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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): MARCH 13, 2000
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HIE, INC.
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(Exact name of registrant as specified in its charter)
GEORGIA 0-27056 58-2112366
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification Number)
incorporation
or organization)
1850 PARKWAY PLACE, SUITE 1100, MARIETTA, GEORGIA 30067
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (770) 423-8450
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N/A
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(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On March 13, 2000, HIE, Inc. (the "Company") signed an agreement,
effective as of February 25, 2000, to purchase certain service contracts and
other assets of the Integrated Solutions Division ("ISD") of Thermo Information
Solutions Inc. ("Thermo"). ISD, based in Charleston, South Carolina, designs,
implements and manages information technology solutions. The purchase price
consisted of 1,307,345 shares of the Company's common stock and a warrant to
purchase an additional 261,469 shares of the Company's common stock at any time
on or before March 13, 2004 at an exercise price of $4.207 per share. As part of
the purchase price, the Company also assumed a $500,000 liability related to the
on-going operations of the acquired business. On the closing date, the fair
value of the securities issued was $5,500,000. The value of the warrant was
$506,028 on the closing date, determined using the Black-Scholes option-pricing
model. Thermo has a one-time right, exercisable at any time on or before
September 14, 2000, subject to certain limitations, to receive additional shares
of HIE common stock in the event that the average trading price of HIE common
stock during the 10-day trading period prior to its election is below $4.207 per
share.
The purchase price and other terms of the Acquisition were determined as a
result of arms' length negotiations between unrelated parties. At the closing
date, there was no material relationship between the Company and Thermo or any
of the shareholders of Thermo, or any of their respective affiliates, officers,
directors or associates.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired.
It is impracticable to provide financial statements for ISD, to the
extent required, at the date of the filing of this Form 8-K. The financial
statements, if required, will be provided as soon as practicable but not later
than 60 days after the date on which this Form 8-K is filed.
(b) Pro Forma Financial Information.
It is impracticable to file the pro forma financial information for
ISD, to the extent required, at the date of the filing of this Form 8-K. The pro
forma financial information, if required, will be provided as soon as
practicable, but not later than 60 days after the date on which this Form 8-K is
filed.
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(c) Exhibits
Exhibit
Number Description
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2.1 Asset Purchase Agreement dated March 13, 2000 between
Thermo Information Solutions Inc. and HIE, Inc. (In
accordance with Item 601(b)(2) of Regulation S-K, the
exhibits and schedules to the Asset Purchase
Agreement have not been included. The Registrant
agrees to furnish supplementally a copy of the
omitted exhibits and schedules to the Commission upon
request.)
2.2 Common Stock Purchase Warrant dated March 13, 2000
issued by HIE, Inc. to Thermo Information Solutions
Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HIE, Inc.
By: /s/ Joseph A. Blankenship
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Joseph A. Blankenship
Senior Vice President-Finance,
Chief Financial Officer,
Treasurer and Secretary
Date: March 28, 2000
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EXHIBIT INDEX
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Exhibit
Number Description
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2.1 Asset Purchase Agreement dated
March 13, 2000 between Thermo
Information Solutions Inc. and
HIE, Inc.
2.2 Common Stock Purchase Warrant
dated March 13, 2000 issued by
HIE, Inc. to Thermo Information
Solutions Inc.
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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
Between
THERMO INFORMATION SOLUTIONS INC.
and
HIE, INC.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section
Page
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1. Sale and Delivery of the Assets...........................................................................................1
1.1 Delivery of the Assets..........................................................................................1
1.2 Further Assurances..............................................................................................2
1.3 Purchase Price..................................................................................................2
1.4 Assumption of Liabilities; Etc..................................................................................3
1.5 Allocation of Base Purchase Price and Assumed Liabilities.......................................................3
1.6 The Closing.....................................................................................................3
1.7 Apportionment...................................................................................................3
2. Representations of the Seller.............................................................................................3
2.1 Organization....................................................................................................4
2.2 Authorization.................................................................................................. 4
2.3 Ownership of the Assets.........................................................................................4
2.4 Litigation......................................................................................................4
2.5 Leases ........................................................................................................ 4
2.6 Contracts.......................................................................................................5
2.7 Employee Relations..............................................................................................5
2.8 Employee Benefit Plans..........................................................................................6
2.9 Investment......................................................................................................6
2.10 Fixed Assets...................................................................................................6
2.11 Financial Statements...........................................................................................6
2.12 Absence of Material Adverse Change.............................................................................7
2.13 Permits........................................................................................................7
2.14 Employee Loans.................................................................................................7
2.15 Tax Matters....................................................................................................7
2.16 Intellectual Property..........................................................................................7
2.17 No Material Liability..........................................................................................8
3. Representations of the Buyer..............................................................................................8
3.1 Organization and Authority......................................................................................8
3.2 Capitalization of the Buyer.....................................................................................9
3.3 Authorization.................................................................................................. 9
3.4 Noncontravention................................................................................................9
3.5 Reports and Financial Statements................................................................................9
3.6 Absence of Material Adverse Change.............................................................................10
3.7 Absence of Undisclosed Liabilities.............................................................................10
3.8 Litigation.....................................................................................................10
3.9 Issuance of Stock..............................................................................................10
</TABLE>
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<TABLE>
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4. Conditions to Obligations of the Buyer...................................................................................11
4.1 Continued Truth of Representations and Warranties of the Seller; Compliance
with Covenants and Obligations............................................................................11
4.2 Corporate Proceedings..........................................................................................11
4.3 Governmental Approvals.........................................................................................11
4.4 Consents of Lenders, Lessors and Other Third Parties...........................................................11
4.5 Adverse Proceedings............................................................................................11
4.6 Opinion of Counsel.............................................................................................11
4.7 Closing Deliveries.............................................................................................11
5. Conditions to Obligations of the Seller..................................................................................12
5.1 Continued Truth of Representations and Warranties of the Buyer; Compliance
with Covenants and Obligations............................................................................12
5.2 Corporate Proceedings..........................................................................................12
5.3 Governmental Approvals.........................................................................................12
5.4 Consents of Lenders, Lessors and Other Third Parties...........................................................13
5.5 Adverse Proceedings............................................................................................13
5.6 Opinion of Counsel.............................................................................................13
5.7 Closing Deliveries.............................................................................................13
6. Indemnification..........................................................................................................13
6.1 Indemnification by the Seller..................................................................................13
6.2 Indemnification by the Buyer...................................................................................14
6.3 Claims for Indemnification.....................................................................................14
6.4 Survival.......................................................................................................15
6.5 Limitations....................................................................................................15
7. Conduct of Business Pending Closing......................................................................................16
8. Post-Closing Agreements..................................................................................................16
8.1 Proprietary Information........................................................................................17
8.2 Sharing of Data................................................................................................17
8.3 Accounts Receivable............................................................................................17
8.4 Employment Matters.............................................................................................17
8.5 Hawaii Bond....................................................................................................18
8.6 Accrued Taxes..................................................................................................18
8.7 Offer of Employment............................................................................................18
9. Registration Rights......................................................................................................18
9.1 Required Registrations.........................................................................................18
9.2 Incidental Registration........................................................................................19
9.3 Registration Procedures........................................................................................19
9.4 Allocation of Expenses.........................................................................................22
9.5 Indemnification and Contribution...............................................................................22
</TABLE>
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<TABLE>
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10. Transfer of Shares..............................................................................................25
10.1 Restricted Shares.....................................................................................25
10.2 Requirements for Transfer.............................................................................25
10.3 Legend................................................................................................25
11. Notices.........................................................................................................25
12. Successors and Assigns..........................................................................................26
13. Entire Agreement; Amendments; Attachments.......................................................................26
14. Expenses........................................................................................................27
15. Dispute Resolution..............................................................................................27
16. Termination of Agreement........................................................................................28
16.1 Termination by Lapse of Time..........................................................................28
16.2 Termination by Agreement of the Parties...............................................................28
16.3 Termination by Reason of Breach.......................................................................28
17. Brokers.........................................................................................................28
17.1 For the Seller........................................................................................28
17.2 For the Buyer.........................................................................................28
18. Governing Law...................................................................................................29
19. Section Headings................................................................................................29
20. Severability....................................................................................................29
21. Counterparts....................................................................................................29
</TABLE>
Schedules to be provided by the Seller
1.1(a)(iv) - Fixed Assets
1.1(a)(v) - Employee Loans
1.1(a)(vi) Vacation Time
1.1(b)(i) - Accounts Receivable
1.5 - Allocation of the Purchase Price
2.2 - Third Party Consents
2.5 - Leases
2.6 - Contracts
2.7 - Employee Matters
2.8 - Employee Plans
2.11 - Financial Statements
2.13 - Permits
2.16 - Intellectual Property
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Schedules to be provided by the Buyer
3.2 - Capitalization
Exhibits
A - Warrant
B - Instrument of Assumption of Liabilities
C - Opinion of Hale and Dorr LLP
D - Bill of Sale
E - Opinion of Troutman Sanders
F. - Non-Competition Agreement
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ASSET PURCHASE AGREEMENT
Agreement made as of the 13th day of March, 2000 between Thermo
Information Solutions Inc., a Delaware corporation with its principal office at
81 Wyman Street, Waltham, Massachusetts 02151 (the "Seller"), and HIE, Inc., a
Georgia corporation with its principal office at 1850 Parkway Place, Suite
1100, Marietta, Georgia 30067(the "Buyer").
Preliminary Statement
The Buyer desires to purchase, and the Seller desires to sell, certain
of Seller's assets, for the consideration set forth below and the assumption of
certain of the Seller's liabilities set forth below, subject to the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises hereinafter
set forth and other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereby agree as follows:
1. Sale and Delivery of the Assets.
1.1 Delivery of the Assets.
(a) Subject to and upon the terms and
conditions of this Agreement, at the Closing (as defined in Section 1.6
hereof), the Seller shall sell, transfer, convey, assign and deliver to the
Buyer, and the Buyer shall purchase from the Seller, all of the Seller's right,
title and interest in and to the following assets (the "Assets") used primarily
in connection with the Seller's Integrated Solutions division (the "Business"):
(i) the contracts and agreements set
forth on Schedule 2.6 attached hereto (collectively, the "Contracts");
(ii) the real property leases set forth
on Schedule 2.5 attached hereto (collectively, the "Real Property Leases");
(iii) all books, records,
correspondence, technical and procedural manuals, customer lists, employment
records, and any confidential information, whether or not reduced to writing;
(iv) the equipment, furniture,
leasehold improvements and other personal property set forth on Schedule
1.1(a)(iv) attached hereto (collectively, the "Fixed Assets");
(v) those loans from Seller to certain
of its employees set forth on Schedule 1.1(a)(v) attached hereto (the "Employee
Loans");
(vi) all right of Seller in and to the
Licensed Rights and Proprietary Information (as such terms are defined in
Section 2.16), but specifically excluding the names "Thermo" and "Thermo
Information Solutions" or any variations thereof, together with the goodwill
associated therewith (collectively, the "Intellectual Property");
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(vii) Cash in an amount equal to the
difference between $1,000,000 and (i) the outstanding principal and interest
payable under the Employee Loan, (ii) the value of the Fixed Assets reflected
on the balance sheet of the Seller, (iii) the negative balance for vacation
time for the Transferred Employees (as defined in Section 2.7(b) hereof) set
forth in Schedule 1.(a)(vi) attached hereto, and (iv) the costs incurred by
Seller for payroll and expense reimbursement with respect to the Transferred
Employees from the Effective Date (as defined in Section 1.6 hereof) through
the date of Closing (the "Seller Cash"); and
(viii) to the extent not already covered
by this Section 1.1, all of Seller's properties, assets and rights and
obligations of any kind, whether tangible or intangible (unless otherwise
expressly excluded in this Agreement or retained by Seller pursuant to Section
1.4 hereof).
(b) Notwithstanding the provisions of paragraph
(a) above, the assets to be transferred to the Buyer under this Agreement shall
not include any other assets of any nature of Seller, including without
limitation, those assets set forth below (the "Excluded Assets"):
(i) except for the Employee Loans, all
accounts, accounts receivable, notes and notes receivable existing on the
Effective Date which are payable to the Seller, including any late charges
payable in connection therewith and any security held by the Seller for the
payment thereof including, without limitation, those listed on Schedule
1.1(b)(i) attached hereto (the "Accounts Receivable"); and
(ii) all prepaid expenses, deposits,
bank accounts and other similar assets of the Seller existing on the Effective
Date, including the cash represented by such assets.
