Exhibit 99.1
[EXECUTION COPY1
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$12,000,000
FLOATING RATE CONVERTIBLE NOTES
Due 2000
NOTE PURCHASE AGREEMENT
dated
March 27, 1997
between
SYSTEM SOFTWARE ASSOCIATES, INC.
and
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
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TABLE OF CONTENTS
Section Page
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1. ISSUANCE OF SECURITIES AND RESERVATION OF RESERVED SHARES..................1
2. PURCHASE, SALE AND DELIVERY................................................1
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY..............................1
(a) Organization.........................................................1
(b) Capital Stock; Indebtedness; Liens...................................2
(c) Authorization of Agreement...........................................2
(d) Authorization of Notes...............................................2
(e) Authorization of Shares..............................................3
(f) Non-Contravention; No Required Consents..............................3
(g) Litigation...........................................................3
(h) Compliance: Governmental Authorizations..............................4
(i) Financial Statements.................................................4
(j) Absence of Changes...................................................4
(k) Taxes................................................................4
(l) Intellectual Property................................................5
(m) Compliance with ERISA................................................5
(n) No Defaults..........................................................6
(o) SEC Reports..........................................................6
(p) Offering Exemption...................................................6
(q) Use of Proceeds......................................................6
(r) Investment Company...................................................7
(s) Disclosure...........................................................7
(t) No Finders' Fees.....................................................7
(u) Delaware Law; Rights Agreement.......................................7
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER............................7
(a) Investment Purpose...................................................7
(b) Restricted Securities................................................8
(c) Accredited Investor..................................................8
5. CONDITIONS OF OBLIGATIONS OF THE PURCHASER.................................8
(a) Note.................................................................8
(b) Actions Authorized...................................................8
(c) Consents.............................................................8
(d) Legal Opinion........................................................8
(e) Representations and Warranties; Compliance; No Default...............8
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6. TRANSFER OF NOTES......................................................... 9
(a) Restriction on Transfer............................................. 9
(b) Restrictive Legend.................................................. 9
(c) Notice of Transfer.................................................. 9
(d) Removal of Legends..................................................10
7. REGISTRATION OF REGISTRABLE STOCK.........................................10
(a) Shelf Registration..................................................10
(b) Registration Procedures.............................................11
(c) Designation of Underwriter..........................................12
(d) Cooperation by Prospective Sellers..................................12
(e) Expenses............................................................12
(f) Indemnification.....................................................13
8. COVENANTS.................................................................14
(a) Information.........................................................14
(b) Payment of Obligations..............................................15
(c) Conduct of Business and Maintenance of Existence....................16
(d) Compliance with Laws................................................16
(e) Inspection of Property, Books and Records...........................16
(f) Prohibited Transactions.............................................16
1. Survival of Representations. Warranties and Agreements Etc................17
2. MISCELLANEOUS.............................................................17
(a) Entire Agreement....................................................17
(b) Headings............................................................17
(c) Notices.............................................................17
(d) Counterparts........................................................18
(e) Amendments..........................................................18
(f) Assignment..........................................................18
(g) Expenses; Documentary Taxes; Indemnification........................18
(h) CHOICE OF LAW.......................................................19
(i) CONSENT TO JURISDICTION.............................................19
(j) WAIVER OF JURY TRIAL................................................20
Exhibit A - Exhibit A - Form of Floating Rate Convertible Note Due 2000
Exhibit B - Exhibit B - Form of Consent of Bank of America National Trust and
Savings Association and American National Bank and Trust Company of
Chicago
Exhibit C - Exhibit C - Form of Consent of Bank of America National Trust and
Savings Association and American National Bank and Trust Company of
Chicago
Exhibit D - Exhibit D - Form of Opinion of Counsel to the Company
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NOTE PURCHASE AGREEMENT dated as of March 27, 1997 between SYSTEM
SOFTWARE ASSOCIATES, INC a Delaware corporation (the "Company"), and
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX(the
"Purchaser").
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The parties hereto agree as follows:
1. Issuance of Securities and Reservation of Reserved Shares.
Subject to the terms and conditions of this Agreement, the Company has
authorized the issuance of its Floating Rate Convertible Notes Due 2000 (the
"Notes") in substantially the form of Exhibit A hereto in the aggregate
principal amount of $12,000,000, and the Company has authorized the reservation
of a sufficient number of shares of Common Stock, par value $.0033 per share
(the "Common Stock"), including the associated Rights (as defined below in
Section 3(b)) of the Company to provide for conversion of the Notes (such
reserved shares being referred to herein as the "Reserved Shares").
2. Purchase, Sale and Delivery. On the basis of the
representations, warranties, covenants and agreements, but subject to the terms
and conditions, set forth in this Agreement, at the Closing (as defined below),
the Company agrees to sell and deliver to the Purchaser, and the Purchaser
agrees to purchase from the Company, one or more Notes in the aggregate
principal amount of $12,000,000 at 100% of the principal amount (the "Purchase
Price"). The Purchaser will designate to the Company the number and
denominations of Notes at least one business day prior to the Closing. The
closing (the "Closing") for the consummation of the transactions contemplated by
this Agreement shall take place at 10:00 a.m Eastern Standard Time, on March 27,
1996 at the offices of xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 or on such other date and location as the Purchaser and the
Company may mutually agree (such date of the Closing being herein referred to as
the "Closing Date"). The Purchase Price shall be delivered to the Company in
funds payable at Closing by wire transfer of immediately available Federal funds
(instructions for which will be provided by the Company to the Purchaser),
against receipt of the Notes.
3. Representations and Warranties of the Company. Except in the
case of any representation and warranty below, to the extent described under the
caption identifying such representation and warranty in the Company Disclosure
Letter dated the date of this Agreement and furnished by the Company to the
Purchaser on the date of this Agreement (the "Company Disclosure Letter"), the
Company represents and warrants, and agrees, as follows:
(a) Organization. The Company and each of the subsidiaries of
the Company, a list of which are set forth on Schedule 3(a) of the Company
Disclosure Letter (each a "Subsidiary" and, collectively, the "Subsidiaries"),
are corporations duly organized, validly existing and in good standing under the
laws of their respective jurisdictions of incorporation, and are duly qualified
and in good standing to do business in each jurisdiction in which such
qualification is necessary because of the property owned or leased or because of
the nature of business conducted by it, except for those jurisdictions where the
failure to be so qualified would
not, individually or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), assets, liabilities, operations, earnings,
business or prospects of the Company and its Subsidiaries, taken as a whole (a
"Material Adverse Effect"). The Company does not own, directly or indirectly,
any equity interest in any corporation, partnership, joint venture or other
entity other than the Subsidiaries.
