EXHIBIT 10.31
STOCKHOLDERS AGREEMENT
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THIS AGREEMENT is made as of June 9, 1994, by and among Global Imaging
Systems Inc., a Delaware corporation (the "Company") and the stockholders listed
on the Schedule of Holders attached hereto and their permitted assigns and such
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other purchasers of the Class A Common Stock, $.01 par value per share ("Class A
Common"), and the Class B Common Stock, $.01 par value per share ("Class B
Common": collectively the Class A Common and the Class B Common are sometimes
collectively referred to as the "Common Stock"), of the Company who may become
parties hereto from time to time and their permitted assigns (collectively
referred to as the "Stockholders" and individually as a "Stockholder").
Capitalized terms used herein are defined in paragraph 7 hereof.
The Company and the Stockholders desire to enter into this Agreement
for the purposes, among others, of (i) establishing the composition of the
Company's Board of Directors (the "Board"), (ii) assuring continuity in the
management and ownership of the Company and (iii) limiting the manner and terms
by which the Stockholders' Common Stock may be transferred.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties to this Agreement hereby agree as
follows:
1. BOARD OF DIRECTORS.
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(a) From and after the Closing (as defined in the Purchase
Agreement) and until the provisions of this paragraph 1 cease to be effective,
each Stockholder shall vote all of his or its Common Stock and any other voting
securities of the Company over which such Stockholder has voting control and
shall take all other necessary or desirable actions within his or its control
(whether in such Stockholder's capacity as a stockholder, director, member of a
board committee or officer of the Company or otherwise, and including, without
limitation, attendance at meetings in person or by proxy for purposes of
obtaining a quorum and execution of written consents in lieu of meetings), and
the Company shall take all necessary and desirable actions within its control
(including, without limitation, calling special board and stockholder meetings),
so that:
(i) the authorized number of directors on the Board shall
be established at four (4) directors;
(ii) the following persons shall be elected to the Board:
(A) three representatives designated by GTCR, so
long as GTCR remains a Qualified Holder, and
(B) the Chief Executive Officer of the Company.
(iii) the composition of the board of directions of each of
the Company's subsidiaries (a "Sub Board") shall be the same as that
of the Board, unless a different composition is approved by at least
75% of the members of the Board;
(iv) the removal from the Board or a Sub Board (with or
without cause) of any representative designated hereunder shall be
effective only upon the written request of the party entitled to
designate such representative pursuant to paragraph 1(a)(ii) above;
provided that if GTCR ceases to be a Qualified Holder, any directors
designated by GTCR may be removed by vote of the Stockholders holding
a majority of the Stockholder Shares; and
(v) in the event that any representative designated
pursuant to paragraph 1(a)(ii) for any reason ceases to serve as
a member of the Board or a Sub Board during his term of office (other
than a removal described in the proviso set forth in 1(a)(iv) above),
the resulting vacancy on the Board or a Sub Board shall be filled by a
representative designated pursuant to paragraph 1(a)(ii), and, in the
case of GTCR ceasing to be a Qualified Holder, any resulting vacancy
shall be filled by the Stockholders, determined by a vote of the
Stockholders holding a majority of the Stockholder Shares then
outstanding; and
(vi) in the event that GTCR elects not to designate any of
the directors which it is entitled to designate in accordance with
paragraph 1(a)(ii) above, the Stockholders agree not to vote to fill
such vacancy other than with an individual designated by GTCR, as
provided in paragraph 1(a)(ii).
(b) The Company shall pay the reasonable out-of-pocket expenses
incurred by each director in connection with attending the meetings of the Board
or a Sub Board or discharging any of such director's duties as a director of the
Company or a Sub Board.
(c) The provisions of this paragraph 1 shall terminate
automatically and be of no further force and effect upon the first to occur of
(i) the tenth anniversary of the date hereof unless extended by the parties
hereto in accordance with Section 218 of the Delaware General Corporation Law or
(ii) a Qualified Public Offering.
2. RESTRICTIONS ON TRANSFER OF STOCKHOLDER SHARES.
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(a) TRANSFER OF STOCKHOLDER SHARES. No Stockholder shall sell,
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transfer, assign, pledge or otherwise dispose of (a "Transfer") any interest in
any Stockholder Shares except pursuant to the provisions of this paragraph 2 or
pursuant to a Public Sale. Each Stockholder agrees not to consummate any
Transfer (other than a Public Sale) until 30 days
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after the later of the delivery to the Company and the other Stockholders of
such Stockholder's Offer Notice or Sale Notice (if any), unless the parties to
the Transfer have been finally determined pursuant to this paragraph 2 prior to
the expiration of such 30-day period (the "Election Period").
(b) FIRST OFFER RIGHT. At least 30 days prior to making
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any Transfer of any Stockholder Shares (other than a Public Sale), the
transferring Stockholder (the "Transferring Stockholder") shall deliver a
written notice (the "Offer Notice") to the Company and the other Stockholders
(the "Other Stockholders"). The Offer Notice shall disclose in reasonable detail
the proposed number of Stockholder Shares to be transferred and the proposed
terms (including price) and conditions of the Transfer (the "Minimum Sale
Terms"). First, the Company may elect to purchase all (but not less than all) of
the Stockholder Shares specified in the Offer Notice at the price and on the
terms specified therein by delivering written notice of such election to the
Transferring Stockholders and the Other Stockholders as soon as practical but in
any event within ten days after the delivery of the Offer Notice. If the Company
has not elected to purchase all of the Stockholder Shares within such ten-day
period, the Other Stockholders may elect to purchase all (but not less than all)
of such Stockholder Shares at the price and on the terms specified in the Offer
Notice by delivering written notice of such election to the Transferring
Stockholder as soon as practical, but in any event within 30 days after delivery
of the Offer Notice. If the Other Stockholders have in the aggregate elected to
purchase more than the number of Stockholder Shares being offered by the
Transferring Stockholder, the shares shall be allocated among the Other
Stockholders electing to purchase shares according to the ratio of each such
Stockholders' Pro Rata Shares. If the Company or any Other Stockholders have
elected to purchase Stockholder Shares from the Transferring Stockholder, the
transfer of such shares shall be consummated as soon as practical after the
delivery of the election notices, but in any event within 15 days after the
expiration of the Election Period. If the Company and the Other Stockholders
have not elected to purchase all of the Stockholder Shares being offered, the
Transferring Stockholder may, within 120 days after the expiration of the
Election Period (the "Authorized Sale Period") and subject to the provisions of
subparagraph (c) below, transfer such Stockholder Shares to one or more third
parties at a price no less than the price per share specified in any Offer
Notice and on other terms no more favorable to the transferees than offered to
the Company and the Other Stockholders in the Offer Notice. The purchase price
specified in any Offer Notice shall be payable solely in cash at the closing of
the transaction or in installments over time, and no Stockholder Shares may be
pledged without the prior written consent of all Qualified Holders, which
consent may be withheld in their sole discretion. Each Stockholder's "Pro Rata
Share" shall be based upon such Stockholder's ownership percentage of all then
outstanding Stockholder Shares. For purposes of this definition, all outstanding
shares of Class A Common shall be treated as being converted into ten percent
(10%) of the outstanding number of shares of Class B Common outstanding
immediately following such conversion.
