Exhibit 2.03
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STOCK AND ASSET PURCHASE AGREEMENT
Dated September 23, 1998
By and Between
COLORSMART, INC.
and
ADVERTISING THAT WORKS, INC.
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TABLE OF CONTENTS
INTRODUCTION 7
RECITALS 7
ARTICLE I. 7
1.01 Sale and Transfer of ATW Stock 7
1.02 Consideration at Closing 7
ARTICLE II. CLOSING 8
2.01 Closing Date 8
2.02 Delivery 8
ARTICLE III. REPRESENTATIONS AND WARRANTIES
OF SHAREHOLDER 8
3.01 Title to Shares 8
3.02 Authorization 8
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF ATW
AND SHAREHOLDER 9
4.01 Organization 9
4.02 Capitalization 9
4.03 ATW Subsidiaries 9
4.04 Validity of Agreement 9
4.05 ATW Financial Statements 10
4.06 Events Since Date of ATW Balance Sheet 10
4.07 Properties 12
4.08 Accounts Receivable 12
4.09 Taxes 12
4.10 Compensation 12
4.11 Compliance with Law 13
4.12 Litigation 13
4.13 Contracts 13
4.14 Real Property 14
4.15 Proprietary Rights 14
4.16 Toxic Wastes; Employee Safety, etc 15
4.17 Insurance 15
4.18 Bank Accounts 15
4.19 No Conflict 15
4.20 No Default 16
4.21 Certain Advances 17
4.22 Related Parties 17
4.23 Copies of Certain Documents 17
4.24 Underlying Documents 17
4.25 Disclosure 17
4.26 Effect of Agreement 17
4.27 Indemnification of ColorSmart 17
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF COLORSMART 17
5.01 Organization 17
5.02 Validity of Agreement 17
5.03 Effect of Agreement 18
5.04 Indemnification of ATW and
the Shareholder 18
ARTICLE VI. ACCESS TO INFORMATION; CONFIDENTIALITY 19
6.01 Access 19
6.02 Confidentiality 19
ARTICLE VII. COVENANTS OF ATW AND THE SHAREHOLDER 20
7.01 Conduct of Business 20
7.02 Notice of Certain Adverse Changes, Defaults or Claims 20
7.03 Actions Requiring Consent 20
7.04 Implementation of Representations and Warranties 20
7.05 Communications 20
7.06 Other Negotiations 20
7.07 Cooperation 21
7.08 Facilitation of Public Offering 21
ARTICLE VIII. COVENANTS OF COLORSMART 21
8.01 Implementation of Representations and Warranties 21
8.02 Communications 22
8.03 Registration of ColorSmart Stock 22
8.04 Additional SEC Documents 22
ARTICLE IX. SECURITIES LAW MATTERS 22
9.01 Securities Act Exemptions 22
9.02 Stock Restrictions 22
9.03 Representations of ColorSmart 22
9.05 Legend Restrictions 23
ARTICLE X. CONDITIONS TO OBLIGATIONS OF THE SHAREHOLDER 23
10.01 Accuracy of Representations and Warranties 23
10.02 Fulfillment of Covenants 23
10.03 Approval of Sale 23
10.04 No Litigation 23
ARTICLE XI. CONDITIONS TO OBLIGATIONS OF COLORSMART 24
11.01 Accuracy of Representations and Warranties 24
11.02 Fulfillment of Covenants 24
11.03 Approval of Sale 24
11.04 Consents Obtained 24
11.05 No Litigation 24
11.06 Accountant's Review 24
11.07 Accounting Treatment 25
11.08 ColorSmart Review 25
11.09 Resignation of Directors 25
11.10 Sale of ATW Stock 25
ARTICLE XII. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
COVENANTS 25
ARTICLE XIII. PAYMENT OF EXPENSES 25
13.01 Expenses 25
13.02 Brokers 26
ARTICLE XIV. GENERAL PROVISIONS 26
14.01 Notices 27
14.02 Heading 27
14.03 Counterparts 27
14.04 Assignment 27
14.05 Waiver 27
14.06 Entire Agreement 27
14.07 Good Faith 27
14.08 Applicable Law 27
14.09 Severability 27
SCHEDULE OF EXHIBITS 29
STOCK AND ASSET PURCHASE AGREEMENT
THIS STOCK AND ASSET PURCHASE AGREEMENT ("Agreement") is made and entered
into as of the 23rd day of September, 1998, by and between ColorSmart, Inc., a
Tennessee corporation ("ColorSmart") and Advertising That Works, Inc., a Georgia
corporation ("ATW"); and the sole shareholder of ATW, Xxxxx Xxxxxxx (the
"Shareholder").
RECITALS:
A. The Shareholder is the holder of one-hundred percent (100%) of the
outstanding voting stock of ATW (the "ATW Stock") and the owner in fee simple
title of certain real property upon which the ATW business is currently
conducted ("ATW Real Estate");
B. ColorSmart desires to purchase from the Shareholder, and the
Shareholder desires to sell to ColorSmart, all of the outstanding ATW Stock
owned by Shareholder and the ATW Reel Estate, in exchange for the consideration
described herein.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereby agree as follows:
ARTICLE I.
1.01 Sale and Transfer of ATW Stock and ATW Real Estate. Subject to the
terms and conditions of this Agreement, on the Closing Date (as hereinafter
defined) the Shareholder agrees to sell, and ColorSmart agrees to purchase, all
of the shares of ATW Stock owned by the Shareholder, and Shareholder agrees to
convey by sufficient warranty deed to ColorSmart, all right, title, ownership,
and interest in and to the ATW Real Estate, free and clear of any liens or
encumbrances.
1.02 Consideration. As payment for the ATW Stock, ColorSmart shall deliver
at closing as hereinafter defined, to the Shareholder by certified bank check or
wire transfer, the sum of $1,500,000.00 ("Purchase Price"). The Purchase Price
shall be allocated such that $1,000,000 shall be allocated to the ATW Stock and
$500,000 shall be allocated to the ATW Real Estate.
ARTICLE II.
CLOSING
2.01 Closing Date. The closing of the purchase and sale of the ATW Stock
and ATW Real Estate hereunder (the "Closing") shall be held at the offices of
ATW at 1:00 p.m. on November 30, 1998, or at such other time and place upon
which ColorSmart and ATW may agree in writing (the "Closing Date"); provided,
however, that any agreement postponing the Closing Date beyond November 30, 1998
shall also require the consent of all the parties hereto.