1.2 Further Assurances. At any time and from time to
time after the Closing, at the Buyer's reasonable request and without further
consideration, the Seller promptly shall execute and deliver such instruments
of sale, transfer, conveyance, assignment and confirmation, and take such other
action, as the Buyer may reasonably request to more effectively transfer,
convey and assign to the Buyer, and to confirm the Buyer's title to, all of the
Assets.
1.3 Purchase Price.
(a) The purchase price ("Purchase Price") for
the Assets shall be:
(i) 1,307,345 shares (hereinafter
referred to as the "Shares") of Buyer's $.01 par value Common Stock (the
"Common Stock"); and
(ii) warrants in the form of Exhibit A
attached hereto to purchase 261,469 shares of Common Stock (the "Warrants").
Notwithstanding the foregoing, provided Seller is the owner of all of
the Shares issued at Closing, during the six (6) month period commencing on the
first day following the Closing, Seller shall have the one-time right, at its
election, to receive additional shares of Common Stock (the "Additional
Shares") equal to (i) $5,500,000, (ii) divided by the average closing price of
the Common Stock on the Nasdaq National Market during the 10 trading days
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prior to the date of such election, (iii) minus the 1,307,345 Shares issued to
Seller at Closing. The Buyer will at all times reserve and keep available,
solely for issuance and delivery to Seller, a sufficient number of shares of
its Common Stock to fulfill Buyer's obligations under this Section 1.3. Seller
shall not exercise its rights under this paragraph within ten (10) days of the
filing of a registration statement for the Shares pursuant to Section 9.1
hereof.
1.4 Assumption of Liabilities; Etc. At the Closing, the
Buyer shall execute and deliver an Instrument of Assumption of Liabilities (the
"Instrument of Assumption") in the form attached hereto as Exhibit B, pursuant
to which the Buyer shall assume and agree to perform, pay and discharge the
following obligations of Seller (the "Assumed Liabilities"): (i) all
obligations relating to the Business or the Assets incurred from and after the
Effective Date and arising from events occurring on and after the Effective
Date, including without limitation all obligations relating to the Contracts
and the Real Property Leases arising from and after the Effective Date, and all
obligations with respect to the Transferred Employees arising from and after
the Effective Date, and (ii) the royalty payable to the South Carolina
Retirement System ("SCRS") under Section 4.16 of that certain Licensing
Agreement between the Seller and SCRS dated September 18, 1999. The Buyer shall
not at the Closing assume or agree to perform, pay or discharge, and the Seller
shall remain unconditionally liable for, all obligations, liabilities and
commitments, fixed or contingent, of the Seller other than the Assumed
Liabilities. Without limitation of the foregoing, Buyer shall not assume any
obligations for the employee benefits plans set forth on Schedule 2.8 of this
Agreement.
1.5 Allocation of Base Purchase Price and Assumed
Liabilities. The aggregate amount of the Purchase Price and the Assumed
Liabilities shall be allocated among the Assets as set forth on Schedule 1.5
attached hereto.
1.6 The Closing. The Closing shall take place at the
offices of Hale and Dorr LLP, 60 State Street, Boston, Massachusetts at 5 p.m.,
Boston time, on March 13, 2000 (the "Closing"). Notwithstanding the foregoing,
the transfer of the Assets by the Seller to the Buyer shall be deemed to have
occurred at the close of business on February 25, 2000 (the "Effective Date").
1.7 Apportionment. Prepaid insurance premiums, real
estate taxes, rent and other amounts payable under the Real Property Leases
shall be apportioned and adjusted as of the Effective Date and the net amount
thereof shall be added to or deducted from, as the case may be, the Purchase
Price. Any transfer taxes payable at the Closing shall be shared equally by
Buyer and Seller.
2. Representations of the Seller.
Except as set forth in the disclosure schedule attached
hereto (the "Disclosure Schedule"), Seller represents and warrants to Buyer as
of the Effective Date as follows: The Disclosure Schedule shall be arranged in
sections corresponding to the sections contained in this Article 2 and the
disclosures in any section of the Disclosure Schedule shall qualify (i) the
corresponding section in this Article 2, and (ii) other sections in this
Article 2 to the extent it is clear (notwithstanding the absence of a specific
cross reference) from a reading of the disclosure that such disclosure is
applicable to such other sections.
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2.1 Organization. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of Delaware,
and has all requisite power and authority (corporate and other) to own its
properties and to carry on its business as now being conducted. The Seller has
full power and authority to execute and deliver this Agreement and the
agreements contemplated herein, and to consummate the transactions contemplated
hereby and thereby. The Seller is duly qualified to do business and is in good
standing in all jurisdictions in which its ownership of property or the
character of its business requires such qualification.
2.2 Authorization. The execution and delivery of this
Agreement by the Seller, and the agreements provided for herein, and the
consummation by the Seller of the transactions contemplated hereby, have been
duly authorized by all requisite corporate action including, without
limitation, any required shareholder action. This Agreement and all such other
agreements and obligations entered into and undertaken in connection with the
transactions contemplated hereby to which the Seller is a party constitute the
valid and legally binding obligations of the Seller, enforceable against the
Seller in accordance with their respective terms except as the foregoing may be
limited by equitable principles or by bankruptcy, insolvency, fraudulent
transfer or other similar laws relating to or affecting the rights of creditors
generally. The execution, delivery and performance by the Seller of this
Agreement and the agreements provided for herein, and the consummation by the
Seller of the transactions contemplated hereby and thereby, will not, with or
without the giving of notice or the passage of time or both in any respect, (a)
violate the provisions of any law, rule or regulation applicable to the Seller;
(b) violate the provisions of the Certificate of Incorporation or Bylaws of the
Seller; (c) violate any judgment, decree, order or award of any court,
governmental body or arbitrator; or (d) conflict with or result in the breach
or termination of any term or provision of, or constitute a default under, or
cause any acceleration under, or cause the creation of any lien, charge or
encumbrance upon the Assets. Schedule 2.2 attached hereto sets forth a true,
correct and complete list of all consents and approvals of third parties that
are required in connection with the consummation by the Seller of the
transactions contemplated by this Agreement.
2.3 Ownership of the Assets. The Seller is, the true and
lawful owner of the Assets, and has the right to (i) assign, in the case of the
Real Property Leases, a valid leasehold interest therein, and (ii) sell and
transfer, in the case of all other Assets, good title such Assets. The delivery
to the Buyer of the instruments of transfer of ownership contemplated by this
Agreement will vest (i) in the case of the Real Property Leases, good leasehold
title, and (ii) in the case of all other Assets, good title to such Assets in
the Buyer, free and clear of all liens, mortgages, pledges, security interests,
restrictions, prior assignments, encumbrances and claims of any kind or nature
whatsoever.
2.4 Litigation. The Seller is not a party to, or to the
knowledge of Seller threatened with, any litigation, suit, action,
investigation, proceeding or controversy before any court, administrative
agency or other governmental authority relating to the Business, the Assets or
the transactions contemplated hereby.
2.5 Leases. Schedule 2.5 attached hereto sets forth a
true, correct and complete list of the Real Property Leases. True, correct and
complete copies of the Real Property Leases, and all amendments, modifications
and supplemental agreements thereto, have previously been delivered by the
Seller to the Buyer. The Leases are in full force and effect, and, except as
set
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forth on Schedule 2.5, have not been modified or amended since the date of
delivery to the Buyer. To the knowledge of Seller, (i) the Seller is not in
breach of or default under any Real Property Lease, and (ii) there is no
existing breach or default by any other party to any Real Property Lease.
2.6 Contracts.
(a) Except as set forth on Schedule 2.6
attached hereto:
(i) each Contract is a valid and
binding agreement of the Seller, and the Seller does not have any knowledge
that any Contract is not a valid and binding agreement of the other parties
thereto;
(ii) the Seller has fulfilled the
obligations required pursuant to the Contracts to have been performed by the
Seller on its part prior to the Effective Date;
(iii) the Seller is not in breach of or
default under any Contract and to the knowledge of Seller no event has occurred
which, with notice or lapse of time or both, would constitute such a breach or
default;
(iv) to the knowledge of the Seller,
there is no existing breach or default by any other party to any Contract and
to the knowledge of Seller no event has occurred which, with notice or lapse of
time or both, would constitute such a breach or default;
(v) no Contract has been terminated or
partially terminated by the Seller, or to the knowledge of Seller, by any other
party thereto; and
(vi) except for the at will employment
contracts with the Transferred Employees, the Contracts constitute all of the
contracts used in the operation of the Business as of the Effective Date.
(b) True, correct and complete copies of all
Contracts, and all amendments, modifications and supplements thereto have
previously been delivered by the Seller to the Buyer.
2.7 Employee Relations.
(a) With respect to the Transferred Employees,
the Seller is in compliance with federal, state and municipal laws respecting
employment and employment practices, terms and conditions of employment, and
wages and hours, and is not engaged in any unfair labor practice. There are no
arrears in the payment of wages or social security taxes with respect to the
Transferred Employees.
(b) Schedule 2.7 attached hereto sets forth a
true, correct and complete list of (a) all employees employed by the Seller in
connection with the Assets (the "Transferred Employees"), and (b) the Seller's
current payroll, including the job descriptions and salary or wage rates of
each of the Transferred Employees. True and current copies of any written
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employment agreements with respect to the Transferred Employees have previously
been provided to Buyer.
2.8 Employee Benefit Plans. Schedule 2.8 attached hereto
contains a true, correct and complete list of all pension, benefit, profit
sharing, retirement, deferred compensation, welfare, insurance, disability,
bonus, vacation pay, severance pay and other similar plans, programs and
agreements affecting the Transferred Employees, whether reduced to writing or
not.
2.9 Investment.
(i) Seller acknowledges and understands that
the Shares, the Warrant, the Additional Shares issuable pursuant to Section 1.3
hereof and the shares of Common Stock to be issued upon exercise of the Warrant
(the "Warrant Shares") have not been registered under the Securities Act of
1933, as amended (the "Securities Act") or any applicable state securities
laws, and may not be sold, pledged, hypothecated or otherwise transferred
without an effective registration statement for such securities under the
Securities Act and such applicable state securities laws or an opinion of
counsel satisfactory to the Buyer that registration is not required under the
Securities Act or under any applicable state securities laws;
(ii) Seller acknowledges and understands that
the Warrant and each certificate representing the Shares, the Additional Shares
and the Warrant Shares shall bear a legend in substantially the form set out in
Section 10.3 of this Agreement;
(iii) Seller acknowledges that it received prior
to executing this Agreement the Buyer SEC Reports (as defined in Section 3.5 of
this Agreement) and that Buyer has made available to Seller prior to its
execution of this Agreement the opportunity to obtain any additional
information which Buyer possesses that is necessary to verify the accuracy of
the information referred to therein.
(iv) Seller is acquiring the Shares, the
Additional Shares, the Warrant and the Warrant Shares for its own account for
investment and not with a view to, or for sale in connection with, any
distribution thereof, nor with any present intention of distributing or selling
the same; and, except as contemplated by this Agreement and the Exhibits
hereto, the Seller has no present or contemplated agreement, undertaking,
arrangement, obligation, indebtedness or commitment providing for the
disposition thereof. Seller is an "accredited investor" as defined in Rule
501(a) under the Securities Act.
2.10 Fixed Assets. The Fixed Assets constitute all of the
equipment, furniture, leasehold improvements and other personal property of
Seller which is used in connection with the operation of the Business or the
performance of the Contracts.
2.11 Financial Statements. True and correct copies of the
unaudited income statements of the Business as of and for the twelve month
periods ending January 1, 2000, January 2, 1999 and January 3, 1998,
respectively (the "Income Statements"), and a true and correct copy of the
unaudited balance sheet of the Business as of December 31, 1999 (the "Balance
Sheet") ( the Income Statements and the Balance Sheet are collectively referred
to herein as the "Financial Statements") are attached hereto as Schedule 2.11.
The Financial
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Statements were prepared in accordance with generally accepted accounting
practices applied on a consistent basis throughout the periods covered thereby
(except that the Financial Statements exclude all footnotes). The Balance Sheet
fairly represents the financial position of the Business as of the date
thereof, and the Income Statements fairly represent the results of operation of
the Business as of the respective dates thereof and for the periods referred to
therein. The Financial Statements are consistent with the books and records of
Seller.
2.12 Absence of Material Adverse Change. To the knowledge
of Seller, since December 31, 1999, there has occurred no event or development
which has had, or would reasonably be expected to have in the future, a
material adverse effect on the condition (financial or otherwise) or results of
operation of the Business, including the Assets transferred to Buyer hereby.