(c) PARTICIPATION RIGHTS. At least 30 days prior to any
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Significant Transfer of Stockholder Shares (other than a Public Sale or a
Transfer pursuant to paragraph 2(b)), the Stockholder making such Significant
Transfer (the "Transferring Stockholder") shall deliver a written notice (the
"Sale Notice") to the Company and the other Stockholders who hold Stockholder
Shares (the "Other Stockholders"), specifying in reasonable detail the identity
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of the prospective transferee(s), the number and class of Stockholders Shares
being transferred and the terms and conditions of the Significant Transfer. The
Other Stockholders may elect to participate in the contemplated Significant
Transfer by delivering written notice to the Transferring Stockholder within 30
days after delivery of the Sale Notice. If any Other Stockholders have elected
to participate in such Significant Transfer, the Transferring Stockholder and
such Other Stockholders shall be entitled to sell in the contemplated
Significant Transfer, at the same price and on the same terms (subject to the
provisions of paragraph 2(d) below), a number of Stockholder Shares equal to the
product of (i) the quotient determined by dividing the percentage of Stockholder
Shares owned by such person by the aggregate percentage of Stockholder Shares
owned by the Transferring Stockholder and the Other Stockholders participating
in such sale and (ii) the number of Stockholder Shares to be sold in the
contemplated Significant Transfer. For purposes of this calculation, all shares
of Class A Common shall be treated as if converted into ten percent (10%) of the
outstanding number of shares of Class B Common outstanding immediately following
such conversion.
For example, if the Sale Notice contemplated a sale of 60
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shares of Class A Common by the Transferring Stockholder,
and if the Transferring Stockholder at such time owns 30% of
all Stockholder Shares and if one Other Stockholder elects
to participate and owns 40 shares of the Class B Common
(representing 20% of all Stockholder Shares), the
Transferring Stockholder would be entitled to sell 36 shares
(30% + 50% x 60 shares) and the Other Stockholder would be
entitled to sell 24 shares (20% + 50% x 60 shares).
Each Stockholder shall use best efforts to obtain the agreement of the
prospective transferee(s) to the participation of the Other Stockholders in any
contemplated Significant Transfer, and each Stockholder shall not transfer any
of its Stockholder Shares to the prospective transferee(s) if the prospective
transferee(s) declines to allow the participation of the Other Stockholders.
(d) TRANSFERS WHILE CLASS A COMMON IS OUTSTANDING. Without
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limiting the generality of the other provisions of this paragraph 2, each
Stockholder hereby agrees that so long as any Class A Common remains
outstanding, the Other Stockholders who hold Class B Common shall not be allowed
to participate in any Significant Transfer by a Class A Common Stockholder
under paragraph 2(c) above unless the consideration paid to the Transferring
Stockholder for his shares of Class A Common exceeds the aggregate Unreturned
Original Cost and Unpaid Yield on such Stockholder Shares; provided, further,
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that in the event that holders of shares of both Class A Common and Class B
Common are entitled to participate in any Significant Transfer of Stockholder
Shares under paragraph 2(c), the price per share paid to each holder of Class A
Common or Class B Common participating in such Significant Transfer shall be
allocated among such classes of Common Stock in a manner determined in good
faith by the Company's Board after taking into account the Unreturned Original
Cost and Unpaid Yield on each share of Class A Common to be transferred and the
relative distribution percentages of each class of Common Stock under Section
4.2.2(iii) of the Company's Certificate of Incorporation.
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(e) PERMITTED TRANSFERS. The restrictions contained in this
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paragraph 2 shall not apply with respect to any Transfer of Stockholder Shares
by any Stockholder (i) in the case of a Stockholder that is an individual,
pursuant to applicable laws of descent and distribution or among such
Stockholder's Family Group, (ii) in the case of a Stockholder that is not an
individual, among its Affiliates (collectively referred to herein as "Permitted
Transferees"), (iii) involving not more than 2% of the total Stockholder Shares
then outstanding (on a fully diluted basis) in one or a series of related
transactions or (iv) referred to or otherwise permitted by the Purchase
Agreement. Notwithstanding the foregoing two sentences, the restrictions
contained in this paragraph 2 shall continue to be applicable to the Stockholder
Shares after any such Transfer and provided further that the transferees of such
Stockholder Shares shall have agreed in writing to be bound by the provisions of
this Agreement affecting the Stockholder Shares so transferred. "Family Group"
means an individual's spouse and descendants (whether natural or adopted) and
any trust solely for the benefit of the individual and/or the individual's
spouse and/or descendants, and any such trust may transfer shares to the
individual and/or members of the individual's immediate family in accordance
with its terms.
(f) TERMINATION OF RESTRICTIONS. The restrictions set forth in
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this paragraph 2 shall continue with respect to each Stockholder Share until the
earlier of (i) the date on which such Stockholder Share has been transferred in
a Public Sale, or (ii) the consummation of a Qualified Public Offering.
3. LEGEND. Each certificate evidencing Shareholder Shares and each
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certificate issued in exchange for or upon the transfer of any Stockholder
Shares (if such shares remain Stockholder Shares as defined herein after such
transfer) shall be stamped or otherwise imprinted with a legend in substantially
the following form:
"The securities represented by this certificate are subject to
a Stockholders Agreement dated as of June ____ 1994, among
the issuer of such securities (the "Company") and certain of
the Company's stockholders. A copy of such Stockholders
Agreement will be furnished without charge by the Company to
the holder hereof upon written request."
The Company shall imprint such legend on certificates evidencing Stockholder
Shares outstanding prior to the date hereof. The legend set forth above shall be
removed from the certificates evidencing any shares which cease to be
Stockholder Shares in accordance with paragraph 6 hereof.
4. TRANSFER. Prior to transferring any Stockholder Shares (other
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than in a Public Sale) to any person or entity, the transferring Stockholder
shall cause the prospective transferee to execute and deliver to the Company and
the other Stockholders a counterpart of this Agreement.
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5. SALE OF THE COMPANY.
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(a) If the Board and all Qualified Holders approved a Sale of
the Company (the "Approved Sale"), the holders of Stockholder Shares will
consent to and raise no objections against the Approved Sale of the Company, and
if the Approved Sale of the Company is structured as a sale of stock, the
holders of Stockholder Shares will agree to sell their Stockholder Shares and
all other equity securities of the Company held by such Stockholder on the terms
and conditions approved by the Board and the Qualified Holders. The holders of
Stockholder Shares will take all necessary and desirable actions in connection
with the consummation of the Approved Sale of the Company.
(b) If, at any time after the fifth anniversary of this
Agreement, (i) a Qualified Holder delivers an Offer Notice to the Other
Stockholders of the type described in paragraph 2(b) above with respect to all
of the Stockholder Shares then held by such Qualified Holder and (ii) the
Company and the Other Stockholders do not elect to purchase all of such
Stockholder Shares prior to the expiration of the Election Period, such
Qualified Holder shall be entitled to give written notice to the Other
Stockholders prior to the expiration of the Authorized Sale Period that such
Qualified Holder intends to seek an Independent Third Party who will purchase
all of the outstanding securities of the Company. If not later than 120 days
after the expiration of the Authorized Sale Period the Qualified Holder
identifies an Independent Third Party that has agreed to consummate prior to the
termination of such 120-day period the purchase of all of the outstanding
securities of the Company, such Qualified Holder shall be entitled to give
written notice to the Other Stockholders that a Sale of the Company shall be
deemed to have been approved in accordance with Section 5(a). In connection with
such Approved Sale, holders of Stockholder Shares will consent to and raise no
objections against the Approved Sale and the holders of Stockholder Shares will
agree to sell their Stockholder Shares and all other equity securities of the
Company held by such Stockholders on terms (including price) and conditions no
less favorable than the Minimum Sale Terms (as defined below). The holders of
Stockholders Shares will take all necessary and desirable actions in connection
with the consummation of the Approved Sale.
