<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 31, 1996.
REGISTRATION NO. 333-2642
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
--------------
GRAPHIX ZONE, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<CAPTION>
DELAWARE 7379 33-0697932
<S> <C> <C>
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification Number)
incorporation or organization) Industrial Classification Code Number)
------------------------
42 CORPORATE PARK, SUITE 200
IRVINE, CALIFORNIA 92714
(714) 833-3838
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
------------------------
CHARLES R. CORTRIGHT, JR., PRESIDENT
GRAPHIX ZONE, INC.
42 CORPORATE PARK, SUITE 200
IRVINE, CALIFORNIA 92714
(714) 833-3838
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
------------------------
COPIES TO:
GREGG AMBER, ESQ. CARL J. STONEY, JR., ESQ.
LARRY A. CERUTTI, ESQ. TWILA L. FOSTER, ESQ.
SNELL & WILMER L.L.P. JACKSON TUFTS COLE & BLACK, LLP
1920 MAIN STREET, 12TH FLOOR 650 CALIFORNIA STREET, 31ST FLOOR
IRVINE, CALIFORNIA 92714 SAN FRANCISCO, CALIFORNIA 94108
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: UPON
CONSUMMATION OF THE TRANSACTIONS DESCRIBED HEREIN.
IF THE SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED IN
CONNECTION WITH THE FORMATION OF A HOLDING COMPANY AND THERE IS COMPLIANCE WITH
GENERAL INSTRUCTION G, CHECK THE FOLLOWING BOX. / /
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Graphix Zone, Inc., a Delaware corporation (the "Registrant"), has
previously filed with the Securities and Exchange Commission (the "Commission")
a Registration Statement on Form S-4 on March 25, 1996 (SEC File No. 333-2642)
(as amended, the "Registration Statement"). The Registration Statement was
declared effective by the Commission on June 11, 1996. This Post-Effective
Amendment No. 1 to Registration Statement is being filed by the Commission for
the purpose of filing two (2) exhibits (Exhibits 8.1 and 8.2) to the
Registration Statement and for the purpose of deregistering certain shares of
the Registrant's Common Stock, par value $0.01 per share ("Common Stock"), which
were registered pursuant to the Registration Statement.
On June 27, 1996 (the "Effective Date"), upon approval of the merger to
which the Registration Statement relates (the "Merger") by the respective
stockholders of Graphix Zone, Inc., a California corporation and, pursuant to
the Merger, a wholly-owned subsidiary of the Registrant ("GZ California"), and
StarPress, Inc., a Colorado corporation and, pursuant to the Merger, a wholly-
owned subsidiary of the Registrant ("StarPress") at respective stockholders'
meetings held on such date, the Merger was approved and thereafter consummated
on June 28, 1996.
As soon as practicable hereafter, pursuant to and in compliance with
applicable rules and regulations of the Commission promulgated under the
Securities Act of 1933, as amended, the Registrant is filing with the
Commission a Registration Statement on Form S-8 (the "Form S-8 Registration
Statement"), pursuant to which, among other things, it is (i) in effect,
assuming all options outstanding as of June 28, 1996, under the stock option
plans of GZ California and StarPress (but excluding any non-plan options);
(ii) registering shares of Common Stock of the Registrant to be issued
pursuant to the exercise of options (other than any non-plan options) to
purchase shares of Common Stock of the Registrant into which such options to
purchase shares of GZ California and StarPress under such assumed stock
option plans were converted pursuant to the Merger; and (iii) registering
additional shares of Common Stock of the Registrant to be issued pursuant to
the exercise of options to purchase shares of Common Stock of the Registrant
to be issued under the 1996 Stock Option Plan of the Registrant.
As a consequence of the filing of the Form S-8 Registration Statement, a
portion of the 12,005,852 shares of Common Stock of the Registrant already
registered pursuant to the Registration Statement would also be registered
pursuant to the Form S-8 Registration Statement or would otherwise not be
contractually entitled to registration. Therefore, the Registrant is also
filing this Post-Effective Amendment No. 1 to the Registration Statement to
deregister such portion of Common Stock of the Registrant already registered
pursuant to the Registration Statement.
The Registrant hereby deregisters 1,397,104 shares of the Registrant's
Common Stock originally registered pursuant to the Registration Statement.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Irvine, State of California, on the 31st day of July,
1996.
GRAPHIX ZONE, INC.
By: /S/CHARLES R. CORTRIGHT, JR.
----------------------------
Charles R. Cortright, Jr., President
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment No. 1 to the Registration Statement has been signed by the
following persons in the capacities indicated and on the dates stated.
Signature Title Date
--------- ----- ----
/S/RONALD S. POSNER Chairman and Director July 31, 1996
- -------------------
Ronald S. Posner
/S/CHARLES R. CORTRIGHT, JR. President (Principal July 31, 1996
- ---------------------------- Executive Officer) and Director
Charles R. Cortright, Jr.
/S/ANGELA ABER CORTRIGHT Executive Vice President, July 31, 1996
- ------------------------ Secretary and Director
Angela Aber Cortright
/S/NORMAN BLOCK Executive Vice President, July 31, 1996
- --------------- Treasurer, Chief Operating
Norman Block Officer and Chief Financial
Officer (Principal Financial
and Accounting Officer)
<PAGE>
EXHIBIT INDEX
Sequentially
Exhibit Numbered
No. Description Page
- ------- ----------- ------------
8.1 Opinion of Snell & Wilmer L.L.P., regarding the 5
legality of certain Federal income tax matters.
8.2 Opinion of Jackson, Tufts Cole & Black, LLP, 23
regarding certain Federal income tax matters.
<PAGE>
Exhibit 8.1 to
Registration Statement
on Form S-4
[Letterhead of Snell & Wilmer, L.L.P.]
