exceptions.
(v) Except for the consent and approval of the stockholders of each of
Logical and Color and the filing of the Certificate of Merger, no consents or
approvals of, or filings or registrations with, any third party or any public
body or authority are necessary in connection with (i) the execution and
delivery by Logical or Color of this Agreement and (ii) the consummation by
Logical and Color of the Mergers and by Logical and Color of all other
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Logical and Color and constitutes the legal, valid and binding
obligation of both Logical and Color, enforceable against each of them in
accordance with the terms hereof, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
relating to or affecting the enforcement of rights hereunder or (b) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
(w) Neither Logical nor Color knows of any person who rendered any
service in connection with the introduction of Advatex, LAC, CAC, Logical or
Color to any of the other Companies other than G-V Capital Corp. ("G-V"), and
they know of no claim by anyone other than G-V for a "finder's fee" or similar
type of fee in connection with the Mergers and the other transactions
contemplated hereby.
(x) No employees of either Logical or Color are on strike or to the
best of their respective knowledge threatening any strike or work stoppage.
Neither Logical nor Color has any obligations under any collective bargaining or
labor union agreements nor is either Logical
12
13
or Color involved in any material controversy with any of its employees or any
organization representing any of its employees.
(y) None of the Exhibits and Schedules furnished by Logical or Color
contains any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading.
(z) The execution and delivery by each of Logical and Color of this
Agreement, the consummation and performance of the transactions herein
contemplated, and compliance with the terms of this Agreement by Logical and
Color will not conflict with, result in a breach of or constitute or give rise
to a default under (i) any indenture, mortgage, deed of trust or other
agreement, instrument or Contract to which either Logical or Color, as
applicable, is now a party or by which either of them or any of their respective
assets or properties are bound; (ii) the Certificate of Incorporation or the
By-laws of both Logical and Color, in each case as amended; or (iii) any law,
order, rule, regulation, writ, injunction, judgment or decree of any government,
governmental instrumentality or court, domestic or foreign, having jurisdiction
over Logical and Color or any of their respective businesses or properties
wherein such breach could have a material adverse effect on Logical or Color or
any of their respective businesses or properties.
(aa) The stockholders of both Logical and Color are acquiring the
shares of Advatex \ Common Stock to be issued to them as a result of the Mergers
for investment purposes only and not with a view to, or sale in connection with,
any distribution within the meaning of the Securities Act.
13
14
(bb) To the best of their respective knowledge, neither Logical nor
Color is in violation of any federal, state or local environmental law or
regulation.
3. Representations and Warranties of LAC and CAC. LAC and CAC, each
solely on behalf of itself, represents and warrants as follows:
(a) LAC and CAC are, and on the Effective Date will be, duly organized
and validly existing corporations in good standing under the laws of the State
of Delaware, authorized to issue only the LAC Shares and CAC Shares, as
applicable. On the Effective Date there will be issued and outstanding all of
the LAC Shares and CAC Shares, which shall be fully paid and nonassessable and
all of which shall be owned by Advatex. There are no, and on the Effective Date
there will be no issued or outstanding options or warrants to purchase LAC
Shares or CAC Shares or any issued or outstanding securities of any nature
convertible into LAC Shares or CAC Shares, or any agreements or understandings
to issue any LAC Shares or CAC Shares, options or warrants.
(b) Both LAC and CAC have been organized solely for the purpose of
consummating the Mergers and, since their inception and through the Closing,
have not had and will not have any business activity of any nature other than
those related to its organization or as contemplated by this Agreement.
(c) LAC and CAC have, and on the Effective Date will have, full power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement and the transactions contemplated hereby
have been duly approved by the Board of Directors and sole shareholder of both
LAC and CAC.
14
15
(d) Since their inception, neither LAC nor CAC have issued or
committed themselves to issue, and to the Effective Date will not issue or
commit to issue, any LAC Shares or CAC Shares or any options, rights, warrants,
or other securities convertible into LAC Shares or CAC Shares, except for the
issuance of the LAC Shares and the CAC Shares to Advatex.
(e) Except for the consent and approval of the stockholders of Logical
and Color, the filing of the Certificate of Merger and approval by Advatex
stockholders of the Name Change and Reverse Stock Split, no consents or
approvals of, or filings or registrations with, any third party or any public
body or authority are necessary in connection with (i) the execution and
delivery by LAC or CAC of this Agreement and (ii) the consummation by LAC or CAC
of the Mergers and the other transactions contemplated hereby.
(f) The execution and delivery by LAC and CAC of this Agreement, the
consummation and performance of the transactions herein contemplated, and
compliance with the terms of this Agreement by LAC and CAC will not conflict
with, result in a breach of or constitute or give rise to a default under any
indenture, mortgage, deed of trust or other agreement, instrument or contract to
which LAC or CAC is now a party or by which either of them or any of their
respective assets or properties are bound or their respective Certificates of
Incorporation, as amended, or the by-laws of LAC or CAC, in each case as
amended, or any law, order, rule or regulation, writ, injunction, judgment or
decree of any government, governmental instrumentality or court, domestic or
foreign, having jurisdiction over LAC or CAC or any of their respective
businesses or properties.