(b) Capital Stock; Indebtedness; Liens.
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(i) The authorized capital stock of the Company as of the
date hereof consists of 60,000,000 shares of Common Stock and 100,000 shares of
Preferred Stock, par value $.0033 per share, of which 42,613,825 shares of
Common Stock, including associated Rights (the "Rights") issued pursuant to the
Rights Agreement, dated as of May 3, 1988, between the Company and The First
National Bank of Chicago, as Rights Agent (the "Rights Agreement"), are validly
issued and outstanding, fully paid and non-assessable, with no personal
liability attaching to the ownership thereof, and no shares of Preferred Stock
are issued or outstanding. All outstanding shares of capital stock of the
Company are duly authorized and not subject to any pre-emptive rights. Except
for such 42,613,825 shares of Common Stock, there are no other shares of capital
stock or other securities of the Company issued or outstanding.
(ii) There are no options, warrants, contracts,
commitments or agreements to which the Company is a party or is bound relating
to any shares of capital stock or other securities of the Company, whether or
not outstanding. Other than the Purchaser pursuant to this Agreement, no person
has any right to cause the Company to effect the registration under the
Securities Act of 1933, as amended (the "Securities Act"), of Common Stock or
any other securities of the Company. There are no voting trusts, voting
agreements, proxies or other agreements or instruments with respect to the
voting of the Company's capital stock to which the Company is a party or, to the
best of the Company's knowledge, among or between any persons other than the
Company.
(iii) Schedule 3(b)(iii) of the Company Disclosure Letter
sets forth a true and complete list of (1) all outstanding Indebtedness (as
defined in the Notes) of the Company and its Subsidiaries and (2) all Liens (as
defined in the Notes) (other than Liens arising by operation of law that
constitute Permitted Liens under the Notes) of the Company and its Subsidiaries,
in each case as of March 27, 1997.
(c) Authorization of Agreement. The execution, delivery and
performance by the Company of this Agreement are within the Company's corporate
powers and have been duly authorized by all requisite corporate action by the
Company; and this Agreement has been duly executed and delivered by the Company
and constitutes the valid and binding obligation of the Company.
(d) Authorization of Notes. The issuance, sale and delivery of
the Notes are within the Company's corporate powers and have been duly
authorized by all requisite corporate action of the Company, and when issued,
sold and delivered in accordance with the provisions of this Agreement, the
Notes will constitute the valid and binding obligations of the Company,
enforceable in accordance with their terms.
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(e) Authorization of Shares The Notes are convertible into Common
Stock in accordance with the terms of this Agreement and of the Notes. The
reservation, issuance and delivery of the Reserved Shares are within the
Company's corporate powers and have been duly authorized by all requisite
corporate action of the Company, and when issued and delivered in accordance
with the terms of this Agreement and the terms of the Notes, the Reserved Shares
will be validly issued and outstanding, fully paid and non-assessable with no
personal liability attaching to the ownership thereof and not subject to
preemptive or any other similar rights of the stockholders of the Company or
others. The stockholders of the Company have no preemptive rights with respect
to Notes, the Reserved Shares or the Common Stock.
(f) Non-Contravention; No Required Consents. The execution,
delivery and performance of this Agreement, the issuance, sale and delivery of
the Notes and the reservation, issuance and delivery of the Reserved Shares, and
compliance with the provisions hereof and thereof by the Company will not (i)
violate any provision of law, statute, rule or regulation, or any ruling, writ,
injunction, order, judgment, or decree of any court, administrative agency or
other governmental body applicable to the Company, any of the Subsidiaries or
any of their properties or assets or (ii) conflict with or result in any breach
of any of the terms, conditions or provisions of, or constitute (with due notice
or lapse of time, or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties or assets of
the Company under, the Company's or any Subsidiary's articles of incorporation
or bylaws, or (x) any note, indenture, mortgage, lease, contract, agreement or
instrument (1) to which the Company is a party or by which it or any of its
properties or assets are bound or affected and (2) relating to any debt owed by,
or any capital stock issued by, the Company, (y) any other lease, contract,
agreement or other instrument to which the Company is a party or by which any of
its properties or assets are bound or affected or (z) any note, indenture,
mortgage, lease, agreement or other contract, agreement or instrument to which
any Subsidiary is a party or by which it or any of its properties or assets are
bound or affected. Except for the filing of any notice subsequent to the Closing
that may be required under applicable Federal or state securities laws (which,
if required, shall be filed on a timely basis as may be so required), no
consent, approval or authorization of, or declaration to, or filing with, any
Person is required for the valid authorization, execution, delivery, and
performance by the Company of this Agreement or for the valid authorization,
issuance, sale and delivery of the Notes or for the valid authorization,
reservation, issuance and delivery of the Reserved Shares. The term "Person", as
used herein, means an individual, a corporation, a partnership, a limited
liability company, a trust, an unincorporated association or any other entity or
organization, including, without limitation, a government or political
subdivision or an agency, instrumentality or official thereof.
(g) Litigation. Except as disclosed in the Reports (as defined
below), (i) there are no actions, suits, claims, investigations or legal or
administrative or arbitration proceedings pending or, to the knowledge of the
Company or any Subsidiary, threatened against or affecting the Company or any
Subsidiary, whether at law or in equity, or before or by any Federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality which individually or in the aggregate would, if adversely
determined, have a Material Adverse Effect, or which in any manner draws into
question the validity of this
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Agreement, the Notes or the Reserved Shares or the transactions contemplated
hereby or thereby; and (ii) there are no judgments, decrees, injunctions or
orders of any court, governmental department, commission, agency,
instrumentality or arbitrator against or affecting the Company or any
Subsidiary, which individually or in the aggregate, would have a Material
Adverse Effect.
