Exhibit 10.7
COMMON STOCK PURCHASE AGREEMENT
by and among
PREMIER APPRAISALS, INC.,
J. XXXXX XXXXXXX,
WINDCREST PARTNERS,
CHRYSALIS VENTURES LIMITED PARTNERSHIP,
CASSELBERRY PARTNERS, L.P.,
X.X. FUNDING, LLC,
RICHLAND VENTURES II, L.P.,
SOUTH ATLANTIC PRIVATE EQUITY FUND IV, LIMITED PARTNERSHIP,
SOUTH ATLANTIC PRIVATE EQUITY FUND IV (Q.P.), LIMITED PARTNERSHIP,
XXXXX GLOBAL INVESTMENTS, LTD.
and
REMINGTON STRATEGIES INVESTMENTS, L.P.
June 16, 1998
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT ("Agreement") is made and
entered into as of the 16th day of June, 1998, by and among (i) PREMIER
APPRAISALS, INC., a Georgia corporation ("Company"), and (ii) CHRYSALIS VENTURES
LIMITED PARTNERSHIP, a Kentucky limited partnership, CASSELBERRY PARTNERS, L.P.,
a Kentucky limited partnership, X.X. FUNDING, LLC, a Kentucky limited liability
company, WINDCREST PARTNERS, a New York limited partnership, J. XXXXX XXXXXXX,
an individual, RICHLAND VENTURES II, L.P., a Delaware limited partnership,
REMINGTON INVESTMENTS STRATEGIES, L.P., a _______ limited partnership, XXXXX
GLOBAL INVESTMENTS, LTD., a __________ limited partnership, SOUTH ATLANTIC
PRIVATE EQUITY FUND IV, LIMITED PARTNERSHIP, a Delaware limited partnership, and
SOUTH ATLANTIC PRIVATE EQUITY FUND IV (Q.P.), LIMITED PARTNERSHIP, a Delaware
limited partnership (each an "Investor" and collectively the "Investors").
WITNESSETH:
Company desires to sell and issue, and each Investor desires
to purchase and acquire, the number of shares of Company's authorized but
unissued common stock ("Common Stock") set forth opposite his or its name on
SCHEDULE 1 hereto, upon the terms and subject to the conditions contained
herein.
NOW, THEREFORE, in consideration of the mutual covenants,
representations and warranties herein contained, and intending to be legally
bound, Company and Investors agree as follows:
1. SALE AND ISSUANCE OF COMMON STOCK.
a. Company shall adopt and file with the Secretary of State of
the State of Georgia on or before the Closing (as defined below) Articles of
Amendment to the Company's Articles of Incorporation in the form attached hereto
as EXHIBIT A (the "Articles of Amendment").
b. Subject to the terms and conditions of this Agreement, each
Investor agrees, severally and not jointly, to purchase from Company, and
Company agrees to sell, issue and deliver to each Investor, severally and not
jointly, the number of shares of Common Stock set forth opposite each Investor's
name on SCHEDULE 1 attached hereto at a price of Four Dollars ($4.00) per share
resulting in a total purchase price at the Closing of Eight Million Six Hundred
Thousand Dollars ($8,600,000). Except as set out on SCHEDULE 1, Investors will
pay the purchase price in immediately available funds at the Closing.
c. Subject to the terms and conditions of this Agreement, each
Investor shall have the right and option (the "Option"), but not the obligation,
at any time within six (6) months after the Closing, upon delivery of ten (10)
days prior written notice to Company (the
"Option Notice"), to purchase from Company, and Company agrees to sell, issue
and deliver to such Investor, the number of shares of Common Stock of Company
set forth opposite each Investor's name on SCHEDULE 2 attached hereto (the
"Option Shares") at a price of Five Dollars and Fifty Cents ($5.50) per share
(the "Option Purchase Price"). The Option may not be exercised for any amount
less than the entire number of shares set forth on Schedule 2. Within ten (10)
days of delivery of the Option Notice, such Investor shall deliver the Option
Purchase Price to the Company in immediately available funds. Upon receipt of
the entire Option Purchase Price, the Company shall deliver certificates
representing the Option Shares to such Investor.
2. CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at 10:00 a.m. on June 15, 1998, at
the offices of Xxxxx, Xxxxxxx & Xxxxx, 0000 Xxxxxxxx Xxxxx, Xxxxxxxxxx,
Xxxxxxxx, or at such other time, date, or place as shall be mutually agreed upon
by the parties hereto in writing (the "Closing Date").
3. CLOSING ITEMS.
a. At the Closing, Company shall deliver, or cause to be
delivered, the following items:
i. the Articles of Incorporation and Bylaws of
Company, and all amendments thereto, certified as to their due adoption
and validity by the Secretary of Company;
ii. certificates representing the shares of Common
Stock that each Investor is purchasing as set forth on SCHEDULE 1
hereto against payment of the purchase price therefor in immediately
available funds;
iii. Waiver and Consent of certain shareholders of
the Company with respect to preemptive rights, antidilution protection
and other matters;
iv. Amended and Restated Registration Rights
Agreement in the form attached hereto as EXHIBIT B duly executed by
Company;
v. The Shareholders' Agreement in the form attached
hereto as EXHIBIT C duly executed by Company;
vi. the Amended and Restated Stock Option Plan in the
form attached hereto as EXHIBIT D duly executed by Company;
vii. resolutions of the Board of Directors of Company
authorizing the execution, delivery and consummation of this Agreement,
the issuance of the shares of Common Stock, and the other matters
contemplated hereby, certified as to their due adoption and continued
validity by the Secretary of Company;
viii. resolutions of the shareholders of Company
authorizing the Articles of Amendment and the Amended and Restated
Stock Option Plan certified as to their due adoption and continued
validity by the Secretary of the Company; and
ix. a certificate executed by the President of
Company to the effect that each of Company's representations and
warranties in this Agreement was accurate in all respects as of the
date of this Agreement and is accurate in all respects as of the
Closing Date as if made on the Closing Date.