(c) The obligations of the holders of Stockholder Shares set
forth in paragraph 5(a) and 5(b) above are subject to the satisfaction of the
following conditions (the "Minimum Sale Terms"): (i) upon the consummation of
the Approved Sale, all holders of the Class A Common will receive for each share
of Class A Common held by such holder an amount equal to the sum of (A) the
Unreturned Original Cost, (B) the Unpaid Yield and (C) its pro rata share of 10%
of all net proceeds payable to the Stockholders from the Approved Sale (after
satisfaction in full of the aggregate Unreturned Original Cost and Unpaid Yield
on each outstanding share of Class A Common), (ii) upon the consummation of the
Approved Sale, all holders of the Class B Common will receive for each share of
Class B Common held by such holder an amount equal to its pro rata share of 90%
of all net proceeds payable to the Stockholders from the Approved Sale (after
satisfaction in full of the aggregate Unreturned Original Cost and Unpaid Yield
on each outstanding share of Class A Common), (iii) upon the consummation of the
Approved Sale, all of the holders of Class A Common will receive the same form
and amount of consideration per share of Class A Common, or if any holders of
Class A Common are given an option as to the form and amount of consideration to
be
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received, all holders will be given the same option, (iv) upon the consummation
of the Approved Sale, all of the holders of Class B Common will receive the same
form and amount of consideration per share of Class B Common, or if any holders
of Class B Common are given an option as to the form and amount of
consideration to be received, all holders will be given the same option; and
(v) all holders of rights to acquire shares of Common Stock will be given an
opportunity to either (A) exercise such rights prior to the consummation of the
Approved Sale and participate in such sale as holders of Common Stock or (b)
upon the consummation of the Approved Sale, receive in exchange for such rights
consideration equal to the amount determined by multiplying (1) the same amount
of consideration per share of Class A Common or Class B Common received by the
holders of such class in connection with the Approved Sale less the exercise
price per share of Common Stock of such rights to acquire Common Stock by (2)
the number of shares of Class A Common or Class B Common represented by such
rights.
(d) If the Company or the holders of the Company's securities
enter into any negotiation or transaction for which Rule 506 of the Securities
Act (or any similar rule then in effect) promulgated by the Securities Exchange
Commission may be available with respect to such negotiation or transaction
(including a merger, consolidation or other reorganization), the holders of
Stockholder Shares will, at the request of the Company, appoint a purchaser
representative (as such term is defined in Rule 501 of the Securities Act)
reasonably acceptable to the Company. If any holder of Stockholder Shares
appoints a purchaser representative designated by the Company, the Company will
pay the fees of such purchaser representative, but if any holder of Stockholder
Shares declines to appoint the purchaser representative designated by the
Company such holder will appoint another purchaser representative (reasonably
acceptable to the Company), and such holder will be responsible for the fees of
the purchaser representative so appointed.
(e) Each Stockholder will bear its pro-rata share (based upon
the amount of money received by each Stockholder for the sale of its shares) of
the costs of any sale of Stockholder Shares pursuant to an Approved Sale to the
extent such costs are incurred for the benefit of all holders of Stockholder
Shares and are not otherwise paid by the Company or the acquiring party. Costs
incurred by a Stockholder on its own behalf will not be considered costs of the
transaction hereunder.
6. STOCKHOLDERS PREEMPTIVE RIGHTS. The Company hereby grants to each
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Stockholder, its successors and Affiliates the right on the terms (including the
limitations contained in paragraph (d) below) set forth below to purchase such
Stockholder's Pro Rata Share of New Securities (as defined in subparagraph (a)
below) which the Company may, after the date hereof, from time to time, propose
to sell and issue for cash or other consideration.
(a) "New Securities" shall mean any authorized but unissued
shares, and any treasury shares, of capital stock of the Company and all rights,
options or warrants to purchase capital stock, and securities of any type
whatsoever that are, or may become, convertible into capital stock; provided,
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however, that the term "New Securities" does not include:
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(i) Common Stock under the Purchase Agreement;
(ii) equity securities issued pursuant to the acquisition
of another corporation or entity by the Company by merger, purchase of
all or substantially all of the assets or other reorganization whereby
the Company shall become the owner of more than 50% of the voting
power of such corporation; provided, however, that such securities,
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together with all other securities sold in reliance under this
subparagraph (ii), do not exceed 20% of any class of the Corporation's
Common Stock;
(iii) equity securities issued to financial institutions
solely as consideration for and in connection with any credit
facilities obtained by the Company;
(iv) equity securities issued (after all shares of New
Stock have been sold pursuant to the Purchase Agreement) in order to
ensure compliance with any of the Corporation's debt instruments or
credit agreements;
(v) equity securities issued in connection with any stock
split, stock dividend or reclassification of Common Stock
distributable on a pro rata basis to all holders of Common Stock; and
(vi) up to 3,267.97 shares of Common Stock (subject to
adjustment from time to time for any stock splits, stock dividends
recombinations, mergers, reclassifications, recapitalizations or any
similar event) sold or issued pursuant to options granted after the
date hereof to any senior management personnel or directors or
pursuant to any employee stock option plan entered into by the
Company and approved by the Board.
(b) In the event the Company proposes to undertake an issuance
of New Securities, it shall give the Stockholders, their successors and/or their
Affiliates written notice of its intention, describing the type of New
Securities, the consideration and the general terms upon which the Company
proposes to issue the same. Each such Person shall have thirty (30) days from
the date of receipt of any such notice to agree to purchase its Pro Rata Share
of such New Securities for the cash or cash equivalent consideration and upon
the general terms specified in the notice by giving written notice to the
Company and stating therein the quantity of New Securities to be purchased. In
the event that any Stockholder, successor or Affiliate elects to purchase less
than its Pro Rata Share of the New Securities so offered, the Pro Rata Share of
such Stockholder, successor or Affiliates not so purchased may be elected to be
purchased within such period by the other Stockholders, their successors or
their Affiliates in such proportion as is agreed by such Stockholders, their
successors or their Affiliates or, failing agreement, in proportion to the
shares of outstanding Class B Common held by each Stockholder, successor or
Affiliate desiring to purchase such New Securities.
(c) In the event a Stockholder, successor or Affiliate fails to
exercise the above rights within said thirty (30) day period, the Company shall
have one hundred twenty
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(120) days thereafter to sell the New Securities respecting which any such
Person's private preemptive right was not exercised, at a cash or cash
equivalent price and upon general terms no more favorable to the purchasers
thereof than specified in the Company's notice. In the event the Company has not
sold the New Securities within said one hundred twenty (120) day period, the
Company shall not thereafter issue or sell any New Securities, without first
offering a portion of such securities to the Stockholders, their successors and
Affiliates as provided above.
(d) The purchase rights granted under this paragraph 6 shall be
exercisable only by a Stockholder and its successors and by an Affiliate if such
Affiliate received at the time of transfer and continues to hold Class B Common
representing at least two percent (2%) of the number of shares of Class B Common
then issued and outstanding.
(e) GTCR and the Company agree not to cause the issuance of any
shares of New Securities prior to the time that GTCR has purchased its full
commitment of New Stock pursuant to the Purchase Agreement unless such issuance
is made as a result of any of the events described in clauses (i) through (vi)
of paragraph 6(a) above.
7. DEFINITIONS.
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"AFFILIATE" means, as to any Person, any other Person, entity or
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investment fund controlling, controlled by or under common control with such
Person and any general partner of such person which is a partnership.
"COMMON STOCK" means collectively, the Company's Class A Common
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and Class B Common.
"GTCR" means Golder, Thoma, Xxxxxxx, Xxxxxx Fund IV Limited
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Partnership and its successors and Affiliates.
