EX-99.2 20 dex992.txt RESCISSION AGREEMENT BETWEEN JOE DALEY & SONS, INC. Exhibit 99.2 RESCISSION AGREEMENT THIS RESCISSION AGREEMENT (the "Agreement") is entered into as of this 20th day of March, 2002, by and between Joe Daley & Sons, Inc., a California -- corporation (the "Purchaser") and Color Imaging, Inc., a Delaware corporation (the "Company"). RECITALS WHEREAS, Purchaser and the Company are parties to that certain Subscription Agreement dated as of December 20, 2001 (the "Subscription Agreement"), pursuant to which Purchaser has purchased from the Company (i) 25,000 shares of Company common stock, $0.01 par value per share (the "Shares"), and (ii) 25,000 warrants representing 25,000 Shares, at an exercise price of $2.00 per Share (the "Warrants"), subject to adjustment as provided in the Warrant Agreement, dated as of December 20, 2001, granted by the Company to the Purchaser (the "Warrant Agreement"), in exchange for (x) a cash payment by the Purchaser to the Company of $500 (the "Cash"), and (y) a recourse promissory note in the principal amount of $49,500, executed by the Purchaser in favor of the Company on December 20, 2001 (the "Note"); WHEREAS, to date, Purchaser has not (i) sold any of its Shares, (ii) exercised any of its Warrants pursuant to the Warrant Agreement, or (iii) made any payments to the Company pursuant to the Note; and WHEREAS, Purchaser and the Company have determined that it is in their mutual best interests to rescind the transactions contemplated by each of the Subscription Agreement, the Warrant Agreement and the Note in light of certain recent developments frustrating the Company's ability to have its Registration Statement on Form SB-2, filed on December 28, 2001, as amended on February 11, 2002, declared effective by the United States Securities and Exchange Commission. NOW THEREFORE BE IT RESOLVED, that for and in consideration of the foregoing recitals and the mutual promises, agreements and undertakings set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: AGREEMENT Section 1. RESCISSION. ----------------------- In order to accomplish the rescission of the transactions set forth in and contemplated by each of the Subscription Agreement, the Warrant Agreement and the Note, the following actions shall occur as of the date hereof (the "Closing Date"): (a) On the Closing Date, the Company will make a cash payment to the Purchaser in the amount of $500 in immediately available funds; (b) As of the Closing Date, Purchaser will no longer claim any right to or interest in the Shares held by the Purchaser and covenants to return to the Company on the Closing Date the original certificate numbered CI 0379, which certificate evidences 25,000 Shares. From and after the Closing Date, the Company will own all of the Shares evidenced by such certificate as treasury stock; (c) The Company will no longer claim any interest in the Warrant Agreement, the Warrants evidenced by such Warrant Agreement will be canceled in their entirety and the Purchaser hereby covenants to return to the Company the original executed Warrant Agreement, marked "CANCELLED," on the Closing Date; (d) The Company will no longer claim any interest in the Note, the indebtedness evidenced by such Note will be canceled in its entirety and the Company hereby covenants to return to the Purchaser the original executed Note, marked "CANCELLED," on the Closing Date; and (e) The Subscription Agreement is hereby rescinded in its entirety as of the Closing Date and shall be of no further force or effect. In addition, the Warrant Agreement executed by the Company in connection with the Subscription Agreement and the Note executed by the Purchaser in favor of the Company are hereby rescinded and shall be of no further force or effect. Section 2. GOVERNING LAW ------------------------- This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of California, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. Section 3. NOTICES ------------------- All notices, requests and demands required or permitted hereunder must be in writing to be effective and shall be deemed to have been duly given or made when actually delivered by certified or registered or overnight mail, in the case of telex, when sent, or in the case of notice by facsimile transmission, when received, addressed as follows or to such other address as may be hereafter notified by the respective parties hereto: Purchaser: Joe Daley & Sons, Inc. 781 Ceres Avenue Los Angeles, CA 90021 Attention: Joseph A. Daley, President Tel: (213) 627-1331 Fax: (213) ___-____ 2 Company: Color Imaging, Inc. 4350 Peachtree Industrial Blvd., Suite 100 Norcross, GA 30071 Attn: Chief Executive Officer Tel: (770) 840-1090 Fax: (770) ___-____ With Copies To: Gibson, Dunn & Crutcher, LLP 4 Park Plaza, 18th Floor Irvine, California 92614 Attn: James J. Moloney, Esq. Tel: (949) 451-4343 Fax: (949) 475-4756 Section 4. AMENDMENT & MODIFICATION. --------------------------------------- Subject to applicable law, this Agreement may be amended, modified, rescinded or supplemented only by a written agreement signed by both the Purchaser and the Company. Section 5. SUCCESSORS AND ASSIGNS ---------------------------------- This Agreement shall bind and inure to the benefit of the parties hereto and their respective successors and assigns. Notwithstanding the foregoing, however, no party hereto may assign or delegate any of its obligations hereunder without the prior written consent of the other party. Section 6. ENTIRE AGREEMENT. ----------------------------- This Agreement represents the entire agreement of the parties relating to the subject matter hereof. All prior or contemporaneous agreements, understandings, representations and statements, whether oral or written, are merged herein and hereby superseded. Section 7. FURTHER ASSURANCES ------------------------------ From time to time after execution of this Agreement, Purchaser and the Company will execute, deliver and acknowledge all such further documents, instruments of transfer and conveyance and will perform such other acts as either party may reasonably request to more effectively consummate the transactions contemplated hereby and give effect to the parties' intentions with respect hereto. Section 8. SEVERABILITY ------------------------ Any provision of this Agreement which is invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions hereof in such 3 jurisdiction or rendering that or any other provision of this Agreement invalid, illegal or unenforceable in any other jurisdiction. Section 9. COUNTERPARTS ------------------------ This Agreement may be executed by Purchaser and the Company in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. This Agreement may be executed via facsimile signature. Section 10. HEADINGS --------------------- The headings to the sections contained in this Agreement are for the convenience of the parties only and shall not be applied in interpreting or construing the meaning of this Agreement. Section 11. NO THIRD PARTY BENEFICIARIES ----------------------------------------- This Agreement is made and entered into for the sole protection and benefit of Purchaser and the Company and no other person or entity shall have any right of action hereon, right to claim any right or benefit from the terms contained herein, or be deemed a third party beneficiary hereunder. IN WITNESS WHEREOF, the parties hereto have caused this Rescission Agreement to be duly executed as of this March __, 2002. JOE DALEY & SONS, INC. By: /S/ JOSEPH A. DALEY Name: Joseph A. Daley Title: President COLOR IMAGING, INC. By: /S/ MICHAEL W. BRENNAN Name: Michael W. Brennan Title: Chief Executive Officer 4