June 28, 1996
Graphix Zone, Inc.
42 Corporate Park, Suite 200
Irvine, California 92714
Re: Agreement and Plan of Reorganization between Graphix Zone, Inc.,
a California corporation ("Graphix Zone"), and StarPress, Inc., a
Colorado corporation ("StarPress"), dated as of January 3, 1996
(the "Agreement").
Ladies and Gentlemen:
We have acted as counsel to Graphix Zone in connection with various
matters pertaining to the transactions contemplated by the Agreement which
encompass (a) the proposed merger of GZ Merger Corp., a California corporation
and wholly-owned subsidiary of Graphix Zone, a Delaware corporation ("New GZ")
with and into Graphix Zone (the "GZ Merger") and (b) the proposed merger of SP
Merger Corp., a Colorado corporation and wholly-owned subsidiary of New GZ, with
and into StarPress (the "SP Merger") (the aforementioned mergers hereafter
collectively referred to as the "Mergers"). Assuming the Mergers are
consummated, Graphix Zone and StarPress will become wholly-owned subsidiaries of
New GZ and the holders of Graphix Zone Common Stock and StarPress Common Stock
immediately before the Effective Time of the Mergers will become holders of New
GZ Common Stock.
Our opinion regarding the treatment of the GZ Merger, in conjunction
with the SP Merger, as entailing transfers of property qualifying for federal
income tax purposes under section 351 of the Internal Revenue Code of 1986, as
amended (the "Code"), is required under Section 10.7 of the Agreement as a
condition to the closing of the GZ Merger. Our opinion regarding certain
federal income tax aspects of the GZ Merger was also required in connection with
the Proxy Statement-Prospectus that formed part of the Registration Statement on
Form S-4 filed with the Securities and Exchange Commission in connection with
the Mergers.
<PAGE>
Graphix Zone, Inc.
June 28, 1996
Page 2
SECTION 1 - OPINION
Based upon the certified representations set forth at Section 2 below
and the assumptions set forth at Section 3 below, and subject to the limitations
on the scope of our opinion set forth at Section 4 below, it is our opinion that
the GZ Merger, in conjunction with the SP Merger, will, for federal income tax
purposes, entail transfers of property qualifying under section 351 of the Code.
As a consequence thereof, it is our opinion that:
1. No gain or loss will be recognized by holders of Graphix Zone
Common Stock upon their receipt of New GZ Common Stock in the GZ Merger.
2. The holding period of New GZ Common Stock received in exchange
for Graphix Zone Common Stock in the GZ Merger will include the holding period
of such Graphix Zone Common Stock, assuming that the shares of Graphix Zone
Common Stock represent capital assets in the hands of the holder thereof at the
Effective Time of the GZ Merger.
3. The tax basis of New GZ Common Stock received in the GZ Merger
will be the same as the tax basis of the Graphix Zone Common Stock for which it
was treated as exchanged.
SECTION 2 - CERTIFIED REPRESENTATIONS
In rendering the opinion set forth at Section 1 above, we have
obtained and, with your consent, are relying upon (without any independent
investigation or review) letters from the Presidents of Graphix Zone and New GZ
as well as the Chairman of the Board of Directors of SP, and various Affiliate
Agreements which, in the aggregate, certify (either without qualification or
based on the knowledge of management of Graphix Zone, StarPress, or New GZ as
the case may be) as to various facts relating to the Mergers, including the
following facts:
1. The Mergers and the transactions incident thereto will take place
in accordance with the Agreement.
<PAGE>
Graphix Zone, Inc.
June 28, 1996
Page 3
2. The principal purpose of the Mergers is to consolidate Graphix
Zone and StarPress into a single affiliated corporate structure.
3. The issuance of New GZ Common Stock incident to the GZ Merger and
the issuance of New GZ Common Stock incident to the SP Merger will occur on
approximately the same date and in accordance with a single plan for the
issuance of shares of New GZ Common Stock as contemplated by the Agreement.
4. No holder of New GZ Common Stock issued in the Mergers pursuant
to the Agreement as a consequence of the conversion of shares of GZ Common Stock
or SP Common Stock held by such holder prior to the Effective Time of the
Mergers will, following the Effective Time of the Mergers, retain any rights in
such shares of GZ Common Stock or SP Common Stock held prior to the Effective
Time of the Mergers other than dissenters' rights, if any, applicable with
respect to shares of GZ Common Stock and SP Common Stock.
5. As of the Effective Time of the Mergers and immediately
thereafter, the only class of outstanding capital stock of New GZ will be the
New GZ Common Stock referred to in the Agreement.
6. As of the Effective Time of the Mergers and immediately
thereafter, there will be no plan or intent to issue any class of capital stock
other than New GZ Common Stock.
7. Immediately after the Effective Time of the Mergers, the only
outstanding shares of New GZ Common Stock will be the shares of New GZ Common
Stock issued in accordance with Section 2.3 of the Agreement.
8. Immediately after the Effective Time of the Mergers, there will
be at least 10,608,747 shares of New GZ Common Stock issued in accordance with
Section 2.3 of the Agreement: 5,526,543 issued to former shareholders of Graphix
Zone and 5,082,204 issued to former shareholders of StarPress.
9. Immediately after the Effective Time of the Mergers, the only
interests ultimately reflective of equity in New GZ other than outstanding
shares of New GZ Common Stock will be (a) the options and warrants to acquire
shares of New GZ Common Stock issued in accordance with Sections 2.6.1 and 2.6.2
of the Agreement and (b) options to acquire 225,000 shares of New GZ Common
Stock issued by New GZ pursuant to the New GZ 1996 Stock Option Plan (the "New
GZ Options") and with respect to which
<PAGE>
Graphix Zone, Inc.
