EXHIBIT 1
PREFERRED STOCK PURCHASE AGREEMENT
This Preferred Stock Purchase Agreement (the "Agreement") is made as of
August 24, 1999 by and among Vista Information Solutions, Inc., a Delaware
corporation (the "Company") and the investors named in the Schedule of
Purchasers attached hereto as Exhibit A (the "Purchasers").
In consideration of the mutual promises and covenants contained in this
Agreement, and intending to be legally bound by the terms and conditions of this
Agreement, the parties hereto hereby agree as follows:
1. Authorization and Sale of Series A Convertible Preferred Stock.
1.1. Authorization of Series A Convertible Preferred Stock. On or
before the First Closing (as defined in Section 2), the Company will have duly
authorized the sale and issuance of up to 100,000 shares of its Series A
Convertible Preferred Stock, $.001 par value per share (the "Series A Preferred
Stock"), having the rights, restrictions, privileges and preferences set forth
in the Certificate of Designation, Preferences and Rights attached hereto as
Exhibit B (the "Certificate of Designation") and will have adopted and filed the
Certificate of Designation with the Secretary of State of the State of Delaware.
1.2. Sale of Series A Preferred Stock at First Closing. Subject to
the terms and conditions of this Agreement, at the First Closing the Company
shall sell and issue to Century Capital Partners II, L.P. ("Century"), and
Century shall purchase from the Company, the number of shares of Series A
Preferred Stock determined by dividing the Aggregate Purchase Price set forth
opposite such Purchaser's name under the heading "First Closing Amount" on
Exhibit A by a per-share purchase price (the "First Purchase Price") equal to
the lower of (a) $91.60 per share, or (b) ten times the average of the closing
prices of the Company's Common Stock as reported on the Nasdaq National Market
(each a "Closing Price") for the 10 consecutive trading days ending on the last
trading day before the First Closing.
1.3. Authorization of Series A-1 Convertible Preferred Stock. On or
before the Second Closing (as defined in Section 2), the Company will have duly
authorized the sale and issuance of the number of shares of its Series A-1
Convertible Preferred Stock, $.001 par value per share (the "Series A-1
Preferred Stock") sufficient to raise $35,000,000.00, having the rights,
restrictions, privileges and preferences substantially identical to those of the
Series A Preferred Stock except for (a) the applicable Original Purchase Price
(as defined in the "Certificate of Designation") and those terms that are
calculated based on the Original Purchase Price, and (b) such other terms as may
be permitted upon compliance with the provisions of the Certificate of
Designation relating to "Subsequent Equity," and will have adopted and filed the
appropriate Certificate of Designation with the Secretary of State of the State
of Delaware.
1.4. Sale of Series A-1 Preferred Stock at Second Closing. Subject
to the terms and conditions of this Agreement, at the Second Closing the Company
shall sell and issue to each of the Purchasers, and each of the Purchasers,
severally and not jointly, shall purchase from the Company, the number of shares
of Series A-1 Preferred Stock determined by dividing the Aggregate Purchase
Price set forth opposite such Purchaser's name under the heading "Second Closing
Amount" on Exhibit A by a per-share purchase price (the "Second Purchase Price")
equal to lower of (a) $91.60 per share, or (b) ten times the amount that is 90%
of the average of the Closing Prices for the 10 consecutive trading days ending
on the last trading day before the Second Closing; provided that, if necessary
to ensure that the aggregate number of shares of Series A Preferred Stock and
Series A-1 Preferred Stock issued does not exceed the number for which issuance
would require the approval of the Company's shareholders under the rules of the
Nasdaq National Market, the Second Purchase Price described in this clause (b)
may be increased to such minimum amount (not greater than the lower of (i) ten
times the Closing Price on the last trading day before the Second Closing or
(ii) ten times the average of the Closing Prices for the 10 consecutive trading
days ending on such last trading day) as is necessary to avoid the need for such
approval.
1.5. Shares. Unless the context otherwise requires, "Shares" herein
means all shares of Series A Preferred Stock and Series A-1 Preferred Stock
being sold and purchased under this Agreement to the Purchasers.
1.6. Use of Proceeds. The Company shall use the net proceeds from
the sale of the Shares for the retirement of bank debt, for general working
capital purposes and to fund acquisitions.
2. The Closings.
2.1. First Closing. The closing of the sale and purchase of the
shares of Series A Preferred Stock under this Agreement (the "First Closing")
shall take place at the main offices of the Company on the tenth (10th) day
after the date hereof, or at such other time, date, and place as are mutually
agreeable to the Company and each Purchaser purchasing at such closing. The date
of the First Closing is hereinafter referred to as the "First Closing Date." At
the First Closing, the Company shall deliver to each such Purchaser a
certificate registered in such Purchaser's name for the number of Shares being
acquired by such Purchaser against payment to the Company of the Purchase Price
therefor, by wire transfer, certified or cashier's check or other method
acceptable to the Company, or, at the election of the Purchaser, by the
cancellation of outstanding indebtedness to such Purchaser. If at the First
Closing any of the conditions specified in Section 5 of this Agreement shall not
have been fulfilled, each such Purchaser shall, at its election, be relieved of
all of its obligations under this Agreement with respect to the First Closing
without thereby waiving any other right such Purchaser may have by reason of
such failure or such non-fulfillment.
