-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J63lziQ3dzFLEUTgywvFjFYnRS7XK6GrKQWL5CJ0Ulryw5vEf44b8O3viA3JYUcF nlXZugRjEWgf70CAZBkwIQ== /in/edgar/work/20000831/0000917253-00-000056/0000917253-00-000056.txt : 20000922 0000917253-00-000056.hdr.sgml : 20000922 ACCESSION NUMBER: 0000917253-00-000056 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000831 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RAINWIRE PARTNERS INC /DE/ CENTRAL INDEX KEY: 0000917253 STANDARD INDUSTRIAL CLASSIFICATION: [3823 ] IRS NUMBER: 570941152 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB/A SEC ACT: SEC FILE NUMBER: 000-23892 FILM NUMBER: 714248 BUSINESS ADDRESS: STREET 1: 9229 UNIVERSITY BLVD STREET 2: STE 201 CITY: CHARLESTON STATE: SC ZIP: 29406 BUSINESS PHONE: 8435539456 MAIL ADDRESS: STREET 1: 9229 UNIVERSITY BLVD STREET 2: STE 201 CITY: CHARLESTON STATE: SC ZIP: 29406 FORMER COMPANY: FORMER CONFORMED NAME: ENVIROMETRICS INC /DE/ DATE OF NAME CHANGE: 19940107 10QSB/A 1 0001.txt QUARTERLY REPORT FOR RAINWIRE PARTNERS, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-QSB/A (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT 1934 For the quarterly period ended June 30, 2000 Commission file Number 0-23892 RAINWIRE PARTNERS, INC. (Exact name of registrant as specified in its charter.) DELAWARE 57-0941152 (State or other jurisdiction of I.R.S. Employer incorporation or organization) Identification No.) 4940 Peachtree Industrial Boulevard, Ste 350 Norcross, GA 30071 (Address of principal executive offices) Registrant's telephone number, including area code: (843) 553-9456 Indicate by check mark whether the registrant(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X ] NO [ ] As of June 30, 2000 the Registrant had outstanding 5,503,222 shares of common Stock. Transitional small business disclosure format (check one): YES [ ] NO [X] INDEX - ----- PART I. FINANCIAL INFORMATION Page # Item 1. Financial Statements Condensed Consolidated Balance Sheet at June 30, 2000 and December 31, 1999 2 Condensed Statement of Operations for the Second Quarter ended June 30, 2000 and 1999 3 Condensed Statement of Cash Flows for the Second Quarter ended June 30, 2000 and 1999 4 Notes to Consolidated Financial Statements 5 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Conditions 6-9 PART II. OTHER INFORMATION Item 1. Legal Proceedings 9 Item 3. Defaults upon Senior Securities 9 Item 5. Other Information 9-14 Item 6. Exhibits and Reports 14 Signature 15 ENVIROMETRICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS June 30, 2000 and December 31, 1999 Envirometrics Envirometrics 2000 1999 (Unaudited) (Audited) ------------- ------------- ASSETS ------ CURRENT ASSETS Cash and cash equivalents $ 30,936 $ 104,607 Notes receivable, current portion 127,871 - Trade receivables less allowance for doubtful accounts $5,000 in 2000 and 1999 17,010 131,654 Inventories 4,000 4,000 Prepaid expenses 1,572 27,634 ----------- ----------- TOTAL CURRENT ASSETS 181,389 267,895 ----------- ----------- OTHER ASSETS AND INTANGIBLES Deposits 2,500 2,500 Other 9,352 - ----------- ----------- 11,852 2,500 ----------- ----------- PROPERTY AND EQUIPMENT Furniture and equipment 202,615 921,358 Vehicles 9,490 9,490 ----------- ----------- 212,105 930,848 Less accumulated depreciation 192,619 870,816 ----------- ----------- 19,486 60,032 ----------- ----------- $ 212,727 $ 330,427 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Notes payable $ 73,492 $ 12,848 Current maturities of long-term debt 18,171 13,708 Accounts payable 231,370 221,228 Accrued expenses 61,789 170,677 ----------- ----------- TOTAL CURRENT LIABILITIES 384,822 418,461 ----------- ----------- LONG-TERM DEBT, less current maturities - 71,681 Deferred Gain on Asset Sale 12,084 24,167 ----------- ----------- 12,084 95,848 ----------- ----------- Redeemable Preferred Sotck 49,918 717,985 ----------- ----------- STOCKHOLDERS' EQUITY Common stock par value $.001; authorized 10,000,000 shares; issued 2000 - 5,503,222 and 1999 - 3,640,880 shares 5,503 3,640 Additional paid-in capital 5,811,856 5,069,388 Retained earnings(deficit) (6,051,456) (5,974,895) ----------- ----------- (234,097) (901,867) ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 212,727 $ 330,427 =========== =========== See Notes to Condensed Consolidated Financial Statements 1 ENVIROMETRICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED June 30, June 30, June 30, June 30, 2000 1999 2000 1999 -------- -------- -------- -------- DISCONTINUED OPERATIONS Loss from discontinued operations (149,107) (17,700) (282,210) (11,758) Gain (loss) on disposition of operations 211,703 5,028 205,661 26,224 Interest (net) 65 1,507 (12) 827 NET INCOME (LOSS)FROM ----------- ---------- ----------- ---------- DISCONTINUED OPERATIONS 62,661 (11,165) (76,561) 15,293 =========== ========== =========== ========== Weighted average number of common shares outstanding 5,155,312 3,012,686 4,398,096 3,012,686 =========== ========== =========== ========== Net income (loss) per common share $ 0.012 $ (0.004) $ (0.017) $ 0.005 =========== ========== =========== ========== Net (loss) per common share, after preferred dividends $ 0.010 $ (0.007) $ (0.020) $ 0.002 =========== ========== =========== ========== Dividends per common share $ - $ - $ - $ - =========== ========== =========== ========== See Notes to Condensed Consolidated Financial Statements
2 ENVIROMETRICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS SECOND QUARTER ENDED JUNE 30, 2000 AND 1999 June 30, June 30, 2000 1999 -------- -------- Cash Flows From Discontinued Operation's: Net income $ (76,561) $ 15,293 Adjustments To Reconcile net income (loss) to net cash used in discontinued operation's. Depreciation 10,875 20,567 (Gain) on disposal of subsidiary operations (125,329) - (Gain)loss on disposal of real property (12,083) - Net gain on vendor balances mediated (68,248) (26,199) Change in assets and liabilities: (Increase) decrease in accounts receivable 114,644 67,722 (Increase) decrease in prepaid expenses 26,062 4,461 Increase (decrease) in accounts payable and accrued expenses (98,746) (27,984) ------------ ----------- Net cash provided by (used in) discontinued operation's (229,386) 53,860 ------------ ----------- Cash Flows From Investing Activities: Issuance of notes receivable for disposal of subsidiary operations 130,000 - Collection of notes receivable 2,129 218,294 Book value of assets disposed 40,699 - Purchase of furniture and equipment - (2,835) (Increase) decrease in deposits - (128) (Increase) decrease in other assets (9,352) 252 ------------ ----------- Net cash provided by investing activities 163,476 215,583 ------------ ----------- Cash Flows From Financing Activities: Principal payments on long-term borrowing (7,761) (36,673) ------------ ----------- Net cash used in financing activities (7,761) (36,673) ------------ ----------- Net increase (decrease) in cash and cash equivalents (73,671) 232,770 Cash and cash equivalents, beginning 104,607 40,934 ------------ ----------- Cash and cash equivalents, ending $ 30,936 $ 273,704 =========== =========== Supplemental Disclosure of Cash Flows Information Cash payments for interest $ 787 $ 2,768 =========== =========== Supplemental Disclosure of Cash Flows Information Issuance of common stock for warrants, loan costs and other $ - $ 3,554 =========== =========== Issuance of common stock for debt conversion $ $ 76,877 =========== =========== Issuance of preferred stock for debt conversion $ $ 422,379 =========== =========== See Notes to Condensed Consolidated Financial Statements 3 ENVIROMETRICS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000 (1) The unaudited condensed financial statements and related notes have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations. The accompanying condensed consolidated financial statements of the Company, and notes thereto, should be read in conjunction with the audited financial statements and related notes included in the Company's Annual Report on Form 10-KSB for the year ended December 31, 1999, filed under the Company's former name Envirometrics, Inc. The results of activity for the interim periods shown in this report are not necessarily indicative of results to be expected for the fiscal year. In the opinion of management, the information contained herein reflects all adjustments necessary to present fairly the consolidated financial position, discontinued operations and changes in cash flow for the interim periods. All such adjustments are of a normal recurring nature. (2) Net loss per common share is computed using the weighted average number of common shares outstanding, after giving effect for the 1 for 2 reverse split effective with the initial public offering in 1994. (3) The Company's common stock and warrants were deleted from The Nasdaq SmallCap Market(tm) on December 3, 1996 for failure to meet the capital and surplus requirement for continued listing. The Company was subsequently listed on the OTC-Bulletin Board. The Company's listing on the OTC-Bulletin board was deleted November 18, 1999 and re-listed on March 21, 2000 after filing the required forms 10-KSB for the years 1996, 1997, 1998 and 1999. (4) At June 30, 2000 the Company had accrued $873 in dividends on Series C preferred shares discussed above. In March 2000, the holders of all preferred shares agreed to convert to Common Stock all accrued dividends of $69,304. (5) The Company disposed of all remaining operations in May, 2000 in two unrelated transactions. Therefore, all activity for 2000 and 1999 has been reflected as discontinued operations. Two notes receivable have been recorded in connection with these transactions (6) The Company entered into a binding agreement with The Catapult Group, Inc. and acquired all of the outstanding stock of that corporation on July 26, 2000. The Company subsequently changed its name to Rainwire Partners, Inc. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Three Months Ended June 30, 2000 Compared To Three Months Ended June 30, 1999 On April 26 and May 8, 2000 respectively, the Company sold its remaining consultative and laboratory operations. Because of these two transactions, the Company has reported all activity as discontinued operations for the quarter ended June 30, 2000, and has restated the corresponding amounts for the quarter ended June 30, 1999. Because these operations were sold and the Company focused its attention on closing the transaction with The Catapult Group, Inc., no comparative discussion of operations with prior periods has been included. Financial Condition The independent auditor's report, filed in the Company's Annual Report on Form 10-KSB for the year ended December 31, 1999, stated that the Company has suffered from recurring losses from operations and decreases in working capital and stockholders' equity. This raised substantial doubt about the Company's ability to continue as a going concern. The Company's financial condition deteriorated during the second quarter ended June 30, 2000 over 1999 due to the sale of assets from its operating subsidiary. The Company is experiencing cash flow constraints. Working capital deficiency at June 30, 2000 amounted to $129,900 which was approximately a $20,600 improvement over December 31, 1999. Cash decreased by approximately $73,700 and trade accounts receivable decreased by approximately $114,600 over December 31, 1999. Two notes receivable in connection with the disposition of subsidiary operations are expected to be collected within one year and are recorded as current assets. Included in current maturities of long term debt is $73,400 in connection with the Small Business Administration debt discussed below. The Company did not have adequate assets to meet its obligations at June 30, 2000. Approximately $80,000 (representing 100%) of debt in connection with the Small Business Administration is expected to be paid from collections of a note receivable recorded in connection with the sale of the consultative operations. As part of that agreement, the Company also is expected to receive additional proceeds based on revenues from certain existing customer contracts transferred. In addition, the Company received $700,000 through the issuance of new shares of common stock subsequent to the completion of the acquisition of The Catapult Group, Inc., $500,000 was used to repay notes payable of The Catapult Group, Inc. of which $250,000 was in default. The remaining amount will be used for working capital. In addition, $69,304 of accrued dividends on preferred shares were converted into common shares during April 2000. The Company eliminated approximately $53,000 in trade payables related to vendor amounts greater than three years old during the first six months of 2000. The Company has significant professional fees included in accounts payable at June 30, 2000. The Company expects that payment in excess of $100,000 for professional fees recorded at June 30, 2000 will be from the capital raise completed at the merger with The Catapult Group, Inc., and additional financing anticipated through the sale of new shares of common stock. Recent Development On May 18, 2000 the Company filed a definitive Information Statement soliciting consents from its shareholders to consummate the transaction with The Catapult Group, Inc. and take other actions as outlined in the Information Statement necessary to comply with the Plan and Agreement to Exchange Stock dated as of February 16, 2000 (the "Exchange Agreement"). On June 8, 2000 the Company's transfer agent, Continental Stock Transfer & Trust Company suspended the consent count because a majority (approximately 60%) of the consents had been returned. The transfer agent then issued the Company a confirmation letter tabulating the consent count, 3,264,363 votes were received with greater than 99% giving consent to the transactions outlined in the Information Statement. Prior to the closing of the Exchange Agreement, on July 26, 2000, Registrant effected a 10:1 reverse split of its outstanding common stock, issued 5,555,064 shares of its common stock to purchase all of the outstanding common stock of Catapult, changed its name to The Catapult Group, Inc. and increased its authorized shares from Ten Million (10,000,000) to Twenty Million (20,000,000). An amendment to Registrant's Certificate of Incorporation reflecting such changes was filed with the Secretary of State of Delaware on July 26, 2000. Upon completion of the Exchange Agreement, The Catapult Group, Inc. became a wholly owned subsidiary of the Company and the shareholders of The Catapult Group, Inc. became owners of approximately 90% of the current outstanding shares of Common Stock of the Company. The Company subsequently changed its name to Rainwire Partners, Inc. Mr. Walter H. Elliott, III resigned as President and CEO and Mr. Bryan M. Johns became President and CEO. On July 26, 2000 four individuals, Jake Cantrell, Ronald Potts, Nancy Edwards and Shiela A. Tallent (the "Purchasers") acquired a total of Nine Hundred Thousand (900,000) shares of newly issued Common Stock of the Company for Seven Hundred Thousand dollars ($700,000) or approximately $0.78 per share. Although the Exchange Agreement required an investment of $2 million, both Envirometrics, Inc. and The Catapult Group, Inc. agreed to waive this requirement and accept the $700,000 capital investment. In consideration of their purchase of Common Stock the Purchasers were granted certain Registration Rights. The Purchasers' registration rights include the right to make one demand that the Company register common stock constituting all or part of the above-mentioned 900,000 shares on Forms S-1, S-2 or S-3 at any time after September 1, 2000. If the Company is unable to financially bear the cost of the filing of the registration statement under the demand registration, the Purchasers may elect to pay the registration expenses. Subject to certain restrictions, the Purchasers' registration rights also require the Company, upon request, to use its best efforts to include in any registration of equity securities of the Company, whether for sale for the account of the Company or for the account of any holder of securities of the Company, common stock constituting all or part of the above-mentioned 900,000 shares that the Company has been so requested to register. For a more detailed description of the terms of the registration rights agreement please see Exhibit 10.5. General Overview During the course of the "Turnaround" phase (see Envirometrics, Inc. 1999 10-KSB, Item 1: Description of Business), the Company explored alternative plans for growth to include the identification of companies in other markets which had greater growth potential than the Environmental, Health and Safety market. This process began with a view of keeping all options open for the future of the Company. In September 1999, the Company was introduced to The Catapult Group, Inc. ("The Catapult Group"), a Georgia corporation. The Catapult