(h) Compliance; Governmental Authorizations. Each of the Company
and each Subsidiary has complied, and is in compliance with, in all respects
with the Federal, state, local or foreign laws, ordinances, regulations and
orders (including environmental laws, ordinances, regulations and orders)
necessary for the conduct of its business, except where the failure to comply
with any of the foregoing would not have a Material Adverse Effect. Each of the
Company and each Subsidiary has all Federal, state and foreign governmental
licenses and permits necessary in the conduct of its business as presently being
conducted (including all those required by the United States Environmental
Protection Agency and similar state agencies), such licenses and permits are in
full force and effect, no violations are or have been recorded in respect of any
thereof and no proceeding is pending or, to the knowledge of the Company or any
Subsidiary, threatened to revoke or limit any thereof, except where the failure
to comply with any of the foregoing would not have a Material Adverse Effect.
(i) Financial Statements. The consolidated financial statements
of the Company and the Subsidiaries set forth in the (i) Company's Annual Report
on Form 10-K for the year ended October 31, 1996, reported on by KPMG Peat
Marwick, and (ii) Company's Quarterly Report on Form 10-Q for the three months
ended January 31, 1997, in each case fairly present the consolidated financial
position of the Company and the Subsidiaries as of such date and the
consolidated results of operation and cash flows for such period then ended in
conformity with generally accepted accounting principles. KPMG Peat Marwick is
the independent accountant as defined under the Securities Act and the rules and
regulations promulgated thereunder.
(j) Absence of Changes. Since October 31, 1996, the Company and
each Subsidiary has been operated in the ordinary course of business consistent
with past practice and there has not been (i) any material adverse change in the
condition (financial or otherwise), assets, liabilities, operations, earnings,
business or prospects of the Company and its Subsidiaries, taken as a whole; or
(ii) any declaration, setting aside or payment of any dividend or other
distribution with respect to any shares of Common Stock, or any direct or
indirect redemption, purchase or other acquisition of any such shares of Common
Stock.
(k) Taxes. The federal income tax returns of the Company or its
predecessors have never been examined by the Internal Revenue Service. Neither
the Company nor its predecessors has taken any reporting positions for which
they do not have a reasonable basis and the Company does not anticipate any
further material tax liability with respect to the years for which returns have
been filed prior to the date of this Agreement. For purposes of this paragraph,
the term "Company" shall include each other corporation with which the Company
files consolidated or combined income tax returns or reports. The Company and
each Subsidiary have timely filed all United States federal income tax returns
and all other material tax returns (federal, state, local and foreign) required
to be filed by it, which returns are true and correct in
4
all material respects, and all taxes, assessments, fees and other governmental
charges thereupon and upon its properties, assets, income and franchises which
are due and payable prior to the date of this Agreement, the failure of which to
pay when due and payable has or is likely to have a Material Adverse Effect,
have been paid when due and payable, or reserves have been provided for payment
thereof to the extent required under generally accepted accounting standards.
The Company does not know of any actual or proposed additional tax assessments
for any fiscal period against it or any of the Subsidiaries which, singly or in
the aggregate, would have a Material Adverse Effect and the Company has
established adequate reserves for such additional tax assessments, if any.
(l) Intellectual Property. The Company or a Subsidiary
exclusively or jointly owns, or is licensed to use, all patents, licenses,
copyrights, trademarks or trade names or other intellectual property rights
("Intellectual Property") which the Company believes are necessary, required or
desirable for the conduct of the business of the Company and the Subsidiaries as
presently conducted or as presently proposed to be conducted. There are no
pending or threatened claims against the Company or any Subsidiary alleging that
the conduct of the Company's or such Subsidiary's business (as now conducted or
presently proposed to be conducted) infringes or conflicts with or will infringe
or will conflict with the rights of others in any Intellectual Property. To the
knowledge of the Company, no third party is infringing any of the Intellectual
Property of the Company or any Subsidiary. To the Company's knowledge, neither
the Company nor any Subsidiary is making unauthorized use of any confidential
information or trade secrets of any person, including without limitation, any
former or present employees of the Company or any Subsidiary.
(m) Compliance with ERISA. Each member of the ERISA Group has
fulfilled its obligations under the minimum funding standards of ERISA and the
Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement,
which has resulted or could result in the imposition of a lien or the posting of
a bond or other security under ERISA or the Internal Revenue Code or (iii)
incurred any liability under Title IV of ERISA other than a liability to the
PBGC for premiums under Section 4007 of ERISA. "ERISA" means the Employee
Retirement Income Security Act of 1974, as amended, or any successor statute.
"ERISA Group" means the Company and all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Company, are treated as a single
employer under Section 414 of the Internal Revenue Code. "PBGC" means the
Pension Benefit Guaranty Company or any entity succeeding to any or all of its
functions under ERISA. "Benefit Arrangement" means at any time an employee
benefit plan within the meaning of Section 3(3) of ERISA which is not a Plan or
a Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group. "Multiemployer Plan" means at any time an employee
pension benefit plan within the meaning of Section 4001(a) (3) of ERISA to which
any member of the ERISA Group
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is then making or accruing an obligation to make contributions or has within the
preceding five Plan years made contributions, including for these purposes any
Person which ceased to be a member of the ERISA Group during such five year
period. "Plan" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.
(n) No Defaults. Neither the Company nor any Subsidiary is in
default (i) under its articles of incorporation or bylaws, or any indenture,
mortgage, lease, purchase or sales order, or any other contract, agreement or
instrument to which the Company or any Subsidiary is a party or by which they or
any of their properties are bound or affected or (ii) with respect to any order,
writ, injunction or decree of any court or any Federal, state, municipal or
other domestic or foreign governmental department, commission, board, bureau,
agency or instrumentality, which defaults individually or in the aggregate would
have a Material Adverse Effect. There exists no condition. event or act which
constitutes, or which after notice, lapse of time, or both, would constitute, a
default under any of the foregoing, which defaults individually or in the
aggregate would have a Material Adverse Effect.
