EXHIBIT 10.1
EQUITY PURCHASE AGREEMENT
THIS AGREEMENT is made as of June 9, 1994, by and among GLOBAL IMAGING
SYSTEMS INC., a Delaware corporation (the "Company"), and GOLDER, THOMA,
XXXXXXX, XXXXXX FUND IV LIMITED PARTNERSHIP, a Delaware limited partnership
("GTCR"); Xxxxxx X. Xxxxxxx ("Xxxxxxx") and the other purchasers listed on the
Schedule of Purchasers attached hereto (GTCR, Xxxxxxx and such other purchasers
being referred to individually as a "Purchaser" and collectively as the
"Purchasers"). Except as otherwise indicated, capitalized terms used herein are
defined in Section 8 hereof.
The parties hereto agree as follows:
1. Authorization of Common Stock. The Company has authorized the issuance
and sale to the Purchasers of (i) 0 shares of its Class A Common Stock, $.01 par
value per share, having the rights and preferences set forth in Exhibit A
attached hereto (the "Class A Common"), and (ii) 49,019.59 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 "Common
Stock."
2. Purchase and Sale of the Stock. The parties will execute and deliver
counterparts of this Agreement, the Registration Agreement and the Stockholders
Agreement (as defined in Sections 4C and 4F below) on or about June 9, 1994. The
initial funding of the Company will occur at an initial closing ("Closing") to
be held on a date mutually satisfactory to the Purchasers and the Company not
later than June 9, 1994. At the Closing, the Company will sell to each of the
Purchasers and, subject to the terms and conditions set forth herein, each of
the Purchasers will purchase from the Company, (i) the number of shares of Class
A Common set forth opposite such person's name on the Schedule of Purchasers at
a price of $90.00 per share and (ii) the number of shares of Class B Common set
forth opposite such person's name on the Schedule of Purchasers at a price of
$10.455 per share (in the aggregate, a total purchase price of $512,500 Closing
of the purchase and sale of the Common Stock will be effected by exchange of
documents, certificates and agreements, by air courier, facsimile transmission
or other means satisfactory to the parties. At the Closing, the Company will
issue and deliver to each of the Purchasers certificates evidencing the Common
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 in this Section 2.
3. Purchasers' Commitment to Purchase Additional Equity.
3A. Commitment.
(i) Each of the Purchasers hereby agrees to purchase its Pro Rata Share
of up to $19,987,500 of additional Class A Common (the "New Stock") on the terms
and subject to the conditions set forth in this Section 3.
(ii) The funds received by the Corporation from each purchase of New
Stock shall be invested in Class A Common at a purchase price of $90.00 per
share. All purchases shall be made in cash or by wire transfer of funds.
3B. Providing Funds for Qualified Acquisitions and Investments.
(i) Prior to June __, 1998, the Company will use reasonable efforts
to notify (the "Purchase Notice") each of the Purchasers at least 30 days prior
to the consummation by the Company or a Subsidiary of a Qualified Acquisition or
Investment (as defined immediately below) which is to be financed by the Company
or a Subsidiary other than solely with the Company's or a Subsidiary's available
funds (including cash on hand or available under then existing credit
facilities) (the "Equity Portion"). The Purchase Notice shall state the
aggregate amount of the Equity Portion of any Qualified Acquisition or
Investment and shall provide each Purchaser's Pro Rata Share thereof.
The purchase and sale of the New Stock shall occur at a time and place
specified in the Purchase Notice in connection with (and is conditioned upon)
the consummation of the Qualified Acquisition or Investment.
(ii) For purposes of this Section 3B, a Qualified Acquisition or
Investment shall mean the acquisition of, or investment in, a company in the
copier/office equipment service dealer industry which is approved by the board
of directors of the Company or the Subsidiary making such investment or
acquisition.
(iii) In no event shall the aggregate amount of purchases of New Stock
under this Section 3B exceed $19,987,500 (the "Total Commitment"). In the event
that Xxxxxxx is unable to fulfill any part of his Pro Rata Share (a
"Deficiency"), then (a) the other Purchasers shall fulfill the amount of the
Deficiency by the purchase of additional New Stock, with such purchase to be
apportioned among such other Purchasers on the basis of their respective Pro
Rata Shares and (b) the Purchasers' Total Commitment shall be reduced by the
amount of the Deficiency; provided, however, that no Purchaser shall be required
to exceed its Individual Commitment as set forth on the Purchasers' Commitment
Schedule attached hereto.
(iv) Xxxxxxx shall have the right to make any or all of his purchases
of New Stock by borrowing his Pro Rata Share from the Company pursuant to the
form of note attached as Exhibit A-l hereto and by also executing the form of
stock pledge agreement attached as Exhibit A-2 hereto. Xxxxxxx shall not be in
default under this Section 3 if the funds are not loaned by the Company.