Group operated as an Internet integration firm offering intelligent end-to-end e-business solutions to large and middle-market organizations. These solutions range from strategic e-business planning and application development to marketing and communications services for Internet enterprises. The Catapult Group was looking to enter the public market without incurring the cost of an expensive Initial Public Offering and was exploring the avenue of a reverse merger with a company whose securities were already publicly traded. In February 2000, the Company and The Catapult Group entered into a non-binding agreement whereby the Company would acquire The Catapult Group. On July 26, 2000 this transaction was consummated. On July 26, 2000, Registrant entered into Employment Agreements with Mr. Bryan M. Johns, President and Chief Executive Officer, and Mr. Walter H. Elliott, III, Vice President, Business Operations and Mergers and Acquisitions. The Employment Agreements have an initial term of three (3) years and are renewable for one year successive terms after the expiration of three (3) years. The Employment Agreements provide for an annual minimum base salary of $102,000 for Mr. Johns, and $100,000 for Mr. Elliott. The Employment Agreements entitle Mr. Johns and Mr. Elliott to annual bonuses to be determined by the Compensation Committee of the Board of Directors and participation in Registrant's Incentive Stock Option Plan. On July 26, 2000, the majority of the shareholders of Registrant elected to change the name of Registrant from The Catapult Group, Inc. to Rainwire Partners, Inc. An amendment to Registrant's Certificate of Incorporation reflecting the name change was filed with the Secretary of State of Delaware on July 27, 2000. On August 1, 2000, Rainwire Partners, Inc. received a new symbol from NASDAQ. As of that date, Rainwire Partners, Inc. is traded on the OTC Bulletin Board under the symbol RNWR. This 10-QSB contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. Investors are cautioned that certain statements in this 10-QSB are "forward looking statement" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve known and unknown risks, uncertainties and other factors. Such uncertainties and risks include, among others, government regulation, and general economic and business conditions. Actual events, circumstances, effects and results may be materially different from the results, performance or achievements expressed or implied by the forward-looking statements. Consequently, the forward-looking statements contained herein should not be regarded as representations by the Company or any other person that the projected outcomes can or will be achieved. PART II. OTHER INFORMATION Item 1. Legal Proceedings - None Item 3. Defaults upon Senior Securities Dividends on Preferred Shares As of June 30, 2000, 24,959 shares of Series C preferred stock remain outstanding. Dividends on these shares total $873 and are still unpaid. Item 5. Other Information ProForma Financial Information ENVIROMETRICS, INC. AND THE CATAPULT GROUP, INC. (NOW RAINWIRE PARTNERS, INC.) UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION The following unaudited pro forma condensed financial information has been prepared based upon the net deficiency in monetary assets of Envirometrics, Inc. acquired and the historical consolidated financial statements of The Catapult Group, Inc., giving effect to the combination. In the financial statements of the Company, the acquisition is accounted for as a reverse purchase of the assets and liabilities of Envirometrics, Inc. by The Catapult Group, Inc. The accounting treatment applied in the reverse acquisition differs from the legal form of the transaction and the continuing legal entity is now Rainwire Partners, Inc (formerly Envirometrics, Inc.). The pro forma condensed financial information does not purport to present the financial condition and results of operations of Envirometrics, Inc. and The Catapult Group, Inc. had the Merger actually been completed as of the dates indicated. In addition, the pro forma condensed financial information is not necessarily indicative of the future results of operations and should be read in connection with the historical consolidated financial statements and the notes thereto of Envirometrics, Inc. and The Catapult Group, Inc., respectively. The Company filed a Form 8-K on August 4, 2000 announcing the completion of the transaction and will file updated pro forma condensed financial statements as of the effective date, July 26, 2000, as an amendment to this Form 8-K filing. THE CATAPULT GROUP, INC. (formerly ENVIROMETRICS, INC. AND SUBSIDIARIES) PROFORMA CONSOLIDATED BALANCE SHEET JUNE 30, 2000
Actual Adjustments Pro Forma --------------- --------------- --------------- ASSETS Current Assets Cash and cash equivalents $ (10,351) $ 30,936 (1)$ 20,585 Accounts receivable 186,596 17,010 (1) 206,606 Other net monetary assets - 127,184 127,184 Prepaid expenses - 5,572 (1) 5,572 --------------- --------------- --------------- Total Current Assets 176,245 180,702 356,947 --------------- --------------- --------------- Property and Equipment Furniture and equipment 70,674 202,615 (1) 273,289 Less accumulated depreciation (22,369) (183,129) (205,498) --------------- --------------- --------------- 48,305 19,486 67,791 --------------- --------------- --------------- Other Assets Deposits 4,942 11,852 (1) 16,794 Goodwill, net of accumulated amortization of 469,341 - 469,341 --------------- --------------- --------------- 474,283 11,852 486,135 --------------- --------------- --------------- TOTAL $ 698,833 $ 212,040 $ 910,873 =============== =============== =============== See Notes to Consolidated Proforma Financial Statements
Actual Adjustments Pro Forma --------------- --------------- --------------- LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Notes payable $ 500,000 $ $ 500,000 Current maturities of long-term debt - 18,171 (1) 18,171 Accounts payable 127,982 231,370 (1) 359,352 Accrued expenses and other 80,773 60,916 (1) 141,689 -------------- --------------- --------------- Total Current Liabilities 708,755 310,457 1,019,212 -------------- --------------- --------------- Long-term Debt, less current portion Banks and others - 72,805 (1) 72,805 Deferred gain on asset sale - 12,083 (1) 12,083 -------------- --------------- --------------- Total Current Liabilities - 84,888 84,888 -------------- --------------- --------------- Redeemable Preferred Stock, Par value $.001; authorized 2,500,000 shares; issued 2000 - 24,959 - 49,918 (1) 49,918 -------------- --------------- --------------- - 49,918 49,918 -------------- --------------- --------------- Common Stock and Accumulated Deficit Common stock, par value $.001; authorized 10,000,000 shares; issued 2000 - 6,107,887 shares 60,000 (60,000)(2) 6,108 5,555 (2) 3,852 (1) 148 (2) 25 (2) 1,503 (2) (4,975)(3 Additional paid-in capital 554,930 54,445 (2) 375,600 (25)(2) (238,726)(1) 4,975 (3) Accumulated deficit (624,852) - (624,852) -------------- --------------- --------------- (9,922) (233,223) (243,145) -------------- --------------- --------------- $ 698,833 $ 212,040 $ 910,873 ============== =============== =============== See Notes to Consolidated Proforma Financial Statements
THE CATAPULT GROUP, INC.(formerly ENVIROMETRICS, INC.) CONSOLIDATED STATEMENTS OF OPERATIONS QUARTER ENDED JUNE 30,2000
ACTUAL ADJUSTMENTS CONSOLIDATED -------------- --------------- --------------- Service Revenue $ 922,555 $ $ 922,555 - --------------- Direct Service Costs 353,045 353,045 - -------------------- -------------- --------------- --------------- Gross Profit 569,510 569,510 -------------- --------------- --------------- Operating Expenses - ------------------ Sales and marketing 141,641 141,641 General and administrative 593,261 593,261 Depreciation and amortization 26,362 26,362 -------------- --------------- --------------- 761,264 761,264 -------------- --------------- --------------- Operating Loss (191,754) (191,754) -------------- --------------- --------------- Other Income (Expense) - ---------------------- Interest income 1,130 1,130 Interest expense (16,250) (16,250) Other income (expense) 1,050 1,050 -------------- --------------- --------------- Net Income (Loss) $ (205,824) $ $ (205,824) - ----------------- ============== =============== =============== Net (Loss) Per Common Share $ (0.034) $ n/a $ (0.034) - --------------------------- ============== =============== =============== Weighted average number of common shares outstanding 6,000,000 (4,109) 5,995,891 ============== =============== =============== See Notes to Consolidated Proforma Financial Statements
RAINWIRE PARTNERS, INC. (formerly ENVIROMETRICS, INC. AND SUBSIDIARIES) NOTES TO UNAUDITED PROFORMA CONDENSED FINANCIAL STATEMENTS The unaudited pro forma condensed financial statements have been prepared combining the net monetary assets purchased of Envirometrics, Inc. and The Catapult Group, Inc. and adjusting such combined balances to conform to the accounting policies of the two companies. The following describes adjustments and other items relevant to the pro forma financial statements. (1) Net deficiency in monetary assets acquired amounted to $203,433 at June 30, 2000. This is due to the use of cash approximating and significant decrease in trade accounts receivable from December 31, 1999. (2) Re-capitalization. The weighted average number of shares outstanding was calculated assuming Envirometrics shares were exchanged for all of the outstanding shares of The Catapult Group at January 1, 2000 and 5,555,064 new shares of Envirometrics, Inc. common stock was issued. (3) Loss per Common Share. Loss per common share is based upon the weighted average number of common shares outstanding. The calculation also assumes that holders of Envirometrics, Inc. common shares participated in a reverse split transaction and were issued one share of Envirometrics, Inc. common stock for every ten shares held. (4) Impairment of long-lived assets. The Company reviews long-lived assets for impairment whenever events or changes in business circumstances indicate the carrying value of the assets may not be fully recoverable. The Company performs undiscounted cash flow analyses to determine if impairment exists. Based on a review performed for the quarter ended June 30, 2000, no impairment existed that would require adjustment to or disclosure in the pro forma financial statements. Note 1. Proforma Financial Condition and Plan of Operation The pro forma consolidated balance sheet presents negative working capital in the amount of $305,200. Included in this deficiency is $500,000 in notes payable, of which $250,000 was in default as of June 30, 2000. Prior to the closing of and in accordance with the Exchange Agreement, The Catapult Group was to have obtained a financing commitment for Two Million Dollars ($2,000,000) in net proceeds or such lesser amount as may be agreed to by Envirometrics and The Catapult Group, from a third party investor(s) upon terms and conditions satisfactory to Envirometrics and The Catapult Group. At closing on July 26, 2000, the Company received an equity infusion of Seven Hundred Thousand dollars ($700,000) as described above (Part I, Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations--Recent Developments). This initial equity infusion was used to retire the aforementioned notes outstanding. Note 2. Results of Operations and Management's Plans Envirometric's completion of the plan to exchange stock with The Catapult Group, Inc. represents the conclusion of the Company's turn-around efforts and a considerable shift in strategy from environmental consulting services to Internet and electronic commerce strategy and consulting services. Traditionally, The Catapult Group has provided end-to-end Internet technology solutions to its clientele. Moving forward, the Company will continue to provide these services while orienting its brand and its operations toward a pure consulting model. Under this model, the Company will supply its customers with technology design and strategy, project management, quality assurance, and auditing services. As a component of this honing of focus and market differentiation, the organization has changed its operating name to Rainwire Partners, Inc.("Rainwire"). Rainwire will aggressively expand both its Atlanta and Charleston operations late in the third quarter and early in the fourth quarter of this year. The Company has continued to enlist new business throughout the second and third quarters of 2000. However, the pace of new revenues has slowed as the Company makes changes to its billing structure and begins to phase in its consulting model and enhanced business plan. Additionally, late in the second quarter, one of the Company's larger accounts was unable to pay amounts owed to the Company. This default generated the write-off of nearly $100,000 in receivables and the elimination of unbilled revenue accruals. The total write-off to this customer was approximately $250,000. The Company anticipates a return to profitability in the first quarter of 2001. The Company intends to pursue other acquisition opportunities and expand its effort in the Southeastern United States. The timing and success of these efforts is unpredictable. Accordingly, the Company is unable to accurately estimate its expected capital requirement. Funding for these efforts will likely come from the issuance of additional equity. In the last 30 days, Rainwire has secured additional projects centering on the deployment of Internet technology initiatives from; a company focusing on creating and managing transformational technologies, products and business models from ideas through market entry, a company that is a leader in packaged concrete products, and a company providing technology infrastructure. These initial contracts total $125,000 in projected revenue. Item 6. Exhibits and Reports (a) The following exhibits are filed along with this Report on Form 10-QSB: Number Description of Exhibit 10.1 Subscription Agreement by and between Registrant and Ronald Potts, dated July 26, 2000 10.2 Subscription Agreement by and between Registrant and Jake Cantrell, dated July 26, 2000 10.3 Subscription Agreement by and between Registrant and Shiela Tallent, dated July 26, 2000 10.4 Subscription Agreement by and between Registrant and Nancy Edwards, dated July 26, 2000 10.5 Registration Rights Agreement by and between Registrant and Ronald Potts, Jake Cantrell, Shiela Tallent, and Nancy Edwards, dated July 26, 2000 (b) Reports on Form 8-K: The Company filed a Form 8-K on August 4, 2000. SIGNATURE 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. RAINWIRE PARTNERS, INC. Date: August 21, 2000 /s/ Walter H. Elliott, III __________________________ Walter H. Elliott, III Vice President EX-10.1 2 0002.txt SUBSCRIPTION AGREEMENT - RONALD POTTS SUBSCRIPTION AGREEMENT THE INVESTOR IS REQUIRED TO MARK BOXES TO INDICATE WHICH REPRESENTATIONS AND WARRANTIES IT IS MAKING UNDER PART 1 HEREOF. Ladies and Gentlemen: By executing this Subscription Agreement, the undersigned (the "Investor") hereby irrevocably subscribes for the number of shares (the "Shares") of THE CATAPULT GROUP, INC., a Delaware Corporation (the "Company") listed on the signature page hereto at a subscription price of $0.78 per share. The Investor has delivered herewith to the Company payment of the Total Purchase Price as set forth on the signature page hereto. This Subscription Agreement shall not be valid and binding on the Company unless and until accepted by the Company. If this Subscription Agreement is not accepted by the Company, the purchase price paid by the Investor to the Company shall be refunded to the Investor. The Investor understands that the Shares may be acquired hereunder only by investors who are able to make all required representations and warranties under Part I and Part II below. REPRESENTATIONS AND WARRANTIES The Investor makes representations and warranties in this Subscription Agreement in order to permit the Company to determine the suitability of the Shares as an investment for the Investor and to determine the availability of the exemptions relied upon by the Company from registration under Section 5 of the United States Securities Act of 1933, as amended, and the regulations promulgated thereunder (the "Securities Act"). Part I: Representations as to Accredited Investor Status TO ESTABLISH THAT THE INVESTOR IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a) PROMULGATED UNDER THE SECURITIES ACT, THE INVESTOR MUST MARK AT LEAST ONE BOX BELOW, THEREBY MAKING THE REPRESENTATION SET FORTH BESIDE THE MARKED BOX. |_| The Investor is a natural person whose individual net worth, or joint net worth with that person's spouse, at the time of the Investor's purchase exceeds $1,000,000. |_| The Investor is a natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person's spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year. |_| The Investor is a bank