Exhibit 1
$12,000,000
FLOATING RATE CONVERTIBLE NOTES
Due 2000
NOTE PURCHASE AGREEMENT
dated
March 27, 1997
between
SYSTEM SOFTWARE ASSOCIATES, INC.
and
COMPUTER ASSOCIATES INTERNATIONAL, INC.
TABLE OF CONTENTS
Section Page
------- ----
1. Issuance of Securities and Reservation of Reserved Shares 1
2. Purchase, Sale and Delivery 1
3. Representations and Warranties of the Corporation 1
(a) Organization 1
(b) Capital Stock; Indebtedness; Liens 2
(c) Authorization of Agreement 2
(d) Authorization of Notes 2
(e) Authorization of Shares 2
(f) Non-Contravention; No Required Consents 3
(g) Litigation 3
(h) Compliance; Governmental Authorizations 3
(i) Financial Statements 4
(j) Absence of Changes 4
(k) Taxes 4
(l) Intellectual Property 4
(m) Compliance with ERISA 5
(n) No Defaults 5
(o) SEC Reports 6
(p) Offering Exemption 6
(q) Use of Proceeds 6
(r) Investment Company 6
(s) Disclosure 6
(t) No Finders Fees 6
(u) Delaware Law; Rights Agreement 7
4. Representations and Warranties of the Purchaser 7
(a) Investment Purpose 7
(b) Restricted Securities 7
(c) Accredited Investor 7
5. Conditions of Obligations of the Purchaser 7
(a) Note 7
(b) Actions Authorized 7
(c) Consents 8
(d) Legal Opinion 8
(e) Representations and Warranties; Compliance; No Default 8
6. Transfer of Securities 8
(a) Restriction on Transfer 8
(b) Restrictive Legend 8
(c) Notice of Transfer 9
(d) Removal of Legends, Etc 9
7. Registration of Registrable Stock 9
(a) Shelf Registration 9
(b) Preparation and Filing 10
(c) Designation of Underwriter 11
(d) Cooperation by Prospective Sellers 11
(e) Expenses 11
(f) Indemnification 12
8. Covenants 13
(a) Information 13
(b) Payment of Obligations 14
(c) Conduct of Business and Maintenance of Existence 14
(d) Compliance with Laws 15
(e) Inspection of Property, Books and Records 15
(f) Prohibited Transactions 15
9. Survival of Representations, Warranties and Agreements Etc. 15
10. Miscellaneous 15
(a) Entire Agreement 15
(b) Headings 15
(c) Notices 16
(d) Counterparts 16
(e) Amendments 16
(f) Assignment 17
(g) Expenses; Documentary Taxes; Indemnification 17
(h) CHOICE OF LAW 17
(i) CONSENT TO JURISDICTION. 18
(j) WAIVER OF JURY TRIAL 18
EXHIBITS
Exhibit A - Form of Floating Rate Convertible Note Due 2000
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 - Form of Consent of Principal Mutual Life Insurance Company
and Massachusetts Mutual Life Insurance Company
Exhibit D - Form of Opinion of Counsel to the Company
NOTE PURCHASE AGREEMENT dated as of March 27, 1997 between
SYSTEM SOFTWARE ASSOCIATES, INC., a Delaware corporation (the
Company), and COMPUTER ASSOCIATES INTERNATIONAL, INC., a Delaware
corporation (the Purchaser).
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
Xxxxxx, Xxxxx & Xxxxx, 0000 Xxxxxx xx xxx Xxxxxxxx, 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
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indirectly, any equity interest in any corporation, partnership, joint
venture or other entity other than the Subsidiaries.
b. Capital Stock; Indebtedness; Liens..
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.
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
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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 shareholders 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 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,
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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 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
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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
purposed 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 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
6
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.
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
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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 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. 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.
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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 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.
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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 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
10
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 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 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.
ii. 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
11
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 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
12
accountants shall be paid by the Company; provided, however, that all
underwriting discounts and selling commissions applicable to the
Registrable Stock covered by 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 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
13
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 shareholders 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 to 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, copies of each of such reports;
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
14
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 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
15
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 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
16
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
If to the Purchaser:
Computer Associates International, Inc.
Xxx Xxxxxxxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: President
Telecopy: 000-000-0000
with a copy to:
Computer Associates International, Inc.
Xxx Xxxxxxxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: General Counsel
Telecopy: 000-000-0000
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.
17
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
party 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-of-pocket
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 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.
18
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 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.
19
IN WITNESS WHEREOF, this Note Purchase Agreement has been duly
executed by an officer of each of the parties hereto thereunto duly
authorized all on the date first above written.
SYSTEM SOFTWARE ASSOCIATES, INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
COMPUTER ASSOCIATES INTERNATIONAL, INC.
By: /s/ Xxxxxxx X. XxXxxx
------------------------------
Name: Xxxxxxx X. XxXxxx
Title: Senior Vice President -
Finance