3C. Effect of Failure by a Purchaser to Fulfill Commitment.
(i) If for any reason any Purchaser fails to purchase its Pro Rata
Share of New Stock (a "Default"), then the Company shall be given a three-year
option to repurchase any or all of such defaulting Purchaser's Common Stock at
the lesser of
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(a) the book value per share, calculated as of the end of the Company's
most recent fiscal quarter for which financial statements are available
prior to the date of repurchase, such determination to be made in
accordance with generally accepted accounting principles consistently
applied or (b) the original purchase price per share. Any repurchase under
this Section 3C shall be made in cash by the Company within fifteen (15)
days following the Company's written notice of its exercise of the
repurchase option provided in this Section 3C.
(ii) To effect the repurchase option contemplated by this
Section 3C, each Purchaser hereby irrevocably constitutes and appoints any
duly authorized officer of the Company to register in the stock transfer
books of the Company at any time on or after the date hereof the transfer
to the Company of the number of shares of Common Stock which is subject to
the repurchase option pursuant to this Section 3C, as determined by the
board of directors of the Company in the exercise of its good faith
judgment.
(iii) Except as set forth in the next sentence, the Company and
the Purchasers acknowledge that the provisions of this Section 3C shall be
the Company's sole remedy for a Purchaser's failure to purchase its Pro
Rata Share of New Stock as set forth in this Agreement.
(iv) In the event of a Default (a) the other Purchasers shall
collectively fulfill the amount of the Default by purchasing such
defaulting Purchaser's Pro Rata Share of New Stock on the basis of the
ratio of their respective Pro Rata Shares; and (b) the Total Commitment
shall be reduced by the amount of the Default; provided, however, that no
Purchaser shall be required to exceed its Individual Commitment as set
forth on the Purchasers' Commitment Schedule attached hereto.
3D. Miscellaneous. At the closing of any purchase and sale pursuant
to this Section 3, the Company will deliver to each Purchaser certificates
evidencing the New Stock to be purchased, upon payment to the Company of the
aggregate purchase price therefor by wire transfer of immediately available
funds. In connection with such closing, (i) the Company shall represent and
warrant that the representations and warranties set forth in Section 7 below are
true and correct in all material respects as of the date of such closing,
provided that the Company shall be entitled to disclose information relating to
the period from the date hereof through the date of such closing which is
required in order to make such representations and warranties not false or
misleading and (ii) each Purchaser shall represent and warrant to the Company
that the representations and warranties set forth in Section 9C are true and
correct with respect to the contemplated purchase of New Stock.
3E. Future Purchases. In the event that GTCR invests more than
$20,000,000 in the Common Stock of the Corporation (an "Additional Investment"),
than the funds received by the Corporation from each Additional Investment by
GTCR shall be invested in both the Class A Common and the Class B Common. Each
Additional Investment shall be allocated as follows: (i) 97.5% of the Additional
Investment shall be made in the Class A Common (at a purchase price of $90.00
per share) and (ii) 2.5% of the Additional Investment
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shall be made in the Class B Common (at a purchase price of $ 10.455 per share).
In the event GTCR makes any Additional Investment, pursuant to paragraph 6 of
the Stockholders Agreement, Xxxxxxx and each other Manager shall be given 30
days to purchase such number of additional shares of Class B Common (at a
purchase price of $ 10.455 per share) as necessary to maintain such Manager's
percentage interest in the Class B Common of the Corporation prior to the sale
of the Additional Investment; provided, however, that each Manager's right to
maintain his percentage interest in the Class B Common shall not be available in
the event that the Additional Investment is being made by GTCR in order to
ensure compliance with any of the Corporation's debt instruments or credit
agreements.
4. Conditions of each of the Purchasers' Obligations at the Closing. The
obligation of each of the Purchasers to purchase and pay for the Common Stock at
the Closing is subject to the satisfaction as of the Closing of the following
conditions:
4A. Representations and Warranties. The representations and warranties
contained in Section 7 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.
4B. Certificate of Incorporation. The Company's Certificate of
Incorporation in the form of Exhibit B (the "Charter"), as so filed will be in
full force and effect at the Closing and will not have been further amended or
modified.
4C. Registration Agreement. The Company and the Purchasers will have
entered into a registration agreement, in form and substance substantially
similar to Exhibit C attached hereto (the "Registration Agreement"), and the
Registration Agreement will be in full force and effect as of the Closing.
4D. Consulting Agreement. The Company will have entered into a Consulting
Agreement with Golder, Thoma, Cressey, Rauner, Inc. in form and substance
substantially similar to Exhibit D attached hereto (the "Consulting Agreement"),
and such Consulting Agreement will not have been amended or modified and will be
in full force and effect as of the Closing.