"INDEPENDENT THIRD PARTY" means any person who, immediately prior
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to the contemplated transaction, does not own in excess of 5% of the Company's
Common Stock on a fully-diluted basis assuming conversion of the Preferred
Stock into Common Stock (a "5% Owner"), who is not controlling, controlled by or
under common stock with any such 5% Owner and who is not the spouse or
descendent (by birth or adoption) of such 5% Owner or a trust for the benefit of
such 5% Owner and/or such other persons.
"NEW STOCK" shall have the meaning assigned to such term in the
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Purchase Agreement.
"PERMITTED TRANSFEREE" shall have the meaning set forth in
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paragraph 2(e) hereof.
"PERSON" means an individual, a partnership, a corporation, an
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association, a joint stock company, a trust, a joint venture, an unincorporated
organization or a governmental entity or any department, agency or political
subdivision thereof.
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"PRO RATA SHARE" shall mean the ratio of (i) the number of
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shares of Class B Common owned by a Stockholder on such date to (ii) the total
number of shares of Class B Common then outstanding.
"PUBLIC SALE" means any sale of Stockholder Shares to the public
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pursuant to an offering registered under the Securities Act or to the public
through a broker, dealer or market maker pursuant to the provisions of Rule 144
adopted under the Securities Act.
"PURCHASE AGREEMENT" means that certain Equity Purchase
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Agreement of even date herewith among the Company, GTCR and Xxxxxx X. Xxxxxxx,
as amended from time to time.
"QUALIFIED HOLDER" means GTCR and any other Stockholder
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(together with its Affiliates) so long as it owns at least 20% of each class of
the then outstanding Class A Common and Class B Common.
"QUALIFIED PUBLIC OFFERING" means the sale in an underwritten
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public offering registered under the Securities Act of shares of the Company's
Common Stock having an aggregate value of at least $5 million.
"SALE OF THE COMPANY" means the sale of the Company to an
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Independent Third Party or group of Independent Third Parties pursuant to which
such party or parties acquire (i) capital stock of the Company possessing the
voting power under normal circumstances to elect a majority of the Company's
board of directors (whether by merger, consolidation or sale or transfer of the
Company's capital stock) or (ii) all or substantially all of the Company's
assets determined on a consolidated basis.
"SECURITIES ACT" means the Securities Act of 1933, as amended
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from time to time.
"SECURITIES EXCHANGE COMMISSION" means the United States
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Securities and Exchange Commission and any governmental body or agency
succeeding to the functions thereof.
"SIGNIFICANT TRANSFER" shall mean a Transfer in one transaction
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or a series of transactions of more than 10% of the then outstanding Stockholder
Shares by a Qualified Holder.
"STOCKHOLDER SHARES" means (i) any Common Stock purchased or
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otherwise acquired by any Stockholder and (ii) any equity securities issued or
issuable directly or indirectly with respect to the Stock by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization. As to any
particular shares constituting Stockholder Shares, such shares will cease to be
Stockholder Shares when they have been (x) effectively registered under the
Securities Act and disposed of in accordance with the registration statement
covering them or (y) sold to the public
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through a broker, dealer or market maker pursuant to Rule 144 (or any similar
provision then in force) under the Securities Act. For purposes of calculating
any percentage of Stockholder Shares, all outstanding shares of Class A Common
shall be deemed to be converted into 10% of the then outstanding Class B Common.
"UNPAID YIELD" shall have the meaning assigned to such term in
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the Company's Certificate of Incorporation.
"UNRETURNED ORIGINAL COST" shall have the meaning assigned to
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such term in the Company's Certificate of Incorporation.
8. TRANSFERS IN VIOLATION OF AGREEMENT. Any Transfer or attempted
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Transfer of any Stockholder Shares in violation of any provision of this
Agreement shall be void, and the Company shall not record such Transfer on its
books or treat any purported transferee of such Stockholder Shares as the owner
of such shares for any purpose.
9. AMENDMENT AND WAIVER. Except as otherwise provided herein, no
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modification, amendment or waiver of any provision of this Agreement shall be
effective against the Company or the Stockholders unless such modification,
amendment or waiver is approved in writing by the Company, the Qualified
Holders, and the holders of at least 70% of each class of Common Stock then
outstanding. The failure of any party to enforce any of the provisions of this
Agreement shall in no way be construed as a waiver of such provisions and shall
not affect the right of such party thereafter to enforce each and every
provision of this Agreement in accordance with its terms.
10. SEVERABILITY. Whenever possible, each provision of this
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Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
11. ENTIRE AGREEMENT. Except as otherwise expressly set forth
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herein, this document embodies the complete agreement and understanding among
the parties hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way.
12. SUCCESSORS AND ASSIGNS. Except as otherwise provided herein,
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this Agreement shall bind and inure to the benefit of and be enforceable by the
Company and its successors and assigns and the Stockholders and any subsequent
holders of Stockholder Shares and the respective successors and assigns of each
of them, so long as they hold Stockholder Shares.
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13. NEW STOCKHOLDERS. During the term of this Agreement, the Company
----------------
shall cause all purchasers of its Stock to become parties hereto, without the
consent of any Stockholders hereto, by execution and delivery of a counterpart
to this Agreement. All additional shares of Common Stock issued by the Company
to such purchasers shall be deemed to be "Stockholder Shares" for purposes of
this Agreement.
14. COUNTERPARTS. This Agreement may be executed in separate
------------
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
15. REMEDIES. The Company and the Stockholders shall be entitled to
--------
enforce their rights under this Agreement specifically to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights existing in their favor. The parties hereto agree and acknowledge
that money damages may not be an adequate remedy for any breach of the
provisions of this Agreement and that the Company or any Stockholder may in its
sole discretion apply to any court of law or equity of competent jurisdiction
for specific performance and/or injunctive relief (without posting a bond or
other security) in order to enforce or prevent any violation of the provisions
of this Agreement.
16. GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
-------------
VALIDITY AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL
LAW, AND NOT THE LAW OF CONFLICTS, OF THE STATE OF DELAWARE.
17. DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement
--------------------
are inserted for convenience only and do not constitute a part of this
Agreement.
18. NOTICES. All notices, demands or other communications to be given
-------
or delivered under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given when delivered personally or
mailed by certified or registered mail, return receipt requested and postage
prepaid, to the recipient. Such notices, demands and other communications will
be sent to each Stockholder at the address indicated on the Schedule of Holders
-------------------
and to the Company at the address indicated below:
Global Imaging Systems Inc.
X.X. Xxx 000000
Xxxxx, Xxxxxxx 00000-0000
Attention: Chief Executive Officer
Telecopy: (000) 000-0000
-12-
With a copy to:
Xxxxxxxxxxx X. Xxxxx, Esq.
Xxxxx, Xxxxxx & Xxxxxx
0000 Xxx Xxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxxxxx, XX 00000-0000
Telecopy: (000) 000-0000
or to such other address or to the attention of such other Person as the
recipient party has specified by prior written notice to the sending party.
19. TERM OF AGREEMENT. The Term of this Agreement shall begin on the
-----------------
date hereof and shall terminate on the first to occur of the following events:
(a) the written consent of all Stockholders; (b) the Sale of the Company; (c) a
merger or other business combination involving the Company in which the
Stockholders of the Company immediately prior to the effective time of such
merger or business combination own less than 50% of the capital stock of the
surviving corporation (determined on a fully diluted basis) immediately after
the effective time of such merger or business combination or (d) the closing of
a Qualified Public Offering; provided, that unless earlier terminated pursuant
--------
to clauses (a), (b), (c) or (d) above, the agreements set forth in Section 1
hereof shall terminate on the date 10 years after the date hereof.
