<PAGE>
As filed with the Securities and Exchange Commission on December 1, 1994
Registration No. 33-________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------
STERLING SOFTWARE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-1873956
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
8080 North Central Expressway
Suite 1100
Dallas, Texas 75206
(214) 891-8600
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
----------
JEANNETTE P. MEIER, ESQ. With a copy to:
Executive Vice President, CHARLES D. MAGUIRE, JR., ESQ.
Secretary and General Counsel Jackson & Walker, L.L.P.
Sterling Software, Inc. 901 Main Street
8080 North Central Expressway Suite 6000
Suite 1100 Dallas, Texas 75202
Dallas, Texas 75206 (214) 953-5850
(214) 891-8685
(Name, address, including zip code, and
telephone number, including area code,
of agent for service)
----------------
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered in connection with dividend or interest
reinvestment plans, check the following box. [X]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================
Title of Each Class Amount Proposed Maximum Proposed Maximum
of Securities to to be Offering Price Aggregate Amount of
be Registered Registered Per Unit(1) Offering Price(1) Registration Fee
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$.10 per share 82,650 shares $29.50 $2,438,175 $841
====================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
Pursuant to Rule 457(c), the offering price and registration fee are
computed on the basis of the average of the high and low prices of the
Common Stock as reported by the New York Stock Exchange on November 23,
1994.
----------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
<PAGE>
PROSPECTUS
82,650 Shares
STERLING SOFTWARE, INC.
Common Stock
Pursuant to an Amended and Restated Agreement and Plan of Merger dated as
of August 31, 1994 (as amended, the "Merger Agreement"), Sterling Software,
Inc., a Delaware corporation ("Sterling" or the "Company") acquired
KnowledgeWare, Inc., a Georgia corporation ("KnowledgeWare"), through the merger
(the "Merger") of a wholly owned subsidiary of Sterling ("Merger Sub") with and
into KnowledgeWare effective November 30, 1994.
This Prospectus relates to the issuance by Sterling of up to 82,650 shares
(the "Warrant Shares") of Common Stock, par value $.10 per share ("Sterling
Common Stock"), that are issuable upon exercise of certain warrants (the
"Warrants") that had been issued by KnowledgeWare in June 1994 and were assumed
by Sterling pursuant to the Merger. As a result of the Merger, each Warrant
entitles the holder thereof to purchase .1653 of a share of Sterling Common
Stock (the exchange ratio in the Merger (the "Exchange Ratio")) at an exercise
price of $17.50 for such fraction, subject to certain adjustments, at anytime
until June 9, 1997; provided that Warrants are exercisable only for whole shares
of Sterling Common Stock and no cash will be paid in lieu of fractional Warrants
or fractional shares of Sterling Common Stock. In general, the Warrant Shares,
when and if issued upon the exercise of the Warrants, may be resold without
restriction under the Securities Act of 1933, as amended (the "Securities Act").
See "Description of Warrants and Plan of Distribution."
The Sterling Common Stock is listed for trading on the New York Stock
Exchange (the "NYSE") under the symbol "SSW." On November 29, 1994, the
closing price of the Sterling Common Stock on the NYSE was $30.00. The Company
will pay all expenses incurred in connection with this offering, which are
estimated to be approximately $18,000.00.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------------
The date of this Prospectus is ____________, 1994.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional
offices at Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60611 and at 7 World Trade Center, Suite 1300, New York, New
York 10048. Copies of such material can also be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Sterling Common Stock is listed on the NYSE.
Reports, proxy statements and other information concerning the Company can also
be inspected at the offices of the NYSE at 20 Broad Street, New York, New York
10005.
This Prospectus, which constitutes part of a Registration Statement filed
by the Company with the Commission under the Securities Act (the "Registration
Statement"), omits certain of the information contained in the Registration
Statement. Reference is made to the Registration Statement and to the exhibits
thereto for further information with respect to the Company and the Sterling
Common Stock offered hereby. Copies of such Registration Statement are
available from the Commission. Statements contained herein concerning the
provisions of documents filed herewith as exhibits are necessarily summaries of
such documents, and each such statement is qualified in its entirety by
reference to the copy of the applicable document filed with the Commission.
The Company's principal executive offices are located at 8080 North Central
Expressway, Suite 1100, Dallas, Texas 75206, and its telephone number at such
address is (214) 891-8600.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed with the Commission by the
Company, are incorporated herein by reference and made a part hereof:
(i) Annual Report on Form 10-K (File No. 1-8465) for the year ended
September 30, 1993, as amended by Form 10-K/A Amendment No. 1, filed
January 26, 1994;
(ii) Quarterly Report on Form 10-Q (File No. 1-8465) for the quarter
ended December 31, 1993;
(iii) Quarterly Report on Form 10-Q (File No. 1-8465) for the quarter
ended March 31, 1994, as amended by Form 10-Q/A Amendment No. 1,
filed May 16, 1994;
-2-
<PAGE>
(iv) Quarterly Report on Form 10-Q (File No. 1-8465) for the quarter
ended June 30, 1994;
(v) Current Report on Form 8-K (File No. 1-8465) dated November 15,
1993, filed November 16, 1993;
(vi) Current Report on Form 8-K (File No. 1-8465) dated July 31, 1994,
filed August 2, 1994;
(vii) Current Report on Form 8-K (File No. 1-8465) dated August 1, 1994,
filed August 2, 1994;
(viii) Current Report on Form 8-K (File No. 1-8465) dated August 31, 1994,
filed September 2, 1994;
(ix) Current Report on Form 8-K (File No. 1-8465) dated November 3, 1994,
filed November 3, 1994;
(x) Current Report on Form 8-K (File No. 1-8465) dated November 14,
1994, filed November 14, 1994;
(xi) Current Report on Form 8-K (File No. 1-8465) dated November 14,
1994, filed November 25, 1994; and
(xi) the description of the Sterling Common Stock contained in Sterling's
Registration Statement on Form 8-A (File No. 0-108465), filed
March 7, 1990.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of Common Stock to be made hereunder
shall be deemed to be incorporated by reference herein and to be a part hereof
from the date of filing thereof. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for all purposes of this Prospectus to the
extent that a statement contained herein or therein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide, without charge, to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of such person, a
copy of any or all of the documents incorporated herein by reference (other than
exhibits to such documents, unless such exhibits are specifically incorporated
by reference into the information that this Prospectus incorporates). Written
or telephonic requests for copies should be directed to the Company's principal
office: Sterling Software, Inc., 8080 N. Central Expressway, Suite 1100,
Dallas,
-3-
<PAGE>
Texas 75206, Attention: Jeannette P. Meier, Executive Vice President, Secretary
and General Counsel (telephone: (214) 891-8600).
USE OF PROCEEDS
The proceeds received by the Company upon exercise of the Warrants, if any,
will be used for general corporate purposes, including, but not limited to,
operating and working capital requirements. As of the date of this Prospectus,
there were outstanding Warrants to purchase an aggregate of 82,650 shares of
Sterling Common Stock, exercisable at the price of $105.87 per share, and
expiring on June 9, 1997. The number of shares of Sterling Common Stock
issuable upon exercise of the Warrants, and the exercise price thereof, are
subject to adjustment for stock splits and similar events in accordance with the
terms of the Warrant Agreement (as amended or supplemented, the "Warrant
Agreement") dated June 9, 1994 between KnowledgeWare and Trust Company Bank,
Atlanta, Georgia, as warrant agent (the "Warrant Agent"), pursuant to which the
Warrants were issued.
DESCRIPTION OF WARRANTS AND PLAN OF DISTRIBUTION
BACKGROUND
According to the public filings of KnowledgeWare prior to the effectiveness
of the Merger, the Warrants were issued in connection with a complaint that was
filed on December 18, 1994, in the United States District Court for the Northern
District of Georgia, Atlanta Division which consolidated and amended several
class action lawsuits previously filed against KnowledgeWare in October 1991.
This action, styled In re: KnowledgeWare, Inc. Shareholder Litigation, Master
File No. 1:92-CV-1651-JTC, pending in the United States District Court for the
Northern District of Georgia (the "1991 Class Action"), was a class action
lawsuit alleging violations of Sections 20 and 10(b) of the Exchange Act and
Rule 10b-5 under the Exchange Act. In summary, the complaint alleged that
KnowledgeWare misrepresented or failed to disclose material facts which would
have a material adverse impact on KnowledgeWare or approved such
misrepresentations and omissions. The complaint sought compensatory damages and
reimbursements for the plaintiffs' fees and expenses. On January 26, 1994,
KnowledgeWare entered into and the District Court preliminarily approved a
stipulation of settlement of the 1991 Class Action (the "Settlement Agreement").
By entering into the settlement, KnowledgeWare did not admit the allegations in
the suit and, to the contrary, denied any wrongdoing. The Settlement Agreement,
which received final court approval in April 1994, required a cash payment of
$1,750,000, all of which was paid by KnowledgeWare's insurance carrier, and the
issuance by KnowledgeWare of the Warrants, which allowed the holders to acquire
an aggregate of 500,000 shares of common stock, without par value
("KnowledgeWare Common Stock"), of KnowledgeWare at a price of $17.50 per share.
On August 30, 1994, the plaintiffs in the 1991 Class Action filed a "Motion to
Enforce Stipulation of Settlement, for Temporary Injunction of Merger and for
Damages Resulting from Fraud" (the "Motion"). In the Motion, the plaintiffs
allege that the proposed business combination between KnowledgeWare and Sterling
and the
-4-
<PAGE>
announcement by KnowledgeWare that it modified its accounting policy for revenue
recognition and restated financial results for the first three quarters of
fiscal year 1994 resulted in a substantially reduced value of the Warrants
available to the plaintiffs under the Settlement Agreement. Accordingly, the
plaintiffs moved the District Court for a decree of specific performance of the
terms of the Settlement Agreement entailing the delivery of new warrants of
equivalent value to the original value of the Warrants, and for a preliminary
injunction of the consummation of any business combination between KnowledgeWare
and Sterling, pending compliance by KnowledgeWare with the terms of the
Settlement Agreement. Alternatively, the plaintiffs moved for a declaration
that the Warrant Agreement set forth in the Settlement Agreement was the product
of fraud and for an award to the plaintiffs of the appropriate measure of
damages. The plaintiffs have subsequently filed a motion requesting the
withdrawal of their request for the preliminary injunction.
EFFECT OF THE MERGER
Pursuant to the terms of the Merger Agreement, Sterling assumed the
Warrants upon consummation of the Merger. Each Warrant is exercisable on the
terms and conditions set forth in the Warrant Agreement, except that in
accordance with the automatic adjustment provisions of the Warrant Agreement,
(a) each such Warrant became exercisable for the number of shares of Sterling
Common Stock into which the number of shares of KnowledgeWare Common Stock under
the unexercised portion of the Warrant would have been converted immediately
prior to the effective time of the Merger, and (b) the exercise price per share
of Sterling Common Stock became equal to an amount equal to the exercise price
for a share of KnowledgeWare Common Stock subject to such Warrant immediately
prior to the effective time of the Merger divided by the Exchange Ratio.