b. At the Closing, each Investor shall deliver, or cause to be
delivered, severally and not jointly, the following items:
i. immediately available funds or other consideration
equal to the purchase price of the shares of Common Stock set forth
opposite such Investor's name on SCHEDULE 1 attached hereto;
ii. the Amended and Restated Registration Rights
Agreement duly executed by Investor; and
iii. the Shareholders' Agreement duly executed by
Investor.
4. FURTHER ASSURANCES. Each party shall execute such additional
documents and take such other actions as the other party or parties may
reasonably request to consummate the transactions contemplated hereby and
otherwise as may be necessary to effectively carry out the terms and provisions
of this Agreement.
5. REPRESENTATIONS AND WARRANTIES OF COMPANY. Except as set forth
in the disclosure letter dated the date hereof delivered to each Investor (the
"Disclosure Letter"), Company hereby represents and warrants to each Investor as
follows:
a. CORPORATE STANDING. Company is a corporation duly
organized, validly existing, and in good standing under the laws of Georgia.
Company has all requisite power and authority to own, lease and operate its
properties and to carry on its business as now being conducted and as presently
proposed to be conducted, to execute, deliver and perform this Agreement and any
other agreement to which Company is a party, the execution and delivery of which
is contemplated hereby (the "Ancillary Agreements"). Company is duly qualified
and is authorized to transact business and is in good standing as a foreign
corporation in each jurisdiction in which the failure so to qualify would have a
material adverse effect on its business, properties, prospects, or financial
condition. Every jurisdiction where the Company is qualified as a foreign
corporation to transact business is listed in Section 5.A of the Disclosure
Letter. True and accurate copies of the articles of incorporation and bylaws of
Company (and all amendments thereto) and minute book (containing the records of
meetings and written consents of the stockholders, the board of directors and
any committees of the board of directors) of Company have previously been
delivered to counsel to Investors.
b. AUTHORIZATION. The execution and delivery of this Agreement
and any
Ancillary Agreement and the consummation of the transactions contemplated hereby
and thereby, have been duly authorized by all necessary corporate action on the
part of Company. Each of this Agreement and any Ancillary Agreement have been
duly executed and delivered by Company and constitutes the legal, valid and
binding obligation of Company enforceable against it in accordance with its
terms.
c. CAPITALIZATION. As of the Closing Date, the authorized
capital stock of Company shall consist of 12,920,000 shares, divided into: (i)
10,000,000 shares of Common Stock, par value $0.01 per share; (ii) 2,500,000
shares of preferred stock ("Preferred Stock") with such preferences, limitations
and relative rights as may be determined by the Board of Directors pursuant to
Article IV(B) of the Articles; and (iii) 420,000 shares of Class A Convertible
Preferred Stock ("Class A Preferred"). Immediately prior to the Closing, 100% of
the outstanding shares of Common Stock of the Company are owned by the
stockholders and in the amounts specified in Section 5.C of the Disclosure
Letter and no shares of Preferred Stock or Class A Preferred are outstanding.
Except as set forth in Section 5.C of the Disclosure Letter,
there are outstanding no subscriptions, options, warrants, calls, commitments or
rights (including conversion or preemptive rights and rights of first refusal),
proxy or stockholder agreements or agreements of any character relating to
shares of Company's capital stock or the Common Stock to be issued hereunder or
any instruments that can be converted into shares of Company's capital stock or
the Common Stock to be issued hereunder. None of the shares of Company's capital
stock have been issued in violation of any preemptive right. All issuances,
transfers or purchases of the capital stock of Company have been in compliance
with all applicable agreements and all applicable laws, including federal and
state securities laws, and all taxes thereon, if any, have been paid. No former
or present holder of any of the shares of capital stock of Company has any
legally cognizable claim against Company based on any issuance, sale, purchase,
redemption or involvement in any transfer of any shares of capital stock by
Company. There are no contractual obligations of Company to repurchase, redeem
or otherwise acquire any shares of capital stock of Company. No bonds,
debentures, notes or other indebtedness having the right to vote (or convertible
into or exercisable for securities having the right to vote) on any matters on
which shareholders of Company may vote are issued or outstanding. Company is not
a party to or subject to any agreement or understanding, and, to Company's best
knowledge, there is no agreement or understanding between any persons that
affects or relates to the voting or giving of written consents with respect to
any security or the voting by any director of Company
d. VALIDLY ISSUED SHARES. The shares of Common Stock to be
issued, sold and delivered in accordance with the terms of this Agreement for
the consideration set out herein, will, upon issuance in accordance with the
terms hereof, be duly and validly issued, fully paid and nonassessable, free of
restrictions on transfer other than restrictions on transfer under applicable
federal and state securities laws. The issuance of the Common Stock to Investors
pursuant to this Agreement will comply with all applicable laws, including
federal and state securities laws, and will not violate the preemptive rights of
any person.