as defined in Section 3(a)(2) of the Securities Act or a savings and loan association or any other institution as defined in Section 3(a)(5)(A) of the Securities Act. |_| The Investor is a broker dealer registered pursuant to Section 15 of the United States Securities Exchange Act of 1934, as amended. |_| The Investor is an insurance company as defined in Section(2)(13) of the Securities Act. |_| The Investor is an investment company registered under the Investment Company Act or a business development company as defined in Section 2(a)(48) of that Act. |_| The Investor is a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the U.S. Small Business Investment Act of 1958, as amended. |_| The Investor is a plan established and maintained by a state within the United States, one or more political subdivisions of such a state, or any agency or instrumentality of such a state or its political subdivisions, for the benefit of its employees, with total assets in excess of $5,000,000. |_| The Investor is an employee benefit plan within the meaning of the U.S. employee Retirement Income Security Act of 1974, as amended ("ERISA"), (i) the investment decision for which is made by a plan fiduciary, as defined in Section 3(21) of ERISA, which is either a bank, savings and loan association, insurance company, or registered investment advisor or (ii) which has total assets in excess of $5,000,000 or (iii) which is a self-directed plan with investment decisions made solely by persons that are Accredited Investors. |_| The Investor is a private business development company as defined in Section 202(a)(22) of the U.S. Investment Advisers Act of 1940. |_| The Investor is an organization that is described in Section 501(c)(3) of the U.S. Internal Revenue Code of 1986, as amended, a corporation, a Massachusetts or similar business trust, or a partnership, in any case that was not formed for the specific purpose of acquiring the Shares, with total assets in excess of $5,000,000. |_| The Investor is a director or executive officer (as defined in Rule 502(f) promulgated under the Securities Act) of the Company. |_| The Investor is a trust with total assets of $5,000,000, not formed for the specific purpose of acquiring the Shares, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) promulgated under the Securities Act. |_| The Investor is an entity in which all of the equity owners are Accredited Investors. PART II. Additional Representations THE INVESTOR, BY SIGNING THIS SUBSCRIPTION AGREEMENT, WILL BE DEEMED TO HAVE MADE ALL REPRESENTATIONS AND WARRANTIES CONTAINED IN PARAGRAPHS 1 THROUGH 11 BELOW. 1. The Investor and/or the Investor's representative (if any) have received a copy of all of the public filings of the Company pursuant to the Securities Exchange Act of 1934 together with current information regarding the Company's wholly owned subsidiary. The Investor, either alone or together with the Investor's purchaser representative, if any, have such knowledge and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in the Company. 2. The Investor acknowledges that: (a) the Investor has been provided with information concerning the company and has had an opportunity to ask questions and to obtain such additional information concerning the Company as the Investor deems necessary in connection with the Investor's acquisition of interests in the Company; (b) information with respect to existing business and historical operating results of the Company and estimates and projections as to future operations involve significant subjective judgment and analysis, which may or may not be correct; (c) the Company cannot, and does not, make any representation or warranty as to the accuracy of the information concerning the past or future results of the Company. 3. The Investor has sought such accounting, legal and tax advice as the Investor considered necessary to make an informed investment decision. The Investor is experienced in investment and business matters (or has been advised by an investment advisor who is so experienced), and is aware of and can afford the risks of making such an investment, including the risk of losing the Investor's entire investment. 4. The Shares subscribed for herein will be acquired solely by and for the account of the Investor for investment and are not being purchased for resale or distribution. The Investor has no contract, undertaking, agreement or arrangement with any person to sell or transfer to such person or anyone else any of the Shares (or any portion thereof or interest therein) for which the Investor hereby subscribes, and the investor has no present plans or intentions to enter into any such contract, undertaking, agreement or arrangement. The financial condition of the Investor is such that the Investor has no need for liquidity with respect to the Investor's investment in the Shares and no need to dispose of any portion of the Shares to satisfy any existing or contemplated undertaking or indebtedness; and the overall commitment by the Investor to investments which are not readily marketable is not disproportionate to the Investor's net worth and will not become excessive as a result of investment in the Shares. 5. The Investor acknowledges that the Registration Rights Agreement entered into between Investor and Company in consideration of this Subscription Agreement and pertaining to the Shares contains limitations on Demand Registrations and Piggyback Registrations that may postpone any registration of the Shares. 6. The Investor understands, represents, warrants and agrees that the Investor's Shares are not transferable, that the Investor will not, directly or indirectly, sell, assign, convey, hypothecate or otherwise transfer the Investor's Shares (or any portion thereof or interest therein) except in accordance with Securities Act of 1933 and other applicable state securities laws and that violation of the foregoing will cause such transfer to be void and need not be recognized by the Company. 7. The Investor warrants that the Investor has knowledge and experience in financial, investment and business matters and that the Investor is capable of evaluating the merits and risks of an investment in the Shares. 8. The Company, by and through its Board of Directors and/or legal counsel, has made no representation or warranty as to the suitability of the Investor's investment in the Shares. Neither the Company nor its counsel has made an independent investigation on behalf of the Investor, nor has the Company, by and through its Board of Directors or counsel, acted in an advisory capacity to the Investor. 9. The Investor has relied solely upon independent investigations made by the Investor in making the decision to purchase the Shares subscribed for herein, and acknowledges that no representations or agreements have been made to the Investor with respect thereto. 10. The Investor expressly acknowledges that: (a) No federal, state or other governmental agency has passed upon the adequacy or accuracy or the information concerning the Company or made any finding or determination as to the fairness of the investment, or any recommendation or endorsement of the Shares as an investment. (b) The Investor is not dependent upon a current cash return with respect to the Investor's investment in the Shares, and the Investor understands that distributions are not required to be made and that returns on an investment in the Shares may not be realized for years. (c) The Shares are being offered and sold to prospective purchasers directly, and neither the Company nor any person acting on behalf of the Company has offered to sell the Shares to the Investor by means of any form of general solicitation or advertising, such as media advertising or public seminars. 11. The Investor (i) if an individual, is at least 21 years of age; (ii) if a partnership, is comprised of partners all of whom are at least 21 years of age; and (iii) if a corporation, partnership, trust or other like entity, is authorized and otherwise duly qualified to purchase and hold the Shares. The Investor has duly authorized, executed and delivered this Subscription Agreement and understands that the Company is not obligated to accept this Subscription Agreement and that this Subscription shall be valid and binding on the Company only upon acceptance by the Company. The Investor understands that if this Subscription Agreement is accepted and executed by the Company, the Investor will constitute a valid and legally binding obligation of the Investor and the Company. 12. The Investor certifies under penalties of perjury that (i) the Investor's taxpayer identification number (social security number for an individual Investor) as set forth on the signature page hereof is correct; (ii) the Investor's home address (in the case of an individual) or office address (in the case of an entity) as set forth on the signature page hereof is correct; and (iii) the Investor is not subject to backup withholding either because the Investor has not been notified by the Internal Revenue Service ("IRS") that the Investor is subject to backup withholding as a result of a failure to report all interest or dividends, or because the Investor has been notified by the IRS that the Investor is no longer subject to backup withholding. If the Investor is subject to backup withholding, Investor should cross through clause (iii) and check the following box: ______ MISCELLANEOUS 1. Successors and Assigns. Upon acceptance by the Company, this Subscription Agreement, and all of the obligations of the Investor hereunder, and all of the representations and warranties by the Investor herein, shall be binding upon the heirs, executors, administrators, personal representatives, successors and assigns of the Investor. 2. Governing Law. This Subscription Agreement shall be construed in accordance with, and governed in all respects by, the laws of the State of Georgia. 3. Indemnification. The Investor agrees to indemnify the Company, its officers and managers for any and all claims or losses (including attorneys' fees) incurred by them as a result of the incorrectness of the Investor's representations and warranties contained herein, including but not limited to, claims arising under federal and state securities laws and common law claims. [Remainder of page intentionally left blank] SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT FOR Executed at ________ ,_________ this_____ day of _________, 2000. CITY STATE THE INVESTOR: Ronald Potts - ------------ Please print or type legal name of Investor as it should appear on stock certificate and in stockholder records By: Sign here Its: If signatory is executing on behalf of an entity, please indicate signatory's title or office with such entity Number of Shares of Stock Subscribed for: 300,000 Price Per Share: $ 0.78 Total Purchase Price: $ 234,000 Taxpayer I.D. Number or Social Security Number: Print or type address, telephone number and fax number preferred for stockholder communications: Address: Telephone: Fax: Accepted this_______day of___________, 2000 By: Title: * If the Investor is a corporation, trust, partnership, or other entity, please attach a copy of the resolutions, trust instrument, partnership agreement or similar document (or in lieu thereof, an opinion of counsel) showing the corporation, trust, partnership or other entity has authority to purchase the Shares and showing that the signatory above may act on its behalf in making this investment. EX-10.2 3 0003.txt SUBSCRIPTION AGREEMENT - JAKE CANTRELL SUBSCRIPTION AGREEMENT THE INVESTOR IS REQUIRED TO MARK BOXES TO INDICATE WHICH REPRESENTATIONS AND WARRANTIES IT IS MAKING UNDER PART 1 HEREOF. Ladies and Gentlemen: By executing this Subscription agreement, the undersigned (the "Investor") hereby irrevocably subscribes for the number of shares (the "shares") of THE CATAPULT GROUP, INC., a Delaware Corporation (the "Company") listed on the signature page hereto at a subscription price of $0.78 per share. The Investor has delivered herewith to the Company payment of the Total Purchase Price as set forth on the signature page hereto. This Subscription Agreement shall not be valid and binding on the Company unless and until accepted by the Company. If this Subscription Agreement is not accepted by the Company, the purchase price paid by the Investor to the Company shall be refunded to the Investor. The Investor understands that the Shares may be acquired hereunder only by investors who are able to make all required representations and warranties under Part I and Part II below. REPRESENTATIONS AND WARRANTIES The Investor makes representations and warranties in this Subscription Agreement in order to permit the Company to determine the suitability of the Shares as an investment for the Investor and to determine the availability of the exemptions relied upon by the Company from registration under Section 5 of the United States Securities Act of 1933, as amended, and the regulations promulgated thereunder (the "Securities Act"). Part I: Representations as to Accredited Investor Status TO ESTABLISH THAT THE INVESTOR IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a) PROMULGATED UNDER THE SECURITIES ACT, THE INVESTOR MUST MARK AT LEAST ONE BOX BELOW, THEREBY MAKING THE REPRESENTATION SET FORTH BESIDE THE MARKED BOX. |_| The Investor is a natural person whose individual net worth, or joint net worth with that person's spouse, at the time of the Investor's purchase exceeds $1,000,000. |_| The Investor is a natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person's spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year. |_| The Investor is a bank as defined in Section 3(a)(2) of the Securities Act or a savings and loan association or any other institution as defined in Section 3(a)(5)(A) of the Securities Act. |_| The Investor is a broker dealer registered pursuant to Section 15 of the United States Securities Exchange Act of 1934, as amended. |_| The Investor is an insurance company as defined in Section(2)(13) of the Securities Act. |_| The Investor is an investment company registered under the Investment Company Act or a business development company as defined in Section 2(a)(48) of that Act. |_| The Investor is a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the U.S. Small Business Investment Act of 1958, as amended. |_| The Investor is a plan established and maintained by a state within the United States, one or more political subdivisions of such a state, or any agency or instrumentality of such a state or its political subdivisions, for the benefit of its employees, with total assets in excess of $5,000,000. |_| The Investor is an employee benefit plan within the meaning of the U.S. employee Retirement Income Security Act of 1974, as amended ("ERISA"), (i) the investment decision for which is made by a plan fiduciary, as defined in Section 3(21) of ERISA, which is either a bank, savings and loan association, insurance company, or registered investment advisor or (ii) which has total assets in excess of $5,000,000 or (iii) which is a self-directed plan with investment decisions made solely by persons that are Accredited Investors. |_| The Investor is a private business development company as defined in Section 202(a)(22) of the U.S. Investment Advisers Act of 1940. |_| The Investor is an organization that is described in Section 501(c)(3) of the U.S. Internal Revenue Code of 1986, as amended, a corporation, a Massachusetts or similar business trust, or a partnership, in any case that was not formed for the specific purpose of acquiring the Shares, with total assets in excess of $5,000,000. |_| The Investor is a director or executive officer (as defined in Rule 502(f) promulgated under the Securities Act) of the Company. |_| The Investor is a trust with total assets of $5,000,000, not formed for the specific purpose of acquiring the Shares, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) promulgated under the Securities Act. |_| The Investor is an entity in which all of the equity owners are Accredited Investors. PART II. Additional Representations THE INVESTOR, BY SIGNING THIS SUBSCRIPTION AGREEMENT, WILL BE DEEMED TO HAVE MADE ALL REPRESENTATIONS AND WARRANTIES CONTAINED IN PARAGRAPHS 1 THROUGH 11 BELOW. 1. The Investor and/or the Investor's representative (if any) have received a copy of all of the public filings of the Company pursuant to the Securities Exchange Act of 1934 together with current information regarding the Company's wholly owned subsidiary. The Investor, either alone or together with the Investor's purchaser representative, if any, have such knowledge and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in the Company. 