EXHIBIT 10.4
EQUITY SUBSCRIPTION AGREEMENT
THIS AGREEMENT is made as of _______________, by and among GLOBAL
IMAGING SYSTEMS INC., a Delaware corporation (the "Company"), and
____________________________________ (collectively, the "Purchasers" and each
individually a "Purchaser"). Except as otherwise indicated, capitalized terms
used herein are defined in paragraph 7 hereof.
The parties hereto agree as follows:
1. Authorization of Stock. The Company has authorized the issuance
and sale to the Purchasers of an aggregate of (i) __________ shares of its Class
A Common Stock, $.01 par value per share (the "Class A Common"), and (ii) ____
shares of its Class B Common Stock, $.01 par value per share (the "Class B
Common"). The Class A Common and the Class B Common are collectively referred
to herein as the "Stock."
2. Purchase and Sale of the Stock. The parties will execute and
deliver counterparts of this Agreement, the Joinder to the Registration
Agreement and the Joinder to the Stockholders Agreement (as defined in
paragraphs 3D and 3E below) on or about ___________. The subscription by the
Purchasers will occur at a closing ("Closing") to be held on a date mutually
satisfactory to the Purchasers and the Company not later than ____________. At
the Closing, the Company will sell to the Purchasers and, subject to the terms
and conditions set forth herein, the Purchasers will purchase from the Company,
an aggregate of (i) _______ shares of Class A Common at a price of $_____ per
share and (ii) _______ shares of Class B Common at a price of $_____ per share
(in the aggregate, a total price of $_____________). The allocation of the
purchase of the Stock among each of the Purchasers is set forth in Exhibit A
hereto. The Closing of the purchase and sale of the Stock will be effected by
exchange of documents, certificates and agreements, by air courier, telefax or
other means satisfactory to the parties. At the Closing, the Company will issue
and deliver to the Purchasers certificates evidencing the Stock to be purchased
by the Purchasers, registered in each Purchaser's name, against payment of the
purchase price therefor by check or wire transfer of funds in the amount set
forth for each Purchaser in Exhibit A hereto.
3. Conditions of the Purchasers' Obligation at the Closing. The
obligation of the Purchasers to purchase and pay for the Stock at the Closing is
subject to the satisfaction as of the Closing of the following conditions:
3A. Representations and Warranties. The representations and
warranties contained in part 6 hereof will be true and correct at and as of the
Closing as though then made, except to the extent of changes caused by the
transactions expressly contemplated herein.
3B. Certificate of Incorporation. The Company's Restated Certificate
of Incorporation (the "Charter") as filed with the State of Delaware will be in
full force and effect at the Closing and will not have been further amended or
modified.
3C. Equity Purchase Agreement. The Equity Purchase Agreement dated
June 9, 1994, as amended (the "Equity Purchase Agreement") among the Company,
Golder, Thoma, Xxxxxxx, Xxxxxx Fund IV, L.P. ("GTCR IV") and Xxxxxx X. Xxxxxxx
("Xxxxxxx") will be in full force and effect and will not have been amended or
modified as of the Closing.
3D. Registration Agreement. The Company, the Purchasers, GTCR IV,
Xxxxxxx, Xxxxxxx Xxxxxxxxx ("Xxxxxxxxx") and the other stockholders of the
Company are parties to that certain Registration Agreement dated June 9, 1994
pursuant to amendments and joinders thereto, in form and substance substantially
similar to Exhibit B attached hereto (the "Registration Agreement"), and the
Registration Agreement as so amended will be in full force and effect as of the
Closing.
3E. Stockholders Agreement. The Company, the Purchasers, GTCR IV,
Xxxxxxx, Xxxxxxxxx and the other stockholders of the Company are parties to that
certain Stockholders Agreement dated June 9, 1994 pursuant to amendments and
joinders thereto, in form and substance substantially similar to Exhibit C
attached hereto (the "Stockholders Agreement"), and the Stockholders Agreement
as so amended will be in full force and effect as of the Closing.