4E. Executive Agreements. . The Company will have entered into an Executive
Employment Agreements with Xxxxxxx and Xxxxxxx Xxxxxxxxx in form and substance
substantially similar to Exhibits E-l and E-2 attached hereto (the "Executive
Agreements"), and such Executive Agreements will not have been amended or
modified and will be in full force and effect as of the Closing.
4F. Stockholders Agreement. The Company and the Purchasers will have
entered into a stockholders agreement in form and substance substantially
similar to Exhibit F attached hereto (the "Stockholders Agreement"), and the
Stockholders Agreement will be in full force and effect as of the Closing.
4G. Closing Documents. The Company will have delivered to each of the
Purchasers all of the following documents:
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(i) an Officer's Certificate, dated the date of the Closing,
stating that the conditions specified in Section 1 and Sections 4A through
4F, inclusive, have been fully satisfied;
(ii) certified copies of the resolutions duly adopted by the
Company's Board of Directors authorizing the execution, delivery and
performance of this Agreement, the Registration Agreement, the Consulting
Agreement, the Executive Agreements, the Stockholders Agreement, and each
of the other agreements contemplated hereby, the filing of the Charter
referred to in Section 4A, the issuance and sale of the Common Stock, and
the consummation of all other transactions contemplated by this Agreement;
(iii) certified copies of the Charter and the Company's bylaws,
each as in effect at the Closing;
(iv) an opinion from Xxxxx, Xxxxxx & Xxxxxx, special counsel to
the Purchasers, addressed to the Purchasers and dated the Closing Date, in
form and substance substantially similar to Exhibit G hereto; and
(v) such other documents relating to the transactions
contemplated by this Agreement as the Purchasers may reasonably request.
4H. Minimum Paid-in Equity Capital. The Company will have received
from the Purchasers at least $512,500 in cash as payment for the Common Stock.
4I. 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.
4J. Waiver. Any condition specified in this Section 4 may be waved;
provided that no such waiver will be effective against the Purchasers unless it
is set forth in a writing executed by all of the Purchasers.
5. Covenants.
5A. Financial Statements and Other Information. The Company will
deliver to each of the Purchasers (so long as the Purchaser holds any of the
Common Stock):
(i) concurrently with their delivery to the Company's board of
directors, unaudited quarterly consolidated and consolidating statements of
income and changes in consolidated financial position of the Company and
its Subsidiaries for such fiscal quarter and for the period from the
beginning of the fiscal year to the end of such quarter, and balance sheets
of the Company and its Subsidiaries as of the end of such quarterly period;
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(ii) concurrently with their delivery to the Board of Directors,
consolidating and consolidated statements of income and consolidated
statements of changes in financial position of the Company and its
Subsidiaries for each fiscal year and consolidating and consolidated
balance sheets of the Company and its Subsidiaries as of the end of such
fiscal year, accompanied by an opinion of a "Big Six" or other independent
accounting firm of recognized national standing acceptable to the Purchaser
and a copy of such firm's annual management letter to the Board of
Directors;
(iii) any additional reports or other information concerning the
Company as the Board of Directors may from time to time prescribe; and
(iv) with reasonable promptness, such other information and
financial data concerning the Company and its Subsidiaries as any Person
entitled to receive information under this Section 5A reasonably requests.
5B. Inspection of Property. The Company will permit any
representatives designated by the Purchasers, upon reasonable notice and during
normal business hours and such other times as the Purchasers may reasonably
request, to (i) visit and inspect any of the properties of the Company and its
Subsidiaries, (ii) examine the corporate and financial records of the Company
and its Subsidiaries and make copies thereof or extracts therefrom, (iii)
discuss the affairs, finances and accounts of the Company and its Subsidiaries
with the directors, officers, key employees and independent accountants of the
Company and its Subsidiaries, and (iv) consult with and advise the management of
the Company and its Subsidiaries as to their affairs, finances and accounts.
5C. Meetings of Directors. There will be at least four meetings of the
Company's Board of Directors during each fiscal year, at least one of which will
be held in each 90-day period during the Company's fiscal year. All
out-of-pocket expenses of each board member incurred in connection' with
attending regular and special Board of Directors' meetings and any meeting of
any committee thereof will be paid by the Company.