2.2. Second Closing. The closing of the sale and purchase of the
shares of Series A-1 Preferred Stock under this Agreement (the "Second Closing")
shall take place at the main offices of the Company on the day on which the
Company consummates the pending acquisition of Xxxxx North America, Inc. on
substantially the terms set forth in the Agreement for Purchase and Sale of
Assets by and among Xxxxx North America, Inc., Vista DMS, Inc. and the Company,
dated July 28, 1999, and simultaneously with such acquisition, or at such other
time, date, and place as are mutually agreeable to the Company and each
Purchaser. The date of the Second Closing is hereinafter referred to as the
"Second Closing Date." At the Second Closing, the Company shall deliver to each
Purchaser a certificate registered in such Purchaser's name for the number of
Shares being acquired by such Purchaser against payment to the Company of the
Purchase Price therefor, by wire transfer or other method acceptable to the
Company, or, at the election of the Purchaser, by the cancellation of
outstanding indebtedness to such Purchaser. If at the Second Closing any of the
conditions specified in Section 5 of this Agreement shall not have been
fulfilled, each Purchaser shall, at its election, be relieved of all of its
obligations under this Agreement with respect to the Second Closing without
thereby waiving any other right such Purchaser may have by reason of such
failure or such non-fulfillment.
2.3. Rights of the Purchasers Upon Subsequent Sales of Certain
Securities. The Purchasers shall be entitled to any and all additional rights
and benefits provided by the Company to any purchaser of any equity security
proposed to have rights, preferences or privileges pari passu with or senior to
the Series A Preferred Stock which is issued on or before December 31, 1999,
whether Series A-1 Preferred Stock or otherwise (the "Subsequent Equity").
Without limiting the foregoing, the terms of the Series A Preferred Stock as set
forth in the Certificate of Designation shall, as provided in the Certificate of
Designation, and without further action by the Company or the Purchasers, be
amended simultaneously with the authorization of the Subsequent Equity to
provide for rights, preferences and privileges in all respects equal to and pari
passu with such Subsequent Equity. In consideration for, and contingent upon
receiving such additional rights, each Purchaser, by executing and delivering
this Agreement, consents to and waives any voting rights conferred by the
Certificate of Designation upon such Purchaser as a holder of Series A Preferred
Stock with respect to the authorization, designation and issuance of the
Subsequent Equity. The Company shall use its best efforts to ensure that the
issuance and sale of the Subsequent Equity is on the terms of this Preferred
Stock Purchase Agreement by causing the purchaser(s) of the Subsequent Equity to
become parties hereto by executing a counterpart hereof, which may also provide
for amendments consistent with the first sentence of this section 2.3.
3. Representations and Warranties of the Company.
Except as disclosed in the Disclosure Schedule attached hereto as Exhibit
C, the Company hereby represents and warrants to each Purchaser as follows:
3.1. Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, has all requisite corporate power to own, lease and operate its
property and to carry on its business as now being conducted and as proposed to
be conducted, and is duly qualified to transact business and is in good standing
as a foreign corporation in each jurisdiction in which the failure to be so
qualified would have a materially adverse effect on the Company's business,
properties, assets, or condition (financial or otherwise) taken as a whole (a
"Material Adverse Effect").
3.2. Authority. The Company has all requisite corporate power and
authority to enter into this Agreement, the Investor Rights Agreement and any
ancillary agreements (the "Other Transaction Documents"), and to consummate the
transaction contemplated hereby. The execution and delivery of this Agreement
and the Other Transaction Documents and the consummation of the transactions
contemplated hereby and thereby, including without limitation the issuance of
the Shares, have been duly authorized by the Board of Directors of the Company
and the holders of the Series C Preferred, Series D Preferred and the Series F
Preferred, which is all the necessary corporate action on the part of the
Company. This Agreement has been duly executed and delivered by the Company and
constitutes the valid and binding obligation of the Company, enforceable in
accordance with its terms, except as such enforceability may be limited by
bankruptcy laws and other similar laws affecting creditors' rights generally and
general principles of equity.
3.3. Compliance. The Company is not in violation of any of the
provisions of its Certificate of Incorporation or By-laws. The Company is not in
violation of any term of any agreement, instrument, judgment, decree, order,
law, statute, rule, authorization or government regulation applicable to the
Company or any of its assets or to which the Company is a party or by which it
or any of its assets is bound, which violation has had or could reasonably be
expected to have a Material Adverse Effect.
3.4. Capital Structure.
(a) The authorized capital stock of the Company consists of
43,000,000 shares of Common Stock and 2,000,000 shares of Preferred Stock, each
with $0.001 par value, and of which 200,000 shares are designated "Series B
Convertible Preferred Stock" (the "Series B Preferred"), 670,000 shares are
designated "Series C Convertible Preferred Stock" (the "Series C Preferred"),
240,000 shares are designated "Series D Convertible Preferred Stock" (the
"Series D Preferred"), 2,500 shares are designated "Series E Convertible
Preferred Stock" (the "Series E Preferred"), and 2,500 shares are designated
"Series F Convertible Preferred Stock" (the "Series F Preferred"). As of August
20, 1999, (i) there were issued and outstanding (A) 19,665,799 shares of Common
Stock, (B) 149,603 shares of Series C Preferred (which are convertible into an
aggregate of 792,372 shares of Common Stock), (C) 18,712 shares of Series D
Preferred (which are convertible into an aggregate of 99,108 shares of Common
Stock), and (D) 2,500 shares of Series F Preferred (which are convertible into
an aggregate of 392,465 shares of Common Stock), and (ii) 2,239,326 additional
shares of Common Stock were reserved for issuance pursuant to outstanding stock
options and warrants (including shares of Common Stock issuable upon conversion
of Preferred Stock issuable upon exercise of warrants), except for the mandatory
conversion of all remaining shares of the Company's Series C Preferred Stock and
Series D Preferred Stock which shall take place on or before September 9, 1999.