3F. Proceedings. All corporate and other proceedings taken or
required to be taken in connection with the transactions contemplated hereby to
be consummated at or prior to the Closing and all documents incident thereto
will be satisfactory in form and substance to the Purchasers.
4. Transfer of Restricted Securities.
(i) Restricted Securities are transferable pursuant to (a)
public offerings registered under the Securities Act, (b) Rule 144 of
the Securities and Exchange Commission (or any similar rule then in
force) if such rule is available and (c) subject to the conditions
specified in subparagraph 4(ii) below, any other legally available
means of transfer.
(ii) In connection with the transfer of any Restricted
Securities (other than a transfer described in subparagraph 4(i)(a) or
(b) above), the holder thereof will deliver written notice to the
Company describing the transfer or proposed transfer, together with an
opinion of Xxxxx & Xxxxxxx LLP or other counsel, which (to the
Company's reasonable satisfaction) is knowledgeable in securities law
matters, to the effect that such transfer of Restricted Securities may
be effected without registration of such Restricted Securities under
the Securities Act. In addition, if the holder of the Restricted
Securities delivers to the Company an opinion of Xxxxx & Xxxxxxx LLP
or such other counsel that no subsequent transfer of such Restricted
Securities will require registration under the Securities Act, the
Company will promptly upon such contemplated transfer deliver new
certificates for such Restricted Securities which do not bear the
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Securities Act legend set forth in paragraph 8A. If the Company is
not required to deliver such new certificates for such Restricted
Securities, the holder thereof will not transfer the same until the
prospective transferee has confirmed to the Company in writing its
agreement to be bound by the conditions contained in this paragraph
and paragraph 8A.
5. Representations and Warranties of the Purchasers. Each of the
Purchasers represents and warrants to the Company that he or she is purchasing
and will purchase the Stock for his or her own account, with no present
intention of distributing or reselling the Stock or any part thereof, and that
he or she is prepared to bear the economic risk of retaining the Stock for an
indefinite period, all without prejudice, however, to his or her right at any
time, in accordance with this Agreement, lawfully to sell or otherwise dispose
of all or any part of the Stock held by him or her. Each of the Purchasers also
represents and warrants that he or she is an accredited investor, as such term
is defined in Rule 501 of Regulation D promulgated under the Securities Act (or,
if he or she is not an accredited investor, that they have relied on ___________
as their purchaser representative), and that he or she has had the opportunity
to ask questions of the Company's management with respect to his or her
investment. Each of the Purchasers also represents and warrants that he or she
has received the confidential offering memorandum of the Company delivered to
such Purchaser in accordance with applicable securities laws. Each of the
Purchasers agrees that if, and to the extent, he or she elects to sell the
Stock, he or she will do so in compliance with the provisions and requirements
of the Securities Act and applicable state securities laws. Each of the
Purchasers further represents that he or she has full authority to enter into
the transactions contemplated by this Agreement and to perform his or her
obligations hereunder.
6. Representations and Warranties of the Company. As a material
inducement to the Purchasers to enter into this Agreement and purchase the
Stock, the Company hereby represents and warrants that:
6A. Organization and Corporate Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and is qualified to do business in every jurisdiction in which
the failure so to qualify might reasonably be expected to have a material
adverse effect on the financial condition, operating results or business
prospects of the Company. The Company has all requisite corporate power and
authority and all material licenses, permits and authorizations necessary to own
and operate its properties, to carry on its businesses as now conducted and
presently proposed to be conducted and to carry out the transactions
contemplated by this Agreement. The copies of the Company's Charter and bylaws
that have been furnished to the Purchasers' counsel reflect all amendments made
thereto at any time prior to the date of this Agreement and are correct and
complete.
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6B. Capital Stock and Related Matters.