(g) There are, and on the Effective Date will be, no liabilities
(including, but not limited to, tax liabilities) or claims against Advatex
(whether such liabilities or claims are contingent or
15
16
absolute, direct or indirect, matured or unmatured) not appearing on the
financial statements of Advatex delivered to Logical and Color, other than
liabilities incurred in the ordinary course of business or taxes incurred on
earnings since March 31, 2000, which such liabilities, individually or in the
aggregate, are in an amount greater than $150,000. This representation shall
survive for a period of one (1) year following the date of Closing; provided,
however, that any representation as to tax liabilities (and related penalties,
interest and costs) shall survive indefinitely.
4. Representations and Warranties of Advatex. Advatex represents and
warrants as follows:
(a) Advatex is a duly organized and validly existing corporation in
good standing under the laws of the State of Delaware, authorized to issue an
aggregate of 20,000,000 shares of Advatex Common Stock. On the Effective Date,
giving effect to the Reverse Split, there will be issued and outstanding no more
than approximately 900,000 shares of Advatex Common Stock, all of which such
issued and outstanding shares will be validly issued, fully paid and
nonassessable. On the Effective Date, the total liabilities of Advatex,
including but not limited to, legal, accounting and all other fees and expenses
incurred by Advatex in connection with this Agreement, shall not exceed $75,000.
On the Effective Date, Advatex shall have cash on hand in an amount equal to or
greater than the sum of $950,000 and the amount of all of its liabilities.
Except as contemplated by this Agreement, on the Effective Date there will be no
issued or outstanding options, warrants or other rights, or commitments or
agreements of any kind, contingent or otherwise, to purchase or otherwise
acquire shares of Advatex Common Stock or any issued or outstanding securities
of any nature convertible into shares of Advatex Common Stock. There is no proxy
or any other agreement, arrangement or understanding of any kind
16
17
authorized or outstanding which restricts, limits or otherwise affects the right
to vote any shares of Advatex Common Stock.
(b) Except as set forth below, the business of Advatex since 1997 has
been limited primarily to the search for an acquisition or merger partner and
certain transactions described in its filings with the Commission (the "SEC
Filings"), and except for transactions related to conversion of debt or other
obligations and merger or acquisition activities of one of its subsidiaries, and
other matters disclosed in the SEC Fillings, it has not engaged in any other
business or activity since 1997.
(c) Advatex is, and on the Effective Date will be, duly authorized,
qualified and licensed under any and all applicable laws, regulations,
ordinances or orders of public authorities to carry on its business in the
places and in the manner as presently conducted. The business of Advatex does
not require it to be registered as an investment company or investment advisor,
as such terms are defined under the Investment Company Act and the Investment
Advisors Act of 1940.
(d) Advatex has, and on the Effective Date will have no subsidiaries
except for LAC, CAC and Alorex Corp. Alorex Corp. does not have, and on the
Effective Date shall not have, any assets or liabilities.
(e) The financial statements of Advatex, consisting of its Balance
Sheets as at December 31, 1999 and 1998, and its Statement of Operations for the
fiscal years ended December 31, 1999 and 1998, its Statement of Stockholders'
Equity as of December 31, 1999 and 1998, and its Statement of Cash Flows for the
fiscal years ended December 31, 1999 and 1998, all together with accompanying
notes, have been audited by independent public accountants, are complete and
correct in all material respects, present fairly the financial position
17
18
of Advatex and the results of operations and changes in financial position for
the respective periods ended on such dates, and were prepared in accordance with
generally accepted accounting principles consistently applied during the
periods. The financial statements of Advatex for the period ended March 31, 2000
are complete and correct in all material respects, present fairly the financial
position of Advatex and the results of operations and changes in financial
position for such period, have been reviewed by independent public accountants
and were prepared in accordance with generally accepted accounting principles
consistently applied. All the financial statements referenced herein regarding
Advatex are collectively referred to as the "Advatex Financial Statements."
(f) There has not been, and on the Effective Date there will not have
been, any material change in the financial condition of Advatex from that set
forth in the Advatex Financial Statements except for (i) transactions in the
ordinary course of business, (ii) transactions relating to this Agreement, and
the incurring of expenses and liabilities relating to this Agreement not in
excess of $75,000 in the aggregate and (iii) conversions of debt and other
obligations into Advatex Common Stock prior to the effectiveness of the Reverse
Split.