-13-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
GLOBAL IMAGING SYSTEMS INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxx,
President and Chief Executive Officer
GOLDER, THOMA, XXXXXXX, XXXXXX FUND IV LIMITED
PARTNERSHIP
By: Golder, Thoma, Xxxxxxx, Xxxxxx IV, L.P.
Its: General Partner
By: Golder, Thoma, Cressey, Rauner, Inc.
Its: General Partner
By: /s/ Xxxx X. Xxxxx
--------------------------------
Xxxx X. Xxxxx, Authorized Officer
/s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Xxxxxx X. Xxxxxxx
/s/ Xxxxxxx Xxxxxxxxx
-------------------------------------
Xxxxxxx Xxxxxxxxx
-14-
SCHEDULE OF HOLDERS
-------------------
NAME ADDRESS
---- -------
Golder, Thoma, Xxxxxxx, Xxxxxx c/o Golder, Thoma, Cressey, Rauner, Inc.
Fund IV Limited Partnership 000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxxx
Telecopy: (000) 000-0000
Xxxxxx X. Xxxxxxx X.X. Xxx 000000
Xxxxx, XX 00000-0000
Telecopy: (000) 000-0000
Xxxxxxx Xxxxxxxxx X.X. Xxx 000000
Xxxxx, XX 00000-0000
Telecopy: (000) 000-0000
-15-
AMENDMENT NO. 1
---------------
TO STOCKHOLDERS AGREEMENT
-------------------------
This AMENDMENT NO. 1 is made as of this 15 day of DECEMBER, 1994 (this
"Amendment") by and among Global Imaging Systems Inc., a Delaware corporation
(the "Company"), Golder, Thoma, Xxxxxxx, Xxxxxx Fund IV, Limited Partnership, a
Delaware limited partnership ("GTCR"), Xxxxxx X. Xxxxxxx ("Xxxxxxx"), Xxxxxxx
Xxxxxxxxx ("Xxxxxxxxx") and Xxxxxx X. Xxxxxxx ("Felcoff") ("Felcoff"), to that
certain Stockholders Agreement dated as of June 9, 1994 (the "Agreement") among
the Company, GTCR, Xxxxxxx and Xxxxxxxxx. Terms not otherwise defined herein
shall have the meanings assigned to such terms in the Agreement.
1. The Company, GTCR, Xxxxxxx and Xxxxxxxxx hereby agree to add to
Felcoff as a party to the Agreement. All references to "Stockholders" in the
Agreement shall include Felcoff.
2. The Schedule of Holders attached as Exhibit A to the Agreement
shall be amended to add the following:
Xxxxxx X. Xxxxxxx 0000 Xxxxx Xxxxx Xxxx
Xxxxx 000
Xxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
3. Felcoff hereby agrees to be bound by the terms of the Agreement,
as amended by this Amendment.
4. This Amendment may be executed in counterparts, each of which is
deemed to be an original and all of which taken together shall constitute one
and the same agreement. This Amendment may be executed and delivered by
facsimile transmission.
IN WITNESS WHEREOF, the parties have executed this AMENDMENT NO. 1 as of
the day and year first above written.
GLOBAL IMAGING SYSTEMS INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------
Xxxxxx X. Xxxxxxx
President
GOLDER, THOMA, XXXXXXX, XXXXXX
FUND IV, LIMITED PARTNERSHIP
By: GOLDER, THOMA, XXXXXXX,
XXXXXX IV, L.P.
General Partner
By: GOLDER, THOMA, CRESSEY,
RAUNER, INC.
General Partner
By: /s/ Xxxx X. Xxxxx
----------------------
Xxxx X. Xxxxx
Authorized Officer
/s/ Xxxxxx X. Xxxxxxx
----------------------
Xxxxxx X. Xxxxxxx
/s/ Xxxxxxx Xxxxxxxxx
----------------------
Xxxxxxx Xxxxxxxxx
AGREED AND ACCEPTED:
/s/ Xxxxxx X. Xxxxxxx
---------------------
Xxxxxx X. Xxxxxxx
JOINDER AND AMENDMENT TO
STOCKHOLDERS AGREEMENT
----------------------
The undersigned Xxxxx X. Xxxxxx ("Xxxxxx"), Xxxxx X. Xxxxx ("Xxxxx"), Xxxx
X. Xxxxxxx ("Xxxxxxx") and Xxxxxxxxxxx X. Xxxxxxxx ("Xxxxxxxx") hereby agree
effective as of January 31, 1995 to become parties to and to be bound by the
terms and conditions of that certain Stockholders Agreement dated June 9, 1994,
as amended (the "Agreement") by and among Global Imaging Systems Inc., a
Delaware corporation ("Global") and the Stockholders of Global. The Agreement is
hereby amended to provide that all references to "Stockholders" in the Agreement
shall include Conway, Dinan, Xxxxxxx and Xxxxxxxx
Paragraph 6(d) of the Agreement is hereby amended to delete the phrase
"two percent (2%)" and to insert the phrase "one percent (1%)" in its place.
IN WITNESS WHEREOF, the undersigned has executed this Joinder and Amendment
to the Stockholders Agreement as of the date first written above.
/s/ Xxxxx X. Xxxxxx
---------------------------
Xxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxx
---------------------------
Xxxxx X. Xxxxx
/s/ Xxxx X. Xxxxxxx
---------------------------
Xxxx X. Xxxxxxx
/s/ Xxxxxxxxxxx X. Xxxxxxxx
---------------------------
Xxxxxxxxxxx X. Xxxxxxxx
Agreed and Accepted as of
January 31, 1995:
GLOBAL IMAGING SYSTEMS INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Xxxxxx X. Xxxxxxx
President and Cheif Executive Officer
MAJORITY STOCKHOLDERS:
----------------------
GOLDER, THOMA, XXXXXXX, XXXXXX
FUND IV LIMITED PARTNERSHIP
By: Golder, Thoma, Xxxxxxx, Xxxxxx IV, L.P.
Its: General Partner
By: GTCR, Inc.
Its: General Partner
By: /s/ Xxxx X. Xxxxx
-----------------
Xxxx X. Xxxxx
Authorized Officer
/s/ Xxxxxx X. Xxxxxxx
---------------------
Xxxxxx X. Xxxxxxx
-2-
AMENDMENT NO. 2 TO STOCKHOLDERS AGREEMENT
-----------------------------------------
THIS AMENDMENT TO NO. 2 TO STOCKHOLDERS AGREEMENT is made as of August
14, 1996 by and among Global Imaging Systems Inc., a Delaware corporation (the
"COMPANY"); Golder, Thoma, Xxxxxxx, Xxxxxx Fund IV, Limited Partnership, a
Delaware limited partnership ("GTCR"); Xxxxxx X. Xxxxxxx ("XXXXXXX"); Xxxxxxx
Xxxxxxxxx ("XXXXXXXXX"); Xxxxxxx Xxxxxxx ("XXXXXXX"); and Xxxxxxx National Life
Insurance Company, a Michigan life insurance company ("JNL").
