Exhibit 10.16
EXECUTION COPY
SUBSCRIPTION AGREEMENT
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THIS SUBSCRIPTION AGREEMENT dated as of August 22, 1997 (the
"Agreement") by and between Software AG Systems, Inc., a Delaware corporation,
(the "Company") and Xxxxxxx X. Xxxx (the "Purchaser").
WHEREAS, the Purchaser has been elected Vice President, Marketing of the
Company; and
WHEREAS, the Company and the Purchaser desire to enter into an agreement
pursuant to which the Purchaser will purchase from the Company, and the Company
will sell to the Purchaser, 500 shares (the "Shares") of the Company's common
stock;
NOW, THEREFORE, intending to be legally bound hereby, the parties hereto
agree as follows:
ARTICLE 1.
PURCHASE AND SALE OF THE SHARES
1.1 Purchase and Sale of the Shares. Upon execution of this Agreement:
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(a) The Purchaser will purchase from the Company, and the Company
will issue and sell to the Purchaser, the Shares for an aggregate purchase price
of $202,095 (the "Purchase Price");
(b) The Company will deliver to the Purchaser a certificate
representing the Shares; and
(c) The Purchaser will deliver to the Company a cashier's or
certified check or wire transfer of funds in the amount of the Purchase Price.
1.2 Purchaser Representations and Warranties.
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In connection with the purchase and sale of the Shares hereunder, the
Purchaser represents and warrants to the Company that:
(a) The Purchaser is acquiring the Shares for his own account for
investment purposes only and not with a view to, or intention of, making a
distribution thereof within the meaning of the Securities Act of 1933, as
amended (the "Act"), or any applicable state securities laws, and the Shares
will not be transferred
or disposed of in contravention of the Act or any applicable state securities
laws.
(b) The Purchaser is aware that the Shares have not been
registered under the Act or any state or other jurisdiction's securities laws,
and that the Shares must be held indefinitely unless the sale or other transfer
thereof is subsequently registered or exemptions from such registration
requirements are available. The Purchaser is further aware that the Company is
under no obligation to register the Shares under the Act or any state or other
jurisdiction's securities laws or to assist the Purchaser is complying with any
exemption from such registration requirements.
(c) The Purchaser acknowledges that investment in the Shares
involves substantial risks, including the risk of total loss of his investment
in the Shares. The Purchaser (i) is able to bear the economic risk of his
investment in the Shares for an indefinite period of time; (ii) has adequate
means, other than the Shares or funds invested therein, of providing for his
current and foreseeable needs; (iii) has no foreseeable need to sell or
otherwise dispose of any of the Shares; and (iv) has sufficient net worth to
sustain a loss of his entire investment in the Shares in the event such loss
should occur.
(d) The Purchaser acknowledges that (i) all documents, books and
records requested by the Purchaser pertaining to the Company or the Shares have
been made available for inspection by the Purchaser and his agents and
representatives and (ii) the Purchaser and his agents and representatives have
had a reasonable opportunity to ask questions of and receive answers from the
Company or persons acting on behalf of the Company, concerning all matters
relevant to the Purchaser's decision to purchase Shares.
(e) The Purchaser is an "accredited investor," as such term is
defined in Rule 501 under the Act. The Purchaser and his agents and
representatives have such knowledge and experience in financial and business
matters as to enable them to utilize the information made available to them in
connection with the transactions contemplated hereby to evaluate the merits and
risks of an investment in the Shares and to make an informed decision with
respect thereto, and such an evaluation and informed decision have been made.
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(f) The Purchaser has the legal capacity and authority to enter
into and perform all of his obligations under this Agreement. This Agreement
constitutes the legal, valid and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms. The execution,
delivery and performance of this Agreement does not and will not conflict with,
violate, cause a breach of or constitute a default under (i) any agreement,
contract or other instrument or obligation to which the Purchaser is a party or
by which the Purchaser is bound or (ii) any judgment, order, decree, statute,
rule or regulation to which the Purchaser is subject.
ARTICLE 2.
REPURCHASE RIGHT AND NO RAID
2.1 Company's Repurchase Right.
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(a) The Purchaser covenants and agrees that, except with the
prior written consent of the Company, he will not transfer, sell or otherwise
dispose of, whether directly or indirectly, any of the Shares prior to the later
of (i) the second anniversary of the date hereof and (ii) the ninetieth (90th)
day following the Termination Date (as defined below), and any purported
disposition in violation hereof shall be null and void. If prior to the second
anniversary of the date hereof the Purchaser's employment with the Company is
terminated for any reason, then within sixty (60) days following the date of
such termination (the "Termination Date"), the Company may elect, by delivering
to the Purchaser a written notice of the Company's election, to purchase the
Shares (including any securities issued in respect of the Shares upon any stock
split, stock dividend, recapitalization, merger, consolidation or other similar
event) for a total purchase price equal to the Purchase Price.