Accordingly, as a result of the Merger, there currently are outstanding Warrants
to purchase an aggregate of 82,650 shares of Sterling Common Stock with an
exercise price of $105.87 for each share of Sterling Common Stock.
DESCRIPTION OF WARRANTS
GENERAL. The Warrants are issued in certificated form ("Warrant
-------
Certificates") pursuant to the provisions of the Warrant Agreement. The
following summary description of the Warrants and the Warrant Agreement does not
purport to be complete and is qualified in its entirety by reference to the
Warrant Agreement, which is filed as an exhibit to the Registration Statement.
Each Warrant entitles the registered holder thereof (the "Warrantholder")
to purchase .1653 of a share of Sterling Common Stock at an exercise price of
$17.50 for such fraction, subject to certain adjustments, at any time from June
9, 1994 through June 9, 1997 (the "Exercise Period"); provided that Warrants are
exercisable only for whole shares of Sterling Common Stock and no cash will be
paid in lieu of fractional Warrants or fractional shares of Sterling Common
Stock.
TRANSFER AND EXCHANGE. Warrants may be presented for exchange or
---------------------
registration of transfer (with the form of assignment on the reverse side
thereof fully completed and executed)
-5-
<PAGE>
at the stock transfer office of the Warrant Agent. The Warrants have not been,
and are not expected to be, listed on any exchange or traded in an interdealer
quotation system. There is no assurance that there will be a market for the
Warrants.
EXERCISE OF WARRANTS. The Warrants can be exercised for whole shares of
--------------------
Sterling Common Stock, at any time and from time to time during the Exercise
Period, by surrendering to the stock transfer office of the Warrant Agent a
Warrant Certificate with the form of election to purchase on the reverse side
thereof duly completed and signed by the Warrantholder or his or her duly
authorized agent indicating the Warrantholder's election to exercise all or a
portion (consisting of whole Warrants) of the Warrant evidenced by such Warrant
Certificate. The election to purchase must be accompanied by (i) payment of the
exercise price of the Warrants to be exercised and (ii) an amount equal to any
applicable transfer tax, which payment may be made in the form of cash or a
certified or official bank check payable in lawful money of the United States to
the order of the Company. The Warrant Agent will return a certificate
evidencing the number of shares of Sterling Common Stock issued upon exercise of
the Warrant, together with a new Warrant Certificate if less than all of the
shares covered by the Warrant Certificate are being purchased. The shares of
Sterling Common Stock received upon exercise of the Warrants are being offered
directly by the Company to the Warrantholders, without participation by any
brokers, dealers or underwriters. No discounts, commissions or other
compensation will be paid in connection with this offering.
In general, the Warrant Shares, when and if issued upon the exercise of the
Warrants, may be resold without restriction under the Securities Act.
ADJUSTMENTS. The number of securities issuable upon exercise of the
-----------
Warrants and the exercise price of the Warrants are subject to adjustment upon
the occurrence of specified events including stock dividends, stock splits,
reorganization or certain other occurrences, all as set forth in the Warrant
Agreement. There is no adjustment for the payment of cash dividends, if any, by
the Company on the Sterling Common Stock.
MODIFICATION AND WAIVER. The Company and the Warrant Agent may from time
-----------------------
to time supplement or amend the Warrant Agreement or the provisions of the
Warrant Certificates without the approval of the Warrantholders in order to cure
any ambiguity or to correct any defective or inconsistent provision or clerical
omission therein, or to make any other provisions in regard to matters or
questions arising thereunder and which shall not be inconsistent with the
provisions of the Warrant Certificates and which shall not adversely affect the
interest of the Warrantholders.
FRACTIONAL INTERESTS. No Warrant Certificate evidencing a fraction of a
--------------------
Warrant, fractions of shares of Sterling Common Stock on the exercise of the
Warrants, or cash in lieu of fractional Warrants or shares will be issued.
NO RIGHTS AS STOCKHOLDERS. The Warrantholders as such are not entitled to
-------------------------
vote, receive dividends or exercise any of the rights of holders of shares of
Sterling Common Stock for any
-6-
<PAGE>
purpose until such Warrants have been duly exercised and payment of the exercise
price has been made.
LEGAL MATTERS
Certain legal matters in connection with the validity of the securities
offered hereby have been passed upon for the Company by Jackson & Walker,
L.L.P., Dallas, Texas. Michael C. French, a partner in Jackson & Walker,
L.L.P., is a director of the Company.
EXPERTS
The consolidated financial statements and financial statement schedules
appearing in Sterling's Annual Report on Form 10-K for the year ended September
30, 1993, as amended by Form 10-K/A Amendment No.1 filed January 26, 1994, have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated by reference herein, which as
to the years 1992 and 1991, are based in part on the report of Arthur Andersen
LLP, independent public accountants. Such consolidated financial statements and
schedules are incorporated herein by reference in reliance upon such reports
given upon the authority of such firms as experts in accounting and auditing.
The consolidated financial statements of KnowledgeWare, Inc. and
subsidiaries as of June 30, 1994 and 1993 and for each of the three years in the
period ending June 30, 1994 incorporated by reference in this Prospectus have
been incorporated herein on the report, which includes an explanatory paragraph
about KnowledgeWare, Inc.'s ability to continue as a going concern, of Coopers &
Lybrand L.L.P., independent certified public accountants, given upon authority
of that firm as experts in accounting and auditing.
-7-
<PAGE>
=========================================== ===============================
No person has been authorized in connection
with the offering made hereby to give any
information or to make any representation
not contained in this Prospectus and, if
given or made, such information or
representation must not be relied upon.
This Prospectus does not constitute an offer
to sell or a solicitation of an offer to buy
any securities other than registered securities
to which it relates, or an offer to or a
solicitation of any person in any jurisdiction
where such offer or solicitation would be
unlawful. Neither the delivery of this
Prospectus nor any sale made hereunder
shall, under any circumstances, create any
implication that the information contained
herein is correct as of any date subsequent STERLING SOFTWARE, INC.
to the date hereof.
PROSPECTUS
, 1994
-----------
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
<S> <C>
Available Information................. 2
Incorporation of Certain
Documents by Reference............... 2
Use of Proceeds....................... 4
Description of Warrants
and Plan of Distribution............. 4
Legal Matters......................... 7
Experts............................... 7
</TABLE>
=========================================== ===============================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
-------------------------------------------
The estimated expenses to be incurred in connection with the issuance and
distribution of the Common Stock covered by this Registration Statement, all of
which will be paid by the Registrant, are as follows:
<TABLE>
<S> <C>
Registration Fee................. $ 841.00
Printing and Engraving Expenses.. 6,000.00
Accounting Fees and Expenses..... 5,000.00
Legal Fees and Expenses.......... 5,000.00
Miscellaneous.................... 1,159.00
__________
Total............................ $18,000.00
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
-----------------------------------------
Section 145 of the Delaware General Corporation Law empowers a corporation
to indemnify its directors and officers or former directors or officers and to
purchase insurance with respect to liability arising out of their capacity or
status as directors and officers. Such law provides further that the
indemnification permitted thereunder shall not be deemed exclusive of any other
rights to which the directors and officers may be entitled under a corporation's
Certificate of Incorporation, Bylaws, any agreement or otherwise.
Article IX of the Company's Certificate of Incorporation, as amended,
provides that, to the fullest extent permitted by the Delaware General
Corporation Law, as the same exists or may hereafter be amended, a director of
the Company shall not be liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director. Article IX of the Company's
Restated Bylaws provides for indemnification of officers and directors. In
addition, the Company has entered into Indemnity Agreements with each of its
officers and directors pursuant to which such officers and directors may be
indemnified against losses arising from certain claims, including claims under
the Securities Act, which may be made by reason of their being officers or
directors.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been advised that in the
opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
II-1
<PAGE>
ITEM 16. EXHIBITS.
--------
The following is a list of all exhibits filed as a part of this
Registration Statement on Form S-3, including those incorporated herein by
reference.
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
- -------- ----------------------
<S> <C>
1 None.
2.1 Amended and Restated Agreement and Plan of Merger dated as of August
31, 1994 among the Registrant, KnowledgeWare, Inc. and SSI
Corporation.(1)
2.2 Agreement dated October 11, 1994 among the Registrant, KnowledgeWare,
Inc. and SSI Corporation.(1)
2.3 First Amendment to Amended and Restated Agreement and Plan of Merger
dated as of October 24, 1994 among the Registrant, KnowledgeWare, Inc.
and SSI Corporation.(1)
4.1 Certificate of Incorporation of the Registrant.(2)
4.2 Certificate of Amendment of Certificate of Incorporation of the
Registrant.(3)
4.3 Certificate of Amendment of Certificate of Incorporation of the
Registrant.(4)
4.4 Restated Bylaws of the Registrant.(5)
4.5 Form of Common Stock Certificate.(6)
4.6 Warrant Agreement dated June 9, 1994 between KnowledgeWare, Inc. and
Trust Company Bank.(7)
4.7 Supplemental Warrant Agreement dated as of November 30, 1994 between
KnowledgeWare, Inc. and Trust Company Bank.(7)
5 Opinion of Jackson & Walker, L.L.P.(7)
8 None.
12 None.
15 None.
</TABLE>
II-2
<PAGE>
<TABLE>
<S> <C>
23.1 Consent of Ernst & Young LLP./(7)/
23.2 Consent of Arthur Andersen LLP./(7)/
23.3 Consent of Coopers & Lybrand L.L.P. /(7)/
23.4 Consent of Jackson & Walker, L.L.P. (included in its opinion filed as
Exhibit 5 to this Registration Statement)./(7)/
24 Power of Attorney (appearing on page II-6 of this Registration
Statement)./(7)/
25 None.
26 None.
27 None.
28 None.
</TABLE>
- ------------------------
/(1)/ Previously filed as an exhibit to the Registrant's Registration Statement
No. 33-56185 on Form S-4 and incorporated herein by reference.
/(2)/ Previously filed as an exhibit to the Registrant's Registration Statement
No. 2-82506 on Form S-1 and incorporated herein by reference.
/(3)/ Previously filed as an exhibit to the Registrant's Annual Report on Form
10-K for the fiscal year ended September 30, 1993 and incorporated herein
by reference.
/(4)/ Previously filed as an exhibit to the Registrant's Registration Statement
No. 33-69926 on Form S-8 and incorporated herein by reference.
/(5)/ Previously filed as an exhibit to the Registrant's Registration No. 33-
47131 on Form S-8 and incorporated herein by reference.