2.13 Permits. Seller has all permits, licenses,
authorizations, consents and approvals of any government entity required (a) to
own, operate, and maintain the Assets, or (b) to perform the Contracts
(collectively the "Permits"). Schedule 2.13 attached hereto sets forth a true,
correct and complete list of all Permits.
2.14 Employee Loans. Each Employee Loan is a valid and
binding agreement of the Seller and the Seller does not have any knowledge that
any Employee Loan is not a valid and binding agreement of the other parties
thereto. The Seller is not in breach of or default under any Employee Loan,
and, to the knowledge of Seller, none of the other parties to the Employee
Loans is in breach of or default under such Employee Loans. The Employee Loans
comply with the requirements of all applicable federal, state and municipal
laws.
2.15 Tax Matters. All amounts in respect of federal,
state or local taxes imposed on the Assets or for which the owner of the
Business is or may be liable after the Effective Date with respect to all
taxable periods or portions of periods ending on or before the Effective Date
have been paid or, in the case of taxes for which returns have not been filed
(the "Accrued Taxes"), will be paid by Seller.
2.16 Intellectual Property.
(a) Schedule 2.16 lists each material license,
sublicense, agreement or permission relating to any intellectual property that
any third party owns and to which the Seller is a party ("Licensed Rights"),
other than Licensed Rights which are readily available in the marketplace at a
cost of less than $1,000. To the knowledge of Seller, the Seller is not in
violation of any agreement to which it is a party governing the Licensed Rights
as a result of the operation of the Business in the manner in which it is
currently operated. The execution and delivery of this Agreement, and the
consummation of the transactions contemplated by this Agreement, will not limit
the Buyer's ability to use the Licensed Rights in the operation of the Business
in the manner in which it is currently operated by Seller.
(b) Except as set forth in Schedule 2.16:
(i) the Seller has obtained no
copyright registrations and has made no application for such registrations with
respect to the Assets or related to the Business;
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(ii) Seller has no registered
trademarks, registered service marks, trademark applications, or service mark
applications related to the Business or any products or services sold or
licensed by it, or which it uses in the conduct of the Business;
(iii) the Seller does not own any
patents or applications for patents that cover the operation of the Business or
any products sold or licensed by it, or assets used by it, in the conduct of
the Business; and
(iv) no person or entity has a right to
receive royalty or similar payments in respect of any Intellectual Property
pursuant to any contractual arrangements entered into by Seller.
(c) To the knowledge of Seller, the Seller has
taken reasonable steps designed to safeguard and maintain the secrecy and
confidentiality of, and its proprietary rights in, any licenses, processes,
designs, methods, trade secrets, inventions, proprietary or technical
information, and data and code covering or embodied in any software or other
assets owned by Seller and used in the conduct of the Business and not readily
available to the public ("Proprietary Information"). To the knowledge of
Seller, Seller's Intellectual Property has not been infringed upon or
misappropriated by third parties.
(d) To the knowledge of Seller, the Seller has
not infringed or misappropriated, and is not infringing or misappropriating, on
any trademark, service mark, trade name, copyright, patent, or trade secret of
any third party and to the knowledge of Seller there is no claim pending or
threatened against the Seller with respect to any alleged infringement of any
trademark, service mark, trade name, copyright, patent, or trade secret owned
by any third party.
2.17 No Material Liability. No representation and
warranty made by Seller to Buyer in this Agreement, taken as a whole, contains
any untrue statement of material fact. Except as disclosed in the Contracts and
except for the Assumed Liabilities, to the best knowledge of Seller, Seller has
not incurred any material liability with respect to or affecting the Business
or Assets prior to the Effective Date for which payment or performance is
required after the Effective Date. For purposes of this Section, any liability
or obligation of the Seller relative to the Business or Assets, whether
liquidated or contingent, which involves the payment or consideration or
performance of services in excess of Fifty Thousand Dollars ($50,000), shall be
deemed a material liability.
3. Representations of the Buyer.
The Buyer represents and warrants to the Seller as of the
Effective Date (except as provided in Section 3.2 below) as follows:
3.1 Organization and Authority. The Buyer is a
corporation duly organized, validly existing and in good standing under the
laws of the state of Georgia, and has all requisite power and authority
(corporate and other) to own its properties and to carry on its business as now
being conducted. The Buyer has full power and authority to execute and deliver
this Agreement and the agreements contemplated herein, the Warrant and the
Instrument of Assumption of Liabilities and to consummate the transactions
contemplated hereby and thereby.
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The Buyer is duly qualified to do business and in good standing in all
jurisdictions in which its ownership of property or the character of its
business requires such qualification.
3.2 Capitalization of the Buyer. As of February 29,
2000, the Buyer's authorized capital stock consists of (i) 50,000,000 shares of
Common Stock, of which 25,688,036 shares are issued and outstanding and
6,967,500 shares have been reserved for issuance pursuant to the director and
employee stock option plans of Buyer, and (ii) 20,000,000 shares of Preferred
Stock, no par value (the "Preferred Stock"), of which 64,133 shares are issued
and outstanding. All of the outstanding shares of capital stock of the Buyer
have been duly and validly issued and are fully paid and nonassessable. Except
as provided in this Agreement, the Buyer SEC Reports (as defined in Section
3.5) or in Schedule 3.2 and except for individual stock option grants issued
pursuant to one of Buyer's director or employee stock option plans, (i) no
subscription, warrant, option, convertible security or other right (contingent
or otherwise) to purchase or acquire any shares of capital stock of the Buyer
is authorized or outstanding, (ii) the Buyer has no obligation (contingent or
otherwise) to issue any subscription, warrant, option, convertible security or
other such right or to issue or distribute to holders of any shares of its
capital stock any evidences of indebtedness or assets of the Buyer, (iii) Buyer
has no obligation (contingent or otherwise) to purchase, redeem or otherwise
acquire any shares of its capital stock or any interest therein or to pay any
dividend or make any other distribution in respect thereof, and (iv) there are
no outstanding or authorized stock appreciation, phantom stock or similar
rights with respect to the Buyer. All of the issued and outstanding shares of
capital stock of the Buyer have been offered, issued and sold by the Company in
compliance with applicable federal and state securities laws.
3.3 Authorization. The execution and delivery of this
Agreement by the Buyer, and the agreements provided for herein, and the
consummation by the Buyer of all transactions contemplated hereby, have been
duly authorized by all requisite corporate action including, without
limitation, any required shareholder action. This Agreement and all such other
agreements and obligations entered into and undertaken in connection with the
transactions contemplated hereby to which Buyer is a party constitute the valid
and legally binding obligations of the Buyer, enforceable against the Buyer in
accordance with their respective terms except as the foregoing may be limited
by equitable principles or by bankruptcy, insolvency, fraudulent transfer or
other similar laws relating to or affecting the rights of creditors generally.
3.4 Noncontravention. The execution and delivery by the
Buyer of this Agreement and the agreements provided for herein, and the
consummation by the Buyer of the transactions contemplated hereby or thereby,
will not, with or without the giving of notice or the passage of time or both
in any respect, (a) violate the provisions of any law, rule or regulation
applicable to the Buyer, (b) violate the provisions of the Certificate of
Incorporation or By-laws of the Buyer (c) violate any judgment, decree, order
or award of any court, governmental body or arbitrator; or (d) conflict with or
result in the breach or termination of any term or provision of, or constitute
a default under, or cause any acceleration under, or cause the creation of any
lien, charge or encumbrance upon the Buyer's assets. Buyer has received all
consents and approvals of third parties that are required in connection with
the consummation by the Buyer of the transactions contemplated by this
Agreement.
3.5 Reports and Financial Statements. The Buyer has
previously furnished to the Seller complete and accurate copies, as amended or
supplemented, of its (a) Annual Report on
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Form 10-K for the fiscal year ended 1998, as filed with the Securities and
Exchange Commission (the "SEC"), and (b) all other reports filed by the Buyer
under Section 13 or subsections (a) or (c) of Section 14 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") with the SEC since
January 1, 1999 (such reports are collectively referred to herein as the "Buyer
SEC Reports"). The Buyer SEC Reports constitute all of the documents required
to be filed by the Buyer under Section 13 or subsections (a) or (c) of Section
14 of the Exchange Act with the SEC from January 1, 1999 through the date of
this Agreement. The Buyer SEC Reports complied in all material respects with
the requirements of the Exchange Act and the rules and regulations thereunder
when filed. As of their respective dates, the Buyer SEC Reports did not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
audited financial statements and unaudited interim financial statements of the
Buyer included in the Buyer SEC Reports (i) complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto when filed, (ii) were prepared in
accordance with generally accepted accounting practices applied on a consistent
basis throughout the periods covered thereby (except as may be indicated
therein or in the notes thereto, and in the case of quarterly financial
statements, as permitted by Form 10-Q under the Exchange Act), (iii) fairly
present the financial condition, results of operations and cash flows of the
Buyer as of the respective dates thereof and for the periods referred to
therein, and (iv) are consistent with the books and records of the Buyer.
3.6 Absence of Material Adverse Change. To the knowledge
of Buyer, since September 30, 1999, there has occurred no event or development
which has had, or would reasonably be expected to have in the future, a
material adverse effect on the business, condition (financial or otherwise) or
results of operations of the Buyer.
3.7 Absence of Undisclosed Liabilities. To the knowledge
of Buyer, the Buyer does not have any liability (whether absolute or
contingent), except for (a) liabilities shown in the Buyer SEC Reports, (b)
liabilities which have arisen since the Buyer SEC Reports in the ordinary
course of business and which are similar in nature and amount to the
liabilities which arose during the comparable period of time in the immediately
preceding fiscal period and (c) contractual and other liabilities incurred in
the ordinary course of business which are not required by generally accepted
accounting practices to be reflected on a balance sheet.
3.8 Litigation. Except as disclosed in the Buyer SEC
Reports, there is no legal proceeding which is pending or, to the knowledge of
Buyer, threatened against the Buyer or any subsidiary of the Buyer which, if
determined adversely to the Buyer or such subsidiary, could have, individually
or in the aggregate, a material adverse effect on Buyer or which in any manner
challenges or seeks to prevent, enjoin, alter or delay the transactions
contemplated by this Agreement.
3.9 Issuance of Stock. The issuance, sale and delivery
of the Shares, the Additional Shares, the Warrant and the Warrant Shares, have
been duly authorized and reserved for issuance, as the case may be, by all
necessary corporate action on the part of the Buyer, and the Shares and
Additional Shares when so issued, sold and delivered in accordance with the
provisions of this Agreement, and the Warrant Shares issuable upon exercise of
such Warrant,
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when issued upon such exercise and payment of the exercise price provided for
therein, will be duly and validly issued, fully paid and nonassessable.
4. Conditions to Obligations of the Buyer.
The obligations of the Buyer under this Agreement are subject
to the fulfillment, at the Closing, of the following conditions precedent, each
of which may be waived in writing in the sole discretion of the Buyer:
4.1 Continued Truth of Representations and Warranties of
the Seller; Compliance with Covenants and Obligations. The representations and
warranties of the Seller shall be true on and as of the Effective Date. The
Seller shall have performed and complied with all terms, conditions,
obligations, agreements and restrictions required by this Agreement to be
performed or complied with by it prior to or at the Closing.
4.2 Corporate Proceedings. All corporate and other
proceedings required to be taken on the part of the Seller to authorize or
carry out this Agreement and to convey, assign, transfer and deliver the Assets
shall have been taken.
4.3 Governmental Approvals. All governmental agencies,
departments, bureaus, commissions and similar bodies, the consent,
authorization or approval of which is necessary under any applicable law, rule,
order or regulation for the consummation by the Seller of the transactions
contemplated by this Agreement shall have consented to, authorized, permitted
or approved such transactions.
4.4 Consents of Lenders, Lessors and Other Third
Parties. The Seller shall have received all requisite consents and approvals of
all lenders, lessors and other third parties whose consent or approval is
required in order for the Seller to consummate the transactions contemplated by
this Agreement, including, without limitation, those set forth on Schedule 2.2
attached hereto.
4.5 Adverse Proceedings. No action or proceeding by or
before any court or other governmental body shall have been instituted or
threatened by any governmental body or person whatsoever which shall seek to
restrain, prohibit or invalidate the transactions contemplated by this
Agreement or which might affect the right of the Buyer to own or use the Assets
after the Effective Date.
4.6 Opinion of Counsel. The Buyer shall have received an
opinion of Hale and Dorr LLP, counsel to the Seller, dated as of the Closing,
in substantially the form attached hereto as Exhibit C, and as to such other
matters as may be reasonably requested by the Buyer or its counsel.