2.02 Delivery. At the Closing, the Shareholder shall deliver to ColorSmart
a stock certificate or certificates, duly endorsed with signatures guaranteed,
representing the shares of ATW Stock to be purchased from such Shareholder and
totaling an aggregate of five-hundred (500) shares, duly endorsed with
appropriate signature guarantees for transfer. In addition at Closing, the
Shareholder shall deliver to ColorSmart a warranty deed in form and substance
satisfactory to counsel for the parties hereto, sufficient to convey fee simple
title to the ATW Real Estate to ColorSmart, free and clear of any liens or
encumbrances. Upon receipt of the stock certificate or stock certificates
referenced in the preceding sentence, and all other conditions to Closing are
satisfied, ColorSmart shall cause to be delivered to the Shareholder the
Purchase Price.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER
The Shareholder represents and warrants to ColorSmart as set forth below
that:
3.01 Title to ATW Stock and ATW Real Estate. Shareholder is the owner,
beneficially and of record, of all of the outstanding shares of capital stock
issued by ATW and to be sold by such Shareholder hereunder, free and clear of
any liens, encumbrances, security agreements, options, claims, charges or
restrictions of any nature whatsoever. Further, that such Shareholder shall
cause his shares to be voted in favor of the consummation of the transactions
contemplated by this Agreement, at any meeting of such Shareholder which may be
required hereunder. Shareholder is also the record title holder to all right,
title, and interest to the ATW Real Estate to be sold by such Shareholder
hereunder, free and clear of any liens, encumbrances.
3.02 Authorization. Such Shareholder has the full power and authority to
execute and deliver this Agreement and to execute and deliver any and all other
collateral agreements hereto and which are referred to as a part hereof. This
Agreement constitutes the valid and binding obligation of such Shareholder,
enforceable in accordance with its terms, except as enforcement may be limited
by applicable bankruptcy laws or other similar laws affecting creditors' rights
generally and by principles of equity.
ARTICLE IV.
JOINT REPRESENTATIONS AND WARRANTIES OF
ATW AND THE SHAREHOLDER
Subject to and except for the information which is set forth in a list of
exceptions, identified by the Section in this Article to which they pertain, and
contained in a schedule delivered to ColorSmart prior to the execution of this
Agreement and signed for identification on behalf of ColorSmart and ATW (the
"ATW Schedule"), ATW and the Shareholder jointly and severally represent and
warrant to ColorSmart that:
4.01 Organization. ATW is a corporation duly organized, validly existing
and in good standing under the laws of the State of Georgia, and has full
corporate power and authority to carry on its business as it is now being
conducted. ATW is duly qualified to do business and is in good standing in each
jurisdiction in which the nature of its business or properties make such
qualification necessary, except where the failure to be so qualified will not
have a material adverse effect on ATW.
4.02 Capitalization. The authorized capital stock of ATW consists of
___________ shares of Common Stock all of which is issued and outstanding. All
such outstanding shares have been duly authorized, are validly issued, fully
paid and nonassessable and not subject to preemptive rights created by statute,
ATW's Articles of Incorporation or Bylaws or any agreement to which ATW is a
party or by which it is bound. All such outstanding shares have been issued in
accordance with all applicable state and federal securities laws. Except as set
forth herein, there are no options, warrants, calls, rights, commitments or
agreements of any character to which ATW is a party or by which it is bound
obligating ATW to issue, deliver or sell, or cause to be issued, delivered or
sold, additional shares of its capital stock or obligating ATW to grant, extend
or enter into any such option, warrant, call, right, commitment or agreement.
4.03 ATW Subsidiaries. ATW owns no shares of capital stock directly or
indirectly, of any other corporation, partnership or joint venture interest.
4.04 Validity of Agreement. ATW has corporate power and authority to
execute and deliver this Agreement. This Agreement constitutes the valid and
binding obligation of ATW, enforceable in accordance with its terms, except as
enforcement may be limited by applicable bankruptcy laws or other similar laws
affecting creditors' rights generally and by principles of equity. The execution
and delivery of this Agreement by ATW, and the consummation of the transactions
contemplated hereby, have been duly authorized by all necessary corporate
action, and such execution and delivery do not require the consent, approval or
authorization of any person, public authority or other entity.
4.05 ATW Financial Statements. ATW has furnished to ColorSmart true and
correct copies of its unaudited statements of operations, statements of
shareholders' equity and statements of changes in financial condition for its
fiscal year ended December 31, 1997, and for the interim period from January 1,
1998 to June 30, 1998, and ATW's unaudited balance sheets as of the end of such
fiscal period (the balance sheet as of December 31, 1997, and as of June 30,
1998, hereinafter referred to as the "ATW Balance Sheets", and all such
financial statements, together with the notes thereto, being hereinafter
referred to collectively as the "ATW Financials"). All of the ATW Financials:
(i) are in accordance with ATW's books and records; (ii) present fairly the
financial position of ATW and the results of its operations as of the respective
dates and for the periods indicated thereon (subject to normal adjustments); and
(iii) have been prepared in accordance with generally accepted accounting
principles, applied on a consistent basis. At the date of the ATW Balance
Sheets, ATW had no material liabilities or obligations, fixed, contingent or
otherwise, not set forth on or reserved against in the ATW Financials, or the
accompanying notes thereto, or in the ATW Schedule. For purposes of this
Agreement, "materiality" shall mean amounts in excess of $10,000 either
individually or in the aggregate.
4.06 Events Since Date of ATW Balance Sheets. Since the date of the ATW
Balance Sheet, except as otherwise contemplated by this Agreement, and except as
described in the ATW Schedule, ATW has conducted its business only in the
ordinary and usual course and, without: (i) limiting the generality of the
foregoing:
(a) ATW has not sustained any damage, destruction or loss by reason of
fire, explosion, earthquake, casualty, labor trouble, requisition or taking of
property by any government or agency thereof, windstorm, embargo, riot, act of
God or public enemy, flood, accident, revocation of license or right to do
business, total or partial termination, suspension, default or modification of
contracts, governmental restriction or regulation, other calamity, or other
similar or dissimilar event (whether or not covered by insurance) materially and
adversely affecting the condition (financial or otherwise), business, net worth,
assets, properties or operations of ATW taken as a whole.
(b) There have been no changes in the condition (financial or otherwise),
business, net worth, assets, properties, operations, obligations or liabilities
(fixed or contingent) of ATW which, in the aggregate, have had or may be
reasonably expected to have (whether before or after the Closing Date) a
materially adverse effect on the condition (financial or otherwise), business,
net, worth, assets, properties or operations of ATW as a whole.