2. The Investor acknowledges that: (a) the Investor has been provided with information concerning the company and has had an opportunity to ask questions and to obtain such additional information concerning the Company as the Investor deems necessary in connection with the Investor's acquisition of interests in the Company; (b) information with respect to existing business and historical operating results of the Company and estimates and projections as to future operations involve significant subjective judgment and analysis, which may or may not be correct; (c) the Company cannot, and does not, make any representation or warranty as to the accuracy of the information concerning the past or future results of the Company. 3. The Investor has sought such accounting, legal and tax advice as the Investor considered necessary to make an informed investment decision. The Investor is experienced in investment and business matters (or has been advised by an investment advisor who is so experienced), and is aware of and can afford the risks of making such an investment, including the risk of losing the Investor's entire investment. 4. The Shares subscribed for herein will be acquired solely by and for the account of the Investor for investment and are not being purchased for resale or distribution. The Investor has no contract, undertaking, agreement or arrangement with any person to sell or transfer to such person or anyone else any of the Shares (or any portion thereof or interest therein) for which the Investor hereby subscribes, and the investor has no present plans or intentions to enter into any such contract, undertaking, agreement or arrangement. The financial condition of the Investor is such that the Investor has no need for liquidity with respect to the Investor's investment in the Shares and no need to dispose of any portion of the Shares to satisfy any existing or contemplated undertaking or indebtedness; and the overall commitment by the Investor to investments which are not readily marketable is not disproportionate to the Investor's net worth and will not become excessive as a result of investment in the Shares. 5. The Investor acknowledges that the Registration Rights Agreement entered into between Investor and Company in consideration of this Subscription Agreement and pertaining to the Shares contains limitations on Demand Registrations and Piggyback Registrations that may postpone any registration of the Shares. 6. The Investor understands, represents, warrants and agrees that the Investor's Shares are not transferable, that the Investor will not, directly or indirectly, sell, assign, convey, hypothecate or otherwise transfer the Investor's Shares (or any portion thereof or interest therein) except in accordance with Securities Act of 1933 and other applicable state securities laws and that violation of the foregoing will cause such transfer to be void and need not be recognized by the Company. 7. The Investor warrants that the Investor has knowledge and experience in financial, investment and business matters and that the Investor is capable of evaluating the merits and risks of an investment in the Shares. 8. The Company, by and through its Board of Directors and/or legal counsel, has made no representation or warranty as to the suitability of the Investor's investment in the Shares. Neither the Company nor its counsel has made an independent investigation on behalf of the Investor, nor has the Company, by and through its Board of Directors or counsel, acted in an advisory capacity to the Investor. 9. The Investor has relied solely upon independent investigations made by the Investor in making the decision to purchase the Shares subscribed for herein, and acknowledges that no representations or agreements have been made to the Investor with respect thereto. 10. The Investor expressly acknowledges that: (a) No federal, state or other governmental agency has passed upon the adequacy or accuracy or the information concerning the Company or made any finding or determination as to the fairness of the investment, or any recommendation or endorsement of the Shares as an investment. (b) The Investor is not dependent upon a current cash return with respect to the Investor's investment in the Shares, and the Investor understands that distributions are not required to be made and that returns on an investment in the Shares may not be realized for years. (c) The Shares are being offered and sold to prospective purchasers directly, and neither the Company nor any person acting on behalf of the Company has offered to sell the Shares to the Investor by means of any form of general solicitation or advertising, such as media advertising or public seminars. 11. The Investor (i) if an individual, is at least 21 years of age; (ii) if a partnership, is comprised of partners all of whom are at least 21 years of age; and (iii) if a corporation, partnership, trust or other like entity, is authorized and otherwise duly qualified to purchase and hold the Shares. The Investor has duly authorized, executed and delivered this Subscription Agreement and understands that the Company is not obligated to accept this Subscription Agreement and that this Subscription shall be valid and binding on the Company only upon acceptance by the Company. The Investor understands that if this Subscription Agreement is accepted and executed by the Company, the Investor will constitute a valid and legally binding obligation of the Investor and the Company. 12. The Investor certifies under penalties of perjury that (i) the Investor's taxpayer identification number (social security number for an individual Investor) as set forth on the signature page hereof is correct; (ii) the Investor's home address (in the case of an individual) or office address (in the case of an entity) as set forth on the signature page hereof is correct; and (iii) the Investor is not subject to backup withholding either because the Investor has not been notified by the Internal Revenue Service ("IRS") that the Investor is subject to backup withholding as a result of a failure to report all interest or dividends, or because the Investor has been notified by the IRS that the Investor is no longer subject to backup withholding. If the Investor is subject to backup withholding, Investor should cross through clause (iii) and check the following box: ______ MISCELLANEOUS 1. Successors and Assigns. Upon acceptance by the Company, this Subscription Agreement, and all of the obligations of the Investor hereunder, and all of the representations and warranties by the Investor herein, shall be binding upon the heirs, executors, administrators, personal representatives, successors and assigns of the Investor. 2. Governing Law. This Subscription Agreement shall be construed in accordance with, and governed in all respects by, the laws of the State of Georgia. 3. Indemnification. The Investor agrees to indemnify the Company, its officers and managers for any and all claims or losses (including attorneys' fees) incurred by them as a result of the incorrectness of the Investor's representations and warranties contained herein, including but not limited to, claims arising under federal and state securities laws and common law claims. [Remainder of page intentionally left blank] SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT FOR Executed at________ this______ day of______, 2000. CITY STATE THE INVESTOR: Jake Cantrell Please print or type legal name of Investor as it should appear on stock certificate and in stockholder records By: Sign here Its: If signatory is executing on behalf of an entity, please indicate signatory's title or office with such entity Number of Shares of Stock Subscribed for: 300,000 Price Per Share: $ 0.78 Total Purchase Price: $ 234,000 Taxpayer I.D. Number or Social Security Number: Print or type address, telephone number and fax number preferred for stockholder communications: Address: Telephone: Fax: Accepted this________ day of _____, 2000 By: Title: * If the Investor is a corporation, trust, partnership, or other entity, please attach a copy of the resolutions, trust instrument, partnership agreement or similar document (or in lieu thereof, an opinion of counsel) showing the corporation, trust, partnership or other entity has authority to purchase the Shares and showing that the signatory above may act on its behalf in making this investment. EX-10.3 4 0004.txt SUBSCRIPTION AGREEMENT - SHIELA TALLENT SUBSCRIPTION AGREEMENT THE INVESTOR IS REQUIRED TO MARK BOXES TO INDICATE WHICH REPRESENTATIONS AND WARRANTIES IT IS MAKING UNDER PART 1 HEREOF. Ladies and Gentlemen: By executing this Subscription Agreement, the undersigned (the "Investor") hereby irrevocably subscribes for the number of shares (the "Shares") of THE CATAPULT GROUP, INC., a Delaware Corporation (the "Company") listed on the signature page hereto at a subscription price of $0.78 per share. The Investor has delivered herewith to the Company payment of the Total Purchase Price as set forth on the signature page hereto. This Subscription Agreement shall not be valid and binding on the Company unless and until accepted by the Company. If this Subscription Agreement is not accepted by the Company, the purchase price paid by the Investor to the Company shall be refunded to the Investor. The Investor understands that the Shares may be acquired hereunder only by investors who are able to make all required representations and warranties under Part I and Part II below. REPRESENTATIONS AND WARRANTIES The Investor makes representations and warranties in this Subscription Agreement in order to permit the Company to determine the suitability of the Shares as an investment for the Investor and to determine the availability of the exemptions relied upon by the Company from registration under Section 5 of the United States Securities Act of 1933, as amended, and the regulations promulgated thereunder (the "Securities Act"). Part I: Representations as to Accredited Investor Status TO ESTABLISH THAT THE INVESTOR IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a) PROMULGATED UNDER THE SECURITIES ACT, THE INVESTOR MUST MARK AT LEAST ONE BOX BELOW, THEREBY MAKING THE REPRESENTATION SET FORTH BESIDE THE MARKED BOX. |_| The Investor is a natural person whose individual net worth, or joint net worth with that person's spouse, at the time of the Investor's purchase exceeds $1,000,000. |_| The Investor is a natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person's spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year. |_| The Investor is a bank as defined in Section 3(a)(2) of the Securities Act or a savings and loan association or any other institution as defined in Section 3(a)(5)(A) of the Securities Act. |_| The Investor is a broker dealer registered pursuant to Section 15 of the United States Securities Exchange Act of 1934, as amended. |_| The Investor is an insurance company as defined in Section(2)(13) of the Securities Act. |_| The Investor is an investment company registered under the Investment Company Act or a business development company as defined in Section 2(a)(48) of that Act. |_| The Investor is a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the U.S. Small Business Investment Act of 1958, as amended. |_| The Investor is a plan established and maintained by a state within the United States, one or more political subdivisions of such a state, or any agency or instrumentality of such a state or its political subdivisions, for the benefit of its employees, with total assets in excess of $5,000,000. |_| The Investor is an employee benefit plan within the meaning of the U.S. employee Retirement Income Security Act of 1974, as amended ("ERISA"), (i) the investment decision for which is made by a plan fiduciary, as defined in Section 3(21) of ERISA, which is either a bank, savings and loan association, insurance company, or registered investment advisor or (ii) which has total assets in excess of $5,000,000 or (iii) which is a self-directed plan with investment decisions made solely by persons that are Accredited Investors. |_| The Investor is a private business development company as defined in Section 202(a)(22) of the U.S. Investment Advisers Act of 1940. |_| The Investor is an organization that is described in Section 501(c)(3) of the U.S. Internal Revenue Code of 1986, as amended, a corporation, a Massachusetts or similar business trust, or a partnership, in any case that was not formed for the specific purpose of acquiring the Shares, with total assets in excess of $5,000,000. |_| The Investor is a director or executive officer (as defined in Rule 502(f) promulgated under the Securities Act) of the Company. |_| The Investor is a trust with total assets of $5,000,000, not formed for the specific purpose of acquiring the Shares, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) promulgated under the Securities Act. |_| The Investor is an entity in which all of the equity owners are Accredited Investors. PART II. Additional Representations THE INVESTOR, BY SIGNING THIS SUBSCRIPTION AGREEMENT, WILL BE DEEMED TO HAVE MADE ALL REPRESENTATIONS AND WARRANTIES CONTAINED IN PARAGRAPHS 1 THROUGH 11 BELOW. 1. The Investor and/or the Investor's representative (if any) have received a copy of all of the public filings of the Company pursuant to the Securities Exchange Act of 1934 together with current information regarding the Company's wholly owned subsidiary. The Investor, either alone or together with the Investor's purchaser representative, if any, have such knowledge and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in the Company. 2. The Investor acknowledges that: (a) the Investor has been provided with information concerning the company and has had an opportunity to ask questions and to obtain such additional information concerning the Company as the Investor deems necessary in connection with the Investor's acquisition of interests in the Company; (b) information with respect to existing business and historical operating results of the Company and estimates and projections as to future operations involve significant subjective judgment and analysis, which may or may not be correct; (c) the Company cannot, and does not, make any representation or warranty as to the accuracy of the information concerning the past or future results of the Company. 3. The Investor has sought such accounting, legal and tax advice as the Investor considered necessary to make an informed investment decision. The Investor is experienced in investment and business matters (or has been advised by an investment advisor who is so experienced), and is aware of and can afford the risks of making such an investment, including the risk of losing the Investor's entire investment. 4. The Shares subscribed for herein will be acquired solely by and for the account of the Investor for investment and are not being purchased for resale or distribution. The Investor has no contract, undertaking, agreement or arrangement with any person to sell or transfer to such person or anyone else any of the Shares (or any portion thereof or interest therein) for which the Investor hereby subscribes, and the investor has no present plans or intentions to enter into any such contract, undertaking, agreement or arrangement. The financial condition of the Investor is such that the Investor has no need for liquidity with respect to the Investor's investment in the Shares and no need to dispose of any portion of the Shares to satisfy any existing or contemplated undertaking or indebtedness; and the overall commitment by the Investor to investments which are not readily marketable is not disproportionate to the Investor's net worth and will not become excessive as a result of investment in the Shares. 5. The Investor acknowledges that the Registration Rights Agreement entered into between Investor and Company in consideration of this Subscription Agreement and pertaining to the Shares contains limitations on Demand Registrations and Piggyback Registrations that may postpone any registration of the Shares. 6. The Investor understands, represents, warrants and agrees that the Investor's Shares are not transferable, that the Investor will not, directly or indirectly, sell, assign, convey, hypothecate or otherwise transfer the Investor's Shares (or any portion thereof or interest therein) except in accordance with Securities Act of 1933 and other applicable state securities laws and that violation of the foregoing will cause such transfer to be void and need not be recognized by the Company. 7. The Investor warrants that the Investor has knowledge and experience in financial, investment and business matters and that the Investor is capable of evaluating the merits and risks of an investment in the Shares. 8. The Company, by and through its Board of Directors and/or legal counsel, has made no representation or warranty as to the suitability of the Investor's investment in the Shares. Neither the Company nor its counsel has made an independent investigation on behalf of the Investor, nor has the Company, by and through its Board of Directors or counsel, acted in an advisory capacity to the Investor. 