Exhibit 10.63
Information Management Associates, Inc.
0000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
October 29, 1991
Wand/IMA Investments, L.P.
00 Xxxxxxxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxx, X.X. 00000
Dear Sirs:
Reference is made to a certain Letter Agreement, dated
December 21, 1990 (the "Letter Agreement") among you, Information Management
Associates, Inc. (the "Company") and certain shareholders of the Company. You
and the Company now propose to enter into a Stock Purchase Agreement, dated
October 29, 1991 (the "Stock Purchase Agreement") providing for the purchase by
you of 29,632 shares of the Company's Common Stock, and an Exchange and Note
Modification Agreement, dated October 29, 1991 (the "Exchange and Note
Modification Agreement"), providing, among other things, for the issue to you of
a new warrant (the "New Warrant") entitling you to purchase 14,812 shares of the
Company's Common Stock, and for the amendment of the original $1,600,000 15%
senior subordinated note originally issued to you to reduce the principal amount
to $1,000,000 and the interest rate thereon to 12%, and to change the principal
repayment schedule, all as set forth in a 12% senior subordinated note to be
issued to you (the "Amended Note"). In order to induce you to enter into the
Stock Purchase Agreement and the Exchange and Note Modification Agreement, the
Company and Xxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxxx, Xxxxxx Poludnewycz, Xxxx X.
Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxxx Xxxxxx and Xxxxxx X. XxXxx (collectively, the
"Shareholders") agree with you, and the Letter Agreement is hereby amended, as
follows:
1. Paragraph 1(a) is hereby deleted in its entirety
and the following paragraph is substituted therefor:
"1. Board of Directors. (a) So long as any of the
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Notes are outstanding or, if no Notes are outstanding and any Warrants or
Registrable Securities (as such terms are defined in the New Warrant) are
outstanding, so long as there has not been an Initial Public Offering (as
defined in the New Warrant), the Company and each of the Shareholders shall take
all action within their respective powers, including, but not limited to, the
voting of capital stock of the
Company, required to cause the Board of Directors of the Company to at all
times have two members designated by you. Further, the Company and each of
the Shareholders shall take all action within their respective powers,
including, but not limited to, the voting of capital stock of the Company,
required to cause the Board of Directors of the Company to at all times have
a third and additional member designated by you (i) if any Note is
outstanding, after the occurrence and during the continuance of any Default
or Event of Default under the Notes as set forth in section 13 of the
Purchase Agreement or (ii) if no Notes are outstanding but any Warrant or
Registrable Security is outstanding and there has not been an Initial Public
Offering, after the occurrence and during the continuance of any Default or
Event of Default pursuant to sections 8, 9.1(i), 9.2, 9.4, 9.5, 9.6 or 9.8
of the Purchase Agreement."
2. The reference in the first sentence of Paragraph 3
to "65%" is hereby deleted and "40%" is substituted therefor.
3. Paragraph 5 is hereby deleted in its entirety and
the following paragraph is substituted therefor:
"5. Financial Advisory Fees. The Company hereby
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agrees to pay to you in cash on or before January 15, 1992 an advisory fee of
$20,000 for the 1991 calendar year, and thereafter to pay to you in cash an
annual advisory fee of $20,000 for each of the 1992, 1993 and 1994 calendar
years, such annual advisory fees being payable in quarterly installments on
March 31, June 30, September 30, and December 31 in each such calendar year. The
Company also hereby agrees to pay to Wand Partners Inc., the general partner of
Wand/IMA Investments, Inc., in cash on or before January 15, 1992, a financial
advisory fee of $5,000, and thereafter to pay to Wand Partners Inc. in cash an
annual advisory fee of $30,000 for the 1992 calendar year and each calendar year
thereafter, such financial advisory fees being payable in quarterly installments
on March 31, June 30, September 30 and December 31 in each such calendar year.
The annual advisory fee to Wand Partners Inc. shall continue to be paid by the
Company until the later to occur of (a) January 1, 1995; (b) the date on which a
registration statement relating to an Initial Public Offering is filed with the
Securities and Exchange Commission; (c) the date on which the Company has
entered into a definitive agreement providing for sale of all or substantially
all of the assets of the Company; or (d) the date on which you own or have the
right to acquire less than ten percent (10%) of the issued and outstanding
common stock of the Company (calculated on
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a fully-diluted basis as if all outstanding warrants, options, rights and
securities convertible into or exchangeable for Common Stock had been
exercised in full, but without regard to the adjustment provisions of any
outstanding securities). All payments pursuant to this Section 5 shall be
paid on or before the due date. Late payments shall bear interest from the
expiration of the 30th calendar date after the due date through the date of
payment at the publicly announced interest rate of the Xxxxxx Guaranty
Trust Company of New York in effect from time to time during such period,
plus 2%.