/(6)/ Previously filed as an exhibit to the Registrant's Registration Statement
No. 2-86825 on Form S-1 and incorporated herein by reference.
/(7)/ Filed herewith.
II-3
<PAGE>
ITEM 17. UNDERTAKINGS.
------------
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that
are incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Commission
II-4
<PAGE>
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-5
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below authorizes Sterling L. Williams,
George H. Ellis and Jeannette P. Meier, and each of them, each of whom may act
without joinder of the others, to execute in the name of each such person who is
then an officer or director of the Registrant and to file any amendments to this
Registration Statement necessary or advisable to enable the Registrant to comply
with the Securities Act of 1933, as amended, and any rules, regulations and
requirements of the Securities and Exchange Commission, in respect thereof, in
connection with the registration of the securities which are the subject of this
Registration Statement, which amendments may make such changes in the
Registration Statement as such attorney may deem appropriate.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Dallas, State of Texas on the 30th day of November,
1994.
STERLING SOFTWARE, INC.
By: /s/ Jeannette P. Meier
--------------------------
Name: Jeannette P. Meier
------------------------
Title: Executive Vice President
-------------------------------
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
President, Chief
Executive Officer
/s/ STERLING L. WILLIAMS and Director November 30, 1994
- -------------------------- (Principal Executive Officer)
Sterling L. Williams Executive Vice President
and Chief
/s/ GEORGE H. ELLIS Financial Officer November 30, 1994
- -------------------------- (Principal Financial and
George H. Ellis Accounting Officer)
/s/ SAM WYLY Chairman of the November 30, 1994
- -------------------------- Board of Directors
Sam Wyly
/s/ CHARLES J. WYLY, JR. Vice Chairman of the November 30, 1994
- -------------------------- Board of Directors
Charles J. Wyly, Jr.
/s/ EVAN A. WYLY Director November 30, 1994
- --------------------------
Evan A. Wyly
/s/ MICHAEL C. FRENCH Director November 30, 1994
- --------------------------
Michael C. French
/s/ ROBERT J. DONACHIE Chairman of the Audit November 30, 1994
- -------------------------- Committee and Director
Robert J. Donachie
/s/ PHILLIP A. MOORE Executive Vice November 30, 1994
- -------------------------- President,
Phillip A. Moore Technology and Director
/s ROBERT E. COOK Director November 30, 1994
- --------------------------
Robert E. Cook
/s/ DONALD R. MILLER, JR. Director November 30, 1994
- --------------------------
Donald R. Miller, Jr.
</TABLE>
II-7
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
- ------ ----------------------
<S> <C>
1 None.
2.1 Amended and Restated Agreement and Plan of Merger dated as of August
31, 1994 among the Registrant, KnowledgeWare, Inc. and SSI
Corporation./(1)/
2.2 Agreement dated October 11, 1994 among the Registrant, KnowledgeWare,
Inc. and SSI Corporation./(1)/
2.3 First Amendment to Amended and Restated Agreement and Plan of Merger
dated as of October 24, 1994 among the Registrant, KnowledgeWare, Inc.
and SSI Corporation./(1)/
4.1 Certificate of Incorporation of the Registrant./(2)/
4.2 Certificate of Amendment of Certificate of Incorporation of the
Registrant./(3)/
4.3 Certificate of Amendment of Certificate of Incorporation of the
Registrant./(4)/
4.4 Restated Bylaws of the Registrant./(5)/
4.5 Form of Common Stock Certificate./(6)/
4.6 Warrant Agreement dated June 9, 1994 between KnowledgeWare, Inc. and
Trust Company Bank./(7)/
4.7 Supplemental Warrant Agreement dated as of November 30, 1994 between
KnowledgeWare, Inc. and Trust Company Bank./(7)/
5 Opinion of Jackson & Walker, L.L.P./(7)/
8 None.
12 None.
15 None.
23.1 Consent of Ernst & Young LLP./(7)/
23.2 Consent of Arthur Andersen LLP./(7)/
23.3 Consent of Coopers & Lybrand L.L.P. /(7)/
</TABLE>
<PAGE>
<TABLE>
<S> <C>
23.4 Consent of Jackson & Walker, L.L.P. (included in its opinion filed as
Exhibit 5 to this Registration Statement)./(7)/
24 Power of Attorney (appearing on page II-6 of this Registration
Statement)./(7)/
25 None.
26 None.
27 None.
28 None.
</TABLE>
- ----------------
/(1)/ Previously filed as an exhibit to the Registrant's Registration Statement
No. 33 -56185 on Form S-4 and incorporated herein by reference.
/(2)/ Previously filed as an exhibit to the Registrant's Registration Statement
No. 2-82506 on Form S-1 and incorporated herein by reference.
/(3)/ Previously filed as an exhibit to the Registrant's Annual Report on Form
10-K for the fiscal year ended September 30, 1993 and incorporated herein
by reference.
/(4)/ Previously filed as an exhibit to the Registrant's Registration Statement
No. 33-69926 on Form S-8 and incorporated herein by reference.
/(5)/ Previously filed as an exhibit to the Registrant's Registration No. 33-
47131 on Form S-8 and incorporated herein by reference.
/(6)/ Previously filed as an exhibit to the Registrant's Registration Statement
No. 2-86825 on Form S-1 and incorporated herein by reference.
/(7)/ Filed herewith.
<PAGE>
EXHIBIT 4.6
WARRANT AGREEMENT
between
KNOWLEDGEWARE, INC.
and
TRUST COMPANY BANK
Dated as of June 9, 1994
WARRANT AGREEMENT dated as of June 9, 1994, between Knowledgeware, Inc.
corporation (the "Company") and Trust Company Bank (the "Warrant Agent").
In connection with the settlement of the action In Re: Knowledgeware, Inc.
Shareholder Litigation, In the United States District Court for the Northern
District of Georgia, Atlanta Division, Master File No. 1:92-CV-1651-JTC and
pursuant to a Stipulation of Settlement dated as of January 26, 1994 (the
"Stipulation") among the parties to the above-captioned litigation, the Company
proposes to issue warrants ("Warrants") to purchase an aggregate of 500,000
shares of the Company's Common Stock, without par value ("Common Stock"), at a
purchase price of $17.50 per share, subject to adjustment in certain
circumstances as hereinafter provided, all upon the terms and subject to the
conditions set forth in this Agreement.
The Company desires to retain the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to act, in connection with the
issuance, transfer, exchange and replacement of the certificates evidencing the
Warrants to be issued under this Agreement (the "Warrant Certificates") and the
exercise of Warrants.
The Company desires to enter into this Agreement to set forth the terms and
conditions of the Warrants and the rights of the holders thereof and to set
forth the respective rights and obligations of the Company and the Warrant
Agent.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto agree as follows:
1. Appointment of Warrant Agent. The Company hereby appoints the Warrant
----------------------------
Agent to act as agent for the Company in
1
<PAGE>
accordance with the instructions in this Agreement, and the Warrant Agent hereby
accepts such appointment.
2. Date, Denomination and Execution of Warrant Certificates. The Warrant
--------------------------------------------------------
Certificates (and the Form of Election to Purchase and the Form of Assignment to
be printed on the reverse thereof) shall be in registered form only and shall be
substantially of the tenor recited in Exhibit A hereto, and may have such
---------
letters, numbers or other marks of identification or designation and such
legends, summaries or endorsements printed, lithographed or engraved thereon as
the Company may deem appropriate and as are not inconsistent with the provisions
of this Agreement, or as may be required to comply with any law, or with any
rule or regulation made pursuant thereto, or with any rule or regulation of any
stock exchange on which the Common Stock or Warrants may be listed, or to
conform to usage. Each Warrant Certificate shall entitle the registered holder
thereof, subject to the provisions of this Agreement (including, without
limitation, Section 7) and of the Warrant Certificate, to purchase, at any time
during the period commencing on the Original Issuance Date (as hereinafter
defined) and ending at the close of business on the third anniversary of the
Original Issuance Date (the "Exercise Period"), one fully paid and nonassessable
share of Common Stock for each Warrant evidenced by such Warrant Certificate, at
an exercise price equal to the Purchase Price (as defined in Section 6). Each
Warrant Certificate issued pursuant to the Stipulation as part of the original
issuance of the Warrants shall be dated June 9, 1994 (the "Original Issuance
Date"); each other Warrant Certificate shall be dated the date on which the
Warrant Agent received valid issuance instructions from the Company or, if such
instructions specify another date, such other date. For purposes of this
Agreement, (i) the term "close of business" on any given date means 5:00 p.m.,
Atlanta time, on such date; provided, however, that if such date is not a
-----------------
business day, it shall mean 5:00 p.m., Atlanta time, on the next succeeding
business day; and (ii) the term "business day" means any other day other than a
Saturday, Sunday or a day on which banking institutions in Atlanta, Georgia, are
authorized or obligated by law to be closed.
Each Warrant Certificate shall be executed on behalf of the Company by its
Chairman of the Board or its President or a Vice President, either manually or
by facsimile signature printed thereon, and have affixed thereto the company's
seal or a facsimile thereof which shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile signature.
Each Warrant Certificate shall be manually countersigned by the Warrant Agent
and shall not be valid for any purpose unless so countersigned. If any officer
of the Company who shall have signed any Warrant Certificate shall cease to be
such officer of the Company before countersignature by the Warrant Agent and
issue and delivery thereof by the Company, such Warrant
2
<PAGE>
Certificate, nevertheless, may be countersigned by the Warrant Agent, issued and
delivered with the some force and effect as though the person who signed such
Warrant Certificate had not ceased to be such officer of the Company.
3. Subsequent Issue of Warrant Certificates. Following the original
----------------------------------------
issuance of Warrant Certificates, no new Warrant Certificates shall be issued
except (i) Warrant Certificates issued upon transfer thereof in accordance with
Section 4, (ii) Warrant Certificates issued upon any combination, split-up or
exchange of Warrant Certificates pursuant to Section 4, (iii) Warrant
Certificates issued in replacement of mutilated, destroyed, lost or stolen
Warrant Certificates pursuant to Section 5, (iv) Warrant Certificates issued
upon the partial exercise of Warrant Certificates pursuant to Section 8, and (v)
Warrant Certificates issued pursuant to Section 23 to reflect any adjustment or
change in the Purchase Price or the number or kind of shares purchasable
thereunder. The Warrant Agent is hereby irrevocably authorized to countersign
and deliver, in accordance with the provisions of Sections 4, 5, 8 and 23, the
new Warrant Certificates required for purposes thereof, and the Company,
whenever required by the Warrant Agent, will supply the Warrant Agent with
Warrant Certificates duly executed on behalf of the Company for such purposes.
4. Transfers and Exchanges of Warrant Certificates. The Warrant Agent
-----------------------------------------------
shall keep or cause to be kept books for registration of ownership and transfer
of the Warrant Certificates issued hereunder. Such registers shall show the
names and addresses of the respective holders of the Warrant Certificates, the
number of Warrants evidenced by each such Warrant Certificate and the date of
each of the Warrant Certificates.