9. The Investor has relied solely upon independent investigations made by the Investor in making the decision to purchase the Shares subscribed for herein, and acknowledges that no representations or agreements have been made to the Investor with respect thereto. 10. The Investor expressly acknowledges that: (a) No federal, state or other governmental agency has passed upon the adequacy or accuracy or the information concerning the Company or made any finding or determination as to the fairness of the investment, or any recommendation or endorsement of the Shares as an investment. (b) The Investor is not dependent upon a current cash return with respect to the Investor's investment in the Shares, and the Investor understands that distributions are not required to be made and that returns on an investment in the Shares may not be realized for years. (c) The Shares are being offered and sold to prospective purchasers directly, and neither the Company nor any person acting on behalf of the Company has offered to sell the Shares to the Investor by means of any form of general solicitation or advertising, such as media advertising or public seminars. 11. The Investor (i) if an individual, is at least 21 years of age; (ii) if a partnership, is comprised of partners all of whom are at least 21 years of age; and (iii) if a corporation, partnership, trust or other like entity, is authorized and otherwise duly qualified to purchase and hold the Shares. The Investor has duly authorized, executed and delivered this Subscription Agreement and understands that the Company is not obligated to accept this Subscription Agreement and that this Subscription shall be valid and binding on the Company only upon acceptance by the Company. The Investor understands that if this Subscription Agreement is accepted and executed by the Company, the Investor will constitute a valid and legally binding obligation of the Investor and the Company. 12. The Investor certifies under penalties of perjury that (i) the Investor's taxpayer identification number (social security number for an individual Investor) as set forth on the signature page hereof is correct; (ii) the Investor's home address (in the case of an individual) or office address (in the case of an entity) as set forth on the signature page hereof is correct; and (iii) the Investor is not subject to backup withholding either because the Investor has not been notified by the Internal Revenue Service ("IRS") that the Investor is subject to backup withholding as a result of a failure to report all interest or dividends, or because the Investor has been notified by the IRS that the Investor is no longer subject to backup withholding. If the Investor is subject to backup withholding, Investor should cross through clause (iii) and check the following box: ______ MISCELLANEOUS 1. Successors and Assigns. Upon acceptance by the Company, this Subscription Agreement, and all of the obligations of the Investor hereunder, and all of the representations and warranties by the Investor herein, shall be binding upon the heirs, executors, administrators, personal representatives, successors and assigns of the Investor. 2. Governing Law. This Subscription Agreement shall be construed in accordance with, and governed in all respects by, the laws of the State of Georgia. 3. Indemnification. The Investor agrees to indemnify the Company, its officers and managers for any and all claims or losses (including attorneys' fees) incurred by them as a result of the incorrectness of the Investor's representations and warranties contained herein, including but not limited to, claims arising under federal and state securities laws and common law claims. [Remainder of page intentionally left blank] SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT FOR Executed at__________________________ this_______day of__________, 2000. CITY STATE THE INVESTOR: Shiela Tallent - -------------- Please print or type legal name of Investor as it should appear on stock certificate and in stockholder records By: Sign here Its: If signatory is executing on behalf of an entity, please indicate signatory's title or office with such entity Number of Shares of Stock Subscribed for: 250,000 Price Per Share: $ 0.78 Total Purchase Price: 195,000 Taxpayer I.D. Number or Social Security Number: Print or type address, telephone number and fax number preferred for stockholder communications: Address: Telephone: Fax: Accepted this day of __________, 2000 By: Title: * If the Investor is a corporation, trust, partnership, or other entity, please attach a copy of the resolutions, trust instrument, partnership agreement or similar document (or in lieu thereof, an opinion of counsel) showing the corporation, trust, partnership or other entity has authority to purchase the Shares and showing that the signatory above may act on its behalf in making this investment. EX-10.4 5 0005.txt SUBSCRIPTION AGREEMENT - NANCY EDWARDS SUBSCRIPTION AGREEMENT THE INVESTOR IS REQUIRED TO MARK BOXES TO INDICATE WHICH REPRESENTATIONS AND WARRANTIES IT IS MAKING UNDER PART 1 HEREOF. Ladies and Gentlemen: By executing this Subscription Agreement, the undersigned (the "Investor") hereby irrevocably subscribes for the number of shares (the "Shares") of THE CATAPULT GROUP, INC., a Delaware Corporation (the "Company") listed on the signature page hereto at a subscription price of $0.78 per share. The Investor has delivered herewith to the Company payment of the Total Purchase Price as set forth on the signature page hereto. This Subscription Agreement shall not be valid and binding on the Company unless and until accepted by the Company. If this Subscription Agreement is not accepted by the Company, the purchase price paid by the Investor to the Company shall be refunded to the Investor. The Investor understands that the Shares may be acquired hereunder only by investors who are able to make all required representations and warranties under Part I and Part II below. REPRESENTATIONS AND WARRANTIES The Investor makes representations and warranties in this Subscription Agreement in order to permit the Company to determine the suitability of the Shares as an investment for the Investor and to determine the availability of the exemptions relied upon by the Company from registration under Section 5 of the United States Securities Act of 1933, as amended, and the regulations promulgated thereunder (the "Securities Act"). Part I: Representations as to Accredited Investor Status TO ESTABLISH THAT THE INVESTOR IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a) PROMULGATED UNDER THE SECURITIES ACT, THE INVESTOR MUST MARK AT LEAST ONE BOX BELOW, THEREBY MAKING THE REPRESENTATION SET FORTH BESIDE THE MARKED BOX. |_| The Investor is a natural person whose individual net worth, or joint net worth with that person's spouse, at the time of the Investor's purchase exceeds $1,000,000. |_| The Investor is a natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person's spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year. |_| The Investor is a bank as defined in Section 3(a)(2) of the Securities Act or a savings and loan association or any other institution as defined in Section 3(a)(5)(A) of the Securities Act. |_| The Investor is a broker dealer registered pursuant to Section 15 of the United States Securities Exchange Act of 1934, as amended. |_| The Investor is an insurance company as defined in Section(2)(13) of the Securities Act. |_| The Investor is an investment company registered under the Investment Company Act or a business development company as defined in Section 2(a)(48) of that Act. |_| The Investor is a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the U.S. Small Business Investment Act of 1958, as amended. |_| The Investor is a plan established and maintained by a state within the United States, one or more political subdivisions of such a state, or any agency or instrumentality of such a state or its political subdivisions, for the benefit of its employees, with total assets in excess of $5,000,000. |_| The Investor is an employee benefit plan within the meaning of the U.S. employee Retirement Income Security Act of 1974, as amended ("ERISA"), (i) the investment decision for which is made by a plan fiduciary, as defined in Section 3(21) of ERISA, which is either a bank, savings and loan association, insurance company, or registered investment advisor or (ii) which has total assets in excess of $5,000,000 or (iii) which is a self-directed plan with investment decisions made solely by persons that are Accredited Investors. |_| The Investor is a private business development company as defined in Section 202(a)(22) of the U.S. Investment Advisers Act of 1940. |_| The Investor is an organization that is described in Section 501(c)(3) of the U.S. Internal Revenue Code of 1986, as amended, a corporation, a Massachusetts or similar business trust, or a partnership, in any case that was not formed for the specific purpose of acquiring the Shares, with total assets in excess of $5,000,000. |_| The Investor is a director or executive officer (as defined in Rule 502(f) promulgated under the Securities Act) of the Company. |_| The Investor is a trust with total assets of $5,000,000, not formed for the specific purpose of acquiring the Shares, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) promulgated under the Securities Act. |_| The Investor is an entity in which all of the equity owners are Accredited Investors. PART II. Additional Representations THE INVESTOR, BY SIGNING THIS SUBSCRIPTION AGREEMENT, WILL BE DEEMED TO HAVE MADE ALL REPRESENTATIONS AND WARRANTIES CONTAINED IN PARAGRAPHS 1 THROUGH 11 BELOW. 1. The Investor and/or the Investor's representative (if any) have received a copy of all of the public filings of the Company pursuant to the Securities Exchange Act of 1934 together with current information regarding the Company's wholly owned subsidiary. The Investor, either alone or together with the Investor's purchaser representative, if any, have such knowledge and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in the Company. 2. The Investor acknowledges that: (a) the Investor has been provided with information concerning the company and has had an opportunity to ask questions and to obtain such additional information concerning the Company as the Investor deems necessary in connection with the Investor's acquisition of interests in the Company; (b) information with respect to existing business and historical operating results of the Company and estimates and projections as to future operations involve significant subjective judgment and analysis, which may or may not be correct; (c) the Company cannot, and does not, make any representation or warranty as to the accuracy of the information concerning the past or future results of the Company. 3. The Investor has sought such accounting, legal and tax advice as the Investor considered necessary to make an informed investment decision. The Investor is experienced in investment and business matters (or has been advised by an investment advisor who is so experienced), and is aware of and can afford the risks of making such an investment, including the risk of losing the Investor's entire investment. 4. The Shares subscribed for herein will be acquired solely by and for the account of the Investor for investment and are not being purchased for resale or distribution. The Investor has no contract, undertaking, agreement or arrangement with any person to sell or transfer to such person or anyone else any of the Shares (or any portion thereof or interest therein) for which the Investor hereby subscribes, and the investor has no present plans or intentions to enter into any such contract, undertaking, agreement or arrangement. The financial condition of the Investor is such that the Investor has no need for liquidity with respect to the Investor's investment in the Shares and no need to dispose of any portion of the Shares to satisfy any existing or contemplated undertaking or indebtedness; and the overall commitment by the Investor to investments which are not readily marketable is not disproportionate to the Investor's net worth and will not become excessive as a result of investment in the Shares. 5. The Investor acknowledges that the Registration Rights Agreement entered into between Investor and Company in consideration of this Subscription Agreement and pertaining to the Shares contains limitations on Demand Registrations and Piggyback Registrations that may postpone any registration of the Shares. 6. The Investor understands, represents, warrants and agrees that the Investor's Shares are not transferable, that the Investor will not, directly or indirectly, sell, assign, convey, hypothecate or otherwise transfer the Investor's Shares (or any portion thereof or interest therein) except in accordance with Securities Act of 1933 and other applicable state securities laws and that violation of the foregoing will cause such transfer to be void and need not be recognized by the Company. 7. The Investor warrants that the Investor has knowledge and experience in financial, investment and business matters and that the Investor is capable of evaluating the merits and risks of an investment in the Shares. 8. The Company, by and through its Board of Directors and/or legal counsel, has made no representation or warranty as to the suitability of the Investor's investment in the Shares. Neither the Company nor its counsel has made an independent investigation on behalf of the Investor, nor has the Company, by and through its Board of Directors or counsel, acted in an advisory capacity to the Investor. 9. The Investor has relied solely upon independent investigations made by the Investor in making the decision to purchase the Shares subscribed for herein, and acknowledges that no representations or agreements have been made to the Investor with respect thereto. 10. The Investor expressly acknowledges that: (a) No federal, state or other governmental agency has passed upon the adequacy or accuracy or the information concerning the Company or made any finding or determination as to the fairness of the investment, or any recommendation or endorsement of the Shares as an investment. (b) The Investor is not dependent upon a current cash return with respect to the Investor's investment in the Shares, and the Investor understands that distributions are not required to be made and that returns on an investment in the Shares may not be realized for years. (c) The Shares are being offered and sold to prospective purchasers directly, and neither the Company nor any person acting on behalf of the Company has offered to sell the Shares to the Investor by means of any form of general solicitation or advertising, such as media advertising or public seminars. 11. The Investor (i) if an individual, is at least 21 years of age; (ii) if a partnership, is comprised of partners all of whom are at least 21 years of age; and (iii) if a corporation, partnership, trust or other like entity, is authorized and otherwise duly qualified to purchase and hold the Shares. The Investor has duly authorized, executed and delivered this Subscription Agreement and understands that the Company is not obligated to accept this Subscription Agreement and that this Subscription shall be valid and binding on the Company only upon acceptance by the Company. The Investor understands that if this Subscription Agreement is accepted and executed by the Company, the Investor will constitute a valid and legally binding obligation of the Investor and the Company. 12. The Investor certifies under penalties of perjury that (i) the Investor's taxpayer identification number (social security number for an individual Investor) as set forth on the signature page hereof is correct; (ii) the Investor's home address (in the case of an individual) or office address (in the case of an entity) as set forth on the signature page hereof is correct; and (iii) the Investor is not subject to backup withholding either because the Investor has not been notified by the Internal Revenue Service ("IRS") that the Investor is subject to backup withholding as a result of a failure to report all interest or dividends, or because the Investor has been notified by the IRS that the Investor is no longer subject to backup withholding. If the Investor is subject to backup withholding, Investor should cross through clause (iii) and check the following box: ______ MISCELLANEOUS 1. Successors and Assigns. Upon acceptance by the Company, this Subscription Agreement, and all of the obligations of the Investor hereunder, and all of the representations and warranties by the Investor herein, shall be binding upon the heirs, executors, administrators, personal representatives, successors and assigns of the Investor. 2. Governing Law. This Subscription Agreement shall be construed in accordance with, and governed in all respects by, the laws of the State of Georgia. 