Exhibit 10.4
REIMBURSEMENT AGREEMENT
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This Agreement (this "Agreement") is executed and entered into as of
January 29, 1999 by and among Law Office Information Systems, Inc., an Arkansas
corporation (the "Company"), Xxxx X. Xxxxxx, as Trustee for The Xxxxxx Trust
dated March 15, 1989 (the "Xxxxxx Trust"), Xxxxxxx Xxx Xxxxxx and Capital
Resource Lenders III, L.P., a Delaware limited partnership ("CRL III").
Reference is hereby made to that certain Senior Subordinated Note and Securities
Purchase Agreement dated as of November 24, 1997 by and between the Company and
CRL III, as amended by that certain Amendment dated as of June 29, 1998 by and
among the Company, CRL III, CRP Investment Partners III, L.L.C. ("CRP
Investment") and Xxxxxxx Xxxxxxxx ("Xxxxxxxx" and together with CRL III and CRP
Investment, the "Purchasers"), that certain Amendment No. 2 dated as of August
20, 1998 by and among the Company and the Purchasers, that certain Amendment No.
3 dated as of November 30, 1998 by and among the Company and the Purchasers, and
that certain Amendment No. 4 dated as of the date hereof by and among the
Company and the Purchasers (as so amended, the "Purchase Agreement").
Capitalized terms not otherwise defined herein shall have the meanings ascribed
to them in the Purchase Agreement.
W I T N E S S E T H:
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WHEREAS, the Company and Fleet National Bank, a national banking
association (the "Bank"), have entered into that certain Credit Agreement dated
as of August 20, 1998, as amended by that certain First Amendment to Credit
Agreement dated as of December 31, 1998 (as the same may from time to time be
amended, modified or supplemented, hereinafter referred to as the "Loan
Agreement"), pursuant to which the Bank has agreed, subject to the terms and
conditions set forth therein, to establish a credit facility in the original
aggregate principal amount of $10,000,000 in favor of the Company; and
WHEREAS, in connection with the Loan Agreement, CRL III executed that
certain Limited Guaranty dated August 20, 1998 (the "Guaranty") in favor of the
Bank, pursuant to which CRL III has agreed to guarantee certain obligations of
the Company under the Loan Agreement.
NOW THEREFORE, in consideration of the premises and the agreements herein
contained, and intending to be bound hereby, the parties hereby agree as
follows:
1. Reimbursement. The Company agrees, subject to Section 2 hereof, that
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it will repay to CRL III, immediately upon demand given by CRL III, any amounts
which may have been paid by CRL III (the "Reimbursement Amount") to the Bank, or
any of its successor and assigns, under the Guaranty, together with interest
from the date of payment to the Bank to the date of reimbursement hereunder at a
rate of 15.5% per annum. At the request of CRL III, the Company shall issue to
CRL III, or its assigns, a promissory note or notes (the "Reimbursement Note")
in the aggregate principal amount of such Reimbursement Amount. Such
Reimbursement Note shall (i) be due and payable on September 30, 2004, (ii) bear
interest (based on a 360-day year counting actual days elapsed) on the principal
amount thereof until due and payable at the rate of 15.5% per annum, which
interest shall be payable quarterly in arrears on the last Business Day of
March, June, September and December in each year, and at maturity or prior
prepayment of the Reimbursement Note in full, and (iii) be, in all other
respects, on the same terms, and in the same form as, the Notes issued to the
Purchasers under the Purchase Agreement.
2. Optional Conversion. CRL III shall have the right and option (the
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"Conversion Option"), at any time after payment of the Reimbursement Amount is
made to the Bank, to convert any portion of the then outstanding principal
balance of the Reimbursement Amount (whether evidenced by the Reimbursement Note
issued in accordance with Section 1 hereof or otherwise) together with all
accrued and unpaid interest due thereon (collectively, the "Conversion Amount"),
into shares of the Company's Series A Convertible Preferred Stock, $0.001 par
value per share (the "Series A Preferred Stock"), on the same terms and
conditions set forth in the Purchase Agreement and the Company's Articles of
Incorporation, as amended and in effect on the date hereof, such that: as soon
as practicable after CRL III exercises the Conversion Option, the Company shall
issue to CRL III or its assigns that number of shares of Series A Preferred
Stock equal to the quotient obtained by dividing (x) the Conversion Amount, by
(y) 3.2222.
3. Further Assurances. From and after the date of this Agreement, upon
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the request of CR III, the Company, Xxxx X. Xxxxxx as Trustee for the Xxxxxx
Trust and Xxxxxxx Xxx Xxxxxx shall execute and deliver such instruments,
documents, agreements and other writings as may be reasonably necessary or
desirable to confirm and carry out and to effectuate fully the intent and
purposes of this Agreement. Without limiting the generality of the foregoing,
the parties hereto agree: (i) to execute all necessary amendments to the
Operative Documents (including, without limitation, the Stockholders' Agreement,
the Registration Rights Agreement and the Preferred Stock Subordination
Agreement, each as amended and in effect) and the Company's Articles of
Incorporation, as amended and in effect; and (ii) to take such other action
including the voting of (or acting by written consent with respect to) any and
all shares of capital stock of the Company that such party is entitled to vote,
as may be necessary, from time to time, to ensure that the Company's Articles of
Incorporation and By-laws, as amended and in effect, do not conflict with the
intent and purposes of this Agreement.