(i) As of the Closing and immediately thereafter, the
authorized capital stock of the Company will consist of (a) 300,000
shares of Class A Common, of which ________________ shares will be
issued and outstanding, (b) 350,000 shares of Class B Common, of which
approximately ______________ shares will be issued and outstanding,
and (c) 350,000 shares of Class C Common, of which ______________
shares will be issued and outstanding. As of the Closing, the Company
will not have outstanding any stock or securities convertible or
exchangeable for any shares of its capital stock, nor will it have
outstanding any rights or options to subscribe for or to purchase its
capital stock or any stock or securities convertible into or
exchangeable for its capital stock except as described in the Equity
Purchase Agreement. As of the Closing, the Company will not be
subject to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any shares of its capital stock, except
pursuant to its Charter and the Management Agreements with Johnson,
Schilling, Xxxxxx Xxxxxx ("Xxxxxx") and Xxxxxxx Xxxxxxx ("Xxxxxxx").
As of the Closing, all of the outstanding shares of the Company's
capital stock will be validly issued, fully paid and nonassessable.
(ii) Except as provided in the Equity Purchase Agreement,
there are no statutory or contractual stockholders preemptive rights
with respect to the issuance of the Stock hereunder. Based in part on
the investment representations of the Purchasers in paragraph 5 above,
the Company has not violated any applicable federal or state
securities laws in connection with the offer, sale or issuance of any
of the Stock, and the offer, sale and issuance of the Stock hereunder
do not require registration under the Securities Act or any applicable
state securities laws. To the best of the Company's knowledge, there
are no agreements among the Company's stockholders with respect to the
voting or transfer of the Company's capital stock or with respect to
any other aspect of the Company's affairs other than the Equity
Purchase Agreement, the Stockholders Agreement, the Registration
Agreement or the Management Agreements with Johnson, Mueller, Xxxxxx
and Xxxxxxxxx.
6C. Authorization; No Breach. The execution, delivery and
performance of this Agreement, the Registration Agreement, the Stockholders
Agreement, and all other agreements contemplated hereby to which the Company is
a party have been duly authorized by the Company. This Agreement, the
Registration Agreement, the Stockholders Agreement, the Charter and all other
agreements contemplated hereby each constitutes a valid and binding obligation
of the Company, enforceable in accordance with its terms. The execution and
delivery by the Company of this Agreement, the Registration Agreement, the
Stockholders Agreement and all other agreements contemplated hereby to which the
Company is a party, the offering, sale and issuance of the Stock hereunder, and
fulfillment of and compliance with the respective terms hereof and thereof by
the Company, do not and will not (i) conflict with or
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result in a breach of the terms, conditions or provisions of, (ii) constitute a
default under, (iii) result in the creation of any lien, security interest,
charge or encumbrance upon the Company's capital stock or assets pursuant to,
(iv) give any third party the right to accelerate any obligation under, (v)
result in a violation of, or (vi) require any authorization, consent, approval,
exemption or other action by or notice to any court or administrative or
governmental body pursuant to, the Charter or bylaws of the Company, or any law,
statute, rule or regulation to which the Company is subject, or any agreement,
instrument, order, judgment or decree to which the Company is a party or by
which it is bound.
6D. Brokerage. There are no claims against the Company for brokerage
commissions, finders' fees or similar compensation in connection with the
transactions contemplated by this Agreement based on any arrangement or
agreement binding upon the Company.
6E. Governmental Consent, etc. No permit, consent, approval or
authorization of, or declaration to or filing with, any governmental authority
is required in connection with the execution, delivery and performance by the
Company of this Agreement or the other agreements contemplated hereby, or the
consummation by the Company of any other transaction contemplated hereby or
thereby.
6F. Compliance with Laws. The Company is not in violation of any law
or any regulation or requirement which violation might reasonably be expected to
have a material adverse effect upon the financial condition, operating results
or business prospects of the Company and the Company has not received notice of
any such violation.