The outstanding shares of Company's Common Stock have been
duly authorized
and validly issued, are fully paid and nonassessable, and were issued in
accordance with the registration or qualification provisions of the applicable
federal and state securities laws or pursuant to valid exemptions therefrom.
e. NO CONFLICT. The execution and delivery of this Agreement
and any Ancillary Agreement do not, and the consummation of the transactions
contemplated hereby and thereby will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or the loss of a material benefit under, or the creation of a
lien, pledge, security interest, charge or other encumbrance on assets (any such
conflict, violation, default, right of termination, cancellation or
acceleration, loss or creation, a "Violation") pursuant to, any provision of the
Company's Articles of Incorporation or Bylaws, or result in any Violation of any
material lease, agreement, obligation, instrument, permit, concession,
franchise, license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Company, or Company's properties or assets.
f. CONTRACTS AND OTHER COMMITMENTS; COMPLIANCE. Company is not
in violation or default of any provision of its Articles of Incorporation or
Bylaws or in any respect of any provision of any material contract or other
items listed on the Disclosure Letter.
g. SUBSIDIARIES. Company does not own or control, directly or
indirectly, any interest in any other corporation, partnership, limited
liability company, association or other business entity. Company is not a
participant in any joint venture, partnership or similar arrangement.
h. CONSENTS. No consent, approval, qualification, order or
authorization of, or registration, declaration or filing with, any court,
administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign, or other third party is required by or
with respect to Company in connection with the execution and delivery of this
Agreement, or the consummation by Company of the transactions contemplated
hereby, which has not already been obtained, except for notices of sale required
to be filed with the Securities and Exchange Commission, or such post closing
filings as may be required under applicable state securities laws which will be
timely filed within the applicable periods therefor.
i. FINANCIAL STATEMENTS. Company has delivered to Investors
prior to the date hereof its audited financial statements for the years ended
December 31, 1996 and December 31, 1997, and its unaudited financial statements
(balance sheet and profit and loss statement) for the four (4) month period
ended April 30, 1998 (the "Financial Statements"). The Financial Statements,
including any footnotes thereto, were prepared in accordance with generally
accepted accounting principles and fairly present the financial position and
operating results of Company as of the dates and for the periods indicated
therein. Since April 30, 1998, there has not been any material adverse change in
the assets, liabilities, financial condition, results of operation or prospects
of Company.
j. INDEBTEDNESS FOR BORROWED MONEY; NO UNDISCLOSED
LIABILITIES. Except as and to the extent reflected and adequately reserved
against in the Financial Statements, as of the
Closing Date, Company has no direct or indirect indebtedness for borrowed money,
indebtedness by way of lease-purchase arrangements, guarantees, undertakings,
chattel mortgages or other security arrangements with any bank, financial
institution or other third party and Company will not have any liability or
obligation whatsoever, whether accrued, absolute, contingent or otherwise.
k. TITLE TO PROPERTY AND ASSETS; LEASES. Company owns no real
property in fee simple. Company has good, valid and marketable title to all the
personal and mixed, tangible and intangible properties and assets which it
purports to own, free and clear of all liens, restrictions, claims, charges,
security interests, easements or other encumbrances of any nature whatsoever,
except for liens for current taxes not yet due and payable. With respect to the
property and assets that it leases, Company is in compliance with such leases
and, to Company's knowledge, holds a valid leasehold interest free and clear of
any liens, claims and encumbrances. All properties and assets of Company are in
the possession or control of Company, and no other person is entitled to
possession of any such properties and assets. Company is not bound or committed
to make any capital improvement or expenditure with respect to its owned or
leased real or personal property.
l. LEGAL PROCEEDINGS. Except as set forth in the Disclosure
Letter or which are not material to Company, there are no claims of any kind or
any actions, suits, proceedings, arbitrations or investigations pending or, to
Company's knowledge, threatened against or affecting Company or against any
asset, interest or right of Company or which questions the validity of the
transactions contemplated by this Agreement and Company knows of no facts which
may constitute a basis therefor.
m. ENVIRONMENTAL MATTERS. Company is not in violation of any
applicable statute, law or regulation relating to the environment or
occupational health and safety (the "Environmental Laws"), and, to Company's
knowledge, as of the date hereof no material expenditures are required to be
made by Company in order to comply with any of the Environmental Laws.
n. LICENSES AND PERMITS; COMPLIANCE WITH LAWS. Except as set
forth in Section 5.N of the Disclosure Letter, Company holds all franchises,
permits, licenses, variances, exemptions, orders and approvals of all
governmental entities which are material to the operation of Company's business
and is in compliance with the terms thereof. Company has complied with and is
not in any default under (and has not been charged with or received notice with
respect to, nor is threatened with or under investigation with respect to, any
charge concerning any violation of any provision of) any federal, state or local
law, regulation, ordinance, rule or order (whether executive, judicial,
legislative or administrative) or any order, writ, injunction or decree of any
court, agency or instrumentality and no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, demand, or notice has been filed or
commenced against any of them alleging any failures to comply.
