FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER
THIS FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER (the "Amendment")
is made as of October 9, 1998, by and among American Enterprise Solutions,
Inc., a Florida corporation ("AES"); PRN Acquisition Co., a Florida
corporation and a wholly-owned subsidiary of AES (the "Subsidiary"); and
HALIS, Inc., a Georgia corporation ("HALIS").
R E C I T A L S
WHEREAS, the parties hereto and Physicians Resource Network, Inc., a
Georgia corporation and formerly a wholly-owned subsidiary of HALIS ("PRN"),
have heretofore entered into that certain Agreement and Plan of Merger,
dated June 25, 1998 (the "Original Agreement"), pursuant to which PRN was
merged into the Subsidiary and the Subsidiary continues to exist as the
surviving corporation of the merger; and
WHEREAS, the parties desire to amend the Original Agreement as
hereinafter provided;
NOW, THEREFORE, for and in consideration of the mutual covenants set
forth herein, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Definitions. Capitalized terms used in this Amendment
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shall have the meanings ascribed to them in the Original Agreement.
SECTION 2. Amendments to Original Agreement. The Original
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Agreement is hereby amended as follows:
2.1 Amendment to Recital D. Recital D of the Original Agreement is
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hereby amended by deleting the second sentence thereof in its entirety and
adding in its place and stead the following:
AES is the direct or indirect holder of, and except as
set forth herein has the right to convey and transfer to
HALIS, 12,048,325 shares of common stock, $.01 par
value, of HALIS (the "AES HALIS Stock"). The parties
acknowledge that it is their intention that all the AES
HALIS Stock be transferred to HALIS by AES as
consideration for the Merger, all as more fully
hereinafter set forth.
2.2 Amendment to Section 1.8. Section 1.8 of the Original Agreement
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is hereby amended by deleting the existing Section 1.8 in its entirety and
adding in its place and stead the following:
1.8 Merger Consideration. The merger consideration to
be paid by AES to HALIS in consideration of the Merger
(the "Merger Consideration") shall consist of the AES
HALIS Stock. (i) On or before October 13, 1998, AES
shall deliver to HALIS, or cause its stockbroker, Xxxxx
Xxxxx Incorporated. to provide to HALIS written
confirmation that it has received irrevocable
instructions from AES to immediately transfer to HALIS,
a certificate or certificates representing 11,548,325
shares of the AES HALIS Stock (the "Initial Shares"),
and (ii) on or before January 31, 1999, AES shall
deliver to HALIS a certificate or certificates
representing the remaining 500,000 shares of AES HALIS
Stock (the "Pledged Shares")due pursuant to the Merger.
Each such certificate shall be duly endorsed in blank or
accompanied by stock powers duly executed in blank by
AES, or as appropriate to consummate the transfer. The
Initial Shares shall be delivered to HALIS as soon as
practicable and in the ordinary course after October 13,
1998, subject only to the normal and ordinary delays in
clearing stock transfer instructions.
2.3 Amendment to Section 3.4. Section 3.4 of the Original Agreement
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is hereby amended by deleting the existing first sentence of Section 3.4 in
its entirety and adding in its place and stead the following:
(i) AES beneficially and of record owns, and has full
power and authority to convey free and clear of all
liens, encumbrances or restrictions (except the Pledged
Shares that are currently pledged to Central Bank of
Tampa) all of the AES HALIS Stock constituting the
Merger Consideration, (ii) the AES HALIS Stock
constituting the Merger Consideration consists of
12,048,325 shares of HALIS common stock, (iii) the AES
HALIS Stock represents all of the common stock of HALIS
that AES or any affiliate of AES, or any officer or
director or their affiliates, owns either directly or
indirectly, or otherwise has a beneficial interest of
any kind or nature, and (iv) upon delivery of the
certificate or certificates representing the Merger
Consideration as provided in Section 1.8, HALIS will
acquire title thereto, free and clear of all liens,
encumbrances or restrictions of any kind or nature.
2.4 Amendment to Section 7.3. Section 7.3 of the Original Agreement
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is hereby amended by deleting the existing first sentence of Section 7.3 in
its entirety and adding in its place and stead the following:
HALIS agrees that upon receipt from AES of 11,548,325
shares of HALIS Stock constituting a portion of the
Merger Consideration, HALIS will promptly cause HALIS
Services, Inc. a wholly-owned subsidiary of HALIS
("HALIS Services"), to execute and deliver to AES a
written assignment to AES of all right, title and
interest of HALIS Services in, to and under Section 3 of
that certain Asset Purchase Agreement dated December 31,
1997, by and between Communications Wiring and
Accessories, Inc. and HALIS Services.
Section 3. Releases and Additional Agreements. AES and Subsidiary
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hereby waives any claim of any kind whatsoever that either of them may have
with respect to the consummation of the Merger or the consideration paid
therefore, provided, however, that the release herein shall not release any
claim based on a breach of the representations, warranties or covenants made
by HALIS in the Original Agreement, in which case the provisions of the
Original Agreement shall apply, or a breach of the agreements delivered by
HALIS pursuant to section 4(e) of the Original Agreement, in which case the
provisions of such respective agreements shall apply, or any other
agreements between or among any of the parties, in which case such
respective other agreements shall apply, nor shall this release apply to any
other claim or action or remedy AES and/or Subsidiary may have against
HALIS. AES and the Subsidiary agree that it shall not further restrict,
encumber or commit the Pledged Shares for any purpose other than the
existing pledge to the Central Bank of Tampa, and that in the event the
Pledged Shares are foreclosed or otherwise not available to be delivered by
January 31, 1999, AES shall be obligated to pay HALIS the fair market value
of such stock on and as of such date and, upon its receipt of such payments,
HALIS will be deemed to have released and relinquished any further right to
acquire or receive a transfer of the Pledged Shares. Upon execution hereof,
HALIS withdraws its Notice of Claim made on October 1, 1998 and deems any
breach or default under the Original Agreement claimed therein to have been
timely cured as a result of the execution hereof.
Section 4. Original Agreement to Remain in Effect. Except as
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hereinabove expressly provided, the Original Agreement shall remain
unaltered and in full force and effect.
Section 5. No Admission; Non-waiver. The parties agree that their
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execution of this Amendment is not an admission of any liability and that
they have not waived any rights they may have under any agreement or
applicable law except as specifically and expressly set forth herein.
The foregoing Amendment is hereby executed as of the date first above
written.
"AES"
AMERICAN ENTERPRISE
SOLUTIONS, INC.
By: __________________________________
Name: _________________________________
Title: ________________________________
"SUBSIDIARY"
PRN ACQUISITION CO.
By: __________________________________
Name: _________________________________
Title: ________________________________
"HALIS"
HALIS, INC.
By: __________________________________
Xxxx X. Xxxxxxxx,
President and CEO