4.7 Closing Deliveries. The Buyer shall have received at
or prior to the Closing each of the following documents:
(a) a bill of sale substantially in the form
attached hereto as Exhibit D (the "Bill of Sale");
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(b) such instruments of conveyance, assignment
and transfer, in form and substance reasonably satisfactory to the Buyer, as
shall be appropriate to convey, transfer and assign to, and to vest in, the
Buyer, (i) in the case of the Real Property Leases, good leasehold title, and
(ii) in the case of all other Assets, good title to such Assets;
(c) such contracts, files and other data and
documents pertaining to the Assets as the Buyer may reasonably request;
(d) a certificate of the Seller confirming
satisfaction of the conditions specified in this Section 4;
(e) a certificate of the Secretary of State of
the State of Delaware as to the legal existence and good standing (including
tax) of the Seller in Delaware;
(f) certificates of the Secretary of the Seller
attesting to the incumbency of the Seller's officers and the authenticity of
the resolutions authorizing the transactions contemplated by the Agreement;
(g) a cross receipt executed by the Buyer and
the Seller;
(h) payment of the Seller Cash by wire transfer
in accordance with instructions provided by Buyer;
(i) a Non-Competition Agreement substantially
in the form attached hereto as Exhibit F (the "Non-Competition Agreement"); and
(j) such other documents, instruments or
certificates as the Buyer may reasonably request.
5. Conditions to Obligations of the Seller.
The obligations of the Seller under this Agreement are
subject to the fulfillment, at the Closing, of the following conditions
precedent, each of which may be waived in writing at the sole discretion of the
Seller:
5.1 Continued Truth of Representations and Warranties of
the Buyer; Compliance with Covenants and Obligations. The representations and
warranties of the Buyer in this Agreement shall be true on and as of the
Effective Date. The Buyer shall have performed and complied with all terms,
conditions, obligations, agreements and restrictions required by this Agreement
to be performed or complied with by it prior to or at the Closing.
5.2 Corporate Proceedings. All corporate and other
proceedings required to be taken on the part of the Buyer to authorize or carry
out this Agreement shall have been taken.
5.3 Governmental Approvals. All governmental agencies,
departments, bureaus, commissions and similar bodies, the consent,
authorization or approval of which is necessary under any applicable law, rule,
order or regulation for the consummation by the Buyer of the transactions
contemplated by this Agreement shall have consented to, authorized, permitted
or approved such transactions.
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5.4 Consents of Lenders, Lessors and Other Third
Parties. The Buyer shall have received all requisite consents and approvals of
all lenders, lessors and other third parties whose consent or approval is
required in order for the Buyer to consummate the transactions contemplated by
this Agreement.
5.5 Adverse Proceedings. No action or proceeding by or
before any court or other governmental body shall have been instituted or
threatened by any governmental body or person whatsoever which shall seek to
restrain, prohibit or invalidate the transactions contemplated by this
Agreement or which might affect the right of the Seller to transfer the Assets.
5.6 Opinion of Counsel. The Seller shall have received
an opinion of Troutman Sanders, LLP counsel to the Buyer, dated as of the
Closing, in substantially the form attached hereto as Exhibit E, and as to such
other matters as may be reasonably requested by the Seller or its counsel.
5.7 Closing Deliveries. The Seller shall have received
at or prior to the Closing each of the following documents:
(a) a certificate of the Buyer confirming
satisfaction of the conditions specified in this Section 5;
(b) a certificate of the Secretary of State of
the State of Georgia as to the legal existence and good standing of the Buyer
in Georgia;
(c) a certificate of the Secretary of the Buyer
attesting to the incumbency of the Buyer's officers and the authenticity of the
resolutions authorizing the transactions contemplated by this agreement;
(d) a certificate for 1,307,345 Shares to be
delivered by Buyer at the Closing, registered in the name of the Seller;
(e) the Warrant;
(f) the Instrument of Assumption of Liabilities
executed by the Buyer and accepted by the Seller;
(g) a cross receipt executed by the Buyer and
the Seller; and
(h) such other documents, instruments or
certificates as the Seller may reasonably request.
6. Indemnification.
6.1 Indemnification by the Seller. Subject to the terms
and conditions of this Article 6, from and after the Closing, the Seller shall
indemnify the Buyer in respect of, and hold the Buyer harmless against, any and
all claims, debts, obligations and other liabilities, monetary damages, fines,
fees, penalties, interest obligations, deficiencies, losses, costs and expenses
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(including without limitation reasonable attorneys' fee and expenses)
(collectively, "Damages") incurred or suffered by the Buyer:
(a) resulting from, relating to or constituting
any (i) misrepresentation or breach of any representation or warranty of the
Seller contained in this Agreement or the certificate of the Seller delivered
at the Closing pursuant to Section 4.7(d) of this Agreement or (ii) failure to
perform any covenant or agreement of the Seller contained in this Agreement; or
(b) resulting from the conduct of the Business
or the operation of the Assets prior to the Effective Date.
6.2 Indemnification by the Buyer. Subject to the terms
and conditions of this Article 6, from and after the Closing, the Buyer shall
indemnify the Seller (and, in the case of paragraph (c) below, Thermo Electron
Corporation ("Thermo")) in respect of, and hold the Seller (and, in the case of
paragraph (c) below, Thermo) harmless against, any and all Damages incurred or
suffered by the Seller (and, in the case of paragraph (c) below, Thermo):
(a) resulting from, relating to or constituting
(i) any misrepresentation or breach of any representation or warranty of the
Buyer contained in this Agreement or the certificate of the Buyer delivered at
the Closing pursuant to Section 5.7(a) of this Agreement or (ii) failure to
perform any covenant or agreement of the Buyer contained in this Agreement; or
(b) resulting from the conduct of the Business
or the operation of the Assets following the Effective Date; or
(c) arising as a result of any claim made under
the Contract set forth as item 4 on Schedule 2.6 (the "Hawaii Contract") or the
bond furnished to the State of Hawaii (the "Hawaii Bond") under the Hawaii
Contract.
6.3 Claims for Indemnification.
(a) Third-Party Claims. A person entitled to
indemnification under this Article 6 (an "Indemnified Party") shall give prompt
written notice to the person from whom indemnification is sought (the
"Indemnifying Party") of the commencement of any action, suit or proceeding
relating to a third-party claim for which indemnification may be sought or, if
earlier, upon the assertion of any such claim by a third party; provided,
however, that no delay on the part of the Indemnified Party in notifying any
Indemnifying Party shall relieve the Indemnifying Party from any obligation
hereunder unless (and then solely to the extent) the Indemnifying Party thereby
is prejudiced. Within 30 days after delivery of such notice, the Indemnifying
Party may, upon written notice thereof to the Indemnified Party, assume control
of the defense and settlement of such action, suit, proceeding or claim with
counsel reasonably satisfactory to the Indemnified Party. If the Indemnifying
Party does not assume control of such defense, the Indemnified Party shall
control such defense. Any party not controlling such defense may participate
therein at its own expense; provided that if the Indemnifying Party assumes
control of such defense and the Indemnified Party reasonably concludes, based
on advice from counsel, that the Indemnifying Party and the Indemnified Party
have conflicting interests with respect to such action, suit, proceeding or
claim, the reasonable fees and expenses of counsel to the Indemnified Party
shall be considered "Damages" for purposes of this Agreement; provided,
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however, that in no event shall the Indemnifying Party be responsible for the
fees and expenses of more than one counsel per jurisdiction for all Indemnified
Parties. Any party controlling such defense shall keep the other parties
advised of the status of such action, suit, proceeding or claim and the defense
thereof and shall consider recommendations made by the other party with respect
thereto. The Indemnified Party shall not agree to any settlement of such
action, suit, proceeding or claim without the prior written consent of the
Indemnifying Party. The Indemnifying Party shall not agree to any settlement of
such action, suit, proceeding or claim that does not include a complete release
of the Indemnified Party from all liability with respect thereto or that
imposes any liability or obligation on the Indemnified Party without the prior
written consent of the Indemnified Party, which shall not be unreasonably
withheld or delayed.
(b) Procedure for Other Claims. An Indemnified
Party wishing to assert a claim for indemnification under this Article 6 shall
deliver to the Indemnifying Party a written notice (a "Claim Notice") which
contains (i) a description and the estimated amount (the "Claimed Amount") of
any Damages incurred by the Indemnified Party, (ii) a statement that the
Indemnified Party is entitled to indemnification under this Article 6 and a
reasonable explanation of the basis therefor, and (iii) a demand for payment in
the amount of such Damages. Within 30 days after delivery of a Claim Notice,
the Indemnifying Party shall deliver to the Indemnified Party a written
response in which the Indemnifying Party shall: (i) agree that the Indemnified
Party is entitled to receive all of the Claimed Amount (in which case such
response shall be accompanied by a payment by the Indemnifying Party to the
Indemnified Party of the Claimed Amount, by check or by wire transfer), (ii)
agree that the Indemnified Party is entitled to receive part, but not all, of
the Claimed Amount (the "Agreed Amount") (in which case such response shall be
accompanied by a payment by the Indemnifying Party to the Indemnified Party of
the Agreed Amount, by check or by wire transfer) or (iii) contest that the
Indemnified Party is entitled to receive any of the Claimed Amount. If the
Indemnifying Party in such response contests the payment of all or part of the
Claimed Amount, the Indemnifying Party and the Indemnified Party shall use good
faith efforts to resolve such dispute. If such dispute is not resolved within
60 days following the delivery by the Indemnifying Party of such response, the
Indemnifying Party and the Indemnified Party shall each have the right to
submit such dispute to binding arbitration in accordance with the provisions of
Section 14.
6.4 Survival.
(a) The representations and warranties of the
Seller and the Buyer set forth in this Agreement and the certificates delivered
at the Closing pursuant to Section 4.7(d) and 5.7(a) shall survive the Closing
and the consummation of the transactions contemplated hereby and continue until
18 months after the Effective Date, at which time they shall expire.
(b) Any valid claim that is properly asserted
in writing pursuant to Section 6.3 prior to the expiration of the
representation or warranty that is the basis for such claim shall survive until
such claim is finally resolved and satisfied.
6.5 Limitations.
(a) Notwithstanding anything to the contrary
contained in this Agreement, each of the following limitations shall apply:
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(i) the aggregate liability of the
Seller for the sum of all Damages under Section 6.1 shall not exceed
$4,500,000;
(ii) the Seller shall be liable under
Section 6.1(a)(i) for only that portion of the aggregate Damages under Section
6.1(a)(i) which exceeds $100,000 (it being understood that the Seller shall not
be liable, in any event, for the first $100,000 of said Damages);
(iii) the aggregate liability of the
Buyer for the sum of all Damages under Section 6.2 shall not exceed $5,500,000,
except that the foregoing limitation shall not apply to Damages under Section
6.2(c); and
(iv) the Buyer shall be liable under
Section 6.2(a)(i) for only that portion of aggregate Damages under Section
6.2(a)(i) which exceeds $100,000 (it being understood that the Buyer shall not
be liable, in any event, for the first $100,000 of said Damages).
(b) In no event shall any Indemnifying Party be
responsible and liable for any Damages or other amounts under this Article 6
that are consequential, in the nature of lost profits, diminution in value,
damage to reputation or the like, special or punitive or otherwise not actual
Damages. For avoidance of doubt, the parties confirm that, notwithstanding the
previous sentence, if and to the extent an Indemnified Party is required as a
result of a suit commenced by a third party to pay consequential damages to a
third party, such consequential damages shall constitute indemnifiable Damages.
Each party shall use commercially reasonable efforts to pursue all legal rights
and remedies available in order to minimize the Damages for which
indemnification is provided under Article 6.
(c) The amount of any Damages for which
indemnification is provided under this Article 6 shall be reduced by any
related recoveries to which the Indemnified Party is entitled under insurance
policies or other related payments received or receivable from third parties
and any tax benefits actually received by the Indemnified Party or any of its
affiliates or for which the Indemnified Party or any of its affiliates is
eligible on account of the matter resulting in such Damages or the payment of
such Damages.
7. Conduct of Business Pending Closing. From the date hereof
through the Closing, Seller shall, except as contemplated by this Agreement,
(a) operate the Assets in the ordinary course of business, (b) notify Buyer of
(i) the occurrence (or failure to occur) of any event which occurrence or
failure would be likely to cause any representation and warranty contained
herein or in any documents contemplated hereby to be untrue or inaccurate, or
(ii) any material adverse event in connection with the operation of the Assets,
(c) provide reasonable access to the books and records of Seller pertaining to
the Business and other information reasonably requested by Buyer, and (d) to
use reasonable efforts to assist Buyer in its efforts to employ the Transferred
Employees and to consummate the transactions contemplated hereby.