5D. Class A Common Stock Restrictions. So long as any Class A Common
remains outstanding, the Company will not, without the consent of the holders of
a majority of the outstanding Class A Common:
(i) directly or indirectly declare or pay any dividends or make
any distributions upon any of its equity securities other than the Class A
Common, except for dividends payable in shares of Class B Common issued
upon the outstanding shares of Class B Common;
(ii) directly or indirectly redeem, purchase or otherwise
acquire, or permit any Subsidiary to redeem, purchase or otherwise acquire,
any of the Company's equity securities other than the Class A Common,
except up to 9,803.91 shares of Common Stock (as adjusted for stock splits,
stock dividends, combinations of shares and
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other reclassifications of shares) sold or contemplated as available for
sale to Xxxxxxx and to the Company's officers and employees;
(iii) issue or enter into any agreement providing for the issuance
(contingent or otherwise) of (a) equity securities that are senior to or on
a parity with the Class A Common, or (b) any Class B Common (or options,
warrants or rights to acquire Class B Common) at a price less than $9.00
per share, or the fair market value of the Common Stock (as determined by
the Board of Directors), whichever is greater;
(iv) become subject to, or permit any of its Subsidiaries to
become subject to, any agreement or instrument, which by its terms would
(under any circumstances) restrict the Company's right to perform any of
its obligations pursuant to the terms of this Agreement, the Registration
Agreement, the Consulting Agreement, the Executive Agreements, the
Stockholders Agreement, the Charter or the Company's bylaws (including,
without limitation, all obligations relating to payment of dividends on and
making redemptions of the Class A Common); or
(v) except as contemplated by this Agreement, make any amendment
to the Charter or the Company's bylaws, or file any resolution of the Board
of Directors with the Delaware Secretary of State containing any
provisions, which would adversely affect or otherwise impair the rights of
the holders of the Common Stock under this Agreement, the Registration
Agreement, the Consulting Agreement, the Executive Agreements, the
Stockholders Agreement, the Charter or the Company's bylaws.
5E. Negative Covenants. So long as there is a Qualified Holder, the
Company will not, without the prior consent of each Qualified Holder:
(i) merge or consolidate with any Person or, except as permitted
by subparagraph (iv) below, permit any Subsidiary to merge or consolidate
with any Person (other than a merger between the Company and a wholly-owned
Subsidiary (but only if the Company is the surviving corporation and its
certificate of incorporation is not amended or modified thereby) or between
wholly-owned Subsidiaries);
(ii) sell, lease or otherwise dispose of, or permit any
subsidiary to sell, lease or otherwise dispose of, more than 20% of the
Company's consolidated assets in any transaction or series of related
transactions (other than sales in the ordinary course of business).
(iii) liquidate, dissolve or effect a recapitalization or
reorganization in any form of transaction;
(iv) acquire, or permit any Subsidiary to acquire, any interest
in any business (whether by a purchase of assets, purchase of stock, merger
or otherwise) involving an aggregate consideration exceeding $100,000 in
any one transaction or an aggregate consideration exceeding $250,000 in any
twelve-month period;
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(v) except as contemplated by this Agreement, enter into, or
permit any Subsidiary to enter into, any transaction with any of the
Company's or any of its Subsidiary's officers, directors, or employees or
their respective affiliates, except for normal employment arrangements and
benefit programs, and except for the Consulting Agreement and the Executive
Agreements;
(vi) create, incur, assume, or suffer to exist or permit any
Subsidiary to create, incur, assume or suffer to exist, funded indebtedness
exceeding in the aggregate $200,000 outstanding at any time on a
consolidated basis;
(vii) make any capital expenditures (including, without
limitation, payments with respect to capitalized leases, as determined in
accordance with generally accepted accounting principles consistently
applied) exceeding $200,000 in the aggregate on a consolidated basis during
any twelve-month period;
(viii) enter into any leases or other rental agreements (excluding
capitalized leases, as determined in accordance with generally accepted
accounting principles consistently applied) under which the amount of the
aggregate lease payments for all such agreements exceeds $400,000 on a
consolidated basis for any twelve-month period;
(ix) issue or sell any shares of capital stock, or rights to
acquire shares of capital stock except as contemplated by this Agreement;
or
(x) issue or sell any shares of the capital stock, or rights to
acquire shares of the capital stock, of any Subsidiary to any Person other
than the Company or another Subsidiary.
5F. Affirmative Covenants. So long as there is a Qualified Holder,
unless otherwise consented to by each Qualified Holder, the Company will, and
will cause each Subsidiary to:
(i) at all times cause to be done all things necessary to
maintain, preserve and renew its corporate existence and all material
licenses, authorizations and permits necessary to the conduct of its
businesses;
(ii) maintain and keep its properties in good repair, working
order and condition (ordinary wear and tear excepted), and from time to
time make all necessary or desirable repairs, renewals and replacements, so
that its businesses may be properly and advantageously conducted at all
times in all material respects;
(iii) pay and discharge when payable all taxes, assessments and
governmental charges imposed upon its properties or upon the income or
profits therefrom (in each case before the same becomes delinquent and
before penalties accrue thereon) and all claims for labor, materials or
supplies which if unpaid might by law
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become a lien upon any of its properties, unless and to the extent that the
same are being contested in good faith;
(iv) comply with all other material provisions of any material
contract or agreement to which it is a party or by which it is bound,
whether oral or written, express or implied, and pay all material
obligations which it has incurred or may incur pursuant to any such
contract or agreement as such obligations become due, unless and to the
extent that the same are being contested in good faith;
(v) comply with all applicable laws, rules and regulations of
all governmental authorities, the violation of which might reasonably be
expected to have a material adverse effect upon the financial condition,
operations or business prospects of the Company or any Subsidiary;
(vi) apply for and continue in force with good and reputable
insurance companies adequate insurance covering risks of such types and in
such amounts as are customary for well-insured corporations of similar size
engaged in similar lines of business;
(vii) make all required filings under the Xxxx-Xxxxx-Xxxxxx Act
for all acquisitions by the Company or any Subsidiary; and
(viii) maintain proper books of record and account which fairly
present its financial condition and results of operations and make
provisions on its financial statements for all such proper reserves as in
each case are required in accordance with generally accepted accounting
principles, consistently applied.