(o) SEC Reports. The Company has delivered to the Purchaser its
(i) Annual Report on Form 10-K for the year ended October 31, 1996 and (ii)
Quarterly Report on Form 10-Q for the three months ended January 31, 1997
(together, the "Reports"). The description of the business, operations,
properties and assets of the Company contained in the Reports, as well as all
other factual statements concerning the Company contained therein, are true,
correct and complete in all material respects and do not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
(p) Offering Exemption. Neither the Company nor any of its
agents has offered or sold any Notes or Common Stock, or any similar security or
securities to, or solicited any offers to buy any of the foregoing from, or
otherwise approached or negotiated in respect thereof with, any person or
persons so as to require registration of the Notes or the Reserved Shares under
the Securities Act or qualification under the Trust Indenture Act of 1939. The
offering and sale of the Notes and the issuance of the Reserved Shares upon
conversion of the Notes are each exempt from registration under the Securities
Act pursuant to Section 4(2) of such Act.
(q) Use of Proceeds. The proceeds received by the Company from
the sale of the Notes shall be used by the Company for general corporate
purposes. None of such proceeds will be used, directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of buying or carrying any
"margin stock" within the meaning of Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System.
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(r) Investment Company. The Company is not an "investment
company" or an entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended.
(s) Disclosure. No document, certificate, instrument or written
statement or information furnished or made available to the Purchaser by or on
behalf of the Company in connection with the transactions contemplated hereby
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained therein not misleading.
There is no fact peculiar to the Company which materially adversely affects
(without regard to general market and economic conditions), or in the future may
(so far as the Company can now foresee), to the best knowledge of the Company,
materially adversely affect the business, operations, prospects, condition,
properties or assets of the Company which has not been set forth in this
Agreement or in the other documents, certificates, instruments or written
statements furnished to the Purchaser by or on behalf of the Company pursuant
hereto.
(t) No Finders' Fees. There is no investment banker, broker,
finder or other intermediary which has been retained by or is authorized to act
on behalf of the Company or any Subsidiary who might be entitled to any fee or
commission from the Company, any Subsidiary, the Purchaser or any of Purchaser's
affiliates upon consummation of the transactions contemplated by this Agreement
or thereafter.
(u) Delaware Law; Rights Agreement. The Board of Directors of
the Company has approved this Agreement and the issuance and delivery of the
Reserved Shares in accordance with the terms of this Agreement and the terms of
the Notes, and such approval is sufficient to render the provisions of Section
203 of the Delaware General Corporation Law inapplicable to this Agreement and
the transactions contemplated hereby and by the Notes The Company has delivered
to the Purchaser a complete and correct copy of the Rights Agreement including
all amendments and exhibits thereto. The Company has taken, and as soon as
possible after the date hereof (but in no event later than two business days
after the date hereof), the Rights Agent will take, all actions necessary or
appropriate to amend the Rights Agreement to ensure that the execution of this
Agreement and the issuance and delivery of the Reserved Shares in accordance
with the terms of this Agreement and the terms of the Notes and the other
transactions contemplated by this Agreement and the Notes will not cause (i) the
Purchaser or any of its affiliates to be considered an Acquiring Person (as such
term is defined in the Rights Agreement), (ii) the occurrence of a Distribution
Date or Stock Acquisition Date (as such terms are defined in the Rights
Agreement) or (iii) the separation of the Rights from the underlying Shares, and
will not give the holders thereof the right to acquire securities of any party
hereto.
4. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants to the Company as follows:
(a) Investment Purpose. The Purchaser is acquiring the Notes for
the Purchaser's own account, not as a nominee or agent, and the Purchaser is
acquiring the Notes for
7
investment and not with a view to the distribution thereof within the meaning of
the Securities Act.
(b) Restricted Securities.
(i) The Purchaser understands that the Notes have not been
registered under the Securities Act; and that the Notes are restricted
securities within the meaning of Rule 144 under the Securities Act.
(ii) The Purchaser understands that the Reserved Shares
issuable upon conversion will not be registered under the Securities Act (except
as otherwise provided in Section 6) and may only be sold or transferred in
compliance with the Securities Act.
(c) Accredited Investor. The Purchaser is an Accredited Investor
(as that term is defined in Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended).
5. Conditions of Obligations of the Purchaser. The obligations of the
Purchaser to perform under this Agreement are subject to the satisfaction of the
following conditions unless waived by the Purchaser:
(a) Note. The Purchaser shall have received a duly executed Note
or Notes evidencing the principal amount of Notes purchased.
(b) Actions Authorized. All action necessary to authorize the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby shall have been duly and validly taken by
the Company, and the Company shall have full power and right to consummate the
transactions contemplated hereby The Company shall have furnished to the
Purchaser such documents relating to its corporate existence and authority
(including, without limitation, certified copies of the Company's Articles of
Incorporation, Bylaws, resolutions and minutes of meetings of the Board of
Directors authorizing the Agreement and good standing certificates from the
Secretaries of State of the states of Delaware and Illinois and such other
matters as the Purchaser or its counsel may reasonably request.
(c) Consents. The Purchaser shall have received (i) a consent
duly executed by Bank of America National Trust and Savings Association and
American National Bank and Trust Company of Chicago in the form of Exhibit B and
(ii) a consent duly executed by Principal Mutual Life Insurance Company and
Massachusetts Mutual Life Insurance Company in the form of Exhibit C.
(d) Legal Opinion. The Purchaser shall have received an opinion
dated the Closing Date of Xxxxxxxx & Xxxxxx Ltd counsel to the Company in the
form of Exhibit D.
(e) Representations and Warranties; Compliance; No Default. The
representations and warranties of the Company in Section 3 shall be true and
correct in all
8
respects on and as of the Closing Date; the Company shall have complied with all
obligations, covenants and conditions required to be complied with by it
pursuant to this Agreement on or prior to the Closing; and the Purchaser shall
have received a certificate signed by the Company's President and Chief
Executive Officer to the foregoing effect. No Event of Default under the Notes
and no event or condition which, with the giving of notice or the lapse of time
or both, would, unless cured or waived, become such an Event of Default, shall
have occurred and be continuing.
6. Transfer of Notes.
(a) Restriction on Transfer. The Notes shall not be transferable
except upon the conditions specified in this Section 6, which conditions are
intended to ensure compliance with the provisions of the Securities Act in
respect of the transfer of the Notes.
(b) Restrictive Legend. Each Note shall (unless otherwise
permitted by the provisions of Section 6(d)) be stamped or otherwise imprinted
with legends in substantially the following form:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939. THIS
NOTE MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT.