8. Post-Closing Agreements.
The Seller agrees that from and after the Closing:
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8.1 Proprietary Information.
Except as may otherwise be required by law, the Seller shall
hold in confidence, and use its best efforts to have all of its officers,
directors and personnel hold in confidence, all knowledge and information of a
secret or confidential nature with respect to the Assets and Seller shall not
disclose, publish or make use of the same without the consent of the Buyer,
except to the extent that such information shall have become public knowledge
other than by breach of this Agreement by the Seller.
8.2 Sharing of Data.
The Seller shall have the right for a period of five years
following the Effective Date to have reasonable access to such books, records,
correspondence, employment records and other similar information as are
transferred to the Buyer pursuant to the terms of this Agreement for the
limited purposes of concluding its involvement with the Assets prior to the
Effective Date and for complying with its obligations under applicable
securities, tax, employment or other laws and regulations. The Buyer shall have
the right for a period of five years following the Effective Date to have
reasonable access to those books, records, correspondence, employment records
and other records which are retained by the Seller pursuant to the terms of
this Agreement to the extent that any of the foregoing relates to the Assets.
8.3 Accounts Receivable.
(a) After the Closing, the Buyer shall use
commercially reasonable efforts to collect the Accounts Receivable. Seller
shall have the right, upon reasonable prior notice to Buyer, to inspect Buyer's
books and records pertaining to the Accounts Receivable and Buyer's collection
thereof.
(b) In the event that any payment is remitted
by a customer which is indebted under both Accounts Receivable and an account
receivable arising out of activities of the Buyer after the Effective Date (a
"New Receivable"), such payments shall first be applied to the Accounts
Receivable due from such customer and the balance remaining after payment in
full of all Accounts Receivable due from such customer shall be applied to the
New Receivable.
(c) Any sums received by the Buyer in respect
of Accounts Receivable shall be promptly transmitted by the Buyer to the
Seller. In addition, if receipt by the Buyer of unidentified sums of money from
an account debtor who owes any Account Receivable results in such account
debtor having an aggregate credit balance with the Buyer, the Buyer shall
promptly transmit to the Seller an amount of money equal to the lesser of (a)
such aggregate credit balance or (b) the remaining unpaid balance of all
Accounts Receivable.
8.4 Employment Matters. After the Closing, Seller shall
transfer to Buyer the healthcare and dependent care flexible spending account
balances held by Seller for the benefit of each of the Transferred Employees.
In addition, Seller shall use reasonable efforts to cause Blue Cross/Blue
Shield of South Carolina to provide a health plan affecting the Transferred
Employees on the same terms and conditions as Seller's health plan. Until such
new plan is provided, but in no event for more than 60 days, Seller shall
continue the health insurance coverage for each of the Transferred Employees
and Buyer shall reimburse Seller for all costs
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incurred in connection therewith within ten (10) days of presentation of an
invoice therefor from Seller.
8.5 Hawaii Bond. After the Closing, Seller shall
maintain the Hawaii Bond in effect for the original term of the Hawaii Contract
as in effect as of the Effective Date. Seller shall not be obligated to renew
the Hawaii Bond during any extension of the Hawaii Contract.
8.6 Accrued Taxes. After the Closing, Seller shall pay
the Accrued Taxes on or before the due date thereof.
8.7 Offer of Employment. Promptly after the Closing, the
Buyer shall make an employment offer as an employee at will effective as of the
Effective Date to all of the Transferred Employees on terms (including without
limitation salary, fringe benefits, job responsibility and location but
excluding any benefits provided under any equity or non-qualified deferred
compensation plan) no less favorable in the aggregate than those provided to
the Transferred Employees by the Seller immediately prior to the Effective
Date. The Buyer will give credit for past service with the Seller or its
affiliates for purposes of participation, vesting and eligibility for benefit
levels, but not for benefit accrual purposes.
9. Registration Rights.
9.1 Required Registrations.
(a) At any time on or after the Closing, Seller
may request, in writing, that the Buyer effect a separate registration under
the Securities Act for each of the Shares and the Additional Shares on Form
S-3. At the request of Seller, the Warrant Shares shall be included in either
such registration. The Shares, the Additional Shares and the Warrant Shares are
hereinafter collectively referred to as the "Registrable Shares." In each such
case, the Buyer shall promptly use commercially reasonable efforts to effect
the registration. Notwithstanding the foregoing, if at the time of the issuance
of the Additional Shares, the Shares have not been registered pursuant to this
Section 9.1, Seller shall thereafter include both the Shares and the Additional
Shares in any such registration request and Buyer shall thereupon only be
required to effect one (1) registration of the Registrable Shares pursuant to
this Section 9.1. Seller shall not be permitted to request a separate
registration of the Warrant Shares.
(b) If at the time of any request to register
any of the Registrable Shares by the Seller pursuant to this Section 9.1, the
Buyer is engaged or has plans to engage in a registered public offering or is
engaged in any other activity which, in the good faith determination of the
Buyer's Board of Directors, would be adversely affected by the requested
registration, then the Buyer may at its option direct that such request be
delayed for a period not in excess of 60 days from the date of such request,
such right to delay a request to be exercised by the Buyer not more than once
in any 12-month period.
(c) The Buyer agrees to use commercially
reasonable efforts to keep any registration statement filed pursuant to this
Section 9.1 effective and current until the earlier of (i) one year from the
effective date of the registration statement or (ii) the date that all of the
Registrable Shares covered by the registration statement have been sold by the
Seller or (iii) such
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time as to which all of the Registrable Shares covered by the registration
statement may be sold by the Seller under Rule 144(k) or any successor rule or
regulation under the Securities Act.
9.2 Incidental Registration.
(a) If the Buyer shall propose the registration
under the Securities Act of an offering of any of its Common Stock to be sold
for cash, whether or not for its own account, (other than a registration
relating to either (1) a dividend reinvestment, stock option, stock purchase or
similar plan, (2) a transaction pursuant to Rule 145 under the Securities Act,
or (3) a merger, consolidation or reorganization), the Buyer, on such occasion,
shall as promptly as practicable but in no event later than ten (10) days prior
to the proposed filing date of the registration statement give written notice
(the "Notice") to the Seller of its intention to effect such registration, and
the Seller shall be entitled, on each such occasion, to request to have all or
a portion of the Registrable Shares included in such registration statement.
Upon the written request of the Seller that the Buyer include any Registrable
Shares in such registration statement (which request shall state the number of
the Registrable Shares for which registration is sought), given within ten (10)
days after the giving of the Buyer's Notice, the Buyer shall cause such
Registrable Shares to be so included in the offering covered by such
registration statement, subject to the limitations hereinafter set forth.
(b) The registration of some or all of such
Registrable Shares pursuant to this Section 9.2 may be conditioned or
restricted if, in the case of a registration statement which also includes
shares to be sold for the account of the Buyer in an underwritten offering, in
the judgment of the managing underwriter of such proposed offering, inclusion
thereof in such registration statement will have an adverse impact on the
marketing of the securities to be offered by the Buyer (provided that such
conditions or restrictions apply on a proportional basis not only to the
Registrable Shares but also to all other securities to be included other than
those to be offered for the Buyer's own account). If such managing underwriter
shall require that the number of Registrable Shares to be offered by the Seller
be reduced or eliminated, the Seller shall have the right to withdraw its
request for registration pursuant to this Section 9.2.
(c) The Buyer shall not be obligated to honor
any request by the Seller under this Section 9.2 if the Seller could then sell
under Rule 144(k) promulgated under the Securities Act all of the Registrable
Shares the Seller proposes to have registered under Section 9.2.
9.3 Registration Procedures.
(a) If and whenever the Buyer is required by
the provisions of this Agreement to effect the registration of the Registrable
Shares under the Securities Act, the Buyer shall:
(i) file with the Commission a
Registration Statement with respect to such Registrable Shares and use
commercially reasonable efforts to cause that Registration Statement to become
effective promptly and remain effective as provided herein; provided however,
that in the case of any registration pursuant to Section 9.2, such filing may
be delayed in the discretion of the Buyer;
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(ii) promptly prepare and file with the
Commission any amendments and supplements to the Registration Statement and the
prospectus included in the Registration Statement as may be necessary to comply
with the provisions of the Securities Act (including the anti-fraud provisions
thereof) and to keep the Registration Statement effective in accordance with
the provisions of Section 9;
(iii) promptly furnish to Seller such
reasonable numbers of copies of the Prospectus, including any preliminary
Prospectus, in conformity with the requirements of the Securities Act, and such
other documents as Seller may reasonably request in order to facilitate the
public sale or other disposition of the stock;
(iv) promptly use commercially
reasonable efforts to register or qualify the stock covered by the Registration
Statement under the securities or Blue Sky laws of such states as the Seller
shall reasonably request, and do any and all other acts and things that may be
necessary or desirable to enable the Seller to consummate the public sale or
other disposition in such states; provided, however, that the Buyer shall not
be required in connection with this paragraph (iv) to qualify as a foreign
corporation or execute a general consent to service of process in any
jurisdiction or to maintain the effectiveness of any such registration or
qualification for any period during which it is not required to maintain the
effectiveness of the related registration statement under the Securities Act;
(v) promptly cause all such
Registrable Shares to be listed on each securities exchange or automated
quotation system on which similar securities issued by the Buyer are then
listed;
(vi) promptly provide a transfer agent
and registrar for all such Registrable Shares not later than the effective date
of such registration statement;
(vii) promptly make available for
inspection by the Seller, any managing underwriter participating in any
disposition pursuant to such Registration Statement, and any attorney or
accountant or other agent retained by Seller, all financial and other records,
pertinent corporate documents and properties of the Buyer and cause the Buyer's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such Registration Statement;
(viii) promptly notify Seller, promptly
after it shall receive notice thereof, of the time when such Registration
Statement has become effective or a supplement to any Prospectus forming a part
of such Registration Statement has been filed; and
(ix) promptly following the
effectiveness of such Registration Statement, notify Seller of any request by
the Commission for the amending or supplementing of such Registration Statement
or Prospectus.
(b) If the Buyer has delivered a Prospectus to
the Seller and after having done so the Prospectus is amended to comply with
the requirements of the Securities Act, the Buyer shall promptly notify the
Seller and, if requested, the Seller shall immediately cease making offers of
the Registrable Shares and return all Prospectuses to the Buyer. The Buyer
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<PAGE> 26
shall promptly provide the Seller with revised Prospectuses and, following
receipt of the revised Prospectuses, the Seller shall be free to resume making
offers of the Registrable Shares.
(c) In the event that, in the judgment of the
Buyer, it is advisable to suspend use of a Prospectus included in a
Registration Statement due to pending material developments or other events
that have not yet been publicly disclosed and as to which the Buyer believes
public disclosure would be detrimental to the Buyer, the Buyer shall notify
Seller to such effect, and, upon receipt of such notice, Seller shall
immediately discontinue any sales of the Registrable Shares pursuant to such
Registration Statement until Seller has received copies of a supplemented or
amended Prospectus or until Seller is advised in writing by the Buyer that the
then current Prospectus may be used and has received copies of any additional
or supplemental filings that are incorporated or deemed incorporated by
reference in such Prospectus. Notwithstanding anything to the contrary herein,
the Buyer shall not exercise its rights under this Section 9.3(c) to suspend
sales of Registrable Shares for a period in excess of 60 days in any 365-day
period.
(d) (i) Notwithstanding any provision of this
Agreement to the contrary, and except as provided in clause (ii) of this
Section 9.3(d), in the event the Buyer notifies the Seller in writing and no
later than ten (10) days prior to the proposed filing date that the Buyer
intends to file a registration statement in connection with an underwritten
offering of any of its capital stock, the Seller shall refrain from selling or
otherwise distributing, except in accordance with the provisions of Section 9.2
hereunder, any Registrable Shares within the period beginning up to seven days
prior to the effective date of such registration statement (or on such later
date that the Buyer notifies the Seller, in writing, that such period has
begun) and ending up to 120 days after such effective date (or on such earlier
date that the Buyer notifies the Seller that such period has ended)(the
"Offering Restricted Period");
(ii) Notwithstanding the provisions of clause
(i) above, in the event the Seller's Registrable Shares are not included in
such a registered underwritten offering pursuant to Section 9.2 hereof, the
Seller may during the Offering Restricted Period, sell or otherwise distribute
up to 700,000 Registrable Shares during any thirty (30) day period without the
prior written consent of the managing underwriter.