WITNESSETH:
The Company, GTCR, Johnson, Schilling, Xxxxxxx, Xxxxx X. Xxxxxx, Xxxx
Xxxxxxx, Xxxxx Xxxxxxxx, Xxxxx Xxxxx, L. Xxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxxx
Xxxxxx, Xxxxxx Xxxx, Xxxxxxx X. Xxxx, Xxxxxx Xxxxxxx, Xxxx Xxxxxxxxx, Xxxxxx
Xxxx, Xxxx Xxxxxxx, Xxxxxxx X. Xxxxxxxxxxx, Xxxxxxxxxxx Xxxxx, Xxxxxx X. Xxxxxx,
Xxxxxx X. Xxxx, Xxxxxx X. Xxxx, Xxxxxx XxXxxx, Xxxxx Xxxx, Xxxxx X. Xxxxx and
Xxxxxxx X. Xxxxx are parties to a Stockholders Agreement dated June 9, 1994, as
amended (the "STOCKHOLDERS AGREEMENT") pursuant to which the Company and such
parties have agreed to certain voting arrangements and restrictions on the
transfer of their shares of the Company's Common Stock. In order to induce JNL
to enter into an Equity Purchase Agreement of even date herewith (the "JNL
PURCHASE AGREEMENT"), the Company and each of GTCR and Xxxxxxx have agreed to
amend the Stockholders Agreement to add JNL as a party thereto. The execution
and delivery of this Agreement is a condition to the Closing under the JNL
Purchase Agreement.
Certain Capitalized Terms used herein are defined in the Stockholders
Agreement.
The parties hereto agree as follows:
1. AMENDMENTS TO STOCKHOLDERS AGREEMENT.
1.1 PREAMBLE. The first paragraph of the Stockholders Agreements is
--------
hereby amended to add the phrase "the Class C Common Stock, $.01 par value per
share ("CLASS C COMMON")," after "("CLASS A COMMON")," in the fourth line of
such paragraph. In addition, the first paragraph is further amended to add the
phrase ",Class C Common" after the first word "Common" in the sixth line of such
paragraph.
1.2 VOTING. Paragraph 1 of the Stockholders Agreement is hereby
------
amended and restated in its entirety to read as follows:
"1. BOARD OF DIRECTORS.
------------------
(a) From and after the Closing (as defined in the Purchase
Agreement) and until the provisions of this paragraph 1 cease to be
effective, each Stockholder shall vote all of his or its Common Stock
and any other voting securities of the Company over which such
Stockholder has voting control and
-1-
shall take all other necessary or desirable actions within his or its
control (whether in such Stockholder's capacity as a stockholder,
director, member of a board committee or officer of the Company or
otherwise, and including, without limitation, attendance at meetings
in person or by proxy for purposes of obtaining a quorum and execution
of written consents in lieu of meetings), and the Company shall take
all necessary and desirable actions within its control (including,
without limitation, calling special board and stockholder meetings),
so that:
(i) the authorized number of directors on the Board
shall be established at five (5) directors;
(ii) the following persons shall be elected to the
Board:
(A) three representatives designated by GTCR, so
long as GTCR remains a Qualified Holder,
(B) the Chief Executive Officer of the Company,
and
(C) one representative designated by JNL (which
designee shall be Xxxxx Xxxxxxx; any subsequent replacement
designee shall be subject to the approval of GTCR, as lon
as GTCR remains a Qualified Holder), so long as JNL owns at
least 50% of the JNL Stockholder Shares.
(iii) the composition of the board of directions of each
of the Company's subsidiaries (a "SUB BOARD") shall be the same
as that of the Board, unless a different composition is approved
by at least 75% of the members of the Board;
(iv) the removal from the Board or a Sub Board (with or
without cause) of any representative designated hereunder shall
be effective only upon the written request of the party entitled
to designate such representative pursuant to paragraph 1(a)(ii)
above; provided that (a) if GTCR ceases to be a Qualified Holder,
any directors designated by GTCR may be removed by vote of the
Stockholders holding a majority of the Stockholder Shares or (b)
if JNL ceases to own at least 50% of the JNL Stockholder Shares,
the director designated by JNL may be removed by vote of the
Stockholders holding a majority of the Stockholder Shares; and
(v) in the event that any representative designated
pursuant to paragraph 1(a)(ii) for any reason ceases to serve as
a member of the Board or a Sub Board during his term of office
(other than a removal described in the proviso set forth in
1(a)(iv) above), the resulting
-2-
vacancy on the Board or a Sub Board shall be filled by a
representative designated pursuant to paragraph 1(a)(ii), and, in
the case of GTCR ceasing to be a Qualified Holder or JNL ceasing
to own at least 50% of the JNL Stockholder Shares, any resulting
vacancy shall be filled by the Stockholders, determined by a vote
of the Stockholders holding a majority of the Stockholder Shares
then outstanding; and
(vi) in the event that GTCR elects not to designate
any of the directors which it is entitled to designate in
accordance with paragraph 1(a)(ii) above, the Stockholders agree
not to vote to fill such vacancy other than with an individual
designated by GTCR, as provided in paragraph 1(a)(ii).
(b) The Company shall pay the reasonable out-of-pocket
expenses incurred by each director in connection with attending the
meetings of the Board or a Sub Board or discharging any of such
director's duties as a director of the Company or a Sub Board.
(c) The provisions of this paragraph 1 shall terminate
automatically and be of no further force and effect upon the first to
occur of (i) the tenth anniversary of the date hereof unless extended
by the parties hereto in accordance with Section 218 of the Delaware
General Corporation Law or (ii) a Qualified Public Offering.
(d) So long as JNL holds at least 1% of the shares of any
class of the Company's outstanding Stockholder Shares, JNL shall
receive notice of and will be entitled to have one (1) representative
attend all meetings of the Board (whether in person or by telephone);
provided, however, in the event JNL's representative director is
unable to attend the Board meeting, two individuals designated by JNL
shall be invited to attend as observers of such meeting. Notice of any
meeting of the Board shall be given to JNL at the same time and in the
same manner as it is given to the Company's directors.
(e) The Company shall hold meetings of the Board at least
quarterly during the term of this Agreement."
1.3 TRANSFERS WHILE CLASS A COMMON IS OUTSTANDING. Subparagraph 2(d)
---------------------------------------------
of the Stockholders Agreement is hereby amended to (i) delete the phrase "in
good faith by the Company's Board after" in the fourth and fifth lines from the
end of such subparagraph and to replace it with the word "by," and (ii) change
the Section reference in the last line from Section 4.2.2(iii) to Section
----------------- -------
5.2.2(iii) of the Company's Certificate of Incorporation.
---------
1.4 PERMITTED TRANSFERS. Subparagraph 2(e) of the Stockholders
--------------------
Agreement is hereby amended to delete clauses (iii) and (iv) of the first
sentence and to replace it with the following:
-3-
"or (iii) a Transfer by JNL of Stockholder Shares to any Person in
connection with a pro rata transfer of Senior Notes to such Person,
provided, that such transferee agrees to execute and deliver to the Company
and the other Stockholders a counterpart of this Agreement."
1.5 SALE OF THE COMPANY.
-------------------
(a) Subparagraph 5(a) of the Stockholders Agreement is hereby amended
to add the following provision at the end of the sentence:
";provided, however, that no Stockholder shall be required (i) to
-------- -------
incur aggregate indemnification liability in connection with such an
Approved Sale greater than the value of the consideration to be received by
such Stockholder in connection with such sale, (ii) to incur
indemnification liability in a proportion which is greater that such
Stockholder's pro rata share of the proceeds of such Approved Sale with
respect to breaches of representations and warranties regarding matters
other than such Stockholder and the securities purported to be held by such
Stockholder, (iii) to pay incidental or consequential damages with respect
to breaches of representations and warranties which were not known by such
Stockholder, but which were known by any other Stockholder, to be untrue in
any material respect when made, (iv) to make representations or warranties
with respect to any matter not relating to the Company, its Subsidiaries,
such Stockholder, or the securities purported to be held by such
Stockholder, which are not qualified as to such Stockholder's actual
knowledge. Each Stockholder will use its best efforts to cooperate in such
Approved Sale and will take all necessary and desirable actions in
connection with the consummation of such Approved Sale as are reasonably
requested by the Company; provided that the reasonable out-of-pocket
--------
expense incurred by any such Stockholder in the ordinary course of
complying with this subparagraph 5(a) (including reasonable attorneys'
-----------------
fees) shall be paid for or reimbursed by the Company.