(g) There are, and on the Effective Date will be, no liabilities
(including, but not limited to, tax liabilities) or claims against Advatex
(whether such liabilities or claims are contingent or absolute, direct or
indirect, accrued or unaccrued), except for (i) liabilities not in excess of
$75,000 in the aggregate for expenses incurred relating to this Agreement and
the consummation of the transactions contemplated hereby and (ii) liabilities
and commitments incurred or made in the ordinary course of Advatex's business or
taxes incurred on earnings since March 31, 2000 not in excess of $10,000 in the
aggregate.
18
19
(h) All federal, state, county and local income, excise, property or
other tax returns required to be filed by Advatex have been filed and all
required taxes, fees or assessments have been paid. The federal income tax
returns and state and foreign income tax returns of Advatex have not been
audited by the IRS or any other taxing authority within the past five (5) years.
Neither the IRS nor any state, local or other taxing authority has proposed any
additional taxes, interest or penalties with respect to Advatex or any of its
operations or business, there are no pending, or to the knowledge of Advatex
threatened, tax claims or assessments, and there are no pending, or to the
knowledge of Advatex threatened, tax examinations by any taxing authorities.
Advatex has not given any waivers of rights (which are currently in effect)
under applicable statutes of limitations with respect to the federal income tax
returns of Advatex for any year.
(i) Advatex has, and on the Effective Date will have, no fixtures,
furniture, equipment, inventory or accounts receivable.
(j) Advatex has, and on the Effective Date will have, no material
contracts to which it is, or on the Effective Date will be, a party, except as
described in the Advatex Financial Statements, the SEC filings or as set forth
on Schedule G attached hereto and made a part hereof.
(k) There are, and on the Effective Date there will be, no legal,
administrative, arbitral or other proceedings, claims, actions or governmental
investigations of any nature pending or to Advatex's knowledge threatened in
writing, against Advatex, including, but not limited to any stockholder claims
or derivative actions, or challenging the validity or propriety of the
transactions contemplated by this Agreement, and, to Advatex's best knowledge,
there is no reasonable basis for any proceeding, claim, action or governmental
investigation against Advatex. Advatex is not a party to any order, judgment or
decree which will, or might
19
20
reasonably be expected to, materially adversely affect the business, operations,
properties, assets or financial condition of Advatex.
(l) Since March 31, 2000, other than as disclosed in the SEC Filings,
there have been, and to the Effective Date there will be (i) no salaried or
otherwise compensated employees and no bonuses paid to any officer or director
of Advatex; (ii) no loans made to or transactions with any officer or director
of Advatex; (iii) no dividends or other distributions declared or paid by
Advatex; and (iv) no purchase by Advatex of any of its common shares.
(m) Since March 31, 2000, other than as disclosed in the SEC Filings,
Advatex has not issued or committed itself to issue, and to the Effective Date
will not issue or commit itself to issue, any additional common shares or any
options, rights, warrants, or other securities convertible into common shares,
except as contemplated by this Agreement or in connection with conversion of
debt or other payables into Advatex Common Stock prior to the effectiveness of
the Reverse Split.
(n) Advatex has no patents, patent applications, trademarks, trademark
registrations, trade names, copyrights, copyright registrations or applications
therefor. Advatex has no knowledge of any infringements by it of any third
party's intellectual property.
(o) Advatex has, and on the Effective Date will have, in all material
respects operated its business and conducted its affairs in compliance with all
applicable laws, rules and regulations.
(p) On the Effective Date there will be no loans, leases commitments,
arrangements or other contracts of any kind or nature outstanding between (i)
Advatex and (ii) any officer or director of Advatex or any person related to or
affiliated with any officer or director of Advatex.
20
21
(q) During the past five year period, no officer or director of
Advatex has been the subject of any Bad Event.
(r) Advatex has no pension plan, profit sharing or similar employee
benefit plan.
(s) Except for the consent and approval of the Board of Directors of
Advatex to the Mergers and the consent and approval of the holders of Advatex
Common Stock to the Reverse Split and the Name Change, and the filing of the
Certificate of Merger, no consents or approvals of, or filings or registrations
with, any third party or any public body or authority are necessary in
connection with (i) the execution and delivery by Advatex of this Agreement and
(ii) the consummation of the Mergers and the other transactions contemplated
hereby. Advatex has, and on the Effective Date will have, full power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement and the transactions contemplated hereby
have been, or will be prior to the Effective Date, duly approved by the Board of
Directors of Advatex. This Agreement has been duly executed and delivered by
Advatex and constitutes the legal, valid and binding obligation of Advatex
enforceable against it in accordance with the terms hereof except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application relating to or affecting the enforcement of rights hereunder
or general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(t) Advatex knows of no person who rendered any service in connection
with the introduction of Advatex, LAC, CAC, Logical or Color to each other
except for G-V, and that it knows of no claim by anyone other than G-V for a
"finder's fee" or similar type of fee in connection with the Mergers and the
other transactions contemplated hereby.
21
22
(u) Advatex has no employees.
(v) None of the information supplied or to be supplied by or about
Advatex to Logical and Color concerning the Mergers contains any untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading.