5G. Registration of Transfer. The Company will keep at its principal
office (or such other place as the Company reasonably designates) a register for
the registration of stock. Upon the surrender of any certificate representing
shares of Common Stock at such place, the Company will, at the request of the
registered holder of such certificate and subject to the restrictions on
transfer set forth in this Agreement, execute and deliver a new certificate or
certificates in exchange therefor representing the number of shares of Common
Stock represented by the surrendered certificate, and the Company forthwith will
cancel such surrendered certificate. Each such new certificate will be
registered in such name and will represent such number of shares of Common Stock
as is requested by the holder of the surrendered certificate and will be
substantially identical in form to the surrendered certificate. The issuance of
new certificates will be made without charge to the holders of the surrendered
certificates for any issuance tax in respect thereof or other costs incurred by
the Company in connection with such issuance.
6. 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
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Commission (or any similar rule then in force) if such rule is available
and (c) subject to the conditions specified in subparagraph (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 6(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, Xxxxxx &
Xxxxxx 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,
Xxxxxx & Xxxxxx 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
Securities Act legend set forth in Section 9C. 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 Section 9D.
7. Representations and Warranties of the Company. As a material
inducement to the Purchasers to enter into this Agreement and purchase the
Common Stock, the Company hereby represents and warrants that:
7A. 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' reflect all amendments made thereto
at any time prior to the date of this Agreement and are correct and complete.
7B. 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 Stock, of which no shares will be issued and outstanding, and (b)
300,000 shares of Class B Common Stock, of which 55,555.53 shares will be
issued and outstanding, and 3,267.97 shares will be reserved for issuance
to employees, officers and directors of the Company. 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
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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. 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, this Agreement, the Stockholders Agreement and the Executive
Agreements. 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 this Agreement, there are no statutory
or contractual stockholders preemptive rights with respect to the issuance
of the Common Stock hereunder. Based in part on the investment
representations of each of the Purchasers in Section 9C, the Company has
not violated any applicable federal or state securities laws in connection
with the offer, sale or issuance of any of its capital stock, and the
offer, sale and issuance of the Common 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 this Agreement, the Registration Agreement,
the Executive Agreements and the Stockholders Agreement.
7C. Subsidiaries. The Company does not own or hold any rights to
acquire any shares of stock or any other security or interest in any other
Person.
7D. Authorization: No Breach. The execution, delivery and performance
of this Agreement, the Registration Agreement, the Consulting Agreement, the
Executive Agreements, 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 Consulting
Agreement, the Executive Agreements, 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 Consulting Agreement, the Executive Agreements, the Stockholders
Agreement and all other agreements contemplated hereby to which the Company is a
party, the offering, sale and issuance of the Common 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 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.
7E. No Prior Activities. As of the date of the Closing, the Company
has no significant assets and has not incurred any significant liabilities or
obligations, except those
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incurred in connection with its incorporation, with the negotiation and
consummation of this Agreement and the transactions contemplated hereby. As of
the date of the Closing, the Company has not engaged in any business or
activities of any type or kind whatever, or entered into any agreements or
arrangements with any person or entity, or become subject to or bound by any
obligation or undertaking which is not related to the transactions contemplated
by this Agreement.
7F. Tax Matters. The Company has filed all tax returns which it is required
to file; all such returns are true and correct in all material respects; the
Company has in all material respects paid all taxes owed by it or which it is
obligated to withhold from amounts owing to any employee, creditor or third
party; the Company has not waived any statute of limitations with respect to
taxes or agreed to any extension of time with respect to a tax assessment or
deficiency; the assessment of any additional taxes for periods for which returns
have been filed is not expected; and there are no material unresolved questions
or claims concerning the Company's tax liability. The Company has not made an
election under Section 341(f) of the Internal Revenue Code of 1986, as amended
(the "Code").
7G. Contracts and Commitments. The Company has not entered into any
contract or commitment except as described herein. No director, officer or
employee of the Company is prohibited or in any way limited by any agreement in
his or her ability to conduct the business of the Company or engage in any of
the transactions contemplated by this Agreement.