June 28, 1996
Page 4
options to acquire not more than 46,875 shares of New GZ Common Stock will be
exercisable as of the Effective Time of the Mergers. Specifically, immediately
after the Effective Time of the Mergers, there will be no convertible securities
or any other debt or other instrument outstanding in which the holder will have
a right to convert such holding into equity of New GZ or might otherwise be
treated as an owner of equity of New GZ.
10. Immediately after the Effective Time of the Mergers, the maximum
number of shares of New GZ Common stock that may be issued as a consequence of
the exercise of all options and warrants outstanding as of the Effective Time of
the Mergers will be 2,897,505; 1,978,131 issuable to holders of GZ options and
warrants and 919,374 issuable to holders of SP options and warrants.
11. Management of StarPress and Graphix Zone have, on behalf of the
shareholders of their respective corporations, waived the rights to receive SP
Additional Shares pursuant to Section 8.2(d) of the Agreement and the rights to
receive GZ Additional Shares pursuant to Section 8.3(d) of the Agreement.
12. As of the Effective Time of the Mergers, New GZ will have
received copies of Affiliate Agreements executed by each person or entity who,
immediately before the Effective Time of the Mergers, was either (a) an
executive officer or director of Graphix Zone or StarPress who was the holder of
GZ Common Stock or SP Common Stock (excluding Philip Smith who will hold not
more than 32,000 shares of SP Common Stock as of the Effective Time of the
Mergers) or (b) other holder of five percent (5%) or more of the outstanding GZ
Common Stock or SP Common Stock (either directly or indirectly taking into
consideration for this purpose any options or warrants to acquire GZ Common
Stock or SP Common Stock) and which set forth each such person's or entity's
representations that such person or entity, as of the Effective Time of the
Mergers and immediately thereafter, will, with respect to shares of New GZ
Common Stock owned by such person or entity at such time periods, neither (i) be
under a binding commitment or similar obligation to sell, exchange, transfer,
pledge, distribute (including distributions by a partnership to its partners or
by a corporation to its shareholders), redeem, or engage in any other
transaction which would reduce in any way such person's or entity's risk of
ownership of such shares, (ii) be a party to an option contract or other similar
arrangement with respect to which a third party may be under some form of legal
or economic compulsion to acquire or otherwise assume such person's or entity's
risk of ownership of such shares by reason of such option contract or similar
arrangement, (iii) possess a plan or intention (formulated prior to the
Effective Time and without which the holder would not have
<PAGE>
Graphix Zone, Inc.
June 28, 1996
Page 5
participated in the Mergers) to sell, exchange, transfer, pledge, distribute
(including distributions by a partnership to its partners or by a corporation to
its shareholders), redeem, or engage in any other transaction which would reduce
in any way such person's or entity's risk of ownership of such shares, or (iv)
possess any other plan or intention to sell, exchange, transfer, pledge,
distribute (including distributions by a partnership to its partners or by a
corporation to its shareholders), redeem, or engage in any other transaction
which would reduce in any way such person's or entity's risk of ownership of
such shares.
13. In the case of any person or entity who, immediately before the
Effective Time of the Mergers, owns shares of GZ Common Stock or SP Common Stock
(other than an executive officer or director of GZ or SP and other than a person
or entity who holds five percent (5%) or more of the outstanding shares of GZ
Common Stock or SP Common Stock (either directly or indirectly taking into
consideration for this purpose any options or warrants to acquire GZ Common
Stock or SP Common Stock), management of New GZ, Graphix Zone, and StarPress,
after due inquiry, have no knowledge of, and believe that there does not exist
with respect to the shares of New GZ Common Stock to be issued to any such
person or entity in the Mergers, as of the Effective Time of the Mergers and
immediately thereafter, (a) any binding commitment or similar obligation on the
part of any such person or entity to sell, exchange, transfer, pledge,
distribute (including distributions by a partnership to its partners or by a
corporation to its shareholders), redeem, or engage in any other transaction
which would reduce in any way such person's or entity's risk of ownership of
such shares, (b) any outstanding option contract or similar arrangement with
respect to which a third person other than the holder of such shares may be
under some form of legal or economic compulsion to acquire or otherwise assume
such person's or entity's risk of ownership of such shares by reason of such
option contract or similar arrangement, (c) any plan or intention on the part of
such person or entity (formulated prior to the Effective Time and without which
the person or entity would not have participated in the Mergers), to sell,
exchange, transfer, pledge, distribute (including distributions by a partnership
to its partners or by a corporation to its shareholders), redeem, or engage in
any other transaction which would reduce in any way such person's or entity's
risk of ownership of such shares, or (d) any other plan or intention on the part
of such person or entity to sell, exchange, transfer, pledge, distribute
(including distributions by a partnership to its partners or by a corporation to
its shareholders), redeem, or engage in any other transaction which would reduce
in any way such person's or entity's risk of ownership of such shares.
<PAGE>
Graphix Zone, Inc.
June 28, 1996
Page 6
14. In the case of any person or entity who, immediately before the
Effective Time of the Mergers, holds options or warrants to acquire shares of
New GZ Common Stock, GZ Common Stock, or SP Common Stock, management of New GZ,
Graphix Zone, and StarPress, after due inquiry, have no knowledge of, and
believe that there does not exist with respect to any holder of options and
warrants to acquire New GZ Common Stock to be issued to any such person or
entity in the Mergers, as of the Effective Time of the Mergers or immediately
thereafter, (a) any binding commitment or similar obligation to exercise such
options or warrants or (b) any plan or intention to exercise such options and
warrants that is in any way inconsistent with such person's or entity's plan or
intention regarding the exercise of options or warrants prior to the
commencement of negotiations regarding the Mergers or prior to the Effective
Time of the Mergers.