(w) The execution and delivery by Advatex of this Agreement, the
consummation and performance of the transactions herein contemplated, and
compliance with the terms of this Agreement by Advatex will not conflict with,
result in a breach of or constitute a default under (i) any indenture, mortgage,
deed of trust or other agreement, instrument or contract to which Advatex is now
a party or by which it or any of its assets or properties is bound; (ii) the
Certificate of Incorporation, as amended, or the bylaws of Advatex, in each case
as amended; or (iii) any law, order, rule or regulation, writ, injunction,
judgment or decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over Advatex or any of its business or
properties.
(x) To the best of its knowledge, Advatex is not in violation of any
federal, state or local environmental law or regulation.
(y) There are no claims pending, or the knowledge of Advatex
threatened, against Advatex by any stockholder of Advatex.
(z) Schedule H attached hereto sets forth the names and addresses of
each Advatex stockholder of record, as supplied by Advatex's transfer agent, and
the number of shares owned by each of them.
22
23
5. Representations to Survive Closing. All of the representations,
covenants and warranties contained in this Agreement (including all statements
contained in any certificate or other instrument delivered by or on behalf of
Advatex, LAC, CAC, Logical or Color pursuant hereto or in connection with the
transactions contemplated hereby) shall survive the Closing for a period of two
(2) years from the Effective Date.
6. Surviving Corporation. The surviving corporation of the Logical
Merger shall be Logical and the surviving corporation of the Color Merger shall
be Color. Each of their respective names, identities, certificates of
incorporation, by-laws, existence, purposes, powers, objects, franchises, rights
and immunities shall be unaffected and unimpaired by the Mergers, except as
described in the Certificate of Merger.
7. Treatment of Shares of Constituent Corporations. The terms and
conditions of the Mergers, the mode of carrying the same into effect, and the
manner and basis of converting the securities of each of the Constituent
Corporations are as follows:
(a) The equity interests in Logical shall be converted by virtue of
the Logical Merger, and at the Effective Date, into approximately 3,000,000
newly issued shares of Advatex Common Stock ("Advatex Common Shares"), on the
basis of 1.84843 Advatex Common Shares for each one share of common stock of
Logical, without any action on the part of the holders thereof. The actual
number of Advatex Common Shares to be issued to each Logical stockholder shall
be rounded to the nearest whole number. The equity interests in Color shall be
converted by virtue of the Color Merger, and at the Effective Date, into
approximately 3,000,000 newly issued Advatex Common Shares, on the basis of 15
Advatex Common Shares for each one share of common stock of Color, without any
action on the part of the holders thereof. The actual
23
24
number of Advatex Common Share to be issued to each Color stockholder shall be
rounded to the nearest whole number. After the Effective Date, each holder of a
common equity interest in Logical prior to the Logical Merger shall be entitled
upon surrender to receive from LAC a certificate representing the number of
Advatex Common Shares to which such holder shall be entitled, which certificate
shall contain any appropriate restrictive legend concerning the resale of such
Advatex Common Shares. After the Effective Date, each holder of a common equity
interest in Color prior to the Color Merger shall be entitled upon surrender to
receive from CAC a certificate representing the number of Advatex Common Shares
to which such holder shall be entitled, which certificate shall contain any
appropriate restrictive legend concerning the resale of such Advatex Common
Shares. Until so surrendered, any outstanding certificates or other
documentation which, prior to the Effective Date, represented a common equity
interest in either Logical or Color shall be deemed for all corporate purposes
to evidence ownership of Advatex Common Shares into which such common equity
interests shall have been converted. Upon such surrender, the equity interests
of Logical and Color so surrendered shall be owned of record and beneficially by
Advatex. Upon conversion, any fractional shares resulting from conversion shall
be rounded to the nearest whole number of Advatex Common Shares.
(b) Following the effectiveness of the Reverse Split, there shall be
no change in the ownership of the outstanding Advatex Common Shares from that in
existence immediately prior to the Mergers.
(c) The 147,000 currently existing warrants of Logical, exercisable at
$5.00 per share of the common stock of Logical shall be replaced by 271,719
warrants to purchase Advatex Common Shares at $ 2.70 per share, with such other
terms as the parties shall deem appropriate.
24
25
(d) The separate existence and corporate organization of LAC and CAC,
except insofar as they may be continued by statute, shall cease on Effective
Date, and Logical and Color each shall become a wholly owned subsidiary of
Advatex.