(c) ATW has not issued, or authorized for issuance, any equity security,
bond, note or other security or granted, or entered into, any commitment or
obligation to issue or sell any such equity security, bond, note or other
security, whether pursuant to offers, stock option agreements, stock bonus
agreements, stock purchase plans, incentive compensation plans, warrants, calls,
conversion rights or otherwise.
(d) ATW has not incurred additional debt for borrowed money, nor incurred
any obligation or liability (fixed, contingent or otherwise) except in the
ordinary and usual course of business.
(e) ATW has not declared or made any dividend, payment or other
distribution on or with respect to any share of its capital stock.
(f) ATW has not purchased, redeemed or otherwise acquired or committed
itself to acquire for a consideration, directly or indirectly, any share or
shares of its capital stock.
(g) ATW has not mortgaged, pledged, otherwise encumbered or subjected to
lien any of its assets or properties, tangible or intangible, nor committed
itself to do any of the foregoing, except for liens for current taxes which are
not yet due and payable and purchase money liens arising out of the purchase or
sale of products or services made in the ordinary and usual course of business.
(h) ATW has not disposed of, or agreed to dispose of, any asset or
property, tangible or intangible, except in the ordinary and usual course of
business, and in each case for a consideration at least equal to the fair value
of such asset or property, nor leased or licensed to others (including officers
and directors), or agreed to lease or license, any asset or property.
(i) ATW has not purchased or agreed to purchase or otherwise acquire any
debt or equity securities of any corporation, partnership, joint venture, firm
or other entity.
(j) ATW has not entered into any transaction or contract, or made any
commitment to do the same, except in the ordinary and usual course of business
and not involving an amount in any case in excess of $10,000 nor waived any
right of substantial value or cancelled any debt or claim or voluntarily
suffered any extraordinary loss.
(k) ATW has not sold, assigned, transferred or conveyed, or committed
itself to sell, assign, transfer or convey, any Proprietary Right (as defined in
Section 4.15).
(l) ATW has not effected or agreed to any amendment or supplement to any
employee profit sharing, stock option, stock purchase, pension, bonus,
incentive, retirement, medical reimbursement, life insurance, deferred
compensation or any other employee benefit plan or arrangement.
(m) ATW has not effected or agreed to effect any change in its directors
or executive management.
(n) ATW has not effected or committed itself to effect any amendment or
modification to its Articles of Incorporation or Bylaws.
4.07 Properties. The ATW Balance Sheets reflects all of the assets and
properties, real and personal, used by ATW in its business or otherwise held by
it, except for: (i) property acquired or disposed of in the ordinary and usual
course of business since the date of such balance sheet; and (ii) property not
required under generally accepted accounting principles to be reflected thereon;
and (iii) the ATW Real Estate. Except as set forth in the ATW Schedule, ATW has
good and marketable title to all assets and properties listed on the ATW Balance
Sheet and thereafter acquired, free and clear of any imperfections of title,
lien, claim, encumbrance, restriction, charge or equity of any nature
whatsoever, except for the lien of current taxes not yet due and payable. All of
the fixed assets and properties listed on the ATW Balance Sheet and thereafter
acquired are in good operating condition and are free from any material defect.
Attached hereto and made a part hereof as Exhibit 4.07 is a full and complete
legal description of the ATW Real Estate.
4.08 Accounts Receivable. All of the accounts receivable of ATW shown on
the ATW Balance Sheet or thereafter acquired arose and are collectible in the
ordinary and usual course of ATW's business, except that the value of any
account receivable the collection of which is doubtful or which is subject to a
defense or set-off has been written down to an amount not in excess of
realizable market value or adequate reserves or allowances therefor have been
provided. The values at which accounts receivable are carried reflect the
accounts receivable valuation policy of ATW, which is consistent with its past
practice and in accordance with generally accepted accounting principles applied
on a consistent basis.
4.09 Taxes. ATW has duly filed with the appropriate United States, state,
local and foreign governmental agencies, all tax returns and reports required to
be filed and has paid or accrued in full all taxes, interest, penalties,
assessments or deficiencies, if any, due to, or claimed to be due by, any taxing
authority. The ATW Balance Sheet includes adequate provision for all such taxes,
interest, penalties, assessments or deficiencies, if any, through the date
indicated thereon. ATW has not executed or filed with any taxing authority any
agreement extending the period for assessment or collection of any taxes. ATW is
not a party to any pending action or proceeding, nor, to the best of its
knowledge, is any such action or proceeding threatened by any governmental
authority for the assessment or collection of taxes, interest, penalties,
assessments or deficiencies, and no claim for assessment or collection of taxes,
interest, penalties, assessments or deficiencies has been asserted against it.
No issue has been raised by any federal, state, local, or foreign taxing
authority in connection with an audit or examination of ATW's tax returns,
business or properties which has not been settled or resolved.
4.10 Compensation. The ATW Schedule contains a full and complete list of
all persons who served as directors, officers, employees or consultants of ATW
at June 30, 1998, specifying their names and job designations, the annual
compensation paid or
payable to such persons and the basis of such compensation, whether fixed or
commission or a combination thereof Except as otherwise disclosed in the ATW
Schedule, since June 30, 1998, there his been no material change in
compensation, by means of wages, salaries, bonuses, gratuities or otherwise, to
any such director, officer, employee or consultant of ATW.
4.11 Compliance with Law. Except for possible minor exceptions, the curing
or non-curing of which would not have a material effect on the condition
(financial or otherwise), business, net worth, assets, properties, or operations
of ATW taken as a whole, the business of ATW has been conducted in accordance
with all applicable laws, regulations, orders and other requirements of
governmental authorities, including, without limiting the generality of the
foregoing, all laws, regulations and orders relating to employment practices and
procedures and the health and safety of employees. ATW has not received any
notice of alleged violations of any of the foregoing.
4.12 Litigation. Except as set forth in the ATW Schedule, there is no
claim, dispute, action, proceeding, suit, appeal or investigation, at law or in
equity, pending against ATW or involving any of its business or properties,
before any court, agency, authority, arbitration panel or other tribunal, and,
to the best knowledge of ATW and the Shareholder, none has been threatened. To
the best knowledge of ATW and the Shareholder, there are no facts which, if
known to shareholders, customers, governmental authorities or other persons,
would result in any such claim, dispute, action, proceeding, suit, appeal or
investigation which would have a material adverse effect on the condition
(financial or otherwise), business, net worth, assets, properties or operations
of ATW taken as a whole. Except as set forth in the ATW Schedule, ATW is not
subject to any order, writ, injunction or decree of any court, agency,
authority, arbitration panel or other tribunal, or in default with respect to
any notice, order, writ, injunction or decree.