15. Except with respect to (a) shares of New GZ Common Stock to be
issued pursuant to Section 2.3 of the Agreement, (b) shares of New GZ Common
Stock to be issued on the occasion of the exercise, if any, of options and
warrants issued in accordance with Sections 2.6.1 and 2.6.2 of the Agreement,
and (c) shares of New GZ Common Stock to be issued on the occasion of the
exercise, if any, of the New GZ Options, each of (a) through (c) of which are
contingent either upon the actions of the holder or the occurrence of certain
additional matters beyond the control of New GZ, and may never occur, New GZ
will, as of the Effective Time of the Mergers and immediately thereafter, be
under no binding commitment or similar obligation to issue shares of New GZ
Common Stock or any other class of capital stock. Specifically, as of the
Effective Time of the Mergers and immediately thereafter, New GZ will be under
no binding commitment or similar obligation to issue shares of New GZ Common
Stock or any other class of capital stock following the Effective Time of the
Mergers pursuant to any primary or secondary offering. Additionally, as of the
Effective Time of the Mergers and immediately thereafter, New GZ will be under
no binding commitment or similar obligation to issue any equity instrument or
any other instrument with respect to which the holder will have a right to
convert such holding into equity of New GZ or might otherwise be treated as an
owner of equity of New GZ.
16. As of the Effective Time of the Mergers and immediately
thereafter, New GZ will be under no binding commitment or similar obligation to
redeem or otherwise cause the sale, transfer, or other disposition of shares of
New GZ Common Stock outstanding immediately following the Effective Time of the
Mergers.
<PAGE>
Graphix Zone, Inc.
June 28, 1996
Page 7
17. With respect to the 483,135 warrants to acquire GZ Common Stock
issued in connection with the February, 1996 private offering of GZ Common Stock
to persons who acquired shares of GZ Common Stock in such offering on the basis
of one warrant for each three shares of stock, management of GZ will not, prior
to the Effective Time of the Mergers or immediately thereafter, consent to the
transfer of such warrants independent of the transfer of the related shares and,
accordingly, each holder of such warrants will, as of the Effective Time of the
Mergers and immediately thereafter, be a holder of New GZ Common Stock.
18. With respect to options and warrants to acquire GZ Common Stock
outstanding and exercisable as of the Effective Time of the Mergers which are
held by Charles R. Cortright, Angela Aber Cortright, John Aber, Anne Aber, Frank
Cutler, Thomas Yuen, T. and H. Vandeveer, Glenn Johnson, and GT Interactive
Software Corp., and Cruttenden Roth and encompassing, collectively, options and
warrants to acquire a total of 1,215,446 shares of GZ Common Stock, each such
person will, either on the basis of the execution of Affiliate Agreements or on
the basis of other information known to management of GZ, own, as of the
Effective Time of the Mergers and immediately thereafter, shares of New GZ
Common Stock representing ten percent (10%) or more of the number of shares of
New GZ Common Stock that such person could acquire if such person exercised all
such options and warrants outstanding and exercisable as of the Effective Time
of the Mergers.
19. With respect to options and warrants to acquire SP Common Stock
outstanding and exercisable as of the Effective Time of the Mergers which are
held by Ronald Posner, Douglas Cole, Dennis Cagan, and Cruttenden Roth, and
encompassing, collectively, options and warrants to acquire a total of 109,664
shares of New GZ Common Stock, each such person will, either on the basis of the
execution of Affiliate Agreements or on the basis of other information known to
management of StarPress, own, as of the Effective Time of the Mergers and
immediately thereafter, shares of New GZ Common Stock representing ten percent
(10%) or more of the number of shares of New GZ Common Stock that such person
could acquire if such person exercised all such options and warrants outstanding
and exercisable as of the Effective Time of the Mergers.
20. Neither (a) the consummation of the Mergers, (b) the consummation
of the transactions incident to the Mergers as provided under the Agreement, or
(c) the viability of New GZ as an operating entity following the Mergers is or
was conditioned or otherwise dependent upon (i) the issuance or exercise of any
options and warrants to acquire New GZ Common Stock, GZ Common
<PAGE>
Graphix Zone, Inc.
June 28, 1996
Page 8
Stock, or SP Common Stock, (ii) the procurement of additional capital by New GZ
through the issuance, following the Effective Time of the Mergers, of additional
shares of New GZ capital stock, any other equity instrument, or any other
instrument with respect to which the holder will have a right to convert such
holding into equity of New GZ or might otherwise be treated as an owner of
equity of New GZ, or (iii) the consummation of any other transactions entailing
the issuance, following the Effective Time of the Mergers, of additional shares
of New GZ Common Stock, any other equity instrument, or any other instrument
with respect to which the holder will have a right to convert such holding into
equity of New GZ or might otherwise be treated as an owner of equity of New GZ.
21. Neither (a) the consummation of the Mergers, (b) the consummation
of the transactions incident to the Mergers as contemplated by the Agreement, or
(c) the viability of New GZ as an operating entity following the Mergers is
conditioned upon any plan or arrangement that entails, following the Effective
Time of the Mergers, the sale, transfer, redemption, or other disposition of
shares of New GZ Common Stock, any other equity instrument, or any other
instrument with respect to which the holder will have a right to convert such
holding into equity of New GZ or might otherwise be treated as an owner of
equity of New GZ.
22. Any decision made by New GZ relating to the issuance, or sale,
transfer, redemption, or other disposition, of New GZ Common Stock, any other
equity instrument, or any other instrument with respect to which the holder will
have a right to convert such holding into equity of New GZ or might otherwise be
treated as an owner of equity of New GZ following the Effective Time of the
Mergers will be made on the basis of facts and circumstances which are
independent of the Mergers and of the transactions incident to the Mergers and
which arise or exist after the Effective Time of the Mergers and immediately
thereafter.