8. Rights and Liabilities of Surviving Corporation. (a) On and after the
Effective Date, Logical, as the surviving corporation of the Logical Merger,
shall succeed to and possess, without further act or deed, all of the estate,
rights, privileges, powers and franchises, both public and private, and all of
the property, real, personal, and mixed, of LAC; all debts due to LAC on
whatever account shall be vested in Logical; all claims, demands, property,
rights, privileges, powers, franchises and every other interest of LAC shall be
as effectively the property of Logical as they were of LAC; the title to any
real estate by deed or otherwise in LAC shall not revert or be in any way
impaired by reason of the Logical Merger, but shall be vested in Logical; all
rights of creditors and all liens upon any property of LAC shall be preserved
unimpaired, limited in lien to the property affected by such lien at the
Effective Date; all debts, liabilities, and duties of LAC shall thenceforth
attach to Logical and may be enforced against it to the same extent as if such
debts, liabilities, and duties had been incurred or contracted by it; and
Logical shall indemnify and hold harmless Advatex and the officers and directors
of LAC against all such debts, liabilities, and duties, and against all claims
and demands arising out of the Logical Merger.
(b) On and after the Effective Date, Color, as the surviving
corporation of the CAC Merger, shall succeed to and possess, without further act
or deed, all of the estate, rights, privileges, powers and franchises, both
public and private, and all of the property, real, personal, and mixed, of CAC;
all debts due to CAC on whatever account shall be vested in Color; all claims,
demands, property, rights, privileges, powers, franchises and every other
interest of CAC
25
26
shall be as effectively the property of Color as they were of CAC; the title to
any real estate by deed or otherwise in CAC shall not revert or be in any way
impaired by reason of the Color Merger, but shall be vested in Color; all rights
of creditors and all liens upon any property of CAC shall be preserved
unimpaired, limited in lien to the property affected by such lien at the
Effective Date; all debts, liabilities, and duties of CAC shall thenceforth
attach to Color and may be enforced against it to the same extent as if such
debts, liabilities, and duties had been incurred or contracted by it; and Color
shall indemnify and hold harmless Advatex and the officers and directors of CAC
against all such debts, liabilities, and duties, and against all claims and
demands arising out of the Color Merger.
9. Further Assurances of Title. As and when requested by Logical or Color,
or by any of their respective successors or assigns, LAC or CAC, as applicable,
shall execute and deliver, or cause to be executed and delivered, all such deeds
and instruments and will take or cause to be taken all such further action as
Logical or Color may deem necessary or desirable in order to vest in and confirm
to Logical or Color, as applicable, title to and possession of the property
acquired by Logical and Color by reason or as a result of the Mergers, and
otherwise to carry out the intent and purposes hereof, and the officers and
directors of Logical, Color and Advatex are fully authorized in the name of
Logical, Color or Advatex or otherwise to take any and all such action.
10. Conditions of Obligations of LAC, CAC and Advatex. The obligation of
LAC, CAC and Advatex to consummate the Mergers is subject to the following
conditions prior to the Effective Date:
(a) Logical and Color shall each be in compliance with their
respective representations, warranties and covenants contained herein, and that
LAC, CAC and Advatex
26
27
shall each receive from Logical and Color a certificate to such effect from the
Presidents of Logical and Color as of the Effective Date.
(b) Neither Logical nor Color has suffered an uninsured loss on
account of fire, flood, accident, or other calamity of such a character as to
interfere materially with the continuous operation of their respective
businesses or materially affect adversely their respective conditions, financial
or otherwise, regardless of whether or not such loss shall have been insured.
(c) No material transactions shall have been entered into by either
Logical or Color other than transactions in the ordinary course of business
between March 31, 2000 and the Effective Date, other than as referred to in this
Agreement or in the schedules annexed, except with the prior written consent of
Advatex.
(d) Except as disclosed in this Agreement or in the schedules annexed
hereto, that no material adverse change in the aggregate shall have occurred in
the financial condition of either Logical or Color since March 31, 2000.
(e) That none of the properties or assets of either Logical or Color
shall have been sold or otherwise disposed of other than in the ordinary course
of business during such period, except with the written consent of Advatex.
(f) That Logical and Color shall have each performed and complied with
the provisions and conditions of this Agreement on their respective part to be
performed and complied with, and that the representations and warranties made by
each of Logical and Color in this Agreement are true and correct, both when made
and as of the Effective Date.
(g) That all applicable filings and regulatory approvals required to
be made or obtained by Logical and Color have been made or obtained.
27
28
(h) That this Agreement and the transactions contemplated hereby shall
have been approved by appropriate corporate action of both Logical and Color and
that corporate votes and resolutions to that effect in form and substance
reasonably satisfactory to Advatex and its counsel have been delivered to
Advatex.
(i) That there shall have been full compliance with the applicable
securities or "blue sky" laws and regulations of any state or other governmental
body having jurisdiction over the Mergers.
(j) The Reverse Split and Name Change are approved by the requisite
vote of the stockholders of Advatex.
(k) That Xxxxxx X. Xxxxxxx, G-V and their respective designees, along
with Advatex, shall have entered into the Registration Rights Agreement
substantially in the form of Exhibit C hereto ("Registration Rights Agreement").