4.13 Contracts. The ATW Schedule contains a full and complete list
(subject in the case of clause (i) below to the dollar amount indicated therein)
of each partially or totally executory contract or agreement to which ATW is a
party, or by which it is bound in any respect, including, without limitation,
any and all: (i) contracts or agreements for the purchase, sale, lease or other
disposition of equipment, goods, materials, research and development, supplies,
studies, or capital assets, or for the performance of services, in any case
involving more than $10,000, except that such limitation as to dollar amount
shall not apply as to any contracts or agreements covered by Section 4.22; (ii)
contracts or agreements for the joint performance of work or services, and all
other joint venture or teaming agreements, (iii) management or employment
contracts, consulting contracts, collective bargaining contracts or termination
and severance agreements; (iv) notes, mortgages, deeds of trues, loan
agreements, security agreements, guarantees, debentures, indentures, credit
agreements and other evidences of indebtedness; (v) pension, retirement, profit
sharing, deferred compensation, bonus, incentive, life insurance,
hospitalization, or other employee benefit plans or arrangements (including,
without limitation, any contracts or agreements with trustees, insurance
companies or others relating to any such employee benefit plan or arrangement);
(vi) stock option, stock
purchase, warrant, repurchase or other contracts or agreements relating to any
shares of capital stock; (vii) contracts or agreements with agents, brokers,
consignees, sales representatives or distributors; (viii) contracts or
agreements with any director, officer, employee, consultant or shareholder; (ix)
powers of attorney or similar authorizations granted to third parties; and (x)
licenses, sublicenses, royalty agreements, and other contracts or agreements to
which ATW is a party, or otherwise subject, relating to technical assistance or
to Proprietary Rights (as defined in Section 4.15). ATW is not a party to, nor
bound by, any contract or agreement which: (A) ATW can reasonably foresee will
result in any material loss upon the performance thereof (including any material
liability for penalties or damages, whether liquidated, direct, indirect,
incidental or consequential, or down time charges); and (B) is not reflected or
adequately reserved against on the ATW Balance Sheets. No party has raised any
claim, dispute or controversy or withheld payments from ATW with respect to any
of its contracts nor has ATW received notice or warning of alleged
nonperformance, delay in delivery or other noncompliance with respect to the
obligations of ATW under any of its contracts, nor are there any facts which
exist indicating that any of such contracts may be totally or partially
terminated or suspended by the other party thereto. ATW has not entered into any
contract or agreement containing covenants limiting its right to compete in any
business with any person. As used in this Agreement, the terms "contract" and
"agreement" mean and include every contract, agreement and commitment whether
written or oral.
4.14 Real Property. The ATW Schedule contains a full and complete list of
all real property leased by ATW. All such property is held under valid and
enforceable leases, copies of which have been delivered to ColorSmart and as to
which neither party to the lease is in material default ATW does not own any
real property in fee simple. To the best knowledge of ATW, the operations of ATW
on any of such real property, nor any improvement thereon, violate any
applicable building code, zoning requirement, or pollution control ordinance or
any other regulation or statute applicable to such real property.
4.15 Proprietary Rights. The ATW Schedule contains a full and complete
list of all trademarks, trade names, service marks, and copyrights, or
applications therefor, owned or used by ATW. ATW owns, or possesses adequate
licenses or other rights to use, all trademarks, trademark applications, service
marks, trade names, copyrights, inventions, drawings, computer software,
designs, trade secrets, customer lists, proprietary know-how or information, or
other rights with respect thereto (collectively referred to as "Proprietary
Rights") required for or incident to the operation, sale and use of all products
and services sold or provided by ATW, free and clear of any right, lien,
encumbrance or claim of others, including without limitation present or former
employees of ATW or their former employers; provided, however, that the
possibility exists that other persons, completely independent of ATW or its
employees or agents, could have developed trade secrets, customer information or
items of technical information similar or identical to that of ATW. ATW is not
aware of any such development by other persons of similar or identical trade
secrets or technical
information. ATW has taken reasonable security measures to protect the secrecy
and confidentiality of such of its Proprietary Rights, the value of which
depends upon such secrecy and confidentiality.
4.16 Toxic Wastes; Employee Safety etc. To the best of its knowledge, ATW
makes adequate provision for the control, removal, disposal and storage of all
toxic wastes, if any, generated by its business operations. ATW is not presently
in violation of any federal or state law, regulation, ordinance, or the like
governing protection of the environment and human health and safety regarding
toxic wastes. ATW is not presently in violation of any provision of OSHA or any
regulation promulgated thereunder. No action, proceeding, claim, suit or the
like is pending or has been threatened against by any government agency or any
person with respect to toxic wastes, occupational health and safety or
environmental damage, nor is ATW aware of any potential claims concerning any
such matters.
4.17 Insurance. The ATW Schedule contains a full and complete list of all
policies of insurance to which ATW is a party or is a beneficiary or named
insured, and ATW has in full force and effect, with all premiums due thereon
paid, the policies of insurance set forth therein. All the insurable properties
of ATW are insured in amounts and coverages and against risks and losses which
are adequate and usual for similar properties and businesses.
4.18 Bank Accounts. The ATW Schedule contains a full and complete list of
all the bank accounts of ATW together with the names of the persons authorized
to draw thereon. All cash in such accounts is held in demand deposits and is not
subject to any restriction or limitation as to withdrawal.
4.19 No Conflict. The execution and delivery of this Agreement by ATW and
the performance of its obligations hereunder: (i) are not in violation or breach
of, and will not conflict with or constitute a default under, any of the terms
of its Articles of Incorporation or Bylaws, or any note, debt instrument,
security agreement, lease, deed of trust or mortgage, or any other contract,
agreement or commitment binding upon ATW or any of its assets or properties;
(ii) will not result in the creation or imposition of any lien, encumbrance,
equity or restriction in favor of any third party upon any of its assets or
properties; and (iii) will not conflict with or violate any applicable law,
rule, regulation, judgment, order or decree of any government, governmental
instrumentality or court having jurisdiction over ATW or any of its assets or
properties. The ATW Schedule contains a full and complete list of all necessary
consents, waivers and approvals of third parties required to be obtained by ATW
in connection with the execution and delivery of this Agreement by ATW and the
performance of its obligations hereunder.