ADDITIONALLY, THE TRANSFER OF THIS NOTE IS SUBJECT TO THE
CONDITIONS SPECIFIED IN SECTION 6 OF THE NOTE PURCHASE AGREEMENT
PURSUANT TO WHICH THIS NOTE WAS PURCHASED, AND NO TRANSFER OF
THIS NOTE SHALL BE VALID OR EFFECTIVE UNTIL SUCH CONDITIONS HAVE
BEEN FULFILLED.
(c) Notice of Transfer. Each holder of a Note (a "Holder"), by
acceptance thereof agrees, prior to any transfer of any Notes, to give written
notice to the Company of such Holder's intention to effect such transfer and to
comply in all other respects with the provisions of this Section 6(c). Each such
notice shall describe the manner and circumstances of the proposed transfer and
shall be accompanied by the written opinion of counsel for such Holder, as to
whether in the opinion of such counsel such proposed transfer involves a
transaction requiring registration of such Notes under the Securities Act. If in
the opinion of such counsel the proposed transfer of the Notes may be effected
without registration under the Securities Act, the Holder shall thereupon be
entitled to transfer the Notes in accordance with the terms of the notice
delivered by it to the Company. Each certificate or other instrument evidencing
the securities issued upon the transfer of any Notes (and each certificate or
other instrument evidencing any untransferred balance of such Notes) shall bear
the legend set forth in Section 6(b) unless in the opinion of such counsel
registration of future transfer is not
9
required by the applicable provisions of the Securities Act. The Notes shall not
be transferred in denominations of less than $1,000,000. Without the prior
written consent of the Company, the Notes may not be transferred by the
Purchaser or any transferee to any Person listed on Schedule 6(c) of the Company
Disclosure Schedule (the "Prohibited Transferees"); provided that, if an Event
of Default has occurred and is continuing, the Notes may be transferred to a
Prohibited Transferee in which case the Company would only be obligated to
deliver publicly available information to such Person pursuant to Section 8(a).
(d) Removal of Legends, Etc. Notwithstanding the foregoing
provisions of this Section 6, the restrictions imposed by Section 6 upon the
transferability of any Notes shall cease and terminate when any such Notes are
sold or otherwise disposed of in accordance with the intended method of
disposition by the seller or sellers thereof contemplated by Section 6 which
does not require that the Notes transferred bear the legend set forth in Section
6(b). Whenever the restrictions imposed by Section 6 shall terminate as herein
provided, the holder of any Notes as to which such restrictions have terminated
shall be entitled to receive from the Company, without expense, one or more new
certificates not bearing the restrictive legend set forth in Section 6(b) and
not containing any other reference to the restrictions imposed by Section 6.
7. Registration of Registrable Stock.
(a) Shelf Registration.
(i) The Company shall (x) within 15 business days of
delivery of a written request to register Registrable Stock (as defined below)
by any holder of Registrable Stock, file with the Securities and Exchange
Commission (the "SEC") a Shelf Registration Statement (as defined below)
relating to the offer and sale of the shares of Common Stock or other securities
issued or issuable upon conversion of the Notes (the "Registrable Stock") by the
holders of Registrable Stock from time to time in accordance with the methods of
distribution elected by such holders and set forth in such Shelf Registration
Statement, and (y) use its best efforts to cause such Shelf Registration
Statement to be declared effective under the Securities Act as promptly as
practicable; provided that the holders of Registrable Stock may not request the
Company to file a Shelf Registration Statement unless and until (x) such holders
have the right at such time to convert the Notes into Common Stock pursuant to
Section 3(a)(x) of the Notes or (y) the Company has exercised its right to cause
the Notes to convert into Common Stock pursuant to Section 3(a)(y) of the Notes.
"Register," "registered" and "registration" each refer to:
(ii) a registration of Registrable Stock effected by filing
with the SEC a registration statement in compliance with the Securities Act and
the declaration or ordering by the SEC of effectiveness of such registration
statement. "Shelf Registration" means a registration effected pursuant to this
Section 7. "Shelf Registration Statement" means a shelf registration statement
of the Company filed with the SEC pursuant to the provisions of this Section 7
which covers some or all of the Registrable Stock, as applicable, on an
appropriate form under Rule 415 under the Securities Act or any similar rule
that may be adopted by the
10
SEC, amendments and supplements to such registration statement, including post-
effective amendments, in each case including the prospectus contained therein,
all exhibits thereto and all material incorporated by reference therein.
(iii) The Company shall use its best efforts (x) to keep
the Shelf Registration Statement continuously effective in order to permit the
prospectus forming part thereof to be usable by the holders of Registrable Stock
for a period equal to the longer of (1) three years and (2) the period any
holder of Registrable Stock is subject to any limitations on the resale thereof
under Rule 144, and (y) after the effectiveness of the Shelf Registration
Statement promptly upon the request of any holder of Registrable Stock, to take
any action necessary to register the sale of any Registrable Stock of such
holder and to identify such holder as a selling securityholder.
(b) Registration Procedures. In connection with any Shelf
Registration Statement, the Company shall:
(i) prepare and file with the SEC a Shelf Registration
Statement with respect to the Registrable Stock and use its best efforts to
cause such Shelf Registration Statement to become and remain effective as
provided in this Agreement;
(ii) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such Shelf Registration Statement
effective and current and to comply with the provisions of the Securities Act
with respect to the disposition of all shares covered by such Shelf Registration
Statement, including such amendments and supplements as may be necessary to
reflect the intended method of disposition from time to time of the prospective
seller or sellers of such Registrable Stock;
(iii) furnish to each selling holder of Registrable Stock
such number of copies of a prospectus in conformity with the requirements of the
Securities Act, and such other documents, as such holder may reasonably request
in order to facilitate the public sale or other disposition of the Registrable
Stock owned by such holder;
(iv) use its best efforts to register or qualify the shares
of Registrable Stock covered by such Shelf Registration Statement under such
other securities or blue sky or other applicable laws of such jurisdiction
within the United States as each prospective seller shall reasonably request, to
enable such seller to consummate the public sale or other disposition in such
jurisdictions of the shares of Registrable Stock owned by such seller; and
(v) furnish to each prospective seller a signed
counterpart, addressed to the prospective sellers, of (i) an opinion of counsel
for the Company, dated the effective date of the Shelf Registration Statement,
and (ii) a "comfort" letter (or, in the case of any such Person which does not
satisfy the conditions for receipt of a "comfort" letter specified in Statement
on Auditing Standards No. 72, an "agreed upon procedures" letter) signed by the
independent auditors who have certified the Company's financial statements
included in the Shelf
11
Registration Statement, covering substantially the same matters with respect to
the Shelf Registration Statement (and the prospectus included therein) and (in
the case of the "comfort" or "agreed upon procedures" letter) with respect to
events subsequent to the date of the financial statements, as are customarily
covered (at the time of such registration) in opinions of issuer's counsel and
in "comfort" letters delivered to the underwriters in underwritten public
offerings of securities (with in the case of an "agreed upon procedures" letter,
such modifications or deletions as may be required under Statement on Auditing
Standards No. 35).