(e) The Buyer's obligations with respect to and
compliance with the registration statement provisions set forth herein shall be
expressly conditioned upon the Seller's compliance with the following:
(i) the Seller shall cooperate with
the Buyer in connection with the preparation of the registration statement, and
for so long as the Buyer is obligated to keep the registration statement
effective, shall provide to the Buyer, in writing, for use in the registration
statement, all such information regarding the Seller and the plan(s) of
distribution of the Registrable Shares as may be necessary to enable the Buyer
to prepare the registration statement and prospectus covering the Registrable
Shares, to maintain the currency and effectiveness thereof and otherwise to
comply with all applicable requirements of law in connection therewith.
(ii) During such time as the Seller may
be engaged in a distribution of the Registrable Shares, the Seller shall comply
with Regulation M promulgated under the Exchange Act and pursuant thereto,
shall, among other things: (w) not engage in any
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<PAGE> 27
stabilization activity in connection with the securities of the Buyer in
contravention of the rules comprising Regulation M; (x) distribute the
Registrable Shares in the manner described in the registration statement or
pursuant to Rule 144 of the Securities Act; (y) cause to be furnished to each
broker through whom the Registrable Shares may be offered, or to the offeree if
an offer is not made through a broker, such copies of the prospectus and any
amendment or supplement thereto and documents incorporated by reference therein
as may be required by law; and (z) not bid for or purchase any securities of
the Buyer or attempt to induce any person to purchase any securities of the
Buyer other than as permitted under the Exchange Act.
9.4 Allocation of Expenses. The Buyer will pay all
Registration Expenses for all registrations under this Agreement. For purposes
of this Section, the term "Registration Expenses" shall mean all expenses
incurred by the Buyer in complying with this Agreement, including, without
limitation, all registration and filing fees, exchange listing fees, printing
expenses, fees and expenses of counsel for the Buyer, state Blue Sky fees and
expenses, and the expense of any special audits incident to or required by any
such registration, but excluding underwriting discounts, selling commissions
and the fees and expenses of Seller's own counsel.
9.5 Indemnification and Contribution.
(a) In the event of any registration of any of
the Registrable Shares under the Securities Act pursuant to this Agreement, the
Company will indemnify and hold harmless Seller, each underwriter of the
Registrable Shares, and each other person, if any, who controls Seller or such
underwriter within the meaning of the Securities Act or the Exchange Act
against any losses, claims, damages or liabilities, joint or several, to which
Seller, such underwriter or controlling person may become subject under the
Securities Act, the Exchange Act, state securities or Blue Sky laws or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any Registration
Statement under which such Registrable Shares was registered under the
Securities Act, any preliminary prospectus or final prospectus contained in the
Registration Statement, or any amendment or supplement to such Registration
Statement, or arise out of or are based upon the omission or alleged omission
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading; and the Buyer will reimburse Seller, such
underwriter and each such controlling person for any legal or any other
expenses reasonably incurred by Seller, such underwriter or controlling person
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Buyer will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon (i) any untrue statement or omission made in
such Registration Statement, preliminary prospectus or prospectus, or any such
amendment or supplement, in reliance upon and in conformity with information
furnished to the Buyer, in writing, by or on behalf of Seller, such underwriter
or controlling person specifically for use in the preparation thereof or made
in any preliminary prospectus if a copy of the final prospectus was not
delivered to the person alleging any loss, claim, damage or liability for which
losses arise at or prior to the written confirmation of the sale of the
Registrable Shares to such person and the untrue statement or omission
concerned had been corrected in such final prospectus and copies thereof had
timely been delivered by the Buyer to such indemnified party; (ii) any untrue
statement or omission made in any prospectus used by such indemnified party if
a court of competent jurisdiction finally determines that at the
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time of such use the indemnified party had actual knowledge that information
provided in such prospectus by or on behalf of Seller contained any untrue
statement or omission; or (iii) the use of any prospectus after such time as
the Buyer has advised the Seller in writing that the filing of a post-effective
amendment or supplement thereto is required, except the Prospectus as so
amended or supplemented, or the use of any prospectus after such time as the
obligation of the Buyer to keep the same current and effective has expired.
(b) In the event of any registration of the
Registrable Shares under the Securities Act pursuant to this Agreement, Seller
will indemnify and hold harmless the Buyer, each of its directors and officers
and each underwriter (if any) and each person, if any, who controls the Buyer
or any such underwriter within the meaning of the Securities Act or the
Exchange Act, against any losses, claims, damages or liabilities, joint or
several, to which the Buyer, such directors and officers, underwriter or
controlling person may become subject under the Securities Act, Exchange Act,
state securities or Blue Sky laws or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement under which such Registrable
Shares were registered under the Securities Act, any preliminary prospectus or
final prospectus contained in the Registration Statement, or any amendment or
supplement to the Registration Statement, or arise out of or are based upon any
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, if the
statement or omission was made in reliance upon and in conformity with
information relating to Seller furnished in writing to the Buyer by or on
behalf of Seller specifically for use in connection with the preparation of
such Registration Statement, prospectus, amendment or supplement, (ii) the use
by such indemnifying party of any prospectus after such time as the Buyer has
advised such indemnifying party in writing that the filing of a post-effective
amendment or supplement thereto is required, except the prospectus as so
amended or supplemented, or after such time as the obligation of the Buyer to
keep the registration statement effective and current has expired, or (iii) any
information given or representation made by such indemnifying party in
connection with the sale of the Registrable Shares which is not contained in
and not in conformity with the prospectus (as amended or supplemented at the
time of the giving of such information or making of such representation); and
such indemnifying party shall reimburse each such indemnified party for all
legal and other expenses reasonably incurred by such party in investigating or
defending against any such claims, whether or not resulting in any liability,
or in connection with any investigation or proceeding by any governmental
agency or instrumentality relating to any such claims with respect to any
offering of securities pursuant to this Section 9 of this Agreement; provided,
however, that the obligations of Seller hereunder shall be limited to an amount
equal to the net proceeds to Seller of Registrable Shares sold in connection
with such registration.
(c) Each party entitled to indemnification
under this Section (the "Section 9 Indemnified Party") shall give notice to the
party required to provide indemnification (the "Section 9 Indemnifying Party")
promptly after such Section 9 Indemnified Party has actual knowledge of any
claim as to which indemnity may be sought, and shall permit the Section 9
Indemnifying Party to assume the defense of any such claim or any litigation
resulting therefrom; provided, that counsel for the Section 9 Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Section 9 Indemnified Party (whose approval shall not be
unreasonably withheld); and, provided, further, that the failure of any Section
9
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Indemnified Party to give notice as provided herein shall not relieve the
Section 9 Indemnifying Party of its obligations under this Section except to
the extent that the Section 9 Indemnifying Party is adversely affected by such
failure. The Section 9 Indemnified Party may participate in such defense at
such party's expense; provided, however, that the Section 9 Indemnifying Party
shall pay such expense if representation of such Section 9 Indemnified Party by
the counsel retained by the Section 9 Indemnifying Party would be inappropriate
due to actual or potential differing interests between the Section 9
Indemnified Party and any other party represented by such counsel in such
proceeding; provided further that in no event shall the Section 9 Indemnifying
Party be required to pay the expenses of more than one law firm per
jurisdiction as counsel for the Section 9 Indemnified Party. The Section 9
Indemnifying Party also shall be responsible for the expenses of such defense
if the Section 9 Indemnifying Party does not elect to assume such defense. No
Section 9 Indemnifying Party, in the defense of any such claim or litigation
shall, except with the consent of each Section 9 Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Section 9 Indemnified Party of a release from all liability in respect of such
claim or litigation, and no Section 9 Indemnified Party shall consent to entry
of any judgment or settle such claim or litigation without the prior written
consent of the Section 9 Indemnifying Party, which consent shall not be
unreasonably withheld.
(d) In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in this
Section 9.5 is due in accordance with its terms but for any reason is held to
be unavailable to a Section 9 Indemnified Party in respect to any losses,
claims, damages and liabilities referred to herein, then the Section 9
Indemnifying Party shall, in lieu of indemnifying such Indemnified Party,
contribute to the amount paid or payable by such Section 9 Indemnified Party as
a result of such losses, claims, damages or liabilities to which such party may
be subject in such proportion as is appropriate to reflect the relative fault
of the Buyer on the one hand and the Seller on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative fault of the Buyer and the Seller shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of material
fact related to information supplied by the Buyer or the Seller and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Buyer and the Seller agree
that it would not be just and equitable if contribution pursuant to this
Section 9.5 were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph of Section 9.5, (a)
in no case shall Seller be liable or responsible for any amount in excess of
the net proceeds received by Seller from the offering of Registrable Shares and
(b) the Buyer shall be liable and responsible for any amount in excess of such
proceeds; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be made
against another party or parties under this Section, notify such party or
parties from whom contribution may be sought, but the omission so to notify
such party or parties from whom contribution may be sought shall not relieve
such party from any other obligation it or they may have thereunder or
otherwise under this Section. No party shall be liable for contribution with
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respect to any action, suit, proceeding or claim settled without its prior
written consent, which consent shall not be unreasonably withheld.
10. Transfer of Shares.
10.1 Restricted Shares. "Restricted Shares" means (i) the
Shares, (ii) the Additional Shares, (iii) the Warrant, (iv) any Warrant Shares,
and (v) any other shares of capital stock of the Buyer issued in respect of
such shares (as a result of stock splits, stock dividends, reclassifications,
recapitalizations, or similar events); provided, however, that shares of Common
Stock which are Restricted Shares shall cease to be Restricted Shares (x) upon
any sale pursuant to a registration statement under Section 5 of the Securities
Act or Rule 144 under the Securities Act or (y) at such time as they become
eligible for sale under Rule 144(k) under the Securities Act.
10.2 Requirements for Transfer.
(a) Restricted Shares shall not be sold or
transferred unless either (i) they first shall have been registered under the
Securities Act, or (ii) the Buyer first shall have been furnished with an
opinion of legal counsel to the effect that such sale or transfer is exempt
from the registration requirements of the Securities Act.
(b) Notwithstanding the foregoing, no
registration or opinion of counsel shall be required for (i) a transfer by
Seller to a wholly owned subsidiary provided that the transferee agrees in
writing to be subject to the terms of this Section 9 to the same extent as if
it were the original purchaser hereunder, or (ii) a transfer made in accordance
with Rule 144 under the Securities Act.
10.3 Legend. Each certificate representing Restricted
Shares shall bear a legend substantially in the following form:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and
may not be offered, sold or otherwise transferred, pledged or
hypothecated unless and until such shares are registered
under such Act or an opinion of counsel satisfactory to the
Company is obtained to the effect that such registration is
not required."
The foregoing legend shall be removed from the certificates
representing any Restricted Shares, at the request of the holder thereof, at
such time as they become eligible for resale pursuant to Rule 144(k) under the
Securities Act.
11. Notices.
Any notices or other communications required or permitted
hereunder shall be sufficiently given if delivered personally or sent by
overnight courier, registered or certified mail, postage prepaid, addressed as
follows or to such other address of which the parties may have given notice:
To the Seller:
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Charles K. Wittenberg
Thermo Information Solutions Inc.
81 Wyman Street
Waltham, MA 02151
With a copy to:
Jeffrey A. Hermanson, Esq.
Hale and Dorr LLP
60 State Street
Boston, MA 02109-1803
To the Buyer:
HIE, Inc.
1850 Parkway Place
Suite 1100
Marietta, Georgia 30067
With copies to:
Patricia Wilson, Esq.
Troutman Sanders, LLP
600 Peachtree Street, N.E. - Suite 5200
Atlanta, GA 30308-2216
Unless otherwise specified herein, such notices or other
communications shall be deemed received (a) on the date delivered, if delivered
by overnight courier; or (b) three business days after being sent, if sent by
registered or certified mail.
12. Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns, except that
the Buyer and the Seller may not assign their respective obligations hereunder
without the prior written consent of the other party. Any assignment in
contravention of this provision shall be void.
13. Entire Agreement; Amendments; Attachments.
(a) This Agreement, all Schedules and Exhibits
hereto, and all agreements and instruments to be delivered by the parties
pursuant hereto represent the entire understanding and agreement between the
parties hereto with respect to the subject matter hereof and supersede all
prior oral and written and all contemporaneous oral negotiations, commitments
and understandings between such parties. The Buyer and the Seller, by the
consent of their respective Boards of Directors, or officers authorized by such
Boards, may amend or modify this
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Agreement, in such manner as may be agreed upon, by a written instrument
executed by the Buyer and the Seller.
(b) If the provisions of any Schedule or
Exhibit to this Agreement are inconsistent with the provisions of this
Agreement, the provision of the Agreement shall prevail. The Exhibits and
Schedules attached hereto or to be attached hereafter are hereby incorporated
as integral parts of this Agreement.
