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EXHIBIT 10.19
AMENDMENT NO. 4 TO SENIOR SUBORDINATED
NOTE AND SECURITIES PURCHASE AGREEMENT
AND
AMENDMENT AGREEMENT
This Amendment No. 4 to Senior Subordinated Note and Securities Purchase
Agreement and Amendment Agreement (this "Agreement") dated as of January 29,
1999 by and among Law Office Information Systems, Inc., an Arkansas corporation
(the "Company"), Capital Resource Lenders III, L.P. ("CRL III"), CRP Investment
Partners III, L.L.C. ("CRP Investment"), ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇" and
together with CRL III and CRP Investment, the "Purchasers"), and, for purposes
of Section 2 hereof only, the parties listed under the heading "Securityholders"
on the signature pages hereto, amends (i) 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, that certain Amendment No. 2 dated as of August 20, 1998 and that
certain Amendment No. 3 dated as of November 30, 1998 by and among the Company
and the Purchasers (as so amended, the "Purchase Agreement"), (ii) that certain
Stockholders' Agreement dated as of November 24, 1997 by and among the Company
and certain of the Company's securityholders named therein (the "Stockholders'
Agreement), and (iii) that certain Registration Rights Agreement dated as of
November 24, 1997 by and among the Company, CRL III and Dublind Investments LLC
(the "Registration Rights Agreement").
WHEREAS, prior to the date hereof and pursuant to the Purchase Agreement
and that certain Assignment, Assumption and Consent dated as of January 1, 1998
by and among the Company and the Purchasers, the Company has issued and sold to
the Purchasers (i) 12.5% Senior Subordinated Notes due 2004 (the "Notes") of the
Company in the aggregate principal amount of $8,000,000, (ii) an aggregate of
931,044 shares of Series A Convertible Preferred Stock, par value $.001 per
share, of the Company, and (iii) Common Stock Purchase Warrants to purchase up
to an aggregate of 972,293 shares of Common Stock, par value $.001 per share, of
the Company;
WHEREAS, CRL III executed a Limited Guaranty dated as of August 20, 1998,
as amended (the "CRL III Guaranty") in favor of Fleet National Bank, a national
banking association (the "Bank"), pursuant to which CRL III agreed to guarantee
certain obligations of the Company under that certain Credit Agreement dated as
of August 20, 1998 between the Company and the Bank;
WHEREAS, pursuant to Section 2.02(c) of the Purchase Agreement, the
Purchasers remain obligated to purchase up to an additional $2,000,000 aggregate
principal amount of Notes (the "Remaining Notes") less the Maximum Cumulative
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Liability (as such term is defined in the CRL III Guaranty) at a Takedown
Closing scheduled to occur on May 31, 1999;
WHEREAS, the Company and the Purchasers desire to amend the Purchase
Agreement, the Stockholders' Agreement and the Registration Rights Agreement as
hereinafter set forth so
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that (i) the Purchasers remain obligated to purchase from the Company the
Remaining Notes without reducing such aggregate principal amount by the Maximum
Cumulative Liability, (ii) the purchase and sale of the Remaining Notes shall
occur prior to May 31, 1999 at two separate Takedown Closings such that an
aggregate of $500,000 of the Remaining Notes be purchased and sold on the date
hereof and an aggregate of $1,500,000 of the Remaining Notes be purchased and
sold on February ▇, ▇▇▇▇ (▇▇▇ "▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇"), (▇▇▇) at the Final
Takedown Closing the Company shall issue to the Purchasers additional Common
Stock Purchase Warrants of the Company (the "Final Takedown Closing Warrants")
for the purchase of an aggregate of 102,091 shares of Common Stock (the "Final
Takedown Closing Warrant Shares"), (iv) all references to the term "Warrants" in
the Stockholders' Agreement shall be deemed to include the Final Takedown
Closing Warrants, and (v) all references to the terms "Warrant" and "Warrant
Shares" in the Registration Rights shall be deemed to include the Final Takedown
Closing Warrants and the Final Takedown Closing Warrant Shares, respectively.
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. Amendment of Purchase Agreement.
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1.01. Section 1.01 of the Purchase Agreement shall be amended to delete in
its entirety the definitions of "Fourth Takedown Notice" and by adding the
following definitions:
"Final Takedown Closing" shall have the meaning assigned to that
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term in Section 2.02(c).
"Final Takedown Closing Date" shall have the meaning assigned to
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that term in Section 2.02(c).
"Final Takedown Closing Warrants" shall have the meaning assigned to
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that term in Section 3.02(b).
"Final Takedown Closing Warrant Shares" shall have the meaning
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assigned to that term in Section 3.02(b).
"Final Takedown Principal" shall have the meaning assigned to that
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term in Section 2.02(c).
"Initial Closing Warrants" shall have the meaning assigned to that
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term in Section 3.02(a).