4. Representations and Warranties of the Company. The Company hereby
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represents and warrants to CRL III that: (i) the Company is a duty organized
and validly existing corporation under the laws of the State of Arkansas, (ii)
the Company has taken all corporate action required to make all the provisions
of this Agreement the valid and enforceable obligations they purport to be, and
(iii) neither the execution and delivery of this Agreement nor the consummation
of any transaction contemplated hereby has constituted or resulted in or will
constitute or result in a default or violation of any law or regulation
applicable to the Company or any term or provision of the Company's Articles of
Incorporation or By-laws or any agreement or instrument by which it is bound or
to which its properties or assets are subject.
5. Survival of Representations. The representations and warranties made
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in this Agreement shall survive the execution and delivery hereof.
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6. Miscellaneous.
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(a) Descriptive Headings. The descriptive headings in this Agreement
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are inserted for convenience only and do not constitute a part of this
Agreement.
(b) Governing Law. The construction, validity and interpretation of
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this Agreement will be governed by and construed in accordance with the domestic
laws of the Commonwealth of Massachusetts without giving effect to any choice of
law or conflict of law provision or rule (whether of the Commonwealth of
Massachusetts or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the Commonwealth of Massachusetts.
(c) Counterparts. This Agreement may be executed in any number of
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counterparts, all of which taken together shall constitute one and the same
instrument, and each of the parties hereto may execute this Agreement by signing
any such counterpart.
(d) Costs, Expenses, Taxes. The Company agrees to pay on demand all
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costs and expenses of CRL III in connection with the preparation, execution and
performance of this Agreement and the transactions contemplated hereby,
including the reasonable fees and out-of-pocket expenses of Messrs. Xxxxx,
Xxxxxxx & Xxxxxxxxx, LLP counsel for CRL III, with respect thereto.
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IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto
as of the day and year first above set forth.
LAW OFFICE INFORMATION SYSTEMS, INC.
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: CEO
THE XXXXXX TRUST DATED MARCH 15, 1989
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: CEO
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx Xxx Xxxxxx
CAPITAL RESOURCE LENDERS III, L.P.
By: Capital Resource Partners III, L.L.C.
Its General Partner
By: /s/ Xxxxxx X. Xxxxxxxx
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Managing Member
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AMENDMENT NO. 1
TO
REIMBURSEMENT AGREEMENT
This Amendment No. 1 dated as of June 16, 1999 (the "Amendment") by and
among Law Office Information Systems, Inc., an Arkansas corporation (the
"Company"), Xxxx X. Xxxxxx, as Trustee for The Xxxxxx Trust dated March 15,
1989, as amended (the "Xxxxxx Trust"), Xxxxxxx Xxx Xxxxxx, an individual (Xx.
Xxxxxx") and Capital Resource Lenders III, L.P., a Delaware limited partnership
("CRL III") amends that certain Reimbursement Agreement dated as of January 29,
1999 by and among the Company, the Xxxxxx Trust, Xx. Xxxxxx and CRL III (the
"Reimbursement Agreement"). Capitalized terms not otherwise defined herein
shall have the meanings ascribed to them in the Purchase Agreement.
In consideration of the mutual covenants and agreements set forth herein
and for good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereby agree as follows:
1. Paragraph 2 of the Reimbursement Agreement is hereby amended and
restated in its entirety to read as follows:
2. Optional Conversion. Until such time as the Company consummates
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an underwritten initial public offering of the Company's common stock
registered under the Securities Act of 1933, as amended, CRL III shall have
the right and option (the "Conversion Option"), at any time after payment
of the Reimbursement Amount is made to the Bank, to convert any portion of
the then outstanding principal balance of the Reimbursement Amount (whether
evidenced by the Reimbursement Note issued in accordance with Section 1
hereof or otherwise) together with all accrued and unpaid interest due
thereon (collectively, the "Conversion Amount"), into shares of the
Company's Series A Convertible Preferred Stock, $0.001 par value per share
(the "Series A Preferred Stock"), on the same terms and conditions set
forth in the Purchase Agreement and the Company's Articles of
Incorporation, as amended and in effect on the date hereof, such that: as
soon as practicable after CRL III exercises the Conversion Option, the
Company shall issue to CRL III or its assigns that number of shares of
Series A Preferred Stock equal to the quotient obtained by dividing (x) the
Conversion Amount, by (y) 3.2222.
2. This Amendment may be executed in counterparts, each of which is
deemed to be an original and all of which together shall be deemed to constitute
one and the same agreement. In addition to any other lawful means of execution
or delivery, this Amendment may be executed by facsimile signatures and may be
delivered by the exchange of counterparts of signature pages by means of
telecopier transmission.
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IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto
as of the day and year first above set forth.
LAW OFFICE INFORMATION SYSTEMS, INC.
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: Chief Executive Officer
XXXX X. XXXXXX, TRUSTEE OF THE XXXXXX TRUST DATED MARCH 15, 1989
By: /s/ Xxxx Xxxxxx
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Xxxx X. Xxxxxx, Trustee
/s/ Xxxxxxx Xxx Xxxxxx
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Xxxxxxx Xxx Xxxxxx
CAPITAL RESOURCE LENDERS III, L.P.
By: Capital Resource Partners III, L.L.C.
Its General Partner
By: /s/ Xxxxxx X. Xxxxxxxx
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Managing Member
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