(c) Designation of Underwriter. In the case of any registration
effected pursuant to this Section 7, a majority in interest of the holders of
Registrable Stock shall have the right to designate the managing underwriter in
any underwritten offering.
(d) Cooperation by Prospective Sellers.
(i) Each prospective seller of Registrable Stock, and each
underwriter designated by each such seller, will furnish to the Company such
information as the Company may reasonably require from such seller or
underwriter in connection with the Shelf Registration Statement (and the
prospectus included therein). No holder of Registrable Stock may participate in
any offering unless such Holder completes and executes all questionnaires,
indemnities, underwriting agreements and other documents required in connection
with the offering.
(ii) Failure of a prospective seller of Registrable Stock
to furnish the information and agreements described in this Agreement shall not
affect the obligations of the Company under this Agreement to remaining sellers
to furnish such information and agreements unless, in the reasonable opinion of
counsel to the Company or the underwriters, such failure impairs or may impair
the viability of the offering or the legality of the registration or the
underlying offering.
(iii) The holders holding shares of Registrable Stock
included in the registration will not (until further notice by the Company)
effect sales thereof (or deliver a prospectus to any purchaser) after receipt of
telegraphic or written notice from the Company to suspend sales to permit the
Company to correct or update a registration statement or prospectus. In
connection with any offering each Holder who is a prospective seller, will not
use any offering document, offering circular or other offering materials with
respect to the offer or sale of Registrable Stock, other than the prospectuses
provided by the Company and any documents incorporated by reference therein.
(e) Expenses. All expenses incurred in complying with this
Section 7, including, without limitation, all registration and filing fees
(including all expenses incident to filing with the National Association of
Securities Dealers, Inc.), fees and expenses of complying with securities and
"blue sky" laws, printing expenses and fees and disbursements of counsel for the
Company and one counsel for the holders of Registrable Stock, and of the
independent certified public accountants shall be paid by the Company, provided.
however, that all underwriting discounts and selling commissions applicable to
the Registrable Stock covered by
12
registrations effected pursuant to this Section 7 shall not be borne by the
Company but shall be borne by the seller or sellers.
(f) Indemnification.
(i) In the event of any registration of any Registrable
Stock under the Securities Act pursuant to this Section 7 or registration or
qualification of any Registrable Stock pursuant to this Section 7, the Company
shall indemnify and hold harmless the seller of such shares, each underwriter of
such shares, if any, each broker or any other person acting on behalf of such
seller and each other person, if any, who controls any of the foregoing persons,
within the meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which any of the foregoing persons may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any registration statement under which such Registrable Stock as
registered under the Securities Act, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereto, or any
document prepared or furnished by the Company incident to the registration or
qualification of any Registrable Stock pursuant to this Section 7, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading or, with respect to any prospectus, necessary to make the
statements therein in light of the circumstances under which they were made, not
misleading, or any violation by the Company of the Securities Act or state
securities or "blue sky" laws applicable to the Company and relating to action
or inaction required of the Company in connection with such registration or
qualification under such state securities or blue sky laws; and shall reimburse
such seller, such underwriter, broker or other person acting on behalf of such
seller and each such controlling person for any legal or any other expenses
reasonably incurred by any of them in connection with investigating or defending
any such loss claim, damage, liability or action; provided, however, that the
Company shall not be liable (i) in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the registration statement, the preliminary prospectus or prospectus or in any
amendment or supplement thereof pursuant to this Section 7 in reliance upon and
in conformity with written information furnished to the Company through an
instrument duly executed by such seller or such underwriter specifically for use
in the preparation thereof and (ii) to any broker or other person acting on
behalf of such seller to the extent that any such loss, claim, damage or
liability arises out of or is based upon any representation or other statement
of such broker or other person that is not in conformity with the preliminary
prospectus or prospectus.
(ii) Before Registrable Stock held by a prospective seller
shall be included in any registration pursuant to this Section 7, such
prospective seller and any underwriter acting on its behalf shall have agreed to
indemnify and hold harmless (in the same manner and to the same extent as set
forth in (i) above) the Company, each director of the Company, each officer of
the Company who shall sign such registration statement and any person who
controls the Company within the meaning of the Securities Act, with respect to
any
13
untrue statement or omission from such registration statement, any preliminary
prospectus or prospectus contained therein, or any amendment or supplement
thereof, if such untrue statement or omission was made in reliance upon and in
conformity with written information furnished to the Company through an
instrument duly executed by such seller or such underwriter, as the case may be,
specifically for use in the preparation of such registration statement,
preliminary prospectus, prospectus or amendment or supplement; provided that the
maximum amount of liability in respect of such indemnification shall be limited,
in the case of each prospective seller of Registrable Stock to an amount equal
to the net proceeds actually received by such prospective seller from the sale
of Registrable Stock effected pursuant to such registration.
(iii) Notwithstanding the foregoing provisions of this
Section 7, if pursuant to an underwritten public offering of Common Stock, the
Company, the selling stockholders and the underwriters enter into an
underwriting or purchase agreement relating to such offering which contains
provisions covering indemnification among the parties thereto in connection with
such offering, the indemnification provisions of Section 7(f) shall be deemed
inoperative for purposes of such offering.