(b) If the Company exercises its right to purchase the Shares
pursuant to this Section, the Company and the Purchaser shall consummate the
sale and purchase of the Shares no later than ninety (90) days after the
Termination Date.
(c) The Purchaser hereby acknowledges that the right of the
Company to purchase the Shares in the manner described in this Section is not
unreasonable under the circumstances existing as of the date hereof.
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2.2 No Raid Covenant.
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(a) The Purchaser agrees that, from the date hereof until five
years after the termination of the Purchaser's employment with the Company and
its susidiaries, the Purchaser shall not, directly or indirectly, acting either
alone or in concert with others, seek to influence any employee of the Company
or any of its subsidiaries to leave or otherwise terminate such employee's
employment with such entity. The Purchaser agrees that, from the date hereof
until three years after the termination of the Purchaser's employment with the
Company and its subsidiaries, the Purchaser shall not, directly or indirectly,
solicit or assist any other person in soliciting (other than on behalf of the
Company and its subsidiaries) any customers, clients or suppliers of the Company
or any of its subsidiaries, provided, however, that the obligations set forth in
this sentence shall not apply to the Purchaser following the termination of the
Purchaser's employment if such termination is (i) by the Company and (ii) not
for cause.
(b) The Purchaser acknowledges that he has carefully read and
considered all of the terms of this Agreement, including particularly the terms
of this Section 2.2, that the Company has made a substantial investment in the
Company's business and that the restrictions provided in this Section 2.2 are
reasonable and necessary for the Company's protection. The Purchaser further
acknowledges that damages at law will not be a measurable or adequate remedy for
breach of the covenants contained in this Section, and accordingly the Purchaser
consents to the entry by any court of competent jurisdiction of any order
enjoining the Purchaser from violating any such covenants. The parties hereto
further agree that if, in any judicial proceeding, a court should refuse to
enforce any covenants set forth in this Section 2.2 because of their term or
geographical scope, then such covenants shall be deemed to be modified to permit
their enforcement to the maximum extent permitted by law.
ARTICLE 3.
GENERAL PROVISIONS
3.1 Shareholders Agreement. The Purchaser understands and agrees that,
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upon execution of this Agreement, the Purchaser becomes a party to the
Shareholders Agreement dated as of April 1, 1997, by and
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among the Company and certain shareholders of the Company (the "Shareholders
Agreement"), a copy of which has been provided to the Purchaser. The Purchaser
hereby agrees to be bound as a "Shareholder" to all the terms and conditions,
including the transfer restrictions, of the Shareholders Agreement.
3.2 Legends. The Purchaser understands and agrees that, in addition to
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any other legends required by applicable law, the certificate or certificates
representing the Shares will bear legends substantially to the effect set forth
below and that a stop transfer order may be placed with respect thereto.
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
APPLICABLE SECURITIES LAW OF ANY JURISDICTION AND MAY NOT BE TRANSFERRED
UNTIL (A) A REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT AND SUCH
APPLICABLE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD
THERETO OR (B) IN THE OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE
COMPANY, REGISTRATION UNDER SUCH SECURITIES ACT AND SUCH APPLICABLE
SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED
TRANSFER.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TRANSFER RESTRICTIONS AND OTHER TERMS OF A SHAREHOLDERS AGREEMENT DATED
AS OF APRIL 1, 1997, AMONG SOFTWARE AG SYSTEMS, INC. AND CERTAIN
SHAREHOLDERS THEREOF AND MAY NOT BE TRANSFERRED EXCEPT IN ACCORDANCE
WITH SUCH AGREEMENT. A COPY OF SUCH AGREEMENT IS ON FILE AT THE
PRINCIPAL OFFICE OF SOFTWARE AG SYSTEMS, INC. AND WILL BE FURNISHED UPON
REQUEST TO THE HOLDER OF RECORD OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TRANSFER RESTRICTIONS AND OTHER TERMS OF A SUBSCRIPTION AGREEMENT DATED
AS OF AUGUST 22, 1997, BETWEEN SOFTWARE AG SYSTEMS, INC. AND THE
REGISTERED HOLDER HEREOF AND MAY NOT BE TRANSFERRED EXCEPT IN ACCORDANCE
WITH SUCH AGREEMENT. A COPY OF SUCH AGREEMENT IS ON FILE AT THE
PRINCIPAL OFFICE OF SOFTWARE AG SYSTEMS, INC. AND WILL BE FURNISHED UPON
REQUEST TO THE REGISTERED HOLDER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE.
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3.3 Survival. The representations, warranties and covenants contained in
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this Agreement shall survive the purchase and sale of the Shares pursuant to
this Agreement.
3.4 Amendment. This Agreement may be amended, or any provision hereof
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may be waived, at any time by an agreement in writing of the parties hereto.
3.5 Entire Agreement; Successors. This Agreement contains the entire
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agreement among the parties hereto with respect to the transactions contemplated
hereunder and supersedes all prior arrangements or understandings with respect
thereto, written or oral, other than documents referred to herein. The terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and permitted assigns.