23. Except with respect to the possible repurchase in the ordinary
course of business of shares of capital stock acquired from employees of New GZ
(or any subsidiary thereof) who terminate employment with New GZ (or any
subsidiary thereof), New GZ will, as of the Effective Time of the Mergers and
immediately thereafter, have no plan or intention to redeem or otherwise
reacquire any shares of New GZ Common Stock issued in connection with the
Mergers.
24. Except with respect to (a) the grant of the New GZ Options, (b)
the grant by Graphix Zone on January 5, 1996 of options to acquire 50,000 shares
of GZ Common Stock to Thomas Yuen
<PAGE>
Graphix Zone, Inc.
June 28, 1996
Page 9
as a consequence of a binding commitment to issue such options outstanding
before November 13, 1995, (c) the grant by Graphix Zone on February 1, 1996 of
options to acquire 7,500 shares of GZ Common Stock, (d) the grant by Graphix
Zone on April 18, 1996 of options to acquire 25,000 shares of GZ Common Stock,
and (e) the grant by StarPress on January 3, 1996 of options to acquire
2,486,000 shares of SP Common Stock as a consequence of a binding agreement to
issue such options outstanding before November 13, 1995, as of the Effective
Time of the Mergers and immediately thereafter, no outstanding options to
acquire GZ Common Stock, SP Common Stock, or New GZ Common Stock will have been
granted after November 13, 1995. Further, in the case of the options referred to
in clauses (a), (c) and (d), none of such options to acquire shares of GZ Common
Stock will have been exercised as of the Effective Time of the Mergers.
25. Except with respect to (a) the grant of the New GZ Options, (b)
the grant by Graphix Zone on January 5, 1996 of options to acquire 50,000 shares
of GZ Common Stock to Thomas Yuen as a consequence of a binding commitment to
issue such options outstanding before November 13, 1995, (c) the grant by
Graphix Zone on February 1, 1996 of options to acquire 7,500 shares of GZ Common
Stock, (d) the grant by Graphix Zone on April 18, 1996 of options to acquire
25,000 shares of GZ Common Stock, (e) the grant by StarPress on January 3, 1996
of options to acquire 2,486,000 shares of SP Common Stock as a consequence of a
binding agreement to issue such options outstanding before November 13, 1995,
and (f) a total of 852,312 shares of SP Common Stock issued to Cruttenden Roth
as a consequence of services rendered to SP in connection with the SP Merger and
to be converted to 125,000 shares of New GZ Common Stock in the SP Merger (and
which are included in the number of outstanding shares of New GZ Common Stock
specified in Paragraph 8), no shares of GZ Common Stock, SP Common Stock, or New
GZ Common Stock will, directly or indirectly, have been issued after November
13, 1995 to employees or other persons in consideration of the performance of
services to New GZ, Graphix Zone, or StarPress.
26. Except with respect to the grant of the New GZ Options, as of the
Effective Time of the Mergers and immediately thereafter, no options to acquire
capital stock or shares of capital stock will have been granted to employees or
former employees of New GZ, Graphix Zone, or StarPress in whole or in part in
consideration for the performance of services to or for the benefit of New GZ.
27. Except with respect to (a) the grant of warrants by Graphix Zone
to acquire 483,135 shares in connection with the February, 1996 private offering
of GZ Common Stock, (b) the grant of warrants by Graphix Zone to GT Interactive
Software Corp. to
<PAGE>
Graphix Zone, Inc.
June 28, 1996
Page 10
acquire 840,000 shares of GZ Common Stock (with respect to which warrants to
acquire 80,000 shares of GZ Common Stock were exercised prior to the Effective
Time of the Mergers), and (c) the grant of warrants by Graphix Zone to Silicon
Bank to acquire 20,000 shares of GZ Common Stock, as of the Effective Time of
the Mergers, no outstanding warrants to acquire GZ Common Stock, SP Common
Stock, or New GZ Common Stock will have been granted after November 13, 1995.
28. In the case of any option or warrant to acquire GZ Common Stock,
SP Common Stock, or New GZ Common Stock which is outstanding as of the Effective
Time of the Mergers or immediately thereafter, the holder of such option or
warrant will not have paid, directly or indirectly, to acquire such option or
warrant or otherwise assumed the benefits and burdens of ownership of the shares
underlying such option or warrant.
29. Except with respect to options to acquire 227,250 shares of SP
Common Stock, in the case of any option or warrant to acquire New GZ Common
Stock, GZ Common Stock, or SP Common Stock which is outstanding as of the
Effective Time of the Mergers, the price per share payable to exercise such
option or warrant will not be less than eight-five percent (85%) of the fair
market value per share of the underlying GZ Common Stock, SP Common Stock, or
New GZ Common Stock as of the date of grant of such option or warrant.
30. In the case of any option or warrant to acquire New GZ Common
Stock, GZ Common Stock, or SP Common Stock which is outstanding at the Effective
Time of the Mergers, any such option or warrant will be (a) nontransferable
except by will or the laws of descent and distribution and (b) not actively
traded on an established securities market.
31. Except with respect to 1,102,575 shares of SP Common Stock, in
the case of any option or warrant to acquire GZ Common Stock or SP Common Stock
which was exercised in the period between November 13, 1995 and the Effective
Time of the Mergers, the price per share paid to exercise such option or warrant
was not less than eight-five percent (85%) of the fair market value per share of
the underlying GZ Common Stock or SP Common Stock as of the date of grant of
such option or warrant.
32. [Reserved]
33. Except with respect to (a) the issuance of New GZ Common Stock on
the occasion of the exercise, if any, of options described in Sections 2.6.1 or
2.6.2 of the Agreement, (b) the issuance of shares of New GZ Common Stock on the
occasion of the
<PAGE>
Graphix Zone, Inc.