(b) Subparagraph 5(c) of the Stockholder's Agreement is hereby
amended to add the following clause (vi) to the end of such subparagraph:
"and (vi) except with the prior written consent of the holders of
a majority of the JNL Stockholder Shares, the Approved Sale shall be made
for an aggregate consideration (which consideration must consist of cash or
other marketable securities which may legally be held by the holders of JNL
Stockholder Shares and which are not deemed to be an Illegal Investment)
not less than the "Fair Market Value" of the Company as of the date of the
Company's most recent Financial Statements (such "FAIR MARKET VALUE" to be
determined by an independent appraiser or investment banker jointly
selected by the Company and JNL)."
-4-
1.6 PREEMPTIVE RIGHTS.
-----------------
(a) Subparagraph 6(a) of the Stockholders Agreement is hereby
amended to add the following phrase after the end of clause (i) of such
subparagraph:
"or the JNL Purchase Agreement or 1,354.17 shares of Class A
and 240.13 shares of Class B Common Stock contemplated to be issued to
Green, Xxxxxxx & Bunch" ("GMB") (together with any Common Stock
purchased by GMB pursuant to any preemptive rights granted to GMB in
connection with such issuance); provided, however, that
-------- -------
notwithstanding the foregoing, if after the date of the JNL Purchase
Agreement GTCR and/or Xxxxxx X. Xxxxxxx ("XXXXXXX") purchase
additional shares of Class A Common Stock pursuant to the Purchase
Agreement, JNL shall have the right under this Section 6 to purchase
---------
its proportionate share of Class A Common Stock for a price of $90.00
per share (i.e., the same per share price for such securities provided
----
for the JNL Purchase Agreement with respect to the Class A Common
Stock JNL purchased upon consummation thereof) up to a total number of
shares as is necessary, when taken together with the number of shares
of Class C Common Stock purchased by JNL pursuant to subparagraph (g)
----------------
below, to maintain JNL's Common Stock ownership in the Company;"
(b) Subparagraph 6(a) of the Stockholders Agreement is hereby
amended to add the following sentence at the end of such subparagraph:
"Notwithstanding the foregoing, the exemptions provided in
clauses (iii), (iv) and (vi) above shall not apply to securities
issued to GTCR and its Affiliates."
(c) Subparagraph 6(d) of the Stockholders Agreement is hereby
amended to delete "The" in the first line of such subparagraph and to replace it
with the following:
"Except for the holders of the JNL Stockholder Shares, the"
(d) New subparagraphs "(f)" and "(g)" are hereby added to the
end of paragraph 6 of the Stockholders Agreement:
"(f) For purposes of this paragraph 6, all references to
"Class B Common" shall be deemed to include all outstanding shares of
Class C Common assuming they have been converted into Class B Common.
(g) If after the date of the JNL Purchase Agreement, GTCR
and/or Xxxxxxx purchase additional shares of Class A Common Stock in
partial or complete fulfillment of their total $20,500,000 commitment
pursuant to the Purchase Agreement, and JNL exercises its preemptive
right to purchase its proportionate share of additional shares of
Class A Common Stock in accordance
-5-
with the terms of subparagraph (a)(i) of this Section 6, then
------------------- ---------
simultaneously with such purchase by JNL, JNL shall have the right to
purchase additional Class C Common Stock for a price of $13.014 per
share (i.e., the same per share price for such securities provided for
----
in the JNL Purchase Agreement with respect to the Class C Common Stock
JNL purchased upon consummation thereof) up to a total number of
shares as is necessary, when taken together with the shares of Class A
Common Stock purchased by JNL pursuant to subparagraph (a)(i) of this
-------------------
Section 6, to maintain JNL's Common Stock ownership in the Company;
---------
provided, however, that in exercising its rights pursuant to this
-------- -------
subparagraph (g) and subparagraph (a)(i) of this Section 6, JNL will
---------------- ------------------- ---------
maintain its 97.5%/2.5% ownership split as between its Class A and
Class C Common Stock. The terms of such purchase shall otherwise be in
accordance with the terms of the JNL Purchase Agreement as though such
agreement pertained to such Class C Common Stock so purchased by JNL,
and the terms of the JNL Purchase Agreement are incorporated herein by
this reference."
1.7 DEFINITIONS.
-----------
(a) Paragraph 7 of the Stockholders Agreement is hereby amended
to add the following language at the end of the definition of "Affiliate":
";provided, however, that an "Affiliate" will not mean any
-------- -------
entity in which GTCR is an investor other than an investment fund in
which GTCR (or its Affiliates) serve as managing general partner"
(b) The definition of "COMMON STOCK" in paragraph 7 of the
Stockholders Agreement is hereby amended and restated in its entirety to read as
follows:
"COMMON STOCK" means collectively the Company's Class A Common, Class
B Common and Class C Common.
(c) The definition of "INDEPENDENT THIRD PARTY" in paragraph 7
of the Stockholders Agreement is amended to delete the word "person" in the
first line of such definition and to replace it with the phrase "Person,
together with its Affiliates (other than any Qualified Holder),"
(d) The definition of "PRO RATA SHARE" in paragraph 7 of the
Stockholders Agreement is hereby amended to add the following sentence at the
end of such definition:
"For purposes of this definition, all outstanding shares of
Class C Common shall be deemed to be converted into shares of Class B
Common."
(e) The definition of "QUALIFIED HOLDER" in paragraph 7 of the
Stockholders Agreement is hereby amended to delete "20%" in the second line of
such definition and to replace it with "50%".
-6-
(f) The definition of "QUALIFIED PUBLIC OFFERING" in paragraph 7
of the Stockholders Agreement is hereby amended to delete the number "$5
million" and to replace it with "$20 million".
(g) The definition of "SIGNIFICANT TRANSFER" in hereby amended
and restated in its entirety to read as follows:
"SIGNIFICANT TRANSFER" shall mean a Transfer in one
transaction or a series of transactions (other than to a Permitted
Transferee) of then outstanding Stockholder Shares by a Qualified
Holder, GTCR, Xxxxxx Xxxxxxx, JNL, an executive officer of the Company
or any holder of more than two percent (2%) of the then outstanding
Stockholder Shares.
(h) The definition of "STOCKHOLDER SHARES" in paragraph 7 of the
Stockholders Agreement is hereby amended to add the phrase "and all outstanding
shares of Class C Common shall be deemed to have been converted into Class B
Common" to the end of such definition.
1.8 NEW DEFINITIONS. Paragraph 7 of the Stockholders Agreement is
---------------
hereby amended to add the following new definitions to such paragraph:
"ILLEGAL INVESTMENT" means any investment or other property
with respect to which none of JNL nor any Affiliate of either of them
is permitted to loan or invest their funds, buy, sell, hold title to,
possess, occupy, pledge, convey, manage, protect, insure, or otherwise
deal with pursuant to Section 500.901 through 500.8184 of the Michigan
Administrative Code, as amended (the "INSURANCE CODE"),
notwithstanding the availability under any applicable asset thresholds
or reserve baskets set forth in such Insurance Code sections pursuant
to which JNL, or any such Affiliate would otherwise be able to hold
such investment or property, other than those baskets and/or
thresholds the availability of or under which is already reduced by
JNL's or any such Affiliate's existing equity investments in the
Company.