The Warrant Agent shall, from time to time, register the transfer of any
outstanding Warrants upon the books to be maintained by the Warrant Agent for
that purpose, upon surrender of the Warrant Certificate evidencing such
Warrants, with the Form of Assignment completed and duly executed, to the
Warrant Agent at its stock transfer office in Atlanta, Georgia, at any time on
or before the date of expiration of the Exercise Period, and upon payment to the
Warrant Agent for the account of the Company of an amount equal to any
applicable transfer tax. Payment of the amount of such tax may be made in cash,
or by certified or official bank check, payable in lawful money of the United
States of America to the order of the Company.
Upon receipt of a Warrant Certificate with the Form of Assignment completed
and duly executed, accompanied by payment of an amount equal to any applicable
transfer tax, the Warrant Agent shall promptly cancel the surrendered Warrant
Certificate and countersign and deliver to the transferee a new Warrant
Certificate for the number of full Warrants transferred to such transferee;
3
<PAGE>
provided, however, that if the registered holder of any Warrant Certificate
- -----------------
shall elect to transfer fewer than all of the Warrants evidenced by such Warrant
Certificate, the Warrant Agent in addition shall promptly countersign and
deliver to such registered holder one or more new Warrant Certificates for the
number of full Warrants not so transferred.
Any Warrant Certificate may be exchanged at the option of the holder thereof
for one or more Warrant Certificates of different denominations, of like tenor
and representing in the aggregate the same number of Warrants, upon surrender of
the Warrant Certificate to be exchanged, with the Form of Assignment completed
and duly executed, to the Warrant Agent, at any time or from time to time after
the date hereof and prior to the expiration of the Exercise Period. The Warrant
Agent shall promptly cancel the surrendered Warrant Certificate and deliver the
new Warrant Certificate pursuant to the provisions of this Section 4.
5. Mutilated, Destroyed, Lost or Stolen Warrant Certificates. Upon
---------------------------------------------------------
receipt by the Company and the Warrant Agent of evidence reasonably satisfactory
to them of the loss, theft, destruction or mutilation or any Warrant
Certificate, and the case of loss, theft, destruction, of indemnity and/or
security reasonably satisfactory to them, and reimbursement to them of all
reasonable expenses incidental thereto, and in the case of mutilation, upon
surrender and cancellation of the mutilated Warrant Certificate, the Warrant
Agent shall countersign and deliver a new Warrant Certificate of like tenor for
the same number of Warrants.
Any Warrant Certificate issued upon the transfer, exchange, destruction,
loss, theft or mutilation of any Warrant Certificate described herein shall be
subject to all of the terms and provisions of the Warrant Agreement and the
Warrant.
6. Purchase Price. As used in this Agreement, the term "Purchase Price"
--------------
means the purchase price of $17.50 per share, subject to adjustment from time to
time in accordance with the provisions of Section 7.
7. Anti-Dilution Adjustments. (a) If the Company shall at any time or
-------------------------
from time to time after the Original Issuance Date declare a dividend payable in
Common Stock (including, in the event of a Common Stock split), then each holder
of an unexercised Warrant, upon exercise of such Warrant after the record date
or dates for the determination of holders of Common Stock entitled to receive
such dividend, shall be entitled to receive, in addition to the number of shares
of Common Stock as to which such Warrant is exercised, such additional shares of
Common Stock as such holder would have received had such Warrant been exercised
immediately prior to such record date or dates.
4
<PAGE>
(b) If the Company shall at any time after the original Issuance Date
effect a recapitalization or reclassification of such character that the shares
of Common Stock shall be changed into or become exchangeable for a larger or
smaller number of shares, then upon the effective date of such recapitalization
or reclassification the number of shares of Common Stock that each holder of an
unexercised Warrant shall be entitled to purchase upon exercise of such Warrant
shall be increased or decreased, as the case may be, in direct proportion to the
increase or decrease in the number of shares of Common Stock by reason of such
recapitalization or reclassification, and the Purchase Price shall be, in the
case of an increase in the number of shares, proportionately decreased and, in
the case of a decrease in the number of shares, proportionately increased, with
the effect that the total consideration payable upon exercise of any Warrant in
respect of all the shares of Common Stock purchasable thereunder shall remain
the same. If the Company shall at any time hereafter issue any shares of
capital stock of the Company by reclassification of shares of Common Stock
(including, except as otherwise provided in Section 7(i), in connection with any
merger or consolidation of the Company in which it is the continuing
corporation), then each holder of an unexercised Warrant shall have the right
thereafter to receive, upon exercise of such Warrant, the kind and amount of
shares of stock and other securities and property or assets receivable upon such
reclassification by a holder of the number of shares of Common Stock for which
such Warrant might have been exercised immediately prior to such
reclassification. The provisions of this Section 7(b) shall similarly apply to
successive recapitalizations and reclassifications of Common Shares if, as a
result of an adjustment made pursuant to this Section 7(b), any holder of
Warrants shall become entitled upon the exercise thereof to receive shares of
two or more classes of capital stock of the Company, the Board of Directors of
the Company (whose determination shall be conclusive and shall be evidenced by a
resolution of the Company's Board of Directors filed with the Warrant Agent)
shall determine the allocation of the adjusted Purchase Price between or among
shares of such classes of capital stock. Any adjustment in respect of a
recapitalization involving the forgiveness, exchange or conversion of
outstanding debt shall be governed by Section 7 (c) and not this Section 7 (b).
(c) If the Company shall at any time after the Original Issuance Date
during the exercise period issue or sell any shares of Common Stock or any other
securities convertible into Common Stock or any options or warrants to purchase
Common Stock (except by way of a dividend as provided in Section 7(a) and except
as provided in Section 7(i)), including in connection with retirement of
outstanding debt, for a consideration per share less than the fair market value
in effect immediately prior to the time of such issue or sale, then, forthwith
upon such issue or sale, the
5
<PAGE>
Purchase Price shall be reduced to the price (calculated to the nearest cent)
determined by dividing (1) and amount equal to the sum of (x) the number of
shares of Common Stock outstanding immediately prior to such issuer or sale
multiplied by the Purchase Price at the time plus (y) the consideration, if any,
received by the Company upon such issue or sale, by (z) the total number of
shares of Common Stock outstanding immediately after such issue or sale
multiplied by the purchase price. The number of shares purchasable upon
exercise of each Warrant shall not be subject to adjustment upon the occurrence
of any event referred to in this Section 7(c).
For purposes of this Section 7(c) the consideration in connection with any
such issue or sale shall be the amount of cash received by the Company (or, in
the case of securities sold to underwriters or dealers for public offering or to
the public through underwriters, the initial public offering price) for the sale
of such shares or other securities, options or warrants, before deducting
therefrom any commissions or other expenses paid or incurred by the Company in
connection with the issue or sale of such securities, options or warrants plus
any additional cash receivable by the Company on conversion or exercise of such
other securities, options or warrants, except that if any portion of such
consideration is a consideration other than cash, the amount of such
consideration other than-cash shall be (i) the principal amount thereof, plus
any accrued but unpaid interest thereon and all other amounts payable in
connection with such debt including for expenses and yield maintenance premiums,
in the case of debt forgiven, exchanged or converted, and (ii) the value of such
consideration as determined in good faith by the Board of Directors of the
Company (whose determination shall be conclusive and shall be evidenced by a
resolution of the Company's Board of Directors filed with the Warrant Agent), in
the case of any other non-cash consideration.
If the conversion or exercise price of any securities convertible into
Common Stock or options or warrants to purchase Common Stock is not specified at
the time of the issue or sale of such securities, option so Warrants, the amount
thereof, for purposes only of this Section 7(c), shall be as determined in
accordance with Section 7(g).
In the event of the issuance or sale by the Company of any securities
convertible into Common Stock or any options or warrants to purchase Common
Stock (except by way of a dividend as provided in Section 7(a) and except as
provided in Section 7(i)), the Company shall be deemed to have issued the
maximum number of shares of Common Stock into which such convertible securities
may be converted or the maximum number of shares of Common Stock deliverable
upon the exercise of such options or warrants, as the case may be, for the
minimum consideration payable in respect
6
<PAGE>
thereof. On the expiration of such options or warrants or the termination of
the right to convert such convertible securities, the Purchase Price shall be
readjusted based upon the number of shares of Common Stock actually delivered
upon the exercise of such options or warrants or upon the conversion of such
convertible securities. Except as provided in the next preceding sentence no
further adjustment of the Purchase Price shall be made as a result of the actual
issuance of shares of Common Stock upon the exercise of such options or warrants
or the conversion of such convertible securities.
(d) If the Company shall at any time after the Original Issuance Date
consolidate or merge with any other corporation (except as provided in Section
7(i)) or transfer all or substantially all of its assets to any other
corporation, then the corporation formed by such consolidation or merger or the
party that shall have acquired such assets, as the case may be, shall, as a
condition precedent to such transaction, execute and deliver to the Warrant
Agent a supplemental warrant agreement providing that each holder of an
unexercised Warrant upon exercise of such Warrant after the effective date of
such transaction shall be entitled to receive the kind and amount of shares,
evidences of indebtedness and/or other securities or assets receivable on such
transaction by a holder of the number of shares of Common Stock as to which such
Warrant was exercisable immediately prior to such transaction; and, in any such
case, such supplemental warrant agreement shall contain appropriate provisions
with respect to the rights and interests of the holder of each Warrant to the
end that the provisions of this Section 7 shall thereafter be applicable (as
nearly as may be practicable) with respect to any shares, evidences of
indebtedness and/or other securities or assets thereafter deliverable upon
exercise of such Warrant.
The Warrant Agent shall not be under any responsibility to determine the
correctness of any provision contained in any such supplemental warrant
agreement relating to either the kind or amount of shares of stock or securities
or property (or cash) purchasable by holders of Warrant Certificates upon the
exercise of their Warrants after any such consolidation, merger, sale or
transfer or of any adjustment to be made with respect thereto, but subject to
the provisions of Section 21, may accept as conclusive evidence of the
correctness of any such provisions, and shall be protected in relying upon, a
certificate of a firm of independent certified public accountants with respect
thereto.
(e) No adjustment shall be made hereunder to the Purchase Price unless
such adjustment would change the Purchase Price at the time by $.25 or more;
provided, however, that all adjustments not so made shall be deferred and made
- -----------------
when the aggregate thereof would change the Purchase Price at the time by $.25
or more. No adjustment made pursuant to any provision of this
7
<PAGE>
Section 7 shall have the effect of increasing the total consideration payable
upon exercise of any Warrant in respect of all the shares of Common Stock
purchasable thereunder.