7H. Litigation, etc. There are no actions, suits, proceedings, orders,
investigations or claims pending or, to the best of the Company's knowledge,
threatened against or affecting the Company at law or in equity, or before or by
any governmental department, commission, board, bureau, agency or
instrumentality; the Company is not subject to any arbitration proceedings under
collective bargaining agreements or otherwise or, to the best of the Company's
knowledge, any governmental investigations or inquiries (including inquiries as
to the qualification to hold or receive any license or permit); and, to the best
of the Company's knowledge, there is no basis for any of the foregoing. The
Company has not received any opinion or memorandum or legal advice from legal
counsel to the effect that it is exposed, from a legal standpoint, to any
liability or disadvantage which may be material to its business.
7I. 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. The Company will pay, and hold the
Purchasers harmless against, any liability, loss or expense (including, without
limitation, reasonable attorneys' fees and out-of-pocket expenses) arising in
connection with any such claim.
7J. 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.
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7K. ERISA. The Company does not presently maintain or contribute to, nor
has ever maintained or contributed to, any "employee benefit plan," as such term
is defined in Section 3 of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), with respect to which the Company is required to file
Internal Revenue Service ("IRS") Form 5500, and the Company does not presently
contribute to nor ever has contributed to any "multi-employer plan," as such
term is defined in Section 3 of ERISA.
7L. 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.
7M. Employee Agreements. None of the Company's key employees is obligated
under any contract (including licenses, covenants, or commitments of any nature)
or other agreement, or subject to any judgment, decree or order of any court or
administrative agency, which would conflict with his obligation to use his best
efforts to promote the interests of the Company or which would conflict with the
Company's business as conducted or as proposed to be conducted. Neither the
execution or delivery of this Agreement, nor the carrying on of the Company's
business as an officer, director or employee by any of its key employees, nor
the conduct of the Company's business as conducted or as proposed to be
conducted, will conflict with or result in a breach of the terms, conditions or
provisions of, or constitute a default under, any contract, covenant or
instrument under which any of its key employees is now obligated.
7N. 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.
7O. Closing Date. The representations and warranties of the Company
contained in this Section 7 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 Purchaser 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.
8. Definitions. For the purposes of this Agreement, the following terms
have the meanings set forth below:
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"Affiliates" shall have the meaning set forth in Rule 405 of the Securities
Act.
"Executive Agreements" shall mean those certain executive agreements with
Xxxxxxx, Xxxxxxx Xxxxxxxxx and other principal executives of the Company
pursuant to which such executives will purchase up to an aggregate of 8,823.5
shares of Class B Common (as adjusted from time to time for any stock splits,
stock dividends, recombinations, mergers, recapitalizations, reclassifications
or any similar event).
"Individual Commitment" shall mean, with respect to each Purchaser, the
amount set forth on the Purchasers' Commitment Schedule attached hereto under
the caption "Individual Commitment" opposite such Purchaser's name.
"Investment" as applied to any Person means (i) any direct or indirect
purchase or other acquisition by such Person of any notes, obligations,
instruments, stock, securities or ownership interest of any other Person and
(ii) any capital contribution by such Person to any other Person.
"Manager" shall mean Xxxxxxx, Xxxxxxx Xxxxxxxxx and any other executives of
the Company or a Subsidiary who purchase shares of Class B Common pursuant to
the Executive Agreements.
"Officer's Certificate" means a certificate signed by the Company's
president or its chief financial officer, stating that (i) the officer signing
such certificate has made or has caused to be made such investigations as are
necessary in order to permit him to verify the accuracy of the information set
forth in such certificate and (ii) to the best of such officer's knowledge, such
certificate does not misstate any material fact and does not omit to state any
fact necessary to make the certificate not misleading.
"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.
"Pro Rata Share" means the ratio of (x) the total commitment by each
Purchaser to purchase Class A Common Stock on the date of the Closing to (y)
$20,000,000. Each Purchaser's Pro Rata Share is set forth on the Purchasers'
Commitment Schedule attached hereto.
"Qualified Holder" means any Purchaser (together with successors and its
Affiliates) which owns at least 40% of the outstanding shares of Class A Common
(so long as shares of Class A Common remain outstanding) and 30% of the
outstanding shares of Class B Common.
"Restricted Securities" means the Common 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
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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 Section 9C have been
delivered by the Company in accordance with paragraph 6(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 Section
9C.
"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.
9. Miscellaneous.
9A. Expenses. The Company agrees to pay, and hold the Purchasers and all
holders of Common Stock issued hereunder, harmless against liability for the
payment of, (i) the reasonable fees and expenses of their counsel arising in
connection with the negotiation, execution and consummation of the transactions
contemplated by this Agreement, (ii) reasonable fees and expenses incurred with
respect to any amendments or waivers (whether or not the same become effective)
under or in respect of this Agreement, the agreements contemplated hereby or the
Charter, (iii) stamp and other taxes which may be payable in respect of the
execution and delivery of this Agreement or the issuance, delivery or
acquisition of any shares of Common Stock issued hereunder, (iv) reasonable fees
and expenses incurred in respect of the enforcement of the rights granted under
this Agreement, the agreements contemplated hereby and the Charter, and (v) any
out-of-pocket expenses incurred by the Purchasers in connection with the
formation of the Company or the conduct of the Company's business (including,
without limitation, any travel expenses and executive search fees of executive
search firms).