(l) That Advatex shall have received an opinion from counsel to each
of Logical and Color, in form satisfactory to Advatex's counsel, that
(1) Logical or Color, as applicable, has been duly organized and
is a validly existing corporation in good standing under the laws of the state
of its incorporation with full power and authority to own and operate its
properties and to carry on its current and proposed business. Logical or Color,
as applicable, is qualified as a foreign corporation in all jurisdictions where
the business or ownership of assets so requires, except where the failure to so
qualify does not have a material adverse effect on the business or corporation
status of Logical or Color, as applicable.
(2) Logical or Color, as applicable, has an authorized and
outstanding capitalization as described in this Agreement and the schedules
thereto.
(3) This Agreement has been duly authorized, executed and
delivered by Logical or Color, as applicable, and is a valid and binding
obligation of Logical or Color, as applicable, legally enforceable against
Logical or Color, as applicable, in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization and
other laws of
28
29
general applicability relating to or affecting creditors' rights now or
hereafter in effect, and to general equitable principles.
(4) To such counsel's knowledge, neither the execution, delivery
or performance of this Agreement nor the consummation of the transactions herein
contemplated, nor compliance with the terms hereof by Logical or Color, as
applicable, do or will conflict with or result in a breach of any of the terms
or provisions of, or constitute a default under, the certificate of
incorporation, as amended, or the by-laws, as amended, of Logical or Color, as
applicable, any indenture, mortgage, deed of trust or other contract, agreement
or instrument to which such counsel knows Logical or Color, as applicable, is a
party or by which Logical or Color, as applicable, or any of its assets or
properties is bound, or any law, order, rule or regulation, judgment, writ,
injunction or decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over Logical or Color, as applicable,
or its business or any of its properties; and no consent, approvals,
authorizations or orders of agencies, officers or other regulatory authorities
are necessary for the consummation of the applicable Merger, except under state
securities or "blue sky" laws, as to which no opinion need be expressed.
(5) This Agreement and the transactions contemplated hereby have
been duly authorized by appropriate corporate action of Logical or Color, as
applicable, and that upon consummation of the applicable Merger, Advatex will be
the sole owner of all of the equity interests in Logical or Color, as
applicable.
(6) The business of Logical or Color, as applicable, does not
require it to be registered as an investment company or an investment adviser
under the Investment Company Act of 1940 or the Investment Advisers Act of 1940.
(m) Each of G-V, Advatex, Logical and Color shall have entered into
that certain finders fee and investment banking agreement ("G-V Agreement")
substantially in the form of Exhibit D attached hereto.
(n) Both Mergers shall have been consummated and the Certificate of
Merger filed.
(o) U.S. Patent 5,834,150 shall have been duly, validly and
irrevocably assigned to Logical.
Compliance with the provisions of this paragraph shall be evidenced by the
certificate of the President and Secretary of Logical or Color, as applicable.
29
30
11. Conditions of Obligations of Logical and Color. The obligations of
Logical and Color to consummate the Mergers are subject to the following
conditions prior to the Effective Date:
(a) That LAC, CAC and Advatex are in compliance with their respective
representations, warranties and covenants contained herein, and that Logical and
Color shall receive from each of LAC, CAC and Advatex a certificate to such
effect from the President of each of LAC, CAC and Advatex as of the Effective
Date.
(b) That LAC, CAC and Advatex shall not have suffered any loss on
account of fire, flood, accident, or other calamity of such a character as to
interfere materially with the continuous operation of its business or materially
affect adversely its condition, financial or otherwise, regardless of whether or
not such loss shall have been insured.
(c) That no material transactions shall have been entered into by LAC,
CAC or Advatex other than transactions in the ordinary course of business since
March 31, 2000, other than as referred to in this Agreement, except with the
prior written consent of Logical and Color.
(d) That no material adverse change shall have occurred in the
financial condition of LAC, CAC or Advatex since March 31, 2000, other than as
referred to in this Agreement.
(e) That none of the properties or assets of LAC, CAC or Advatex shall
have been sold or otherwise disposed of other than in the ordinary course of
business since March 31, 2000, except with the prior written consent of Logical
and Color.
(f) That LAC, CAC and Advatex shall each have performed and complied
with the provisions and conditions of this Agreement on its part to be performed
and complied with,
30
31
and that the representations and warranties made by LAC, CAC and Advatex herein
are true and correct.
(g) That all applicable filings and regulatory approvals required to
be made or obtained by Advatex have been made or obtained, including, but not
limited to, all periodic reports on Form 10-Q and Form 10-K under the Securities
Exchange Act of 1934, as amended.
(h) That Advatex shall have held a meeting of its Board of Directors
at which meeting all of its directors shall have resigned seriatim and the
persons designated by Logical and Color shall have been elected as directors of
Advatex, all subject to the consummation of the Mergers.