(iv) Each party entitled to indemnification under this
Section 7(f) (the "indemnified party") shall give notice to the party required
to provide indemnification (the "indemnifying party") promptly after such
indemnified party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the indemnifying party (at its expense) to assume the
defense of any claim or any litigation resulting therefrom, provided that
counsel for the indemnifying party, who shall conduct the defense of such claim
or litigation, shall be reasonably satisfactory to the indemnified party, and
the indemnified party may participate in such defense, but only at such
indemnified party's expense, and provided, further, that the omission by any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under this Section 7(f) except to the
extent that the omission results in a failure of actual notice to the
indemnifying party and such indemnifying party is damaged solely as a result of
the failure to give notice. No indemnifying party, in the defense of any such
claim or litigation, shall, except with the consent of each indemnified party,
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
such indemnified party of a release from all liability in respect to such claim
or litigation.
8. Covenants. The Company agrees that:
(a) Information. The Company shall deliver to each Holder:
(i) (A) as soon as available and in any event within 5 days
after filing of each of the Company's Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K with the Commission, copies of each of such
reports; and (B) as soon as available and in any event within 10 days after
filing of each of the Company's Annual Reports on Form 10-K including
copies of the Company's Annual Report to Shareholders and Proxy Statement
with the Commission, xxxxx of each of such reports;
14
(ii) promptly upon the mailing thereof to the shareholders
of the Company generally, copies of all information (other than as described in
clause (i)) so mailed;
(iii) simultaneously with the delivery of each set of
financial statements referred to above, a certificate of the chief financial
officer or the chief accounting officer of the Company stating whether any Event
of Default, as defined in the Notes, or any condition or event which, with the
giving of notice or lapse of time or both would, unless cured or waived, become
an Event of Default, exists on the date of such certificate and, if any Event of
Default or any such condition or event then exists, setting forth the details
thereof and the action which the Company is taking or proposes to take with
respect thereto;
(iv) if and when any member of the ERISA Group (i) gives or
is required to give notice to the PBGC of any "reportable event" (as defined in
Section 4043 of ERISA) with respect to any Plan which might constitute grounds
for a termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC, (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any Multiemployer
Plan is in reorganization, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of an intent
to terminate, impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of
such notice; (iv) applies for a waiver of the minimum funding standard under
Section 412 of the Internal Revenue Code, a copy of such application; (v) gives
notice of intent to terminate any Plan under Section 4041(c) of ERISA, a copy of
such notice and other information filed with the PBGC; (vi) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of such
notice; or (vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has resulted or could result
in the imposition of a Lien or the posting of a bond or other security, a
certificate of the chief financial officer or the chief accounting officer of
the Company setting forth details as to such occurrence and action, if any,
which the Company or applicable member of the ERISA Group is required or
proposes to take; and
(v) from time to time such additional information
regarding the financial position or business of the Company and its Subsidiaries
as any Holder may reasonably request (it being understood and agreed that no
Holder shall be entitled to request any confidential or proprietary information
of the Company and its Subsidiaries pursuant to this clause (v)).
(b) Payment of Obligations. The Company will pay and discharge,
and will cause each Subsidiary to pay and discharge, at or before maturity, all
their respective material obligations and liabilities, including, without
limitation, tax liabilities, except where the same may be contested in good
faith by appropriate proceedings, and will maintain, and will cause each
Subsidiary to maintain, in accordance with generally accepted accounting
principles, appropriate reserves for the accrual of any of the same; provided
that the Holders hereby waive
15
any default arising out of the Company's or any Subsidiary's failure to pay any
Indebtedness described on Exhibit C to Schedule 3(n) of the Company Disclosure
Letter, such waiver to be effective until the first to occur of (i) any holder
of such Indebtedness either accelerates such Indebtedness or commences any
enforcement action with respect thereto, (ii) any holder of Senior Indebtedness
(as defined in the Notes) ceases to waive any default under such Senior
Indebtedness arising out of such failure to pay any Indebtedness described on
Exhibit C and (iii) the aggregate dollar amount of all such outstanding
Indebtedness specified on Exhibit C (other than fees, interest or penalties
thereon) increases above the level so specified.
(c) Conduct of Business and Maintenance of Existence. The
Company will continue, and will cause each Subsidiary to continue, to engage in
business of the same general type as now conducted by the Company and its
Subsidiaries, and will preserve, renew and keep in full force and effect, and
will cause each Subsidiary to preserve, renew and keep in full force and effect
their respective corporate existence and their respective rights, privileges and
franchises necessary or desirable in the normal conduct of business, provided
that nothing in this Section 8(c) shall prohibit (i) the merger of a Subsidiary
into the company or the merger or consolidation of a Subsidiary with or into
another Person if the corporation surviving such consolidation or merger is a
Subsidiary and if, in each case, after giving effect thereto, no Event of
Default under the Notes and no event or condition which, with the giving of
notice or lapse of time or both, would, unless cured or waived, become an Event
of Default under the Notes, shall have occurred and be continuing or (ii) the
termination of the corporate existence of any Subsidiary if the Company in good
faith determines that such termination is in the best interest of the Company
and is not materially disadvantageous to the Holders of the Notes.
(d) Compliance with Laws. The Company will comply, and cause
each Subsidiary to comply, in all material respects with all applicable laws,
ordinances, rules, regulations, and requirements of governmental authorities
(including, without limitation, environmental laws and ERISA and the rules and
regulations thereunder) except where the necessity of compliance therewith is
contested in good faith by appropriate proceedings.
(e) Inspection of Property. Books and Records. The Company will
keep, and will use its best efforts to cause each Subsidiary to keep, proper
books of record and account in which full, true and correct entries shall be
made of all dealings and transactions in relation to its business and
activities; and will permit, and will cause each Subsidiary to permit,
representatives of any Holder at such Holder's expense to visit and inspect any
of their respective properties, to examine and make abstracts from any of their
respective books and records and to discuss their respective affairs, finances
and accounts with their respective officers, employees and independent public
accountants, all at such reasonable times, upon reasonable notice and as often
as may reasonably be desired (it being understood and agreed that no Holder
shall be entitled to request any confidential or proprietary information of the
Company and its Subsidiaries pursuant to this subsection (e)).
(f) Prohibited Transactions. Neither the Company nor any agent
acting on its behalf will, directly or indirectly, sell or offer for sale or
dispose of, or attempt or offer to dispose of, any of the Notes, Common Stock or
any similar security of the Company to, or solicit
16
any offers to buy any thereof from, or otherwise approach or negotiate in
respect thereof with, any person or persons, so as to require registration of
the Notes or the Reserved Shares under the Securities Act.