No material change in such capitalization has occurred between August 20, 1999
and the date of this Agreement. The Company has previously provided the
Purchasers with the names of the record holders of such outstanding shares of
Preferred Stock and warrants. All the outstanding shares of Common and Preferred
Stock are validly issued and are fully paid and nonassessable. No shares of the
Company's Common or Preferred Stock are held in the treasury of the Company. All
shares of Common Stock subject to issuance as specified above, upon such
issuance on the terms and conditions specified in the instruments pursuant to
which they are issuable, will be duly authorized, validly issued, fully paid and
nonassessable and are subject to no preemptive rights or rights of first refusal
created by statute, the charter documents of the Company or any agreement to
which the Company is a party or by which it is bound.
(b) Except as set forth in this Section 3.4 or as reserved for
future grants of options under the stock option plan(s) (collectively, "Company
Option Plans") described in the SEC Reports (as defined in Section 3.8(a)),
there are (a) no equity securities of any class of the Company, or any security
exchangeable or convertible into or exercisable for such equity securities,
issued, reserved for issuance or outstanding and (b) no outstanding
subscriptions, options, warrants, puts, calls, rights or other commitments or
agreements of any character to which the Company is a party or by which it is
bound obligating the Company to issue, deliver, sell, repurchase or redeem or
cause to be issued, delivered, sold, repurchased or redeemed any equity
securities of the Company or obligating the Company to grant, extend, accelerate
the vesting of, change the exercise price of or otherwise amend or enter into
any such option, warrant, call, right, commitment or agreement.
3.5. Valid Issuance of Preferred and Common Stock. When issued in
accordance with the terms of this Agreement, the Shares will be duly authorized,
validly issued, fully paid, and nonassessable. Neither the Shares nor the shares
of common stock issuable upon conversion of the Shares ("Conversion Shares")
will be subject to preemptive rights or rights of first refusal created by
statute, the charter documents of the Company or any agreement to which the
Company is a party or by which it is bound, and, based in part on the
representations and warranties of the Purchasers set forth in Section 4, the
Shares and the Conversion Shares will be issued in compliance with the
registration requirements of the Securities Act of 1933, as amended (the "Act")
or a valid exemption therefrom. The Conversion Shares have been duly and validly
reserved for issuance and, upon issuance in accordance with the terms of the
Series A Preferred Stock, as set forth in the Certificate of Designation, or the
terms of the Series A-1 Preferred Stock, as set forth in the Certificate of
Designation, as the case may be, will be duly and validly issued, fully paid and
nonassessable.
3.6. No Conflict. The execution and delivery by the Company of this
Agreement and the Other Transaction Documents and the consummation of the
transactions contemplated hereby and thereby will not (a) conflict with, or
result in any violation or breach of any provision of the Certificate of
Incorporation or By-laws of the Company, (b) result in any violation or breach
of, or constitute (with or without notice or lapse of time, or both) a default
under, or give rise to a right of termination, cancellation or acceleration of
any material obligation or loss of any material benefit under, any note,
mortgage, indenture, lease, contract or other agreement, instrument or
obligation to which the Company is a party or by which the Company or any of its
properties or assets may be bound, or (c) conflict with or violate any permit,
concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to the Company or any of its properties
or assets, except in the case of (b) and (c) for any such conflicts, violations,
defaults, terminations, cancellations or accelerations which would not,
individually or in the aggregate, have a Material Adverse Effect.
3.7. Required Filings and Consents. No consent, approval, order or
authorization of, or registration, declaration or filing with, any governmental
entity is required by or with respect to the Company in connection with the
execution and delivery of this Agreement and the Other Transaction Documents or
the consummation of the transactions contemplated hereby or thereby, except for
(a) such consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable federal and state
securities laws and the laws of any foreign country, all of which have been made
or obtained or will be made or obtained within the time required and (b) such
other consents, authorizations, filings, approvals and registrations which, if
not obtained or made, would not prevent or alter or delay the transaction
contemplated by this Agreement and would not have a Material Adverse Effect.
3.8. SEC Filings. The Company has timely filed and made available to
the Purchaser all forms, reports and documents required to be filed by the
Company with the Securities and Exchange Commission (the "SEC") since December
31, 1997, (collectively, the "SEC Reports"). Each SEC Report (a) at the time
filed, complied in all material respects with the applicable requirements of the
Act and the Securities Exchange Act of 1934, as amended, as the case may be, and
(b) did not at the time it was filed (and if amended or superseded by a filing
prior to the date of this Agreement, then on the date of such filing) contain
any untrue statement of a material fact or omit to state a material fact
required to be stated in such SEC Report or necessary in order to make the
statements in such SEC Report, in the light of the circumstances under which
they were made, not misleading.