9B. Remedies. Each holder of Common Stock will have all rights and remedies
set forth in this Agreement and the Charter and all rights and remedies which
such holders have been granted at any time under any other agreement or contract
and all of the rights which such holders have under any law. Any Person having
any rights under any provision of this Agreement will be entitled to enforce
such rights specifically, to recover damages by reason of any breach of any
provision of this Agreement and to exercise all other rights granted by law.
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9C. Purchasers' Investment Representations. Each Purchaser hereby
represents that it is acquiring the Restricted Securities purchased hereunder or
acquired pursuant hereto for its own account with the present intention of
holding such securities for purposes of investment, that it is an Accredited
Investor as that term is defined in Rule 501 under the Securities Act and that
it has no intention of selling such securities in a public distribution in
violation of the federal securities laws or any applicable state securities
laws; provided that nothing contained herein will prevent such Purchaser and
subsequent holders of Restricted Securities from transferring such securities in
compliance with the provisions of Section 6 hereof. 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 Purchase Agreement, dated as of June __, 1994, by
and among the issuer (the "Company") and certain investors, 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.
9D. Consent to Amendments. Except as otherwise expressly provided herein,
the provisions of this Agreement may be amended and the Company may take any
action herein prohibited, or omit to perform any act herein required to be
performed by it, only if (i) in the case of provisions relating expressly to
rights of the Class A Common or the holders thereof, the Company has obtained
the written consent of holders of a majority of the shares of Class A Common
issued hereunder outstanding at the time such consent is given, (ii) in the case
of provisions relating expressly to rights of the Class B Common or the holders
thereof, the Company has obtained written consent of holders of at least
two-thirds of the shares of Class B Common issued hereunder outstanding at the
time such consent is given and (iii) in the case of all such other provisions,
the Company has obtained the written consent of holders of a majority of the
Class A Common and at least two-thirds of the Class B Common issued hereunder.
No other course of dealing between the Company and the holder of any Class A
Common or Class B Common or any delay in exercising any rights hereunder or
under the Charter will operate as a waiver of any rights of any such holders.
For purposes of this Agreement, shares of Class A Common or Class B Common held
by the Company or any Subsidiaries will not be deemed to be outstanding. If the
Company pays any consideration to any holder of Common Stock for such holder's
consent to any amendment, modification or waiver hereunder, the Company shall
also pay each other holder granting its consent hereunder equivalent
consideration computed on a pro rata basis.
9E. Survival of Representations and Warranties. All representations and
warranties contained herein or made in writing by any party in connection
herewith will survive the execution and delivery of this Agreement, regardless
of any investigation made by any of the Purchasers or on their xxxxxx.
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0X. Xxxxxxxxxx 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 Common Stock are also for
the benefit of, and enforceable by, any subsequent holder of such Common Stock.
9G. Capital and Surplus. The Company agrees that the capital of the Company
(as such term is used in Section 154 of the General Corporation Law of Delaware)
in respect of the Common Stock issued pursuant to this Agreement will be equal
to the aggregate par value of such shares. The Company further agrees that it
will not increase the capital of the Company with respect to any shares of the
Company's capital stock at any time on or after the date of this Agreement,
except as contemplated herein.
9H. Severability. Whenever possible, each provision of this Agreement will
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 prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Agreement.
9I. Counterparts. 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.
9J. Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
9K. Governing Law. The corporate law of Delaware will govern all issues
concerning the relative rights of the Company and its stockholders. All other
questions concerning the construction, validity and interpretation of this
Agreement and the exhibits and schedules hereto will be governed by the internal
law, and not the law of conflicts, of Illinois.
9L. 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 Purchaser at the address indicated below:
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Notice to the Company
X.X. Xxx 000000
Xxxxx, Xxxxxxx 00000-0000
Attention: President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Notice to the Purchasers
Golder, Thoma, Xxxxxxx, Xxxxxx Fund IV
Limited Partnership
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
And to the other Purchasers at the addresses set forth opposite each
Purchaser's name on the Schedule of Purchasers attached hereto.
With a copy to
Xxxxxxxxxxx X. Xxxxx
Xxxxx, Xxxxxx & Xxxxxx
0000 Xxx Xxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxx, X.X. 00000
Telephone: (000) 000-0000
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.
9M. Unrelated Business Taxable Income. The Company shall not engage in any
transaction which is reasonably likely to cause GTCR or any of its limited
partners which are exempt from income taxation under Section 501(a) of the Code
and if applicable, any pension plan that any such trust may be a part of, to
recognize unrelated business taxable income as defined in Section 512 and
Section 514 of the Code.