o. EMPLOYEE BENEFIT PLANS. Except as set forth in Section 5.O
of the Disclosure Letter, Company has no employee benefit plans including any
profit sharing, deferred
compensation, incentive compensation, stock ownership, stock purchase, phantom
stock, retirement, vacation, severance, disability, death benefit,
hospitalization, medical or other plan, arrangement or understanding (whether or
not legally binding) providing benefits to any current or former employee,
officer or director of Company (collectively "Benefit Plans"), or any
employment, consulting, severance, termination or indemnification agreement,
arrangement or understanding between Company and any officer, director or
employee of Company. Company has delivered to Investors true, complete and
correct copies of each Benefit Plan, or, in the case of any unwritten Benefit
Plans, descriptions thereof. Each Benefit Plan has been administered in all
material respects in accordance with its terms and all applicable laws.
p. LABOR RELATIONS.
i. Company is in compliance in all material respects
with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours and
occupational safety and health;
ii. There is no unfair labor practice charge or
complaint or any other matter against or involving Company pending or,
to Company's knowledge, threatened before the National Labor Relations
Board or any court of law;
iii. There is no labor strike, dispute, slowdown or
stoppage actually pending or, to Company's knowledge, threatened
against Company;
iv. Company is not a party to or bound by any
collective bargaining agreement or any similar labor union arrangement;
v. There are no charges, investigations,
administrative proceedings or formal complaints of discrimination
(including discrimination based upon sex, age, marital status, race,
color, religion, national origin, sexual preference, disability,
handicap or veteran status) pending or, to Company's knowledge,
threatened, before the Equal Employment Opportunity Commission or any
federal, state or local agency or court against Company. There have
been no governmental audits of the equal employment opportunity
practices of Company and, to Company's knowledge, no basis for any such
claim exists; and
vi. To Company's knowledge, Company is in compliance
in all material respects with the requirements of the Americans With
Disabilities Act.
q. INSURANCE. Section 5.Q of the Disclosure Letter sets forth
a list of all insurance policies, including property, casualty, liability and
other insurance maintained with respect to the assets and business of Company
("Company Insurance"). Company is not liable for any material retroactive
premium adjustments with respect to any of its insurance policies or bonds. All
such policies and bonds are legal, valid and enforceable and in full force and
effect and Company is not in breach or default (including with respect to the
payment of premiums or the giving of notices) and no event has occurred which,
with notice or the lapse of time, would constitute such a breach or default, or
permit termination, modification or acceleration under the
policy. Nor has the Company received any notice of premium increases or
cancellations with respect to any of such policies and bonds. Company believes
the amount and type of Company Insurance coverage is adequate for Company's
business and is consistent with good business practice.
r. TAX MATTERS. Company has timely filed or caused to be filed
all federal, state, foreign and local income, franchise, gross receipts,
payroll, sales, use, withholding, occupancy, excise, real and personal property,
employment and other tax returns, tax information returns and reports ("Tax
Returns") required to be filed and all such Tax Returns were correct and
complete in all respects. Company has paid, or made adequate provisions for the
payment of, all taxes, duties or assessments of any nature whatsoever, interest
payments, penalties and additions (whether or not reflected in the returns as
filed) due and payable (and/or properly accruable for all periods ending on or
before the date of this Agreement) to any city, county, state, foreign country,
the United States or any other taxing authority. There are no security interests
on any of the assets of Company that arise in connection with any failure (or
alleged failure) to pay any tax. Company has withheld and paid all taxes
required to have been withheld and paid in connection with amounts paid or owing
to any employee, independent contractor, creditor, stockholder or other third
party. No deficiencies for any taxes have been proposed, asserted or assessed
against Company that are not adequately reserved for.
s. PATENTS AND TRADEMARKS. Company owns or possesses
sufficient legal rights to all patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information, and proprietary rights and
processes necessary for its business as now conducted and as proposed to be
conducted without any conflict with, or infringement of the rights of, others.
Except for agreements with its own employees or consultants and standard
end-user license agreements, if any, there are no outstanding options, licenses,
or agreements of any kind relating to the foregoing, nor is the Company bound by
or a party to any options, licenses, or agreements of any kind with respect to
the patents, trademarks, service marks, trade names, copyrights, trade secrets,
licenses, information, and proprietary rights and processes of any other person
or entity. Company has not received any communications alleging that Company has
violated or, by conducting its business as proposed, would violate any of the
patents, trademarks, service marks, trade names, copyrights, trade secrets, or
other proprietary rights or processes of any other person or entity. Company is
not aware that any of its employees is obligated under any contract (including
licenses, covenants, or commitments of any nature) or other agreement, or
subject to any judgment, decree, or order of any court or administrative agency,
that would interfere with the use of such employee's best efforts to promote the
interests of Company or that would conflict with Company's business as proposed
to be conducted. Neither the execution nor delivery of this Agreement, nor the
carrying on of Company's business by the employees of Company, nor the conduct
of Company's business as proposed, will, to Company's knowledge, conflict with
or result in a breach of the terms, conditions, or provisions of, or constitute
a default under, any contract, covenant, or instrument under which any of such
employees is now obligated. Company does not believe it is or will be necessary
to use any inventions of any of its employees (or persons it currently intends
to hire) made prior to their employment by Company. Each independent contractor,
employee and/or officer of Company who or which has contributed to the
development of the Computer Software has executed proprietary
information/confidentiality agreements.