3.9. Financial Statements. Each of the financial statements
(including, in each case, any related notes) contained in the SEC Reports
complied as to form in all material respects with the applicable published rules
and regulations of the SEC with respect thereto, was prepared in accordance with
generally accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved (except as may be indicated in the notes to such
financial statements or, in the case of unaudited statements, as permitted by
Form 10-QSB promulgated by the SEC) and presented fairly, in all material
respects, the financial position of the Company as at the respective dates and
the results of its operations and cash flows for the periods indicated, except
that the unaudited interim financial statements were or are subject to normal
and recurring year-end adjustments which were not or are not expected to be
material in amount.
3.10. No Material Adverse Change. As of June 30, 1999, the Company
had no material liability or obligation of a type that was not required by GAAP
to be disclosed in the balance sheet included in the Company's Form 10-QSB for
the quarter ended on such date, and since June 30, 1999, (a) the Company has
incurred no such liability or obligation other than liabilities or obligations
occurring in the ordinary course of business, and (b) there has been no change
in the condition (financial or otherwise) or the assets, liabilities, properties
or business of the Company that has had or that could reasonably be foreseen to
have a Material Adverse Effect (a "Material Adverse Change").
3.11. No Undisclosed Events or Circumstances. Except as set forth on
the Disclosure Schedule, no material event or circumstance has occurred or
exists with respect to the Company or its businesses, properties, prospects,
operations or financial condition, of which, under applicable law, rule or
regulation, public disclosure is reasonably likely to be required in a
subsequent form, report, or other document to be filed with the SEC or other
announcement by the Company but which has not been so publicly disclosed or
announced.
3.12. Litigation. Except as set forth in the Company's SEC Reports,
there is no action, suit, proceeding or claim or governmental inquiry pending
or, to the best knowledge of the Company, threatened against or involving the
Company or otherwise affecting any of its properties or assets that, (a) if
adversely decided, would be reasonably likely to have a Material Adverse Effect,
or (b) may call into question the validity, or materially hinder the
enforceability or performance, of this Agreement or any of the Other Transaction
Documents, nor, to the best knowledge of the Company, has there occurred any
event or does there exist any condition on the basis of which any such action,
suit, proceeding, inquiry or investigation might properly be instituted.
3.13. Intellectual Property. The Company owns or has sufficient
rights to use all of the licenses, patents, patent applications, trademarks,
trade names, service marks, copyrights, computer software programs or
applications (in both source and object code form), applications and
registrations for any of the foregoing (the "Intellectual Property"), which are
necessary to enable the Company to conduct its business in the manner in which
such business has been and is being conducted. Except as set forth in the
Disclosure Schedule, to the knowledge of the Company: (a) all patents,
trademarks, service marks and copyrights held by the Company are valid,
enforceable and subsisting; (b) no Intellectual Property nor the products and
services offered by the Company which incorporate the Intellectual Property of
the Company infringes, misappropriates or conflicts with any intellectual
property owned or used by any other person; (c) no other person is infringing,
misappropriating or making any unlawful or unauthorized use of, and (d) no
intellectual property owned or used by any other person infringes or conflicts
with, any of the Company's Intellectual Property.
3.14. Year 2000 Compliance. Each significant system, comprised of
software, hardware, databases, or embedded control systems (microprocessor
controlled, robotic or other devices) (each a "System"), that constitutes any
part of, or which is under control of the Company and is used in connection with
the use, operation or enjoyment of any material tangible or intangible asset or
real property of the Company (a) accurately processes date/time data (including,
but not limited to, calculating, comparing and sequencing) from, into, and
between the twentieth and twenty-first centuries, and the years 1999 and 2000
and leap year calculations, to the extent that other systems properly exchange
date/time data with the Company's systems and (b) will not be adversely affected
by the advent of the year 2000 or 2001, the advent of the twenty-first century
or the transition from the twentieth century through the year 2000 and into the
twenty-first century (collectively, items (a) and (b) are referred to herein as
"Year 2000 Compliant"). To the Company's knowledge after reasonable inquiry, no
System that is material to the business, finances, or operations of the Company
receives data from or communicates with any component or system external to
itself (whether or not such external component or system is the Company's or any
third party's) that is not itself Year 2000 Compliant excepting the parts of the
external component or system within which noncompliance will have no effect on
the data or communications sent to the Company, nor on the Systems of the
Company. All licenses for the use of any System-related software, hardware,
databases or embedded controls under the Company's control are certified by the
manufacturer to be Year 2000 Compliant and to contain the capabilities required
to enable them to be Year 2000 Compliant within the Company's computer systems
(hardware and software), or the licenses permit the company or a third party to
make all modifications, bypasses, de-bugging, work-arounds, repairs,
replacements, conversions or corrections necessary to permit the Systems to
operate compatibly, in conformance with their respective specifications, and to
be Year 2000 Compliant. Except as disclosed in the SEC Reports, the Company has
no reason to believe that it may incur material expenses or suffer a Material
Adverse Change arising from or relating to the failure of any of its Systems to
be Year 2000 Compliant.