9N. Xxxx-Xxxxx-Xxxxxx Compliance. In connection with any transaction in
which the Company is involved which is required to be reported under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended from time to
time (the "HSR Act"), the Company shall prepare and file all documents with the
Federal Trade Commission and the United States Department of Justice which may
be required to comply with the HSR Act, and
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shall promptly furnish all materials thereafter requested by any of the
regulatory agencies having jurisdiction over such filings, in connection with
the transactions contemplated thereby. The Company shall take all reasonable
actions and shall file and use reasonable best efforts to have declared
effective or approved all documents and notifications with any governmental or
regulatory bodies, as may be necessary or may reasonably be requested under
federal antitrust laws for the consummation of the subject transaction.
-19-
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.
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
-20-
AMENDMENT NO. 1
TO
EQUITY PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 TO EQUITY PURCHASE AGREEMENT is entered into as of
August 14, 1996 by and between Global Imaging Systems Inc., a Delaware
corporation (the "Company"); Golder, Thoma, Xxxxxxx, Xxxxxx Fund IV, Limited
Partnership, a Delaware limited partnership ("GTCR"); and Xxxxxx X. Xxxxxxx
("Xxxxxxx").
WITNESSETH
The Company, GTCR and Xxxxxxx are parties to an Equity Purchase Agreement
dated June 9, 1994 (the "Equity Purchase Agreement"). In order to induce Xxxxxxx
National Life Insurance Company ("JNL") to invest in the capital stock of the
Company pursuant to an Equity Purchase Agreement to be entered into on the date
hereof between the Company and JNL (the "JNL Purchase Agreement"), the Company,
GTCR and Xxxxxxx have agreed to make certain changes to the Equity Purchase
Agreement.
Certain capitalized terms used herein are defined in the Equity Purchase
Agreement.
The parties hereto agree as follows:
1. AMENDMENTS TO EQUITY PURCHASE AGREEMENT.
1.1 Negative Covenants. Section 5E(ix) of the Equity Purchase Agreement is
hereby amended to add the phrase "or the JNL Purchase Agreement" after the word
"Agreement" in the last line of such Section.
1.2 Definitions. Section 8 of the Equity Purchase Agreement is hereby
amended to add the following new definitions:
"JNL" shall mean Xxxxxxx National Life Insurance Company, a
Michigan life insurance company and its successors and assigns.
"JNL Purchase Agreement" shall mean the Equity Purchase Agreement
between the Company and JNL dated August 14, 1996, as amended from time to
time."
1.3 New Section. A New Section 10 is hereby added to the Equity Purchase
Agreement to read as follows:
"10. Redemption. Subject to the Company's Board of Directors right
to sell all remaining shares of Class A Common to the Purchasers, upon the
earlier of (i) a Sale of the Company (as defined in the Stockholders
Agreement) or (ii) a Qualified Public Offering (as defined in the
Stockholders Agreement), the Company shall have the right to redeem a
number of shares of Class B Common held by each Purchaser determined based
on the following formula:
Redeemed Amount = OB x ( l- (OA / IC))
WHERE:
OB = The number of Class B Common Shares purchased by the
Purchaser pursuant to this Agreement.
OA = The number of Class A Common Shares purchased by such
Purchaser on the date of determinations
IC = The aggregate number of shares of Class A Common which such
Purchaser would have acquired if it had purchased its full
Individual Commitments
For example:
If GTCR purchased 5,000 shares of Class B Common pursuant the Agreement and
has purchased 8,000 of its 10,000 shares of Class A Common prior to a
Qualified Public Offering, then:
Redeemed Amount = 5,000 x (1 - (8,000 / 10,000))
Redeemed Amount = 5,000 x (1 - .8)
Redeemed Amount = 5,000 x .2
Redeemed Amount = 1,000 shares of Class B Common
The number of Redeemed Shares may then be repurchased in cash by the
Company for an amount equal to the original purchase price for such shares.
In addition, the Company shall reimburse the Purchasers for any income
taxes associated with such redemption."
2. EFFECT OF THE AMENDMENT. All references in the JNL Purchase Agreement or
in any other document to the "Equity Purchase Agreement" or the "GTCR Purchase
Agreement" shall mean the Equity Purchase Agreement as amended by this
Amendment. Except as specifically amended above, the Equity Purchase Agreement
shall remain in full force and effect and is hereby ratified and confirmed.
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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 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.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 to
Equity Purchase 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: GTCR IV, L.P.
General Partner
By: Golder, Thoma, Xxxxxxx, Xxxxxx Inc.
General Partner
By: /s/ Xxxx X. Xxxxx
-------------------------------
Xxxx X. Xxxxx
Authorized Officer
/s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxx
-4-