(f) Whenever the number of shares of Common Stock purchasable upon
exercise of a Warrant is adjusted as provided in this Section 7, the Company
shall promptly file with the Warrant Agent a certificate signed by the Chairman
of the Board or the President or Vice President of the Company and by the
Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary
of the Company setting forth the number and kind of shares purchasable, as so
adjusted, stating that such adjustments in the number or kind of shares or other
securities conform to the requirements of this Section 7, and setting forth a
brief statement of the facts accounting for such adjustments. Promptly after
filing such certificate with the Warrant Agent, the Company, or the Warrant
Agent at the Company's request, will deliver, by first-class, postage prepaid
mail, a brief summary thereof (to be supplied by the Company) to the registered
holders of the outstanding Warrant certificates; provided, however, that failure
-----------------
to file or to give any notice required under the Section 7(f), or any defect
therein shall not affect the legality or validity of any such adjustments under
this Section 7; and provided, further, that, where appropriate, such notice may
-----------------
be given in advance and included an part of the notice required to be given
pursuant to Section 13. Any such certificate shall be available at the
principal office of the Company for inspection by the holder of any Warrant on
any day during normal business hours.
(g) The Company shall retain a firm of independent public accountants
of recognized standing, which may be the firm regularly retained by the Company,
selected by the Board of Directors of the Company or the Executive Committee of
such Board to make any computation required under this Section 7, and a
certificate signed by much firm shall be conclusive evidence of the correctness
of any computation made under this Section 7.
(h) For the purpose of this Section 7, the term "Common Stock" shall
mean (i) the class of stock designated as Common Stock in the Articles of
Incorporation of the Company, as amended, at the date of this Agreement, or (ii)
any other class of stock resulting from successive changes or reclassifications
of such Common Stock consisting solely of changes in par value, or from no par
value to par value, or from par value to no par value. If at any time, as a
result of an adjustment made pursuant to this Section 7, the holder of Warrant
shall, upon exercise of such Warrant, become entitled to receive shares and/or
other securities or assets (other than shares of Common Stock), then, wherever
appropriate, all references herein to shares of Common Stock shall be deemed to
refer to and include such shares and/or other securities or assets; and
thereafter the number of such shares an/or other securities or
8
<PAGE>
assets shall be subject to adjustment from time to time in a manner and upon
terms as nearly equivalent as practicable to the provisions of this Section 7.
(i) Notwithstanding anything to the contrary contained in this Section
7, no adjustments to the Purchase Price or the number of shares of Common Stock
that the holder of any Warrant shall be entitled to purchase upon exercise of
such Warrant shall be made pursuant to this Section 7;
(1) upon the issuance or exercise of any of the Warrants;
(2) upon (i) the issuance or sale of shares of Common Stock
pursuant to options, warrants or convertible securities outstanding as of the
---
date of this Agreement; (ii) the grant, or the issuance of shares of Common
- ----------------------
Stock pursuant to the exercise, of any options, warrants, convertible
securities, stock appreciation rights, or similar rights issued (whether before
or after the date hereof) to employees, officers or directors of or consultants
to the Company or any subsidiary of the Company, to purchase shares of Common
Stock; or (iii) issuance of shares of Common Stock pursuant to the Company's
existing ESOP Plan whether by sale, gift, bonus or grant to employees, officers,
or directors of or consultants to the Company or any subsidiary of the Company.
(3) upon the issuance of any shares of Common Stock (i) in
connection with a consolidation or merger in which the Company or a wholly owned
subsidiary of the Company is the continuing corporation and which does not
result in any reclassification of the outstanding Common Stock, or (ii) pursuant
to and in connection with the acquisition by the Company or any wholly owned
subsidiary of the Company of all or substantially all of the assets or stock (or
other equity interests, as the case may be) of another entity.
(4) upon the offerings or issuance of Common Stock pursuant to any
firm commitment or best efforts underwritten public offering.
8. Exercise of Warrants. (a) Subject to the provisions of Section 10,
--------------------
the registered holder of any Warrant Certificate may exercise the Warrants
evidenced by such Warrant Certificate, at any time or from time to time during
the Exercise Period, as to all or any lesser number of the whole shares of
Common Stock covered by such Warrants. Upon expiration of the Exercise Period
the Warrant certificates shall be and become wholly void and of no value.
(b) Exercise of Warrants shall be accomplished upon surrender at any
time during the Exercise Period of the Warrant Certificate evidencing such
Warrants, with the Form of election to
9
<PAGE>
Purchase on the reverse side thereof completed and duly executed, to the Warrant
Agent at its stock transfer office in Atlanta, Georgia, together with payment to
the Company of the Purchase Price of the Warrants then being exercised and an
amount equal to any applicable transfer tax and, if requested by the Company,
any other taxes or other governmental charges which the Company may be required
by law to collect in respect of such exercise. Payment of the Purchase Price
and other amounts may be made in cash, or by certified or official bank check,
payable in lawful money of the United States of America to the order of the
Company. No adjustment shall be made for any cash dividends, whether paid or
declared, on any securities issuable upon exercise of a Warrant.
(c) Upon receipt of a Warrant Certificate, with the Form of Election
to Purchase completed and duly executed, accompanied by payment of the Purchase
Price of the Warrants being exercised (and an amount equal to any applicable
taxes or government charges as aforesaid), the Warrant Agent shall promptly
request from the transfer agent with respect to the securities to be issued and
deliver to or upon the order of the registered holder of such Warrant
Certificate, in such name or names as such registered holder may designate, a
certificate or certificates for the number of full shares of the securities to
be purchased, together with, if applicable, cash made available by the Company
pursuant to Section 9 in respect of any fraction of a share of such securities
otherwise issuable upon such exercise, and shall deliver all amounts paid on
account of the Purchase Price and any amounts paid on account of applicable
taxes and government charges, promptly to the Company. If the Warrant is then
exercisable to purchase property other than securities, the Warrant Agent shall
take appropriate steps to cause such property to be delivered to or upon the
order of the registered holder of such Warrant Certificate.
(d) If the registered holder of any Warrant Certificate shall exercise
fewer than all of the Warrants evidenced by such Warrant Certificate, the
Warrant Agent shall promptly countersign and deliver to the registered holder of
such Warrant Certificate, or to such holder's duly authorized assigns, one or
more new Warrant Certificates evidencing the number of Warrants that were not so
exercised.
(e) Each person in whose name any certificate for securities is issued
upon the exercise of Warrants shall for all purposes be deemed to have become
the holder of record of the securities represented thereby as of, and such
certificate shall be dated, the date upon which the Warrant certificate was duly
surrendered in proper form (and payment of any applicable taxes or other
governmental charges was made in full); provided, however, that if the date of
-----------------
such surrender (and payment) is a date on which the stock transfer books of the
Company are closed, such person shall be deemed to have become the record holder
of such shares as
10
<PAGE>
of, and the certificate for such shares shall be dated, the next succeeding
business day on which the stock transfer books of the Company are open (whether
before, on or after the date of expiration of the Exercise Period), and the
Warrant Agent shall be under no duty to deliver the certificate for such shares
until such date. The Company covenants and agrees that it shall not cause its
stock transfer books to be closed for a period of more than 20 consecutive
business days except upon consolidation, merger, sale of all or substantially
all of its assets, dissolution or liquidation or as otherwise provided by law.
9. Fractional Interests. The company shall not be required to issue any
--------------------
Warrant Certificate evidencing a fraction of a Warrant or to issue fractions of
shares of securities on the exercise of the Warrants. If any fraction
(calculated to the nearest one-hundredth) of a Warrant or a share of securities
would, except for the provisions of this Section 9, be issuable on the exercise
of any Warrant, the Company shall, in lieu thereof, round down to the lowest
whole Warrant. By accepting a Warrant Certificate, the holder thereof expressly
waives any right to receive a Warrant Certificate evidencing any traction of a
Warrant or to receive any fractional share of securities upon exercise of a
Warrant.
10. Reservation of Securities and Property; Registration of Securities.
------------------------------------------------------------------
The Company covenants that it will at all times, solely for the purpose of issue
and delivery upon exercise of the Warrants, reserve and keep available, free
from preemptive and other rights, out of its authorized and unissued or treasury
shares of Common Stock, such number of shares of Common Stock and any other
securities or property which shall then be issuable and/or deliverable upon the
exercise of all outstanding Warrants. The Company covenants that all securities
which shall be so issuable shall, upon such issue be duly authorized, validly
issued, fully paid and nonassessable.
The Company covenants that if any securities, required to be reserved for
the purpose of issue upon exercise of the Warrants hereunder, require
registration with or approval of any governmental authority under any federal or
state securities law before such securities may be issued upon exercise of
Warrants, the Company will in good faith and as expeditiously as possible (at
the Company's expense) endeavor to use its reasonable best efforts to cause such
securities to be duly registered, or approved, as the case may be, and, to the
extent practicable, use its reasonable best efforts to take all such action in
anticipation of and prior to the exercise of the Warrants, including, without
limitation, filing a Registration Statement an the appropriate form and any and
all post-effective amendments to such Registration Statement necessary to permit
a public offering of the securities underlying the Warrants at any and all times
during the Exercise Period; provided, however, that in no event shall such
-----------------
securities be
11
<PAGE>
issued, and the Company is authorized to refuse to honor the exercise of any
Warrant, if such exercise would result in the opinion of the Company's Board of
Directors, upon advice of counsel, in the violation of any law (including by
reason of the failure of such securities to be so registered at the time of such
exercise).
11. Reduction of Conversion Price Below Par Value. Before taking any
---------------------------------------------
action that would cause an adjustment pursuant to Section 7 reducing the portion
of the Purchase Price required to purchase one share of capital stock below the
then par value (if any) of a share of such capital stock, the Company will use
its best efforts to take any corporate action which, in the opinion of its
counsel, may be necessary so that the Company may validly and legally issue
fully paid and nonassessable shares of such capital stock.
12. Payment of Taxes. The Company covenants and agrees that it will pay
----------------
when due and payable any and all federal and state documentary stamp and other
original issue taxes which may be payable in respect of the original issuance of
the Warrant Certificates, or any shares of Common Stock or other securities upon
the exercise of Warrants. The Company shall not, however, be required (i) to
pay any tax that may be payable in respect of any transfer involved in the
issuance, transfer or delivery of Warrant Certificates or the issuance or
delivery of certificates for Common Stock or other securities in a name other
than that of the registered holder of the Warrant Certificate surrendered for
purchase or (ii) to issue or deliver any certificate for shares of Common Stock
or other securities upon the exercise of any Warrant Certificate until any such
tax shall have been paid, all such tax being payable by the holder of such
Warrant Certificate at the time of surrender.