June 28, 1996
Page 11
exercise, if any, of the New GZ Options, and (c) the issuance of 852,312 shares
of SP Common Stock to Cruttenden Roth in consideration for services previously
furnished to SP (which such shares will be converted to 125,000 shares of New GZ
Common Stock in the SP Merger), New GZ will not, as of the Effective Time of the
Mergers or immediately thereafter, issue shares of New GZ Common Stock as
compensation for services previously rendered to New GZ, Graphix Zone, or
StarPress.
34. Except with respect to the 852,312 shares of SP Common Stock
issued to Cruttenden Roth and to be converted to 125,000 shares of New GZ Common
Stock in the SP Merger, no shares of New GZ capital stock will be issued to any
person or entity as compensation for services rendered in connection with the
negotiation of the Agreement and the consummation of the Mergers and the
transactions incident thereto.
35. Except with respect to (a) the New GZ Options, (b) the grant by
Graphix Zone on January 5, 1996 of options to acquire 50,000 shares of GZ Common
Stock to Thomas Yuen as a consequence of a binding commitment to issue such
options outstanding before November 13, 1995, (c) the grant by Graphix Zone on
February 1, 1996 of options to acquire 7,500 shares of GZ Common Stock, (d) the
grant by Graphix Zone on April 18, 1996 of options to acquire 25,000 shares of
GZ Common Stock, and (e) the grant by StarPress on January 3, 1996 of options to
acquire 2,486,000 shares of SP Common Stock as a consequence of a binding
agreement to issue such options outstanding before November 13, 1995, each of
the options to acquire shares of GZ Common Stock, SP Common Stock, or New GZ
Common Stock outstanding as of the Effective Time of the Mergers will have been
described in disclosure schedules to the Agreement.
36. Except with respect to (a) the grant of warrants by Graphix Zone
to acquire 483,135 shares in connection with the February, 1996 private offering
of GZ Common Stock, (b) the grant of warrants by Graphix Zone to GT Interactive
Software Corp. to acquire 840,000 shares of GZ Common Stock (80,000 of which
were exercised prior to the Effective Time of the Mergers), and (c) the grant of
warrants by Graphix Zone to Silicon Bank to acquire 20,000 shares of GZ Common
Stock, as of the Effective Time of the Mergers, each of the warrants to acquire
GZ Common Stock, SP Common Stock, or New GZ Common Stock outstanding as of the
Effective Time of the Mergers will have been described in disclosure schedules
to the Agreement.
37. Except in connection with the ordinary course of business
following the Effective Time of the Mergers, as of the Effective Time of the
Mergers and immediately thereafter, New GZ
<PAGE>
Graphix Zone, Inc.
June 28, 1996
Page 12
will have no plan or intention to issue options, warrants, other equity
instruments, or any other instruments with respect to which the holder will have
a right to convert such holding into equity of New GZ or might otherwise be
treated as an owner of equity of New GZ.
38. As of the Effective Time of the Mergers and immediately
thereafter, there will be no plan or intention to liquidate New GZ, to merge New
GZ with or into another corporation, or to sell, transfer, or otherwise dispose
of the shares of GZ Common Stock and SP Common Stock held by New GZ immediately
after the Effective Time of the Mergers.
39. The fair market value of shares of New GZ Common Stock issued to
each holder of GZ Common Stock or SP Common Stock in the Mergers will be
approximately equal to the fair market value of the shares of GZ Common Stock
and SP Common Stock held by each such holder immediately before the Effective
Time of the Mergers. Specifically, the fair market value of shares of New GZ
Common Stock issued to each holder of GZ Common Stock in the GZ Merger will be
approximately equal to the fair market value of the shares of GZ Common Stock
held by such holder immediately before the Effective Time of the GZ Merger and
the fair market value of shares of New GZ Common stock issued to each holder of
SP Common Stock in the SP Merger will be approximately equal to the fair market
value of the shares of SP Common Stock held by such holder immediately before
the Effective Time of the SP Merger.
40. Payments to former holders of GZ Common Stock and SP Common Stock
who exercise dissenters' rights pursuant to applicable law will be made by
Graphix Zone or StarPress, as the case may be. In the case of the GZ Merger,
dissenters' rights shall not be exercisable with respect to more 1,282,530
shares of GZ Common Stock. In the case of the SP Merger, dissenters' rights
shall not be exercisable with respect to more than - 0 - shares of SP Common
Stock.
41. As of the Effective Time of the Mergers and immediately
thereafter, there will be no indebtedness between any person or entity who owned
shares of GZ Common Stock or SP Common Stock and New GZ and there will be no
indebtedness created in favor of New GZ as a result of the Mergers.
42. No debt relating to any of the shares of GZ Common Stock or SP
Common Stock outstanding immediately before the Effective Time of the Mergers
will be assumed by New GZ and, to the best knowledge of the management of New
GZ, Graphix Zone, and StarPress, no shares of New GZ Common Stock, GZ Common
Stock, or SP
<PAGE>
Graphix Zone, Inc.
June 28, 1996
Page 13
Common Stock will be subject to any debt on or after the Effective Time of the
Mergers.
43. In the case of any holder of GZ Common Stock or SP Common Stock
immediately before the Effective Time of the Mergers who is under the
jurisdiction of a court in a Title 11 or similar case (within the meaning of
section 368(a)(3)(A) of the Code, the shares of New GZ Common Stock received by
such holder in accordance with the Agreement will not be used to satisfy the
indebtedness of any such holder.
44. Each of New GZ, Graphix Zone, StarPress, and the shareholders of
the foregoing corporations did or will pay its or their respective expenses, if
any, incurred in connection with consummation of the Mergers and the
transactions incident thereto.
45. With the exception of cash, the assets of New GZ immediately
after the Mergers will be comprised exclusively of shares of GZ Common Stock and
SP Common stock.