t. RELATED-PARTY TRANSACTIONS. Except as set forth in the
Disclosure Letter, no employee, officer, or director of Company, or member of
his or her immediate family is indebted to Company, nor is Company indebted (or
committed to make loans or extend or guarantee credit) to any of them. To
Company's knowledge, none of such persons has any direct or indirect ownership
interest in any firm or corporation with which Company is affiliated or with
which Company has a business relationship, or any firm or corporation that
competes with Company, except that employees, officers, or directors of Company,
and members of their immediate families may own stock in publicly traded
companies that may compete with Company. Except as set forth in Section 5.T of
the Disclosure Letter, no employee, officer or director of Company, or, to
Company's knowledge, any member of their immediate families is, directly or
indirectly, interested in any material contract with Company. For purposes of
this Agreement, Company shall be deemed to have knowledge of a fact, event,
condition, matter or situation if any of Company's officers or directors are
consciously aware of such fact, event, condition, matter or situation, as
appropriate.
u. SOFTWARE PRODUCTS. Company has received no customer
complaints concerning alleged defects in its computer appraisal software
products, including, without limitation, Value Express (collectively, the
"Computer Software") that, if true, would materially adversely affect the
operations or financial condition of Company.
v. BROKERS' AND FINDERS' FEES. Company has not employed any
broker, finder or financial advisor or incurred any liability for fees or
commissions payable to any broker, finder or financial advisor in connection
with the negotiations relating to or the transactions contemplated by this
Agreement.
w. MATERIAL FACTS. Company has provided each Investor with all
the information reasonably available to it that such Investor has requested for
deciding whether to purchase the Common Stock. This Agreement and the documents
or written statements furnished by Company to Investors in connection with the
transactions contemplated hereby do not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements contained herein or therein, in light of the circumstances in which
they are made, not misleading.
6. REPRESENTATIONS AND WARRANTIES OF INVESTORS. Each Investor
hereby represents and warrants to Company, severally and not jointly, as of the
date hereof, as follows:
a. BINDING AGREEMENT. This Agreement and any Ancillary
Agreement, as applicable, have been duly executed and delivered by such Investor
and each constitutes the legal, valid and binding obligation of such Investor
enforceable against him in accordance with its terms.
b. INVESTMENT REPRESENTATIONS. Such Investor is acquiring the
Common Stock solely for its or his own account as principal, for investment
purposes only and not with a
view to resale or distribution thereof in whole or in part, and such Investor
has no present intention of selling, granting any participation in, or otherwise
distributing the Securities.
c. ACCREDITED INVESTOR; RESIDENCE. Such Investor is a resident
of the state set forth under its or his name on SCHEDULE 1 attached hereto and
is an "accredited investor" as such term is defined under Rule 501 of Regulation
D promulgated pursuant to Section 4(2) of the Securities Act of 1933, as amended
(the "Securities Act").
d. RECEIPT OF INFORMATION; RESTRICTED SECURITIES. Such
Investor acknowledges that the Common Stock is not being and will not be
registered under the Securities Act or the securities laws of any other
jurisdiction in reliance on exemptions thereunder. The Common Stock has not been
and will not be approved or disapproved by the Securities and Exchange
Commission or any other governmental authority or agency of any jurisdiction.
Such Investor represents that such Investor has had an opportunity to ask
questions and receive answers from Company regarding the terms and conditions of
the offering of the Common Stock and the business, properties, prospects, and
financial condition of Company and to obtain additional information (to the
extent Company possessed such information or could acquire it without
unreasonable effort or expense) necessary to verify the accuracy of any
information furnished to such Investor or to which such Investor had access.
Investors' representations under this Section 6, however, shall not limit or
modify the representations and warranties of Company in Section 5 of this
Agreement or the right of Investors to rely thereon.
e. INVESTMENT EXPERIENCE. Such Investor is experienced in
evaluating and investing in private placement transactions of securities of
companies in a similar stage or development and acknowledges that such Investor
is able to fend for itself, can bear the economic risk of such Investor's
investment, and has such knowledge and experience in financial and business
matters that such Investor is capable of evaluating the merits and risks of the
investment in the Common Stock.
f. LEGENDS. Each certificate or other document evidencing any
of the Common Stock issued pursuant to this Agreement shall be endorsed with the
legend set forth below:
THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS
AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED
UNLESS AND UNTIL REGISTERED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS
RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE, SATISFACTORY TO THE
COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
AN AGREEMENT DATED AS OF APRIL 24, 1995, AS AMENDED, HAS BEEN ENTERED
INTO BY CERTAIN SHAREHOLDERS OF THE CORPORATION AND HAS BEEN DELIVERED
TO THE SECRETARY TO
BE KEPT ON FILE AT THE CORPORATION'S REGISTERED OFFICE. THAT AGREEMENT
IMPOSES VARIOUS RESTRICTIONS UPON THE TRANSFER OF THE SHARES
REPRESENTED BY THIS CERTIFICATE AND CREATES VARIOUS OPTIONS, RIGHTS AND
INTERESTS WITH RESPECT TO THOSE SHARES.
7. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties contained in this Agreement by any party to this Agreement and
any certificate or other instrument delivered by or on behalf of any party
pursuant to this Agreement shall be continuous and shall survive the Closing
and the issuance of all shares of Company's capital stock. Each party shall
have the right to rely on each other party's representations and warranties
made herein, notwithstanding any investigation conducted by such party.