3.15. Material Contracts. All material contracts, arrangements,
plans, agreements, leases, licenses, franchises, permits, indentures,
authorizations, instruments and other commitments to which the Company is a
party and which are material to its business (a) have been disclosed in the SEC
Reports to the extent required in accordance with the rules of the SEC and (b)
are valid and in full force and effect. The Company has not, nor, to the
knowledge of the Company, has any other party thereto, breached any provisions
of, nor is in default under the terms thereof, except for such breaches and
defaults which would not, individually or in the aggregate, have a Material
Adverse Effect.
3.16. Registration Rights. The Company is presently not under any
obligation to file any registration statement under the Securities Act relating
to any securities of the Company or to have any securities of the Company
included in any registration statement filed or to be filed with the SEC.
3.17. Full Disclosure. No information contained in this Agreement,
the Other Transaction Documents, or any written statement furnished by or on
behalf of the Company pursuant to the terms of this Agreement contains any
untrue statement of a material fact or omits to state a material fact necessary
to make the statements contained herein or therein not misleading in light of
the circumstances under which made.
4. Representations and Warranties of the Purchaser.
As an inducement to the Company to sell the Shares, each Purchaser,
severally and not jointly, hereby represents and warrants to the Company that:
4.1. Authorization. Such Purchaser has full power and authority to
enter into this Agreement and the Other Transaction Documents. This Agreement
and the Other Transaction Documents each constitute the valid and legally
binding obligation of such Purchaser, enforceable in accordance with its
respective terms, except as such enforceability may be limited by bankruptcy
laws and other similar laws affecting creditors' rights generally and general
principles of equity.
4.2. Purchase Entirely for Own Account. This Agreement is made with
such Purchaser in reliance upon such Purchaser's representation to the Company,
which by such Purchaser's execution of this Agreement, such Purchaser hereby
confirms, that the Shares to be acquired by such Purchaser will be acquired for
investment for the Purchaser's own account, not as a nominee or agent, and not
with a view to the resale or distribution of any part thereof in violation of
the Act, and such Purchaser has no present intention of selling, granting any
participation in, or otherwise distributing the same in violation of the Act. By
executing this Agreement, each Purchaser further represents that such Purchaser
does not presently have any contract, undertaking, agreement or arrangement with
any person to sell, transfer or grant participation to such person or to any
third person, with respect to any of the Shares.
4.3. Disclosure of Information. Such Purchaser has had an
opportunity to discuss the Company's business, management, financial affairs and
the terms and conditions of the offering of the Shares with the Company's
management and has had an opportunity to review the Company's facilities. Such
Purchaser understands that such discussions, as well as any written information
delivered by the Company to such Purchaser, were intended to describe the
aspects of the Company's business which it believes to be material. The
foregoing, however, does not limit or modify the representations and warranties
of the Company in Section 3 of this Agreement or the right of such Purchaser to
rely thereon.
4.4. Restricted Stock. Such Purchaser understands that the issuance
of the Shares has not been, and will not be, registered under the Act, by reason
of a specific exemption from the registration provisions of the Act which
depends upon, among other things, the bona fide nature of the investment intent
and the accuracy of such Purchaser's representations as expressed herein. Such
Purchaser understands that the Shares are "restricted securities" under
applicable U.S. federal and state securities laws and that, pursuant to these
laws, each Purchaser must hold the Shares indefinitely unless their resale is
registered with the SEC and qualified by applicable state authorities, or an
exemption from such registration and qualification requirements is available.
Such Purchaser acknowledges that, except as set forth in the Investor Rights
Agreement, the Company has no obligation to register or qualify the resale of
the Shares. Such Purchaser further acknowledges that if an exemption from
registration or qualification is available, it may be conditioned on various
requirements including, but not limited to, the time and manner of sale, the
holding period for the Shares, and on requirements relating to the Company which
are outside of such Purchaser's control, and which (except as provided in the
Investor Rights Agreement) the Company is under no obligation and may not be
able to satisfy.
4.5. Legends. Such Purchaser understands that each certificate
evidencing any of the Shares will bear one or all of the following legends:
(a) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), AND HAVE BEEN ACQUIRED
FOR INVESTMENT AND NOT WITH A VIEW TO , OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF IN VIOLATION OF THE ACT. NO SUCH SALE OR DISTRIBUTION MAY
BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED UNDER THE ACT."
(b) Any legend required by the Blue Sky laws of any state to the
extent such laws are applicable to the shares represented by the certificate so
legended.
(c) A legend referring to the applicability of this Agreement and
providing that the holder may obtain a copy hereof free of charge at the
principal offices of the Company.
4.6. Accredited Investor. Such Purchaser is an accredited investor
as defined in Rule 501(a) of Regulation D promulgated under the Act.
5. Conditions to the Obligations of the Purchasers. The obligations of
each of the Purchasers under this Agreement in connection with each Closing are
subject to the fulfillment, or the waiver by such Purchaser, of the conditions
set forth in this Section 5 on or before the respective Closing Date.
5.1. Accuracy of Representations and Warranties. Each representation
and warranty of the Company contained in this Agreement shall be true in all
material respects on and as of the respective Closing Date with the same effect
as though such representation and warranty had been made on and as of that date.
5.2. Performance of Obligations. The Company shall have performed
and complied in all material respects with all agreements and conditions
contained in this Agreement required to be performed or complied with by the
Company prior to or at the respective Closing.
5.3. No Material Adverse Change. There shall have been no Material
Adverse Change since the date hereof.