4.20 No Default. ATW has in all respects performed, or is now performing,
the obligations of, and is not in material default (and would not by the lapse
of time and/or the giving of notice be in material default) in respect of, any
note, debt instrument, "security agreement, option to purchase, lease, deed of
trust or mortgage, or any other
material contract, agreement or commitment binding upon it or its assets or
properties. Each of the material contracts, agreements or other instruments
described on the ATW Schedule is a legal, binding, and enforceable obligation by
or against it. To the best knowledge of ATW, no party with whom it has an
agreement or contract, which is of material importance to the condition
(financial or otherwise), business, net worth, assets, properties, or operations
of ATW taken as a whole, is in default thereunder or has breached any terms of
provisions thereof in a material way.
4.21 Certain Advances. There are no receivables of ATW owing by directors,
officers, employees, consultants or its shareholders, or owing by any affiliate
of any director or officer of ATW, other than advances in the ordinary and usual
course of business to officers and employees for reimbursable business expenses.
4.22 Related Parties. No officer or director of ATW, or any affiliate of
any such person, has, either directly or indirectly: (i) an interest in any
corporation, partnership, firm or other person or entity which furnishes or
sells products or services which are similar to those furnished or sold by ATW;
or (ii) a beneficial interest in any contract or agreement to which ATW is a
party or by which ATW may be bound. For purposes of this Section 4.22; there
shall be disregarded any interest which arises solely from the ownership of less
than a one (1) percent equity interest in a corporation whose stock is regularly
traded on any national securities exchange or in the over-the-counter market.
4.23 Copies of Certain Documents. The ATW Schedule contains true and
complete copies of: (i) its currently effective Articles of Incorporation,
certified by the Secretary of State of Georgia; (ii) its currently effective
Bylaws, certified by the Secretary of ATW; and (iii) all federal and other tax
returns filed by ATW since its inception [or for a shorter period agreed to by
the parties such as 5 years].
4.24 Underlying Documents. All underlying documents listed or described in
the ATW Schedule have heretofore been furnished to ColorSmart. All such
documents furnished to ColorSmart are true and correct copies, and there are no
amendments or modifications thereto, except as expressly noted in the ATW
Schedule. The minute books of ATW contain full, complete and accurate records of
all meetings and other corporate actions taken by the directors and shareholders
of ATW, and ColorSmart has heretofore been furnished true and correct copies of
all documents and records contained in said minute books.
4.25 Disclosure. Neither this Agreement, the ATW Schedule, nor any other
written statement or certificate furnished by ATW or the Shareholders to
ColorSmart in connection with the transactions contemplated hereby, when taken
together, contain any untrue statement of a material fact or omit to state any
material fact necessary to make any statement, in light of the circumstances
under which such statement is made, not misleading.
4.26 Effect of Agreement. The execution, delivery and performance by the
Shareholder and by ATW of this Agreement, and the consummation of the
transactions herein contemplated, will not conflict with, or result in a breach
of the terms of, or constitute a default under or violation of, any law or
regulation of any governmental authority or any provision of the Articles of
Incorporation or Bylaws of either, or any agreement or instrument to which the
Shareholder or ATW is a party or by which they are bound or to which they are
subject. No consent of any person not a party to this Agreement and no consent
of any governmental authority is required to be obtained on the part of the
Shareholder or ATW to permit the consummation of the transactions contemplated
by this Agreement, which consents will not have been received before the Closing
Date.
4.27 Indemnification of ColorSmart. ATW and the Shareholder, agree,
jointly and severally, to indemnify, defend and hold ColorSmart, its officers,
directors, employees and attorneys (all such persons and entities being
collectively referred to as the "ColorSmart Group"), harmless from and against
any and all losses, damages, costs and expenses, including attorneys' fees (any
such loss, damage, cost or expense herein called a "Loss"), which they or any
member of the ColorSmart Group may at any time sustain or incur by reason of:
(i) any inaccuracy or breach of any of the representations, warranties or
covenants of ATW or the Shareholder contained herein or in any certificate
delivered pursuant hereto, or (ii) any claim or claims whether or not presently
known to the ColorSmart Group, which arise in connection with the operation of
the business of ATW, where the event which gives rise to such claim occurred
prior to the date of this Agreement, or (iii) any claim or claims arising out of
the failure of ATW or the Shareholder to discharge any of their obligations
pursuant to this Agreement. In any action in respect of which indemnity may be
sought hereunder by a party hereto shall be brought against such party, the
other party shall be entitled to participate in the defense thereof at its own
expense and to settle any such action on such terms as it shall see fit so long
as the party entitled to indemnification hereunder shall be released from any
liability by reason of such settlement. In such event, the party required to
provide indemnification shall receive full cooperation and access to all
relevant and nonprivileged records. The indemnification provisions of this
Section shall not be deemed exclusive and shall not prejudice any other rights
or remedies, at law or in equity, of any party under this Agreement with respect
to any matter relating to the terms, provisions, covenants or conditions of this
Agreement or any transaction contemplated hereby.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF COLORSMART
ColorSmart represents and warrants to ATW and the Shareholder that:
5.01 Organization. ColorSmart is a corporation duly organized, validly
existing and in good standing under the laws of the State of Tennessee and has
full corporate power and authority to carry on its business as now being
conducted.
5.02 Validity of Agreement. ColorSmart has full corporate power and
authority to execute and deliver this Agreement. This Agreement constitutes the
valid and binding obligation of ColorSmart, enforceable in accordance with its
terms, except as enforcement may be limited by applicable bankruptcy laws or
other similar laws affecting creditors' rights generally and by principles of
equity. The execution and delivery of this Agreement by ColorSmart, and the
consummation of the transactions contemplated hereby, have been duly authorized
by all necessary corporate action, and such execution and delivery do not
require the consent, approval or authorization of any person, public authority
or other entity.
5.03 Effect of Agreement. The execution, delivery and performance by
ColorSmart of this Agreement, and the consummation of the transactions herein
contemplated, will not conflict with, or result in a breach of the terms of, or
constitute a default under or violation of, any law or regulation of any
governmental authority or any provision of the Articles of Incorporation or
Bylaws of ColorSmart, or any agreement or instrument to which ColorSmart is a
party or by which it is bound or to which it is subject No consent of any person
not a party to this Agreement and no consent of any governmental authority is
required to be obtained on the part of ColorSmart to permit the consummation of
the transactions contemplated by this Agreement, which consent will not have
been received before the Closing Date.