8. INDEMNIFICATION.
a. INDEMNIFICATION BY COMPANY. Company shall indemnify and
reimburse each Investor for any and all claims, losses, liabilities, damages
(including, without limitation, fines, penalties, and criminal or civil
judgments and settlements), costs (including, without limitation, court costs)
and expenses (including, without limitation, attorneys' and accountants' fees)
(hereinafter "Loss" or "Losses") suffered or incurred by such Investor, any
successors or assigns thereto (the "Protected Parties") as a result of, or with
respect to:
i. Any breach or inaccuracy of any representation or
warranty of Company set forth in Section 5;
ii. Any breach of or noncompliance by Company with
any covenant or agreement of Company contained in this Agreement; and
iii. any and all actions, suits, proceedings, claims,
demands, assessments and judgments incident to any of the foregoing.
b. INDEMNIFICATION BY INVESTORS. Each Investor shall,
severally and not jointly, indemnify and reimburse Company for any and all
claims, losses, liabilities, damages (including, without limitation, fines,
penalties, and criminal or civil judgments and settlements), costs (including,
without limitation, court costs) and expenses (including, without limitation,
attorneys' and accountants' fees) (hereinafter "Loss" or "Losses") suffered or
incurred by Company or any successors or assigns thereto as a result of, or with
respect to:
i. Any breach or inaccuracy of any representation or
warranty of such Investor set forth in Section 6;
ii. Any breach of or noncompliance by such Investors
with any covenant or agreement of Investor contained in this Agreement;
and
iii. any and all actions, suits, proceedings, claims,
demands,
assessments and judgments incident to any of the foregoing.
9. COMPANY COVENANTS. Company hereby covenants and agrees as follows:
a. USE OF PROCEEDS. The proceeds from the sale of the Common
Stock pursuant to this Agreement shall be used by Company (i) to purchase the
capital stock of Xxxxxxx & Xxxxxxxxx, Inc. and (ii) for working capital.
b. FINANCIAL STATEMENTS. Subject to Section 9.c, Company shall
furnish to the Investors:
i. an audited balance sheet and statements of income
and cash flow within ninety (90) days after the end of each fiscal
year, together with comparative figures for the last preceding fiscal
year prepared by a firm of certified public accountants acceptable from
time to time to a majority in interest of the Common Stock of Company;
ii. as soon as available, and in any event within
thirty (30) days after the close of each calendar month, an unaudited
balance sheet and statement of income and cash flows for such month,
together with comparative figures for both the month just ended and the
portion of the fiscal year then ended, and a written one or two page
monthly summary of Company's operations. Such financial statements
shall be prepared in accordance with generally accepted accounting
principles consistently applied (subject to audit and year-end
adjustments) by the principal financial or accounting officer of the
Company;
iii. as soon as available, and in any event within
thirty (30) days before the close of each fiscal year, a business plan
and projections for Company's next fiscal year; and
iv. such additional information with respect to
Company's financial condition as may be reasonably requested by the
Investors.
c. TERMINATION OF COVENANTS. The covenants set forth in
Section 9.b shall terminate and be of no further force or effect at such time as
Company is required to file reports pursuant to Sections 13 or 15(d) of the
Securities Exchange Act of 1934, provided Company delivers to the Investors
copies of all such reports filed within five (5) days of their filing with the
SEC.
10. PUBLIC STATEMENTS. Neither Company nor Investors shall, without
the prior written approval of the other parties hereto, make any press
release or other public announcement concerning the transactions contemplated
by this Agreement. Investors and Company may disclose information with
respect to the transaction contemplated hereby to their respective employees,
agents, consultants and third parties only to the extent such persons have a
need to know such information.
11. NOTICES. All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be mailed
by first class, registered, or certified mail, postage prepaid, or sent via
overnight courier service, or delivered personally:
If to Investors, to: J. Xxxxx Xxxxxxx
x/x Xxxxxxx Xxxxxxx
Xxxxx 0000
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Chrysalis Ventures Limited Partnership
1850 National City Tower
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Casselberry Partners, L.P.
c/o Xxxxxxx X. Xxxx
000 Xxxx Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
X.X. Xxxxxxx, XXX
0000 Xxxxxxxx Xxxx Xxxxx
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Windcrest Partners
49th Floor
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Richland Ventures II, L.P.
0000 Xxxx Xxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000-0000
South Atlantic Private Equity Fund IV
Limited Partnership
and
South Atlantic Private Equity Fund IV
(Q.P.), Limited Partnership
c/o Xxx Xxxxxx
000 X. Xxx Xxxxxx, Xxxxx 000
Xxxxx, XX 00000
Xxxxx Global Investments, Ltd.
and
Remington Investments Strategies, L.P.
c/o Moore Capital Management, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxxx
If to Company to: Premier Appraisals, Inc.
Xxxxx 0000
00 Xxxxxxxxx Xxxxxx Xxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx,
President and CEO
or to such other address of which the addressee shall have notified the sender
in writing. Notices mailed in accordance with this section shall be deemed given
when mailed, and notices sent by overnight courier service shall be deemed given
when placed in the hands of a representative of such service.
12. PARTIES IN INTEREST; ASSIGNMENT. Except as otherwise provided
herein, all covenants and agreements contained in this Agreement by or on
behalf of any of the parties to this Agreement shall bind and inure to the
benefit of their respective heirs, executors, successors, and assigns,
whether so expressed or not. Nothing in this Agreement, express or implied,
is intended to confer upon any party other than the parties hereto and their
respective successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement. This Agreement is not
assignable and any purported assignment shall be null and void.