3. Indemnification. The Investor agrees to indemnify the Company, its officers and managers for any and all claims or losses (including attorneys' fees) incurred by them as a result of the incorrectness of the Investor's representations and warranties contained herein, including but not limited to, claims arising under federal and state securities laws and common law claims. [Remainder of page intentionally left blank] SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT FOR Executed at __________, _____________ this ____ day of_____, 2000. CITY STATE THE INVESTOR: Nancy Edwards - ------------- Please print or type legal name of Investor as it should appear on stock certificate and in stockholder records By: Sign here Its: If signatory is executing on behalf of an entity, please indicate signatory's title or office with such entity Number of Shares of Stock Subscribed for: 50,000 Price Per Share: $ 0.78 Total Purchase Price: $ 39,000 Taxpayer I.D. Number or Social Security Number: Print or type address, telephone number and fax number preferred for stockholder communications: Address: Telephone: Fax: Accepted this________ day of_________, 2000 By: Title: * If the Investor is a corporation, trust, partnership, or other entity, please attach a copy of the resolutions, trust instrument, partnership agreement or similar document (or in lieu thereof, an opinion of counsel) showing the corporation, trust, partnership or other entity has authority to purchase the Shares and showing that the signatory above may act on its behalf in making this investment. EX-10.5 6 0006.txt REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT dated as of July 26, 2000, is made and entered into by and between THE CATAPULT GROUP, INC, a Delaware corporation (the "Company"), and Jake Cantrell, Ronald Potts, Shiela A. Tallent, and Nancy Edwards (the "Purchasers"). WHEREAS, Purchasers have purchased as of July 26, 2000 a total of 900,000 shares of Common Stock of the Company, pursuant to the Subscription Agreements dated as of July 26, 2000 (the "Subscription Agreements") by and between the Company and the Purchasers; WHEREAS, as a condition to the purchase of the Common Stock pursuant to the Subscription Agreements, the Company is entering into this Agreement; NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: Section 1. Definitions. The following terms will have the following meanings for all purposes of this Agreement: "Agreement" means this Registration Rights Agreement, as the same shall be amended from time to time. "Board' means the Board of Directors of the Company. "Business Day" means any day other than a Saturday, Sunday or a day on which bank institutions in the State of Georgia are closed. "Commission" means the United States Securities and Exchange Commission, or any successor governmental agency or authority. "Common Stock" means the Common Stock, par value $____ per share, of the Company, as constituted on the date hereof, and any stock into which such Common Stock shall have been changed or any stock resulting from any reclassification of such Common Stock. "Company" means The Catapult Group, Inc. "Cutback Registration" means any Demand Registration or Piggyback Registration to be effected as an underwritten Public Offering in which the Managing Underwriter with respect thereto advises the Company and the Requesting Holders in writing that, in its opinion, the number of securities requested to be included in such registration (including securities of the Company which are not Registrable Securities) exceeds the number which can be sold in such offering without a reduction in the selling price anticipated to be received for the securities to be sold in such Public Offering. "Demand for Registration" has the meaning ascribed to it in Section 2(a). "Demand Registration" means any registration of Registrable Securities under the Securities Act effected pursuant to a Demand for Registration in accordance with Section 2. "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. "Holder" means the Purchaser and any other holder of Registrable Securities. "Indemnified Party" means a party entitled to indemnity in accordance with Section 6. "Indemnifying Party" means a party obligated to provide indemnification in accordance with Section 7. "Inspectors" has the meaning ascribed to it in Section 4(j). "Losses" has the meaning ascribed to it in Section 6(a). "Managing Underwriter" means, with respect to any Public Offering, the lead managing underwriter for such Public Offering, selected in accordance with Section 9. "NASD" means the National Association of Securities Dealers. "Notice of Demand for Registration" has the meaning ascribed to it in Section 2(a). "Notice of Piggyback Registration" has the meaning ascribed to it in Section 3(a). "Person" means any natural person, corporation, general partnership, limited liability company, limited partnership, proprietorship, other business organization, trust, union or association. "Piggyback Registration" means any registration of equity securities of the Company under the Securities Act (other than a registration in respect of a dividend reinvestment or similar plan for stockholders of the Company or on Form S-4 or Form S-8 promulgated by the Commission, or any successor or similar forms thereto), whether for sale for the account of the Company or for the account of any holder of securities of the Company (other than the Purchaser), including a registration by the Company under the circumstances described in Section 2(f). "Public Offering" means any offering of Shares to the public, either on behalf of the Company or any of its security-holders, pursuant to a registration statement filed and made effective pursuant to the Securities Act of 1933 (other than a registration statement on Form S-4 or S-8 or filed in connection with an exchange offer or offering of securities solely to the Company's existing shareholders). "Purchasers" means Jake Cantrell, Ronald Potts, and Shiela A. Tallent. "Qualified Independent Underwriter" means an underwriter meeting the requirements of Rule 2720(b)(15) of the NASD Conduct Rules as the same may be amended from time to time. "Records" has the meaning ascribed to it in Section 4(j). "Registrable Securities" means (i) any and all shares of Common Stock of the Company acquired by Purchasers through the Subscription Agreements; (ii) shares of stock issued with respect to or in exchange for or in replacement of stock included in clauses (i); or (iii) shares of stock issued in respect of stock referred to in clause (i) and/or (iii) as a result of a stock split, stock dividend or the like. "Registration Expenses" means all expenses incident to the Company's performance of or compliance with its obligations under this Agreement to effect the registration of Registrable Securities in a Demand Registration or a Piggyback Registration, including, without limitation, all registration, filing, securities exchange listing and NASD fees, all registration, filing, qualification and other fees and expenses of complying with securities or blue sky laws, all word processing, duplicating and printing expenses, messenger and delivery expenses, the fees and disbursements of counsel for the Company and of its independent public accountants, including the expenses of any special audits or "cold comfort" letters required by or incident to such performance and compliance, any fees and disbursements of underwriters customarily paid by issuers of securities, but excluding fees and expenses of counsel and accountants retained by the Holders and underwriting discounts and commissions and transfer taxes, if any, in respect of Registrable Securities, which shall be payable by the Holders thereof pro-rata among such Holders in proportion to the number of Registrable Securities being sold. "Request for Registration" means a written request by a Holder to the Company for registration of Registrable Securities in response to a Notice of Demand for Registration or a Notice of Piggyback Registration, which request shall specify the Registrable Securities intended to be disposed of and the intended method of disposition thereof. "Requesting Holders" means, with respect to any registration, the Purchaser demanding or requesting to have Registrable Securities included in a registration in accordance with Section 2 or 3 and any other Holder which has requested that the Company include its Shares in such registration. "Rule 144" means Rule 144 promulgated by the Commission under the Securities Act, and any successor provision thereto. "Securities Act' means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. "Shares" means the shares of Common Stock. "Share Exchange" means the Plan and Agreement to Exchange Stock by and among The Catapult Group, Inc., the Catapult Shareholders, and Envirometrics, Inc., dated February 16, 2000. Section 2. Demand Registration Rights. (a) Demand Registration. At any time after September 1, 2000, the Purchaser may demand that that Company register Common Stock constituting all or part of its Registrable Securities under the Securities Act (a "Demand for Registration") on Forms S-1, S-2 or S-3 (or similar forms then in effect for small business entities) promulgated by the Commission under the Securities Act. Such demand for registration ("Demand for Registration") shall be in writing, delivered to the Company in accordance with Section __ of this Agreement and shall specify the number of Registrable Securities to be registered and the intended method of the disposition of such securities. No later than ten (10) Business Days after receipt of such Demand for Registration the Company shall give written notice (a "Notice of Demand for Registration") of such Demand for Registration to all other Holders, and shall use its best efforts to effect the registration under the Securities Act of: (i) the Registrable Securities included in the Demand for Registration, and (ii) all other Registrable Securities as to which any Holder has delivered to the Company a Request for Registration within fifteen (15) days after the giving of the Notice of Demand for Registration, all to the extent required to permit the disposition of the Registrable Securities so to be registered in accordance with the methods of disposition specified. At the request of the Holders of a majority of the Registrable Securities to be registered, the method of disposition of all Registrable Securities included in such registration shall be an underwritten offering effected in accordance with Section 5(a). Notwithstanding the foregoing, the Company may postpone taking action with respect to a Demand Registration for a reasonable period of time after receipt of the original Demand for Registration (not exceeding ninety (90) days) if, in the good faith opinion of the Board, effecting the registration would adversely affect a material financing, acquisition, disposition of assets or stock, merger or other comparable transaction or would require the Company to make public disclosure of information the public disclosure of which would have a material adverse effect upon the Company, provided that the Company shall not delay such action pursuant to this sentence more than once in any twelve (12) month period. No Holder shall have the right to include any securities in a registration statement to be filed as part of a Demand Registration unless (i) such securities are of the same class as the Registrable Securities included in the Demand for Registration (or the demanding Holders consent to such inclusion in writing), and (ii) if such Demand Registration is an underwritten offering, such other Holders agree in writing to sell their securities on the same terms and conditions as apply to the Registrable Securities being sold pursuant to the Demand for Registration. Except as provided under this Section 2, the Company will include in each Demand for Registration all Registrable Securities for which the Company receives timely written requests for inclusion. All demands made pursuant to this Section 2 must specify the number of Registrable Securities to be registered and the intended method of disposing of the Registrable Securities. (b) Limitations on Demand Registrations. Notwithstanding anything herein to the contrary, the Company shall not be required to honor a Demand for Registration if: (i) such Demand for Registration is received by the Company less than one hundred eighty (180) days following the effective date of any previous registration of Registrable Securities other than on Form S-4 or S-8 (or successor forms thereto), regardless of whether any Holder exercised its rights under this Agreement with respect to such registration; (ii) the Purchaser has previously made a Demand for Registration pursuant to this Agreement; or (iii) the Company is unable to financially bear the cost of the filing of the registration statement because it would render the Company insolvent. However, if the Company is not required to honor a Demand for Registration under subsection 2(b)(iv), the Company shall honor such Demand if the Holders elect to pay the Registration Expenses. (c) Registration Statement Form. Demand Registrations shall be on an appropriate registration form selected by the Company and shall permit the disposition of such Registrable Securities in accordance with the intended method or methods specified by the Holders participating therein. (d) Registration Expenses. The Company will pay all Registration Expenses incurred in connection with any Demand Registration requested by the Purchaser pursuant to this Agreement. (e) Preemption of Demand Registration. Notwithstanding anything to the contrary contained herein, at any time within fifteen (15) days after receiving a Demand for Registration, the Company may elect to effect an underwritten primary registration in lieu of the Demand Registration. If the Company so elects, the Company shall give prompt written notice to the Purchaser of its intention to effect such a registration and shall afford the Purchaser the rights contained in Section 3 with respect to Piggyback Registrations; the Demand for Registration shall be deemed to have been withdrawn; and such primary registration shall not be deemed to be a Demand Registration for purposes of Section 2(d). Section 3. Piggyback Registrations. (a) Right to Include Registrable Securities. Notwithstanding any limitation contained in Section 2, if the Company at any time proposes after the date hereof to effect a Piggyback Registration, including a registration in lieu of a Demand Registration pursuant to Section 2(e), it will each such time give prompt written notice (a "Notice of Piggyback Registration") to the Purchaser of its intention to do so and of such Holders' rights under this Section 3, which Notice of Piggyback Registration shall include a description of the intended method of disposition of such securities. If the Purchaser delivers a Request for Registration to the Company within fifteen (15) days after the Purchaser receives a Notice of Piggyback Registration, the Company will use its best efforts to include in the registration statement relating to such Piggyback Registration all Registrable Securities which the Company has been so requested to register. Notwithstanding the foregoing, if, at any time after giving a Notice of Piggyback Registration and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register or to delay registration of such securities, the Company may, at its election, give written notice of such determination to the Purchaser and, thereupon, (i) in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Securities in connection with such registration (but not from its obligation to pay the Registration Expenses in connection therewith), without prejudice, however, to the rights of the Purchaser to demand that such registration be effected as a Demand Registration under Section 2, and (ii) in the case of a determination to delay registering, shall be permitted to delay registering any Registrable Securities for the same period as the delay in registering such other securities. No registration effected under this Section 3 shall relieve the Company of its obligations to effect a Demand Registration under Section 2. (b) Registration Expenses. The Company will pay all Registration Expenses incurred in connection with each Piggyback Registration. (c) Priority in Cutback Registrations. If a Piggyback Registration becomes a Cutback Registration, the Company will include in such registration to the extent of the amount of the securities which the Managing Underwriter advises the Company can be sold in such offering without a reduction in the selling price anticipated to be received for the securities to be sold in such Public Offering: (i) first, the securities proposed by the Company to be sold for its own account up to a maximum aggregate offering of $3 million (excluding any Underwriter's over allotment; (ii) second, the Registrable Securities of the Purchaser included in its Request for Registration; and (iii) third, the Registrable Securities included in the Requests for Registration of other Requesting Holders, pro rata among such