(i) That Xxxxxxx shall have entered into an agreement prohibiting him
from selling into the public market any Advatex Common Shares beneficially owned
by him for a period, subject to the next succeeding sentence, equal to nine (9)
months from the Effective Date, in the form annexed hereto as Exhibit E (the
"Lock-Up"). The Lock-Up shall not apply to any private sale by Xxxxxxx of any
Advatex Common Shares beneficially owned by him, provided that the transferree
of such shares shall purchase such shares subject to the Lock-Up. The Lock-Up
shall terminate at such time as any former director, officer or five percent
stockholder of Logical or Color, or officer, director or five percent
stockholder of Advatex following the Mergers, shall have any shares of Advatex
Common Stock beneficially owned by him or her registered with the Commission for
resale or shall otherwise be permitted to sell such shares of Advatex Common
Stock beneficially owned by him or her into the public market, whether under
Rule 144 under the Securities Act or otherwise.
31
32
(j) That Logical and Color shall have received an opinion from counsel
to LAC, CAC and Advatex in form satisfactory to Logical and Color's counsel,
that:
(1) Advatex has been duly incorporated and is a validly existing
corporation in good standing under the laws of the State of Delaware with full
corporate power and authority to own and operate its properties and to carry on
its current and proposed business. Advatex is not qualified as a foreign
corporation in any other jurisdiction and the failure to so qualify does not
have a material adverse effect on the business, properties or operations of
Advatex.
(2) LAC and CAC have been duly incorporated and are validly
existing corporations in good standing under the laws of the State of Delaware
with full corporate power and authority to own and operate their respective
properties and to carry on their current and proposed businesses. LAC and CAC
are not qualified as foreign corporations in any other jurisdiction and the
failure to so qualify does not have a material adverse effect on the business,
properties or operations of LAC or CAC.
(3) This Agreement has been duly authorized, executed and
delivered by Advatex, LAC and CAC, and is a valid and binding obligation of LAC,
CAC and Advatex, legally enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors' rights
now or hereafter in effect, and to general equitable principles.
(4) This Agreement and the transactions contemplated hereby have
been duly authorized by appropriate corporate action of LAC, CAC and Advatex.
(5) To such counsel's knowledge, neither the execution, delivery
or performance of this Agreement nor the consummation of the transactions
therein contemplated, nor compliance with the terms of each thereof by LAC, CAC
and Advatex do or will conflict with or result in a breach of any of the terms
or provisions of, or constitute a default under, their respective certificates
of incorporation, as amended, or the bylaws, as amended, of LAC, CAC or Advatex,
any indenture, mortgage, deed of trust or other contract, agreement or
instrument to which such counsel knows LAC, CAC or Advatex is a party or by
which, to the knowledge of such counsel, LAC, CAC or Advatex or any of their
respective assets or properties are bound, or to the knowledge of such counsel,
any law, order, rule or regulation, judgment, writ, injunction or decree of any
government, governmental instrumentality or court, domestic or foreign, having
jurisdiction over LAC, CAC or Advatex or its respective business or any of its
properties; and no consent, approvals, authorizations or orders of agencies,
officers or other regulatory authorities are necessary for the consummation of
the Mergers, except under state securities or "blue sky" laws, as to which no
opinion need be expressed.
32
33
(6) No consent or approval by any governmental authority which
has not been obtained is required to be obtained in connection with the
consummation of this Agreement by LAC, CAC or Advatex.
Compliance with the provisions of this paragraph shall be evidenced by the
certificate of the President and Secretary of each of LAC, CAC and Advatex to be
delivered at Closing.
12. Abandonment. This Agreement and the Mergers may be abandoned (a) by any
of the Companies, acting by its Board of Directors by written notice to the
other parties hereto, at any time in the event of the failure of any condition
in favor of such entity as to which the consummation of the Mergers is subject,
or (b) by the consent of all the Companies, acting each by its Board of
Directors, at any time after such adoption by such stockholders and prior to the
Effective Date. In the event of abandonment of this Agreement, the same shall
become wholly void and of no effect, and there shall be no further liability or
obligation hereunder on the part of any of the Companies, their respective Board
of Directors or any other party to this Agreement.
13. Closing or Termination. In the event the Closing of this Agreement
shall not take place by July 31, 2000, due to failure of any condition of
closing required herein, then any party shall have the right to terminate this
Agreement, upon written notice to the other parties, in which event no party
shall have any further right or obligation as against any other. If either
Logical or Color shall fail to close for any reason other than solely as a
result of the failure of any condition of closing required herein to be
performed on the part of LAC, CAC or Advatex, then Logical and Color, jointly
and severally, shall pay to Advatex the reasonable costs for legal fees incurred
in connection with the proposed Mergers, such sum not to exceed $25,000, plus
reasonable disbursements.
33
34
Any party to this Agreement may, at any time within 30 days after the
execution and delivery of this Agreement, terminate this Agreement upon written
notice to the other parties, if, in its reasonable discretion, it is unsatisfied
with the results of its due diligence examination.