5.4. Certificate of Designation.
(a) Before the First Closing, the Company shall have delivered to
the Purchasers a copy of the Certificate of Designation, duly adopted by the
directors of the Company, with evidence satisfactory to the Purchasers that such
Certificate of Designation has been duly filed with the Secretary of State of
the State of Delaware.
(b) Before the Second Closing, the Company shall have delivered to
the Purchasers a copy of the Certificate of Designation or other amendment to
the Company's Certificate of Incorporation authorizing the Series A-1 Preferred
Stock, duly adopted by the directors of the Company, with evidence satisfactory
to the Purchasers that such Certificate of Designation or other amendment to the
Certificate of Incorporation has been duly filed with the Secretary of State of
the State of Delaware.
5.5. Investor Rights Agreement. The Company shall have executed and
delivered the Investor Rights Agreement substantially in the form attached
hereto as Exhibit D.
5.6. Opinion of Counsel. The Purchasers shall have received an
opinion from Xxxx Xxxx Xxxx & Freidenrich LLP, counsel to the Company, dated as
of the respective Closing Date, addressed to such Purchasers, and in
substantially the form attached hereto as Exhibit E.
5.7. Certificates. The Company shall have delivered to the
Purchasers:
(a) a certificate of the Secretary of State of the State of Delaware
as to the Company's corporate good standing, dated as of the most recent
practicable date;
(b) a certificate of the President of the Company dated as of the
respective Closing Date as to the matters covered in Sections 5.1 and 5.2; and
(c) a certificate of the Secretary of the Company dated as of the
respective Closing Date, certifying as to (i) the incumbency of officers of the
Company, (ii) a copy of the Certificate of Incorporation of the Company
certified by the Secretary of State of the State of Delaware, as in effect
immediately prior to the respective Closing, (iii) a copy of the Bylaws of the
Company, as in effect on and as of the respective Closing Date, and (iv) a copy
of the resolutions of the Board of Directors and stockholders of the Company
authorizing and approving the Certificate of Designation (in the case of the
First Closing) or the applicable amendment to the Certificate of Incorporation
(in the case of the Second Closing) and the Company's execution, delivery and
performance of this Agreement, the Other Transaction Documents and the
transactions contemplated hereby and thereby.
5.8. Blue Sky Approvals. The Company shall have received all
requisite approvals, if any, of the securities authorities of each jurisdiction
in which such approval is required, and such approvals shall be in full force
and effect on the respective Closing Date.
5.9. Other Matters. All corporate and other proceedings in
connection with the transactions contemplated at the respective Closing by this
Agreement, and all documents and instruments incident to such transactions,
shall be reasonably satisfactory in substance and form to the Purchasers and
their counsel, and the Purchasers and their counsel shall have received all such
counterpart originals or certified or other copies of such documents as they may
reasonably request.
6. Conditions to the Obligations of the Company. The obligations of the
Company under this Agreement are subject to the fulfillment, or the waiver by
the Company, of the conditions set forth in this Section 6 on or before the
respective Closing Date.
6.1. Accuracy of Representations and Warranties. Each representation
and warranty of the Purchasers contained in this Agreement shall be true in all
material respects on and as of the respective Closing Date with the same effect
as though such representation and warranty had been made on and as of that date.
6.2. Performance of Obligations. The Purchasers shall have performed
and complied in all material respects with all agreements and conditions
contained in this Agreement required to be performed or complied with by the
Purchasers prior to or at the respective Closing.
7. Covenants of the Company.
The Company covenants and agrees with each of the Purchasers that it will
comply with each of the provisions of this Section 7 so long as any of the
shares of Series A Preferred Stock or Series A-1 Preferred Stock are
outstanding:
7.1. Conversion of Preferred Stock. The Company will use its best
efforts to cause all remaining outstanding shares of Series C Preferred, Series
D Preferred, and Series F Preferred to be converted into Common Stock in
accordance with their respective terms as soon as reasonably possible hereafter.
7.2. Expenses. The Company shall pay all reasonable expenses
incurred by Century in connection with the preparation of this Agreement, the
Other Transaction Documents, and the issuance and sale of the Shares, including
specifically the reasonable fees and costs of Xxxxxx & Dodge LLP, counsel to
Century, that are supported by appropriate documentation provided to the
Company. Such payments may be made directly by Century by deducting such amount
from the amount payable to the Company pursuant to Section 2 of this Agreement.
In addition, the Company shall bear its own legal and other expenses in
connection with the transactions contemplated by this Agreement.
7.3. Reservation of Conversion Stock. The Company shall at all times
reserve and keep available out of its authorized but unissued shares of Common
Stock, for the purpose of effecting the conversion of the Series A Preferred
Stock and the Series A-1 Preferred Stock the number of its duly authorized
shares of Common Stock as shall be sufficient to effect the conversion of such
Preferred Stock from time to time outstanding or otherwise to comply with the
terms of this Agreement. If at any time the number of authorized but unissued
shares of Common Stock shall not be sufficient to effect the conversion of such
Preferred Stock or otherwise to comply with the terms of this Agreement, the
Company will immediately take such corporate action as may be necessary to
increase its authorized but unissued shares of Common Stock to such number of
shares as shall be sufficient for such purposes.