1.02. Section 2.02(c) of the Purchase Agreement is hereby amended to read
in its entirety as follows:
(c)(i) The purchase and sale of up to an additional $500,000
aggregate
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principal amount of Notes (the "Second Takedown Principal") shall take
place at a closing (the "Second Takedown Closing") to be held at the
offices of ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP, High Street Tower, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, at 10:00 a.m. local time on November 30,
1998 (the "Second Takedown Closing Date"). At the Second Takedown Closing,
the Company will issue and sell to each Purchaser and each Purchaser shall
have the obligation to purchase a single Note, dated the Second Takedown
Closing Date, in the principal amount equal to such Purchaser's Pro Rata
Share (as such term is defined in the Assignment Agreement) of the Second
Takedown Principal, against receipt of funds by wire transfer to an account
or accounts designated by the Company prior to such Second Takedown Closing
in the amount of such Purchaser's Pro Rata Share of the Second Takedown
Principal, in payment of the purchase price for such Note, provided,
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however, that ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ obligation to pay the full purchase price
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for the Note issued to him at such Second Takedown Closing shall be offset
against certain amounts owed to him by the Company for certain consulting
services rendered to the Company;
(ii) The purchase and sale of up to an additional $500,000
aggregate principal amount of Notes (the "Third Takedown Principal") shall
take place at a closing (the "Third Takedown Closing") to be held at the
offices of ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP, High Street Tower, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, at 10:00 a.m. local time on December 15,
1998 (the "Third Takedown Closing Date"). At the Third Takedown Closing,
the Company will issue and sell to each Purchaser and each Purchaser shall
have the obligation to purchase a single Note, dated the Third Takedown
Closing Date, in the principal amount equal to such Purchaser's Pro Rata
Share (as such term is defined in the Assignment Agreement) of the Third
Takedown Principal, against receipt of funds by wire transfer to an account
or accounts designated by the Company prior to such Third Takedown Closing
in the amount of such Purchaser's Pro Rata Share of the Third Takedown
Principal, in payment of the purchase price for such Note, provided,
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however, that ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ obligation to pay the full purchase price
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for the Note issued to him at such Third Takedown Closing shall be offset
against certain amounts owed to him by the Company for certain consulting
services rendered to the Company;
(iii) The purchase and sale of up to an additional $500,000
aggregate principal amount of Notes (the "Fourth Takedown Principal") shall
take place at a closing (the "Fourth Takedown Closing") to be held at the
offices of ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP, High Street Tower, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, at 10:00 a.m. local time on January 29, 1999
(the "Fourth Takedown Closing Date"). At the Fourth Takedown Closing, the
Company will issue and sell to each Purchaser and each Purchaser shall have
the obligation to purchase a single Note, dated the Fourth Takedown Closing
Date, in the principal amount equal to such Purchaser's Pro Rata Share (as
such term is defined in the Assignment Agreement) of the Fourth Takedown
Principal, against receipt of funds by wire transfer to an account or
accounts designated by the Company prior to such Fourth Takedown Closing in
the amount of such Purchaser's Pro Rata Share of the Fourth Takedown
Principal, in payment of the purchase price for such Note,
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provided, however, that ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ obligation to pay the full
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purchase price for the Note issued to him at such Fourth Takedown Closing
shall be offset against certain amounts owed to him by the Company for
certain consulting services rendered to the Company; and
(iv) The purchase and sale of up to an additional $1,500,000
aggregate principal amount of Notes (the "Final Takedown Principal") shall
take place at a closing (the "Final Takedown Closing") to be held at the
offices of ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP, High Street Tower, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, at 10:00 a.m. local time on February 9, 1999
(the "Final Takedown Closing Date"). At the Final Takedown Closing, (A) the
Company will issue and sell to each Purchaser and each Purchaser shall have
the obligation to purchase a single Note, dated the Final Takedown Closing
Date, in the principal amount equal to such Purchaser's Pro Rata Share (as
such term is defined in the Assignment Agreement) of the Final Takedown
Principal, and the Company will issue to each Purchaser Final Takedown
Closing Warrants (as provided in Section 3.02(b)), against receipt of funds
by wire transfer to an account or accounts designated by the Company prior
to such Final Takedown Closing in the amount of such Purchaser's Pro Rata
Share of the Final Takedown Principal, in payment of the purchase price for
such Note and such Final Takedown Warrants, provided, however, that
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ obligation to pay the full purchase price for the Note
issued to him at such Final Takedown Closing shall be offset against
certain amounts owed to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ by the Company for certain
consulting services rendered to the Company. The First Takedown Closing,
the Second Takedown Closing, the Third Takedown Closing, the Fourth
Takedown Closing and the Final Takedown Closing are sometimes herein
referred to individually as a "Takedown Closing" and collectively as the
"Takedown Closings").