13. Notice of Certain Corporate Action. If, at any time during the
----------------------------------
Exercise Period (prior to the exercise of this Warrant in full), any of the
following events shall occur:
(i) the Company shall declare any dividend or other distribution upon
its Common Stock payable otherwise than in cash out of earned surplus; or
(ii) the Company shall offer to the holders of its Common Shares any
additional shares of the Company or options or Warrants therefor or securities
convertible into shares of the Company or any right to subscribe therefor; or
(iii) dissolution, liquidation, winding-up of the Company or other
similar action of the Company requiring approval by the shareholders shall be
proposed,
12
<PAGE>
then, in each such case, the Company shall file with the Warrant Agent and the
Company, or the Warrant Agent on its behalf, shall mail (by first-class, postage
prepaid mail) to all registered holders of the Warrant Certificates, not less
than fifteen (15) days' prior notice of the date on which;
(a) the books of the Company shall be closed or a record taken for
determination of the shareholders entitled to such dividend, distribution or
subscription rights, or
(b) the books of the Company shall be closed or a record taken for
determination of the shareholders entitled to vote on such proposed dissolution,
liquidation, winding-up or other similar action;
and which shall also specify any record date for determination of holders of
Common Stock entitled to vote thereon or participate therein.
Failure to give any such notice or any defect therein shall not affect the
legality or validity of any transaction listed in this Section 13.
14. Disposition of Proceeds on Exercise of Warrant Certificates, etc. The
-----------------------------------------------------------------
Warrant Agent shall account promptly to the Company with respect to Warrants
exercised and concurrently pay to the Company all moneys received by the Warrant
Agent in respect of the purchase of securities or other property through the
exercise of such Warrants.
The Warrant Agent shall keep copies of this Agreement available for
inspection by holders of Warrants during normal business hours at its stock
transfer office. Copies of this Agreement may be obtained upon written request
addressed to the Warrant Agent at its stock transfer office in New York, New
York.
15. Warrant Certificate Holder Not Deemed a Stockholder. No holder, as
----------------------------------------------------
such of any Warrant Certificate shall be entitled to vote, receive dividends or
be deemed the holder of Common Stock or any other securities of the Company
which may at any time be issuable an the exercise of the Warrants represented
thereby for any purpose whatever, nor shall anything contained herein or in any
Warrant Certificate be construed to confer upon the holder of any Warrant
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value or change of stock to no par
value, consolidation, merger, conveyance or otherwise), or to receive notice of
meetings or other actions affecting stockholders (except
13
<PAGE>
as provided in Section 13 hereof), or to receive dividend or subscription
rights, or otherwise, until such Warrant Certificate shall have been duly
exercised in accordance with the provisions hereof.
16. Right of action. All rights of action in respect to this Agreement
----------------
are vested in the respective registered holders of the Warrant Certificates; and
any registered holder of any Warrant Certificate, without the consent of the
Warrant Agent or of the holder of any Warrant Certificate, may, in his own
behalf for his own benefit, enforce, and may institute and maintain any suit,
action or preceding against the Company suitable to enforce, or otherwise in
respect of, his right to exercise the Warrants evidenced by such Warrant
Certificate, for the purchase of shares of the Common Stock in the manner
provided in the Warrant Certificate and in this Agreement.
17. Agreement of Holders of Warrant Certificates. Every holder of a
--------------------------------------------
Warrant Certificate by accepting the same consents and agrees with the Company,
the Warrant Agent and every other holder of a Warrant Certificate that:
(a) The Warrant Certificates are transferable only on the registry
books of the Warrant Agent and only upon the terms and conditions set forth in
this Agreement; and
(b) The Company and the Warrant Agent may deem and treat the person in
whose name the Warrant Certificate is registered as the absolute owner of the
Warrants evidenced by such Warrant Certificate (notwithstanding any notation of
the ownership or other writing thereon made by anyone other than the Company or
the Warrant Agent) for all purposes whatsoever, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.
18. Cancellation of Warrant Certificates. If the Company shall purchase
------------------------------------
or otherwise acquire any Warrant Certificate after the issuance thereof, such
Warrant Certificate shall thereupon be delivered to the Warrant Agent and be
canceled by it and retired. The Warrant Agent shall also cancel any Warrant
Certificate delivered to it for exercise, in whole or in part (in accordance
with Section 8), or delivered to it for transfer, split-up, combination or
exchange. Warrant Certificates so canceled shall be delivered by the Warrant
Agent to the Company from time to time, or disposed of in accordance with the
instructions of the Company.
19. Concerning the Warrant Agent. The Company shall pay to the Warrant
----------------------------
Agent from time to time, on demand of the Warrant Agent, reasonable compensation
for all services rendered by it hereunder in accordance with the attached fee
schedule, and also its reasonable expenses and other reasonable disbursements
incurred
14
<PAGE>
in the administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also shall indemnify the
Warrant Agent for, and hold it harmless against, any loss, liability or expense,
incurred without gross negligence, bad faith or willful misconduct on the part
of the Warrant Agent, arising out of or in connection with the acceptance and
administration of this Agreement.
20. Merger or Consolidation of Change of Name of Warrant Agent. Any
----------------------------------------------------------
corporation into which the Warrant Agent, or any successor Warrant Agent, may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Warrant Agent, or any successor Warrant
Agent, shall be a party, or any corporation succeeding to the corporate trust
business of the Warrant Agent, or any successor Warrant Agent, shall be the
successor to the Warrant Agent hereunder without the execution or filing of any
paper or any further act on the part of any of the parties hereto, provided that
such corporation would be eligible for appointment as a successor Warrant Agent
under the provisions of Section 22. If at the time such successor to the
Warrant Agent shall succeed to the agency created by this Agreement, any of the
Warrant Certificates shall have been countersigned but not delivered, any such
successor to the Warrant Agent may adopt the countersignature of the original
Warrant Agent and deliver such Warrant Certificates so countersigned; and in
case at that time any of the Warrant Certificates shall not have been
countersigned, any successor to the Warrant Agent may countersign such Warrant
Certificates either in the name of the predecessor Warrant Agent or in the name
of the successor Warrant Agent, and in all such cases such Warrant Certificates
shall have the full force provided in the Warrant Certificates and in this
Agreement.
If at any time the name of the Warrant Agent shall be changed and at such
time any of the Warrant Certificates shall have been countersigned but not
delivered, the Warrant Agent may adopt the countersignature under its prior name
and deliver Warrant Certificates so countersigned; and in case at that time any
of the Warrant Certificates shall not have been countersigned, the Warrant Agent
may countersign such Warrant Certificates either in its prior name or in its
changed name; and in such cases such Warrant certificates shall have the full
force provided in the Warrant Certificates and in this Agreement.
21. Duties of Warrant Agent. The Warrant Agent undertakes the duties and
-----------------------
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Warrant Certificates, by their
acceptance thereof, shall be bound:
15
<PAGE>
(a) The Warrant Agent may consult with counsel satisfactory to it (who may
be legal counsel for the Company), and the opinion of such legal counsel shall
be full and complete authorization and protection to the Warrant Agent as to any
action taken, suffered or omitted by it in good faith and in accordance with
such opinion; provided, however, that the Warrant Agent shall have exercised
-------- -------
reasonable care in the selection of such legal counsel.
(b) Whenever in the performance of its duties under this Agreement, the
Warrant Agent shall deem it necessary or desirable that any fact or matter be
provided or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board or the
President or a Vice President or the Secretary of the Company and delivered to
the Warrant Agent; and such certificate shall be full authorization to the
Warrant Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Warrant Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct.
(d) The Warrant Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Warrant
Certificates (except its countersignature on the Warrant Certificates and such
statements or recitals as describe the Warrant Agent or action taken or to be
taken by it) or be required to verify the same, but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Warrant Agent shall not be under any responsibility in respect of
the validity of this agreement or the execution and delivery hereof (except the
due execution hereof by the Warrant Agent) or in respect of the validity or
execution of any Warrant Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Warrant certificate; nor shall
it be responsible for the making of any change in the number of shares of Common
Stock required under the provisions of Section 7 or responsible for the manner,
method or amount of any such change or the ascertaining of the existence of
facts that would require any such adjustment or change; nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock to be issued pursuant
to this Agreement or any Warrant Certificate or as to whether any shares of
Common Stock will, when issued, be validly issued, fully paid and nonassessable.
16
<PAGE>
(f) The Warrant Agent shall be under no obligation to institute any action,
suit or legal proceeding or take any other action likely to involve expense
unless the Company or one or more registered holders of Warrants shall furnish
the Warrant Agent with reasonable security and indemnity for any costs and
expenses that may be incurred. All rights of action under this Agreement or
under any of the Warrants may be enforced by the Warrant Agent without the
possession of any of the Warrants or the production thereof at any trial or
other proceeding relative thereto, and any such action, suit or proceeding
institute by the Warrant Agent shall be brought in its name as Warrant agent,
and any recovery of judgment shall be for the ratable benefit of the registered
holders of the Warrants, as their respective rights or interests may appear.
(g) The Warrant Agent and any stockholder, director, officer or employee of
the Warrant Agent may buy, sell or deal in any of the Warrants or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company as though it were not Warrant Agent under this Agreement.
Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
(h) The Warrant Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board or President or a Vice President or the Secretary of the
Company, and to apply to such officers for advice or instructions in connection
with the Warrant agent's duties, and it shall not be liable for any action taken
or suffered or omitted by it in good faith in accordance with instructions of
any such officer.
(i) The Warrant Agent will not incur any liability or responsibility to the
Company or to any holder of any Warrant Certificate for any action taken, or any
failure to take action, in reliance on any notice, resolution, waiver, consents,
order, certificate, or other paper, document or instrument reasonably believed
by the Warrant Agent to be genuine and to have been signed, sent or presented by
the proper party or parties.
(j) The Warrant Agent will act hereunder solely as agent of the Company in a
ministerial capacity, and its duties will be determined solely by the provisions
hereof. The Warrant Agent will not be liable for anything that it may do or
refrain from doing in connection with this Agreement except for its own gross
negligence, bad faith or willful misconduct.
22. Change of Warrant Agent. The Warrant Agent may resign and be
-----------------------
discharged from its duties under this Agreement upon 30 days' prior written
notice, sent to the Company by registered or certified mail. The Company may
remove the Warrant Agent or any
17
<PAGE>
successor warrant agent upon 30 days' prior written notice, sent to the Warrant
Agent or successor warrant agent as the case may be, by registered or certified
mail. If the Warrant Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Warrant Agent
and shall, within 15 days following such appointment, give notice thereof in
writing to each registered holder of the Warrant Certificates. If the Company
shall fail to make such appointment within a period of 15 days after giving
notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Warrant Agent, then
the Company agrees to perform the duties of the Warrant Agent hereunder until a
successor Warrant Agent is appointed. After appointment the successor Warrant
Agent shall be vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Warrant Agent without further act or deed;
but the former Warrant Agent shall deliver and transfer to the successor Warrant
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Failure
to give any notice provided for in this Section, however, or any defect therein
shall not affect the legality or validity of the resignation or removal of the
Warrant Agent or the appointment of the successor Warrant Agent, as the case may
be.