7.4. Observer Rights. Each Purchaser acquiring at least $10,000,000
of Shares shall have the right from time to time to designate a representative
(the "Board Observer") who shall be entitled to attend all meetings of the
Company's Board of Directors and all committees thereof, as a non-voting
observer. Each Board Observer shall be entitled to notice of all meetings of the
Board of Directors and to receive copies of all minutes, written consents, and
other materials provided to the directors in written, graphic, or electronic
form as and when distributed to the directors. Failure to give appropriate
notice to each Board Observer shall render the respective meeting of the Board
of Directors and all actions taken or purported to have been taken thereat
invalid. The Company shall promptly (but in any event within five business days)
after submission of vouchers or other documentation therefor, reimburse each
member of the Board of Directors and the Board Observer for all reasonable and
documented out-of-pocket expenditures relating to or associated with each such
person's attendance at meetings of the Board of Directors and committees
thereof. Notwithstanding the foregoing, the Company shall be entitled to exclude
any Board Observer from any meeting or portion of a meeting of the Company's
Board of Directors to the extent that such exclusion is necessary to preserve
the Company's attorney-client privilege. Each Board Observer, as a condition to
his attendance at meetings of the Company's Board of Directors, shall agree to
such confidentiality and non-disclosure provisions as are reasonable and
customary.
7.5. Information Rights. The Company will furnish to each Purchaser
holding any Shares the following reports:
(a) as soon as available and in any event within ninety (90) days
after the end of each fiscal year of the Company, an income statement for such
fiscal year, a balance sheet of the Company and statement of stockholders'
equity as of the end of such year, such year-end financial reports to be in
reasonable detail, prepared in accordance with GAAP, and audited and certified
by such independent public accountants of nationally recognized standing
selected by the Company and approved by the Investors;
(b) as soon as available and in any event within sixty (60) days
after the end of each quarter, quarterly financial statements of the Company
together with an analysis of the principal financial officer of the Company
comparing the quarterly results with the applicable budget;
(c) as soon as available and in any event within thirty (30) days
after the end of each month, an unaudited income statement and schedule as to
the sources and application of funds and the balance sheet as of the end of such
month;
(d) as soon as available and in any event no later than the
beginning of each fiscal year, an operating plan and budget, prepared on a
monthly basis, for such fiscal year, as well as any revisions thereto as and
when prepared; and
(e) such other financial information of the Company as the
Purchasers may reasonably request, including without limitation certificates of
the principal financial officer of the Company concerning compliance with the
covenants of the Company under this Section 7.5.
7.6. Inspection Rights. At any time during normal business hours and
upon reasonable prior notice to the Company, any Purchaser or its designated
representatives or agents may (a) visit and inspect the premises and any of the
properties of the Company including its records and books of account (and make
copies thereof and take extracts therefrom), and (b) discuss the affairs,
finances and accounts of the Company with its officers, directors, employees and
accountants, all at the expense of such Purchaser, unless the Company is then in
material breach or default under any provision of the Certificate of
Incorporation or this Agreement, in which case such Purchaser's out-of-pocket
expenses relating to such activities shall be at the expense of the Company.
7.7. Litigation. The Company promptly (and, in any event, not later
than the date of release of such information to the public generally) shall
notify the Purchasers of any litigation or governmental proceeding or
investigation pending (or, to the best knowledge of the Company, threatened)
against the Company or against any officer, director, key employee, or principal
stockholder of the Company, that has had or may have a Materially Adversely
Affect.
7.8. Compliance with Law. The Company shall comply with all
applicable laws in the conduct of its business, including environmental laws,
except where the failure to comply would not be reasonably likely to result in a
Material Adverse Effect.
7.9. Minimum Net Worth. The Company shall, at December 31, 1999,
have a Net Worth (as defined below) greater than or equal to $11,375,000.
Thereafter, the Net Worth of the Company shall be (i) at least $12,512,500 on
December 31, 2000, (ii) at least $13,650,000 on December 31, 2001, and (iii) at
least $14,787,500 on December 31, 2002. For purposes of this Section 7.9, the
Company's Net Worth means, as of any date, the sum (determined on a consolidated
basis if and when the Company has any subsidiaries) computed in accordance with
GAAP, of the following: (a) the sum of capital stock taken at par, capital
surplus and retained earnings as of such date minus (b) treasury stock and any
minority interests in subsidiaries, if any.
7.10. Remedies Upon an Event of Default. Upon the occurrence and
during the continuance of an Event of Default (as defined below), in addition to
any other remedies available at law or in equity, the holders of Shares shall be
entitled to elect two members of the Board of Directors of the Company in
accordance with the provisions contained in the Certificate of Designation. Such
right to elect two members of the Board of Directors will continue until such
time as the condition constituting an Event of Default ceases to exist, at which
time such right will terminate subject to revesting upon the reoccurrence and
continuation of any Event of Default. For purposes of this Section 7.10, an
Event of Default shall be deemed to have occurred if the Company fails to comply
with or breaches any material provision hereof, of the Investor Rights Agreement
or of the Certificate of Designation, and such breach or failure remains uncured
for a period of 30 days after written notice thereof is furnished to the
Company.
7.11. Restated Certificate of Incorporation. At the Second Closing
and upon the sale of any Subsequent Equity, the Company shall file a Restated
Certificate of Incorporation to reflect the adjustments, if any, to the terms of
the Series A Preferred by reason of the creation and issuance of the Series A-1
Preferred Shares or any Subsequent Equity.