13. CONSTRUCTION; GOVERNING LAW. The section headings contained in
this Agreement are inserted as a matter of convenience and shall not affect
in any way the construction of the terms of this Agreement. This Agreement
shall be governed by and interpreted in accordance with the laws of the
Commonwealth of Kentucky.
14. ENTIRE AGREEMENT; AMENDMENT AND WAIVER. This Agreement,
including the Disclosure Letter and Exhibits hereto, constitutes and contains
the entire agreement between the parties hereto with respect to the
transactions contemplated hereby and supersedes any prior writing by the
parties. Any term of this Agreement may be amended and the observance of any
term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of Company and each Investor (or its or his permitted assigns). Any
amendment or waiver effected in accordance with this paragraph shall be
binding upon each holder of any securities purchased under this Agreement at
the time outstanding (including securities into which such securities have
been converted), each future holder of all such securities, and Company.
15. SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability
of the remaining provisions.
[Rest of page left intentionally blank]
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same Agreement.
17. EXPENSES. Company agrees, upon consummation of the transactions
contemplated by this Agreement, to pay all reasonable legal and out-of-pocket
expenses incurred by J. Xxxxx Xxxxxxx in connection with this Agreement and
the transactions contemplated hereunder, including, without limitation, all
fees of Xxxxx, Tarrant & Xxxxx, plus expenses.
18. ATTORNEYS' FEES. If any action at law or in equity is necessary
to enforce or interpret the terms of this Agreement or any Ancillary
Agreement, the prevailing party shall be entitled to reasonable attorneys'
fees, costs, and disbursements in addition to any other relief to which such
party may be entitled.
19. RIGHTS OF INVESTORS. Each holder of Common Stock shall have the
absolute right to exercise or refrain from exercising any right or rights
that such holder may have by reason of this Agreement or any Common Stock,
including without limitation the right to consent to the waiver of any
obligation of Company under this Agreement and to enter into an agreement
with Company for the purpose of modifying this Agreement or any agreement
effecting any such modification, and such holder shall not incur any
liability to any other holder or holders of Common Stock with respect to
exercising or refraining from exercising any such right or rights.
20. EXCULPATION AMONG INVESTORS. Each Investor acknowledges that he
is not relying upon any person, firm, or corporation, other than Company and
its current officers and directors, in making its investment or decision to
invest in Company. Each Investor agrees that no other Investor nor the
respective agents of any other Investor shall be liable for any action
heretofore or hereafter taken or omitted to be taken by any of them in
connection with the Common Stock.
IN WITNESS WHEREOF, Company and Investors have caused this
Agreement to be executed as of the day and year first written above.
"COMPANY"
PREMIER APPRAISALS, INC.
By:_______________________________________
Xxxxxxx X. Xxxxxx, President and
Chief Executive Officer
"INVESTORS"
CHRYSALIS VENTURES LIMITED PARTNERSHIP
By: ______________________________________
Title:______________________________________
CASSELBERRY PARTNERS, L.P.
By:_______________________________________
Title:______________________________________
X.X. FUNDING, LLC
By:_______________________________________
Title:______________________________________
_______________________________________
J. XXXXX XXXXXXX
WINDCREST PARTNERS
By:_______________________________________
A General Partner
RICHLAND VENTURES II, L.P.
By:_______________________________________
Its:_______________________________________
SOUTH ATLANTIC PRIVATE EQUITY FUND IV,
LIMITED PARTNERSHIP
By: South Atlantic Private Equity Partners,
Limited Partnership, Its General Partner
By:_______________________________________
Its: General Partner
SOUTH ATLANTIC PRIVATE EQUITY FUND IV,
(Q.P.), LIMITED PARTNERSHIP
By: South Atlantic Private Equity Partners,
Limited Partnership, Its General Partner
By:_______________________________________
Its: General Partner
XXXXX GLOBAL INVESTMENTS, LTD.
By:_______________________________________
_________________ of Xxxxx Capital
Management
Its: Trading Advisor
REMINGTON INVESTMENTS STRATEGIES, L.P.
By:_______________________________________
_____________ of Xxxxx Capital
Advisors, LLC
Its: General Partner
SCHEDULE 1
Investor's Investment at Closing
Number of Shares Purchase
Investor of Common Stock Price
-------- --------------- -----
J. Xxxxx Xxxxxxx
x/x Xxxxxxx Xxxxxxx
Xxxxx 0000
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000 250,000 $1,000,000(1)
Windcrest Partners
49th Floor
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000 125,000 $ 500,000
Richland Ventures II, L.P.
0000 Xxxx Xxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000-0000 500,000 $2,000,000
South Atlantic Private Equity Fund IV
Limited Partnership
000 X. Xxx Xxxxxx, Xxxxx 000
Xxxxx, XX 00000 210,000 $ 840,000
South Atlantic Private Equity Fund IV
(Q.P.), Limited Partnership
000 X. Xxx Xxxxxx, Xxxxx 000
Xxxxx, XX 00000 290,000 $1,160,000
Xxxxx Global Investments, Ltd.
c/o Citco Fund Services (Bahamas), Ltd.