1.03. Section 3.01 of the Purchase Agreement is hereby amended to read in
its entirety as follows:
3.01. The Equity Securities. The Company has authorized the
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issuance and sale to the Purchasers of (i) an aggregate of 931,044 shares
(the "Preferred Shares") of the Company's Series A Preferred Stock where
the rights, designations and preferences and other terms and conditions
relating to the Series A Preferred Stock shall be as set forth on Exhibit
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3.01A attached hereto and (ii) the Company's Common Stock Purchase Warrants
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for the purchase (subject to adjustment as provided therein) of an
aggregate of 1,074,384 shares of the Company's Common Stock. The Common
Stock Purchase Warrants shall be substantially in the form set forth as
Exhibit 3.01B attached hereto and are herein referred to individually as a
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"Warrant" and collectively as the "Warrants", which terms shall also
include any warrants delivered in exchange or replacement therefor. The
Warrants shall be exercisable at a purchase price, subject to adjustment,
of $0.01 per Warrant Share. The shares of Common Stock issuable upon
conversion of the Preferred Shares are referred to herein as the "Preferred
Conversion Shares." The shares of Common Stock issuable upon exercise of
the Warrants are referred to herein as the "Warrant Shares."
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1.03. Section 3.02 of the Purchase Agreement is hereby amended to read in
its entirety as follows:
3.02. Purchase and Sale of Preferred Shares and Warrants. The
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Company agrees to issue and sell to the Purchasers and, subject to and in
reliance upon the representations, warranties, terms and conditions of this
Agreement, the Purchasers agree to purchase the Preferred Shares and the
Warrants, as follows:
(a) At the Initial Closing, the Company shall issue and
sell to CRL III the Preferred Shares and Warrants (the "Initial Closing
Warrants") to acquire 972,293 Warrant Shares.
(b) At the Final Takedown Closing, the Company will issue
to the Purchasers Warrants (the "Final Takedown Closing Warrants") to
acquire 102,091 Warrant Shares (the "Final Takedown Closing Warrant
Shares"), such that the Company will issue to each Purchaser that number of
Warrants equal such Purchaser's Pro Rata Share (as such term is defined in
the Assignment Agreement) of the Final Takedown Closing Warrants.
2. Amendments to Stockholders' Agreement and Registration Rights Agreement.
2.01. Amendment to Stockholders' Agreement. The parties hereby agree that
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all references to the term "Warrants" in the Stockholders' Agreement shall be
deemed to refer to and include the Final Takedown Closing Warrants.
2.02. Amendment to Registration Rights Agreement. The parties hereby
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agree that all references to the terms "Warrants" and "Warrant Shares" in the
Registration Rights Agreement shall be deemed to refer to and include the Final
Takedown Closing Warrants and the Final Takedown Closing Warrant Shares,
respectively.
3. Miscellaneous.
3.01. Effect. Except as amended hereby, the Purchase Agreement, the
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Stockholders' Agreement, the Registration Right shall remain in full force and
effect.
3.02. No Waiver. This Agreement is effective only in the specific
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instances and for the specific purposes for which it is executed and shall not
be considered a waiver or agreement to amend as to any provision of the Purchase
Agreement (as amended), the Stockholders' Agreement (as amended) and the
Registration Rights Agreement (as amended) in the future.
3.03. Defined Terms. All capitalized terms used but not specifically
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defined herein shall have the same meanings given such terms in the Purchase
Agreement unless the context clearly indicates or dictates a contrary meaning.
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3.04. Notices. All notices, requests, demands and other communications
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provided for in this Agreement shall be delivered in compliance with Section
9.03 of the Purchase Agreement.
3.05. Costs, Expenses, Taxes. The Company agrees to pay on demand all
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costs and expenses of the Purchasers in connection with the preparation,
execution and delivery of this Agreement and other instruments and documents to
be delivered hereunder, including the reasonable fees and out-of-pocket expenses
of Messrs. ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, special counsel for the Purchasers.
3.06. Governing Law. This Agreement shall be governed by, and construed
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and enforced in accordance with, the internal laws of The Commonwealth of
Massachusetts.
3.07. Seal. This Agreement is executed as an instrument under seal.
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3.08. 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 of such counterparts.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement or have
caused it to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
COMPANY:
LAW OFFICE INFORMATION SYSTEMS, INC.
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: CEO
PURCHASERS:
CAPITAL RESOURCE LENDERS III, L.P.
By: Capital Resource Partners III, L.L.C.
Its General Partner
By: /S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Managing Member
CRP INVESTMENT PARTNERS III, L.L.C.
By: /S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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SECURITYHOLDERS:
(With respect to Section 2 only)
DUBLIND INVESTMENTS LLC
By:
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▇▇▇▇ ▇. ▇▇▇▇▇▇, TRUSTEE, FOR
THE ▇▇▇▇▇▇ TRUST
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustee
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
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▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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W. ▇▇▇▇▇ ▇▇▇▇▇▇
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Reves ▇. ▇▇▇▇▇▇
/s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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