46. As of the Effective Time of the Mergers and immediately
thereafter, the shares of GZ Common Stock and SP Common Stock owned by New GZ
will neither (a) be traded on a securities market or (b) traded or quoted
regularly on an over-the-counter market.
47. As of the Effective Time of the Mergers and immediately
thereafter, New GZ will not constitute a "regulated investment company" (within
the meaning of section 851 of the Code), a "real estate investment trust"
(within the meaning of section 856 of the Code), or a "personal service
corporation" (within the meaning of section 269A of the Code).
48. As of the Effective Time of the Mergers, no shares of GZ Common
Stock or SP Common Stock will constitute "section 306 stock" within the meaning
of section 306(c) of the Code.
49. No shares of New GZ Common Stock issuable in connection with the
Mergers will be issued on or after the Effective Time of the Mergers under a
contingent stock arrangement and there is no circumstance in which shares of New
GZ Common Stock issuable in connection with the Mergers will be placed in
escrow.
50. Each of New GZ, Graphix Zone, and StarPress is participating in
the Mergers for good and valid business reasons.
51. The transactions contemplated by the Agreement, including the
issuance of shares of New GZ Common Stock, will not
<PAGE>
Graphix Zone, Inc.
June 28, 1996
Page 14
have been the result of the solicitation by a promoter, banker, or investment
house
52. Because of the conversion ratio governing the issuance of New GZ
Common Stock to holders of GZ Common Stock as of the Effective Time of the GZ
Merger, no cash will be paid to holders of GZ Common Stock in lieu of fractional
shares of Graphix Zone Common Stock. The payment of cash in lieu of fractional
shares of SP Common Stock in the SP Merger is solely for the purpose of avoiding
the expense and inconvenience of issuing fractional shares of New GZ Common
Stock and does not represent separately bargained for consideration. Further,
the total cash consideration that will be paid in the SP Merger to shareholders
of StarPress instead of issuing fractional shares of New GZ Common Stock will
not exceed one percent (1%) of the total consideration that will be issued by
New GZ in the SP Merger to the shareholders of StarPress as of the Effective
Time of the SP Merger.
SECTION 3 - ASSUMPTIONS
In rendering the opinion set forth at Section 1 above, with your
consent, we are relying upon the following assumptions:
1. Original documents relating to the consummation of the Mergers
and the transactions incident thereto (including signatures), including
particularly the Agreement, are authentic.
2. Documents submitted to us as copies conform to the original
documents.
3. There has been (or will be by the Effective Time of the Mergers)
due execution and delivery of all documents where due execution and delivery are
prerequisites to effectiveness thereof.
4. The Mergers will be effective under applicable laws.
5. All shares of GZ Common Stock and SP Common Stock outstanding as
of the Effective Time of the Mergers will be converted into New GZ Common Stock
as of the Effective Time of the Mergers.
<PAGE>
Graphix Zone, Inc.
June 28, 1996
Page 15
SECTION 4 - LIMITATIONS ON OPINION
The opinion set forth at Section 1 above represents and is based upon
our best judgment regarding the application of federal income tax laws arising
under the Code, existing judicial decisions, administrative regulations and
published rulings and procedures. Our opinion is not binding upon the Internal
Revenue Service or the courts, and there is no assurance that the Internal
Revenue Service will not successfully assert a contrary position. Furthermore,
no assurance can be given that future legislative, judicial, or administrative
changes, on either a prospective or retroactive basis, would not adversely
affect the accuracy of the conclusions stated herein. Nevertheless, we
undertake no responsibility to advise you of any new developments in the
application or interpretation of the federal income tax laws.
Further, the opinion set forth at Section 1 above addresses only the
qualification of the GZ Merger, in conjunction with the SP Merger, as transfers
of property qualifying under section 351 of the Code and does not address any
other federal, state, local or foreign tax consequences that may result from the
GZ Merger or any other transaction (including any transaction undertaken in
connection with the GZ Merger). In particular, no opinion is expressed
regarding the following:
1. Whether and the extent to which any Graphix Zone employee who has
provided or will provide services to Graphix Zone or New GZ will have
compensation income under any provision of the Code;
2. The effects of the compensation income referred to immediately
above, including but not limited to the effect upon the basis and holding period
of the New GZ stock received by any such shareholder in the GZ Merger;
3. The potential application of the "golden parachute" provisions
(Sections 280G, 3121(v)(2), and 4999) of the Code, the alternative minimum tax
provisions (Sections 55, 56, and 57) of the Code or Sections 305, 306, 357, 424,
and 708, or the regulations promulgated thereunder;
4. The corporate level tax consequences of the GZ Merger to Graphix
Zone, including without limitation the recognition of any gain and the survival
and/or availability, after the GZ Merger, of any of the federal income tax
attributes or elections of Graphix Zone, after application of any provision of
<PAGE>
Graphix Zone, Inc.
June 28, 1996
Page 16
the Code, as well as the regulations promulgated thereunder and judicial
interpretations thereof;
5. The basis of any equity interest in Graphix Zone acquired by New
GZ in the GZ Merger;
6. Except as set forth herein, the tax consequences of any
transaction in which New GZ Common Stock is received; and
7. The tax consequences of the GZ Merger (including the opinion set
forth above) as applied to stockholders of Graphix Zone that may be relevant to
particular classes of Graphix Zone stockholders stock such as dealers in
securities, shareholders subject to the alternative minimum tax, foreign
persons, banks and other financial institutions, tax-exempt organizations,
insurance companies, holders of shares acquired upon exercise of stock options
or in other compensatory transactions, if any, and stockholders who exercise
dissenters' rights.
8. The tax consequences of the GZ Merger as applied to holders of
options or warrants to acquire GZ Common Stock whose options and warrants are
converted into options or warrants to acquire New GZ Common Stock.