Bahamas Financial Center
Charlotte & Xxxxxxx Xxxxxx
X.X. Xxx XX 00000
Xxxxxx, Bahamas 410,000 $1,640,000
Remington Investments Strategies, L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000 90,000 $ 360,000
Casselberry Partners, L.P.
c/o Xxxxxxx X. Xxxx
000 Xxxx Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000 61,716 $246,864(2)
X.X. Xxxxxxx, XXX
0000 Xxxxxxxx Xxxx Xxxxx
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000 56,787 $227,148(3)
Chrysalis Ventures Limited Partnership
1850 National City Tower
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000 156,497 $625,988(4)
-------------------
(1) Payable $178,871.92 by the cancellation of that certain Promissory Note
dated March 12, 1998 in favor of the Company with the remainder in cash.
(2) Payable $39,722.03 by the cancellation of that certain Promissory Note dated
April 27, 1998 in favor of the Company with the remainder in cash.
(3) Payable $36,549.73 by the cancellation of that certain Promissory Note dated
April 27, 1998 in favor of the Company with the remainder in cash.
(4) Payable $100,725.16 by the cancellation of that certain Promissory Note
dated April 27, 1998 in favor of the Company with the remainder in cash.
SCHEDULE 2
Investor's Post-Closing Option
Number of Shares
Investor of Common Stock
-------- ---------------
J. Xxxxx Xxxxxxx
x/x Xxxxxxx Xxxxxxx
Xxxxx 0000
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000 90,909
Windcrest Partners
49th Floor
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000 45,454
Richland Ventures II, L.P.
0000 Xxxx Xxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000-0000 181,818
South Atlantic Private Equity Fund IV
Limited Partnership
000 X. Xxx Xxxxxx, Xxxxx 000
Xxxxx, XX 00000 76,363
South Atlantic Private Equity Fund IV
(Q.P.), Limited Partnership
000 X. Xxx Xxxxxx, Xxxxx 000
Xxxxx, XX 00000 105,454
Xxxxx Global Investments, Ltd.
c/o Citco Fund Services (Bahamas), Ltd.
Bahamas Financial Center
Charlotte & Xxxxxxx Xxxxxx
X.X. Xxx XX 00000
Xxxxxx, Bahamas 149,090
Remington Investments Strategies, L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000 32,727
Casselberry Partners, L.P.
c/o Xxxxxxx X. Xxxx
000 Xxxx Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000 22,442
X.X. Funding, LLC
1850 National City Tower
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000 20,649
Chrysalis Ventures Limited Partnership
1850 National City Tower
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000 56,908
TABLE OF CONTENTS
PAGE
1. Sale and Issuance of Common Stock........................................................................1
2. Closing..................................................................................................2
3. Closing Items............................................................................................2
4. Further Assurances.......................................................................................3
5. Representations and Warranties of Company................................................................3
a. Corporate Standing..............................................................................3
b. Authorization...................................................................................3
c. Capitalization..................................................................................4
d. Validly Issued Shares...........................................................................4
e. No Conflict.....................................................................................5
f. Contracts and Other Commitments; Compliance.....................................................5
g. Subsidiaries....................................................................................5
h. Consents........................................................................................5
i. Financial Statements............................................................................5
j. Indebtedness for Borrowed Money; No Undisclosed Liabilities.....................................5
k. Title to Property and Assets; Leases............................................................6
l. Legal Proceedings...............................................................................6
m. Environmental Matters...........................................................................6
n. Licenses and Permits; Compliance with Laws......................................................6
o. Employee Benefit Plans..........................................................................6
p. Labor Relations.................................................................................7
q. Insurance.......................................................................................7
r. Tax Matters.....................................................................................7
s. Patents and Trademarks..........................................................................8
t. Related-Party Transactions......................................................................8
u. Software Products...............................................................................9
v. Brokers' and Finders' Fees......................................................................9
w. Material Facts..................................................................................9
6. Representations and Warranties of Investors..............................................................9
a. Binding Agreement...............................................................................9
b. Investment Representations......................................................................9
c. Accredited Investor; Residence..................................................................9
d. Receipt of Information; Restricted Securities...................................................9
e. Investment Experience..........................................................................10
f. Legends........................................................................................10
7. Survival of Representations and Warranties..............................................................10
8. Indemnification.........................................................................................10
a. Indemnification by Company.....................................................................10
b. Indemnification by Investors...................................................................11
9. Company Covenants.......................................................................................11
a. Use of Proceeds................................................................................11
b. Financial Statements...........................................................................11
c. Termination of Covenants.......................................................................12
10. Public Statements.......................................................................................12
11. Notices.................................................................................................12
12. Parties in Interest; Assignment.........................................................................14
13. Construction; Governing Law.............................................................................14
14. Entire Agreement; Amendment and Waiver..................................................................14
15. Severability............................................................................................14
16. Counterparts............................................................................................15
17. Expenses................................................................................................15
18. Attorneys' Fees.........................................................................................15
19. Rights of Investors.....................................................................................15
20. Exculpation Among Investors.............................................................................15
Exhibits and Schedules
Schedule 1 Investors' Investment at Closing
Schedule 2 Investors' Post Closing Option
Exhibit A Articles of Amendment
Exhibit B Second Amended and Restated Registration Rights Agreement
Exhibit C Amended and Restated Shareholders' Agreement
Exhibit D Amended and Restated 1997 Employee Stock Option Plan