8. Miscellaneous.
8.1. Survival of Warranties. Unless otherwise set forth in this
Agreement, the warranties and representations of the Company and each Purchaser
contained in or made pursuant to this Agreement shall survive the execution and
delivery of this Agreement and the Closing for a period of one year following
the date hereof.
8.2. Transfer; Successors and Assigns. The terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
8.3. Governing Law. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
Delaware, without giving effect to principles of conflicts of law.
8.4. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
8.5. Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
8.6. Notices. Any notice required or permitted by this Agreement
shall be in writing and shall be deemed sufficient upon delivery, when delivered
personally or by overnight courier or sent by telegram or facsimile, or
forty-eight (48) hours after being deposited in the U.S. mail, as certified or
registered mail, with postage prepaid, addressed to the party to be notified at
such party's address as set forth on the signature page hereto, or as
subsequently modified by written notice, and
(a) if to the Company, with a copy to:
Xxxx Xxxx Xxxx & Freidenrich LLP
Attn: Xxxxxxx X. Xxxx, Esq.
0000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000;
(b) if to Century Capital Partners II, L.P., with a copy to:
Xxxxxx & Dodge LLP
attn: Xxxxxxx X. Xxxxxxx
Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000;
and
(c) if to The Xxxxxxx Company, with a copy to:
The Xxxxxxx Company
attn: R. Xxxx Xxxxxx
0000 Xxxxx Xxxxxxxx
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
8.7. Finder's Fees. Each party represents that it neither is nor
will be obligated for any finder's fee or commission in connection with this
transaction. Each Purchaser agrees to indemnify and to hold harmless the Company
from any liability for any commission or compensation in the nature of a
finder's fee (and the costs and expenses of defending against such liability or
asserted liability) for which such Purchaser is responsible. The Company agrees
to indemnify and hold harmless each Purchaser from any liability for any
commission or compensation in the nature of a finder's fee (and the costs and
expenses of defending against such liability or asserted liability) for which
the Company or any of its officers, employees or representatives is responsible.
8.8. Attorney's Fees. If any action at law or in equity (including
arbitration) is necessary to enforce or interpret the terms of this Agreement,
the prevailing party shall be entitled to reasonable attorney's fees, costs and
necessary disbursements in addition to any other relief to which such party may
be entitled.
8.9. Amendments and Waivers. Except as otherwise provided herein,
any term of this Agreement may be amended or waived only with the written
consent of the Company and the holders of at least a majority of the Shares and
Conversion Shares (excluding any that have been sold in a public sale). Any
amendment or waiver effected in accordance with this Section 8.9 shall be
binding upon the Purchaser and each transferee of any of the Shares, each future
holder of all the Shares, and the Company.
8.10. Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, then (a) such
provision shall be excluded from this Agreement, (b) the balance of this
Agreement shall be interpreted as if such provision were so excluded and (c) the
balance of this Agreement shall be enforceable in accordance with its terms.
8.11. Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to any party under this Agreement, upon any
breach or default of any other party under this Agreement, shall impair any such
right, power or remedy of such non-breaching or non-defaulting party nor shall
it be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any
breach or default under this Agreement, or any waiver on the part of any party
of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
party, shall be cumulative and not alternative.
8.12. Entire Agreement. This Agreement and the documents referred to
herein constitute the entire agreement between the parties hereto pertaining to
the subject matter hereof, and any and all other written or oral agreements
relating to the subject matter hereof existing between the parties hereto are
expressly canceled.
8.13. Confidentiality. Each party hereto agrees that, except with
the prior written permission of the other party or as required by law, it shall
at all times keep confidential and not divulge, furnish or make accessible to
anyone any confidential information, knowledge or data concerning or relating to
the business or financial affairs of the other parties to which such party has
been or shall become privy by reason of this Agreement, discussions or
negotiations relating to this Agreement, the performance of its obligations
hereunder or the ownership of Stock purchased hereunder. The provisions of this
Section 8.13 shall be in addition to, and not in substitution for, the
provisions of any separate nondisclosure agreement executed by the parties
hereto with respect to the transactions contemplated hereby.
[Remainder of this page intentionally left blank]
The parties have executed this Preferred Stock Purchase Agreement as of
the date first written above.
VISTA INFORMATION SOLUTIONS, INC.
By: /s/ Xxxxxx X. Xxx
-------------------------
Name: Xxxxxx X. Xxx
Title:
Address: Vista Information Solutions, Inc.
0000 Xxxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
PURCHASERS:
CENTURY CAPITAL PARTNERS II, L.P.
By: CCP Capital II, LLC, its General Partner
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------
Xxxxxxx X. Xxxxxxx
Vice-President
Address: Xxx Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
EXHIBIT A
List of Purchasers
FIRST CLOSING
Name and Address No. of Series A Price Per
of Purchaser Preferred Shares SharePurchase Price
Century Capital Partners II, L.P. 102,564 $48.75 $5,000,000.00
Xxx Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
TOTAL $48.75 $5,000,000.00
SECOND CLOSING
Name and Address No. of Series A Price Per
of Purchaser Preferred Shares SharePurchase Price
Century Capital Partners II, L.P. $ $10,000,000.00
Xxx Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
The Xxxxxxx Company $ $ 5,000,000.00
[Other]
TOTAL