23. Issuance of New Warrant Certificates. Notwithstanding any of the
------------------------------------
provisions of this Agreement, or the several Warrant Certificates to the
contrary, the Company may, at its option, issue new Warrant Certificates in such
form as may be approved by its Board of Directors to reflect any adjustment or
change in the number or kind of shares purchasable under the several Warrant
Certificates made in accordance with the provisions of this Agreement.
24. Notice. Notice or demand pursuant to this Agreement to be given or
------
made on the Company by the Warrant Agent or by the registered holder of any
Warrant Certificate shall be sufficiently given or made if sent by first class
or registered mail, postage prepaid, addressed (until another address is filed
in writing by the Company with the Warrant Agent) as follows:
Subject to the provisions of Section 22, any notice pursuant to this
Agreement to be given or made by the Company or by the holder of any Warrant
Certificate to or on the Warrant Agent shall be sufficiently given or made if
sent by first class or registered mail, postage prepaid, addresses (until
another address is filed in writing by the Warrant Agent with the Company) as
follows:
A copy of any notice to be given or made by the Company or by the Warrant
Agent pursuant to this Agreement shall also be given by first class or
registered mail, postage prepaid, to:
18
<PAGE>
Any notice or demand authorized to be given or made to the registered holder
of any Warrant Certificate under this Agreement shall be sufficiently given or
made if sent by first class or registered mail, postage prepaid, to the last
address of such holder as it shall appear on the registers maintained by the
Warrant Agent,
25. Modification of Agreement. The Warrant Agent may, without the consent
-------------------------
or concurrence of the holders of the Warrant Certificates, by supplemental
agreement or otherwise, concur with the Company, in making any changes or
corrections in this Agreement that the Warrant Agent shall have been advised by
counsel (who may be counsel for the Company) are necessary or desirable to cure
any ambiguity or to correct any defective or inconsistent provision or clerical
omission or make or manifest error herein contained, or to make any other
provisions in regard to matters or questions arising hereunder and which shall
not be inconsistent with the provisions of the Warrant Certificates and which
shall not adversely affect the interests of the holders of Warrant Certificates;
provided, that the Warrant Agent shall sign any amendment or supplement
authorized pursuant to Section 25 if such amendment or supplement does not
adversely affect the Warrant Agent's rights, duties, liabilities or immunities
under this Agreement. As of the date hereof, this Agreement contains the entire
and only agreement, understanding representation, condition, warranty or
covenant between,the parties hereto with respect to the matters herein,
supersedes any and all other agreements between the parties hereto relating to
such matters, and may be modified or amended only by a written agreement signed
by both parties hereto pursuant to the authority granted by the first sentence
of this Section 25.
26. Successors. All the covenants and provisions of this Agreement by or
----------
for the benefit of the Company or the Warrant Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
27. Governing Law. This Agreement and each Warrant Certificate issued
-------------
hereunder shall be deemed to be a contract made under the laws of the State of
Georgia and for all purposes shall be construed in accordance with the laws of
such state applicable to contracts made and performed in such state.
28. Termination. This Agreement shall terminate as of the close of
-----------
business on the date of expiration of the Exercise Period, or such earlier date
upon which all Warrants shall have been exercised or redeemed, except as to
Section 8(d) (which shall survive such expiration to the extent any Warrants
have been validly exercised in accordance with such Section 8(d) prior to the
expiration of the Exercise Period) and except that the Warrant Agent shall
account to the Company pursuant to Section 4 as to all
19
<PAGE>
Warrants outstanding and all cash held by it as of the close of business on the
expiration of the Exercise Period.
29. Benefits of this Agreement. Nothing in this Agreement or in the
--------------------------
Warrant Certificates shall be construed to give to any person or corporation
other than the Company, the Warrant Agent and their respective successors and
assigns hereunder and the registered holders of the Warrant Certificates any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company the Warrant
Agent, their respective successors and assigns hereunder and the registered
holders of the Warrant Certificates.
30. Descriptive Readings. The descriptive headings of the several
--------------------
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
31. Counterparts. This Agreement may be executed in any number of
------------
counterparts each of which shall be an original and all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, all as of the day and the year first above written.
By: /s/ Rick W. Gossett
----------------------------------
Name: Rick W. Gossett
--------------------------
Title: Vice President, Finance
-------------------------
By: /s/ Donald P. Addington
----------------------------------
Name: Donald P. Addington
--------------------------
Title: President
-------------------------
TRUST COMPANY BANK
By: /s/ T.J. Donaldson
----------------------------------
Authorized Officer
By: /s/ R.C. Aaron
----------------------------------
Authorized Officer
20
<PAGE>
EXHIBIT A
No. RFW________ _______
Warrants
WARRANT CERTIFICATE
For the Purchase of _______ Share of Common Stock,
With No Par Value
CUSIP No._________
(Incorporated under the law of the State of ________)
VOID AFTER 5:00 P.M. ATLANTA TIME ON ______________, 19___/1/
This Warrant Certificate certifies that, for value received,
___________________, or registered assigns, is the registered holder of Warrants
pursuant to which such holder is entitled, subject to the terms and conditions
hereof and of the Warrant Agreement (as Hereinafter defined), at any time and
from time to time during the period ( the "Exercise Period") commencing on
_________________, 19___/2/ and ending 5:00 p.m., Atlanta time, on
___________________, 19___,/3/ but not thereafter, to purchase from
______________________ (the "Company") the number of shares specified above of
its Common Stock, without par value per share ("Common Stock"), at the purchase
price of ________ per share, subject to adjustment in certain events (the
"Purchase Price"), and to receive a certificate or certificates for the Common
Stock so purchased, upon presentation and surrender to
__________________
/1/ Fill in the third anniversary of the Original Issue Date.
/2/ Fill in the Original Issue Date.
/3/ Fill in the third anniversary of the Original Issue Date.
1
<PAGE>
_______________________, the Warrant Agent, with the Form of Election to
Purchase completed and duly executed, and accompanied by payment to the Company
of the Purchase Price of the Warrants then being exercised and any other taxes
or governmental charges that the Company may be required by law to collect in
respect of such exercise, either in cash or by certified or bank cashier's check
payable to the order of the Company. In certain events specified in the Warrant
Agreement, the number of shares purchasable upon exercise of the Warrants
evidenced by this Warrant Certificate shall be subject to adjustment as therein
provided.
This Warrant Certificate is issued under and in accordance with the Warrant
Agreement dated as of ________________, 19____, (the "Warrant Agreement"),
between the Company and the Warrant Agent and is subject to the terms of the
Warrant Agreement, to all of which terms every holder of this Warrant
Certificate consents by acceptance hereof. The Warrant Agreement is
incorporated herein by reference and made a part hereof and reference is made to
the Warrant Agreement for a full description of the rights, obligations, duties
and immunities of the Warrant Agent, the Company and the holder of the Warrant
Certificates. Copies of the Warrant Agreement are available for inspection at
the office of the Warrant Agent, ___________________________ and copies may be
obtained upon written request addressed to the Company at Knowledgeware, Inc.,
3340 Peachtree Road, N.E., Suite 1100, Atlanta, Georgia 30326.
2
<PAGE>
The Company covenants and agrees that all shares of Common Stock that may be
delivered upon the exercise of Warrants evidenced by this Warrant Certificate
will, upon delivery, be free from all taxes, liens, and charges imposed by the
Company with respect to the purchase thereof hereunder, and without limiting the
generality of the foregoing, the Company covenants and agrees that it will, from
time to time, take all such action as may be required to assure that the par
value per share of the Common Stock is at all times equal to or less than the
then current Purchase Price per share of the Common Stock issuable pursuant to
this Warrant Certificate.
The Warrants represented by this Warrant Certificate are exercisable at the
option of the registered owner hereof in whole at any time, or in part from time
to time, within the period above specified, provided, however, that such
Warrants shall not be exercisable with respect to a fraction of a share of
Common Stock. As to any fraction (calculated to the nearest one-hundredth) of a
share that would otherwise be purchasable on the exercise of a Warrant, the
Company shall, in lieu thereof, round down to the lowest whole share of Common
Stock. If fewer than all of the Warrants evidenced by this Warrant Certificate
are exercised by the Holder, the company shall cancel this Warrant Certificate
upon the surrender hereof and shall execute and deliver one or more new Warrant
Certificates of like tenor for the balance of the Warrants that were not so
exercised.
3
<PAGE>
The Company agrees at all times to reserve or hold available a sufficient
number of shares of Common Stock to cover the number of shares issuable upon the
exercise of this and all other Warrant Certificates of like tenor then
outstanding.
This Warrant Certificate shall not entitle the holder hereof to any voting
rights or other rights as a stockholder of the Company, or to any other rights
whatsoever except the rights herein expressed and such as are set forth in the
Warrant Agreement, and no dividends shall be payable or accrue in respect of
Warrants evidenced by this Warrant Certificate or the interest represented
hereby or the shares purchasable hereunder until or unless, and except to the
extent that, Warrants evidenced by this Warrant Certificate shall be exercised.
This Warrant Certificate is exchangeable upon the surrender hereof by the
registered owner to the Warrant Agent for new Warrant Certificates of like tenor
representing in the aggregate the right to purchase the number of shares
purchasable hereunder, each of such new Warrant Certificates to represent the
right to purchase such number of shares as shall be designated by the registered
owner at the time of such surrender
Except as otherwise above provided, this Warrant Certificate and all rights
hereunder are transferable by the registered owner hereof in person or by duly
authorized attorney on the books of the Warrant Agent upon surrender of this
Warrant Certificate, properly endorsed, to the Warrant Agent.
4
<PAGE>
The company may deem and treat the registered owner of this Warrant
Certificate at any time as the absolute owner hereof for all purposes and shall
not be affected by any notice to the contrary.
This Warrant Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Warrant Agent. This Warrant
Certificate shall be deemed to be a contract made under the laws of the State of
Georgia and for all purposes shall be construed in accordance with the law of
such state.
IN WITNESS WHEREOF the Company has caused this Warrant Certificate to be
executed by the signatures of its duly authorized officers and the corporate
seal hereunder affixed.
Dated:
By:
------------------------------
ATTEST:
Countersigned:
- ----------------------
, Secretary
(Corporate Seal)
As Warrant Agent
By:
------------------------------
Authorized Signature
5
<PAGE>
[FORM OF ELECTION TO PURCHASE]
_________________________
Election to Purchase
____________________
(To be executed upon exercise of Warrant)
The undersigned hereby irrevocably elects to exercise Warrants, represented
by this Warrant Certificate, to purchase _______ shares of Common Stock
("Common Stock") of _______________
(the "Company") and herewith tenders $________________________ in payment for
such shares and any applicable taxes payable by the undersigned in cash or a
certified or official bank check payable to the order of the Company in
accordance with the terms hereof.