5.04 Indemnification of ATW and the Shareholder. ColorSmart agrees to
indemnify, defend and hold ATW, the Shareholder, their respective officers,
directors, employees and attorneys (all such persons and entities being
collectively referred to as the "ATW Group"), harmless from and against any and
all losses, damages, costs and expenses, including attorneys' fees (any such
loss, damage, cost or expense herein called a "Loss"), which they or any member
of the ATW Group may at any time sustain or incur by reason of: (i) any claim or
claims whether or not presently known to the ColorSmart Group, which arise in
connection with the operation of the business of ColorSmart, where the event
which gives rise to such claim occurred prior to the date of this Agreement, or
(ii) any claim or claims arising out of the failure of ColorSmart to discharge
any of its obligations pursuant to this Agreement In any action in respect of
which indemnity may be sought hereunder by a party hereto shall be brought
against such party, the other party shall be entitled to participate in the
defense thereof at its own expense and to settle any such action on such terms
as it shall see fit so long as the party entitled to indemnification hereunder
shall be released from any liability by reason of such settlement. In such
event, the party required to provide indemnification shall receive full
cooperation and access to all relevant and nonprivileged records. The
indemnification provisions of this Section shall not be deemed exclusive and
shall not prejudice any other rights or remedies, at law or in equity, of any
party under this Agreement with respect to any matter relating to the terms,
provisions, covenants or conditions of this Agreement or any transaction
contemplated hereby.
ARTICLE VI.
ACCESS TO INFORMATION: CONFIDENTIALITY
6.01 Access.
(a) Prior to the Closing Date, ATW shall afford representatives of
ColorSmart reasonable access to the officers and personnel of ATW and to such of
its financial, contractual and other records as shall be reasonably necessary
for ColorSmart's investigation of ATW and its business and operations.
(b) Prior to the Closing Date, ColorSmart shall afford representatives of
ATW reasonable access to the officers and personnel of ColorSmart and to such of
their financial, contractual and other records as shall be reasonably necessary
for ATW's investigation of ColorSmart and its business and operations.
(c) ColorSmart shall make available to the Shareholder the opportunity to
ask questions of and receive answers from appropriate officers or
representatives of ColorSmart concerning the terms and conditions of the
transactions contemplated by this Agreement and to obtain any additional
information which ColorSmart possesses or can acquire without unreasonable
effort or expense that is necessary to verify the accuracy of the information
furnished to the Shareholder hereunder.
6.02 Confidentiality.
(a) No information concerning ATW not previously disclosed to the public
or in the public domain which is contained herein or in the ATW Schedule, or
which shall have been furnished to or obtained by ColorSmart as provided in
Section 6.0 1(a), shall be disclosed to any person other than ColorSmart's
employees, legal counsel, financial advisers, or accountants in confidence, or
used for any purpose other than as contemplated herein. In the event that the
purchase and sale of the ATW Stock shall not be consummated, ColorSmart shall
return to ATW all such information in its possession which is in written form.
(b) No information concerning ColorSmart not previously disclosed to the
public or in the public domain which is contained herein or which shall have
been furnished to or obtained by ATW or any Shareholder as provided in Section
6.01(b) or 6.0 1(c), shall be disclosed by them to any person other than their
respective employees, legal counsel, financial advisors, or accountants in
confidence, or used for any purpose other than as contemplated herein. In the
event that the purchase and sale of the ATW Stock shall not be consummated, each
such person shall return to ColorSmart all such
information in their possession which is in written form.
ARTICLE VII.
COVENANTS OF ATW AND THE SHAREHOLDER
ATW and the Shareholder hereby jointly and severally covenant:
7.01 Conduct of Business. From and after the execution and delivery of
this Agreement and until the Closing Date or the termination of this Agreement,
whichever shall first occur: (i) ATW shall not engage in any activities or
transactions which shall be outside the ordinary course of its business without
the prior written consent of ColorSmart, which consent shall not be unreasonably
withheld; (ii) such persons will use their best efforts to preserve the existing
licenses, franchises, rights and privileges pertinent to the business and
operations of ATW; and (iii) such persons will use their best efforts to
preserve intact the business organization of ATW and to preserve its goodwill
and relationships with its suppliers, customers, employees and others with whom
it deals.
7.02 Notice of Certain Adverse Changes, Defaults or Claims. ATW shall give
prompt notice to ColorSmart of any material adverse change to the properties or
business of ATW, or any notice of default received by it, subsequent to the date
of this Agreement and prior to the Closing Date, under any instrument or
agreement to which ATW is a party or by which any of its property is bound, or
of the assertion of any claim which, if upheld, would render inaccurate any
representation contained herein.
7.03 Actions Requiring Consent. Between the date hereof and the Closing
Date or, the termination of this Agreement, whichever shall first occur, ATW
shall not, without the prior written consent of ColorSmart, which consent shall
not unreasonably be withheld, take any action of the type described in clauses
(c) Through (n) of Section 4.06.
7.04 Implementation of Representations and Warranties. Such persons shall
use all reasonable efforts to render accurate as of the Closing Date their
representations and warranties contained in this Agreement, and shall refrain
from taking any action which would render inaccurate as of the Closing Date any
of such representations or warranties.
7.05 Communications. Between the date hereof and the Closing Date, such
persons shall furnish no communication to the public with respect to the
transactions contemplated by this Agreement without the prior approval of
ColorSmart as to the content thereof, which approval shall not unreasonably be
withheld by ColorSmart.
7.06 Other Negotiations. Between the date hereof and the Closing Date or
the termination of this Agreement, whichever shall first occur, such persons
will disclose to ColorSmart all bona fide inquiries from other persons, firms or
corporations concerning
the possible acquisition of ATW (by consolidation, merger, sale or exchange of
assets, sale of stock or otherwise) or equity securities of ATW; and neither ATW
nor the Shareholder will solicit an acquisition of ATW by another person, firm
or corporation, whether by consolidation, merger or purchase or sale of business
or assets or by the sale or exchange of stock, nor will ATW solicit the sale of
any of its capital stock or other equity securities to any other person, firm or
corporation. Nothing contained in this Section shall be construed as limiting
the rights of the Board of Directors of ATW to discharge their fiduciary
responsibilities in response to unsolicited offers from third parties.
7.07 Cooperation. The Shareholder shall cooperate, and will use its best
efforts to have the other present officers, directors and employees of ATW
cooperate, with ColorSmart, at its request, on and after the Closing Date and
without further consideration, in endeavoring to effect the collection of
accounts or notes receivable owing to ATW at the Closing Date, and, at
ColorSmart's expense, in furnishing information, evidence, testimony and other
assistance in connection with any actions, proceedings, arrangements or disputes
relating to adjustment of federal income or any other taxes of ATW for all
periods prior to the Closing Date and in connection with any other actions,
proceedings, arrangements or disputes whatsoever involving ATW and based upon
contracts, arrangements or acts which were in effect or occurred on or prior to
the Closing Date.