"JNL" means Xxxxxxx National Life Insurance Company and its
successors and Affiliates.
"JNL PURCHASE AGREEMENT" means that certain Equity Purchase
Agreement between the Company and JNL dated August 14, 1996, as
amended from time to time."
"JNL STOCKHOLDER SHARES" shall mean any Stockholder Shares
initially issued to JNL under the JNL Purchase Agreement and any
shares transferred by JNL thereafter to any Permitted Transferee.
"SENIOR NOTES" shall mean the Notes issued to JNL pursuant
to that certain credit agreement dated August 14, 1996, as amended
from time to time,
-7-
among PPM America, INC., JNL, the Company and certain subsidiaries of
the Company."
1.9 TRANSFERS IN VIOLATION OF THIS AGREEMENT. Paragraph 8 of the
----------------------------------------
Stockholders Agreement is hereby amended to add the following sentence at the
beginning of such paragraph:
"Prior to transferring any Stockholder Shares to any Person,
the Transferring Stockholder shall cause the prospective transferee to
execute and deliver to the Company and the other Stockholders a
counterpart of this Agreement."
1.10 AMENDMENTS AND WAIVERS. Paragraph 9 of the Stockholders Agreement
----------------------
is hereby amended to add the phrase "the holders of a majority of the JNL
Stockholders Shares" after the phrase "the Qualified Holders," in the fourth
line of such paragraph. In addition, the parenthetical "(other than the Class C
Common") "is hereby added after the word "Stock" in the fifth line of such
Paragraph.
1.11 NEW PARAGRAPHS. The following new paragraphs 20 and 21 is hereby
--------------
added to the end of such Agreement:
"20. PUBLIC OFFERING. In the event that the Board and GTCR
---------------
approve a Qualified Public Offering, the holders of Stockholder Shares
shall take all necessary or desirable actions in connection with the
consummation of the Qualified Public Offering. In the event that such
Qualified Public Offering is an underwritten offering and the managing
underwriters advise the Company in writing that in their opinion the
capital stock structure shall adversely affect the marketability of
the offering, each holder of Stockholder Shares shall consent to and
vote for a recapitalization, reorganization and/or exchange of any
class of Stockholder Shares into securities that the managing
underwriters, the Board and GTCR find acceptable and shall take all
necessary or desirable actions in connection with the consummation of
the recapitalization, reorganization and/or exchange; provided that
the resulting securities reflect and are consistent with the rights
and preferences set forth in the Company's Certificate of
Incorporation as in effect immediately prior to such Qualified Public
Offering.
21. AGREEMENT TO CONVERT CLASS A COMMON. In the event that
-----------------------------------
not all of the outstanding shares of Class A Common are redeemed in
connection with a Qualified Public Offering, each of the holders of
the Stockholders Shares hereby agree to cause the Company to amend its
Amended and Restated Certificate of Incorporation in order to provide
for the conversion of the Class A Common into shares of Class B Common
(or Class C Common for the holders of JNL Stockholder Shares at the
holder's option). Such conversion will be effected as follows:
-8-
Each Share of outstanding Class A Common will be converted
into the right to receive a number of shares of Class B Common (or
Class C Common for the holders of JNL Stockholder Shares at the
holder's option) equal to the sum of (i) the Preferred Amount and (ii)
the Common Amount.
For purposes of this paragraph 21. the "Preferred Amount"
shall mean the number of shares of Class B Common or Class C Common,
as the case may be, equal to the quotient by dividing (i) the sum of
(A) $90 and (B) the Unpaid Yield on such share of Class A Common, by
(ii) the product of (A) the Market Price and (B) 80%. For purposes of
this definition, the "Market Price" shall mean the good faith
determination of the managing underwriters of the Company's initial
Qualified Public Offering of the initial public offering price of the
Class B Common after taking into account the conversion and/or
redemption of the Class A Common in full.
For purposes of this paragraph 21, the "Common Amount" shall
mean the number of shares of Class B Common or Class C Common, as the
case may be, determined by the following formula:
Common Amount = (OBC divided by 9) divided by OA
WHERE:
OBC = The number of outstanding shares of Class B Common and
Class C Common on a fully-diluted basis immediately prior
to conversion of the Class A Common.
OA = The number of outstanding shares of Class A Common on a
fully-diluted basis immediately prior to conversion of
the Class A Common.
For example:
If there are 50,000 outstanding shares of Class B Common, 5,000
outstanding shares of Class C Common and 50,000 shares of Class A
Common, the aggregate Yield on such share of Class A Common is $25 and
the Market Price is $20, then:
The Preferred Amount will equal:
Preferred Amount = ($90 + 25) divided by (20 x .8)
Preferred Amount = 115/16
Preferred Amount = 7.1875 shares of Class B Common
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The Common Amount will equal:
Common Amount = (55,000 divided by 9) divided by 50,000
Common Amount = 6,111.111 divided by 50,000
Common Amount = .122 shares of Class B Common Stock
Thus the holder of such Class A Common Share will be
entitled to receive the sum of (i) 7.185 shares of Class B Common and
(ii) .122 shares of Class B Common or 7.307 shares of Class B Common
Stock."
1.12 SCHEDULE OF HOLDERS. The Schedule of Holders to the
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Stockholders Agreement is hereby amended to be in the form attached hereto as
Exhibit A. All references to "Stockholders" in the Stockholders Agreement shall
---------
include all parties listed on the Schedule of Holders including "Xxxxxxx
National Life Insurance Company, a Michigan life insurance company".
2. EFFECT OF THE AMENDMENT. All references to the Stockholders
Agreement in the Purchase Agreement of the JNL Purchase Agreement or any related
document shall mean the Stockholders Agreement as amended by this Amendment.
Except as specifically amended above, the Stockholders Agreement shall remain in
full force and effect, and is hereby ratified and confirmed.
3. DESCRIPTIVE HEADINGS. The descriptive headings of this
Amendment are inserted for convenience only and do not constitute a part of this
Amendment.
4. GOVERNING LAW. This Amendment shall be governed by and
construed and enforced in accordance with the laws of the State of Illinois.
5. COUNTERPARTS. This Amendment may be executed and delivered in
counterparts, each of which shall constitute an original, and all of which
together shall constitute one Amendment.
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IN WITNESS WHEREOF, the parties have executed this Amendment No. 2 to
Stockholders Agreement as of the date first written above.
GLOBAL IMAGING SYSTEMS INC.
By: /s/ Xxxxxxx Xxxxxxxxx
--------------------------------
Its: CFO
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GOLDER, THOMA, XXXXXXX, XXXXXX
FUND IV, LIMITED PARTNERSHIP
By: GTCR IV, L.P.
General Partner
By: Golder, Thoma, Xxxxxxx, Xxxxxx Inc.
General Partner
By: /s/ Xxxx X. Xxxxx
-------------------------------
Its:_______________________________
/s/ Xxxxxx X. Xxxxxxx
-----------------------------------
XXXXXX X. XXXXXXX
/s/ Xxxxxxx Xxxxxxxxx
-----------------------------------
XXXXXXX XXXXXXXXX
/s/ Xxxxxxx Xxxxxxx
-----------------------------------
XXXXXXX XXXXXXX
FOR: XXXXXXX NATIONAL LIFE INSURANCE
COMPANY
By: PPM America, Inc. as its Agent
By: /s/ XXX XXXXX
--------------------------------
Its: Vice President
------------------------------
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