The undersigned requests that a certificate for such shares be registered in
the name of:
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF PERSON IN WHOSE
NAME SHARES ARE TO BE REGISTERED
_________________________________
________________________________________________________________________________
________________________________________________________________________________
whose address is _______________________________________________________________
and that such certificate shall be delivered to
________________________________________________________________________________
whose address is
________________________________________________________________________________
________________________________________________________________________________
If the specified number of shares is less than all of the shares represented by
this Warrant Certificate, the undersigned requests that a new Warrant
Certificate representing the right to purchase the remaining balance of the
shares be registered in the name of
6
<PAGE>
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF PERSON IN WHOSE
NAME WARRANT CERTIFICATE IS TO BE
REGISTERED
_________________________________________
________________________________________________________________________________
whose address is
________________________________________________________________________________
________________________________________________________________________________
DATED:_______________________, 19____
Signature Guaranteed: Signature:
_____________________________ ____________________________________________
(Required if an assignment of (Signature must correspond
shares acquired on exercise or with the name as written upon
an assignment of Warrants the face of this Warrant
remaining after exercise is made Certificate in every
upon exercise. The signature particular, without alteration
must be guaranteed by a duly or enlargement or any
authorized officer of a change whatsoever.)
commercial bank or trust
company in the United States
or member of a registered
national securities exchange.)
7
<PAGE>
[FORM OF ASSIGNMENT]
To be executed by the registered holder if such
holder desires to transfer this Warrant Certificate)
FOR VALUE RECEIVED __________________________, hereby sells, assigns and
transfers ______ Warrants unto __________________
________________________________________________________________________________
________________________________________________________________________________
(PLEASE PRINT NAME AND ADDRESS OF ASSIGNEE)
together with all right, title and interest therein, and does hereby irrevocably
constitute and appoint ________________________ Attorney, to transfer said
Warrants on the books of the within-named Company, with full power of
substitution.
If said number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, a new Warrant Certificate shall be issued in the name of an
delivered to the undersigned for such portion of the Warrants no so sold,
assigned or transferred.
DATED: ___________________________
__________________________________
(Insert Social Security or Tax
Identification Number of Assignee)
Signature Guaranteed: Signature
_________________________ ____________________________________
(The signature must be (Signature must conform in
guaranteed by a duly all respects to name of
authorized officer of a holder as specified on the
commercial bank or trust face of this certificate,
company in the United States in every particular,
or member of a registered without alteration or
national securities exchange.) enlargement or any change
whatever.)
8
<PAGE>
EXHIBIT 4.7
SUPPLEMENTAL WARRANT AGREEMENT
between
KnowledgeWare, Inc. and Trust Company Bank
Dated as of November 30, 1994
SUPPLEMENTAL WARRANT AGREEMENT dated as of November 30, 1994, between
KnowledgeWare, Inc., a Georgia corporation (the "Company") and Trust Company
Bank, Atlanta, Georgia (the "Warrant Agent").
In connection with the settlement of the action In Re: KnowledgeWare, Inc.
--------------------------
Shareholder Litigation, in the United States District Court for the Northern
- ----------------------
District of Georgia, Atlanta Division, Master File No. 1:92-CV-1651-JTC and
pursuant to a Stipulation of Settlement dated as of January 26, 1994 (the
"Stipulation") among the parties to the above captioned litigation, the Company
has issued warrants ("Warrants") to purchase an aggregate of 500,000 shares of
the Company's Common Stock, without par value ("KWI Common"), at a purchase
price of $17.50 per share, subject to adjustments in certain circumstances, all
upon the terms and subject to the conditions set forth in that Warrant Agreement
between the Company and the Warrant Agent dated June 9, 1994 (the "Warrant
Agreement"). All capitalized terms used herein and not otherwise defined shall
have the meanings attributed to such terms in the Warrant Agreement.
On August 31, 1994, the Company entered into an Amended and Restated
Agreement and Plan of Merger (the "Merger Agreement") with Sterling Software,
Inc., a Delaware corporation ("Sterling") and SSI Corporation, a Georgia
corporation and wholly owned subsidiary of Sterling ("SSI").
The Merger Agreement provides that SSI shall be merged with and into the
Company and that the Company shall be the surviving corporation. At the
Effective Time (as defined in the Merger Agreement), each share of KWI Common
issued and outstanding immediately prior to the Effective Time shall be
converted into the right to receive up to .1653 share of the common stock, par
value $.10 per share, of Sterling ("Sterling Common"). Section 4.1(iii) of the
Merger Agreement provides that the Warrants outstanding at the Effective Time
shall be assumed by Sterling.
This Supplemental Warrant Agreement is being entered into in connection
with the foregoing as provided in Section 7(d) of the Warrant Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto agree as follows:
1. At and after the Effective Time, the Warrants shall be exercisable
upon the same terms and conditions now existing, except that:
a. Each Warrant Certificate shall entitle the registered holder
thereof, subject to the provisions of the Warrant Agreement
(including, without limitation,
<PAGE>
Section 7 (Anti-Dilution Adjustments) and Section 9 (Fractional
Interests)) and of the Warrant Certificate, to purchase at any time
during the Exercise Period, .1653 of a share of Sterling Common for
each Warrant evidenced by such Warrant Certificate, and
b. The Purchase Price (i.e., the exercise price per share of Sterling
Common pursuant to the Warrants) shall be an amount equal to the
Purchase Price per share of KWI Common immediately prior to the
Effective Time (i.e., the exercise price of $17.50 per share of KWI
----
Common, as it may be adjusted pursuant to the terms of the Warrant
Agreement) divided by .1653 (the exercise price being rounded upward
to the nearest full cent).
2. At and after the Effective Time, the provisions of Section 7 of the
Warrant Agreement shall similarly apply to successive recapitalizations and
reclassifications of Sterling Common.
3. Except as expressly modified hereby, the Warrant Agreement shall
continue in full force and effect.
4. This Supplemental Warrant Agreement may be executed in any number of
counterparts, each of which shall be an original and all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Warrant Agreement to be duly executed, all as of the day and year first above
written.
KNOWLEDGEWARE, INC.:
/s/ Francis A. Tarkenton
------------------------------
Francis A. Tarkenton,
Chief Executive Officer
/s/ Rick W. Gossett
------------------------------
Rick W. Gossett,
Financial Officer and Treasurer
2
<PAGE>
TRUST COMPANY BANK:
/s/ A C Conn
-----------------------------
Print Name: A C Conn
------------------
Title: Group Vice President
-----------------------
/s/ T. J. Donaldson
-----------------------------
Print Name: T. J. Donaldson
------------------
Title: Group Vice President
-----------------------
3
<PAGE>
[LETTERHEAD OF JACKSON & WALKER, L.L.P. APPEARS HERE]
EXHIBIT 5
November 30, 1994
Sterling Software, Inc.
8080 N. Central Expressway
Suite 1100
Dallas, Texas 75206
Re: Registration Statement on Form S-3 of Sterling Software, Inc.
Gentlemen:
We are acting as counsel for Sterling Software, Inc., a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended (the "Act"), of the offering and sale of up
to 82,650 shares of the Company's Common Stock, par value $0.10 per share (the
"Shares"), which Shares have been reserved for issuance upon exercise of certain
warrants (the "Warrants") issued by KnowledgeWare, Inc., a wholly owned
subsidiary of the Company ("KnowledgeWare"). As a result of the merger of a
wholly owned subsidiary of the Company with and into KnowledgeWare on the date
hereof, KnowledgeWare became a wholly owned subsidiary of the Company and the
Warrants, by their terms, represent the right to acquire the Shares. A
Registration Statement on Form S-3 (the "Registration Statement") is expected to
be filed with the Securities and Exchange Commission (the "Commission") on or
about the date hereof.
In connection with the rendering of this opinion, we have examined and
relied upon the original or copies, certified to our satisfaction, of all
documents, certificates and instruments as we have deemed necessary for the
expression of the opinions expressed herein, including the Certificate of
Incorporation, as amended, and the Restated Bylaws of the Company, copies of
resolutions of the Board of Directors of the Company authorizing the offering
and the issuance of the Shares, the warrant agreement pursuant to which the
Warrants were issued (the "Warrant Agreement") and the Registration Statement
and all exhibits thereto. In making the foregoing examinations, we have assumed
the genuiness of all signatures on original documents, the authenticity of all
documents submitted to us as originals and the conformity to original documents
of all copies submitted to us.
Based upon the foregoing examination, subject to the comments and
exceptions herein stated, and limited in all respects to the laws of the State
of Texas, the General Corporation Law of the State of Delaware and the laws of
the United States of America, and subject to receipt
<PAGE>
Sterling Software, Inc.
November 30, 1994
Page 2
from the Commission of an order declaring the Registration Statement effective,
it is our opinion that the Shares, when issued in accordance with the terms and
conditions of the Warrant Agreement, will be duly authorized, validly issued,
fully paid and non-assessable.
You should be aware that we are not admitted to the practice of law in the
State of Delaware. Accordingly, any opinion herein as to the laws of the State
of Delaware is based solely upon the latest generally available compilation of
the statutes and case law of such state.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm in the Registration
Statement under the caption "Legal Matters." In giving this consent we do not
thereby admit that we come within the category of persons whose consent is
required under Section 7 of the Act or the rules and regulations of the
Commission promulgated thereunder.
Very truly yours,
/s/ Jackson & Walker, L.L.P.
<PAGE>
Exhibit 23.1
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) pertaining to the registration of 82,650
shares of common stock of Sterling Software, Inc. and to the incorporation by
reference therein of our report dated November 15, 1993, with respect to the
consolidated financial statements and schedules of Sterling Software, Inc.
included in its Annual Report on Form 10-K for the year ended September 30,
1993, as amended by Form 10-K/A Amendment No. 1 filed January 26, 1994, filed
with the Securities and Exchange Commission.
/s/Ernst & Young LLP
Dallas, Texas
November 30, 1994
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated June 18, 1993
(except with respect to the matter discussed in Note 19 as to which the date is
July 1, 1993), included in Sterling Software, Inc.'s Annual Report on form 10-K
for the year ended September 30, 1993, and to all references to our Firm
included in this registration statement.
Washington, D.C.
November 30, 1994
/s/ ARTHUR ANDERSEN LLP
<PAGE>
Exhibit 23.3
Consent of Independent Accountants
We consent to the incorporation by reference in this registration statement on
Form S-3 of our report, which includes an explanatory paragraph about
KnowledgeWare, Inc.'s ability to continue as a going concern, dated August 31,
1994, on our audit of the financial statements of KnowledgeWare, Inc. and
Subsidiaries. We also consent to the reference to our firm under the caption
"Experts".
Atlanta, Georgia
November 30, 1994
/s/ Coopers & Lybrand L.L.P.