Further, no opinion is expressed as to any transaction other than the
GZ Merger as described in the Agreement or to any transaction whatsoever,
including the GZ Merger, if all the transactions described in the Agreement are
not consummated in accordance with the terms of the Agreement or if all of the
representations and assumptions upon which we relied are not true and accurate
at all relevant times. In the event any one of the representations or
assumptions upon which we have relied to issue this opinion is incorrect, our
opinion might be adversely affected and may not be relied upon.
SECTION 5 - RELIANCE ON OPINION
This opinion has been delivered to you for the purpose of satisfying
the conditions set forth in Section 10.7 of the Agreement and is intended solely
for your benefit; it may not be relied upon for any other purpose or by any
other person or entity; and may not be made available to any other person or
entity without
<PAGE>
Graphix Zone, Inc.
June 28, 1996
Page 17
our prior written consent. Specifically, the opinion may not be relied upon by
holders of SP Common Stock.
We consent to the use of this opinion as an exhibit to the
Registration Statement on Form S-4 of New GZ and to the reference to us under
the caption "Legal Matters" in the Joint Proxy Statement/Prospectus forming a
part of such Registration Statement.
Very truly yours,
\s\ SNELL & WILMER L.L.P.
-------------------------
Snell & Wilmer L.L.P.
rdb/dew
<PAGE>
Exhibit 8.2 to
Registration Statement
on Form S-4
[Letterhead of Jackson Tufts Cole & Black, LLP]
June 28, 1996
StarPress, Inc.
425 Market Street, 5th Floor
San Francisco, CA 94105
Gentlemen:
You have requested our opinion regarding certain federal income tax
consequences of the proposed merger (the "Merger") among Graphix Zone, Inc.,
a Delaware corporation ("New GZ"), SP Merger Corp., a Colorado corporation
("SP Merger"), and StarPress, Inc., a Colorado corporation ("SP"). We have
examined the Agreement and Plan of Reorganization, dated January 3, 1996,
between Graphix Zone, Inc., a California corporation ("Old GZ"), and SP (the
"Agreement") and the exhibits and attachments thereto. In addition, we have
received written representations pertaining to the Merger from New GZ, SP and
certain of the shareholders of SP. Our opinions are based upon the
understanding that the material facts are as described in the Agreement and
appurtenant documents and that the Merger will be effected in accordance with
the terms set forth in the Agreement, and in rendering our opinions we have
relied upon such documents and the foregoing representations without undertaking
independently to verify the accuracy and completeness of the matters covered
thereby. Except as otherwise noted, capitalized terms used herein have the
same meaning given to such terms in the Agreement.
Based upon the foregoing, it is our opinion that:
1. The transactions pursuant to the Agreement will constitute a
"reorganization" within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code").
2. By virtue of 1, above, for federal income tax purposes:
a. A SP shareholder receiving New GZ Common Stock in the Merger will not
recognize gain or loss, except that a SP shareholder who receives cash
in lieu of a fractional share of New GZ Common Stock will be treated
as receiving such cash in exchange for the fractional share and will
recognize gain or loss equal to the
<PAGE>
StarPress, Inc. JACKSON, TUFTS, COLE & BLACK
June 28, 1996
Page 2
cash received less the sum of the shareholder's basis in the SP stock
and the expenses of such shareholder related to the Merger paid by the
shareholder, in both cases to the extent allocable to such fractional
share.
b. An exchanging shareholder will have the same aggregate tax basis in
the New GZ Common Stock received as such shareholder had in the SP
shares surrendered in exchange therefor, increased by the expenses of
such shareholder related to the Merger paid by the shareholder, and
reduced by the shareholder's basis in the SP stock and the
shareholder's expenses allocable to fractional shares of New GZ Common
Stock.
c. The periods for which an exchanging shareholder has held his, her, or
its SP shares will be included in computing such shareholder's holding
periods for the New GZ Common Stock received in the Merger, assuming
the SP shares are held by such shareholder as capital assets at the
Effective Time.
3. Also by virtue of 1., above, SP, SP Merger and New GZ will not recognize
gain or loss for federal income tax purposes solely as a result of the
Merger.
4. An SP shareholder receiving cash in the Merger will recognize gain or
loss equal to the cash received less the sum of the shareholder's basis in
the SP stock and the expenses of such shareholder related to the Merger
paid by the shareholder.
* * * * * * * * * * *
Our opinions are limited to the federal income tax consequences of the
Merger and do not address the tax consequences under the laws of the various
state and local governments or under the laws of any other jurisdiction.
Moreover, they do not address special rules which may be applicable to
particular shareholders, such as shareholders who acquired their shares
pursuant to the exercise of statutory stock options. We express no opinion
regarding any tax aspect or ramification of the Merger apart from the opinions
specifically set forth above.
An opinion of counsel does not bind the Internal Revenue Service or
preclude it or a court from taking a position contrary to the opinion. This
opinion is rendered in connection with the Agreement. This opinion may not be
relied upon for any other purpose without our written consent. This opinion is
based upon the Code, the Treasury Regulations issued thereunder, and judicial
and administrative interpretations thereof, all as in effect on the date of this
opinion. All of such authority is subject to change, including retroactive
change. We disclaim any obligation
<PAGE>
StarPress, Inc. JACKSON, TUFTS, COLE & BLACK
June 28, 1996
Page 3
to advise of any developments in areas covered by this opinion that occur after
the date of this opinion.
We consent to the use of this opinion as an exhibit to the Registration
Statement on Form S-4 of New GZ and to the reference to us under the caption
"Legal Matters" in the Joint Proxy Statement/Prospectus forming a part of such
Registration Statement.
Very truly yours,
JACKSON TUFTS COLE & BLACK, LLP
\s\ Jackson Tufts Cole & Black, LLP