3.6 No Assignment. No party hereto may assign any of his or its rights
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or obligations under this Agreement to any other person.
3.7 Notices. All notices or other communications which are required or
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permitted hereunder shall be in writing and sufficient if delivered personally,
by facsimile or sent by overnight express or by registered or certified mail,
postage prepaid, addressed as follows:
If to the Company:
Software AG Systems, Inc.
00000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Chief Financial Officer
Facsimile: (000) 000-0000
If to the Purchaser, to the address set forth beneath the signature of the
Purchaser on the signature page hereof.
All such deliveries shall be deemed effective when received by the
person entitled to such receipt or when delivery has been attempted but refused
by such person. Any party may change the person or address to which such
deliveries shall be made with respect to such
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party by delivering notice thereof to the other party hereto in accordance with
this Section.
3.8 Captions. The captions contained in this Agreement are for
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reference purposes only and are not part of this Agreement.
3.9 Counterparts. This Agreement may be executed in any number of
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counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
3.10 Governing Law and Venue. The validity, interpretation,
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construction and performance of this Agreement shall be governed by the laws of
the Commonwealth of Virginia applicable to agreements made and entirely to be
performed within such jurisdiction. The party bringing any action under this
Agreement shall only be entitled to choose the federal or state courts in the
Commonwealth of Virginia as the venue for such action, and each party consents
to the jurisdiction of the court chosen in such manner for such action.
3.11 Further Assurances. Subject to the terms and conditions herein
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provided, each of the parties hereto shall use reasonable efforts to take, or
cause to be taken, such action, to execute and deliver, or cause to be executed
and delivered, such additional documents and instruments and to do, or cause to
be done, all things necessary, proper or advisable under the provisions of this
Agreement and under applicable law to consummate and make effective the
transactions contemplated by this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
SOFTWARE AG SYSTEMS, INC.
By: /s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
Chief Executive Officer
/s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
Address: 00000 Xxxxx Xxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
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EXECUTION COPY
AMENDMENT AGREEMENT
THIS AMENDMENT AGREEMENT is made as of October 13, 1997, by and between
Software AG Systems, Inc., a Delaware corporation (the "Company") and Xxxxxxx X.
Xxxx (the "Purchaser").
WHEREAS, the Purchaser and the Company have previously entered into a
Subscription Agreement, dated as of August 22, 1997 (the "Agreement"), pursuant
to which, the Company may elect to purchase the Shares (as defined in the
Agreement) from the Purchaser for a total purchase price equal to the Purchase
Price (as defined in the Agreement) if the Purchaser's employment with the
Company is terminated for any reason prior to August 22, 1999 (the "Repurchase
Right"); and
WHEREAS, the Purchaser and the Company desire to amend the Agreement to
terminate the Repurchase Right upon a change of control of the Company;
NOW, THEREFORE, Section 2.1 of the Agreement is hereby amended to read
in full as follows:
2.1 Company's Repurchase Right. The Purchaser covenants and agrees that,
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except with the prior written consent of the Company, he will not transfer, sell
or otherwise dispose of, whether directly or indirectly, any of the Shares prior
to the later of (i) August 17, 1999 or (ii) the ninetieth (90th) day following
the Termination Date (as defined below), and any purported disposition in
violation hereof shall be null and void. If prior to the earlier of (y) August
17, 1999 or (z) a Change of Control of the Company, the Purchaser's employment
with the Company is terminated voluntarily by Purchaser or by the Company for
cause, then within sixty (60) days following the date of such termination (the
"Termination Date"), the Company may elect, by delivering to the Purchaser a
written notice of the Company's election, to purchase the Shares (including any
securities issued in respect of the Shares upon any stock split, stock dividend,
recapitalization, merger, consolidation or other similar event) for a total
purchase price equal to the Purchase Price. For purposes of this Section 2.1,
the term "Change of Control" means the occurrence of any of the following events
after the date hereof: (i) any person or group of persons (as defined in Section
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) together with its affiliates, excluding affiliates of Xxxxxx
Equity Investors III, L.P., a
Delaware limited partnership, and employee benefit plans of the Company,
becomes, directly or indirectly, the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act) of securities of the Company representing 51% or
more of the combined voting power of the Company's then outstanding securities;
(ii) the stockholders of the Company approve a merger or consolidation of the
Company with any other corporation or entity regardless of which entity is the
survivor, other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or being converted into voting
securities of the surviving entity) at least 50% of the combined voting power of
the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; or (iii) the stockholders of the
Company approve a plan of complete liquidation or winding-up of the Company or
an agreement for the sale or disposition by the Company of all or substantially
all of the Company's assets.
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[signatures appear on the following page]
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IN WITNESS WHEREOF, the parties have executed this Amendment Agreement
as of the day and year first above written.
SOFTWARE AG SYSTEMS, INC.
By:/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
President and
Chief Executive Officer
PURCHASER
/s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
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