Requesting Holders in proportion to the number of Registrable Securities included in their Requests for Registration. Any securities excluded shall be withdrawn from and shall not be included in such Piggyback Registration. (d) Limitations on Piggyback Registrations. Notwithstanding anything herein to the contrary, the Company shall not be required to honor a Request for Registration if the Company is unable to financially bear the cost of the filing of the registration statement because it would render the Company insolvent. However, if the Company is not required to honor a Request for Registration under this subsection 3(d), the Company shall honor such Request if the Holders elect to pay the Registration Expenses. Section 4. Registration Procedures. If and whenever the Company is required to use its best efforts to effect the registration of any Registrable Securities under the Securities Act pursuant to Section 2 or Section 3, the Company will use its best efforts to effect the registration and sale of such Registrable Securities in accordance with the intended methods of disposition thereof specified by the Holders participating therein. Without limiting the foregoing, the Company in each such case will, as expeditiously as possible: (a) prepare and file with the Commission (in the case of a Demand Registration), the requisite registration statement to effect such registration (including such audited financial statements as may be required by the Securities Act or the rules and regulations promulgated thereunder) and use its best efforts to cause such registration statement to become effective; provided, that as far in advance as practical before filing such registration statement or any amendment thereto, the Company will furnish to counsel for the Requesting Holders copies of reasonably complete drafts of all such documents proposed to be filed (including exhibits), and any such Holder shall have the opportunity to object to any information pertaining solely to such Holder that is contained therein and the Company will make the corrections reasonably requested by such Holder with respect to such information prior to filing any such registration statement or amendment; (b) prepare and file with the Commission such amendments and supplements to such registration statement and any prospectus used in connection therewith as may be necessary to maintain the effectiveness of such registration statement and to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities included in such registration statement, in accordance with the intended methods of disposition thereof, until the earlier of (i) such time as all of such securities have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof set forth in such registration statement and (ii) one hundred eighty (180) days after such registration statement becomes effective; (c) promptly notify each Requesting Holder and the underwriter or underwriters, if any: (i) when such registration statement or any prospectus used in connection therewith, or any amendment or supplement thereto, has been filed and, with respect to such registration statement or any post-effective amendment thereto, when the same has become effective; (ii) of any written request by the Commission for amendments or supplements to such registration statement or prospectus; (iii) of the notification to the Company by the Commission of its initiation of any proceeding with respect to the issuance by the Commission of, or of the issuance by the Commission of, any stop order suspending the effectiveness of such registration statement; and (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the applicable securities or blue sky laws of any jurisdiction. (d) furnish to each seller of Registrable Securities included in such registration statement such number of conformed copies of such registration statement and of each amendment and supplement thereto (in each case including all exhibits and documents incorporated by reference), such number of copies of the prospectus contained in such registration statement (including each preliminary prospectus and any summary prospectus) and any other prospectus filed under Rule 424 promulgated under the Securities Act relating to such Holder's Registrable Securities, and such other documents, as such seller may reasonably request to facilitate the disposition of its Registrable Securities; (e) use its best efforts to register or qualify all Registrable Securities included in such registration statement under such other securities or blue sky laws of such jurisdictions as each Holder thereof shall reasonably request and to keep such registration or qualification in effect for so long as such registration statement filed with the Commission remains in effect, and take any other action which may be reasonably necessary or advisable to enable such Holder to consummate the disposition in such jurisdictions of the Registrable Securities owned by such Holder, except that the Company shall not for any such purpose be required (i) to qualify generally to do business as a foreign corporation in any jurisdiction wherein it would not but for the requirements of this paragraph (e) be obligated to be so qualified, or (ii) to consent to general service of process in any such jurisdiction; (f) use its best efforts to cause all Registrable Securities included in such registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable each Holder thereof to consummate the disposition of such Registrable Securities; (g) to the extent obtained by or furnished to the Company or the underwriters, furnish to each Requesting Holder a signed counterpart, addressed to such Holder (and the underwriters, if any), of an opinion of counsel for the Company, dated the effective date of such registration statement (or, if such registration includes an underwritten Public Offering, dated the date of any closing under the underwriting agreement) and, to the extent obtained by or furnished to the Company or the underwriters, request that the Accountants furnish to each Requesting Holder a signed counterpart, addressed to such Holder (and the underwriters, if any), of a "cold comfort" letter, dated the effective date of such registration statement (and, if such registration includes an underwritten Public Offering, dated the date of any closing under the underwriting agreement), signed by the independent public accountants who have certified the Company's financial statements included in such registration statement, in each case covering substantially the same matters with respect to such registration statement (and the prospectus included therein) and, with respect to events subsequent to the date of such financial statements, as are customarily covered in accountants' letters delivered to the underwriters in underwritten Public Offerings of securities; (h) notify each Holder whose Registrable Securities are included in such registration statement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which any prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and at the request of any such Holder promptly prepare and furnish to such Holder a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such securities, such prospectus shall not include an 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 the light of the circumstances under which they were made, not misleading; (i) otherwise use its best efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months, but not more than eighteen (18) months, beginning with the first full calendar month after the effective date of such registration statement, which earnings statement shall satisfy the provisions of Section 10(a) of the Securities Act and Rule 158 promulgated thereunder, and not file any amendment or supplement to such Registration Statement or prospectus to which any such seller or any Requesting Holder shall have reasonably objected on the grounds that such amendment or supplement does not comply in all material respects with the requirements of the Securities Act or of the rules or regulations thereunder; (j) make available for inspection by any Requesting Holder, any underwriter participating in any distribution pursuant to such registration statement, and any attorney, accountant or other agent retained by such Holder or underwriter (collectively, the "Inspectors"), all financial and other records, pertinent corporate documents and properties of the Company (collectively, the "Records") reasonably necessary to enable the Inspectors to exercise their due diligence responsibility, and cause the Company's officers, directors and employees to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection with such registration statement; (k) provide a transfer agent and registrar for all Registrable Securities included in such registration statement not later than the effective date of such registration statement; and (l) use its best efforts to cause all Registrable Securities included in such registration statement to be listed, upon official notice of issuance, on any securities exchange on which any of the Company's securities of the same class as the Registrable Securities are then listed. The Company may require each Holder whose Registrable Securities are being registered to, and each such Holder, as a condition to including Registrable Securities in such registration, shall, furnish the Company and the underwriters with such information and affidavits regarding such Holder and the distribution of such securities as the Company and the underwriters may from time to time reasonably request in writing in connection with such registration. Upon receipt of any notice from the Company of the happening of any event of the kind described in paragraph (h) of this Section 4, the Purchaser will forthwith discontinue its disposition of Registrable Securities pursuant to the registration statement relating to such Registrable Securities until the Purchaser receives the copies of the supplemented or amended prospectus contemplated by paragraph (h) of this Section 4 and, if so directed by the Company, shall deliver to the Company (at the Company's expense) all copies, other than permanent file copies, then in the Purchaser's possession of the prospectus relating to such Registrable Securities current at the time of receipt of such notice. In the event the Company shall give any such notice, the period referred to in paragraph (b)(ii) of this Section 4 shall be extended by a number of days equal to the number of days during the period from and including the giving of notice pursuant to paragraph (h) of this Section 4 and to and including the date when each Holder whose Registrable Securities are included in such registration statement receives the copies of the supplemented or amended prospectus contemplated by paragraph (h) of this Section 4. Section 5. Underwritten Offerings. If a Demand for Registration is made pursuant to Section 2, or if the Company at any time proposes to register any of its securities in a Piggyback Registration or otherwise, and, in either case, the securities included in such registration are to be distributed by or through one or more underwriters, such securities shall be distributed by or through, and the Company shall enter into a firm commitment underwriting agreement in customary form with, (i) a Managing Underwriter selected in accordance with Section 9, (ii) such other underwriters, reasonably satisfactory to the Company, as may be selected by the Managing Underwriter to assist or participate in the distribution, and (iii) if a Qualified Independent Underwriter is required for such registration pursuant to Rule 2720 (b)(15) of the NASD Common Rules or otherwise, a Qualified Independent Underwriter selected in accordance with Section 9. (a) Underwritten Offerings in Connection with Demand Registration. If a Demand for Registration is made pursuant to Section 2 and the distribution of the Registrable Securities included in such Demand for Registration is to be underwritten, the underwriting agreement shall include, among other provisions, indemnities to the effect and to the extent provided in Section 6. The Holders whose Registrable Securities are to be distributed by such underwriters shall be parties to such underwriting agreement. No Requesting Holder may participate in such underwritten offering unless such Holder agrees to sell its Registrable Securities on the basis provided in such underwriting agreement and completes and executes all questionnaires, powers of attorney, indemnities and other documents reasonably required under the terms of such underwriting agreement. If any Requesting Holder disapproves of the terms of an underwriting, such Holder may elect to withdraw therefrom and from such registration by notice to the Company and the Managing Underwriter, and each of the remaining Requesting Holders shall be entitled to increase the number of Registrable Securities being registered to the extent of the Registrable Securities so withdrawn in the proportion which the number of Registrable Securities being registered by such remaining Requesting Holder bears to the total number of Registrable Securities being registered by all such remaining Requesting Holders. (b) Underwritten Piggyback Offerings. If the Company at any time proposes to register any of its securities in a Piggyback Registration and such securities are to be distributed by or through one or more underwriters, the Company will, subject to the provisions of Section 3(c), use its best efforts, if requested by any Holder whose Registrable Securities are included in such registration to arrange for such underwriters to include the Registrable Securities to be offered and sold by such Holder among the securities to be distributed by such underwriters, and such Holders shall be obligated to sell their Registrable Securities in such Piggyback Registration through such underwriters on the same terms and conditions as apply to the other Company securities to be sold by such underwriters in connection with such Piggyback Registration. The Holders whose Registrable Securities are to be distributed by such underwriters shall be parties to the underwriting agreement between the Company and such underwriter or underwriters. No Requesting Holder may participate in such underwritten offering unless such Holder agrees to sell its Registrable Securities on the basis provided in such underwriting agreement and completes and executes all questionnaires, powers of attorney, indemnities and other documents reasonably required under the terms of such underwriting agreement. If any Requesting Holder disapproves of the terms of an underwriting, such Holder may elect to withdraw therefrom and from such registration by notice to the Company and the Managing Underwriter, and each of the remaining Requesting Holders shall be entitled to increase the number of Registrable Securities being registered to the extent of the Registrable Securities so withdrawn in the proportion which the number of Registrable Securities being registered by such remaining Requesting Holder bears to the total number of Registrable Securities being registered by all such remaining Requesting Holders. Section 6. Indemnification. (a) Indemnification by the Company. The Company shall, to the full extent permitted by law, indemnify and hold harmless the Purchaser, as a seller of Registrable Securities included in any registration statement filed in connection with a Demand Registration or a Piggyback Registration, its directors, officers, and partners, and each other Person, if any, who controls any such seller within the meaning of the Securities Act, against any losses, claims, damages, expenses or liabilities, joint or several (together, "Losses"), to which the Purchaser or any such director, officer, partner or controlling Person may become subject under the Securities Act or otherwise, insofar as such Losses (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any such registration statement, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in the light of the circumstances under which they were made) not misleading, and the Company will reimburse the Purchaser and each such director, officer, partner and controlling Person for any legal or any other expenses reasonably incurred by them in connection with investigating or defending any such Loss (or action or proceeding in respect thereof); provided, that the Company shall not be liable in any such case to the extent that any such Loss (or action or proceeding in respect thereof) arises out of or is based upon (i) an untrue statement or alleged untrue statement or omission or alleged omission made in any such registration statement, preliminary prospectus, final prospectus, summary prospectus, amendment or supplement in reliance upon and in conformity with written information furnished to the Company by the Purchaser specifically stating that it is for use in the preparation thereof, or (ii) the Purchaser's failure to send or give a copy of the final prospectus to the Persons asserting an untrue statement or alleged untrue statement or omission or alleged omission at or prior to the written confirmation of the sale of Registrable Securities to such Person if such statement or omission was corrected in such final prospectus. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such seller or any such director, officer, partner or controlling Person, and shall survive the transfer of such securities by such seller. The Company shall also indemnify each other Person who participates (including as an underwriter) in the offering or sale of Registrable Securities, their officers and directors, and partners, and each other Person, if any, who controls any such participating Person within the meaning of the Securities Act to the same extent as provided above with respect to the Purchaser as a seller of Registrable Securities. (b) Indemnification by the Sellers. The Purchaser, if its Registrable Securities are included or are to be included in any registration statement filed in connection with a Demand Registration or a Piggyback Registration, as a condition to including Registrable Securities in such registration statement, shall, to the full extent permitted by law, indemnify and hold harmless the Company, its directors and officers, and each other Person, if any, who controls the Company within the meaning of the Securities Act, against any Losses to which the Company or any such director or officer or controlling Person may become subject under the Securities Act or otherwise, insofar as such Losses (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any such registration statement, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in the light of the circumstances under which they were made) not misleading, if such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by the Purchaser specifically stating that it is for use in the preparation of such registration statement, preliminary prospectus, final prospectus, summary prospectus, amendment or supplement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Company or any such director, officer or controlling Person and shall survive the transfer of such securities by such seller. The Purchaser shall also indemnify each other Person who participates (including as an underwriter) in the offering or sale of Registrable Securities, their officers and directors and each other Person, if any, who controls any such participating Person within the meaning of the Securities Act to the same extent as provided above with respect to the Company. (c) Notices of Claims. Promptly after receipt by an Indemnified Party of notice of the commencement of any action or proceeding involving a claim referred to in the preceding paragraph (a) or (b) of this Section 6, such Indemnified Party shall, if a claim in respect thereof is to be made against an Indemnifying Party pursuant to such paragraphs, give written notice to the latter of the commencement of such action, provided that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under the preceding paragraphs of this Section 6, except to the extent that the Indemnifying Party is actually prejudiced by such failure to give notice. In case any such action is brought against an Indemnified Party, the Indemnifying Party shall be entitled to participate in and, unless, in the reasonable judgment of any Indemnified Party, a conflict of interest between such Indemnified Party and any Indemnifying Party exists with respect to such claim, to assume the defense thereof, jointly with any other Indemnifying Party similarly notified to the extent that it may wish, with counsel reasonably satisfactory to such Indemnified Party, and after notice from the Indemnifying Party to such Indemnified Party of its election so to assume the defense thereof, the Indemnifying Party shall not be liable to such Indemnified Party for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof other than reasonable costs of investigation; provided that the Indemnified Party may participate in such defense at the Indemnified Party's expense; and provided further that the Indemnified Party or Indemnified Parties shall have the right to employ one counsel to represent it or them if, in the reasonable judgment of the Indemnified Party or Indemnified Parties, it is advisable for it or them to be represented by separate counsel by reason of having legal defenses which are different from or in addition to those available to the Indemnifying Party, and in that event the reasonable fees and expenses of such one counsel shall be paid by the Indemnifying Party. If the Indemnifying Party is not entitled to, or elects not to, assume the defense of a claim, it will not be obligated to pay the fees and expenses of more than one counsel for the Indemnified Parties with respect to such claim, unless in the reasonable judgment of any Indemnified Party a conflict of interest may exist between such Indemnified Party and any other Indemnified Parties with respect to such claim, in which event the Indemnifying Party shall be obligated to pay the fees and expenses of such additional counsel for the Indemnified Parties or counsels. Without the consent of the Indemnified Party, no Indemnifying Party shall 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 Indemnified Party of a release from all liability in respect to such claim or litigation. No Indemnifying Party shall be subject to any liability for any settlement made without its consent, which consent shall not be unreasonably withheld. (d) Contribution. If the indemnity and reimbursement obligation provided for in any paragraph of this Section 6 is unavailable or insufficient to hold harmless an Indemnified Party in respect of any Losses (or actions or proceedings in respect thereof) referred to therein, then the Indemnifying Party shall contribute to the amount paid or payable by the Indemnified Party as a result of such Losses (or actions or proceedings in respect thereof) in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and the Indemnified Party on the other hand in connection with statements or omissions which resulted in such Losses, as well as any other relevant equitable considerations. If the allocation provided by the immediately preceding sentence is unavailable for any reason, then the Indemnifying Party shall contribute to the amount paid or payable by the Indemnified Party as a result of such Losses (or actions or proceedings in respect thereof) in such proportion as is appropriate to reflect not only the relative fault of, but also the relative benefits received by, the Indemnifying Party on the one hand and the Indemnified Party on the other hand in connection with statements or omissions which resulted in such Losses, as well as any other relevant equitable considerations. Relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Indemnifying Party or the Indemnified Party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The parties hereto agree that it would not be just and equitable if contributions pursuant to this paragraph were to be determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the first sentence of this paragraph. The amount paid by an Indemnified Party as a result of the Losses referred to in the first sentence of this paragraph shall be deemed to include any legal and other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any Loss which is the subject of this paragraph. No Indemnified Party guilty of fraudulent misrepresentation (within the meaning of Section 10(f) of the Securities Act) shall be entitled to contribution from the Indemnifying Party if the Indemnifying Party was not guilty of such fraudulent misrepresentation. (e) Other Indemnification. Indemnification similar to that specified in the preceding paragraphs of this Section 6 (with appropriate modifications) shall be given by the Company and each seller of Registrable Securities with respect to any required registration or other qualification of securities under any federal or state law or regulation of any governmental authority other than the Securities Act. The provisions of this Section 6 shall be in addition to any other rights to indemnification or contribution which an Indemnified Party may have pursuant to law, equity, contract or otherwise. (f) Indemnification Payments. The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or Losses are incurred. Section 7. Covenants Relating to Rule 144. If at any time the Company is required to file reports in compliance with either Section 13 or Section 15(d) of the Exchange Act, the Company will (a) file reports in compliance with the Exchange Act and (b) comply with all rules and regulations of the Commission applicable in connection with the use of Rule 144 and take such other actions and furnish each Holder with such other information as such Holder may request in order to avail itself of such rule or any other rule or regulation of the Commission allowing such Holder to sell any Registrable Securities without registration. Section 8. Other Registration Rights. In the event the Company grants registration rights to any other party, the Company agrees that the Purchaser's registration rights will be superior to those of the other parties. Section 9. Selection of Underwriters. It is acknowledged and agreed by the Company and the other parties hereto that the Managing Underwriter for any registration of Registrable Securities effected pursuant to this Agreement shall be such nationally recognized investment banking firm as shall be selected, in the case of a Piggyback Registration, by the Board, and, in the case of a Demand Registration, by the Holders of a majority of the Registrable Securities to be sold in such offering after consultation with, and with the consent of, the Company, which consent shall not be unreasonably withheld. If a Qualified Independent Underwriter is required for any registration of Registrable Securities effected pursuant to this Agreement, such Qualified Independent Underwriter shall be an investment banking firm, selected by the Managing Underwriter and reasonably satisfactory to the Company which (i) meets the criteria for a "qualified independent underwriter" set forth in Rule 2720 of the NASD Conduct Rules as the same may be amended from time to time and any other applicable rule or regulation of the NASD or otherwise, and (ii) agrees to act in such capacity for compensation and upon other terms and conditions substantially consistent with the compensation and other terms and conditions that could reasonably be expected to be required by similar investment banking firms acting in such capacity in similar transactions. Section 10. Miscellaneous. (a) Notices. All notices, requests and other communications hereunder must be in writing and will be deemed to have been duly given only if delivered personally, by courier or by facsimile transmission or mailed (first class postage prepaid) to the parties at the addresses or facsimile numbers set forth below. (i) If to the Company, to: with copy to: (ii) if to the Purchaser, to: Copy to: All such notices, requests and other communications will (x) if delivered personally or by courier to the address provided in this Section 10(a), be deemed given upon delivery, (y) if delivered by facsimile transmission to the facsimile number provided in this Section 10(a), be deemed given when receipt of transmission has been orally confirmed by the sending party, and (z) if delivered by first class or registered mail in the manner described above to the address as provided in this Section 10(a), be deemed given three (3) Business Days after deposit in the United States Mail (in each case regardless of whether such notice, request or other communication is received by any other Person to whom a copy of such notice is to be delivered pursuant to this Section). Any party from time to time may change its address, facsimile number or other information for the purpose of notices to that party by giving notice specifying such change to the other parties hereto. (b) Entire Agreement. This Agreement supersedes all prior discussions and agreements between the parties with respect to the subject matter hereof, and contains the sole and entire agreement between the parties hereto with respect to the subject matter hereof. (c) Amendment. This Agreement may be amended, supplemented or modified only by a written instrument (which may be executed in any number of counterparts) duly executed by or on behalf of each of the Company and the Purchaser. (d) Waiver. Any term or condition of this Agreement may be waived at any time by the party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the party waiving such term or condition. No waiver by any party of any term or condition of this Agreement, in any one or more instances, shall be deemed to be or construed as a waiver of the same term or condition of this Agreement on any future occasion. (e) No Third Party Beneficiary. The terms and provisions of this Agreement are intended solely for the benefit of each party hereto and their respective successors or permitted assigns, and it is not the intention of the parties to confer third-party beneficiary rights upon any other Person other than any Person entitled to indemnification under Section 6. (f) Successors and Assigns. The registration rights contained in this Agreement shall be transferable by the Purchaser to any Person that acquires Registrable Securities from the Purchaser (excluding any Person that acquires such Registrable Securities in a transaction pursuant to which such securities cease to be Registrable Securities). (g) Headings. The headings used in this Agreement have been inserted for convenience of reference only and do not define or limit the provisions hereof. (h) Invalid Provisions. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future law, and if the rights or obligations of any party hereto under this Agreement will not be materially and adversely affected thereby, (i) such provision will be fully severable, (ii) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, (iii) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom and (iv) in lieu of such illegal, invalid or unenforceable provision, there will be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible. (i) Remedies. Except as otherwise expressly provided for herein, no remedy conferred by any of the specific provisions of this Agreement is intended to be exclusive of any other remedy, and each and every remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or otherwise. The election of any one or more remedies by any party hereto shall not constitute a waiver by any such party of the right to pursue any other available remedies. Damages in the event of breach of this Agreement by any party hereto or any of their respective successors or permitted assigns would be difficult, if not impossible, to ascertain, and it is therefore agreed that each such Person, in addition to and without limiting any other remedy or right it may have, will have the right to an injunction or other equitable relief in any court of competent jurisdiction, enjoining any such breach, and enforcing specifically the terms and provisions hereof and each party hereto, on its own behalf and behalf of its respective successors and permitted assigns, hereby waives any and all defenses it may have on the ground of lack of jurisdiction or competence of the court to grant such an injunction or other equitable relief. The existence of this right will not preclude any such Person from pursuing any other rights and remedies at law or in equity which such Person may have. Notwithstanding anything herein to the contrary, if the Company files a Registration Statement pursuant to a Demand Registration but such Registration Statement is not deemed effective by the Securities and Exchange Commission within one hundred eighty (180) days after filing, the Company will issue to the Purchasers an additional 900,000 shares of common stock of the Company as full liquidated damages. (j) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Georgia applicable to a contract executed and performed therein, without giving effect to the conflicts of laws principles thereof. (k) Counterparts. This Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. [Remainder of page intentionally left blank] IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by each party hereto, or the duly authorized officer of each party hereto, as the case may be, as of the date first above written. THE CATAPULT GROUP, INC.: By: Name: Title: PURCHASERS: _____________ Jake Cantrell _____________ Ronald Potts _________________ Sheila A. Tallent _______________ Nancy Edwards EX-27 7 0007.txt ART 5 FDS FOR 2ND QTR 10-QSB/A 2000
5 6-MOS DEC-31-2000 JUN-30-2000 30,936 0 149,881 (5,000) 4,000 181,389 212,105 192,619 212,727 384,822 0 0 49,918 5,503 239,600 212,727 0 0 0 0 0 0 0 0 0 0 (76,561) 0 0 (76,561) 0 0
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