14. Expenses.
Except as otherwise expressly provided herein, the
Buyer and the Seller shall each pay their own expenses in connection with this
Agreement and the transactions contemplated hereby.
15. Dispute Resolution.
In the event that any dispute should arise between
the parties with respect to any matter covered by this Agreement or the
interpretation of this Agreement, the parties hereto shall resolve such dispute
in accordance with the procedures set forth in this Section 15.
(i) Any party hereto may submit any
matter referred to in Section 15 to arbitration by notifying the other party,
in writing, of such dispute. Within 30 days after receipt of such notice, the
parties hereto shall designate in writing a single arbitrator to resolve the
dispute; provided, that if the parties hereto cannot agree on an arbitrator
within such 30-day period, the arbitrator shall be selected by the Washington,
D.C. Office of the American Arbitration Association. The arbitrator shall be a
retired federal or state judge and shall not be an affiliate, employee,
consultant, officer, director or stockholder of any party hereto. If neither
the parties hereto nor the Washington, D.C. Office of the American Arbitration
Association is able to identify a retired federal or state judge to serve as
the arbitrator, the Washington, D.C. Office of the American Arbitration
Association shall select an arbitrator from the CPC Panel of Distinguished
Neutrals of the CPR Institute for Dispute Resolution.
(ii) Within 30 days after the
designation of the arbitrator, the arbitrator and the parties hereto shall
meet, at which time the parties hereto shall be required to set forth in
writing all disputed issues and a proposed ruling on the merits of each such
issue.
(iii) The arbitrator shall set a date
for a hearing, which shall be no later than 45 days after the submission of
written proposals pursuant to paragraph (ii) above, to discuss each of the
issues identified by the parties hereto. Each party hereto shall have the right
to be represented by counsel. The arbitration shall be governed by the
Commercial Arbitration Rules of the American Arbitration Association; provided,
however, that the Federal Rules of Evidence shall apply with regard to the
admissibility of evidence.
(iv) The arbitrator shall use his or
her best efforts to rule on each disputed issue within 30 days after the
completion of the hearings described in paragraph (iii) above. The
determination of the arbitrator as to the resolution of any dispute shall be
binding and conclusive upon all parties hereto. All rulings of the arbitrator
shall be in writing and shall be delivered to the parties hereto.
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(v) The (A) attorneys' fees of the
parties hereto in any arbitration, (B) fees of the arbitrator, and (C) costs
and expenses of the arbitration shall be borne by the parties hereto as
determined by the arbitrator.
(vi) Any arbitration pursuant to this
Section 15 shall be conducted in Washington, D.C. Any arbitration award may be
entered in and enforced by any court having jurisdiction thereover and shall be
final and binding upon the parties hereto.
(vii) Notwithstanding the foregoing,
nothing in this Section 15 shall be construed as limiting in any way the right
of a party hereto to seek injunctive or other equitable relief with respect to
any actual or threatened breach of this Agreement from a court of competent
jurisdiction.
16. Termination of Agreement.
16.1 Termination by Lapse of Time. This Agreement shall
terminate at 5:00 p.m., Boston time, on March 16, 2000, if the transactions
contemplated hereby have not been consummated, unless such date is extended by
the written consent of all of the parties hereto.
16.2 Termination by Agreement of the Parties. This
Agreement may be terminated by the mutual written agreement of the parties
hereto. In the event of such termination by agreement, the Buyer shall have no
further obligations or liability to the Seller under this Agreement, and the
Seller shall have no further obligations or liability to the Buyer under this
Agreement.
16.3 Termination by Reason of Breach. This Agreement may
be terminated by the Seller, if at any time prior to the Closing there shall
occur a breach of any of the representations, warranties or covenants of the
Buyer or the failure by the Buyer to perform any condition or obligation
hereunder, and may be terminated by the Buyer, if at any time prior to the
Closing there shall occur a breach of any of the representations, warranties or
covenants of the Seller or the failure of the Seller to perform any condition
or obligation hereunder.
17. Brokers.
17.1 For the Seller. The Seller represents and warrants
that it has not engaged any broker or finder or incurred any liability for
brokerage fees, commissions or finder's fees in connection with the
transactions contemplated by this Agreement. The Seller agrees to indemnify and
hold harmless the Buyer against any claims or liabilities asserted against it
by any person acting or claiming to act as a broker or finder on behalf of the
Seller.
17.2 For the Buyer. The Buyer represents and warrants
that it has not engaged any broker or finder or incurred any liability for
brokerage fees, commissions or finder's fees in connection with the
transactions contemplated by this Agreement. The Buyer agrees to indemnify and
hold harmless the Seller against any claims or liabilities asserted against it
by any person acting or claiming to act as a broker or finder on behalf of the
Buyer.
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<PAGE> 34
18. Governing Law.
This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
19. Section Headings.
The section headings are for the convenience of the
parties and in no way alter, modify, amend, limit, or restrict the contractual
obligations of the parties.
20. Severability.
The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
21. Counterparts.
This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall be one and the same document.
IN WITNESS WHEREOF, this Agreement has been duly executed by
the parties hereto as of and on the date first above written.
(Corporate Seal) SELLER:
ATTEST: THERMO INFORMATION SOLUTIONS INC.
By: /s/ Charles Wittenberg
----------------------------------
Secretary Title: President
--------------------------------
(Corporate Seal) BUYER:
ATTEST: HIE, INC.
By: /s/ J. Blankenship
/s/ Lisa M. Maguire ----------------------------------
Assistant Secretary Title: Chief Financial Officer
--------------------------------
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<PAGE> 1
EXHIBIT 2.2
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUED UPON ITS
EXERCISE ARE SUBJECT TO THE RESTRICTIONS ON
TRANSFER SET FORTH IN SECTION 4 OF THIS WARRANT
Warrant No. Number of Shares: 261,469
----------- (subject to adjustment)
Date of Issuance: March 13, 2000
HIE, INC.
Common Stock Purchase Warrant
(Void after March 13, 2004)
HIE, Inc., a Georgia corporation (the "Company"), for value received,
hereby certifies that Thermo Information Solutions Inc., or its registered
assigns (the "Registered Holder"), is entitled, subject to the terms and
conditions set forth below, to purchase from the Company, at any time or from
time to time on or after the date of issuance and on or before 5:00 p.m. (Boston
time) on March 13, 2004, up to 261,469 shares of Common Stock, $ .01 par value
per share, of the Company ("Common Stock"), at a purchase price of $4.207 per
share. The shares purchasable upon exercise of this Warrant, and the purchase
price per share, each as adjusted from time to time pursuant to the provisions
of this Warrant, are hereinafter referred to as the "Warrant Shares" and the
"Purchase Price," respectively.
1. Exercise.
(a) This Warrant may be exercised by the Registered Holder, in whole or
in part, by surrendering this Warrant, with the purchase form appended hereto as
Exhibit I duly executed by the Registered Holder or by the Registered Holder's
duly authorized attorney, at the principal office of the Company, or at such
other office or agency as the Company may designate, accompanied by payment in
full, in lawful money of the United States, of the Purchase Price payable in
respect of the number of Warrant Shares purchased upon such exercise.
(b) In lieu of exercising this Warrant pursuant to Section 1(a) above,
the Registered Holder shall have the right to require the Company to convert the
Warrant, in whole or in part and at any time or times (the "Conversion Right"),
into Warrant Shares, by surrender to the Company of this Warrant and the
purchase form attached hereto as Exhibit I duly completed and executed by the
Registered Holder to evidence the exercise of the Conversion Right. Upon
exercise of the Conversion Right, the Company shall deliver to the Registered
Holder (without payment by the Registered Holder of any cash in respect of the
Purchase Price) a certificate(s) representing that number of Warrant Shares
which is equal to the quotient obtained by dividing (x) an amount equal to the
difference between (A) the aggregate Fair Market Value for the number of Warrant
Shares as to which the Conversion Right is then being exercised (the "Conversion
Shares"), determined as of immediately prior to the effective time of the
exercise of
<PAGE> 2
the Conversion Right, minus (B) the aggregate Purchase Price for the Conversion
Shares (such difference, the "Conversion Amount"), by (y) the Fair Market Value
per share on the date of exercise of the Conversion Right. Upon exercise of the
Conversion Right, the Conversion Amount shall be deemed to have been paid to the
Company in respect of the Warrant Shares so acquired. The Fair Market Value per
share of Common Stock shall be determined as follows:
(i) If the Common Stock is listed on a national securities
exchange, the Nasdaq National Market or another nationally recognized trading
system as of the Exercise Date, the Fair Market Value per share of Common Stock
shall be deemed to be the average of the last reported sale prices per share of
Common Stock thereon for the 5 consecutive trading days immediately preceding
the Exercise Date.
(ii) If the Common Stock is not listed on a national
securities exchange, the Nasdaq National Market or another nationally recognized
trading system as of the Exercise Date, the Fair Market Value per share of
Common Stock shall be deemed to be the amount most recently determined by the
Board of Directors to represent the fair market value per share of the Common
Stock (including without limitation a determination for purposes of granting
Common Stock options or issuing Common Stock under an employee benefit plan of
the Company); and, upon request of the Registered Holder, the Board of Directors
(or a representative thereof) shall promptly notify the Registered Holder of the
Fair Market Value per share of Common Stock. Notwithstanding the foregoing, if
the Board of Directors has not made such a determination within the three-month
period prior to the Exercise Date, then (A) the Board of Directors shall make a
determination of the Fair Market Value per share of the Common Stock within 15
days of a request by the Registered Holder that it do so, and (B) the exercise
of this Warrant pursuant to this subsection 1(b) shall be delayed until such
determination is made.
(c) Each exercise of this Warrant shall be deemed to have been effected
immediately prior to the close of business on the day on which this Warrant
shall have been surrendered to the Company as provided in subsection 1(a) above
(the "Exercise Date"). At such time, the person or persons in whose name or
names any certificates for Warrant Shares shall be issuable upon such exercise
as provided in subsection 1(d) below shall be deemed to have become the holder
or holders of record of the Warrant Shares represented by such certificates.
(d) As soon as practicable after the exercise of this Warrant in full
or in part, and in any event within 10 days thereafter, the Company, at its
expense, will cause to be issued in the name of, and delivered to, the
Registered Holder, or as such Holder (upon payment by such Holder of any
applicable transfer taxes) may direct:
(i) a certificate or certificates for the number of full
Warrant Shares to which the Registered Holder shall be entitled upon such
exercise plus, in lieu of any fractional share to which the Registered Holder
would otherwise be entitled, cash in an amount determined pursuant to Section 3
hereof; and
(ii) in case such exercise is in part only, a new warrant or
warrants (dated the date hereof) of like tenor, calling in the aggregate on the
face or faces thereof for the number of Warrant Shares equal (without giving
effect to any adjustment therein) to the number
-2-
<PAGE> 3
of such shares called for on the face of this Warrant minus the sum of (a) the
number of such shares purchased by the Registered Holder upon such exercise plus
(b) the number of Warrant Shares (if any) covered by the portion of this Warrant
cancelled in payment of the Purchase Price payable upon such exercise pursuant
to subsection 1(b) above.
2. Adjustments.
(a) Adjustment for Stock Splits and Combinations. If the Company shall
at any time or from time to time after the date on which this Warrant was first
issued (the "Original Issue Date") effect a subdivision of the outstanding
Common Stock, the Purchase Price then in effect immediately before that
subdivision shall be proportionately decreased. If the Company shall at any time
or from time to time after the Original Issue Date combine the outstanding
shares of Common Stock, the Purchase Price then in effect immediately before the
combination shall be proportionately increased. Any adjustment under this
paragraph shall become effective at the close of business on the date the
subdivision or combination becomes effective.
(b) Adjustment for Certain Dividends and Distributions. In the event
the Company at any time, or from time to time after the Original Issue Date
shall make or issue, or fix a record date for the determination of holders of
Common Stock entitled to receive, a dividend or other distribution payable in
additional shares of Common Stock, then and in each such event the Purchase
Price then in effect immediately before such event shall be decreased as of the
time of such issuance or, in the event such a record date shall have been fixed,
as of the close of business on such record date, by multiplying the Purchase
Price then in effect by a fraction:
(1) the numerator of which shall be the total number of shares
of Common Stock issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date, and
(2) the denominator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date plus the number of
shares of Common Stock issuable in payment of such dividend or distribution;
provided, however, if such record date shall have been fixed and such dividend
is not fully paid or if such distribution is not fully made on the date fixed
therefor, the Purchase Price shall be recomputed accordingly as of the close of
business on such record date and thereafter the Purchase Price shall be adjusted
pursuant to this paragraph as of the time of actual payment of such dividends or
distributions.