7.08 Facilitation of the ColorSmart Public Offering. ATW and the
Shareholder shall use their best efforts to cooperate, and will use their best
efforts to have the other present officers, directors, agents, employees,
attorneys, and accountants of ATW to cooperate with ColorSmart in the process of
ColorSmart's initial public offering of its common stock, being undertaken by
ColorSmart pursuant to the Securities Act of 1933, as amended ("Public
Offering"). Such cooperation shall include, but not be limited to: (i) providing
for, at ColorSmart's expense, a certified audit of ATW's financial statements
and statements of operation for the two year period ended December 31, 1997 and
for the preparation and review of any interim financial statements and
statements of operations of ATW as required by Regulation S-B promulgated under
the Securities Act, if such certified audit shall be required in the Public
Offering; and (ii) providing such additional information or documents which may
be reasonably necessary for ColorSmart to conduct its Public Offering and to
permit the effectiveness of the registration statement to be filed by ColorSmart
with the United States Securities and Exchange Commission ("SEC").
ARTICLE VIII.
COVENANTS OF COLORSMART
ColorSmart hereby covenants:
8.01 Implementation of Representations and Warranties. ColorSmart shall
use all reasonable efforts to render accurate as of the Closing Date its
representations and
warranties contained in this Agreement, and shall refrain from taking any action
which would render inaccurate as of the Closing Date any of such representations
or warranties.
8.02 Communications. Between the date hereof and the Closing Date (except
to the extent required by state or federal securities laws), ColorSmart shall
furnish no communication to the public with respect to the transactions
contemplated by this Agreement without the prior approval of ATW as to the
content thereof, which approval shall not unreasonably be withheld by ATW.
8.03 Registration of ColorSmart Common. ColorSmart will use its best
efforts to file and maintain an effective registration statement with the SEC
and applicable state securities commissions covering the registration on Form
SB-2 and sale of its common stock in order to conduct the Public Offering as
soon as practicable after the execution of this Agreement.
8.04 Additional SEC Documents. ColorSmart shall furnish to ATW and the
Shareholder copies of all documents, if any, (other than preliminary material
and documents which describe this Agreement and the transactions contemplated
hereby) that ColorSmart files-with the SEC from the date hereof through the
Closing Date.
ARTICLE IX.
SECURITIES LAW MATTERS
9.01 Securities Act Exemptions. The ATW Stock to be transferred by the
Shareholder to ColorSmart pursuant to this Agreement shall not be registered
under the Securities Act, in reliance upon exemptions from such registration
contained in Section (4)(1) and/or Section 4(2) of the Securities Act.
9.02 Stock Restrictions. The certificates representing the shares of ATW
Stock transferred pursuant to this Agreement shall bear a restrictive legend in
substantially the following form (and appropriate stock transfer orders shall be
placed against the transfer thereof):
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE 'ACT'). THE SHARES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT
UNDER THE CIRCUMSTANCES SPECIFIED BY A SHAREHOLDER'S AGREEMENT, A
COPY OF WHICH MAY BE OBTAINED FROM THE SECRETARY OF THE
CORPORATION."
9.03 Representations of ColorSmart. ColorSmart represents and warrants to
the Shareholder that it is acquiring the ATW Stock for its own account for
investment and
not with a view to, or for sale in connection with, any distribution thereof,
and without any present intention of selling the same; provided, however, that
any disposition thereof will at all times be within its control.
9.05 Legend Restrictions. It is understood that the certificates
representing the ATW Stock purchased hereunder shall be endorsed with a legend
restricting transfer as necessary to conform to the requirements of the
Securities Act.
ARTICLE X.
CONDITIONS TO OBLIGATIONS OF THE SHAREHOLDER
The obligations of the Shareholder under this Agreement are, at the option
of the Shareholder, subject to the satisfaction at or prior to the Closing of
the following conditions:
10.01 Accuracy of Representations and Warranties. All of the
representations and warranties made-by ColorSmart in this Agreement shall be
true in all material respects as of the Closing Date with the same force and
effect as though such representations and warranties had been made as of the
Closing Date, except for changes contemplated by this Agreement, and ColorSmart
shall have delivered to ATW and the Shareholder a certificate to such effect
dated the Closing Date and signed by its President and Chief Executive Officer.
10.02 Fulfillment of Covenants. All of the terms, covenants and conditions
of this Agreement to be complied with and performed by ColorSmart at or before
the Closing Date shall have been duly complied with and performed, and
ColorSmart shall have delivered to ATW and the Shareholder a certificate to such
effect dated the Closing Date and signed by its President and Chief Executive
Officer.
10.03 Approval of Sale. All authorizations, consents and approvals of all
federal, state and local governmental agencies and authorities required to be
obtained in order to permit consummation of the transactions contemplated by
this Agreement shall have been obtained.
10.04 No Litigation. There shall be no litigation pending which has been
brought for the purpose of enjoining any transaction contemplated by this
Agreement or which would have the effect, if successful, of imposing a material
liability upon ATW the Shareholder because of such transaction.
ARTICLE XI.
CONDITIONS TO OBLIGATIONS OF COLORSMART
The obligations of ColorSmart under this Agreement are, at the option of
ColorSmart, subject to the satisfaction at or prior to the Closing of the
following conditions:
11.01 Accuracy of Representations and Warranties. All of the
representations and warranties made by ATW and the Shareholder in this Agreement
shall be true in all material respects as of the Closing Date with the same
force and effect as though such representations and warranties had been made as
of the Closing Date, except for changes contemplated by this Agreement, and ATW
shall have delivered to ColorSmart a certificate to such effect dated the
Closing Date and signed by its President and Chief Executive Officer.
11.02 Fulfillment of Covenants. All of the terms, covenants and conditions
of this Agreement to be complied with and performed by ATW or the Shareholder at
or before the Closing Date shall have been duly complied with and performed, and
ATW shall each have delivered to ColorSmart a certificate to such effect dated
the Closing Date and signed by its President and Chief Executive Officer.
11.03 Approval of Sale. All authorizations, consents and approvals of all
federal, state and local governmental agencies and authorities required to be
obtained in order to permit consummation of the transactions contemplated by
this Agreement shall have been obtained.
11.04 Consents Obtained. ATW and the Shareholder shall have delivered to
ColorSmart the written consent or approval of each person or organization whose
consent or approval shall be required in order to permit them to consummate the
transactions contemplated hereby or in order to avoid any breach or termination
of any agreement to which they are a party.