9. Survival of Representations, Warranties and Agreements Etc. All
representations and warranties hereunder shall survive the Closing. All
statements contained in any certificate or other instrument delivered by the
Company or pursuant to this Agreement or in connection with the transactions
contemplated by this Agreement shall constitute representations and warranties
by the Company under this Agreement.
10. Miscellaneous.
(a) Entire Agreement. This Agreement and the Schedules and
Exhibits hereto contain the entire agreement between the Company and the
Purchaser with respect to the transactions contemplated hereby and supersede all
prior agreements or understandings among the parties with respect thereto.
(b) Headings. Descriptive headings are for convenience only and
shall not control or affect the meaning or construction of any provision of this
Agreement.
(c) Notices. - All notices or other communications provided for
in this Agreement shall be in writing and shall be sent by confirmed telecopy
(with an undertaking to provide a hard copy) or delivered by hand or sent by
overnight courier service prepaid to the address specified below.
If to the Company:
System Software Associates, Inc.
000 X. Xxxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
Telecopy: 000-000-00000
with a copy to:
System Software Associates, Inc.
000 X. Xxxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telecopy: 000-000-0000
17
If to the Purchaser:
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
with a copy to:
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith.
(d) Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
(e) Amendments. This Agreement shall not be altered or otherwise
amended except pursuant to an instrument in writing signed by each of (i) the
Company, (ii) the Purchaser so long as it holds any of the Notes or any of the
Reserved Shares issued upon conversion thereof, and (iii) the holders of 51% of
the aggregate principal amount of the Notes (or, if the Notes have been
converted, the holders of 51% of the number of the Reserved Shares issued upon
such conversion).
(f) Assignment. This Agreement shall not be assignable by either
parts without the consent of the other party, except that it, or the rights
under this Agreement, in whole or in part, may be assigned by the Purchaser to
any party or parties who purchase the Note or Notes owned by the Purchaser (or,
if the Notes have been converted, to any party or parties who purchase the
Reserved Shares issued upon such conversion).
(g) Expenses; Documentary Taxes; Indemnification. (i) The Company
shall pay (A) all out-of-pocket expenses of each Holder, including fees and
disbursements of counsel for such Holder, in connection with the preparation of
this Agreement, (B) all out-ofpocket expenses of each Holder, including fees and
disbursements of counsel for such Holder, in connection with any waiver or
consent under this Agreement or under the Notes or any amendment of this
Agreement or the Notes or any default or alleged default under this Agreement or
under the Notes and (C) if an Event of Default, as defined in the Notes, occurs,
all out-of-pocket expenses incurred by each Holder, including fees and
disbursements of counsel, in connection with such Event of Default and
collection, bankruptcy, insolvency and other enforcement proceedings resulting
therefrom. The Company shall indemnify each Holder against
18
any transfer taxes, documentary taxes, assessments or charges made by any
governmental authority by reason of the execution and delivery of this Agreement
or the Notes.
(ii) The Company hereby indemnifies and holds each Holder
and its affiliates, shareholders, officers, directors, employees and agents
(collectively, the "Indemnified Parties") harmless from and against any and all
actions, causes of action, suits, losses, costs, claims, liabilities and
damages, and expenses incurred in connection therewith (irrespective of whether
any such Indemnified Party is a party to the action for which indemnification
hereunder is sought), including attorneys' and other experts' fees and
disbursements (collectively, the "Indemnified Liabilities"), incurred by the
Indemnified Parties or any of them as a result of, or arising out of, or
relating to (A) any transaction financed or to be financed in whole or in part
directly or indirectly, with the proceeds from the sale of the Notes; or (B) the
entering into and performance of this Agreement and any other document delivered
in connection herewith by any of the Indemnified Parties.
An Indemnified Party shall be entitled to be represented by the counsel of such
Indemnified Party's choice in connection with the defense (including any
investigation) of any third party claim against or involving such Indemnified
Party for which indemnification is sought under this Agreement and, on demand
(and as incurred), the Company shall pay, or reimburse such Indemnified Party
for, the fees and expenses of such counsel and all other expenses relating to
such defense. This indemnity shall survive repayment or transfer of the Notes,
the conversion of any Note into Reserved Shares or the transfer of any Reserved
Shares. The Company's obligation to any Indemnified Party under this indemnity
shall be without regard to fault on the part of the Company with respect to the
violation or condition which results in liability of any Indemnified Party. If
and to the extent that the foregoing undertaking is determined to be
unenforceable for any reason, the Company hereby agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.
(h) CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(i) CONSENT TO JURISDICTION. EACH OF THE HOLDERS AND THE
CORPORATION HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE
COURT SITTING IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH
OF THE HOLDERS AND THE CORPORATION IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT
ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. EACH OF THE HOLDERS AND THE CORPORATION CONSENTS TO THE SERVICE OF
19
PROCESS IN ANY SUCH PROCEEDING BY THE DELIVERY (BY OVERNIGHT COURIER) TO IT AT
ITS ADDRESS SPECIFIED IN SECTION 9(c) OF THIS AGREEMENT (OR IN THE CASE OF A
HOLDER OTHER THAN THE PURCHASER, TO ITS ADDRESS AS IT APPEARS IN THE REGISTER
MAINTAINED BY THE CORPORATION). EACH OF THE HOLDERS AND THE CORPORATION FURTHER
AGREES THAT A FINAL JUDGMENT IN ANY SUCH PROCEEDING SHALL BE CONCLUSIVE AND
BINDING AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN
ANY OTHER MANNER PROVIDED BY LAW.
(j) WAIVER OF JURY TRIAL. THE CORPORATION AND EACH OF THE HOLDERS
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
20
IN WITNESS WHEREOF, this Note Purchase Agreement has been duly
executed by an officer of the parties hereto thereunto duly authorized all on
the date first above written.
SYSTEM SOFTWARE ASSOCIATES, INC.
By: /s/ Xxxxx Xxxxx
---------------------------------------
Name:
Title: CEO
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
By: /s/ Authorized Officer
---------------------------------------
Name:
Title:
21