(c) Adjustment in Number of Warrant Shares. When any adjustment is
required to be made in the Purchase Price pursuant to subsections 2(a) or 2(b),
the number of Warrant Shares purchasable upon the exercise of this Warrant shall
be changed to the number determined by dividing (i) an amount equal to the
number of shares issuable upon the exercise of this Warrant immediately prior to
such adjustment, multiplied by the Purchase Price in effect immediately prior to
such adjustment, by (ii) the Purchase Price in effect immediately after such
adjustment.
-3-
<PAGE> 4
(d) Adjustments for Other Dividends and Distributions. In the event the
Company at any time or from time to time after the Original Issue Date shall
make or issue, or fix a record date for the determination of holders of Common
Stock entitled to receive, a dividend or other distribution payable in
securities of the Company (other than shares of Common Stock) or in cash or
other property (other than cash out of earnings or earned surplus, determined in
accordance with generally accepted accounting principles), then and in each such
event provision shall be made so that the Registered Holder shall receive upon
exercise hereof, in addition to the number of shares of Common Stock issuable
hereunder, the kind and amount of securities of the Company and/or cash and
other property which the Registered Holder would have been entitled to receive
had this Warrant been exercised into Common Stock on the date of such event and
had the Registered Holder thereafter, during the period from the date of such
event to and including the Exercise Date, retained any such securities
receivable, giving application to all adjustments called for during such period
under this Section 2 with respect to the rights of the Registered Holder.
(e) Adjustment for Mergers or Reorganizations, etc. If there shall
occur any reorganization, recapitalization, consolidation or merger involving
the Company in which the Common Stock is converted into or exchanged for
securities, cash or other property (other than a transaction covered by
subsections 2(a), 2(b) or 2(d)), then, following any such reorganization,
recapitalization, consolidation or merger, the Registered Holder shall receive
upon exercise hereof the kind and amount of securities, cash or other property
which the Registered Holder would have been entitled to receive if, immediately
prior to such reorganization, recapitalization, consolidation or merger, the
Registered Holder had held the number of shares of Common Stock subject to this
Warrant. In any such case, appropriate adjustment (as determined in good faith
by the Board of Directors of the Company) shall be made in the application of
the provisions set forth herein with respect to the rights and interests
thereafter of the Registered Holder, to the end that the provisions set forth in
this Section 2 (including provisions with respect to changes in and other
adjustments of the Purchase Price) shall thereafter be applicable, as nearly as
reasonably may be, in relation to any securities, cash or other property
thereafter deliverable upon the exercise of this Warrant.
(f) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Purchase Price pursuant to this Section 2, the
Company at its expense shall promptly compute such adjustment or readjustment in
accordance with the terms hereof and furnish to the Registered Holder a
certificate setting forth such adjustment or readjustment (including the kind
and amount of securities, cash or other property for which this Warrant shall be
exercisable and the Purchase Price) and showing in detail the facts upon which
such adjustment or readjustment is based. The Company shall, upon the written
request at any time of the Registered Holder, furnish or cause to be furnished
to the Registered Holder a certificate setting forth (i) the Purchase Price then
in effect and (ii) the number of shares of Common Stock and the amount, if any,
of other securities, cash or property which then would be received upon the
exercise of this Warrant.
3. Fractional Shares. The Company shall not be required upon the
exercise of this Warrant to issue any fractional shares, but shall make an
adjustment therefor in cash on the basis of the Fair Market Value per share of
Common Stock, as determined pursuant to subsection 1(b) above.
-4-
<PAGE> 5
4. Requirements for Transfer.
(a) This Warrant and the Warrant Shares shall not be sold or
transferred unless either (i) they first shall have been registered under the
Securities Act of 1933, as amended (the "Act"), or (ii) the Company first shall
have been furnished with an opinion of legal counsel, reasonably satisfactory to
the Company, to the effect that such sale or transfer is exempt from the
registration requirements of the Act.
(b) Notwithstanding the foregoing, no registration or opinion of
counsel shall be required for (i) a transfer by a Registered Holder which is a
corporation to a wholly owned subsidiary of such corporation, a transfer by a
Registered Holder which is a partnership to a partner of such partnership or a
retired partner of such partnership or to the estate of any such partner or
retired partner, or a transfer by a Registered Holder which is a limited
liability company to a member of such limited liability company or a retired
member or to the estate of any such member or retired member, provided that the
transferee in each case agrees in writing to be subject to the terms of this
Section 4, or (ii) a transfer made in accordance with Rule 144 under the Act.
(c) Each certificate representing Warrant Shares shall bear a legend
substantially in the following form:
"The securities represented by this certificate have
not been registered under the Securities Act of 1933,
as amended, and may not be offered, sold or otherwise
transferred, pledged or hypothecated unless and until
such securities are registered under such Act or an
opinion of counsel satisfactory to the Company is
obtained to the effect that such registration is not
required."
The foregoing legend shall be removed from the certificates
representing any Warrant Shares, at the request of the holder thereof, at such
time as they become eligible for resale pursuant to Rule 144(k) under the Act.
5. No Impairment. The Company will not, by amendment to its charter or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, fail to
perform any of the terms of this Warrant. Without limitation of the foregoing,
the Company (a) will not permit the par or nominal value of any Warrant Shares
issuable upon the exercise of Warrants to exceed the amount payable therefor
upon such exercise, (b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable Warrant Shares on the exercise of the Warrants from time to
time outstanding and (c) will not take any action which results in any
adjustment of the number of Warrant Shares issuable upon exercise of the
Warrants if the total number of shares of Common Stock (or other securities)
issuable after the action upon the exercise of all of the Warrants would exceed
the total number of shares of Common Stock (or other securities) then authorized
by the Company's Articles of Incorporation
-5-
<PAGE> 6
and available for the issuance of shares of Common Stock (or other securities)
upon such exercise.
6. Notices of Record Date, etc. In the event:
(a) the Company shall take a record of the holders of its Common Stock
(or other stock or securities at the time deliverable upon the exercise of this
Warrant) for the purpose of entitling or enabling them to receive any dividend
or other distribution, or to receive any right to subscribe for or purchase any
shares of stock of any class or any other securities, or to receive any other
right; or
(b) of any capital reorganization of the Company, any reclassification
of the Common Stock of the Company, any consolidation or merger of the Company
with or into another corporation (other than a consolidation or merger in which
the Company is the surviving entity and its Common Stock is not converted into
or exchanged for any other securities or property), or any transfer of all or
substantially all of the assets of the Company; or
(c) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
then, and in each such case, the Company will mail or cause to be
mailed to the Registered Holder a notice specifying, as the case may be, (i) the
record date for such dividend, distribution or right, and the amount and
character of such dividend, distribution or right, or (ii) the effective date on
which such reorganization, reclassification, consolidation, merger, transfer,
dissolution, liquidation or winding-up is to take place, and the time, if any is
to be fixed, as of which the holders of record of Common Stock (or such other
stock or securities at the time deliverable upon the exercise of this Warrant)
shall be entitled to exchange their shares of Common Stock (or such other stock
or securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation or winding-up. Such notice shall be mailed at least ten days prior
to the record date or effective date for the event specified in such notice.
7. Reservation of Stock. The Company will at all times reserve and keep
available, solely for issuance and delivery upon the exercise of this Warrant,
such number of Warrant Shares and other securities, cash and/or property, as
from time to time shall be issuable upon the exercise of this Warrant.
8. Exchange of Warrants. Upon the surrender by the Registered Holder,
properly endorsed, to the Company at the principal office of the Company, the
Company will, subject to the provisions of Section 4 hereof, issue and deliver
to or upon the order of such Holder, at the Company's expense, a new Warrant or
Warrants of like tenor, in the name of the Registered Holder or as the
Registered Holder (upon payment by the Registered Holder of any applicable
transfer taxes) may direct, calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock (or other securities, cash
and/or property) then issuable upon exercise of this Warrant.
9. Replacement of Warrants. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft
-6-
<PAGE> 7
or destruction) upon delivery of an indemnity agreement (with surety if
reasonably required) in an amount reasonably satisfactory to the Company, or (in
the case of mutilation) upon surrender and cancellation of this Warrant, the
Company will issue, in lieu thereof, a new Warrant of like tenor.
10. Transfers, etc.
(a) The Company will maintain a register containing the name
and address of the Registered Holder of this Warrant. The Registered Holder may
change its or his address as shown on the warrant register by written notice to
the Company requesting such change.
(b) Subject to the provisions of Section 4 hereof, this
Warrant and all rights hereunder are transferable, in whole or in part, upon
surrender of this Warrant with a properly executed assignment (in the form of
Exhibit II hereto) at the principal office of the Company.
(c) Until any transfer of this Warrant is made in the warrant
register, the Company may treat the Registered Holder as the absolute owner
hereof for all purposes; provided, however, that if and when this Warrant is
properly assigned in blank, the Company may (but shall not be obligated to)
treat the bearer hereof as the absolute owner hereof for all purposes,
notwithstanding any notice to the contrary.
11. Mailing of Notices, etc. All notices and other communications from
the Company to the Registered Holder shall be mailed by first-class certified or
registered mail, postage prepaid, to the address last furnished to the Company
in writing by the Registered Holder. All notices and other communications from
the Registered Holder or in connection herewith to the Company shall be mailed
by first-class certified or registered mail, postage prepaid, to the Company at
its principal office at 1850 Parkway Place, Suite 1100, Marietta, Georgia 30067.
If the Company should at any time change the location of its principal office to
a place other than as set forth above, it shall give prompt written notice to
the Registered Holder and thereafter all references in this Warrant to the
location of its principal office at the particular time shall be as so specified
in such notice.
12. No Rights as Stockholder. Until the exercise of this Warrant, the
Registered Holder shall not have or exercise any rights by virtue hereof as a
stockholder of the Company. Notwithstanding the foregoing, in the event (i) the
Company effects a split of the Common Stock by means of a stock dividend and the
Purchase Price of and the number of Warrant Shares are adjusted as of the date
of the distribution of the dividend (rather than as of the record date for such
dividend), and (ii) the Registered Holder exercises this Warrant between the
record date and the distribution date for such stock dividend, the Registered
Holder shall be entitled to receive, on the distribution date, the stock
dividend with respect to the shares of Common Stock acquired upon such exercise,
notwithstanding the fact that such shares were not outstanding as of the close
of business on the record date for such stock dividend.
13. Change or Waiver. Any term of this Warrant may be changed or waived
only by an instrument in writing signed by the party against which enforcement
of the change or waiver is sought.
-7-
<PAGE> 8
14. Section Headings. The section headings in this Warrant are for the
convenience of the parties and in no way alter, modify, amend, limit or restrict
the contractual obligations of the parties.
15. Governing Law. This Warrant will be governed by and construed in
accordance with the internal laws of the State of Georgia (without reference to
the conflicts of law provisions thereof).
EXECUTED as of the Date of Issuance indicated above.
HIE, Inc.
By: /s/ J. Blankenship
-----------------------------
[Corporate Seal] Title: Chief Financial Officer
ATTEST: ------------------------
/s/ Lisa M. Maquire
- -------------------------
-8-
<PAGE> 9
EXHIBIT I
PURCHASE FORM
To:_________________ Dated:____________
The undersigned, pursuant to the provisions set forth in the attached
Warrant (No. ___), hereby irrevocably elects to purchase (check applicable box):
- _____ shares of the Common Stock covered by such Warrant; or
- the maximum number of shares of Common Stock covered by such
Warrant pursuant to the Conversion Right set forth in Section
1(b).
The undersigned herewith makes payment of the full purchase price for such
shares at the price per share provided for in such Warrant, which is $________.
Such payment takes the form of (check applicable box or boxes):
- $______ in lawful money of the United States; or
- the cancellation of such number of Warrant Shares as is
necessary, in accordance with the formula set forth in Section
1(b), to exercise this Warrant with respect to the maximum
number of Warrant Shares purchasable pursuant to the
Conversion Right set forth in Section 1(b).
Signature:
-------------------------------------
Address:
-------------------------------------
-------------------------------------
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<PAGE> 10
EXHIBIT II
ASSIGNMENT FORM
FOR VALUE RECEIVED, _______________________________________ hereby sells,
assigns and transfers all of the rights of the undersigned under the attached
Warrant (No. ____) with respect to the number of shares of Common Stock covered
thereby set forth below, unto:
Name of Assignee Address No. of Shares
Dated: Signature:
----------------------------- -------------------------
Signature Guaranteed:
By: _______________________
The signature should be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved signature guarantee medallion program) pursuant to Rule 17Ad-15
under the Securities Exchange Act of 1934.
-10-