6G. Disclosure. Neither this Agreement nor any of the schedules,
attachments, written statements, documents, certificates or other items prepared
or supplied to the Purchasers by or on behalf of the Company with respect to the
transactions contemplated hereby contains any untrue statement of a material
fact or omits a material fact necessary to make each statement contained herein
or therein not misleading. There is no fact which the Company has not disclosed
to the Purchasers in writing and of which any of its officers, directors or
executive employees is aware and which could reasonably be anticipated to have a
material adverse effect upon the existing or expected financial condition,
operating results, assets, customer relations, employee relations or business
prospects of the Company.
6H. Closing Date. The representations and warranties of the Company
contained in this paragraph 6 and elsewhere in this Agreement and all
information contained in any exhibit, schedule or attachment hereto or in any
writing delivered by, or on behalf of, the Company to any Purchasers will be
true and correct in all material respects on the date of the Closing as though
then made, except as affected by the transactions expressly contemplated by this
Agreement.
7. Definitions. For the purposes of this Agreement, the following
terms have the meanings set forth below:
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"Person" means an individual, a partnership, a corporation, an
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.
"Restricted Securities" means the Stock issued hereunder, and any
securities issued with respect thereto by way of a stock dividend or stock split
or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. As to any particular Restricted
Securities, such securities will cease to be Restricted Securities when they
have (a) been effectively registered under the Securities Act and disposed of in
accordance with the registration statement covering them, (b) become eligible
for sale and have actually been sold to the public pursuant to Rule 144 (or any
similar provision then in force) under the Securities Act or (c) been otherwise
transferred and new certificates for them not bearing the Securities Act legend
set forth in paragraph 8A have been delivered by the Company in accordance with
subparagraph 4(ii). Whenever any particular securities cease to be Restricted
Securities, the holder thereof will be entitled to receive from the Company,
without expense, new securities of like tenor not bearing a Securities Act
legend of the character set forth in paragraph 8A.
"Securities Act" means the Securities Act of 1933, as amended, or
any similar federal law then in force.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended, or any similar federal law then in force.
"Subsidiary" means any corporation of which the securities having
a majority of the ordinary voting power in electing the board of directors are,
at the time as of which any determination is being made, owned by the Company
either directly or through one or more Subsidiaries.
8. Miscellaneous.
8A. Restrictive Legend. Each certificate for Restricted Securities
will be imprinted with a legend in substantially the following form:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended. The transfer
of the securities represented by this certificate is subject to the
conditions specified in the Equity Subscription Agreement, dated as of
______________, by and between the issuer (the "Company") and a
certain investor, and the Company reserves the right to refuse the
transfer of such securities until such conditions have been fulfilled
with respect to such transfer. A copy of such conditions will be
furnished by the Company to the holder hereof upon written request and
without charge.
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8B. Successors and Assigns. Except as otherwise expressly provided
herein or in any instruments of transfer or assignment, all covenants and
agreements contained in this Agreement by or on behalf of any of the parties
hereto will bind and inure to the benefit of the respective successors and
assigns of the parties hereto whether so expressed or not. In addition, and
whether or not any express assignment has been made, the provisions of this
Agreement which are for the Purchasers' benefit as a purchaser or holder of
Stock are also for the benefit of, and enforceable by, any subsequent holder of
such Stock.
8C. Counterparts Facsimile Signatures. This Agreement may be
executed simultaneously in counterparts, both of which need not contain the
signatures of more than one party, but both such counterparts taken together
will constitute one and the same Agreement. This Agreement may be executed by
facsimile transmission.
8D. Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
8E. Governing Law. This Agreement will be governed by the internal
law, and not the law of conflicts, of Delaware.
8F. 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 sent by telex or facsimile transmission, or sent by receipted air courier, 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 the Company and the Purchasers at the address indicated below:
Notice to the Company
Global Imaging Systems Inc.
X.X. Xxx 000000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Notice to the Purchasers
______________________________
______________________________
______________________________
______________________________
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.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
GLOBAL IMAGING SYSTEMS INC.
By:
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Xxxxxx X. Xxxxxxx, President
and Chief Executive Officer
PURCHASERS:
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