4. The following new Paragraph 11 is hereby inserted:
11. Right of First Refusal. (a) The Company hereby grants to
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you the right of first refusal to purchase all (but not less than all) of any
issue or sale of New Securities (as defined in this Section 11) which the
Company may, from time to time, propose to issue or sell at a price per share of
(i) less than $50 (subject to appropriate adjustment in the event of any
increase or decrease in the number of outstanding shares of Common Stock by
virtue of any stock split, stock dividend, reverse stock split, reclassification
or combination) in the case of Common Stock or (ii) having a conversion price or
option or warrant exercise price of less than $50 (subject to appropriate
adjustment in the event of any increase or decrease in the number of outstanding
shares of Common Stock by virtue of any stock split, stock dividend, reverse
stock split, reclassification or combination) in the case of securities
convertible into or exercisable for, Common Stock.
(b) "New Securities" shall mean any Common Stock or preferred
stock of the Company, or any warrants, options or other rights to acquire Common
Stock or preferred stock (other than stock options granted to employees), or any
securities (including any debt instruments) of any other type that are
convertible into said Common Stock or preferred stock, issued after the date
hereof; provided that "New Securities" does not include hereof; provided that
"New Securities" does not include hereof; provided that "New Securities" does
not include (i) Common Stock issued pursuant to currently outstanding warrants
or stock options; or (ii) the issuance by the Company of Common Stock or
preferred stock, or options, rights or warrants to acquire Common Stock or
preferred stock or any other security (including any debt instruments)
convertible into Common Stock or preferred stock in connection with an
acquisition by the Company of the stock or assets of another person or the
merger or consolidation by the Company with or into another corporation.
(c) The value of any non-cash "consideration" shall be
determined in good faith by the Board of Directors of the Company.
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(d) In the event the Company proposes to undertake an issuance
or sale of New Securities for consideration of less than $50 per share as
described in clause (b) above, the Company shall give you written notice of the
Company's intention, describing the type of New Securities, the price, the
maximum amount to be issued or sold and the general terms upon which the Company
proposes to issue or sell the same. You shall have thirty (30) days from the
date of such notice to agree (by written notice to the Company) to purchase such
New Securities upon such price and terms.
(e) The rights of first refusal hereunder shall not apply to
any public offering of the Common Stock or securities convertible into or
exchangeable for Common Stock of the Company pursuant to a registration
statement filed under the Securities Act of 1933, as amended (the "Securities
Act") with the Securities and Exchange Commission which is declared effective by
the Securities and Exchange Commission.
(f) During the period of 60 days after the expiration of the
notice period to which you are entitled hereunder, the Company shall be
permitted to sell or enter into an agreement (pursuant to which the sale or
other transaction shall be closed, if at all, within 60 days from the date of
said agreement) to sell the New Securities at a price and upon general terms no
more favorable to the purchasers thereof than specified in the Company's notice
to you under clause (d) above.
(g) The rights of first refusal described in this Section 11
are personal to you any may not be assigned or transferred, whether by agreement
or by operation of law or otherwise, and any attempted transfer shall be void.
(h) Upon the sale or transfer to any person of New Securities
as to which the rights of first refusal hereunder shall not have been exercised,
such new Securities shall thereafter be transferable free of the rights of first
refusal provided hereunder.
(i) The rights of first refusal hereunder shall terminate upon
the earlier to occur of either of the following events: (A) the date on which a
registration statement relating to an Initial Public Offering is filed with the
Securities and Exchange Commission; or (B) the date on which you own or have the
right to acquire less than ten percent (10%) of the issued and outstanding
Common Stock of the Company (calculated on a fully-diluted basis as if all
outstanding warrants, options, rights and securities convertible into or
exchangeable for Common Stock had been exercised in full, but without regard to
the adjustment provisions of any outstanding securities.
5. Except as amended hereby, all provisions of the Letter Agreement
shall remain in full force and effect.
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6. Capitalized terms not defined herein shall, unless otherwise
indicated, have the meanings assigned to them in the New Warrant.
INFORMATION MANAGEMENT
ASSOCIATES, INC.
By: [SIGNATURE APPEARS HERE]
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/s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
/s/ Andrei Poludnewycz
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Andrei Poludnewycz
/s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
/s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
/s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
/s/ Xxxxxx X. XxXxx
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Xxxxxx X. XxXxx
ACCEPTED AND AGREED:
Wand/IMA Investments, L.P.
By Wand Partners Inc., its
General Partner
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
President
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