11.05 No Litigation. There shall be no litigation pending which has been
brought for the purpose of enjoining any transaction contemplated by this
Agreement or which would have the effect, if successful, of imposing a material
liability upon ColorSmart, or any of its officers or directors because of such
transaction.
11.06 Accountant's Review. ColorSmart shall have received from ATW's
accountant, a letter to the effect that on the basis of their "acquisition
review" of ATW, not constituting a full audit, nothing has come to their
attention which has caused them to believe that the accounts or balances to
which they applied their procedures should be
adjusted.
11.07 Accounting Treatment. ColorSmart shall have received from its
accountant, a written analysis stating that the business combination resulting
from the consummation of the transactions contemplated by this Agreement may be
accounted for on a pooling of interests basis in accordance with generally
accepted accounting principles and in accordance with all rules, regulations and
policies of the SEC.
11.08 ColorSmart Review. There shall not have come to the attention of
ColorSmart, as a result of any investigation performed pursuant to Section 6.01
hereof, any information, not previously disclosed to ColorSmart, which is likely
to materially and adversely affect the business, property or operations of ATW
following the Closing Date.
11.09 Resignation of Directors. All persons serving as directors of ATW
shall have tendered their resignations to be effective as of the Closing Date.
11.10 Sale of ATW Stock. Not less than one hundred percent (100%) of the
shares of ATW Stock outstanding as of the Closing Date shall have been tendered
by the Shareholder for purchase by ColorSmart hereunder.
ARTICLE XII.
SURVIVAL OF REPRESENTATIONS WARRANTIES AND COVENANTS
The representations, warranties and covenants of the parties contained in
this Agreement or in any certificate or instrument delivered pursuant hereto
shall survive the Closing hereunder.
ARTICLE XIII.
PAYMENT OF EXPENSES
13.01 Expenses. Except as provided herein, the parties shall each pay
their own legal and accounting fees and other out-of-pocket expenses incurred
incident to the preparation and carrying out of this Agreement and the
transactions herein contemplated, whether or not such transactions are
consummated; provided however, in the event that the Shareholder, or ATW, or
either of them, shall fail to consummate the transactions contemplated by this
Agreement, for reasons other than a material breach by ColorSmart of the terms
of this Agreement, ATW shall pay to ColorSmart as a "break-up" fee all actual
accounting and legal expenses incurred by ColorSmart up to a maximum of $15,000.
In the event that such transactions are consummated, the reasonable legal and
accounting fees and ether expenses of ATW shall be borne by ColorSmart following
the Closing. All other expenses shall be deemed to be expenses of the
Shareholder, and the
Shareholder, jointly and severally, shall assume and be responsible for the
payment thereof.
13.02 Brokers. Each of the parties represents that it has dealt with no
broker or finder in connection with any of the transactions contemplated by this
Agreement and, insofar as it knows, no broker or other person is entitled to any
commission or finder's fee in connection with any such transaction. Each party
agrees to indemnify and hold the other parties harmless against any loss,
liability, damage, claim or expense incurred by reason of any brokerage
commission or finder's fee alleged to be payable because of any act, omission or
statement of the indemnifying party.
ARTICLE XIV.
GENERAL PROVISIONS
14.01 Notices. Any notice, request, instruction or other document to be
given hereunder by a party to any other party shall be in writing and effective
when delivered personally or sent by certified mail with return receipt
requested, postage prepaid, as follows:
To ColorSmart:
Attn: President
000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
With a Copy to: Xxxxxxx Xxxxxx, Esq.
0000 Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
To ATW
Attn: President
X.X. Xxx 000
Xxxxxx, Xxxxxxx 00000
With a Copy to: Xxxxx Xxxxxx, Esq.
Xxxx, Xxxxxxx & Xxxxxxx
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx Xxxx, Xxxxxxx 00000
To Shareholder: Xxxxxxxxxxx X. Xxxxxxx
0000 Xxxx Xxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
or to such other addresses or other persons as may be designated in writing by
any of the parties, by notice given as aforesaid.
14.02 Headings. The headings of the several sections of this Agreement are
inserted for the convenience of reference only and are not intended to affect
the meaning or interpretation of this Agreement.
14.03 Counterparts. This Agreement may be executed in one or more
counterparts, and when so executed each counterpart shall be deemed to be an
original, and said counterparts together shall constitute one and the same
instrument.
14.04 Assignment None of the parties may assign or transfer any rights or
obligations under this Agreement.
14.05 Waiver. Any party hereto may, by written notice to the others: (i)
waive any of the conditions to its obligations hereunder or extend the time for
the performance of any of the obligations or actions of the others; (ii) waive
any inaccuracies in the representations of the others contained in this
Agreement or in any documents delivered pursuant to this Agreement; (iii) waive
compliance with any of the covenants of the others contained in this Agreement;
or (iv) waive or modify performance of any of the obligations of the others. No
action taken pursuant to this Agreement, including without limitation any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representation,
warranty, condition or agreement contained herein. Waiver of the breach of any
one or more provisions of this Agreement shall not be deemed or construed to be
a waiver of other breaches or subsequent breaches of the same provisions.
14.06 Entire Agreement. This Agreement, including the schedules and
exhibits hereto, constitutes the entire agreement between the parties pertaining
to the subject matter contained herein and supersedes all prior and
contemporaneous agreements, representations, and understandings of the parties.
No supplement, modification, or amendment of this Agreement shall be binding
unless executed in writing by the party sought to be bound.
14.07 Good Faith. Each of the parties hereto agree that it or they shall
act in good faith in an attempt to cause all the conditions precedent to their
respective obligations hereunder to be satisfied.
14.08 Applicable Law. This Agreement shall be governed by and construed
and interpreted in accordance with the laws of the State of Georgia.
14.09 Severability. Should any provision of this Agreement be determined
to be invalid, it shall be severed from this Agreement and the remaining
provisions of the Agreement shall remain in full force and effect.
Witness the due excecution of this Agreement by the parties hereto as of
the date first set forth above.
COLORSMART, INC.
By /s/ Xxxxx X. Xxxxxxx, Xx.
-------------------------
Title: Chairman/CEO
ADVERTISING THAT WORKS, INC.
By: /s/ Xxxxx Xxxxxxx
-------------------------
Title: President/CEO
SHAREHOLDER:
/s/ Xxxxx Xxxxxxx
----------------------------
(Signature)
----------------------------
(Typed or printed name and
title, if applicable)