14. Delivery of Corporate Proceedings of Advatex, CAC and LAC. At the
Closing, Advatex, LAC and CAC shall deliver to counsel for both Logical and
Color, the originals of all of the corporate proceedings of Advatex, LAC and
CAC, duly certified by their respective Secretaries, relating to this Agreement.
15. Delivery of Corporate Proceedings of Logical and Color. At the Closing,
Logical and Color shall deliver to counsel for Advatex, LAC and CAC the
originals of all of the corporate proceedings of Logical and Color, duly
certified by their respective Secretaries, relating to this Agreement.
16. Limitation of Liability. The representations and warranties made by any
party to this Agreement are intended to be relied upon only by the other parties
to this Agreement and by no other person. Nothing contained in this Agreement
shall be deemed to confer upon any person not a party to this Agreement any
third party beneficiary rights or any other rights of any nature whatsoever.
17. Further Instruments and Actions. Each party shall deliver such further
instruments and take such further action as may be reasonably requested by any
other in order to carry out the intent and purposes of this Agreement.
18. Governing Law. This Agreement is being delivered and is intended to be
performed in the State of Delaware, and shall be construed and enforced in
accordance with the laws of such State without regard to conflicts of laws
thereof.
34
35
19. Notices. All notices or other communications to be sent by any party to
this Agreement to any other party to this Agreement shall be sent by certified
mail, nationwide overnight delivery service or by personal delivery to the
addresses hereinbefore designated, or such other addresses as may hereafter be
designated in writing by a party. Such notice or communication shall be deemed
given five business days following deposit in the U.S. mails with respect to
communication by certified mail, the next business day if by overnight delivery
service, and upon personal delivery against receipt therefor if by personal
delivery.
20. Binding Agreement. This Agreement represents the entire agreement among
the parties hereto with respect to the matters described herein and is binding
upon and shall inure to the benefit of the parties hereto and their legal
representatives, successors and permitted assigns. This Agreement may not be
assigned and, except as stated herein, may not be altered or amended except in
writing executed by the party to be charged.
21. Counterparts. This Agreement may be executed in counterparts, all of
which, when taken together, shall constitute the entire Agreement.
22. Severability. The provisions of this Agreement shall be severable, so
that the unenforceability, validity or legality of any one provision shall not
affect the enforceability, validity or legality of the remaining provisions
hereof.
23. Joint Drafting. This Agreement shall be deemed to have been drafted
jointly by the parties hereto, and no inference or interpretation against any
party shall be made solely by virtue of such party allegedly having been the
draftsperson of this Agreement.
24. Reliance on Certificates. In rendering any opinion referred to herein,
counsel for the parties hereto may rely, as to any factual matters involved in
their respective opinions, on
35
36
certificates of public officials and of corporate and company officers, and on
such other evidence as such counsel may reasonably deem appropriate and, as to
the matters governed by the laws of jurisdictions other than the United States
or the States of Delaware, California and Georgia, an opinion of local counsel
in such other jurisdiction(s), which counsel shall be satisfactory to the other
parties in the exercise of their reasonable discretion.
25. Public Announcements. All parties hereto agree that any public
announcement, press release or other public disclosure of the signing of this
Agreement shall be made jointly and only after all parties hereto have reviewed
and approved the language and timing of such disclosure, except as such
disclosure may be required pursuant to any legal obligation or order of any
court having proper jurisdiction over any of the parties hereto.
36
37
IN WITNESS WHEREOF, the parties hereto have made and executed this
Agreement as of the day and year first above written.
ADVATEX ASSOCIATES, INC.
By:
----------------------------------------------
Xxxxxx X. Xxxxxxx, Chairman, President
and Chief Executive Officer
LOGICAL ACQUISITION CORP.
By:
----------------------------------------------
Xxxxxx X. Xxxxxxx, President
COLOR ACQUISITION CORP.
By:
----------------------------------------------
Xxxxxx X. Xxxxxxx, President
LOGICAL IMAGING SOLUTIONS, INC.
By:
----------------------------------------------
Xxxxxxx X. Xxxxxxx, President
COLOR IMAGE, INC.
By:
----------------------------------------------
Xx. Xxx-Xxxx Xxxx, President
37
38
SCHEDULES AND EXHIBITS
Schedules
---------
Schedule of Exceptions
Schedule A List of Stockholders and Warrant holders of Logical
Schedule B List of Stockholders of Color
Schedule C List of Logical Contracts
Schedule D List of Color Contracts
Schedule E Logical Intellectual Properties
Schedule F Color Intellectual Properties
Schedule G List of Advatex Contracts Not Contained in SEC Filings
Schedule H List of Advatex Record Stockholders
Exhibits
--------
Exhibit A Certificate of Merger for Logical Merger
Exhibit B Certificate of Merger for Color Merger
Exhibit C Form of Registration Rights Agreement
Exhibit D Form of G-V Agreement
Exhibit E Form of Lock-Up
38
